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EFFECT OF LOCATION ON THE PERFORMANCE OF CATTLE MARKETERS IN IMO AND ABIA STATES, NIGERIA

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Product Category: Projects

Product Code: 00009194

No of Pages: 117

No of Chapters: 1-5

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ABSTRACT

This study assessed the effect of location on the performance of cattle marketers in Imo and Abia state, Nigeria. The specific objectives were to examine the socio-economic characteristics of the cattle marketers, assess the performance of cattle marketing with respect to net return, marketing margin, and marketing efficiency, ascertain the socio-economic factors influencing performance of cattle marketing, examine the structure of cattle marketing, ascertain the effect of location on the performance of cattle marketers and identify the major constraints facing cattle marketing in Imo and Abia states, Nigeria. Primary data used in the study were obtained using well-structured questionnaire administered to 120 cattle marketers who were randomly selected. Data were analyzed using descriptive statistical tools such means, percentages, marketing margin and efficiency model, multiple regression model, Gini Coefficient analysis and Z-statistics analysis. They results indicated a mean age 47 and 43 years for the primary and secondary marketers respectively, implying that majority of the respondents were of middle age and are active and vibrant. Majority of the respondents were males 85% and 87.5%, while 73.8% and 72.5% respectively of the primary and secondary cattle marketers were married. In terms of education, literacy level was more among the secondary cattle marketers 85%, while 38.8% were literate among the primary cattle marketers. The mean household size was 7 and 5 persons, with mean years of marketing experience of 14.45 and 10.53 for primary and secondary cattle marketers respectively. The cost of buying cattle accounted for 95.44% and 90.49% of the Total Variable Cost incurred by the marketers in the primary and secondary cattle markets respectively. Cattle marketing was profitable with a Net return of N358,404 and N191,166 for the primary and secondary cattle marketers respectively. The marketing margin was 12.52% and 20.83% for both sets of marketers. Marketing efficiency of 125% and 137% for cattle marketing indicated that the cattle marketers in the secondary market were more efficient than those who operated in the primary market. The results also showed that market performance was significantly influenced by marital status, household size, marketing experience, location, Labour, and length of keeping. Results from the Gini Coefficient indicated that the primary and secondary market approximated perfect competition with 0.13 and 0.47 for both markets respectively.  Results from the Z-test showed that location influenced performance of the cattle marketers, with the secondary cattle marketers having higher performance than the primary cattle marketers in the study area. Constraints faced by cattle marketers in the study area includes, inadequate capital, poor road networks, lack of shade/ inadequate market structure, fluctuations in demand, inadequate market information, inadequate market security, poor access road and animal mortality. The study concluded that location has an effect on performance of cattle marketers. Strengthening marketing institutions through capacity building for the cattle marketers and handling problems associated with transportation systems in marketing are recommended as steps necessary to enhance the performance of the cattle marketers in the study area.







TABLE OF CONTENTS

 

Title page                                                                                                                                i

Declaration                                                                                                                             ii

Certification                                                                                                                           iii

Dedication                                                                                                                              iv

Acknowledgements                                                                                                                v

Table of Contents                                                                                                                   vi

List of Tables                                                                                                                          ix

List of Figures                                                                                                                         x

Abstract                                                                                                                                  xi

 

CHAPTER 1: INTRODUCTION

1.1      Background to the Study                                                                                        1

1.2      Statement of the Problem                                                                                       5

1.3   Objective of the study                                                                                                7

1.4  Research Hypothesis                                                                                                     7

1.5  Justification of the study                                                                                                8

 

CHAPTER 2: REVIEW OF RELATED LITERATURE

2.1    Conceptual literature                                                                                                     10       

2.1.1 Market and marketing                                                                                                   10

2.1.2 Cattle marketing                                                                                                            15

2.1.3 Roles of marketing                                                                                                        17

2.1.4 Marketing functions and importance                                                                            18

2.1.5 Participants in cattle marketing                                                                         29

2.1.6 Market performance                                                                                                      30

2.1.7 Law of one price                                                                                                            37

2.1.8    Market location                                                                                                          38

2.1.10 Economies of size                                                                                                        39

2.1.11 Market structure                                                                                                          40

2.2 Factors that influence performance of cattle marketers                                                   43

2.3 Problems of Cattle Marketing                                                                                          44

2.4 Theoretical Framework                                                                                                    46

2.4 Analytical framework                                                                                                       47

2.4.1 Regression analysis.                                                                                                      47

2.4.2 Gini coefficient                                                                                                             49

2.5 Empirical Literature review                                                                                              51

2.5.1 Socio economic characteristics                                                                                     51

 

CHAPTER 3: METHODOLOGY

3.1 Study Area                                                                                                                        56

3.2 Sampling Techniques                                                                                                       56

3.3 Method of Data Collection                                                                                               57

3.4. Description of Respondents Based on Location                                                              57

3.4. Method of Data Analysis                                                                                                 58

 

CHAPTER 4: RESULTS AND DISCUSSION

4.1 Socio Economic Characteristics of the Respondents                                                       64

4.1.1 Gender Distributions                                                                                                     65

4.1.2 Age distribution of cattle marketers                                                                              66

4.1.3 Marital Status of cattle marketers                                                                                 67

4.1.4 Level of Education                                                                                                        68

4.1.5 Marketing Experience of cattle marketers                                                                    69

4.1.6 Household Size of the respondents                                                                               70

4.1.7 Source of Capital                                                                                                           71

4.1.8 Access to veterinary services                                                                                        72

4.1.9 Source of labour                                                                                                            73

4.1.10 Source of cattle                                                                                                            74

4.2 Performance of the cattle market                                                                                     75

4.2.2 Distribution respondents based on marketing efficiency                                              77

4.3 Socio-economic factors influencing performance of cattle marketing                                    77

4.4       The structure of cattle market                                                                                     80

4.5      Effect of Location on the performance of cattle marketers                                       82

4.6       Distribution of Respondent Based on Constraints                                                     85

 

CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary                                                                                                                    87

5.2       Conclusion                                                                                                                  89

5.3       Recommendations                                                                                                      89

 

References                                                                                                                              91

 

 

 

 

 


 

LIST OF TABLES


3.1                   Description of Respondents Based on Location                                             58

4.1:                  Distribution of cattle marketers by Gender                                                    65

4.2                   Distribution of cattle marketers based on age                                                66

4.3                   Distribution of cattle marketers based on marital status                                    67

4.4                   Distribution of cattle marketers based on level of Education                                    68

4.5                   Distribution of cattle marketers based on Marketing Experience                  69

4.6                   Distribution of cattle marketers based on Household size                                    70

4.7                   Distribution of cattle marketers based on source of capital                                    71

4.8                   Distribution of cattle marketers based on access to veterinary services      72

4.9   Distribution of cattle marketers based on source of labour                                    73

4.10    Distribution of cattle marketers based on source of cattle                                    74

4.11   Average cost and return analysis of cattle marketing per month.             75

4.12                 Distribution of marketing efficiency of respondents.                                     77

4.13                 Regression estimates of socio-economic characteristics influencing performance of cattle marketing                             78

4.14                 Result of the Gini Coefficient for cattle marketers in primary markets          81

4.15                 Computation of Gini Coefficient for cattle marketers in secondary markets 81

4.16                 Result of Z-statistic for cattle marketers in primary and secondary cattle markets                                          83

4.17                 Distribution of Respondent Based on Constraints                                         85

 

 





LIST OF FIGURES


2.1                               Exchange function                                                                  20

2.2                               Facilitating functions                                                              24

2.3                               Gini Coefficient                                                                      49

 

  

 


 


CHAPTER 1

INTRODUCTION

1.1       BACKGROUND INFORMATION

Cattle Bos indicus belongs to the genus Bovinae. It is among the breed of animals raised by humans for commercial purposes(Alfred, 2015). There are over 250 distinct breeds of cattle with more than 10readily available to producers in Nigeria (Babayemi et al., 2014). In Nigeria, Cattle are one of the oldest reared animals. Cattle have been used for their milk, meat, hair and skin in different parts of the world. In the twentieth century they have gained popularity and recognized are archeologically by the presence and abundance of the animal into regions that were well beyond their normal habitats, by perceived changes in the body size and shape (morphology), by differences in demorgraphic profiles in wild and domestic groups, and by stable isotope recognition of their dependence on year-round fodder (Alizadeh, 2008).

In Nigeria, cattle are among the major protein sources to the populace and also to the world as a whole. Nigeria has animal population of about 72.5million goats, 41.3 million sheep, 19.5 million cattle and 7.1 million pigs (NASS, 2016). The larger proportion of these animal populations are concentrated in the northern region than in the southern region of Nigeria. Specifically, about 90 percent of the country’s cattle population and 70 percent of the sheep and goat populations are concentrated in the northern region of the country. Concentration of Nigeria’s livestock-based in the northern region is most likely to have been influenced by the ecological condition of the region which is characterized by low rainfall duration, lighter sandy soils and longer dry season (Oyenuga 2008).

It has been reflected that not only does the livestock sub-sector provide the much needed animal protein for the ever-growing human population, and also employment opportunities for millions of rural and urban dwellers involved in some form of livestock production and marketing (Asnakew, 2005). Cattle represent a more liquid form of capital than some other livestock and are readily tradable (Sendros, 2003). Despite the large size of the country’s cattle enterprise, the productivity per unit of animal and the contribution of the agricultural sector to the national economy is relatively low (Lawal-Adebowole, 2012). This may be due to different factors such as poor nutrition, prevalence of diseases, poor infrastructures and poor operations of the production and marketing system. Nigeria’s economic recovery programs have necessitated a radical shift from total dependence on government for job to self-employment. Cattle meat is socially well accepted in many parts of Nigeria. It is a huge aspect of livestock production in Nigeria (Domboet al., 2009).  Apart from serving as a source of food for humans, cattle is also important in providing non-food materials such as hides, skin, and wool which are  in turn used as raw materials for manufacturing other valuable products (Oluwafemi et al.,2008).Cattle being an agricultural product is bulky. It therefore exerts various presences on handling, transportation and sales with adverse antecedent effect on market prices. In addition, poor facilities coupled with improper handling and transportation stress lower quality and quantity and cause loses leading to reduced market marketing margin and efficiency and poor returns (Ugwumba, 2013).

Agricultural marketing is concerned with all stages of operations which include movement of commodities (e.g cattle) from the farms to the consumers. It involves the performance of all activities involved in the flow of goods and services from the point of initial production until they are in the hands of ultimate consumers (Adesiyan et al, 2007). The cattle marketing process makes possible the delivery of cattle to the buyers in the form, place and time needed. This process of bringing the cattle from where they are surplus (production/origin areas) to where they are in shortage (consumption/sink markets), a process known as arbitraging, needs to be fully strengthened to enhance the efficiency of the cattle markets; which is vitally important in achieving sustainable and developed agricultural commercialization in the livestock sub-sector in Nigeria (Mafimisebi, 2011, Mafimisebi, 2012). Marketing is an economic activity which stimulates production and if efficiently done, both the producer and consumer get satisfied in the sense that the former gets a sufficiently remunerative price for the product to continue to produce while the latter gets it at an affordable price that stimulates continued consumption (Umar, 2005; Mafimisebi, 2012).

 Studies in cattle marketing are essential to provide vital information on the operations and efficiency of Cattle marketing system for effective research, planning and policy formulation in the livestock sector. There is need to assess the economic complexities associated with the seasonal prices and consumer’s preferences for the commodity (Ehuiet al, 2000). The goal of any nation is geared towards achieving food sufficiency, improvement in living standard and overall economic growth through increase in the level of agricultural production and marketing. Generally, the rate of development of Nigeria’s agricultural marketing has been very low and the marketing of cattle has not performed satisfactorily in the past and particularly in the last decade (Oguntade, 2010)

Consequently, the outcome of enhanced production and marketing of cattle and its products carry the potentials to better the income and nutritional status of households and positively impinge their living standard. Efficient marketing plays an important role in accessibility and affordability of any product to consumers (Mafimisebi, 2011). Marketing of cattle, being one of the sub-units of the livestock industry has made some contributions to Nigerian Gross Domestic Product (GDP) and employment opportunities. It is therefore important that cattle marketing be carried out efficiently for higher productivity and sustainability since there could be efficiency and inefficiency in the marketing system of livestock(Alfredo, 2016).

Efficiency of cattle marketing is achieved when efforts are geared towards decreasing or keeping constant the inputs of marketing, while the outputs of marketing are kept constant or increased. Inefficiency which is the opposite will then be the reverse of this order. (Alfredo, 2013). 

The indexes for market analysis include the following indicators; marketing margin, net return, market competition, consumer prices and availability of physical market facilities (Barau et al., 2012). Nevertheless, profit constitutes a common yardstick against which the performance of any business enterprise is measured and it is an important factor in stimulating commercialization of any venture (Umar, 2005). The level of profit generated depends to a great extent on how efficiently the market for a commodity works (Mafimisebi, 2012). According to Kotler (2008), market performance is the composite end result or the assessment of how well process of marketing is carried out and how successful its aims are accomplished. In other words, it is the economic result that flows from operation of an industry as an aggregate of firms. According to Ikpi (2008), marketing performance is concerned with technological progressiveness, growth orientation of agricultural firms’ efficiency of resource use, product improvement and maximum market service at the least possible cost.

Market structure relates primarily to factors found in every market that are significant internal features of the market setting and that affect the conduct of firms. The characteristics mostly emphasized as strategic aspects of market structure include the relative sizes and number of buyers and sellers, freedom of entry and exit, degree of differentiation, market knowledge and the degree of seller or buyer concentration. These elements measure the extent of deviation from perfectly competitive norm.

Location is the environmental condition around a market which could be urban or rural, (Ezike 2007).The location of the market serves as a basis for classifying markets into mainly Primary markets and secondary markets. Primary markets are mainly located in big towns or taluks. Different types of Agricultural products are pulled here. Transactions take place between producers and traders. While secondary markets are found in district headquarters. Bulk of the arrivals comes from the primary market (Subba et al 2010). Series of studies have investigated the importance of market location in influencing marketing outcomes such as market performance (Owoeye 2001). The correlation between market location and performance is fundamental to market development in many economies and it is economically imperative for it to be given the necessary research attention.

Omoyemi (2013) noted that location of a market to a large extent influences the level of economic activities that are inherent in the market. This maybe in form of degree of competition, volume of sales and returns, cost, growth and the general contribution of the market to the economy.

1.2       PROBLEM STATEMENT

The huge potentials of the livestock sector has been hindered over the years by low attention, poor research, poverty incidences, activities of middlemen, low contribution to GDP amongst other problems (Umeh et al 2011).

According to Chris (2001), there has been noticeable disparity in profits and efficiency of cattle marketers operatingat different market locations. These differences could be traced in terms of scale of operation, infrastructures, information, transportation, credits, scale of operation etc. The influence of location on performance of marketers has not been maximally explored. Woldemichael (2008) observed that the nature of the disparities and its economic implications has not been given much research attention. Also, virtually little has been done with respect to the effect of location on efficiency of marketers. This remains a research challenge.

Onukomiaya (1997) observed that an increase in cattle production is of little consequence for the welfare of either producer or consumer if the distributive channels remain choked and hinder creation of time and place utility. For place and time utility to be created, it is therefore imperative to address location demands by strengthening marketing channels and facilities.

According to Jevenal (2009) cattle marketers are constrained by management related issues, prevalence of diseases, inadequate and ready supply of the most appropriate type of breeding stock, inadequate information, infrastructures and transportation, poor public policy, decreasing size of farm lands to allow for alternative options that can be exploited economically, insecurity and cattle rustling among other problems which hinder profits of marketers operating at different market locations.

Kohls and Uhl (1990) noticed that an efficient marketing system ensures the supply of goods, even those that are seasonal, all year round, with little variation in prices, which can be attributed to arbitraging; a situation which makes both the producers and consumers better off (Nnadozie and Nwaru, 2005).However, Abbot (1993) and Obasi (2008) noted that serious inefficiencies characterized the operation of the marketing system in most developing countries as a result of so many socioeconomic, political and other constraints militating against marketing efficiency.

The marketing of cattle has not received adequate research attention in the study area especially with regards to nature of location, profits and efficiency of the marketing system. The increasing proportion of the population living in the urban centres and the rising levels of income require more efficient channels for processing and distribution of agricultural products (Wolday et al 2005). This also applies to cattle marketing as it is a very important commodity for many households in Nigeria.

The above scenario has necessitated the following research questions;

i.               How is the performance of cattle marketing in terms of efficiency, costs and returns,

ii.              What factors determine the performance of the marketers’,

iii.            What effect does location have on the marketing of cattle.

1.3       OBJECTIVES OF THE STUDY

The broad objective of the study examined the effect of location on the performance of cattle marketing in Abia and Imo States. The specific objectives were to:

      i.         examine the socio-economic characteristics of the cattle marketers in the study area;

     ii.         assess the performance of the marketers with respect to net returns, marketing margin, and marketing efficiency;

   iii.         ascertain the socio-economic factors influencing performance of the cattle marketers in the study area;

  1. describe the structure of the cattle market in the study area;

     v.         ascertain the effect of location on performance of cattle marketers in the study area;

   vi.         identify the major constraints faced by the cattle marketers in the study area.

 

1.4       RESEARCH HYPOTHESIS

H1: Market performance is positively affected by marital status, educational level, marketing experience, location, volume of sales, and negatively influenced by labour, length of keeping in the study area.

H2; There is no significant difference between the performance of cattle marketers in the primary and secondary cattle markets in the study area.

 

1.5       JUSTIFICATION OF THE STUDY

Recently, there has been increase in the level of cattle business especially in south eastern zone of Nigeria. This became necessary due to the increasing demand for Livestock products. The shortage of protein particularly in developing countries like Nigeria has necessitated the investigation into several sources of protein. The shortage of protein has been partly attributed to the phenomenal rise in the price of animal transportation which accounts for a substantial proportion of the cost of marketing, particularly for cattles. This has the effect of escalating the prices of animal products beyond the reach of the average Nigerian (Afolabi, 2002).

Although there are many sources of animal protein, studies carried out by Mafimisebiet al 2014, have shown that products from cattle are the most commonly consumed in Nigeria. Ikpi(1998), noted that between 1970 and 1995, beef contributed over 70.93% of the total meat consumed in Nigeria; consequently the cattle industry is fundamental to the nutritional needs of the country.

Since cattle is a preferred source of protein in the south eastern region, an assessment of the performance of cattle marketing in the study area is very important as this will help to identify the problem areas that deserve attention and make suitable options in line with the findings. It is however obvious from theory that increased production without corresponding increase in marketing what is produced may amount to wastage of resources. The issues of neglecting marketing system was observed by Kassali et al, (2011) who noted that marketing system has been totally neglected as a vital component of economic development.

Njoku and Nweke (2006) agreed that a lot of activities leading to inefficiency have been introduced into the marketing system because the sector was ignored. All these researchers and many authors including Adetunji and Adesiyan (2008) have shown serious concerns for roles marketing can play in economic development. With respect to cattle marketing, the impact of location on performance of the marketers has not been given adequate research attention in the study area.

The study is structured to examine the effect of location on market performance in Imo and Abia State, Nigeria. As the economy grows, agricultural marketing will become more and more complex which is an indication that marketing efficiency will then depend on the managers of the marketing system who themselves must be well informed about what it takes to strengthen efficient marketing system.

Therefore, the result from the study will be beneficial to researchers, marketers, policy makers and governments for the development of the marketing system.

Given the fact that cattle are produced in Northern and neighbouring countries, the study of location becomes relevant. Considering the distance between the producer and consumer, it implies that a lot of marketing functions and activities take place.

 

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