ABSTRACT
The study analyzed market performance and welfare of oil bean (Pentaclethra macrophylla) seed marketers in Imo state, Nigeria. Specifically, it examined the socio-economic characteristics of oil bean seed marketers in the study area; determined the marketing performance, marketing margin and marketing efficiency; analyzed the level of market integration among markets in the study area, estimated the determinants of marketing efficiency among the marketers in the study area, examined the factors influencing the welfare of the marketers in the study area and identified the constraints militating against oil bean marketing in Imo state. A multi-stage sampling procedure was employed to select the 120 sample size used for the study, although only 114 questionnaires were completely filled and returned. Data analyses were carried out using descriptive analytical tools such as mean, frequencies, and percentages. Inferential statistics such as correlation and multiple regression analysis were also used in the data analysis. The result of the socioeconomic characteristics indicates that majority (60.53%) of the oil bean seed marketers were females with an average age of 45 years. About 60% of the oil bean seed marketers were married with average household size of 4 persons. About 88% of the oil bean seed marketers in the study area were literate with average farming experience of 8 years. Majority of the marketers (78.07%) had access to credit. The average net returns per month realized was N19,293.4 and N32,936.23 for retailers and wholesalers respectively and marketing efficiency were 9.15% and 14.13% for retailers and wholesalers respectively. The Pearson’s Product Moment Correlation (PPMC) shows that price of oil bean seed for source and destination markets were integrated. Multiple regression on determinants of marketing efficiency among the marketers shows that age, household size, education, experience, marital status, distance and cost of oil bean seed purchased were the significant variables affecting marketing efficiency of the oil bean seed marketers in the study area. Multiple regression on determinants of welfare of the marketers shows that access to credit and income of household were positive and significantly influenced welfare of the marketers in the study. Also, the coefficient of age was negative and statistically related to welfare of the marketers in the study. The major constraints affecting Oil Bean marketing were perishability of the product, seasonal price variation and high cost of transportations. The research recommended that rural feeder roads should be rehabilitated by government to enable more cost effective movement of produce.
TABLE OF CONTENTS
Cover page
Title page i
Declaration ii
Certification iii
Dedication iv
Acknowledgments v
Table of
Contents vi
Lists of Tables ix
Lists of Figures x
Abstract xi
CHAPTER
1: INTRODUCTION
1.1 Background
Information 1
1.2 Problem
Statement 4
1.3 Objectives
of the Study 7
1.4 Hypotheses
Statement 7
1.5 Justification of the
Study 8
CHAPTER
2: LITERATURE REVIEW
2.1 Conceptual
review 9
2.1.1 Concept of market and marketing 9
2.1.2 Market
performance 12
2.1.3 Market integration 14
2.1.4 Marketing margin 15
2.1.5 Marketing efficiency 17
2.1.6 Marketing problems 18
2.1.7 Oil bean seed (Pentaclethra
macrophylla) 20
2.1.8 Welfare 22
2.2 Theoretical
review 22
2.2.1 Theory
of profit maximization 22
2.2.2 Utility maximization theory 24
2.3 Empirical
review of related studies 25
2.3.1
Socioeconomic characteristics and
marketing performance 25
2.3.2 Market integration 26
2.3.3
Welfare 31
2.4 Analytical Framework
of the Study 32
CHAPTER 3: RESEARCH METHODOLOGY
3.1 The study area 35
3.2 Sampling technique 36
3.3 Data
collection 36
3.4 Method
of data analysis 37
CHAPTER 4: RESULTS AND DISCUSSION
4.1 Socio economic characteristics of the
respondents 41
4.1.1 Gender distribution of the respondents 41
4.1.2 Age distribution of the oil bean seed
marketers 42
4.1.3 Marital status of the respondents 43
4.1.4 Household size of the respondents 44
4.1.5 Educational level of the respondents 45
4.1.6 Marketing experience 46
4.1.7 Access to credit 47
4.2 Net
returns analysis, marketing margin and marketing efficiency
index 48
4.2.1 Net returns of oil bean seed marketers in
Imo State 48
4.2.2 Marketing margin and marketing efficiency of
oil bean seed marketers in
Imo State 49
4.3 Level of
market integration among markets in the study area 51
4.4 Determinants of marketing efficiency
among the marketers in the
study area 54
4.5 Welfare status and factors influencing
the welfare of the marketers 58
4.5.1 Estimation of per capita household
expenditure 58
4.5.2
Factors
influencing the welfare of the marketers 59
4.6 Constraints
militating against oil bean seed marketing in Imo State 61
CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 63
5.2 Conclusion 64
5.3 Recommendations 64
References
LIST OF
TABLES
4.1 Distribution of
respondents according to gender 41
4.2 Distribution
of the oil bean seed marketers according to age 42
4.3 Distribution
of the oil bean seed marketers according to their
marital status 43
4.4 Distribution
of the oil bean seed marketers according to household
size in Imo State 44
4.5 Distribution
of respondents by educational level 45
4.6 Distribution
of respondents based on marketing experience 46
4.7 Distribution
of the respondents based on access to credit 47
4.8 Cost
and return analysis from the oil bean seed marketers per month 48
4.9 Marketing margins
and efficiency of oil bean seed marketers in Imo
State 49
4.10 Pearson’s product
moment correlation (PPMC) of level of market
integration
among markets in the study area 51
4.11 Multiple
regression result on factors affecting marketing efficiency
of oil bean seed
marketers 54
4.12: Mean
per capita monthly expenditure of oil bean seed marketers in
Imo State 58
4.13 Multiple
regression result on factors affecting welfare
of oil bean seed
marketers 59
4.14 Distribution
of respondents according to marketing challenges 61
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND
INFORMATION
Oil bean
is a popular tree whose origin can be traced to tropical Africa and can
basically be found in the Southern rainforest zone of West Africa. Its
discovery in Nigeria was around 1937, and it is known in various region of the
country by several names such as Apara
in Yoruba, Ukanain Efik and Ugba/ Ukpaka or osisi ugba or osisi
ukpaka in Igbo (Iwuchukwu and Mbah, 2016). Oil bean produces small reddish
leaves that gradually turn to dark green when it is matured, and can grow to a
height of 21m and about 6m in girth. The fruits are always available at most
periods of the year since it produces a large woody persistent pod that
contains seed. The oil bean seeds are irregular and oval in shape, smooth in
texture with black and hard flat pods (Ebitope, 2014).
The oil
bean (Pentaclethra macrophylla)
is found abundantly in the Southern part of Nigeria where its economic, nutritive
and medicinal values are known and appreciated (Amaechi, 2014). The seeds of
oil bean contain 44% protein, 20 essential amino acids, fatty acids within the
seed oil, as well as many minerals, particularly magnesium, iron, manganese,
copper, phosphorus and calcium, and trace amounts of vitamins (Iwuchukwu and
Mbah, 2016). The oil bean seed is an essential food item for various traditional
ceremonies, and in some instances, it may be used as meat substitute in certain
soups/gravy particularly for the rural poor (Enujiugha and Agbede, 2005). More
so, the oil bean seeds, leaves, stems, barks, trunks and roots are very useful
to the traditional medicine practitioners and are very effective in the
treatment of various ailments ranging from cancer, dermatological disorders to leprosy treatment among others (Iwuchukwu
and Mbah, 2016).
Oil bean
is an important source of economic opportunities and social advancement for
most families in the South Eastern part of Nigeria, this is because it does not
only generate income for the farmers but serves as a source of economic
diversification. The seeds are processed and sold in various local markets and
in most cases, the processed seeds are packaged to various regional markets in
Nigeria (Amaechi, 2014). However, oil bean seeds are highly perishable, and
therefore require an efficient marketing system which will fetch remunerative
prices for dealers. A good marketing system is made up of the functions of
regulation, market, support, and the organizations that perform them. It
facilitates buying and selling, storage, transport and processing,
standardization of weights and measures, safety and inspection, financing, risk
bearing, and market intelligence (Gray, 2014). However, marketing performance
is the measure of effectiveness and efficiency of an organization’s marketing
activities with regard to market-related goals, such as revenues, growth, and
market share (Homburg, 2007). Agricultural marketing performance cuts across
the assessment of the agricultural commodity market in terms of the norms of
marketing efficiency, progressiveness and innovation, employment generation
etc. (Arene, 1998).
Improving agricultural market performance is the heart
of the economic growth and the means to meeting the welfare needs of oil bean
dealers in Nigeria. Marketing of agricultural food products like oil bean
necessitates special attention from the government due to the unique
characteristics of the sector from both supply and demand sides (Adegeye and
Dittoh, 1985). Government therefore has a crucial role in keeping the operation
of markets orderly by using its key instruments. One of the ways to enhance
performance of oil bean seed market is regulation via public authority to
assure the fair and proper conduct of each player. Moreover, state has a
responsibility in the operations of oil bean seed market by providing basic
market infrastructure for oil bean seed dealers. The state also has the
responsibility of ensuring the creation of an integrated agricultural marketing
system and as well as the development of agricultural and food market
institutions such as regulatory authorities, state-owned economic enterprises,
licensed warehousing companies, industry associations, and commodity exchange
platforms that will ensure smooth operation of oil bean seed marketing
(Iwuchukwu and Mbah, 2016).
Market
integration is the inter-relationship between prices in different markets
(Norman, 1975). It occurs when prices among different market locations or
related goods follow similar patterns over a long period of time. Groups of
goods often move proportionally to each other and when this relation is very
clear among different markets it is said that the markets are integrated. Thus,
market integration explains how much different markets are related to each
other. An integrated agricultural market could
impact on the economic opportunities and welfare status of oil bean seed
dealers as it ensures that prices established at various locations are
spatially interrelated by transaction and transfer costs and inter-temporally
by storage costs (Acharya, 2003). More so, market integration is important
because it enhances economic growth and welfare status of oil bean seed
dealers, induces structural change, alters locations of economic activity, and
bears on the viability of oil bean seed enterprises (Vollrath and Hallahan,
2006). It is an important indicator of overall performance of oil bean seed
market in that information on spatial market integration provides indications
of competitiveness, effectiveness of arbitrage and efficiency of pricing
(Sexton et al., 1991). Also,
consumers of oil bean seed may benefit from market integration because they can
purchase the product at the lowest possible prices and this could enhance their
welfare status.
Welfare refers to the economic well-being
of an individual, group, or economy. For individuals, it is conceptualized by a
utility function. For groups, including countries and the world, it is a
complex concept, since individuals fare differently. In trade theory, an
improvement in welfare is often inferred from an increase in income. Welfare,
though not observable, could be said to represent the people’s standard of
living. In theory, household consumption expenditure on food and education is
used as proxy for welfare indicator (Quartey, 2006). Welfare in this context
has to do with how the structure of markets and the allocation of goods and
resources determine the overall wellbeing of society. It seeks to evaluate the
costs and benefits of market changes to the economy.
1.2 PROBLEM
STATEMENT
The
agricultural marketing system plays an important role in ensuring that the
interest of producers and consumers in the market are protected (Acharya,
2003). However, majority of agricultural markets in Nigeria and in the study
area are inefficient and poorly integrated due to absence of infrastructural
facilities, inconsistency in government policies, imbalances of inter-regional
production, risk and uncertainties among others (Marva, 2017). Absence of market
infrastructure such as transportation, communication, credit and other
important market facilities could lead to market disintegration and poor
marketing performance in the study area. Also, the presence of inconsistent
government policies such as trade tightening, poor credit and transportation
regulation could affect the marketing system in the study area. Imbalances of
inter-regional production of African oil bean seed in the area emanating from
marketing disintegration could result in market surplus (exporting only to
other market) and deficit market (importing only to other markets). Uncertainties
such as flood, draught and illness could also affect African oil bean seed production
and this could result in malnutrition, poverty and low welfare status in the
study area.
More
so, one of the causes of disintegration between vertically linked markets is
the existence of uncompetitive behavior among intermediate traders, especially
if the intermediary trader is in a concentrated market (Kovalenko, 2016). The intermediary
trader will try to maintain the profit level and will not raise/lower the price
according to the actual price signal. So the intermediary trader will react
faster to the price increase compared to the price decline. This condition
causes competition restraint on the distribution line and the imperfect price
transmission between producer and consumer and at the end the farmers’ and the
consumers’ markets become unintegrated. Similarly, the uncompetitive market
causes the inexistence of price transmission between two different market
levels in the marketing chain. For agricultural commodity like oil bean seed,
the imperfect competition in marketing chain could open opportunity for the
middleman to abuse the market power.
Globally,
food crisis is one major problem confronting mankind in recent times (Osondu et al., 2015). Ekekwe (2014) asserted
that sufficient attention is not being given by policy makers to all sources of
indigenous dishes (foods) and this he says is responsible for the food
insecurity status of developing countries. Oil bean seeds are necessary to the human diet because
of this nutritive value. It is also an important source of economic
opportunities and social advancement for farmers. However, there is little
information on the level of acceptance of the product and the level of integration
of urban and rural markets for oil bean seed in the study area. More
so, the quantity of oil bean seeds available in the market is a function of the
season. This trend results in a market situation whereby demand for fermented oil
bean seeds exceeds its supply. Thus, this limits its potential as a cheap
source of high quality protein. Alteration of land use in the area in response
to increasing population and urbanization has endangered food trees including oil
bean trees as they are cut down to create spaces for human settlements and this
trend might also limit the supply of oil
bean in the market.
Marketing of oil bean seed could be problematic for the
rural poor farmers who have been plying poor feeder roads. Poor access road
makes movement of oil bean seed difficult for dealers especially during rainy
season and this could affect their welfare status. Onukomaya
(1995) observed that an increase in agricultural production was of little
consequence for the welfare of either producers or consumers if the
distributive channels remained choked and hindered. For the creation of time
and place utility, it is therefore imperative to match adequate promotion with
marketing to locate where there are surpluses and adjust them to shortages.
Oyewole and Philip (2006) stated that the inability to analyze effectively the
cost benefit returns from the activity coupled with poor access to productive
inputs stagnated expansion and investment opportunities.
At
present many studies (Odoemelam, 2005; Onwuliri et al., 2004; Ogueke et
al., 2010; Egonu and Njoku, 2006; Enujiugha, 2003; Enujiugha and Agbade,
2005 and Osagie-Eweka and Alaiya, 2013) have been done on oil bean seed.
However, all these studies focused on chemical and proximate composition of the
oil bean seed. Little or no study on economic returns associated with its
marketing in Nigeria is at present available in the literature. It therefore
appears that this important tree crop had been neglected. Hence, this study
aims at bridging the present research gap and providing vista on the economic
role this neglected tree crop species play in the welfare status of oil bean
seed dealers (Osondu et al., 2015).
1.3 OBJECTIVES OF
THE STUDY
The broad
objective of this study was to analyze market performance and welfare of oil
bean (Pentaclethra macrophylla) seed marketers
in Imo State, Nigeria.
The specific
objectives were to;
i.
examine the socio-economic characteristics of oil bean seed marketers
in the study area.
ii.
determine the marketing
performance using net returns analysis, marketing margin and marketing
efficiency index.
iii.
analyze the level of
market integration among markets in the study area.
iv.
estimate the determinants
of marketing efficiency among the marketers in the study area.
v.
examine the factors
influencing the welfare of the marketers in the study area
vi.
identify the constraints
militating against oil bean seed marketing in Imo State.
1.4 HYPOTHESES
STATEMENT
H01: Price movements in the markets across the study area are not integrated
H02: Age, household size, marital status, distance,
cost of transportation, cost of oil bean purchase are negatively
related to marketing efficiency while, educational qualification, marketing
experience are negatively
related to marketing efficiency
H03: Household size, access to credit, selling prices, market charges and household income are positively related to the welfare of the marketers while, gender and age are negatively
related to the welfare of the marketers
1.5 JUSTIFICATION OF THE STUDY
The promotion of agricultural commodity markets through the
formulation of appropriate policies, provision of market infrastructure and
monitoring of the marketing process are prerequisite for the enhancement of
marketing performance as well as in meeting the welfare needs of participants (Otieno
et al., 2009). However, knowledge of
marketing performance and welfare status of oil bean marketers is relevant to
the success of market liberalization or price stabilization policies. In the light of the above, this study hopes to bring to limelight
the level of market performance and the welfare of oil bean (Pentraclethra macrophylla) seed marketers
in Imo State. The findings and recommendations from this study are hoped to be
of immense significant to oil bean seed dealers by helping them to realize the
economic implication of oil bean seed marketing on their welfare status. The
study would not just aid strong assertiveness in analyzing market performance
and the welfare of oil bean (Pentraclethra
macrophylla) seed marketers in Imo State by government and relevant
stakeholders, but hopes to help in the formulation of policies would develop
the marketing system in the study area. The study is hoped to contribute to
already existing knowledge and would go a long way in helping future researches
and student who have interest in carrying out related studies.
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