Reasons For Low Productivity In Agro-based Industries

Reasons For Low Productivity In Agro-based Industries: (A Case Study Of Premier Cashew Industry Oghe)

Reasons For Low Productivity In Agro-based Industries: (A Case Study Of Premier Cashew Industry Oghe)
The history of Agro-base Industries in Nigeria is relatively long. According to J.E. Botton Industrial Revolution in 19th century gave birth to the existence of Agro-base Industries of the world, most the colonial master.

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In late 19th century, the number of Agro-base Industries were increasing in a faster rate due to the improvement in mechanization of agriculture. At that time, there was no laws governing the industries, no ministry of agriculture until later at the end of 20th century when our indigenous entrepreneurs began to set up some of the present industries.

Between 1959 and 1977, the large the large number of companies were registered and been approved by the ministry of Agriculture of which one of them is Livestock Mill Plc. I was founded in 1947 by a group of individuals who combined as a partnership. It was also incorporated in 1955 with shareholders. At times they were combining the production of feeds and poultry farming now they have numerous branches all over the country with their main branch at Aba.

Flourmill which specializes in the extraction of flour for production of chocolate was founded in 1964. the company was incorporated in 1972 and undertake the production of flour as from time to time, the company has been performing fine in the production process until 1982 to 1985 when it was faced a lot of problem.

The Premier Cashew Industries was also among the Agro-base establishments in the late 19th century. It was founded in 1952 as “Oghe Cashew Industry” by the former Eastern Nigeria Development Corporation (E.N.D.C)

The first cashew plantation of the industry was established at Akama Oghe. Subsequently, Oji River and Mbala Isuochi Cashew plantation were established.

The plantation at Oghe has an area of 470 hectares which was divided into 5 fields and 150 plots with a total of 36,486 cashew trees. The Oji River plantation has an area of no hectares of plots with 8,100 cashew trees; The Mbala Isuochi plantation (now in Abia state) has an area of 150 hectares of 31 plots with the total of 9,300 cashew trees.

The cashew tree in the plantation started to bear fruits in 1957 (five years after they were planted) from 1957 to 1964. Then the nuts were shelled ans pealed manually obtain cashew kernels. However in 1965 the method of processing cashew nuts were mechanized following the procurement of a medium seized processing plant from Great Britain. The plant was installed at Akama Oghe and was producing both kernels and cashew nut shell liquid.

The kernels which is generally known as the fruit of cashew is delicious and nutritious. It is highly esteemed as food stuff. Cashew nuts is as large as the tip of a finger in a shape of crescent fade us kidney shaped and is made up of spongy mesocarp of about 1/8 inch or 4cm in thickness. It consists of a network of honey comb cell which contain dark brown viscous resinous liquid called cashew nut shell liquid. This liquid is obtained by extracting through the process of roasting the nut shell to obtain the kernels.

The cashew nut shell liquid consist chiefly of the naturally produced phenolic compounds, one is anacardic acid and the other is carol. Both of them are of non-drying in nature. They cannot be dried unless by means of either the process of chemical reactions. Every activity of the industry stopped at the outbreak of the Nigerian Civil war of 1967 and expatriates employees of the industry all fled to their home countries.

The industry and its three plantations were severely devastated by the civil war. The processing plant as completely vandalized so also were the building and other infrastructural facilities. As the plantation were not plowed or weeded during the war years, they grew into forest thus providing good habitat for antelopes and monkeys.

At the end of the war in 1970, then East central state owned Agricultural Development Corporation (A.D.C.) attempted to reactivate much success.

Following the creation of additional states in 1996 th former East central state was split into two states, Enugu and Imo, Mbala Isuochi was carved into Imo state. Consequently the cashew plantations at Mbala became vested in Imo state government. Enugu state government was thus left with Oghe and Oji River cashew plantation. The two plantations have a total land area of 580 hectares of 179 plots and 44,586 cashew trees.

Between 1980 and 1989, a new factory built at Oghe in which a gigantic processing plant of Japanese make was installed. The plant has the capacity to process up to 1,500 metric tones of cashew nut annually. The factory was officially commissioned in 1989 and it therefore went into processing of cashew nuts harvested at Oghe and Oji River plantations. As the plant could not be adequately feed with cashew nuts supplied by the industry arrangement were made for contract processing to meet the optimum capacity utilization level of the plant.

The industry is fully owned by the Enugu state government following the creation of more states; new Anambra and Enugu. Being immovable assets ownership of the industry and its plantation fell on the government of Enugu state.


The title of this project work is “Reasons for low productivity in Agro-base Industries” cashew industry Oghe being the case study.

Management of establishment like this is often characterized by inefficiency and poor administration with the resultant effects of this low productivity and demoralization of employees. A lot of factors could be attributed to these. The objectives of this research work therefore to identify those factors responsible for the inefficiency and ineffective performance of this Agro-base industry and also to find ways of ameliorating them so that the establishment cannot be viable but also be able to face the challenge of the modern establishment. It is my view that if all the problems facing this establishment or industries are addressed that they will start functioning for the overall healthy living of entire populace.

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Productivity in Agro-base industries have been accounting in a small proportions of the Nigeria economy. These factors which leads to this condition have been seriously hindering the economic growth and development of Agro-base industries in Nigeria.

Although the Agro-base industries faced problems that made them to have low productivity but it plays a strategic roles in the economic well being of the country.


This research work will be of immense important to the masses for a happy life they suppose to enjoy and the government on the other hand for the economic development of the state.

The studying of this area according to Girahen Bannock (1981: p.8) will also help in the following areas.

1) To examine reasons for low productivity in Agro-base industries with emphasis on feedmill Emene Premier Cashew industry Oghe Ezeagu and Flower mill Emene which touches the areas of financial marketing and production of the Agricultural product.

2) To enlighten the proprietors and intended ones about the situation of the existing Agro-base industries.

3) To present to the product the roles played by Agro-base in the economic development.

4) To gain insight of the survival of existing Agro-base.

The activities of the Agro-base industries are not the same throughout the country. They differ as products differ also policies and management which is at individual company discretion. Since this project express the reasons for low productivity in Agro-base industries. Special reference have been taken from Premier Cashew Industry Oghe Ezeagu Local Government area in Enugu state.


It was not possible to carryout this research study wide because of certain limitations. In carrying out a burdensome task like this study, certain constraints are encountered. Even though one tries to give this research study a befitting fight, yet I met with certain setbacks. The first and foremost is lack of financial resources as a result of which I have to contend with the limited financial resources at my disposal.

Another constraints is that of time. Time factors is an essential element in a study of this magnitude and importance. This became more glaring as I needed sufficient time for traveling and asking question and carrying out interview. As a result of the above constraints, I limited my research study to Oghe Ezeagu Local Government Area in Enugu state.



This is defined as the application of machine in the operation of agriculture.


This is defined as the application of machine in the operation of Agriculture.


Efficiency in industrial production.


Apple is used in the production of table wine apple drink from the extraction of juice from the apple. The industry experiment on how generally acceptability of the apple drink and wine in the first two months of production before embarking on a large scale production of the products.



In this chapter, I made reference to textbooks, magazines of related work of study, National Dailies, studies and researchers made seriously by some other people in connection with this project objective.

Agro-base industries in Nigeria has been inhabited with problems and inefficiency in production scale. This problems facing Agro-base industries has immensely affected the economic development of Nigeria.

On the critical problems facing the Agro-base industries according to Dr K.G. Lackyer in this textbook “factory and production management is inadequate management according to Lockyer, he said that for a management to be effective and efficient, all element of management must be in accord. He made this statement when he has comparing the services of the management functions.

There are most of our local industries that lack planning and it affects them a lot during the operation of the company mismanagement of fund frauds. Fraudulent and inability of the management to use the available materials effect well and efficiency lend some of our companies to low productions which jeopardizes their future operations. Most of our management use the funds for the purpose of which its not meant, in 1979, livestock feed mill plc has a problem which have fold it up. The management went as far as using the fund to award a contract which worth millions of Naira. Management inconsistence and the fact that most of the management see the industries as a private own. The basic management principles and functions has been severely neglected. Motivation of staff is poor or decrease in the field of product is even at the time there could be employed proportion of honest.

On the other problem confronting our Agro-base industries is lack of fund to execute the objectives and basic operation of the industries would have been doing better if they are given an adequate financial support to improve and expand their mode of operation. For instance the premier cashew industry has the desire to be processing the raw cashew nuts but due to lack of fund to purchase the machine that is processing it. They only process it on contract and charges which made them to spend much and at the end of everything nothing will be obtain.

The company has made a complete studying on the production of table wine and apple drink from cashew apple which waste away at the process of roasting but due to financial handicap, they unable to enter into the process.

According to Peter Kotler he said that for a sales person to be called professional, he has to be financially strong and reliable, therefore Agro-base industries in Nigeria needs enough finance to take most of their basic needs.

The next problem is the problems of diverfication. Most of our Agro-base Industries have been dealing only on one kind of product at time tired to diversity to another system which can yield more profit to them but they find it difficult, for instance, as from 1059 – 1979 livestock feedmill was combining with the production of feeds and poultry but still at the long-run they found it difficult to cope with and succeeded in one which is the production of feed. Some of our local industries like Sunset Feed, Asaba, which undertakes different kinds of production made it due to the fact that as consumer demand changes, that of the production equally change. The premier Cashew industry can only harvest their cashew during the rainy season and immediately after that most of their workers remain unemployed. This proves that diversification of production is very vital in every growing economy.

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Another reason for low productivity in Agro-base Industries in Nigeria is poor marketing system. Most of our agricultural product are been sold at a take away or cheaper price to the developed countries who know the value of those products and gain much from them. e.g Cashew kernel or nut are in great demand in international market and such countries as India, Brazil, Mozambique, Guinea Bissau and Angola depend on their products for their major foreign exchange sources, Nigeria has so far been recognized in Europe and America (the major buyer of their product) as one of the major cashew nut exporting nations in the world even though the total annual harvest of the product in the country average 90,000 metric.

This is chiefly due to the fact the cashew nuts harvested in Nigeria are sold to Asian merchant who ship them to their countries where the nuts are processed and exported to Europe and America as produce of the merchants countries. This problem of market for exporting of Agricultural product made most of our Agro-base industries to take a declining. According to Peter Kotler he said that marketing business made without satisfying both sides that of the sales person and the prospect can end up being a one time business so we need to export our Agricultural products at the rate it suppose to be.

Lack of basic amenities and infrastructural facility problem is next reason for low productivity in agro-base industries. E.g. Lack of good road, electricity, pipe borne water, inadequate transportation for instance premier cashew at Eziagu has electric generator of 380 colts and 195 KVA respectively and I discovered that the company send a lot of money in maintaining and fueling these generators. Also the road from the company to the main road which is about 5 Kilometers is not well made. Most at times during the raining reason they find it difficult to go there with vehicle, all these problem affects production and makes Agro-base industries to drastically decline in their production.

In summary the postulated problems from these are as follows.

a. Inadequate management.

b. Lack of fund.

c. Problems of diversification

d. Problems of market for export

e. Lack of basic amenities / infrastructured


In the previous work, I elaborated on the basic reason for low productivity in agro-base industries in Nigeria. All problem mentioned and immensely hindered the growth of our economy in agricultural sector. According to Mr. Tuoro, he said that whenever there is a problem that He doesn’t look at it but the after effect of it which one of them is decrease in the standard of living of the people. Agriculture provides 60% of food and other basic needs of man. In this condition the standard of living of people will be reduce, high rate of inflation due to the scarcity of good s in the market. In 1996 budget, the head of state encouraged importation of goods and this indirectly made our country to be dependant to some foreign countries.

Unemployment is another effect which can be seen in a situation where there is no improvement in the level of production the management also finds it difficult to employ new workers. The management of nowadays of utilizing the little resources to pay their workers they will engage in fraudulent. Using the company’s fund anyhow without considering the condition of these infant Agro-base industries. According to Rev. Thomas Malthus, he said that unemployment is one of the economic terms that retard economic development in the country.

The level of National Income is also been affected due to the fact that the government spend huge amount of money importing agricultural goods in order to satisfy the needs of the people. In Nigeria today we are running deficit in every budget made in each year as a result of mass importation almost 7% of our food products are imported from the developed countries.

In this point, the classical economist defined this phenomenon as a vicious circle of poverty this happens in developing nation like Nigeria where they have low saving, low income, low capital and low investment opportunity which encourages poverty.


According to Nwankwor G.O. he said that for a sales person to be called professional he has to be financially strong and reliable person under this we found out that our Agro-base is faced with many problems which hinders it development such problems are as follows.

The Agro –base industries are faced with problem of lack of fund to execute their various stated objectives most of these industries are not operating due to lack of fund and inability of the management to manage the affaires of the industries well e g the premier cashew industries Oghe –Eziagu local government area in Enugu state which is established in the late century is also faced with similar problem and this is the cause of this research work to find out these reason of low productivity .


According to Dr. K.G. locker in his text book ‘factory and production management he said that for a management to be effective and ineffective, all element of management, planning, organizing, directing, cor-ordination etc must be in accord.

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This problems facing the agro- base industries have been a stumbling block in the economic development of Nigeria.

One other problem is lack of fund to execute the objectives and operation of the industries. Most of our agro- base industries for instance premier cashew has the desire to be processing their raw cashew nuts but due to lack of fund to purchase the machine their dream renders to be abortive.

According to Peter Kotler has said that Agro-base industries in Nigeria need enough finance to take most of their basic needs he postulated his own problems as follows.

1. Inadequate management

2. Lack of fund

3. Problem of diversification.

4. Problem of market for export.

5. Lack of basic amenities.


The different method of studying the problems are by research work.


This is situation whereby the person who is writing the research is going around looking for the materials and ideas to be in writing the research project.


This is a situation where the person visit people and ask them questions on the subject that research is being carried on.


Under this method, the researcher is expected to visit the site of his research work to see how things happen and ways the problems manifest.


Under this method, the person carrying out the research will interview people for instance the manager or the workers and seek their opinions in certain aspects.


The topic of this research work is been focused on the reasons for low productivity in Agro-base industries with a case study of Premier Cashew Industry at Oghe, Ezeagu Local Government Area livestock Feed Mill Emene and Flour Mill all in Enugu. Also the effects of this low productivity is been highlighted of which `one of them is mismanagement problem, poor supervision by the senior staff, fraudulent e.t.c. reference is also made to lack of fund, diversification problem, market problem for exporting Agro-base products and infrastructural problem, it is also found out that their problem lead to so many factors which reduces the general growth of the economic and the people’s well being.


In this chapter discussions on the from analysed data to their encourage or discourage the postulated problems facing Agro-base industries in Nigeria is highlighted.

From the point made on the previous chapter, it is seen that inadequate management is of the problems facing Nigeria Agro-base should not be selected or employed based on their education standard but also on the fact of the management abilities and capabilities. The managers with this managerial ability will be able to fund out how best he can align the goals of employees with the goals of the organization so that there can be goals of congruence as a means of increasing the commitment of the employees.

A lot factors if properly considered will ease the task of management and therefore help to over come some of these problems encountered in the task management in the Agro –base industries and at the same time promote efficiency and productivity.

Good Condition For Service:

One thing is to set up a task; another is to set up a good working environment that will enable the operations to accomplish such task without any regrets.

A good working condition is necessary for the attainment of the goods of the organizations, on this ground, our Agro-base industries should be provide with good infrastructural facilities like good network of road to see to the proper and smooth running of there activities. Also good and portable drinking water for employees of the above mentioned industry and good electrification scheme.

Provision Of Adequate Financial Scheme:

Under this sub heading, Government should provide our Agro –base industries with adequate financial scheme witch will as a support in there activities.

This financial aid will help them in the procurement of some machines and equipments witch they need fore their operation. This government involvement in the activities of the Agro –base will act as an energizing force with will lead to increase in productivity.

Involvement of the workers in formulation of the objectives they are expected to achieve if the workers of our Agro –base industries and their managers sit together to formulate goals, this will afford the workers the opportunity to ask questions in situation where they expansion of the activities of the ine in doubt and this will to a great extent facilities their understanding and performance of the job.

Expansion Of The Activities Of The Industries:

Our Agro –based industries should be posed with production of two or more productions. This is aimed at seeing that the industries is busy through out the year like the cashew industry Oghe whose only objectives is the production and growing of cashew which tends to close or flip as soon as the raining season is over.


It is clear from the afford mention ed problems facing the Agro-base industries that government has a lot to be blamed of in the problem. So on this ground, government has to put hand in the operation of our Agro-base industries. This should be the areas of providing financial scheme good infrastructural facilities, provision of good condition of service setting good orientation programmes in which the task of managers of the industries and the of the works should be made know to them government on the other hand should provide a standard in which any industries should be operating to see that their products should provide a good package in the market.

Reasons For Low Productivity In Agro-based Industries: (A Case Study Of Premier Cashew Industry Oghe)

To place an order for the Complete Project Material, pay N5,000 to

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Account No – 0044157183

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