ABSTRACT
The study analyzed the spatial and temporal price efficiency of food grain markets in three states of North West Nigeria. The study was carried out in Kano, Kaduna and Katsina states. The study used both primary and secondary data. The primary data were collected by means of structured questionnaire and focus group discussion while the secondary data used covered monthly price for 96 months (2007-2014). The objectives of the study are to describe the socio-economic characteristics of food grains marketers (Wholesalers) in the study area, to determine the marketing margin of food grains marketing, to describe the trend in the price of some selected food grains markets, to estimates inter market price differentials in relation to transport and other transaction costs, to examine the significance of storage cost as a factor in explaining seasonal price variation and describe the constraint to food grains marketing in the study area. Data were analyzed using simple descriptive statistics, marketing margin model, spatial price model and temporal price model. Seven markets known for food grain marketing (Dawanau, Giwa, Ikara, Pambeguwa, Funtua, Dandume and Danja) were purposively selected. Out of these seven markets, Dawanau market was used as the reference market while Giwa, Ikara, Pambeguwa, Funtua, Dan-dume and Danja markets were used as the supplying markets. The choice of Dawanau market as the reference market was based on large supply of food grains to Dawanau market compared to other markets. The findings of the study revealed that all the respondents were male and married and majority (50%) had 21-30 years of marketing experience. The average marketing margin across the markets were Γ’β¦6,286, Γ’β¦15,000, Γ’β¦16,143 and Γ’β¦13,571 for Maize, Mill rice, Cowpea and Soyabean respectively, indicating that food grain marketing was profitable in the study area. The analysis of inter-market price relationships revealed price spread in excess of transfer costs (1570 price spreads out of 2304 is positive) in the study area, implying imperfections and inefficiency in the marketing system. The appearance of unusually high positive price spreads may be attributed to several factors including, lack of adequate market information, sporadic transportation service, traditional buying and selling practices that condition traders to buy and sell grain only in specific markets regardless of prevailing prices, poor road infrastructure, and high market risks. Analysis of temporal price relationships indicated that seasonal price increases commonly exceeded cost of storage for rice (54 out of 56 instances), cowpea (54 out of 56 instances) and soyabean (47 out of 56 instances) which provided the opportunity for marketers to make more than normal profit. Among the constraints identified by the responds in the study area were transportation problems (30%) and inadequate market infrastructure (27%) as well as poor storage facilities (26%). Government, preferably with the involvement of communities, as well as local contractors and technician should embark on planning, construction, rehabilitation and maintenance of rural feeder roads. This will minimize problem faced by the markets and allow for easy flow of food grain from the rural markets to urban markets where the demand is high. The government, with the help of the local farmer and the marketers, should provide for more and better dissemination of market intelligence among farmers and traders to improve knowledge, combat uncertainties concerning supply and demand and decrease the risk associated with inter-market trade. This would help to reduce price uncertainty.
