PERFORMANCE OF SESAME MARKETING SYSTEM IN NASARAWA STATE, NIGERIA

ABSTRACT

The study assessed the performance of sesame marketing system and the qualitative and quantitative impact of social capital. For primary data, the sampling procedure involved a systematic random selection of 120 sesame farmers, 40 wholesalers, and 60 retailers of the produce after determining the sampling frame. The farmers were proportionately drawn from the main and minor producing areas. Similarly, the wholesalers and retailers were proportionately selected from 13 rural and urban sesame markets in the three agricultural zones of Nasarawa State. Data was collected using structured questionnaire. Retail prices for 84 months from 13 rural and urban markets of sesame were used as secondary data. The analytical tools employed in the analyses of data were descriptive and inferential statistics, regression and correlation techniques, Gini coefficient, Herfindahl index, marketing margin and principal component analysis. Steps to cointegration analysis involved augmented Dickey-Fuller (ADF) test, Granger causality test and augmented Engle – Granger (AEG) test, while price dynamics and speed of price adjustment were accomplished using error correction models (ECM). Results showed that only 34 pairs of market prices (about 21.8%) were cointegrated and the rate of price adjustment within one month was very high in nearly all the cointegrated pairs. Gini coefficient values among farmers, wholesalers and retailers were 0.686, 0.331 and 0.589, respectively. The Herfindahl index values estimated among farmers, wholesalers and retailers were 0.115, 0.442 and 0.188, respectively. The mean marketing margin value of the consumer price for wholesalers was 15.2% while the mean value for retailers was 11.4% of the consumer price. Mean farmer’s share for wholesalers was  84.8% and that of retailers was 88.6%. The key social capital factors perceived to have impact on the performance of the middlemen were named as (1) social relationships that make direct impact on market performance and (2) social relationships that make indirect impact on market performance. Social capital contributed significantly to market performance in the dissemination of information and accessibility of credit. Social capital variables which contributed significantly to market performance included amount of credit from friends, relatives, social contact and membership of organizations on one hand, and number of market information on the other. Public policy intervention on infrastructural development, farm input supply and accessibility to credit by market participants in the right amount and conditions were recommended. Use of social capital variables relevant to market performance is an avenue to improve the marketing system of sesame in Nasarawa State.