ECONOMIC ANALYSIS OF BREAD BAKING ENTERPRISES IN KADUNA AND ZARIA METROPOLIS OF KADUNA STATE, NIGERIA.

ABSTRACT

The study examined the economic analyses of bread baking enterprises in Kaduna and Zaria Metropolis of Kaduna state, Nigeria. Primary data were collected from 124 bread producers selected using multi-stage sampling technique. The data from 2015 season were collected with the aid of structured questionnaire. Data collected were analyzed using stochastic frontier production function. The maximum likelihood estimate (MLE) of the stochastic frontier model production function revealed that the inputs were under-utilized. The technical efficiency score of each respondent revealed that the most efficient producer operated at 99% efficiency, the least was found to operate at 59% efficiency level, while the average was 71%, indicating that bread producers still have the potential to increase the efficiency in their baking activities by 29% in the study area.

The predicted allocative efficiencies differ substantially among the producers ranging between value 0.49 and 0.89 with the mean allocative efficiency of 0.69. The bread producers with the best and least practice had economic efficiency of 0.89 and 0.29 respectively. The mean economic efficiency was 0.51. The variance parameters of the frontier production model were Sigma-squared (δ2) and Gamma (γ) and their estimated coefficients in the study area were 0.00894 and 0.075567 respectively. The net processing income from 50kg bag of flour in terms of other associated variable costs was estimated to be ₦6270. The return per ₦1 invested was therefore estimated to be ₦0.58. Hence, bread Production was profitable in the study areas. The major constraints were inadequate capital, high cost of raw materials, untimely supply of raw materials, problems of defaulters, lack of technical know-how, poor power supply and poor market. The study recommended that Flour, labour, salt and yeast that significantly affect technical efficiency of bread production should be increase in quantities in order to boost more output.