DETERMINATION OF THE INTEGRATION OF RICE MARKETS IN ENUGU STATE, NIGERIA

ABSTRACT
This study was designed to determine the integration of rice markets in Enugu state.
Factors considered include: socio-economic characteristics, existing market structure and
channels, integration of rice markets, structural factors that affect the integration of rice
markets and the problems affecting rice traders in the state. Forty wholesalers and forty
retailers were selected for the study. Primary data and secondary data were collected and
analyzed using descriptive statistics, co-integration analysis and market integration
function. The results showed that majority of the rice traders were between 30 and 49
years with low educational status and marketing experience ranging from 6 to 10 years.
Unit Root Test showed that the variables were stationary at first differencing and were
integrated of the order zero, 1(0). Rice markets in the study area were integrated but the
integration level was low.

The Error Correction Model had a coefficient of -0.0061872
which was significant at 1% level and was negative. The Market Integration Function had
R2 (Coefficient of Determination) of 0.78 showing that the independent variables
explained about 78% of the variations in the prices of rice in the rural and urban rice
markets. Transportation cost, toll fee, processing cost and storage cost significantly
affected the level of market integration. The greatest problems encountered by the rice
traders were inadequate finance, (100%), high transportation cost/bad roads and poor
quality of local rice compared to foreign rice. To improve the level of market integration;
transportation, processing, storage, communication and credits facilities should be
provided.