Farm Budgeting and Gross Margin Analysis as Extension Tools for Promoting Commercial Agriculture among Smallholder Farmers in Zamfara State, Nigeria

Abstract

This study assessed farm budgeting and gross margin analysis as extension tools for promoting commercial agriculture among smallholder farmers in Zamfara State, Nigeria. Specifically, the study examined farmers' knowledge and use of farm budgeting and gross margin analysis, assessed the role of agricultural extension agents in promoting their application, determined the level of commercial agriculture participation, and examined the relationship between the use of the two tools and commercial agriculture participation. A multistage sampling procedure was used to select 241 smallholder farmers from four Local Government Areas. Data were collected through a structured, pre-tested interview schedule and analysed using descriptive statistics, farm budgeting, gross margin analysis, benefit-cost ratio, and multiple linear regression estimated using the Ordinary Least Squares method. The results showed that farmers had a relatively high level of knowledge of farm budgeting and gross margin analysis (grand mean = 3.40), whereas their actual use of the tools was low (mean = 2.82), indicating a knowledge–application gap. Extension support was positively rated (mean = 3.38), although follow-up support remained limited. Commercial agriculture participation was relatively high (mean = 3.41). The regression model was statistically significant (F = 47.84, p < 0.001) and explained 58.3% of the variation in commercial agriculture participation. Farm budgeting (B = 0.286, p < 0.001) and gross margin analysis (B = 0.351, p < 0.001) were positively and significantly associated with commercial agriculture participation. The study concluded that strengthening practical extension support for financial planning and profitability assessment could enhance informed and market-oriented farm decision-making among smallholder farmers.