Economic Analysis of Grain Marketing in Ogun State, Nigeria.

Abstract

The persistent food insecurity problem in Nigeria demands a multi – prong approach to seek solution to it.
Considerable efforts have been put into increasing production through many policies, projects and
programmes adopted by past governments in Nigeria. However, to ensure that this increase in output is
beneficial to the populace, there is the need for effective marketing and good value chain development. This
study is on economic analysis of grain marketing in some major grain markets in Ogun State and the study
aims at determining the efficiency of grain marketing in the study area and estimating the gross margin to the
marketers. Survey method was used in selecting entrepreneurs engaged in marketing maize, rice and cowpea
in 6 selected grain markets of 3 towns of the State namely; Abeokuta, Shagamu and Ijebu Ode. Two major
grain markets were selected from each town and thereafter 20 respondents were randomly selected from each
market. Primary data were then collected from a total of 120 respondents and were used for the study. The data
collected were analyzed using descriptive statistics and budgetary technique. The study revealed that the three
different investments analyzed were profitable at different levels. However, investment in cowpea was the
most profitable of all the enterprises with a mean gross margin of 8,915.00 per month. The marketing
margin was also highest for cowpea marketers with a mean marketing margin of 1,300.00 per 100kg of
cowpea. The mean marketing margin for maize which stood at 850.00 for an 100kg bag of maize was higher
than the least value of margin recorded for polished rice marketers at 500.00 per 50kg bag of rice. However,
polished rice was most efficiently marketed of all the three grain types with a mean marketing efficiency level
of 1.08. For cowpea and maize, the mean marketing efficiency levels were 0.81 and 0.42 respectively.
Procurement cost of grains made up the lion share of the mean total marketing cost for all the three grain types.
Transportation cost was also relatively high This is as a result of the series of bottlenecks encountererd by
marketers in transporting their grains to the market. To improve grain marketing in the study area it is
recommended that credit facilities should be made available to grain marketers. Adequate transportation
facilities in terms of good roads and functional vehicles should be provided by government, private
individuals and cooperative groups.