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TPM00111 - IMPACTS OF ROAD TRANSPORTATION ON MARKETING OF AGRICULTURAL PRODUCE IN OGBOMOSO SOUTH LOCAL GOVERNMENT AREA OF OYO STATE, NIGERIA


CHAPTER ONE

INTRODUCTION

1.1       Background to the study 

Agriculture is being observed to be one of the major sectors of every economy which has been accorded so much importance, and that is why the federal government of Nigeria has introduced a number of incentive measures to encourage the transportation of agricultural products in intense demand from concentration area to other areas. Nigeria is the largest producer of yam in the world producing an average of 26.9 million metric tonnes per annum (FAO, 2002). Nigeria accounted for 75% of World production In 1997 alone (Manyonget al, 2001). The annual growth rate for the same period was 6% for the yield and 10% for the area planted. The need arises for increasing production to satisfy domestic and export demand for yams, although Nigeria is the largest producer of yam in the world. The major yam growing areas of Nigeria extend from the rain forest zone to the southern limit of the Northern Guinea Savannah. However, there is insufficient knowledge as to the efficiency of the yam marketing system and the marketing and export of yam has not received adequate attention in Nigeria.

Without physical access, agricultural farmers and rural communities face obstacles in social services delivery such as health, education, and related social services (Escobal and Ponce, 2002). Evidence suggests that agricultural farmers can be mobilized to manage and maintain their access roads if some financial incentives and an appropriate legal framework are made available by the government (IFRTD, 2006). Poverty, isolation, mobility and accessibility have been considered the overriding objective of donors, with great emphasis on maximizing economic growth, as the difference between rich and poor increases rather than decreases. Mobility defines the way in which people can access goods and services. The need for mobility becomes easy when services are moved closer to the consumers. One of the ways to make services more accessible is by making people more mobile through roads (ADB, 2006). Accessibility defines how easy or difficult is it to get to a place. A place is accessible when people can reach there in an acceptable time, and the risk of not getting there on time would be heavy (Tighe, 2006).

Agriculture’s ability to take advantage of surplus crop production and employment opportunities is severely reduced. Roads play a role in the provision of physical access. Physical access further plays an important role in reaching a number of the Millennium Development Goals (Barret et al., 2001). The benefits of improved access can be short lived if the roads are not managed and maintained. Increased connectivity of road network cheapens the costs of transport to the market and thereby bring addition buyers and sellers in contact to one another with the consequence of increase in elastically of demand and supply goods and services. This there helps to minimize shortage of food products and raw materials.

The role of road transport network is indeed very crucial as it is a phase in production process which is not complete until the commodity is in the hands of final consumers. Availability of road transport network facilities is a crucial management factor that stimulates economic growth through increased accessibility, its efficiency and effectiveness (Ellis and Hine, 1998). Also it affects the basic function of production, distribution, marketing and consumption in many ways. Road network also influences the cost of commodity consumed and the purchasing power of the consumers (Ellis and Hine, 2003). This is because the nature of roads in which goods and services passes will determine the time, quality of goods on reaching the consumers. Meanwhile, if these products reach the final consumers in record time and in good quality it will attract more money for the producers and vice versa.

Inefficiency in the yam marketing system may arise from high cost of transportation of yam between producing and consuming areas or points of sale. Transport cost may be high because of poor feeder road networks between producing and consuming areas leading to high transport cost such that transport costs may exceed price differences between markets.

Government incentive measures to boost the transportation of yam tubers includes the establishment of a good road transport system network and the establishment of state owned transport, firm local government transport, state transport company as well as private transportation and the establishment of sea transport boats, canoes.

In Oyo state the ultimate goal of the agricultural policy is the attainment of self-sustaining growth in all sub-sector of agriculture as well as the realization, necessary for the overall socio-economic development of the rural areas.

The term “market” and the equivalent terms in Yoruba “Oja” have many connotations. Therefore, authors from various disciplines have different meaning to the word. Whelhan (1972) defines market as an institution for exchange for goods and services. This is the line with Holden et alUku’s definition that “a market is an authorized public concourse of buyers and sellers of community meeting an appointed time (Holden el al 1969). There are many types of markets. These can be group in terms several variable like scale of transaction, types of commodity sold, periodicity and time. The most valid and useful classification in Nigeria and for the study area is the one based on periodicity of operation usually and in rural, semi-urban and urban areas.

Markets are important and necessary because people are not capable of producing all the things they need for survival (Daramola, 1999). Therefore, marketing is an integral part of the production process. The basic parts of marketing are storing, transporting and delivery. Each of the function that occurs in marketing is between the time the farmer first offers his produce for sale and when the final purchased is made from the farmer.

The implication is that the poor state of roads slows down the development of supply system, farmers travel and food distribution. It is against this background that the transport characteristics and its effect on marketing of agricultural produce in Ogbomoso South L.G.A. should be looked at. The result which will complement the previous studies done in the other parts of the country and will bring out the peculiar features and problems of road transport in the study area on micro-level bases.

Increases in production of smallholder farmers who dominate in the area depend on the assurance of good prices and market opportunities. Market opportunities, in particular, are constrained by poor transport network, which adversely affect accessibility and personal mobility.

Based on the above reasoning therefore, the influence as well as the importance of road network services is critically investigated in this study with particular reference to marketing of agricultural product especially yam tubers in Ogbomoso South Local Government area of Oyo state because, yam tubers supplies from some of its local government area do not usually respond quickly to changes in demand.

Farmers production activities and costs includes costs of human porterage between home and field often over long distances although often unaccounted for, quite apart from the transport requirements for marketing agricultural products. The proportion of production costs represented by transport and travel costs usually increases rapidly with distance between villages and fields. These constraints in of-road transport limit farmers’ production to fields closer to the villages, and other factors include are inadequacy of infrastructure, high cost of production, and inadequate transport system due to bad roads in Ogbomoso South Local Government area of Oyo state.

1.2       Statement of the Problem

Agricultural and transportation are two words that go together and it is because the source of food and other economic products must be reasonably accessible in distributing agricultural products to the markets. Therefore, adequate transportation network and efficient carrier services operations are necessary conditions for affecting an efficient physical distribution of agricultural products especially yam tubers.

In Nigeria, road constitute the most important infrastructure in the structural transformation of her consumer products in Ogbomoso metropolis, most of the road traverse a territory of sharp contrasts in climate, soil and vegetations and this hinders consumers progress. In some rural areas most of the road which are of course essential for the prompt evacuation of product from the company to the point of delivery are often time inaccessible all year round. Most of these roads are poorly devoured and winding, this prevents easy access to the hinder company where the majority of the products produce were located. Even where such road are in a fair condition there is the problem caused by poor maintenance, lack of adequate executive capacity, lack of suitable materials and management problem. The vicious combination of these factors is that costs are higher.

Besides, the inadequacy of road network services are inefficiently executed, delay in transit bad loading and offloading, rough handling of agricultural goods such as yam characterize road net transport resulting in great losses from damages spoilage and deterioration of preventing manufacturers from specializing in the product materials that offer them the best return. If consumers are to respond to the growing demand then it will be necessary to evolve a good progressive rural structure with rural roads to expedite and reduce the cost of the flow of consumer commodities information and all sorts of rural services to enable it contribute meaningfully to general economic growth. This will also help to accommodate increase traffic flows in both directions impute moving from the marketing location to the company and output in the opposite direction. The task involves a large additional to rural network and maintaining existing road, the expansion of storage and processing facilities and a new institutional arrangement for managing and financing the total system.    

In Oyo state therefore, most roads are in very poor condition. This hinders the transportation of agricultural products in the towns and other areas. Also poor transportation also has the added effect of preventing farmers from specializing, in the crops that offer them the best returns. If agriculture is to respond to the growing demand of consumers, then it will be necessary, to evolve a good progressive rural roads to expedite and reduce cost of the flow of agricultural commodities, information all sorts of rural services to enable it contribute meaningful economic growth of Oyo state and Nigeria as a whole.

1.3       Research Questions

  1. Are the available roads adequate on transporting agricultural produce?
  2. What is the nature of the available roads used in transporting the agricultural produce?

iii.        What effect does road transportation have on the marketing of agricultural produce in Ogbomoso South local government area of Oyo State?

  1. What are the major challenges encountered by the farmers in marketing their agricultural produce?

1.4       Aim and Objectives of the Study

The aim of the study is to examine the impact of road network on marketing of yam tubers in Southwestern region of Nigeria taking Ogbomoso South LGA as case study. The specific objectives of the study are:

  1. To determine the extent, to which road transportation affect marketing of yam tubers.
  2. To determine those factors that are directly or indirectly related to the marketing of yam tubers and to what extents they have contributed to this.

iii.        To offer useful recommendations with a view to making the marketing of yam tubers in Oyo state area more successful and effective.

1.5       Hypotheses of the Study

The two hypotheses to be tested in this study were in null and alternative form:

  1. Hypothesis One

H01: Poor road network system in Oyo state does not affect marketing of yam tubers.

H02: Poor road network system in Oyo state affectmarketing of yam tubers.

 

 

  1. Hypothesis Two

H01: The nature of the modes of transport influence selling price of yam tubers in the open markets.

H02: The nature of the modes of transport does not influence selling prices of yam tubers in the open markets.

1.6       Significance of the Study 

The increased interest in this study is due partially to the gainful and developmental inputs which agriculture can make to the economy and most importantly to the tremendous impact of transportation infrastructure on regional economic. This is because transport and development as well as agriculture are usually closely related since each of them influences the fortunes and the relative rate of growth of the others.

The significance of this study is further highlighted considering that in Nigeria, the road is the only mode of transport by which all the states of the federation are linked, especially with regards to the movement and distribution of agricultural goods from the various rural areas of production to the different urban areas of the state for consumption.

Furthermore, the research will create new information on effective road transport network and marketing service quality in Nigeria that could be used for future reference by upcoming researchers and academicians. The study will provide more efficient marketing options that could be applied by Marketing companies and other Agricultural product manufacturing firms to increase customer services and satisfaction.

Finally, the study shall also serve as a stimulant or reference guide for further research in this area especially in this era of population explosion and impending food shortage.


 

1.7       Scope of the Study

The research covers the road transport network and marketing of agricultural produce in Southwestern Nigeria. The study focused only on the marketing and transportation network of the corporation in Aarada market located in Ogbomoso South Local Government Area to be specific. It covers one of the agricultural produce from markets located in Ogbomoso south local government which is yam. Because of differences in ecological factors such as climate, soil texture, topography and so on. Some villages produce more or several types of agricultural produce than other. Taking cognizance of the fact the study covers Aarada market in Ogbomoso South LGA.

1.8       Limitations of the Study 

Due to time constraints and likewise limited amount of other resources at the disposal of the researcher, the scope of this study is limited to Aarada market in Ogbomoso South Local Government Area. Moreso, because the attendants cost involved, if the whole market present in the town should be visited, the cost cannot be afforded by the researcher, coupled also with the final year academic work and recognizing that Ogbomoso South Local Government zone is the greatest producer of yam. There are also constraints due to financial limitations on part of the researcher, in carrying out detailed work on the research.

The researcher, would have loved to increase the scope of this research work but inadequate material and data on marketing of agricultural products especially yam tubers are limited. In this area, the study therefore will be restricted and limited to the afore said market in investigating the impact of road network on the marketing of yam tubers in Ogbomoso South Local Government Area.


 

1.9       Definition of Terms

  • Accessibility: The design of products, devices, services or environment to access and benefit from some system or entity.
  • Agent: This is a wholesaler who represents buyers or sellers on relatively permanent basis performs, only a few functions and does not take title to goods.
  • Agricultural Marketing: Therefore, may be defined as the performance of all business activities involved in the flow agricultural products and services from the point of initial agricultural production until they are in hands of consumers. It involves the application of the knowledge of marketing to the formulation, implementation and control of activities, which are directly or related to agriculture.
  • Agriculture: According to Webster‟s Dictionary (1980) agriculture is a science or practice of farming.
  • Consumer Market: These are all individuals and households who buy or acquire goods and services for personal consumption.
  • Consumers: They are individual groups and families that buys the produce to meet their satisfaction.
  • Customer value: The difference between a prospective customer’s evaluation of the benefits and cost of one product when compared with others. It the straight forward relationship between perceived cost and perceived benefits.
  • Farming: These are activities that are directed towards the cultivation of agricultural products towards satisfying needs and wants.
  • Industrial Products: Products bought by individuals and organizations for further proceeding or for use in conducting a business.
  • Market: A set of people and organization with latent or manifest, needs to satisfy, the money to spend and the willingness to spend it on need-satisfying goods services either now or in the foreseeable future.
  • Marketing: The performance of all business activities that direct the flow of goods and services from the producer to the consumer’s user.
  • Retailer: Business whose sales come, primarily from retailing.
  • Road Transportation: This is the system or process of carrying or transporting people or goods from one place to another by means or road.
  • Transportation: This is a system for carrying people or goods from one place to another either by means of roads, air, water or underground as the case may be.