Factors influencing profitability among gum Arabic marketers in Jalingo, Taraba State, Nigeria

Umar HY¹*, Otitolaiye JO² and Grace, AA¹

¹Rubber Research Institute of Nigeria, PMB 1049, Benin City, Edo State, Nigeria.

²Department of Agricultural Economic and Extension, Faculty of Agriculture, Kogi State University, Nigeria.

*Corresponding Author:  E- mail:  haliru.umar@gmail.com

Accepted 20 March, 2014

Abstract

Gum arabic is an economic tree crop commonly found in Sahelian and Savannah of tropical zones. There are over 1100 different species of the plant. Three of these are of economic value due to the role they play in manufacturing industries worldwide. The study analysed the factors influencing revenue generation from gum arabic among its marketers in Jalingo Local Government of Taraba state, Nigeria. Sixty respondents were randomly interviewed using structured questionnaire, out of which 50 was used for this study. There are about 11 states in the Nigeria where gum arabic is abundantly gown wild with some on established farms. The produce is used in the manufacture of many industrial goods like ink, pharmaceuticals, paint, textiles, papers etc.  Both descriptive and inferential statistical models were used for the analyses. The results revealed that R² = 0.692, implying that 69.2% of the independent variables used in the study jointly explained the variation in the output. Age, education, operating cost and fixed cost had negative coefficients while family size, purchasing cost, volume of gum arabic sold; labour cost and gum Arabic marketing experience had positive coefficients. These imply that an increase on those variables with negative coefficients will decrease revenue generation in the sales of gum arabic in the area; while an increase in those variables with positive coefficients will lead to increase in the revenue generation in gum arabic marketing in the study area. The economic advice was that gum arabic marketers should reduce allocation of resources with negative coefficients and increase allocation of the variables with positive coefficients in order to be more efficient in the gum arabic business in the area.

Keywords: Gum arabic, Marketing, Profitability, Revenue generation, Jalingo