Journal of Rural Res. & Information (Vol.6; No.1:2011) Adetunji,M.O. STRUCTURE, CONDUCT AND PERFORMANCE OF FRUIT MARKETING IN SURULERE LOCAL GOVERNMENT AREA OF OYO STATE, OGBOMOSHO. Adetunji, M.O. Department of Agricultural Economics And Extension, P.M.B. 4000, Ladoke Akintola University Of Technology, Ogbomoso, Oyo State, Nigeria e-mail: [email protected]Tel : 08033601965 ABSTRACT The study examines the structure, conduct and performance of mango marketing in Surulere local Government Area of Oyo state. Cluster sampling technique was used to select the respondents from the four markets located in the study area. Primary data was collected through the aid of structured questionnaire from the 95 respondents selected from the four villages in Surulere Local Government Area of Oyo State. The socio-economic characteristics of the respondents revealed that 84.2 percent are married, 9.5 percent are widowed while 6.3 percent are single. Also 60 percent of the respondents were female while 40 percent are male. Only a few of the respondents have no formal education, majority of them have one form of education or the other. Quantity of mangoes sold by respondents per day ranges from an average of 27 baskets and the major source of mango is from the wholesalers who in turn buy from the farmgate. Transportation of mangoes is mainly by vehicle and the marketers’ source of fund is from personal effort. Most of the respondents made use of hired labour with an average labour cost and transportation cost of about N 600 and N 2,160 daily respectively daily. The gross margin and marketing margin are N 5,309.95 and N 8,100 reaspectively The result shows that fruit marketing is profitable with an average income of N 9,362 and the market is perfectly competitive with herfindahl index 41
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Journal of Rural Res. & Information (Vol.6; No.1:2011) Adetunji,M.O.
STRUCTURE, CONDUCT AND PERFORMANCE OF FRUIT MARKETING IN SURULERE LOCAL GOVERNMENT AREA OF OYO STATE, OGBOMOSHO.
Adetunji, M.O. Department of Agricultural Economics And Extension,
P.M.B. 4000, Ladoke Akintola University Of Technology, Ogbomoso, Oyo State, Nigeria
This is used to measure concentration of the market which is one variable of the market
structure that affect the behaviour of firms participation in that market.
The market share of firm is denoted by S1 =
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Journal of Rural Res. & Information (Vol.6; No.1:2011) Adetunji,M.O.
Sn =
S1 =
where: q = output of fruit seller i
qn = output of all fruit sellers
Herfindahl Index Hl = S12 + S2
2 + S32+ S4
2+ S52……………..+ Sn
2
HI tells us how concentrated the market is, when there is high concentration that means there is
an uneven distribution of market shares and there is a situation of monopolistic control of the
major marketer and then vice versa.
3.0 RESULTS AND DISCUSSIONS
The socio- economic characteristics of mango marketers in the study area is presented in
Table 1. The table below showed that mango marketing is an occupation with no age limit. Only
about 5.3 percent of the marketers were 25 years and below, majority of the respondents (60
percent ) were between the age bracket of 26– 55 years. The respondents in this age bracket have
greater potentials of selling fruits effectively because they are in their active age. About 30
percent of the mango marketers were between 56 years and above. While 60 percent of the
respondents were female, 40 percent of them were male. This indicates that in the study area
women are more involved in fruit marketing than men.
The result also revealed that 84.2percent of the respondents were married while very few
were single, that is 6.3 percent and 9.5 percent were widowed. Hence, this indicates that married
people are more involved in fruits marketing in the study area. Majority of the fruit marketer’s
household size range between 6 and 10 (59%) while household size with 5 members or below
account for only 5 percent. This implies that respondents with larger family size are more
involved in fruit marketing and this aid the quick distribution of fruits before they deteriorate.
About 14.3 percent of the respondents had no formal education., only 21.1 percent had post
primary education while 64.6 percent accounted for those with primary education. Since
knowledge is a useful tool in marketing activities, this means at least a level of formal education
is useful in successful marketing.
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Journal of Rural Res. & Information (Vol.6; No.1:2011) Adetunji,M.O.
It was revealed in table 1 that 44.2 percent of the respondents sourced their fund through
personal efforts, 29.5 percent sourced theirs from cooperative society, while only 1.1% source
their funds through banks by obtaining loans. This indicates that marketers hardly sourced fund
through banks while self financing was a major source of fund used by the marketers. About
55.6 percent hired labour to help in off loading fruits, transporting purpose and other marketing
activities , 31.6 percent made use of family labour, while 12.6 percent employ both family and
hired labour. The result revealed that most respondents hired labour for marketing activities.
Wage payment increases the marketing cost.
Table 2 presented the market structure of fruit (mango) marketers in the study area. Based
on the reason why respondents ventured into the marketing of mango, 37.7 percent of the
respondents claimed that they sold mango because it was a profitable business, 17.9 percent
ventured into it because it was the fruit in season. While 9.5 percent sell mango because they
inherited the business from their parents, 38.9 percent sell mango because they were generally
into fruit marketing. It was also discovered that all the respondents in the study area used the
same unit of measurement i.e. baskets or sell in bags. About 53.8 percent sells between 21- 30
baskets of mangoes daily, this confirms that majority of the respondents (89.5 percent) have
many customers while only little (10.5 percent) have fewer customers. This indicates the level of
marketing of respondents.
It was revealed in table 2 that 43.2 percent of the respondents sourced their mangoes
fruits from farm gate, 45.3 percent sourced theirs from the wholesalers and 11.6 percent claimed
they bought from both sources. The result revealed that most mango sellers purchased the fruits
from both farm gate and wholesalers. Majority of the respondents (87.4%) claimed that there
were many mango marketers in the market and this revealed that fruit (mango) marketing is
perfectly competitive. Many mango marketers purchased their fruits for reselling on a daily basis
(63.2 percent), while 36.8 percent bought large stock and stored them by spreading it out for
fresh air. This mode of storage indicated that there was no special way of storing mango in the
study area and that majority of the sellers were involved in daily purchase.
There were two modes of transportation used by the respondents in the study area; the
use head carriage for the goods and use of automobiles. Only about 4 percent of the respondents
used head carriage while majority (91.6 percent) used automobiles as means of transporting their
goods to the market for sales. This revealed that transportation via automobiles which was
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Journal of Rural Res. & Information (Vol.6; No.1:2011) Adetunji,M.O.
believed to be more effective in fruit marketing was well adopted by majority of the sellers.
Some respondents employed the activities of middlemen in their transaction process while some
did not. Table 2 showed that 61.1 percent involved the middlemen in their transaction
Table 3 presented the cost and returns from marketing of mangoes . The average
transport cost was N2,160 and this accounted for about 52.17 percent of the total variable cost,
labour cost accounted for 14.49 percent, rent allowance accounted for only 0.72 percent of total
variable cost. The farm gate cost of mango was N1,350 which was about 32% of the total cost
price. Average total revenue was N9,450. The gross margin per daily sale of mango was
N5,309.95 while the marketing margin which was the difference between the producers price
that is the farm gate price and the final price sold to the consumer was N8,100.
The Herfindahl index was estimated to be 1.1 percent that is 0.011. This signifies low
concentration of market shares and that there is a situation of structurally perfect competition
among mango sellers in the study area.
The respondents indicated that they faced many constraints in mango selling,, about 43
percent complained of losing money to the high level of perishability of the fruit,18.9 percent
claimed that bad road affect them from moving the fruit from the source of production to where
they are needed as many transporter always avoid bad road and those ones who dare it charged
exorbitant price. However, 23.2 percent complained about lack / inadequate fund to finance the
business while 14.7 percent reported that lack of storage facilities made them buy only the
baskets they are sure they can sell daily.
Table 5 presents the linear and double log regression analysis which aimed at establishing
the relationship between marketing activities of mango sellers and sales of mangoes For linear
regression, the results showed that the coefficient of transportation was negative and statistically
significant at 5 percent with sales of mango. This implies that as the cost of transportation
increases ,there will be decrease in total sales. Cost of labour and mango purchased from the
source were also significant at 1 percent but were positively related to sales of mango, i.e. as cost
of mango from source and labour increases, sales increases as well. On the other hand, double
log analysis revealed that cost of transportation and mango from the source were significant to
sales of mango at 1 percent level, however transport cost was negatively related sales of mango.
The null hypothesis is therefore rejected because the F-cal is significant at 1%
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Journal of Rural Res. & Information (Vol.6; No.1:2011) Adetunji,M.O.
The result establishing the relationship between gross margin and socio-economic
characteristics is presented in table 6. A positive and significant relationship exit between the
gross margin of the respondents and marital status, years of marketing experience, as well as
specie of mango sold. This implies that irrespective of the status of the marketer, there is no
limitation and no effect on the revenue of respondents. As the years of experience increases,
there is addition to knowledge of mango sales and this enhance the revenue made from mango
sales. This also goes for selling of the right species of mango i.e. as marketers sell good varieties
of mangoes their income increases.
However, household size, education, and number of basket bought for sales were
statistically significant and negatively related to the gross margin from mango sales. The
implication of this is that the larger the household size the lesser the gross margin accruing from
mango sales which may due to household consumption. Knowledge is necessary tool for
marketing purpose but a higher level of education such as tertiary institution etc may not have
impact on the gross margin for mango sales in the study area. Also, larger purchase of baskets of
mango may not necessarily increase gross margin, this may be due to high level of perishability
of the fruits as well as the lack of storage facilities.
The coefficient of determination R square for the model is 68.2%. This means that 68.2%
of the change in income in fruit marketing is explained by all the socio-economic characteristics
variable that are statistically significant.
4.0 CONCLUSION AND RECOMMENDATION
Apart from the perisability and seasonality of the produce, it can be categorically stated
that mango marketing is a worthwhile business due to its high level of profitability, the gross
margin and the marketing margin are quite high and the market is a perfectly competitive one.
Transportation cost was found to be negatively significant to the average sales of mangoes, this
means that the amount spent on transporting mangoes from farm or collection points is affecting
the daily income To make fruit marketing a viable business venture, it is therefore, recommended
that good and motorable roads should be constructed in the remote areas for easy collection of
produce from the farm gate and also provision of storage facilities to increase the shelf life of the
fruits. Also, programmes that will enlighten the marketers on how to process mango into fruit
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juice should be encouraged through the activities of extension officers in order to reduce the
wastage.
REFERENCES.
Abimbola, M.O (1996): Economic Analysis of Vegetable Production and Marketing in Ibadan. An unpublished B.Sc thesis, Submitted to the Department of Agric. Economics and Extension. Ladoke Akintola University of Technology, Ogbomoso.
Abbot. J.C and Madeham J.P (1999): Agricultural Economics and Marketing in the Topics Longman. Nigeria. Pp 65 – 78
Adegeye A.J. and Dittoh J. S (1985): Essentials of Agric Economics, Impact Publishers Ibadan.
Adekanye, T.O (1988): Readings in Agricultural Marketing. Longman Publishers, Nigeria.
Adepoju, A. A (2004): Horticultural Crop Production in Nigeria, Problems, Prospect and Trends. An Unpublished M.Sc Dissertation in Department of Agricultural Economics, University of Ibadan, Ibadan.
Betyl B.S and Molly C.O (1986): Economic Botany Of Planting In Our World. MC Graw Hill Publishing Company. New York.
Downey W.D and Erickson S.P (1987):Agricultural Business Management. 2nd Edition. MC-Graw Hill Inc.pp236-337.
Food and Agricultural Organization (2001): FAO Year Book on Production.
Joseph Y.K and Adeoti J..A (1996): Assessment of The Efficiency of Fruit Marketing System In Nigeria. Horticultural Society of Nigeria (HORTSON) Conference proceedings Publishers.
Swindale K and Bilinsky. L (2006): America for Nutrition, Journal of Nutrition. Nutr 136:
14495- 14525
Table 1: Socio - Economic Characteristics of the Respondents
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Journal of Rural Res. & Information (Vol.6; No.1:2011) Adetunji,M.O.
Frequency Percentage Cumulative %Age (years) < 2526 – 3536 – 4546 – 5556 – 6566 and above
5102723237
5.310.528.424.224.27.4
5.315.844.268.492.6100
Total 95 100
Sex
Male Female
3857
4060
40 100
Total 95 100
Marital status Single Widowed Married Total
698095
6.39.584.2100
63.3 15.8 100.0
Household size ˂ 56 – 1011 – 15
195620
20.059.021.0
20 79 100.0
Total 95 100
Educational level 01 – 6 7 – 12 Total
15602095
14.364.621.1100
14.3 78.9 100
Years of experience 1- 10 11 – 2021 – 3031 and above
22402211
23.242.123.211.5
23.365.388.5100
Total 95 100Source of Fund
(a) Selfb) relation Bank Cooperative Self and cooperative Self and relation Total
421012810495
44.2 10.51.129.510.54.2100
44.2 54.7 55.8 85.3 95.3 100.
Source of labour Family Hired Both
305312
31.655.612.8
31.687.4100.0
Total 95 100
Table 2: Market Structure of fruit marketers
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Journal of Rural Res. & Information (Vol.6; No.1:2011) Adetunji,M.O.
Frequency Percentage Cumulative %ReasonProfitability Fruit in season Inheritance Fruits marketing
3217937
33.717.9 9.538.9
3.751.661.1100
Total 95 100Quantity (baskets)
1 – 10 11 – 2021 – 30
103451
10.635.853.8
10.646.2100
Total 95 100Source Farm gate Wholesalers Both Total
41431195
43.245.311.6100
43.288.4100.
Population of Mango sellersMany Few Total
831295
87.412.6100
87.4100
Mode of storage
Daily purchase Fresh air treatment Total
603595
63.236.8100
63.2100.0
Means of transportationHead carriage Vehicle
881
8.491.6
8.4100.0
Total 95 100Source: Field Survey 2010
Table 3: Cost and Returns on Mango Marketing
Source: Computed from Field Survey 2010
Table 4: Problems encountered by respondents in mango marketing
Variables/ per day (N)/ day % share in the TVC
Per basket SoldTotal Income(TR)Transport CostLabour CostRentFarmgate cost of MangoTotal Variable Cost (TVC)Gross Margin (GM)Marketing Margin (Mm)