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Background of the Study
Agricultural products encompass all categories of products related to agriculture. They range from raw and finished goods under the classifications of plants, animals and other life forms. Agricultural products can, therefore be referred to as crops and animals grown under cultivated conditions whether used for personal consumption, subsistence or sold for commercial benefits (Calestous, 2011).Agricultural products come in the form of fruits and vegetables, grains or cereals, livestock, natural fibres, forest and marine products (Adirika, 2001). Some agricultural products produced in Enugu state include: sugarcane, rice, groundnuts, beans, oil palms, cocoa, coffee, cattle, millet, maize, guinea corn, cotton, tomatoes, cowpea ,cocoyam, sweet potatoes, tea, timber, banana, yam, beniseed, coconut, cassava, citrus fruits, oranges, guavas, sheep, goats, pigs, apples, and grapes (Enugu State Ministry of Information, Culture and Tourism, 2012).Being agrarian in nature, the predominant population of Enugu state is engaged in farming as an occupation. About seventy-five percent (75%) of the population of the people are farmers or local producers while an estimated twenty-five percent (25%) is engaged in other economic activities. John (2002) stated that local producers are unsophisticated farmers in rural communities who are engaged in agricultural production which include raising of livestock, cultivation of crops and vegetables to eat and to sell at a local markets. Local producers therefore, are farmers (comprising of both male and female farmers) who own, work on or operate an agricultural enterprise either for commercial purpose or self-sustenance. Farmers in Enugu State usually move their products to local markets in small quantities by carrying them either on their heads or backs. A few others use either donkeys or bicycles to convey their goods to market places, due to the fact that vehicles do not reach their locations or farm centers. Equally, farmers make use of short channel structure, which is selling goods directly to the consumers without involving wholesalers and agents in the distribution process. The use of short channel of distribution is often done because farmers will want to dispose of their products immediately after harvest even when the prices are low, for fear that the products, especially perishable ones, might get spoilt soon as they cannot be stored because of lack of storage facilities, hence restricting the distribution of their products.
The words “distribution” and “place” are synonymous in marketing, and is one of the components of marketing mix. In the view of Kotler, Keller& Burton (2009), distribution is the handling, movement, and storage of goods from the points of origin or production to the point of consumption, via various channels. It is a marketing function aimed at getting goods and services from the producer to the ultimate consumer, transferring ownership and physically moving the goods to place of need. Distribution is an important marketing function, not only in the post-production marketing situation, but also in the pre-production situation by bringing about time and place utilities; aiding demand creation and satisfaction. The physical distribution of goods from producer to users requires the integration of sub-systems such as fixed infrastructural facilities, warehousing, inventory, and logistics supports. A good distribution system brings a reduction in handling cost, a reduction in the incidence of product damage especially through physical spoilage and deterioration, a reduction in the incidence of loss through theft, and leads to considerable savings in transport cost. Through distribution, products are made available throughout the market place; such that a large number of people can buy them (Braton, 1998). Distribution involves a good transport system to take the goods into different geographical areas; a good tracking system so that the right goods reach at the right time and in the right quantity; a good packing, which takes the wear and tear of transport, tracking the places where the goods can be placed such that there is a maximum opportunity for sales; and a good distribution channel.
Channels of distribution (also known as trade channels), as defined by Nicholson (2007), are the paths or route along which goods or products move from producer or manufacturer to ultimate consumers or industrial users. In other words, they are distribution networks through which farmers or local producers put their products in the market and pass them to the actual users. Channels of distribution normally serve as a bridge or link between the gap in time and space where goods are produced to the period of consumption of the products. Henderson (2008) suggested that Channels of distribution make it possible for products to be moved from the producer to the ultimate consumer. The author further stated that there are usually five channel alternatives for marketing of goods, namely: producer to consumer, producer to retailer to consumer, producer to wholesaler to retailer or consumer, producer to agent/broker to wholesaler to retailer to consumer and producer to agent/broker to retailer to consumer. Adirika, Ebue and Nnolim (2001) stated that where middlemen are not available for one reason or the other, direct selling and therefore, short channel structure is forced on the producer. The unavailability of middlemen may arise as a result of a prohibitive cost of using them or as a result of their inability to offer the services required by the producer or unacceptability of the producer’s channel policy and terms or by government action.
According to Ross (2004) there are basically two types of channel used for the distribution of goods; marketing channel for industrial good as well as that for consumer goods. Both types of channels directly and indirectly make goods available to end-users.
While all goods and services pass through the marketing channels of distribution, the perishability of farm produce sometimes compel farmers to make use of direct distribution channels. Also, since majority of farmers reside in rural areas and are separated from their customers they on the other side make use of the indirect marketing channels. There are special characteristics of most farm produce that require unique commercial distribution such as seasonality, bulkiness, perishability and scattered production among others. Therefore, the agricultural produce distribution channel could take any of the following forms: Direct channel: From the producers (farmers) to the consumers, and no intermediaries at all. This is
common with fruits and vegetables, and fresh livestock products which are highly
perishable. Short channel: The products are moved from the producer through an intermediary before getting to the consumer. This is favoured by products like Yam, Cassava, and Potato which have long shelve life. Long channel: Many intermediaries are involved in the movement of the commodities. This type of channel is common with products that can be stored for longer period such as grains, yam flour, maize flour, hide and skin, cotton and live animals. Coyle (2003) explained that channels of distribution serve to bridge the gap between the point of production and the point of consumption; thereby creating time, place and possession utilities. It involves the management of such elements as order processing, finished goods management, material handling and packaging, transportation, storage and warehousing.
Statement of the Problem
With the advent of new farming technologies such as machinery and farm inputs, self-sufficiency is almost being achieved in agriculture (John, Oral, Parr & Richard, 2010). What is now needed is the efficient distribution and marketing of the products to the places that require them for consumption and other uses.
Greater thrust is laid on the problems of marketing. If the marketing facilities are developed; it gives signals to increase production and thereby ensures the availability of agricultural goods and services both locally and internationally. To distribute the surplus agricultural products, the marketing facilities have to be strengthened through provision and upgrading, right from the center of production to place of market.
Despite the agrarian nature of Enugu state, with about seventy-five percent (75%) of the population engaged in farming various forms of agricultural products such as rice, groundnuts, beans, cocoa, coffee, cattle, millet, cotton, tea, timber, bananas, yams, cassava, tomatoes, maize, sheep and goats, among others, (Enugu state Ministry of Information, Culture, & Tourism, 2012), the distribution systems have been observed to be very inefficient and ineffective; products are damaged either in the field or on transit, high cost of goods, delay in goods reaching places of use or markets, or some goods not spread at all throughout the state and even beyond. The absence of good infrastructure causes significant loss of earnings on the local producers and deprives them of capital for reinvestment and acquisition of machines for project expansion. Infrastructural deficiencies create high scarcity and cost of agricultural products borne by end-users in needed places of the state.
Constraints arising from Transportation constrainst lead to inability of local producers to store goods in order to meet demand during off-production seasons (Ashok & Balasubramanian, 2006). Lack of warehousing and storage facilities compel local producers to sell their products at give –away price during harvesting pe riod and even when demand is low as a way of avoiding waste or spoilage, especially perishable goods; this causes decline in their income and standards of living; hence the need for this study, constraints to distribution of agricultural products by local producers in Enugu State and to identify the strategies for improving the distribution of agricultural products.
Purpose of the Study
The major purpose of this study was to ascertain the constraints to the distribution of agricultural products by local producers in Enugu State. Specifically, the study sought to:
1) determine the infrastructural constraints (land transportation) to the distribution of agricultural products by producers.
2) determine the channel of distribution constraints to the distribution of agricultural products.
3) determine the constraints posed by government policies on the distribution of agricultural products.
4) Identify the strategies for improving the distribution of agricultural products in Enugu State.
Significance of the Study
The findings of this study will be of immense benefit to local producers of agricultural products, consumers/industrialists, government agencies, and researchers.
Agricultural producers who constitute the bulk of the population of Enugu state and by extension, the country, will benefit from the results of this study. The results of this study will make the general public aware of the constraints to distribution faced by farmers. Through this study, farmers will understand the effects of channels of distribution and need for adopting good channels of distribution of different types of products produced. This study will still be of great benefit to agricultural producers as the findings on the constraints if solved, will help reduce costs of production and distribution incurred by them, thus raising their propensity to save and standards of living. All these shall be made known to the local producers through organization of workshops and seminars by the researcher for them to learn.
Equally, consumers/industrialists who are the ultimate users of agricultural products will have value in this study as it will expose them to the various challenges producers face in getting products available to them, and the reasons responsible for high prices of the goods they pay. This study will also enable consumers and industrialists understand the link between government policies on agriculture and distribution of quantitative and qualitative goods they consume, thereby channeling complaints to Consumers Protection Council for redress, thus enabling them buy better goods in the desired quantity and at affordable prices.
Government agencies (especially, Federal and States ministries of agriculture) will also find the findings of this study significant because it will uncover the different constraints farmers encounter in the distribution of the products, which is the last stage of the production process, which may include the effects of the policies made on agriculture. This will then enable the government to formulate favourable policies on agriculture in order to ensure availability of agricultural products all over the country.
Finally, future researchers will find this study useful and as a premise for further studies either through replication or as a source of literature to future studies. The findings of this study when published, will be displayed in public libraries for all people including government officials to read and extract relevant information, for decision making
The following four research questions were developed to guide this study:
1) What are the infrastructural constraints to the distribution of agricultural products?
2) What are the channels of distribution constraints to the distribution of agricultural products?
3) What are the government’s policies constraints to the distribution of agriculture products?
4) What are the strategies for improving the distribution of agricultural products?
The following null hypotheses formulated to guide the study will be tested at 0.05 level of significance.
Ho1: There is no significant difference in the mean responses of male and female agricultural producers on the infrastructural constraints to the distribution of agricultural products in Enugu State.
Ho2: There is no significant difference in the mean responses of agricultural producers of tea and tomatoes on the transportation constraints to the distribution of products in Enugu State.
Ho3: There is no significant difference in the mean responses of producers of tea, tomatoes and dairy products on the channels of distribution constraints to the distribution of agricultural products in Enugu State.
Ho4: There is no significant difference in the mean responses of producers of dairy and tomatoes products on the warehousing constrains to the distribution of agricultural products in Enugu State.
There is no significant difference in the mean responses of producers of dairy and tomatoes products on the government’s policies constraints to the distribution of agricultural products.
Scope of the Study
This study was delimited to constraints to the distribution of agricultural products by local producers in Enugu state. The agricultural products covered in this study are tomatoes, dairy and tea products. The study was focused on local producers of the agricultural
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