Analysis of Market Integration and Price Variation in Rice Marketing in Osun State, Nigeria

Abstract

Aims: The aim of the study was to examine market integration and price variation in local rice marketing in Osun State, Nigeria. Specific issues addressed in the study were the determination of existence of co-integration between the rural and urban markets and the leading market between the rural and urban markets for rice. Study Design: Secondary data were used in this study. The data were sourced from Osun State Agricultural Development Programme. The average monthly retail price (/Kg) of local rice covering the period, January, 2000 to December, 2010 (11years) for Osogbo (urban market), Telemu (rural market) and Erin Ijesa (rural market) were used. Place and Duration of Study: Osun State, South-West Nigeria, between March and July 2011. Methodology: Coefficient of variation and price correlation coefficient were used to examine the behavior of local rice market price in urban and rural areas of Osun State. The Augmented Dickey-Fuller (ADF) test was used to investigate stationarity in the pairs of prices while the Johansen co-integration technique was used to determine the existence of co-integration between the markets. Results: Augmented Dicker Fuller procedure (ADF) indicated that all the variables (the individual price series for rice) were not stationary at their respective levels, but stationary