ECONOMIC ANALYSIS OF COTTON MARKETING UNDER THE FREE-MARKET SYSTEM IN NIGERIA
ECONOMIC ANALYSIS OF COTTON MARKETING UNDER THE FREE-MARKET SYSTEM IN NIGERIA
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Date
1993-11
Authors
AMIN, Yahya Abdulhadi
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Abstract
SJNCE the introduction of the Structural Adjustment
Programme in 1986, the Federal Government has been
introducing a series of measures aimed at stimulating
increased agricultural production. One of such measures was
the abolition of the seven commodity marketing boards which
from 1977-1986 were responsible for organising the marketing
of Nigeria's major agricultural produce Including cotton.
This was informed by their identified Inefficiencies and
inability to sustain expanded commodity production. Since
L9.86 therefore, cotton marketing has been operating under the
free-market system.
The objective of this study was to determine whether
the new marketing system has eliminated the inefficiencies
associated with the commodity board marketing system. To
achieve this, data were collected from a total of 75 cotton
farmers, 15 cotton buying agents, 12 cotton merchants, and 3
cotton ginning companies in Bauchi, Katsina, Kaduna and
Sokoto states during the 1991/92 cotton season.
The data were analysed using descriptive statistics,
gross and marketing margin analysis, marginal cost analysis,
price index analysis, Efficiency Ratio and three measures of
concentration namely: the Gini Coefficient, the Herfindahl
Index and the Coefficient of Variability. The results showed
that efficiency has been" increased under the free
enterprise system.
The study observed that farmers were getting higher
prices relative to the ultimate consumers' expenditure on thecommodity than tinder the previous system. Both average
yield/ha for farmers and aggregate output of the commodity
wore on the increase while the industry was expanding rapidly
and was attracting investments in the areas of product ion,
processing and merchanting.
The study however found that grading of cotton was no
longer practised as buyers usually go after the produce at
farmers' homes and farms. Farmers also faced shortage of
capital and difficulties in acquisition of product ion input.
Part of the recommendations of the study was that to
sustiin the level' of efficiency being achieved, government
should intervene in the area of enforcing inspection and
grading before sales and take decisive steps in ensuring that
farmers got adequate inputs at reasonable prices as well as
credit facilities in order to sustain attractive profit
margin, thereby encouraging expanded production of the crop
in the country.
Description
A THESES SUBMITTED TO THE POST- GRADUAT SCHOOL OF BELLO UNIVERSITY IN PARTIAL FULFILMENT OF THE REQUIREMENTS
FOR THE DEGREE OF MASTER OF SCIENCE (AGRICULTURAL ECONOMICS)
DEPT. OF AGRIC. ECONOMICS AND RURAL SOCIOLOGY, INSTITUTE FOR
AGRICULTURAL RESEARCH, AHMADU BELLO UNIVERSITY, ZARIA
NOVEMBER 1993.
Keywords
ECONOMIC ANALYSIS,, COTTON MARKETING,, FREE-MARKET SYSTEM,, NIGERIA