Price transmission and market integration: a test of the central market hypothesis of geographical markets for cassava products in Nigeria

In the wake of the immediate past administration, the Federal Government had demonstrated its concern in making cassava a major industrial raw material and foreign exchange earner. This leads directly to not only measures of expanding cassava production but to improvements in marketing efficiency of the traditional food market of cassava products in the country as well, since inefficiency in the marketing system can lead to unprofitable arbitrage, with attendant welfare losses. With this in mind, this paper investigates price transmission and market integration of cassava products namely chips, chunks, white gari and yellow gari between a central market in Kano and peripheral/rural markets in Taraba, Benue, Nasarawa and Edo States, using standard econometric methods. Precisely, the co-integration methodology was followed. Results show that the markets for all the products were integrated except for chips in Benue, white gari in Nasarawa, yellow gari in Benue, and yellow gari in Edo. Furtherresults indicate that price transmission elasticities range from o.434 to 1.00, indicating full transmission in some cases and not in others, while the speeds of price transmission range from 11.46% to 47.15%, implying that the speed with which cassava product prices are spatially transmitted between the locations is generally low. Improvements in road network and other communication infrastructure will reduce inefficiencies in the traditional cassava product marketing system with attendant gains for producers, middlemen and consumers

Spatial Integration and Price Transmission in Selected Rural and Urban Markets for Cassava Fresh Roots in Nigeria

An advanced time series econometric technique was used to study the interaction between the prices of cassava fresh roots in typical urban-demand and rural-supply markets in Nigeria. The price data cover 95 weeks from week 37 of 2004 to week 28 of 2006. The Augmented Dickey-Fuller (ADF) test was used to investigate stationarity in the prices while Johansen cointegration test procedure, with its associated vector error correction model (VECM) was used to measure the speed of adjustment coefficients that characterized the long-run dynamics of the system. Unit root tests revealed non-stationarity in both urban and rural prices series: in levels the ADF-test statistics were calculated as -1.68 for the rural price and -2.69 for the urban price while in first differences they were -13.98 and -11.91 respectively. Cointegration test revealed that both prices were cointegrated with the trace- and maximum eigenvalue statistics calculated as 18.79 and 16.38, each being statistically significant (p<0.5). The VECM reveals that any positive deviation from the long-run equilibrium would cause the system to respond with decreases in both the rural and urban prices, albeit the rural price responded faster. The impulse response analysis revealed that the rural price was more responsive to shocks emanating from the rural markets. The effect of the shock was calculated as 63.8% using the forecast error variance decompositions. The effect of rural price shock on the urban price appeared to be very infinitesimal at only 6.0% after about 10 periods. The Granger causality test did not reveal any significant causality link between the rural and urban markets prices, suggesting lack of clear trends in price leadership. The finding reveals the lack of predictability and reliability of markets for highly perishable and susceptible agricultural products, like raw cassava roots. There is need to strengthen cassava value chains with greater emphasis on processing and/or direct sale of roots to commercial processors, so as to reduce the volume of transaction of raw roots in the open market, because of the associated price shocks that have perpetually left the rural Nigerian farmer in abject poverty. Keywords: Cassava fresh roots, spatial integration, rural, urban, markets, price leadership, Nigeria

Factors Influencing Farmer-to-Farmer Transfer of an Improved Cowpea Variety in Kano State, Nigeria

Diffusion of improved technologies among small-scale farmers, especially where formal methods and market mechanisms are inefficient, can be enhanced through the participation of farmers. Unfortunately, formal methods of disseminating improved seed in most African countries have not taken advantage of the farmers’ traditional transfer methods. This article deals with the role of farmer-to-farmer transfer and dissemination of an improved cowpea seed variety in Nigeria. Using household and farm level data from 133 respondents, the study adopts a logit model to investigate the determinants of the farmers’ decision to transfer the new seed variety to other farmers.Area of improved cowpea cultivated, yield, market price of seed, use of pesticides and threshing quality were found to be significant variables affecting farmers’ decision to transfer the improved cowpea variety

Efficiency and its determinants among smallholder farming units supplying cassava to commercial starch processors in Nigeria: data envelopment analysis approach

Open Access JournalUnderstanding the resource allocation and use efficiency is essential considering the supportive role of agriculture in the advancement of other productive sectors of the economy. Technical efficiency and its determinants were investigated among smallholder cassava-farming and decision-taking units selected from eight states of the southeast and southwest zones of Nigeria. The states’ selection was purposive, being the states in which the IITA-Nestlé cassava starch project was implemented from 2011-2015. However, a multi-stage random sampling technique was used to select a sample of 96 farming units from the clusters established under the project’s out-growers’ scheme. Primary data were collected from the farming units’ heads by administering the pre-tested household survey instrument. Data were analysed using descriptive statistics, inferential statistics, data envelopment analysis, and multivariate ordinary least square regression techniques. The DEA results revealed that majority (73.9%) of the farming units had efficiency scores less than 1 and as such classified as inefficient. Over 30.2% of the cassava farming units had efficient scores greater than 0.8 including 3.1% with scores that ranged from 0.81- 0.99. Farming units with efficiency scores from 0.6-0.8 constituted 17.7% of the sample while those with scores from 0.4-0.6 consist of 33.3%, which also corresponds to the percentage of farming units with efficiencies scores of less than 0.5. Only three variables: cassava farming experience, fertilizer use and quantity of stems used were statistically significant (p<0.05) in explaining cassava farming efficiency. Of these the influence of farming experience was positive while that of fertilizer use and stems were negative. The finding suggests that the elderly and better experienced farmers combined their versatile previous knowledge of farming with willingness to adopt and use improved farming practices to achieve efficiency. Contrary to expectation, fertilizer and stems were associated with less efficiency, a surprising result that could have resulted from misapplication and wastage of the vital resources. The results highlight the need for appropriate training and technical backstopping for the heads of farming units to enhance their knowledge of the good agricultural practices and improve their levels of efficiency

The effect of quality on gari prices in Nigeria: a hedonic analysis

This article examines the effect of quality attributes on price of gari, a major staple processed from cassava roots in Nigeria. The effect of quality on prices is estimated under the hedonic function by means of logit model. Two hundred key informants were interviewed in 94 rural markets visited and 100 wholesale traders were interviewed in a big urban market in Lagos, a major commercial city in Nigeria. The markets that supply gari to Lagos are located in the southeast and southwest zones of Nigeria. Gari prices from the southeast zone were generally lower than prices from the southwest zone even though rural markets in the southwest zone were closer to the urban market. Efficiency in cassava production and the processing of gari in the southeast zone may be important in determining the magnitude of the marketing margins and the price differences. Different colours (yellow or white) also command different prices in the market. The study reveals that yellow gari commands a better price than white gari. However, certain ethnic groups despite the better nutrition that can be gained when biofortified with vitamin A do not usually prefer yellow gari with coarse texture. There may be need to change producer and consumer preference through sensitisation and capacity building especially in areas were yellow gari is not currently preferred such as in southwest Nigeria. The relative higher price for yellow gari suggests that research on cassava biofortified with β-carotene (which imparts a yellow colour in a natural form) may also help to improve gari prices as well as improve consumer nutrition and shelf life of yellow gari. These results provide further socio-economic justification for research on crop biofortification in developing countries

Factors influencing farmer-to-farmer transfer of an improved cowpea variety in Kano State, Nigeria

Diffusion of improved technologies among small-scale farmers, especially where formal methods and market mechanisms are inefficient, can be enhanced through the participation of farmers. Unfortunately, formal methods of disseminating improved seed in most African countries have not taken advantage of the farmers’ traditional transfer methods. This article deals with the role of farmer-to-farmer transfer and dissemination of an improved cowpea seed variety in Nigeria. Using household and farm level data from 133 respondents, the study adopts a logit model to investigate the determinants of the farmers’ decision to transfer the new seed variety to other farmers.Area of improved cowpea cultivated, yield, market price of seed, use of pesticides and threshing quality were found to be significant variables affecting farmers’ decision to transfer the improved cowpea variety