Analysis of cowpea marketing in three states of North-West, Nigeria: A measure of spatial price efficiency

Abstract

The study analyzed spatial price efficiency in relation to transportation and other transaction costs in three states of North West Nigeria. The study was carried out in Kano, Kaduna and Katsina States. The study used secondary data that covered monthly prices for 96 months (2007-2014). The secondary data were obtained from the Agricultural Development Project Office (ADPs) of the three selected states and National Agricultural Extension and Research Liaison Service (NAERLS), Ahmadu Bello Univeristy, Zaria, Nigeria. The objectives of the study were to examine the trend in cowpea marketing and to estimate inter market price efficiency in relation to transportation and other transaction costs. Data were analyzed using spatial price model. Seven markets known for food grain marketing; Dawanau (in Kano State), Giwa, Ikara, Pambeguwa (in Kaduna State) and Funtua, Dandume and Danja (in Katsina State) were purposively selected. Out of these seven markets, Dawanau market was used as the reference market while Giwa, Ikara, Pambeguwa, Funtua, Dandume 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 from other States of Northern Nigeria. Analysis of inter-market price efficiency revealed price spread in excess of transfer costs in the study area, implying imperfections and inefficiency in the marketing system. The study recommends the intervention of government, with the involvement of community leaders, as well as local contractors to embark on planning, construction, rehabilitation and maintenance of rural infrastructures like rural roads to facilitate easy movement of cowpea grains to the market. This will allow for easy flow of food grains from the rural markets to urban markets where the demand is high and also minimize the price spread among different markets in the study areas. Also, accurate and timely dissemination of price information will assist in reducing price inefficiency in cowpea marketing.