This study investigated the relationship between environmental costs and value-added of rice processing. The broad objective of the study is to investigate the value-added effect of environmental costs of rice processing in Ebonyi State, Nigeria. The specific objectives of the study were to: (1) Ascertain the effect of environmental prevention cost on value-added of rice processing in Ebonyi State; (2) Determine the effect of environmental detection cost on on value-added of rice processing in Ebonyi State; (3) Ascertain the effect of environmental internal failure cost on value-added of rice processing in Ebonyi State; and (4) Evaluate the effect of environmental external failure cost on value-added of rice processing in Ebonyi State. Research questions were stated in line with the research objectives and the study employed descriptive survey research design, and answers were provided by selected rice milling companies in Ebonyi State for the analysis. The population consisted of 1,526 workers from rice milling companies in Abakaliki. The sample size was determined using the Taro Yamani while the Multi-stage sampling technique was used to select the respondents. Questionnaires were administered to the selected participants and descriptive and inferential statistics (regression analysis) were used to analyze the data. Findings revealed that: (1) Environmental protection and prevention had significant effects on value-added costs of rice processing, with prevention and protection costs accounting for 24% and 48.5%, respectively. Environmental internal failure costs explained 44.5% of the variation in value-added costs. On the other hand, environmental external failure costs were found to have no significant effect on value-added cost of rice processing. The study among other things, recommended that there should be investment in research and investment.

Keywords: Relationship, Environmental costs, Value-added, Rice Processing, Ebonyi State.