ABSTRACT
The study examines the spatial distribution of
local market and variations in vegetable prices in Lagos state using Ojo local
government as a case study. Also the way in which effective distribution
channels can be used to increase customer satisfaction and the spatial
interaction in Ojo local Government as a whole. The major source of data
collection was questionnaire administration using stratified-random sampling
techniques. SPSS 17.0 was employed to analyze the data, while chi-square
statistical index were used to test the hypothesis of the research and
correlation was used to test for the variation in prices of vegetable in the
study area.
TABLE OF CONTENTS
CONTENT PAGES
Title
page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract v
Table of
contents vi
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study 1
1.2 Statement of the Problem 5
1.3 Aim and Objectives 6
1.4 Theoretical Foundation 6
1.5 The Study Area 9
1.6 Methodology 12
1.7 Hypothesis 13
1.8 Significance of Study 13
References 14
CHAPTER TWO
2.0 Literature Review /
Conceptual Framework 15
2.1
Introduction 15
2.2 Spatial Marketing Integration 15
2.2.1 The
Concept of Spatial Market Integration 18
2.2.2 Empirical
Estimation Methods 20
2.2.3 A
Fragile Empirical Foundation for Guiding Policy 21
2.3 Agricultural Marketing
Systems in Nigeria 21
2.4
Distribution Channels for Foodstuff
in Nigeria 24
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction 28
3.1. Methodology of Study 28
3.2. Research Design 29
3.3 Sample Procedure 29
3.4 Data Instrument 29
3.5 Analytical Techniques 30
CHAPTER FOUR: ANALYSIS
OF DATA AND PRESENTATION OF RESULT
4.1 Introduction 31
4.2 Socio-Economic
Background of Marketer/ Retailer 31
4.3 Data Analysis and Results on Market
Products 33
4.4 Testing of Hypotheses and Discussion of
Result. 47
CHAPTER FIVE: SUMMARY,
RECOMMENDATION AND CONCLUSION
5.0 Introduction 50
5.1 Summary 50
5.2 Recommendation 51
5.3 Conclusion 51
Bibliography 53
Appendix 57
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
TO THE STUDY
Agricultural market is a key component of the economy where agriculture
forms a resource base of economy. Thus they play a very important role in
economic development of the region. Geographers are mainly concerned with the
spatial distribution of geographical phenomena. In case of marketing centres their
origin, growth, development and spatial distribution are the combined effect of
various factors. Therefore, correlation between number of such phenomena with
area, population, inhabited villages, and net sown area etc, may give more
elastic picture (Gharpure and Pawar 1981).
Agricultural market also helps in increasing social contact and serves
as centre’s of diffusion of innovation and ideas and become focus for political
and other activities. The potentials contribution of agricultural marketing
towards improved rural incomes in developing countries has been a source of
concern to both businessmen and to researchers.
African agriculture
improved dramatically in the 1960s and 1970s, due to strong public investment
in research and extension, combined with market interventions such as
guaranteed prices and subsidized inputs and credit (Stringer and Pingali,
2004). However, these interventions also had their limitations: government
institutions often are not very efficient, and their interventions tend to be
expensive and also tend to reduce the involvement of the private sector.
Over time, government
intervention in agricultural markets began to be seen as a major problem
(Crawford et al., 2003).As a reaction, and strongly encouraged by the donor
community, many countries adopted Structural Adjustment Plans (SAPs), starting
in the 1980s. These SAPs focused on creating a conducive environment for
private sector involvement, by liberalizing markets for agricultural inputs and
outputs, letting market forces determine the prices of these products, and
reduce government’s role (Gisselquist and Grether, 2000; Gisselquist et al.,
2002). The Nigerian government, faced with tight budgets and pressure from
donors liberalized the vegetable marketing, lifting trade and transport
controls, reducing the interventions of the marketing board, and liberalizing
prices (Wangia et al., 2004).
Unfortunately, the liberalization of the agricultural sector in SSA did
little to increase productivity. A synthesis of relevant research finds a
consensus that economic performance of the region has lagged behind that of
developing countries in other regions and that the reforms have fallen short of
their expected outcomes (Kherallah et al., 2002). Often, reforms studied were
only partially implemented and reversal was common. Others argue that, while
liberalization is necessary to accelerate productivity, it is not sufficient.
Proper distribution systems need to be in place, appropriate and efficient
regulatory and legal frameworks need to be in place, and infrastructure,
especially for transport infrastructure, is needed to decrease the transaction
costs (Tripp, 2001; Tripp and Rohrbach, 2001). Informal discussions in the
different agro-ecological zones in Nigeria revealed that farmers complain that
price volatility is a major problem (De Groote et al., 2004).
Vegetable is an important food crop, and also an important cash crop.
But prices fluctuate heavily over time, so farmers face price insecurity that
hampers investment decisions, and over space, although they have little
knowledge on the latter to guide them to market their surplus.
Agricultural marketing is the performance of all business activates
involved in the flow of goods and services from the pint of initial
agricultural production until they are in the hands of the ultimate consumer
(Kohl’s, 1967).
Income inequality between
the rural and urban area draws people away from agricultural activities and
places great stress upon infrastructure and social services in the cities
(Dixie, 1989).
Economists and geographers have recently devoted an increasing interest
in the analysis of the spatial distribution of economic activities with a
special attention towards agglomeration phenomena. Researchers and policy
makers have been particularly fascinated by the observation that the actions of
one firm may have advantages in production and innovation activities for all
firms in the cluster. Moreover, agglomeration economies have been proven to
play a significant role in the analysis of regional development, regional
growth and industrial location. The
necessity of the distributive trade due to geographical separation of producers
and consumers gives rise to the intermediation of distributors referred to as
wholesalers (Adekanye, 1988). A distributive system that guarantees favourable
prices facilitates the exchange of commodities for additional earnings. These
improve the number of buyers and sellers as well as the price.
The study of spatial distribution of local market and variation of
vegetable price is important in determining the market price of vegetables in
different quantity and to determine the large extent of market size
integration.
Without spatial price analysis of the markets, price signals will not be
transmitted from food deficit to food surplus areas, prices will be more
volatile agricultural producers will fail to specialize according to a long
term comparative advantage and the gain from trade will not be realized
(Chirwa,2000). In order to facilitate Agricultural development process, analysis
of spatial distribution of market and pricing variation of vegetable is
considered very pertinent and it is expected that favorable pricing variation
will stimulate more of the product concerned to be produced.
Over the years, food shortages coupled with high prices in Nigeria have
indicated that domestic output has not been able to provide most Nigerian food
at affordable price (Idachaba, 1998). It is there logical to find out the
factors (particularly transportation and marketing information) that are
responsible for the price hike. The link between the producers and the
consumers is the market. Marketing therefore plays a central role in the
development process. However, the marketing system of Nigeria's food and staple
failed to address prices stability from time to time due to information
asymmetry (Orubu, 1994, Mafimesebi, 2002, Dittoh, 1995).
Agricultural market can easily be considered as the barometer of the
Nigerian economy. Agricultural local market plays a vital role not only in the
marketing system of the country but also in rural development. The spatial
distribution of agricultural local market is influenced by physic-cultural,
historical and many other unique qualities prevailing in the study area. In the
study area the agricultural market is unevenly distributed. Even at national
level there is great variation in the distribution of agricultural market.
Therefore, relating spatial distribution of local market to pricing
variation in vegetable marketing will add to the growing literature in
marketing efficiency analysis and again form a baseline for study in fruits and
vegetable marketing. According to the Federal Ministry of Agriculture and
Natural Resource (1974) the foods produced mainly in Nigeria include
Cereals(millet, maize, rice and wheat), Legumes(cowpea, beans and peas), Roots
and Tubers(yams, cocoyam, potatoes and cassava),Fruits(oranges, lime, lemon,
mango, pear, apple and banana).They also include vegetables groundnut,
soya-bean, onions, okra and pepper.
1.2
STATEMENT OF THE PROBLEM
In Nigeria, the federal and the state governments do not give market the
necessary importance it deserves. For sometimes now, food shortages coupled
with high prices in Lagos have indicated that domestic output has not been able
to provide most Nigerians food at affordable prices (Idachaba, 1998).Also, the
issue of land availability has discouraged most marketers. In big cities like
Lagos, Ibadan, there are few lands in the urban centers that are available for
marketing. Spaces are at premium in cities and are accordingly expensive and
difficult to secure. This is due to the rapid development that is occurring in
the cities.
Besides, there are problems of
poor market organization, standardized weights and measures system, lack of or
inadequate credit facilities and dearth of market information, with the result
that when foods are produced, supplies are not always sent to areas with the
highest demand (Adalemo, 1970; Onakomaiya, 1976) on this note, the purpose of
this study is to identify why there is variation in vegetable price and the
spatial distribution of local market.
The major problem confronting this sector is the fact that most
individuals also see agricultural market as a job for the less privileged and
unemployed illiterate individuals. This tends to discourage young and able
bodied men and women from participating in the agricultural market.
1.3 AIM AND OBJECTIVES
The aim of this study is to evaluate the spatial distribution of local
market and variation in vegetable prices in the study area. In order to achieve
this aim, the following objectives will be pursued:
1. Examination of the spatial distribution and size of market in the
study area.
2. Analysis of market price of selected vegetables.
3. Determination of the correlation between market spatial distribution
and vegetable price.
1.4 THEORETICAL FOUNDATION
In geography, an element of location theory concerning the size and
distribution of central place (settlements) within a system is the central
place theory. Central place theory attempts to illustrate how settlements
locate in relation to one another, the amount of market area a central place
can control.
The German geographer (Walter Christaller) introduced central place
theory in his book entitled “central places in southern Germany
(1933)”Encyclopaedia Britannica (2012). The primary purpose of a market town
according to central place theory is the provision of goods and services for
the surrounding market area. Such towns are centrally located and may be called
central places. Market towns that provide more goods and services than other
places are called higher-order central places. Lower-order central places have
small market areas and provide goods and services that are purchased more
frequently than higher-order goods and services. Higher-order places are more
widely distributed and fewer in number than lower-order places.
Walter Christaller’s theory assumes that central [places are distributed
over a uniform plane of constant population density and purchasing power. Movement
across the place is uniformly easy in any direction, transportation costs vary
linearly and consumers act rationally to minimize transportation costs by
visiting the nearest location offering the desired goal or service. The
determining factor in the location of any central place is the threshold which
comprises the smallest market area necessary for the goods and services to be
economically viable. Once a threshold has been established, the central places
will seek to expand its market area until the range is reached. Since threshold
and range defines the market area of a central place, market areas for a group
of central places offering the same order of goods and services will each
extend an equal distance in all direction in circular fashion.
1.4.1
CENTRAL PLACE THEORY DISTRIBUTION PATTERNS
The central place theory has three orders; the first is the marketing
principle and it is shown as K=3 (K is a constant). In this system, market
areas at a certain level of the central place hierarchy are three times bigger
than the next lowest one. The different levels then follow a progression of
threes, meaning that as one moves through the order of places, the number of
the next level goes up three times.
Secondly the transportation principle (K=4) where areas in the central
place hierarchy are four times bigger than the area in the next lowest order.
Finally, the administrative principle (K=7) is the last system. The
variation between the lowest orders and the highest orders increase by a factor
of seven (7). Here, the highest order trade area completely covers that of the
lowest order, meaning that market serves a larger area.
1.4.2
CENTRAL PLACE SIZE AND SPACING
Within the central place system, there are four sizes of markets. A
roadside market is the smallest and is a rural community which is too small to
be considered a farmer’s market. The rank order of central place for market is
•
Roadside
market or stands
•
Farmer’s
market
•
Wholesale
market
•
Retail
market
1.4.2.1ROADSIDE
MARKET: - People like to stop at
roadside market to buy fresh vegetable. Roadside stands can be close to your
home or garden you can sell crops without traveling far, and you can make money
selling only one or two crops. Example fresh-picked sweet corn, tomatoes and
pumpkins sell well. Customers who stop at roadside market like to see colorful
plants, gardens, animals, even clean gardening tools. They also like to see
your crops growing.
1.4.2.2FARMER'S
MARKET: - Many people come to the
farmer's market to buy vegetables, you can sell a lot of vegetables, so you
need to bring enough vegetable to last the day, you have to plan carefully.
This market is popular in busy area, if you want to sell vegetables at a
farmers market, you look for a market that is;
* In a busier area
* Well known by a lot of customer
* Clean and well managed.
1.4.2.3. WHOLESALE MARKET: - If you have a big farm or live far away from customers, you might
want to sell your crops to one place, like a store, restaurants, food
co-operation. This is called wholesale marketing. Selling your crops this way
is faster than other ways of selling. It is also a good choice if you are not
comfortable meeting and talking to a lot of people. Wholesale marketing will
probably not make you as much money as selling directly to customer and you may
not get paid right away, but it is a simple, easy way of selling.
1.4.2.4
RETAIL MARKET: - If you have a big farm
or if you are a new farmer, it is a good idea to sell your crops directly to
customers. This is called direct or retail marketing. Although you can make
more money and get paid faster this way, you will need more time to sell. It is
a good way to sell your crops if you are a good planner, have time and enjoy
meeting and talking to people.
1.5 THE
STUDY AREA
Lagos is geographically positioned on
longitude 2042’-4020’East and Latitude 6022’-6042’
North it is bounded on the west by the republic of Benin, in the North and east
by Ogun State and in the South by the Atlantic ocean. With a population of
over10million people (NPC, 2007). Lagos metropolitan area is the most rapidly
growing region in Nigeria and the second Africa megacity.
Location: The study area is
in Ojo local Government which is located in between Badagry local government
and Amuwo Odofin local government area of Lagos metropolis. On its western
side, the Ologe Lagoon forms the boundary between it and its western neighbour,
Badagry local government. In the eastern side, it is bounded by Surulere local
government, while Etiosa (Apapa area) is its southern Eastern neighbour. The
rest of the Southern end, ends in the atlantic ocean, latitudinally, it is
located between lat.. 4° 55’N and lat.4° 17’N and long. 12° 55’ E and 13° E.
The local government is elongated on east-west basis, it is about 34 kilometers
in length and about 15 kilometers at its west point.
Ojo local government was created in May 1989 under the military
administration of General Ibrahim Gbadamosi Babangida as the president of
Nigeria. The military governor of Lagos state then was Brigadier general Raji Rasaki.
Before the creation of Ojo local government out of the old Badagry local
government, the area was adjudged the most populous in the federation going by
the National Population Census conducted in Nigeria in 1991. The population as
at that time was put at 1.01million. Ojo local government is divided into 2
segments; the riverside and the upland. It is inhabited by mainly the Aworis
who are very accommodative and progressive.
Despite that fact that the indigenous inhabitants are the Aworis, Ojo is
a mini Nigeria inhabited by Igbos, Hausas and other ethnic groups. Ojo today is
a natural habitat of the Igbos who deals in electronics at the popular Alaba
international market. The Alaba international market was created in 1973 within
the local government area and the Hausas who deal in Rams and cows and also in
vegetable agriculture.
Ojo Local Government area as a case study represents an unplanned area
that was rightly outside the Lagos central city and on plain well occupied
land. Ojo local government is occupied by different socio economic group and
also has various locations for farming such as OKOKO, POST SERVICE, LASU, ABULE
ADO, etc which makes the area suitable to analyze as the case study, to
identify the spatial distribution and price variation of vegetable in the
community.
Ojo is fully concentrated in terms of population. The proximity of the
area to the major road (Badagry expressway) which links the country with some
West African countries such as Ghana, Benin and Ivory Coast contributed to the
drastic growth of the study area thereby making the area densely populated.
Figure
1: Map showing Lagos State.
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Study Area
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Other Local Governments
|
Figure 2:
Map showing Lagos State showing Ojo local Government.
1.6
METHODOLOGY
This involves data collection and analysis of data.
Data collection is categorized into two (2) i.e. primary data and secondary
data. Primary data will be obtained through oral interviews, which include
questionnaires, personal observation. One hundred (100) questionnaires are
expected to be administered in the course of the research.
Secondary data collection method includes journals,
magazines, the internet and also the local government office.
Data analysis would be achieved using descriptive
statistics. Due to the practical obligations of this research, a lot of data
interpretation will be subjective. Personal opinion based on field work will be
employed for efficient analysis sampling will be done randomly in the process.
1.7 HYPOTHESIS
H0: The distance between markets does not affect
the prices of vegetable.
H1: The distance between markets affects the prices
of vegetable.
1.8
SIGNIFICANCE OF STUDY
Agricultural local market seems to be a viable intervention for the
urban poor to earn extra income and sell their own product. However, in
Nigeria, policy makers and governments have neglected this veritable sector.
This research will be a key component of the economy where agriculture forms a
resource base of economy, which would increase the level of buying and selling
in the study area. It will further enlighten the state government and the
general public to know the importance of agricultural products and not to see
it as a job for the less privileged.
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