Economics of yam marketing in Umuahia, Abia state, Nigeria

Abstract

The studies aimed at estimating gross margin and marketing efficiency as well as isolate the factors that determine marketing margin of yam in Abia State. Data for the study were obtained from the response of 64 yam traders using a structured questionnaire and multi stage sampling technique. Data were analyzed using simple descriptive statistics, gross margin and ordinary least square multiple regression estimate. There was a long marketing link of greater than 3 channels with mean marketing margin of 50% in the distribution of yam in the State. The Cobb Douglas model performed best, with cost of changing form, place and adding time utilities accounting for about 76.8% variations in marketing margin. While the cost of place utility increased with the marketing margin, others reduced it, thus, posing a contrast with a priori economic expectation. The profit dominated total cost and returns by 20.3 and 25.5% respectively. A marketing efficiency of 1.25 was estimated, indicating that an increase in the cost of performing marketing service (that is added time, form and place utility) by 100 percent will give a more than proportionate increase of 25 percent in the level of satisfaction derived from a kilogram of yam sold in the market. It is important to address the transportation problem in the state to facilitate the movement of the product and force down the marketing margin. Duplication of roles in the marketing link should be discouraged but more participants can avail themselves the better opportunities available in the system to increase consumer satisfaction and food accessibility.


Keywords:Yam marketing, marketing margin, efficiency and gross margin

IJOTAFS Vol. 1 (1) 2007: pp. 51-56