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PROJECT TOPIC: SPATIAL DISTRIBUTION OF LOCAL MARKET AND VARIATIONS IN PRICES OF VEGETABLE IN LAGOS STATE

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CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND TO THE STUDY

Agricultural market is a key component of the economy where agriculture forms a resource base of economy. Thus they play a very important role in economic development of the region. Geographers are mainly concerned with the spatial distribution of geographical phenomena. In case of marketing centres their origin, growth, development and spatial distribution are the combined effect of various factors. Therefore, correlation between number of such phenomena with area, population, inhabited villages, and net sown area etc, may give more elastic picture (Gharpure and Pawar 1981).

Agricultural market also helps in increasing social contact and serves as centre’s of diffusion of innovation and ideas and become focus for political and other activities. The potentials contribution of agricultural marketing towards improved rural incomes in developing countries has been a source of concern to both businessmen and to researchers.

African agriculture improved dramatically in the 1960s and 1970s, due to strong public investment in research and extension, combined with market interventions such as guaranteed prices and subsidized inputs and credit (Stringer and Pingali, 2004). However, these interventions also had their limitations: government institutions often are not very efficient, and their interventions tend to be expensive and also tend to reduce the involvement of the private sector.

Over time, government intervention in agricultural markets began to be seen as a major problem (Crawford et al., 2003).As a reaction, and strongly encouraged by the donor community, many countries adopted Structural Adjustment Plans (SAPs), starting in the 1980s. These SAPs focused on creating a conducive environment for private sector involvement, by liberalizing markets for agricultural inputs and outputs, letting market forces determine the prices of these products, and reduce government’s role (Gisselquist and Grether, 2000; Gisselquist et al., 2002). The Nigerian government, faced with tight budgets and pressure from donors liberalized the vegetable marketing, lifting trade and transport controls, reducing the interventions of the marketing board, and liberalizing prices (Wangia et al., 2004).

Unfortunately, the liberalization of the agricultural sector in SSA did little to increase productivity. A synthesis of relevant research finds a consensus that economic performance of the region has lagged behind that of developing countries in other regions and that the reforms have fallen short of their expected outcomes (Kherallah et al., 2002). Often, reforms studied were only partially implemented and reversal was common. Others argue that, while liberalization is necessary to accelerate productivity, it is not sufficient. Proper distribution systems need to be in place, appropriate and efficient regulatory and legal frameworks need to be in place, and infrastructure, especially for transport infrastructure, is needed to decrease the transaction costs (Tripp, 2001; Tripp and Rohrbach, 2001). Informal discussions in the different agro-ecological zones in Nigeria revealed that farmers complain that price volatility is a major problem (De Groote et al., 2004).

Vegetable is an important food crop, and also an important cash crop. But prices fluctuate heavily over time, so farmers face price insecurity that hampers investment decisions, and over space, although they have little knowledge on the latter to guide them to market their surplus.


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