SPATIAL DISTRIBUTION OF LOCAL MARKET AND VARIATIONS IN PRICES OF VEGETABLE IN LAGOS STATE
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SPATIAL DISTRIBUTION OF LOCAL MARKET AND VARIATIONS IN PRICES OF VEGETABLE IN LAGOS STATE
ABSTRACT
The study looks at the spatial distribution of local markets and differences in vegetable pricing in Lagos state, using Ojo local government as a case study.
The study also looked at how effective distribution channels may be used to improve customer satisfaction and spatial interaction in the Ojo local government as a whole.
The primary data gathering method was questionnaire administration using stratified-random sampling procedures. SPSS 17.0 was used to analyse the data,
while the chi-square statistical index was used to test the hypothesis of the research, and correlation was utilised to test for the variance in vegetable prices in the study area.
INTRODUCTION
1.1 Background of the Study
The agricultural market is an important part of the economy because agriculture serves as the economy’s resource foundation. As a result, they have a significant impact on the region’s economic development. Geographers primarily study the spatial distribution of geographical phenomena.
In the case of marketing centres, their genesis, growth, development, and spatial dispersion are the result of a variety of variables. As a result, a link between the number of such phenomena and area, population, inhabited villages, net sown area, and other variables may provide a more elastic picture (Gharpure and Pawar 1981).
The agricultural market also promotes social contact by serving as a hub for the dissemination of innovation and ideas, as well as a focal point for political and other activity. Both businesspeople and experts have expressed worry about agricultural marketing’s potential contribution to improved rural incomes in developing countries.
African agriculture improved considerably throughout the 1960s and 1970s, thanks to significant governmental investment in research and extension, as well as market interventions such as guaranteed pricing, subsidised inputs,
and credit (Stringer and Pingali, 2004). However, these initiatives had limitations: government institutions are generally inefficient, and their interventions are costly, reducing private sector involvement.
Over time, government interference in agricultural markets became seen as a serious issue (Crawford et al., 2003). As a result, and with strong encouragement from the donor community, several nations implemented Structural Adjustment Plans (SAPs) beginning in the 1980s.
These SAPs aimed to create a favourable climate for private sector participation by liberalising markets for agricultural inputs and outputs, allowing market forces to set product prices, and reducing government intervention (Gisselquist and Grether, 2000; Gisselquist et al. 2002).
Faced with low finances and donor pressure, the Nigerian government liberalised vegetable marketing by easing trade and transportation constraints, reducing marketing board actions, and liberalising prices (Wangia et al., 2004).
Unfortunately, agriculture sector liberalisation in sub-Saharan Africa achieved nothing to boost production. According to a synthesis of relevant research, the region’s economic performance has lagged behind that of developing countries in other regions, and reforms have failed to deliver the promised results.
Reforms studied were frequently only partially implemented, with reversals usual. Others contend that, while liberalisation is required for increasing productivity, it is insufficient.
Proper distribution networks, proper and efficient regulatory and legal frameworks, and infrastructure, particularly transportation infrastructure, are required to reduce transaction costs. Informal interviews in Nigeria’s several agro-ecological zones found that farmers complain about price instability (De Groote et al., 2004).
Vegetables are an essential food and cash crop. However, prices fluctuate significantly over time, causing farmers to confront price insecurity that impedes investment decisions, as well as over space, while having little knowledge of the latter to aid them in marketing their excess.
Agricultural marketing refers to all business activities engaged in the flow of commodities and services from the point of beginning agricultural production until they reach the ultimate consumer (Kohl, 1967).
Income imbalance between rural and urban areas drives individuals away from agricultural pursuits and puts a strain on city infrastructure and social services (Dixie, 1989).
Economists and geographers have recently shown an increased interest in the study of the spatial distribution of economic activity, with a focus on agglomeration phenomena.
The discovery that the actions of one firm can benefit all firms in the cluster in terms of production and innovation has piqued the interest of researchers and policymakers.
Furthermore, agglomeration economies have been shown to play an important part in the study of regional development, growth, and industrial locations. Because of the geographical separation between producers and consumers, distributive trade necessitates the intermediary role of distributors known as wholesalers (Adekanye, 1988).
A distributive system that assures favourable prices encourages the trade of goods for more income. These increase the number of customers and sellers, as well as the price.
The study of the spatial distribution of the local market and the variation of vegetable prices is significant in determining the market price of vegetables in various quantities as well as the level of market size integration.
Without spatial price analysis of markets, price signals will not be transmitted from food deficit to food surplus areas, prices will be more volatile, agricultural producers will fail to specialise based on long-term comparative advantage, and trade gains will be lost (Chirwa, 2000).
In order to aid the agricultural growth process, an analysis of the spatial distribution of the market and pricing variation of vegetables is regarded highly important, and it is predicted that favourable pricing variation will encourage more of the product to be produced.
Food shortages and high costs in Nigeria have shown that domestic output has been insufficient to provide most Nigerians with cheap food (Idachaba, 1998). It is logical to identify the variables (especially transportation and marketing information) that are causing the price increase. The market connects producers and customers.
Marketing thus plays an important role in the development process. However, the Nigerian food and commodity marketing system has occasionally failed to address price stability due to information asymmetry (Orubu, 1994; Mafimesebi, 2002; Dittoh, 1995).
The agricultural market can easily be viewed as a barometer of the Nigerian economy. The agricultural local market is critical to both the country’s marketing system and rural development.
The spatial distribution of the agricultural local market is impacted by the physical-cultural, historical, and other distinctive characteristics of the research area. In the research area, the agricultural market is unequally dispersed. Even at the national level, there is significant variance in the distribution of agricultural markets.
As a result, linking the spatial distribution of local markets to pricing variance in vegetable marketing will contribute to the growing literature on marketing efficiency analysis and serve as a foundation for future research in fruits and vegetable marketing.
According to the Federal Ministry of Agriculture and Natural Resources (1974), the most common foods produced in Nigeria are cereals (millet, maize, rice, and wheat), legumes (cowpeas, beans, and peas),
roots and tubers (yams, cocoyam, potatoes, and cassava), and fruits (oranges, lime, lemon, mango, pear, apple, and banana). Vegetables include groundnut, soya bean, onions, okra, and pepper.
1.2 Statement of the Problem
In Nigeria, the federal and state governments do not give the market the attention it needs. For some years now, food shortages combined with high prices in Lagos have suggested that domestic output has been insufficient to offer most Nigerians with affordable food (Idachaba, 1998).
Additionally, the issue of land availability has discouraged most retailers. In large cities such as Lagos and Ibadan, there are few urban areas accessible for commercialization. Cities have a high demand for space, which makes it expensive and difficult to obtain. This is owing to the tremendous development taking place in the cities.
Furthermore, there are issues with poor market organisation, a standardised weights and measures system, a lack of or insufficient credit facilities, and a lack of market information, which means that when foods are produced,
supplies are not always sent to areas with the highest demand (Adalemo, 1970; Onakomaiya, 1976). On that note, the purpose of this study is to determine why there is variation in vegetable prices and the spatial distribution of the local market.
The main issue confronting this industry is that most people perceive the agriculture market as a job for the less fortunate and unemployed illiterates. This discourages young and able-bodied men and women from participating in the agricultural market.
1.3 Aim and Objectives
The purpose of this research is to assess the spatial distribution of the local market and the variation in vegetable prices within the study area. To attain this aim, the following objectives will be pursued:
1. An examination of the spatial distribution and market size in the studied area.
2. Market pricing analysis for selected veggies.
3. Determine the relationship between market spatial dispersion and vegetable pricing.
1.4 Theoretical foundation
Central place theory is a branch of location theory that studies the size and distribution of central places (settlements) within a system. Central place theory seeks to demonstrate how communities are located in relation to one another and how much market area a central place can govern.
Walter Christaller, a German geographer, proposed central place theory in his work “central places in southern Germany (1933)” (Encyclopaedia Britannica 2012). According to central place theory, a market town’s principal purpose is to provide goods and services to the surrounding market area.
These settlements are centrally positioned and might be referred to as central places. Market towns that offer more goods and services than others are referred to as higher-order central places.
Lower-order central places have tiny market areas and provide items and services that are more popular than higher-order goods and services. Higher-order places are more evenly distributed and smaller in number than lower-order places.
According to Walter Christaller’s thesis, central sites are spread uniformly throughout a plane with constant population density and purchasing power. Movement is uniformly easy in all directions, transportation costs vary linearly, and consumers act rationally to save transportation costs by visiting the nearest site that provides the desired objective or service.
The position of any central point is determined by the threshold, which is the smallest market area required for products and services to be economically viable. Once a threshold is established, the central places will attempt to increase their market area until the range is met.
Because a central place’s market area is defined by its threshold and range, market areas for a collection of central locations that offer the same order of goods and services will extend an equal distance in all directions in a circular pattern.
1.4.1 Central Place Theory Distribution Patterns
The central place theory includes three orders. The first is the marketing principle, represented by K=3 (K is a constant). In this approach, market spaces at a certain level of the central place hierarchy are three times larger than the next lowest one.
The levels then continue in threes, which means that when one moves through the sequence of places, the number of the next level increases three times.
Second, the transportation principle (K=4) states that regions in the central place hierarchy are four times larger than those in the next lowest order.
Finally, the administrative principle (K=7) constitutes the final system. The variation between the lowest and highest orders increases by a factor of seven. Here, the highest order trade region entirely overlaps the lowest order, indicating that the market serves a bigger area.
1.4.2 CENTRAL PLACE SIZE AND SPACE
The central place system includes four market sizes. A roadside market is the smallest, located in a rural hamlet that is too tiny to be termed a farmer’s market. The rank order of the centre location for market is
• Roadside markets or stands.
• Farmers market.
• Wholesale Market
• Retail market.
1.4.2.1ROADSIDE MARKET: – People enjoy stopping at roadside markets to buy fresh vegetables. Roadside stands can be located close to your home or garden, allowing you to sell crops without travelling far and making money on just one or two crops.
For example, fresh sweet corn, tomatoes and pumpkins are in high demand. Customers who stop at the roadside market enjoy seeing colourful plants, gardens, animals, and even clean gardening tools. They also enjoy seeing your crops thrive.
1.4.2.2FARMER’S MARKET: – Many people visit the farmer’s market to buy veggies; you can sell a lot of produce, so bring enough to last the day; you must prepare properly. This market is popular in a busy neighbourhood; if you want to sell veggies at a farmers market, you opt for one that is
* In a busier area.
* Well-known by many customers.
* Clean and well-managed.
1.4.2.3. WHOLESALE MARKET: – If you own a large farm or live far away from clients, you may wish to sell your crops to a single location, such as a shop, restaurant, or food cooperative. This is known as wholesale marketing.
Selling your produce this manner is faster than other methods of selling. It is also a wonderful option if you are not comfortable meeting and conversing with large groups of people.
Wholesale marketing is unlikely to bring you as much money as selling directly to customers, and you may not be paid immediately away, but it is a simple and straightforward approach to sell.
1.4.2.4 RETAIL MARKET: – If you have a large farm or are a novice farmer, it is best to sell your crops directly to consumers. This is known as direct or retail marketing.
Although this method allows you to generate more money and get paid faster, it takes longer to sell. It is a good approach to sell your harvests if you are well-organized, have free time, and enjoy meeting and conversing with others.
1.5 THE STUDY AREA.
Lagos is geographically located at longitude 2042′-4020′ East and latitude 6022′-6042′ North. It is flanked on the west by the Republic of Benin, on the north and east by Ogun State, and on the south by the Atlantic.
With a population above 10 million persons (NPC, 2007). Lagos Metropolitan Area is Nigeria’s fastest developing region and Africa’s second largest megacity.
Location: The study area is in Ojo local government, which is located between Badagry and Amuwo Odofin in the Lagos metropolitan. The Ologe Lagoon separates it from its western neighbour, Badagry local government. Surulere local government borders it on the east, with Etiosa (Apapa area) on the south.
The remainder of the southern end ends in the Atlantic Ocean; latitudinally, it is situated between lat. 4° 55’N latitude, 4° 17’N longitude. 12°55’E and 13°E. The local government is stretched east-west, measuring around 34 kilometres in length and 15 kilometres at its western extremity.
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