Abstract
The study calculated gross margins of rice (local white), beans (white) and garri (yellow) sellers in Watts, Okurikang and Marian markets in southern Cross River State. Analysis of variance technique was used to test for the statistical differences among the gross margins of each commodity in the three markets. Empirical results revealed positive gross margins for all sellers of the three commodities in the three markets. Comparing gross margins of rice, beans and garri in the three markets reveal that rice and garri sellers had insignificant differences in their gross margins while the mean gross margins for beans sellers showed significant differences between Okurikang market and the other two markets. The results imply perfect information flow for garri and rice markets and hence high probability of perfect competitive market structure for these products. The reverse is the case for beans market. Policy on increased local production of rice, garri and beans were recommended as they will help increase sellers and consumers’ welfare.KEY WORDS: Gross margin, Variance, Market, Commodity, Sellers
Highlights
Beans and garri are among the staple food items produced in Cross River State
A positive gross margin is an indication of profitability potential of any product market
It is obvious that the variances in gross margins exist among sellers of beans, rice and garri in different markets in the zone
Summary
Beans and garri are among the staple food items produced in Cross River State. They are produced by smallholder farmers, who are involved in marketing along with few wholesalers that dominate the marketing business (Okoh, et al 2000). This shows prevalence of marketing inefficiencies and inconsistency in government policy towards agricultural product markets (Okoh et al, 2002 and Akpan, 2007) Due to these inadequacies in the marketing system, asymmetry nature of price information and other human inherent factors, the two components of gross margin would be highly volatile. Following this assertion, it is obvious that the variances in gross margins exist among sellers of beans, rice and garri in different markets in the zone. Students and economic analysts would found the study valuable, as it would be a guide to other related studies and a relevant source of reference
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