Determination Of The Integration Of Rice Markets In Enugu State, Nigeria

ABSTRACT

This study was designed to determine the integration of rice markets in Enugu state.

Factors considered include: socio-economic characteristics, existing market structure and

channels, integration of rice markets, structural factors that affect the integration of rice

markets and the problems affecting rice traders in the state. Forty wholesalers and forty

retailers were selected for the study. Primary data and secondary data were collected and

analyzed using descriptive statistics, co-integration analysis and market integration

function. The results showed that majority of the rice traders were between 30 and 49

years with low educational status and marketing experience ranging from 6 to 10 years.

Unit Root Test showed that the variables were stationary at first differencing and were

integrated of the order zero, 1(0). Rice markets in the study area were integrated but the

integration level was low. The Error Correction Model had a coefficient of -0.0061872

which was significant at 1% level and was negative. The Market Integration Function had

R2 (Coefficient of Determination) of 0.78 showing that the independent variables

explained about 78% of the variations in the prices of rice in the rural and urban rice

markets. Transportation cost, toll fee, processing cost and storage cost significantly

affected the level of market integration. The greatest problems encountered by the rice

traders were inadequate finance, (100%), high transportation cost/bad roads and poor

quality of local rice compared to foreign rice. To improve the level of market integration;

transportation, processing, storage, communication and credits facilities should be

provided.

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