THE IMPACT OF TRANSPORTATION COST VARIATION ON AGRICULTURAL PRODUCE IN NIGERIA

THE IMPACT OF TRANSPORTATION COST VARIATION ON AGRICULTURAL PRODUCE IN NIGERIA

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                                                               CHAPTER ONE

                                                               INTRODUCTION

BACKGROUND OF STUDY

The quest to achieve self-sufficient food production is one of the highest priorities of most countries in the world today, Nigeria inclusive. This challenge also called food security is a major problem in developing economies such as Nigeria. In Nigeria food security is critically dependent upon effective transportation system. This means that a wide variety of Nigerian food would not be available without the complex transportation network system. It is therefore obvious that transportation is the live wire of economic development of every nation. Based on the above reason, the importance of road transport system cannot be over emphasized especially with regard to agricultural products. However, problems relating to rural inaccessibility have continued to hamper food availability in Nigeria. Agriculture which is one of the major sectors of every economy has been accorded so much importance by the Federal Government of Nigeria. Accordingly, successive administrations have introduced a number of incentives to encourage the transportation of agricultural products from areas of production to areas of intense demand. In Edo State, for example, the state government embarked on massive opening of feeder roads to link the state capital, Benin city to encourage easy transportation of agricultural products from the rural areas to the city. Similarly, the state government also operates her own transport company that helps greatly in moving goods and persons from the rural areas to the urban center.

           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.

Evidently, in Edo State, (Benin city to be precise) the ultimate goals of the agricultural policy is the attainment of growth in its value chain of the sub-sector for the overall socio-economic development of the rural areas. However, market opportunities in Edo State in particular are constrained by poor road network which adversely affect accessibility and personal mobility. Although not often accounted for, farmers’ production activities and cost include cost of trekking between home and field, often long distance, which is quite apart from the transport requirement of marketing agricultural products. The proportion of production cost represented by transport and travel cost usually increases rapidly with distance between villages and fields. These constraints of road transport limit farmers’ production in fields to the villages. Other factors include inadequacy of infrastructure, high cost of production and poor transport system due to bad roads in Benin city, Edo State.

It is against the above background that the study seeks to critically investigate the impact of transportation on the marketing of agricultural products in Benin city. Agriculture which used to be the main stay and backbone of the nation’s economy during the pre-colonial and colonial era has unarguably become the forgotten sector of the economy as more attention has been shifted to the oil sector. Nobody wants to identify with agricultural products that used to be the commodity for local and international markets. The story is the same in almost all the states of the Federation including Edo State where people focus mostly on government jobs. Programmes and schemes which include Edo Agricultural Development Programmes (PADP), Livestock, Veterinary, Fisheries and the Integrated, Rural Development and Direct Production activities were established to promote the effect of agricultural activities in the state but schemes which were established are not given attention because only few people in the state engage in agricultural production while others engage in business activities and office work.

According to Ade (2004) “Transportation is the means by which goods and people are carried from one place to another”. With transportation, raw materials are brought to the factory for processing, while the finished goods are delivered to the wholesalers, retailers and the final consumers. Imagine how distribution of agricultural products and business activities would look like without transportation system, which enables long distance to be reached in a short time. Distribution of agricultural products between town, state and nations is made easy and smooth because of transportation system. Ade’s view is that the importance of transportation in distribution of agricultural products, business activities and other activities that affect human beings cannot be over emphasized.

Odedoku, Odokogo and Ogoji (2002) define transportation as a means of moving goods from their place of production to their place of consumption “Improvement in transportation accounts largely for the improved inter-relationship and inter-dependence between the people in the country.” It is now easy to transport goods from places of abundance to places of scarcity. For example, it is now relatively easy to move bags of groundnuts from Kano where groundnuts are abundant to Onitsha where groundnuts are scarce; indeed transportation is indisputably the live wire of distribution and commerce in Nigeria.

Nigeria has witnessed an upsurge in commerce and industry. The result of this upsurge is a massive improvement in various means of transportation within the country.

Igwe et al. (1999) define transportation as the means by which movement is made from one place to another. When you walk or travel from one place to another you use a form of transportation. Transportation started in the past by means of human patronage; people then walked and carried goods over long distance on their heads. Human patronage was followed by the use of domestic animals such as horse, donkeys, and camels. Even dogs were used for drawing sledge over the very cold region of the world. As a result of new discoveries in science and technology, more efficient means and types of transportation are now in use throughout the world.

Ajayi (2003) defines transportation as “the movement of people, goods and animals from one place to another”. Ajayi is of the view that goods and services are moved from production area to places of consumption. Similarly, Eyiyere (2005) views transportation as “a means by which people and goods are carried from one place to another.” The earliest means of transportation was foot. People trekked from one place to another carrying their loads either on their heads or their shoulders. Animals were also used as a means of transportation. Such animals as ass, camel, etc. were used as means of transportation. However, great technological advancement has been made overtime in all forms of transportation. These advancements have enabled all types of goods as well as people to move from one place to another.

Ezeagu (2006) in his own opinion sees transportation as “a means of moving goods and human beings from place to place. It is an auxiliary of trade and commerce, a means of brining about the mobility of most factors of production by land, air and sea.” Transportation has grown in importance and the rate of its importance has led to effective distribution of agriculture products and a very tremendous improvement in all means of transportation in past years.

Ahukannah, Ndnachi and Arukwe (1995) define transportation as an activity that involves the movement of goods from the manufacturer to the consumer. It is inconceivable what the state of affairs would be without transportation. Farmers could not be able to market their products; stores would be closed down because they would not be able to obtain merchandise to sell, and factories would close down because they would not be able to get raw material or distribute finished products. Thus, we see that transportation is essential to the development and expansion of commerce.

According to Kotler (1997) physical distribution is the task involved in planning, implementing and controlling the physical flow of materials, finished goods and related information from point of origin to point of consumption to meet customer requirement at a profit. This definition emphasizes logistic plan made to address the problem of outbound distribution (moving product from place of production to customer). In this, the logistic manager’s task is to coordinate the whole channel, physical distribution system activities of suppliers, purchase agent, marketers, channel members and customer.

From the foregoing, it could be seen that agriculture and transportation are two words that go together. This is because the source of food and other economic products must be reasonably accessible to markets and factories through the instrumentality of transportation to have economic value. Therefore adequate transportation network and efficient carrier services operation are necessary recipes for efficient physical distribution of agricultural products. Unavailability of these hinders the transportation of agricultural products to Benin city city and other areas. Again poor transportation system also has the added effect of preventing farmers from specializing in the production of crops that offer them the best returns. Evidently if agriculture is to respond to the growing demand of consumers, then it will be necessary to evolve a good progressive rural roads system to expedite and reduce cost of the flow of agricultural commodities to points of demand to enable it contribute meaningfully to the economic growth of Benin city North, Edo State and Nigeria as a whole. The critical question is, what is the actual condition of transportation-related infrastructure in Edo State to drive the development of agriculture? There is also the issue of incentives for rural transportation.

OBJECTIVES OF THE STUDY

The major objective of this study is to ascertain the effect of transportation cost on the marketing of agricultural products in Benin city. The specific objectives include the following:

1.      To ascertain the relationship between efficient transportation system and the cost of agricultural products.

2.      To determine the impact of transportation cost on the availability of agricultural products in Benin city

3.      To determine the effect of transportation system infrastructure on the marketing of agricultural products in Benin city North.

4.      To ascertain the relationship between transportation and the marketing of agricultural products.

5.      To proffer suggestions with a view to making the marketing of agricultural products in Benin citymore efficient and effective.

RESEARCH QUESTIONS

The following questions govern the study:

1.      What is the relationship between efficient transportation system and the cost of agricultural products?

2.      What is the impact of transportation on the availability of agricultural products in Benin city?

3.      What is the effect of transportation system infrastructure on the marketing of agricultural products in Benin city?

4.      What is the relationship between transportation and the marketing of agricultural products?

5.      What possible measures could be taken towards making the marketing of agricultural products in Benin city more efficient and effective?

HYPOTHESIS

Based on the stated objectives, the following hypotheses were tested.

H1: The cost of transportation affects the price of agricultural products.

H0: The cost of transportation does not affect the price of agricultural  products.

H1: Transportation affects the marketing of perishable agricultural products  in Benin city

H0: Transportation does not affect the marketing of perishable agricultural products in Benin city


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