Maize Market Integration: A Case Study of Maize Marketing In Ghana

Francis Srofenyoh

doi:10.47127/ijtmr.v1i4.33

Abstract

Agricultural marketing remains a challenge; this is because a large proportion of the population is engaged in a form of small-scale agricultural production and marketing that is characterised by a multitude of constraints and market imperfections. Paramount among the constraints are limited land availability, poor physical and legal infrastructure, high transaction costs and few available and alternative livelihood support systems. For some of these constraints to be removed, there is the need for information flow. Thus, it is believed that, spatial price transmission or market integration measures, the degree to which markets at geographically separated locations share common long-run price or trade information on a homogenous commodity. Using the co-integration approach, the results of the study using either Techiman or Kumasi as the producer markets of maize, the following markets Bolga, Wa, Ho, Tamale, Mankesim, Koforidua, Accra, Cape Coast and Takoradi/Sekond (as consumer markets) shows that there is a long run price transmission relations with the consumer markets. However, Bolgatanga market is the only exception. It is recommended that the Ministry of Food and Agriculture should intensify collection and dissemination of data on maize prices to both consuming markets and producing markets. This can be enhanced by Government establishing market information centres in these markets where both traders and farmers could go for information on the price trend of the commodity in other market(s).Keywords: Co-integration; Marketing; Market Integration; Non-stationarity; stochastic process.

Highlights

Considerable changes have occurred in the macroeconomic policy framework within which the agricultural sector operates, agricultural marketing remains a challenge to the sector; this is because a large proportion of the population is engaged in small-scale farming and marketing that is characterised by a multitude of constraints and market imperfections
Some researchers have claimed that the existence of many intermediaries in the marketing chain results in marketing inefficiencies (Adegeye and Dittoh, 1986), but others have argued that it ensures efficient use of available resources (Wilcock, 1978)
The results show that the consumer market under consideration does have a weak long run price transmission relation with the producer market

Summary

Introduction

Considerable changes have occurred in the macroeconomic policy framework within which the agricultural sector operates, agricultural marketing remains a challenge to the sector; this is because a large proportion of the population is engaged in small-scale farming and marketing that is characterised by a multitude of constraints and market imperfections. A study of the dynamics of markets integration including efficiency should inform policy makers on how long an initial localized scarcity could be expected to persist, given that the necessary transport infrastructure exists. Some researchers have claimed that the existence of many intermediaries in the marketing chain results in marketing inefficiencies (Adegeye and Dittoh, 1986), but others have argued that it ensures efficient use of available resources (Wilcock, 1978). While Miracle (1968) argued that prices are competitive and low at the farm gate and rural retail markets but are uncompetitive and high after the produce leaves local assembly market, Anthonio (1973) was of the view that the issue of competitiveness is not a major determinant of high urban prices. The major cause is high marketing costs resulting largely from poor storage, high transport costs, and high degree of risks

Methods

Results

Conclusion