Evaluation of Price Linkages within the Supply Chain of Rice Markets in Cross River State, Nigeria

Abstract

This paper evaluates price linkages within the supply chain of rice markets in Cross River State using weekly prices in three urban markets located in major rice producing areas of the State. The Johansen cointegration test indicated one cointegrating vector both at the 1% and 5% level of significance. The results of the study indicate that the supply chain (farmgate-assembler-wholesaler-retailer) in Cross River is integrated. Though the price changes may vary in the short run between the different levels (farmgate-assembler-wholesaler-retailer), they were expected to move together as a system in the long run. The study recommends that facilitative policies that will enhance the provision of infrastructures such as good roads, market structures and efficient market information network systems should be formulated and implemented. Also, the government should provide price regulatory services to enhance market integration and reduce market exploitation by intermediaries especially in the short run.

Keywords: Cointegration, supply chain, price linkages, rice markets

Journal of Agriculture and Social Research (JASR) Vol. 11, No. 1, 2011