Cost and Returns to Contract Seed Production in Nigeria: Evidence from Osun State

The need to continuously multiply new improved seeds for onward delivery to the farmers, with the sole aim of attaining food self-suffi ciency, necessitates this study. Data were collected from 17 maize and soybean out growers randomly selected from a list of out growers provided by the seed manager, using structured questionnaire. The data were analyzed using percentages and gross margin analysis. The analysis reveals that the variable costs were 97.38 and 97.07 percent of the total cost of maize and soybean production respectively. The fi xed costs, on the other hand, were 2.62 and 2.93 percent of the total cost of production respectively. The component analysis of revenue shows that 83.72 and 84.00 percent respectively of total revenue from maize and soybean were obtained from the good quality seed while 16.28 and 16.00 percent of revenue came from the poor quality seed (rejects). The economic effi ciency analysis revealed a value of 0.69 and 0.83 respectively for maize and soybean. These imply that a profi t of 0.69 Naira (N) and N0.83 is made for every naira spent by the out growers in maize and soybean production respectively. It was recommended that the out growers be motivated by making available the needed material inputs at reasonable prices.