EMPIRICAL ANALYSIS OF PROFITABILITY AND MARKETING EFFICIENCY OF PORK: EVIDENCE FROM ABIA STATE

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ABSTRACT

In this paper, the performance of pork in Umuahia (Nigeria) is evaluated and the opportunities and challenges highlighted. Pork Industry has not experienced significant growth since its inception in the early 1970’s. Sixty meat processors and butchers were randomly selected who are the major markets for local pork. A structured questionnaire was used for eliciting information from them. The study revealed that the efficiency ratio of pork is high, although its major challenge are inadequate storage facilities, demand of other meat, high cost of pork, religious/cultural beliefs, inadequate knowledge on the health benefits of pork to consumers. Based on the study findings, the study recommended the need for government assistance to people retailer both financially and materially through their co-operative societies. 





TABLE OF CONTENT

Title page                                                                                                           i

Declaration                                                                                                         ii

Certification                                                                                                       iii

Dedication                                                                                                          iv

Acknowledgment                                                                                               v

Table of content                                                                                                 vi

List of Tables                                                                                                     ix

Abstract                                                                                                              x

 

CHAPTER ONE

INTRODUCTION

1.1     Background of the study                                                                          1

1.2     Statement of the Problem                                                                         4

1.3     Objective of the Study                                                                             5

1.4     Research Questions                                                                                  5

1.5     Research Hypothesis                                                                                6

1.6     Scope of the Study                                                                                   6

1.7     Significance of the Study                                                                         7

1.8     Definition of Terms                                                                                7                                                

CHAPTER TWO

LITERATURE REVIEW

2.1     Review of Related Literature in Agricultural Marketing                                10

2.2     Historical Review of Pork                                                                       11

2.3     Meaning, Nature and Scope of Marketing                                               15

2.3.1  Nature of Marketing                                                                                 16

2.3.2  Scope of Marketing                                                                                  18

2.3.3  Market Performance                                                                                19

2.3.4  Marketing Efficiency                                                                               20

2.3.5  Determine of Marketing Efficiency                                                         23

2.3.6  Profitability Ratio                                                                                    29

2.3.7  Types of Profitability Ratio                                                                     29

2.4     Agricultural Marketing                                                                            31

2.4.1  History of Nigeria Agriculture                                                                 33

2.4.2  Agricultural and Food Market                                                                 34

2.4.3  Livestock and Meat Processing                                                               37

 

CHAPTER THREE

RESEARCH METHODOLOGY

3.1     Research Design                                                                                      38

3.2     Area of the Study                                                                                    38

3.3     Population of the Study                                                                           39

3.4     Sample Size Determination                                                                     39

3.5     Sources of Data Collection                                                                      40

3.5.1  Primary Data Sources                                                                              40

3.5.2  Secondary Data Sources                                                                          40

3.6     Sample and Sampling Technique                                                            40

3.7     Instrument for Data Collection                                                                41

3.7.1  Questionnaire                                                                                           41

3.7.2  Validity and Reliability                                                                           41

3.8     Method of Data Presentation and Analysis                                             42

3.9     Model Specification                                                                                 42                                    


CHAPTER FOUR

RESULT AND DISCUSSION

4.1     Discussion of Result                                                                                43

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1     Summary of Findings                                                                              51

5.2     Conclusion                                                                                               52

5.3     Recommendation                                                                                     52

Reference

Appendix





 

LIST OF TABLES

 

Table 4.1     Return Rate of Questionnaire                                                        43

Table 4.2     Sex of Respondents                                                                       43

Table 4.3     Age of Respondents                                                                       44

Table  4.4    Marital Status                                                                                44

Table 4.5     Education Qualification                                                                 45

Table 4 .6    Years of Experience                                                                       45

Table 4.7     Start up Capital                                                                              46

Table 4.8     Source of Market                                                                           46

Table 4.9     Major Customer                                                                             47

Table 4.10   Effects of Price Other Meat.                                                          47

Table 4.11   Cost and Return Analysis of Pork Marketing                                48


 


 

 

 

 

 

CHAPTER ONE

INTRODUCTION

1.1     Background of the study

1n the 1970’s Eugene Fama defined an efficient market as one in which prices always fully reflect available information.

The most common type of efficiency referred to in financial market as the allocative efficiency or the efficiency of allocating resources. This includes producing the right goods for the right people at the right price. Bowbrick, P. (1976). Marketing efficiency is considered to be a prerequisite for prompt delivery of goods. Kohls’ (1967).

Agriculture is an important or imperative sector in the economy in Nigeria. Agriculture marketing is therefore the total system of economic activities concerned with the flow of agricultural product from product to the final consumer. Agriculture occupies a dominant position in the economy of Nigeria, though productivity from the sector has not been as high as expected. The factors responsible for the low output however are partly explained by marketing inefficiency. Literature holds that agriculture was the main stay of the Nigeria economy before the 1970s which was the beginning of oil boom.

Agricultural marketing can be defined as the performance of all business activities included in the flow of products from the beginning of agricultural production until they are in the hands of the consumers – “from the farm of the fork” (Kobls R.L. et al 2002).

Agricultural marketing is more than just selling a commodity and receiving payment: it consists of  supply chain which combines capital items such as land and livestock labour, purchase inputs, equipment, transportation, advertising, processing and selling (wholesaling an derailing) (Carter, . A. 2003).

Pork is the culinary name for meat from domestic pig (sus domesticus) it is the most commonly meat consumed world-wide with evidence of pig husbandry dating back o 5000BC. Port is eaten both freshly cooked and preserved (FAO, 2012).

Pig producers in Umuahia are mainly concentrated in big villages where the market and the demand for pork products are high. The major markets for pig farmers are local meat processors and butcheries. There is also a shortage of the local supply of weaner pigs and replacement breeding stock. (Ayo J.O. et al 1998).

In Nigeria, beef production has been the dominant agricultural activity since independence in 1960, contributing annually about 80% of the livestock sector’s Gross Domestic Product (GDP). The government has instituted a number of programmers with the primary objective of promoting other livestock production activities such as pork production. (Blasco A. Gogue 2000).

The viability of a pork enterprise is influences by many factors: the most important being feeding cost, management and market prices. In order to operate an efficient pork enterprise, the producer needs to maintain proper production and financial records. Studies on the economic performance of pork production in Umuahia have never been carried out. Therefore objective of this study was to evaluating productivity using Umuahia as a model.

It is the most popular meal in East and South East Asia and is also very common in the Western World. Pork is known for its fat content and pleasant texture. Although in many countries and religions, such as Judaism, Islam and some Christians the sale of pork is illegal and several restricted (University of Oxford Press 2005).

The adaptable nature & omnivorous diet of this creature made early humans for domesticate it much easier than many other forms of live stock such as cattle. Pigs were mostly used for food, but people also used their hides for shields & shoes, their bone for tools and weapons and their bristles also for tools & weapons (Giuffra et al 2000).

Pigs have other roles within the human economy: their feeding behaviour in search for root churns up the ground and makes it easier to plough; their sensitive nose leads them to truffles, an underground fungus highly by humans; and their omnivorous nature them to eat rubbish, keeping settlement cleaner (Thompson Michael, 2006).

Pork is the most widely eaten meat in the world accounting for about 38% of meat production worldwide, although consumption varies widely from place to place (Mamta Badkar 2013).

In Nigeria, pork is preferred over economic and aesthetic reasons. The pig is easy to feed and is not used for labour. The colours of the meat and fat of pork are regarded as more appetizing, while the taste and smell are described as sweeter and cleaner (Tropp Barbara 1982).

Its myglobin content is lower than that of beef, but much higher than that of chicken. Pork with its fat trimmed is leaner than the meat of most domesticated animals, but is high in cholesterol and saturated fat (Wines Michael 2011).

Market performance may be seen as a representative of market structure and conduct. The performance, characteristics, features of a food market rest on marketing competition, consumer prices and availability of physical marketing facilities (Barau et al 2000).

The performance of staple food marketing system is determined by the structural characteristics of the market and the behavioural characteristics of market participants (Durojauje & showemimo 2008).

The structural characteristics of food market are those features of the market which seem to affect the behaviour and the performance of the market (Anuebunwa 2008). The number and size of the sellers & buyers is a significant feature.

1.2     Statement of the Problem

The role of pork meat as one of the agricultural product in Nigeria cannot be over emphasized. Inadequacy of storage facilities creates problem of the marketing of pork meat from producers to users. Lack of credit facilities to pig farmers. Incidence of pest and diseases as most famers do not have enough capital to purchase pesticides for the pigs. 

No good road also poses as a threat to the transportation of port meat. Land dispute among indigenes of a community is also a major problem.  Location of site causes a major restriction to pork farming. The subsequent free marketing system introduced has allowed for a lot of illegalities in the marketing system as government have little or no influence in the activities.

1.3     Objective of the Study

The broad objective of this study is to analyze the markets and marketing performance of pork production in Umuahia while the specific objectives are to:

1.       Determine the profit and profitability ratio of pork in the study area.

2.       Measure the relationship between marketing efficiency and profit margin   of pork.

3.       Determine the market and marketing efficiency of pork.

1.4     Research Questions

The following research question will guide this study:

1.       What is the profitability ratio of pork in the study area?         

2.       Is there any significant relationship between marketing efficiency and        profit margin of pork?

3.       How efficient is the market and marketing of pork in the study area?

1.5     Research Hypothesis

Ho1: There is no significant profit and profitability ratio that accrued from          marketing of pork.

Ho2: There is no significant and strong relationship between efficiency and        profit

Ho3: The market and marketing of pork is not operationally efficient

1.6     Scope of the Study

Although there many domesticated meat in the Nigerian market, Umuahia precisely this work tends to cover study on pork meat. It covers also its importance and consumer attitude towards it. The study area centers on Umuahia, mostly adult that have interest in pork consumption.

1.7     Significance of the Study

By providing useful empirical information of pork marketing, the study will serve as a guide both to the state government and to corporate bodies in price stabilization policies as well as improvement in marketing and storage facilities.

The creation of efficient marketing system of pork will encourage other primary producers in the study area.

The study will provide guide on facilities and difficulties encountered in initiating improvement on roads, transportation, storage and production of better information useful to research.

The result and recommendation of the study will benefit producers middle men and consumers it will be of importance to researchers and policy, makers

It will also be a reference material for more investigation by students.

The study will enlighten producers on the need of credit facilities from government before expansion and development.

1.8     Definition of Terms                                                                    

For the purpose of clarity of some basic terms above which are used repeatedly on this work, the following conceptual and operational definitions have been adopted.

Market is an actual or normal place where forces of demand and supply operate, and where buyers and sellers interact (directly through intermediaries) to trade goods and services or contracts or instruments, for money or barter. Dacko Scot G. 2008).

Marketing is communicating the value of a product, service or brand to customer for the purchase of promoting or selling that product, services or brand Kotler Philip e al., 2009).

Marketing performance is a term used by marketing professionals to describe the analysis and improvement of the efficiency of marketing (Gerrald Michael 2008). Marketing performance the behaviour of a security or assest in the market place.

Marketing margin:  is the percentage of the final weighted average selling price taken by each stage of the marketing chain. Margins are then used in the analysis of the efficiency of marketing system (Pant KR 1990)

Marketing efficiency:  the efficiency of a marketing system is measured in terms of the level and or costs to the system of the inputs, to achieve a given level and / or quality of outputs efficient marketing optimizes the ratio between inputs and outputs.

 Profitability ratio:  is a measure of profitability which is a way to measure a company performance.

Profitability is simply the capacity to make a profit and profit is what is left over from income earned after have deducted all costs and expenses related to easing the income

Marketing competition: competition is the rivalry between companies selling similar products and services with the goal of achieving revenue, profit and market share growth

Market performance: the p0erformance of a marketing system could be evaluated in terms of how well the agricultural and food marketing system performs what society and market participants expect of it (shepherd A .W 1993).


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