acta satech Journal of the Life & Physical Sciences Babcock

An Analysis of the Spatial Integration of Groundnut Markets in Nigeria
Bello, Taofik Ayodeji; Balogun, Olubunmi Lawrence and Afodu, Osagie John
Department of Agricultural Economics and Extension, School of Agriculture and Industrial Technology, Babcock University, Ilishan-Remo, Ogun state, Nigeria
June 2015

The study examined the spatial integration of groundnut markets in Nigeria. It covered two producing states of Kano and Niger and four consumption states of Oyo, Lagos, Cross River and Abia States. The monthly retail prices between January, 2008 and December, 2013 obtained from markets in the state capitals were used. Econometric models employed were Unit root test, Cointegration and Ravallion multiple regression. Results indicated that Kano/Abia pair gave index of market concentration (IMC)1=0.2 and IMC2=0.2 indicating a high short-run market integration for the periods. The Kano/Cross River pair gave IMC1=0.4 and IMC2=3.6, indicating high and low short- run market integration in periods one and two respectively. Kano /Lagos pair gave IMC1=0.04 and IMC2=0.1 implying a high short-run market integration for the periods. The Kano /Oyo pair gave IMC1=0.1 and IMC2=0.4 implying high short-run market integration for the periods. Niger /Abia pair gave IMC1=0.3 and IMC2=0.3, hence producing the same result as the Kano/Oyo pair. Niger/Cross River pair gave IMC1=0.01 and IMC2=0.03, implying a high short run market integration for the periods, The remaining pairs of Niger/Lagos (IMC1=0.2 and IMC2=0.9) and Niger/Oyo (IMC1=0.1 and IMC2=0.2) exhibited high short run market integration. These results implied a high marketing efficiency in the groundnut markets. Kano/Oyo, Niger/Abia and Niger/Lagos pairs also have a high degree of marketing efficiency. Kano/Cross River pair lag period one showed a very high degree of market integration, hence high marketing efficiency. There study recommends a nation-wide policy to improve groundnut marketing efficiency, affordability and consumption of groundnut end-users.
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