Market Integration and Price Dynamics of Sesame in Nasarawa State, Nigeria

Abstract

The study was to principally determine the efficiency of the marketing system of sesame in Nasarawa State, Nigeria. This is to provide empirical knowledge on the level of efficiency and competitiveness useful for improving the marketing system for economic development. Analysis of spatial integration of 13 main rural and urban sesame markets was carried out in Nasarawa State of Nigeria, covering all the agricultural zones of the State. Time series data used in the analysis were monthly retail prices of sesame collected by Nasarawa Agricultural Development Programme (NADP) for 84 months. Cointegration analysis and error correction model (ECM) were the main analytical tools used. Steps to cointegration analysis involved augmented Dickey Fuller (ADF), Granger causality and augmented Engle Granger (AEG) tests on the retail prices from the 13 markets. Results showed that retail price series in many sesame markets were segmented. Only 34 pairs of market prices (about 21.8%) were integrated and the rate of price adjustment within one month was very high in nearly all the integrated pairs. Reversing the trend and improving efficiency will certainly involve, among others things, improving infrastructure such as rural roads and providing market information outfit that will disseminate timely information to the marketers.