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;
- 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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