ANALYSIS OF COCOYAM (Xanthosoma sagittifolium and Colocasia esculenta) MARKETING IN RIVERS STATE, NIGERIA

ABSTRACT

The study examined cocoyam marketing in Rivers State, Nigeria. The specific objectives were to describe the systems of cocoyam marketing in the area; identify the market structure and conduct for cocoyam; determine marketing margin along with the profit efficiencies of cocoyam middlemen; determine the influence of socio-economic attributes of cocoyam marketers on their profit efficiencies; assess the effects of marketing costs and other factors on price of cocoyam at the wholesale and retail levels; determine the influence of cocoyam marketers’ socio-economic attributes on their marketing margins; and identify the problems faced by cocoyam marketers in the area. Data were obtained from a sample of 210 traders. The study employed market concentration indices (concentration ratio (CR), Herfindahi index and Gini coefficients), marketing margin, and descriptive and inferential statistics for the analysis of data. The OLS multiple regression analysis model, maximum likelihood estimation model and Chow test were the inferential statistics used in the study. The results showed that processing of cocoyam in the area did not go beyond cleaning of corms (100%). The market structure indicated a more equal distribution of market share. The more dominant units of measure were heaps (33%) and small bowls (29%). Fixing of prices after deducting the amounts spent on purchases and other costs (60%) and settling for a price after haggling with the buyers (40%) were more preferred pricing methods. Average margins of 30 percent were recorded at wholesale and retail levels while those who combined wholesaling and retailing got margins of 27 percent. The average profit efficiency among all marketers was 32 percent. Educational status and household size were the major socio-economic drivers of profit inefficiency and were significant at p<0.05 and p<0.01 respectively. For the wholesalers, tests of hypotheses showed that stock prices, transportation, Information and Communication Technology (ICT) exerted significant influences while for the retailers, transportation, fees and commissions respectively influenced pricing decisions at p<0.01 and p< 0.05 respectively. The Chow test results gave an F-statistic of 3.0865 which was statistically significant at p<0.01. Lack of standardized units and measures (40%), high storage losses (42.9%) and inadequate market infrastructure (41%) were some of the marketing problems. The study recommended among others that, government should prioritize research into processing and storage technologies in order to have the benefits of value-addition in cocoyam production in Rivers State in particular and Nigeria in general. Additionally, there should be promotion of adult education through literacy and entrepreneurship development training programmes by the government to enhance the educational status of the cocoyam marketers in order for them to contribute to a healthy economy.

CHAPTER ONE

INTRODUCTION

1.1      Background Information

American Marketing Association (2004) gave a definition of marketing which views marketing as “an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” Kotler & Armstrong (1991) defined marketing as a process by which individuals and groups obtained what they needed and wanted by creating and exchanging products and values with others. In a related study, Arene (1998) observed agricultural marketing as involving all those legal, physical and economic services that make it possible for products from producers to get to consumers in the form desired by consumers, at the place desired by the consumers, and at the price agreeable to producers and consumers for effecting a change of ownership/possession. From these definitions, therefore, cocoyam marketing involves the creation of utilities of form, place, time and possession. Creation of these utilities bring to the fore performance of all business activities involved in the flow of cocoyam products and services from the point of initial agricultural production until they are in the hands of consumers (Kohls & Uhl, 2001). It can be reasoned from the foregoing, that cocoyam marketing is an integral part of cocoyam production process which comprises all those business services (transportation, grading and standardization, processing, packaging, financing, risk bearing) that take place from the initial point of production (farm or farm gate) to the ultimate or final consumers. For these to be actualized, stake-holders in the agricultural industry take decisions that are critical in the marketing process.

Olukosi and Isitor (1990) held that within the marketing system prices, allocation of resources, income distribution and capital formation are determined. Therefore, the structure and performance of the marketing system may have some significant effects on the total production of a given commodity, on consumer prices, on adoption of improved technology in production and marketing methods and in fact, upon the growth and development of the entire economy. An efficient and functioning cocoyam marketing system is a pre-condition in avoidance of middlemen exploitation of farmers, encouragement of investment in cocoyam production as an aspect of agricultural diversification and improving food security (FAO, 2005). Dixie (1989) highlighted the potential contribution of agricultural and food marketing towards attempts to improve rural income in developing countries. In an earlier study, Kriesberg (1974) reported that in less developed countries the customers spent in excess of 50 percent of the households’ income on basic food stuff, much of which was inadequate in quality and nutritional content. In contrast, Americans spent approximately 12 percent of their total disposable income on food. In Western Europe, the figure ranged from 15 to 19 percent of disposable income. Nigeria’s agriculture, in economic terms, was the major revenue earner long before the advent of oil rigs, pipe lines and refineries which led to the neglect of agricultural activities. The neglect of agricultural activities, however, is much more pronounced in marketing than in production. According to Osuji (1980), this situation appeared to be aggravated in Nigeria by policy makers who had not considered marketing and distribution of food crops (cocoyam inclusive) as serious bottle- necks to the economic development of the nation. Cocoyam marketing, like some agricultural marketing may not be efficient. Explaining this, Banwo (1982) observed that the bulkiness of cocoyam and its high level of perishability made application of uniform standard for efficient marketing difficult.

It is important to note that a food crop such as cocoyam (Xanthosoma sagittifolium and Colocasia esculenta), a member of the araceae family, is an ancient crop grown throughout the humid tropics for its edible corms, cormels and leaves as well as other traditional uses (Pinto, 2000; Onwueme, 1994; Ekanem & Osuji, 2006). It is an important carbohydrate staple food particularly in the southern and middle belt areas of Nigeria (Asumugha & Mbanaso, 2002). They are also....

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Item Type: Ph.D Material  |  Attribute: 134 pages  |  Chapters: 1-5

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