ABSTRACT

The study comparatively analyzed the investment and performance of modern and traditional rice processing enterprises in North-Central Nigeria, from 1987-2016. Specifically, the study examined the features of modern and traditional rice processing enterprises; ascertained the relationship between capacity installation, utilization and un-utilized in modern and traditional rice processing; identify factors influencing capacity utilization; analyzed determinants of investment and performance in modern and traditional rice processing; examined the effect of investment on performance in modern and traditional rice processing; assess the performance of modern and traditional rice enterprises; and identified the factors militating the adoption of the modern technology of processing rice. The population size of 300 (250 traditional and 50 modern) respondents were drawn from the registration list of the National Association of Rice Processors Entrepreneurs of Nigeria. A sample size of 199 was drawn from a population of registered enterprises using Taro Yamane (1967) formula. Secondary data were used for the study. Structured questionnaire were used to collect primary data on features of rice processing enterprises. While secondary data were used on capacity installation, utilization and un-utilized in modern and traditional rice processing enterprises from 1987-2016. Data collected were analyzed with Descriptive Statistics, Correlation Analysis, Auto-regression Distributed Lagged model, Stochastic Trans-log Frontier, Ordinary Least Square (OLS) regression, Chow-Test and Z-test Statistics, Feasibility and Viability analysis as well as Performance analysis. The result showed majority (60 & 65%) of modern and traditional rice processing enterprises to have existed for 30 years. Majority (89%) of the modern rice processing entrepreneurs were males while 80% of the traditional rice processing entrepreneurs were female. The correlation result showed a positive coefficient (0.983**) implying a significant relationship between capacity installation, utilization and un-utilized in modern and traditional rice processing enterprises. The study identified inadequate supply of paddy, unavailability of paddy and poor electricity supply as factors influencing capacity utilization of enterprises. The performance of both enterprises was above 50% average, however the z-test (16.960***) showed significant at 1% difference in performance of modern and traditional rice enterprises. The chow-test (7.23) result showed a significant effect of investment on performance of modern and traditional rice enterprises. The study identified high cost of establishment; high cost of maintenance; high tax on importation of spare parts and unfavorable loan conditions as factors militating the adoption of modern technology of rice processing. The study conclude that modern and traditional rice processing enterprises were underutilized, though they performed above average of 50% which is feasible and viable for investment. The study therefore recommend that Paddy producers should increase production of paddy to ensure maximum utilization of the rice processing enterprises. Government should ensure adequate supply of electricity to power rice processing enterprises to reduce processing price. The rice processors should select an operational price at which the marginal revenue equal marginal cost (MR=MC) for sustainability of the enterprises.