The study examined the economics of groundnut production in Estako West Local Government Area of Edo
State. The objectives of the study were to examine the socio-economic characteristics of groundnut producers,
determine the costs and returns of groundnut production, identify the constraints faced by groundnut farmers
and analyze the socio-economic factors determining groundnut production in the study area. Primary data were
collected with the aid of well-structured questionnaire administered to 60 groundnut farmers using a simple
random sampling technique. The result of the data analysis showed that majority of the farmers were male
(78%) with an average family size of nine persons per family. Also 50% of the respondents acquired formal
education. Results obtained also showed that the gross farm income per hectare was ?(Naira)84,000 (€403.8)
and the net farm income was (Naira) 41,550 (€199.8) per annum respectively. The return per naira invested
was 0.98, indicating that the farm business realized a return of 98 kobo for every (Naira)1.00) invested in
groundnut production. Result obtained from the multiple regression analyses indicated that the Double log
functional form provided the best fit. The coefficients of farm size, farmer’s experience, labour and ages were
positive while family size was negative. The regression model is significant at 1% level as shown by F -
statistic. The R2
value of 0.965 indicated that 96.5% of the variability in groundnut production was accounted
for by the various independent variables used. Finally, the major constraints faced by the farmers were
inadequate finance, unavailability of labour, high incidence of pests and diseases, unfavourable climatic
conditions and high cost of transportation. It is therefore recommended that effort should be channelled towards
ameliorating these constraints.