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CHAPTER ONE INTRODUCTION 1.1 Background to the Study The agricultural sector in Nigeria is the most important non-oil sector of the economy, it is one of the largest employer of labour forces (National Bureau of Statistics, 2010). It plays a significant role in the Nigerian economy with 4.14 percent contribution to the GDP. The benefit it offers to the economy include production of food for consumption, raw material for the industries, foreign exchange earnings and also serves as the major revenue generation for the country before the oil boom (Olajideet al., 2007). After the oil boom the sector has suffered neglect due to government inconsistent policies over the years (Akinlabiet al, 2008). This led to change in emphasis from agriculture and low return in terms of efficiency and performance. According to Food and Agriculture Organization (2012) dichotomy has emanated in the agricultural production sector in the sense that while crop production is characterized by falling prices due to large supplies and stock replenishment in the recent years, cost of livestock production is increasing over the time due to high feed costs and reduced global livestock inventories and production (Food and Agricultural Organization, 2012). Also there seems to be more focus on livestock production due to increase in market demand driven by population growth in developing countries. Research findings on processing and marketing of dairy product has shown that economic efficiency and success of a dairy product largely depend on effective management of operations like milk procurement, processing and marketing of dairy products as well as efficient marketing system (Dhaka et al. ,2007). This minimizes cost of marketing such that consumers are provided with quality product at an affordable price. Dairy development in Nigeria involves various activities such as milk production, importation, processing, marketing and consumption. Despite the unorganized system of the dairy industry, it still represents an important component of the agricultural sector of the economy with great institutional and social implications (Food and Agriculture Organization, 2007). Dairy products are also found mostly where the culture of people favors cattle rearing and where the climatic condition support grass land vegetation which provides the basic food for milk producing animals (Lawalet al.,2012). Imported dairy products are available across the country both in urban and rural outlets. The industries serve as a means of livelihood for most rural pastorals farmers in the sub humid and semi-arid area of the country. Dairy products appear in the market in different forms such as sour milk (Nono) cheese (wara), sour yoghurt (kindirmo), while some are imported in the form of sweetened concentrated milk, butter and cheese. Yoghourt can be made from variety of milk such as cow, buffalo, and goat milk. There are also several types of yoghurt such asflavoured or unflavoured, sweetened and unsweetened, and some with differing level of fat contents. Sour milk is also another dairy product mostly found among Fulani dairy women. It is referred to as ânonoâ usually made from skimmed milk usually sold with âfuraâ a doughty patties of sorghum or millet .Sour milk is mostly produced traditionally by uncontrolled fermentation of milk with lactic acid bacteria which occur naturally in the milk (Peter,2011). This sour milk usually has a distinct smell and coarse texture as a result of fermentation which generated new aroma. Cheese is a concentrated source of milk, produced by coagulation or curdling of milk through starring, heating the curd and draining of the whey. It contributes to animal protein and mineral intake especially in rural communities (Akintundeet al., 2010). It is mostly processed by Fulani women from unpasteurized cow milk, using traditional processing method (Awoyeleet al, 2014). It quality varies with breeds of cow whose milk is being used (Yunusa, 2011). Despite the traditional method employed in the production, the small quantities of cheese produced appear to be a valuable food and source of protein particularly among the Fulani were it serves as a means of livelihood. (Akintundeet al, 2010).   1.2 Problem Statement As the trends of population increase, income growth and urbanization has resulted in tremendous growth in demands for animal protein such as meat, milk and eggs. Consequently the dairy industries have not been able to meet the demand of the country for dairy and dairy products. There have been expressions of fear in terms of food production. Dairy products provide the most important amino acid required for the body. Presently there is a perception that food production may not be enough to feed the teaming population and ensuring maximum food security for all (Food and Agriculture Organization, 2012). Despite Nigeria’s agricultural potentials to ensure food security for all, there is still insufficient food production. Over the time there has been inability to feed on right portion of calories by most household. Animal protein consumption does not commensurate with the recommended intake by nutritionists (Opanaku, 2006). In Africa, Nigeria is one of the countries with the potential of being a major milk producer if well harnessed, but absence of improved method of processing, packaging, storage and marketing of dairy product has made it substantially difficult for internal use as well  as for export. Despite the potential possess by the dairy industries and high consumption pattern among the dairy farmers in the study area only very few study have been conducted in the study area. Most of these researches lay more emphasis on nutritional quality of cheese. Akintunde etal 2010 focus on the analysis and microbiological quality of local cheese. Also,Yunusa (2011) focuses on the quality characteristic of cheese produced from different breeds of cattle. However no study seems to have been carried out research on the profitability and marketing of dairy in the study area. In this light these study intend to identify knowledge gap on profitability and marketing of dairy products in the study area. Therefore the questions this study seeks to answer are: i. What are the socio economics characteristics of dairy processors and marketers in the study area? ii. What are the cost and return of processing and marketing of dairy products? iii. What are the marketing structures and performances of dairy product in the study area? iv. What are the factors militating against the marketing and processing of dairy


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