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Are Middlemen Really Exploitative? Empirical Evidence from the Sun-Dried Fish Market in Southwest, Nigeria
The animal protein intake in Nigeria is grossly insufficient yet the retail price of fish is rising. Market intermediaries, alleged to charge excessive and unjustifiable marketing margins (MM), are often blamed for this. This study examines this allegation using data from 225 sun-dried fish traders classified into three groups. Data for the study were collected by means of structured questionnaire and participant observation method, from market intermediaries sampled by convenience, in three purposively selected markets. Descriptive statistics, gross and marketing margins models and rate of return to investment, were used to analyze data. Empirical analysis showed that a MM of ₦285.15 which translated to 94.8% of farm-gate price, was charged by intermediaries on a kilogramme of fish getting to the end-users. The factors implicated for this high MM included high facilitating costs and risks involved in the trade. The average sales price per kilogramme of fish was ₦390.88, ₦486.20 and ₦585.84 by wholesalers, sub-wholesalers and retailers, respectively. The profit per kilogramme of fish was ₦74.17, ₦75.82 and ₦79.48 while the returns on capital invested were 23.42%, 18.45% and 15.70%. Distributive margins did not show considerable difference among the intermediaries. The conclusion is that there is no evidence of exploitation of consumers in the sun-dried fish trade. It is suggested that the sub-wholesalers be eliminated from the marketing chain by empowering retailers with more trading loans so as to purchase large quantity of merchandise for resale. This will shorten the chain and occasion a lower delivered price