Profitability analysis of sunflower production and processing in Lira district, northern Uganda

Abstract

This study aimed to examine the profitability of sunflower production and processing in Lira District. The research used a cross-sectional survey design and collected data from 80 sunflower farmers through open and close-ended questionnaires. The findings revealed that sunflower farmers in Lira district gain significant profits, but weaknesses still exist in production and processing. The regression results showed that factors affecting profitability have a strong positive significant influence on profits in Lira district. For sunflower production, the study revealed a, GPM of 44.04%, B/C ratio of 1.42, and BEP of 227kg. For sunflower processing, the GPM was 55.55%, B/C ratio was 1.95, and BEP was 28.8 liters. Farm size, cost of input, level of education, age of farmer, sunflower output, farming experience, and selling price of oilseeds significantly determined net farm income for production, while farm size, cost of input, level of education, age of farmer, sunflower output, farming experience, number of labor involved, cost of processing, selling price for oil, selling price for cakes, other income sources, and transportation and marketing costs significantly determined net farm income for farmers who sold processed products. The study further revealed that the NPV for selling processed sunflower products is significantly higher than that of selling oilseeds. The study concluded that sunflower production and processing can be profitable in Lira district, and sunflower processing offers a more profitable option for smallholder farmers. To ensure positive results as regards to profitability, the study recommends encouraging and assisting farmers to process sunflower before sale, facilitating private entrepreneurs to set up processing plants closer to farmers in rural areas, increasing establishment of irrigation facilities for commercial producers without-grower schemes, formulating good policies to help farmers access commercial and rural development bank loans, and development of easy to use and relatively affordable modern processing technologies and devices.