SPATIAL MARKET INTEGRATION OF MAIZE IN ONDO STATE, NIGERIA

Abstract

This study examined the Spatial Market Integration of Maize in Ondo State, Nigeria. The objectives of the study were to, examine the socio-economic characteristics of maize grains marketers in Ondo State; examine sources of information and finance; identify the main problems militating against maize market; determine the degree and extent of market integration among the rural and the urban markets and; identify the price leading market between the rural and the urban markets in the study area. A multistage sampling technique was used for this study. Data were collected from one hundred and twenty (120) respondents but one hundred and fourteen were valid for data analysis. The secondary data on the monthly maize price from rural and urban markets were sourced from Ondo State ADP between 2004- 2013. Descriptive statistics such as mean, frequency distribution, percentage, and charts were used to analyze the socio- economic characteristics and market activities of respondents. Price trend analysis was used to determine rural-urban market price movement of maize and co-integration to determine the long run relationship between rural and urban maize market price. The result revealed that 51.8 % of the respondents were female. The source of information in both rural and the urban areas is cell phone which accounted for 98.2%. This is due to the immediate dissemination of information compare to other source of information. Majority (72%) of respondents sourced their finance from families; this is because there is zero or low interest rate attached. The stationary test indicated that the prices were not stationary at level form. However, at first difference prices became stationary thereby leading to the rejection of the null hypothesis of no stationary in the prices of the maize. The study revealed that both the rural and urban maize markets were integrated. This means that the two markets are strongly linked together in the long-run and market price of maize can be used for long term planning programmes. There is a significant relationship between the markets which signifies that maize market is stable in the study area. The closeness of the markets examined could be a factor for the strong linkage detected among these markets. A clear trend in price leadership, in which the rural market dominated, was established. External (exogenous) shocks from the market and trade network in rural market played significant roles in determining both rural and urban prices while similar external shocks in the urban market had limited influence on the rural market price.