Ogbonna Nkiru

DEPARTMENT OF AGRICULTURAL ECONOMICS

ECONOMICS OF FISH MARKETING IN AKWA IBOM STATE,

UMOINYANG, MFON E.

PG/M.Sc/09/51357

Ogbonna Nkiru

Digitally Signed by: Content manager’s

DN : CN = Webmaster’s name

O= University of Nigeria, Nsukka

OU = Innovation Centre

FACULTY OF AGRICULTURE

DEPARTMENT OF AGRICULTURAL ECONOMICS

ECONOMICS OF FISH MARKETING IN AKWA IBOM STATE,

NIGERIA

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DEPARTMENT OF AGRICULTURAL ECONOMICS

ECONOMICS OF FISH MARKETING IN AKWA IBOM STATE,

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TITLE PAGE

ECONOMICS OF FISH MARKETING IN AKWA IBOM STATE, NIGERIA

A DISSERTATION SUBMITTED TO THE DEPARTMENT OF AGRICULTURAL

ECONOMICS, UNIVERSITY OF NIGERIA, NSUKKA

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF

MASTER OF SCIENCE (M.Sc) DEGREE IN AGRICULTURAL ECONOMICS

BY

UMOINYANG, MFON E.

PG/M.Sc/09/51357

SUPERVISOR: PROF. S. A. N. D. CHIDEBELU

JANUARY 2014

iii

CERTIFICATION

UMOINYANG, MFON EDET. a postgraduate student in the Department of Agricultural

Economics, with registration number PG/M.Sc/09/51357 has satisfactorily completed the

requirements for course and research work for the award of the degree of Master of Science

(M.Sc) in Agricultural Economics. The work embodied in this dissertation, except where

duly acknowledged, is the product of the student and has not been previously published in

part or full for any other diploma or degree of this or any other University.

_____________________ ____________________

PROF. CHIDEBELU, S. A. N. D. DATE

(SUPERVISOR)

______________________ _____________________

PROF. CHIDEBELU, S. A. N. D. DATE

(HEAD, DEPT. OF AGRIC. ECONOMICS)

______________________ _____________________

EXTERNAL EXAMINER DATE

iv

DEDICATION

This work is dedicated to the almighty God for His love, strength, guidance and

provision. May His name be glorified and my late husband Mr. Basil Basil Nkanga your

legacy lives on.

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ACKNOWLEDGEMENT

I am greatly appreciative and indebted to my supervisor, Prof. Chidebelu S. A. N. D.

for guiding me throughout the duration of this work. There were several occasions when I

had given up hope in the work and on life but his encouragements, patience, motivations,

support and assistance sustained me. May God richly bless him.

My regards also go to my lectures who toiled relentlessly to lay the foundation for

this work to commence. These include Profs. S. A. N. D. Chidebelu, E. C. Okorji, C. J.

Arene, A. I. Achike (Mrs.) and Dr. A. A. Enete.

I appreciate my parents Chief and Deac. E. E. Inyang, my brothers and their wives

Dr.& Hon.(Mrs.) Isinenyin Umoinyang, Dr.& Deac. Umoinyang Umoinyang and

Rev.(Prof.)& Mrs. Imo Umoinyang and my Sister Mrs. Emem Imaobong whose love, care

and support have been central to my wellbeing and sustenance. I am also grateful to my

friends too numerous to mention who stood by me in difficulties. They include but not

limited to Oti Okpani, Nsemeke Inuenekpo, Petrina, Atom, Bimpe, Faith, Nsisionu Chidima,

Mrs. Uwaoma, Joseph Iorhii, Tochi, Mike, Mrs. Agangan, Blessing Obinna.

I acknowledge the principal and staff of Redemption Academy Obio Etoi, Uyo.

Mrs. Lynda Ekpenyong, Mrs Akon Ekere, Mrs. Awomukwu, Miss. Chika Chukwudebere,

Miss Ekaete John, Mrs. Yvonne Okokon, Miss. Mbuotidem Timothy, Mr. Joseph Inyang,

Mrs. Mfon Uffort, Mrs. Idara Chukwuemeka, Mrs. Imaobong James. Worthy of special

appreciation is my pretty little angel Mfoniso UyaiAbasi for her smiles and sweet distraction.

To my nieces and nephews I say thank you.

vi

TABLE OF CONTENTS

Title Page ... ... ... ... ... ... ... ... ... ... i

Certification ... ... ... ... ... ... ... ... ... ... ii

Dedication ... ... ... ... ... ... ... ... ... ... iii

Acknowledgement ... ... ... ... ... ... ... ... ... iv

Table of Contents ... ... ... ... ... ... ... ... ... v

List of Tables ... ... ... .... ... ... ... ... ... ... viii

List of Figures ... ... ... ... ... ... ... ... ... ... ix

Abstract ... ... ... ... ... ... ... ... ... ... x

Chapter One INTRODUCTION

1.1 Background of the study ... ... ... ... ... ... ... 1

1.2 Problem statement ... ... ... ... ... ... ... ... 4

1.3 Objectives of the study ... ... ... ... ... ... ... 7

1.4 Research hypothesis ... ... ... ... ... ... ... 8

1.5 Justification of the study ... ... ... ... ... ... ... 8

Chapter Two REVIEW OF RELATED LITERATURE

2.1 Socioeconomic characteristics of agricultural produce marketers ... 10

2.2 Marketing efficiency and profitability ... ... ... ... ... 13

2.3 Marketing channels and vertical differentiation of agricultural produce

marketing ... ... ... ... ... ... ... ... ... 16

2.4 Problems of fish marketing ... ... ... ... ... ... ... 18

2.5 Methods of fish processing and storage ... ... ... ... ... 21

2.6 Role off gender in agricultural produce marketing ... ... ... ... 22

2.7 Theoretical Framework ... ... ... ... ... ... ... 24

2.7.1 Utility theory ... ... ... ... ... ... ... ... 24

2.7.2 Structure-conduct-performance approach ... ... ... ... ... 25

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2.7.3 Theory of demand and supply ... ... ... ... ... ... 28

2.8 Analytical Framework ... ... ... ... ... ... ... 30

2.8.1 Likert rating scale ... ... ... ... ... ... ... ... 30

2.8.2 Concentration ratio ... ... ... ... ... ... ... ... 31

2.8.3 Market performance ... ... ... ... ... ... ... ... 32

2.8.4 Marketing Margin ... ... ... ... ... ... ... ... 33

2.8.5 Multiple regression ... ... ... ... ... ... ... ... 34

2.8.6 Multinomial logit (MNL) model ... ... ... ... ... ... 34

2.8.7 Analysis of variance (ANOVA) ... ... ... ... ... ... 35

2.8.8 Student's t-test ... ... ... ... ... ... ... ... 36

Chapter Three RESEARCH METHODOLOGY

3.1 Area of study ... ... ... ... ... ... ... ... ... 37

3.2 Sampling technique ... ... ... ... ... ... ... ... 37

3.3 Data collection ... ... ... ... ... ... ... ... 38

3.4 Data analysis ... ... ... ... ... ... ... ... 38

Chapter Four RESULTS AND DISCUSSION

4.1 Socioeconomic characteristics of fish marketers ... ... ... ... 44

4.2 Structure and conduct of fish marketing ... ... ... ... ... 49

4.3 Profitability and efficiency of fish marketing channels ... ... ... 50

4.4 Methods of fish processing, storage and transportation ... ... ... 51

4.5 Challenges of fish marketing ... ... ... ... ... ... 52

4.6 Factors that drive vertical differentiation of fish marketing channels ... 53

4.7 Level of gender participation in fish marketing ... ... ... ...

viii

Chapter Five SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary ... ... ... ... ... ... ... ... ... 57

5.2 Conclusion ... ... ... ... ... ... ... ... ... 59

5.3 Recommendations ... ... ... ... ... ... ... ... 60

5.4 Additions to Knowledge ... ... ... ... ... ... ... 62

5.5 Areas Needing Further Research ... ... ... ... ... ... 63

References ... ... ... ... ... ... ... ... ... ... 64

Appendix ... ... ... ... ... ... ... ... ... ... 72

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LIST OF TABLES

Table 2.1: Benefit/cost ratio and market margin of fish marketers in

Yenagoa, Bayelsa State ... ... ... ... ... ... 14

Table 2.2: Marketing efficiency across fish markets in India ... ... ... 14

Table 2.3: Cost and returns of respondents ... ... ... ... ... 15

Table 2.4: Marketing margin of the retailers and producers ... ... ... 15

Table 2.5: Quantity of processed fish distributed/kg/month ... ... ... 16

Table 2.6: Marketing channels of IMC at KLA ... ... ... ... ... 17

Table 2.7: Distribution channels in agricultural produce marketing ... ... 18

Table 2.8: Problems of fresh fish marketing by respondents ... ... ... 18

Table 2.9: Varimax rotated women perceived constraints on agricultural produce

marketing in Enugu South Area of Enugu State ... ... ... 20

Table 2.10: Sex distribution of fish retailers at Djamadjie and Petit Marche markets 24

Table 4.1: Socioeconomic characteristics of fish marketers ... ... ... 44

Table 4.2: Structure of fish marketing ... ... ... ... ... ... 49

Table 4.3: Profitability and efficiency of fish marketing channels ... ... 50

Table 4.4: Frequency distribution of methods of fish processing,

storage and transportation ... ... ... ... ... ... 52

Table 4.5: Likert scale rating of challenges of fish marketing ... ... ... 53

Table 4.6: Multinomial logit result on factors that drive vertical differentiation

of fish marketing channels ... ... ... ... ... ... 54

x

LIST OF FIGURES

Figure 2.1: Processed fish distribution channel in Adamawa State ... ... 17

Figure 2.2: Problems of fish marketing in Adamawa State ... ... ... 19

Figure 2.3: Structure-conduct-performance approach ... ... ... ... 27

Figure 4.1: frequency distribution of gender participation in fish marketing ... 56

xi

ABSTRACT

The study investigated the economics of fish marketing in Akwa Ibom State, Nigeria using

primary data. Purposive and multistage random sampling technique was used to collect the

data from 105 respondents using well-structured and pre-tested questionnaire. These data

were analysed using descriptive statistics, concentration ratio, price spread, net profit

margins, marketing margins analyses and multinomial logit (MNL) models. Tests of

significant differences and effects were carried out using analysis of variance (ANOVA) and

t-test techniques. Research results showed that average age for the fish marketers were

38years for producers, 42years for wholesalers and 46years for retailers, and also that

majority of them were married. The results further showed that majority of the fish producers

and retailers had West African Senior School Certificate while most wholesalers had First

School Leaving Certificate. Also, the all marketers had average household size of 5 members

with 18years marketing experience for the producers, and 15years for the wholesalers and

retailers, respectively. Furthermore, the study found that the marketers made use of referrals,

price discount and home delivery to attract customers. The results showed that the market

was under weak oligopoly at concentration ratio of 47%. This implies that the activities of

the largest four fish marketers affected the price and demand for fish in the market. Further

results showed that fish marketing was profitable with channel 2 having the highest net

margin of N141,095 per annum per processing firm compared to channel 1 (N127,850) and

channel 3 (N137,030) while channel 1 had the highest marketing efficiency of 342% relative

to channels 2 and 3 with marketing efficiencies of 144% and 97%, respectively. The results

indicated that these differences in marketing efficiency among the channels were significant

at P<0.01. This implied that the longer the chain of distribution, the higher the marketing cost

and hence, the lower the marketing efficiency. Furthermore, the study found that smoke-

drying was the predominant method of processing fish at frequencies of 64% for the

producers, 90% for the wholesalers and 92% for the retailers. Use of hangovers was the

dominant method of storing fish at frequencies of 40% for the producers, 76% for the

wholesalers and 83% for the retailers. Also, motor-cycle was the dominant method of

transportation of fish for the producers and wholesalers at frequencies of 73% and 61%,

respectively, while use of bus/taxi was dominant for the retailers at frequency of 76%.

Further results showed that there were challenges facing fish marketing at an average of 2.74

on a 4-Point Likert rating scale. Lack of capital, seasonality of fish business, lack of

government assistance, produce deterioration, lack of storage facilities, poor extension

services and debt were the factors indicted for challenging fish marketing. More so, the

results showed that socioeconomic characteristics accounted for the vertical differentiation of

fish marketing into channels 1, 2 and 3 by 68%, 87% and 92%, respectively. Marital status,

household size, value of fish and membership of cooperative unions were the factors that

significantly drove vertical differentiation of fish marketing positively at P<0.05 while the

effects of age and sex were significant and negative at P<0.05. Firewood splitting, fish

transportation, loading/off-loading of fish, fish packaging, fish processing and fish smoking

were the activities that both males and females participated in. This implied that the

participation of both males and females will enhance the marketing of fish. The study

recommended policies that will enhance that profitability and efficiency of fish marketing.

1

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Agriculture is the major economic activity of developing economies. In Nigeria,

agriculture provides food for the increasing population; supplies adequate raw materials to

growing industrial sector; is a major source of employment; generates foreign exchange

earnings; and provides market for the products of the industrial sector (Okumadewa, 1997;

World Bank, 1998; Winters, Janvry, Sadoulet and Stamoulis, 1998; Food and Agriculture

Organization, FAO (2006) as cited in Eze, Lemchi, Ugochukwu, Eze, Awulonu and Okon

2010).

Fish is a very important agricultural product in the country as it occupies a prime place

in the economy of the country. The term fish is a diverse group of animal that live and

breathe in water by means of gill. Fish is one of the most diverse groups of animals known to

man with over two thousand five hundred species. There are more species of fish than all

other vertebrate (Eyo, 1992). The fishery sector is estimated to contribute about 3.5% to

Nigeria’s Gross Domestic Product (GDP), and also provides direct and indirect employment

to over six million people (Kwara State Government, 2010). The employment opportunities

come from different fishing activities such as production, processing, preservation and

transportation (Ali, Gaya and Jampada, 2008). The Central Bank of Nigeria, CBN (2005)

report shows that the contribution of the fishery sector to the GDP of Nigeria rose from

N76.76 billion in 2001 to N162.61 billion in 2005.

Fish is a very important agricultural product in Nigeria, and is largely consumed in the

country especially due to its rich nutritional and medicinal values. More so, the large coastal

area and continental shelf available in the country makes diverse varieties available in

different areas at affordable prices. Despite these rich coastal and continental resource base of

2

the country, demand for fish far exceeds production, resulting in the importation of over

800,000 metric tonnes of fish annually (FBS, 2007). This trend may not change in the nearby

future considering the rising population of the country and the increasing distance between

fish producers and consumers. This therefore calls for efficiency in fish marketing.

Furthermore, fish is the most important animal protein food available in the tropics, and this

could account for its large consumption in the country. In Nigeria, fish constitutes 40% of

protein intake (Eyo,1992: Federal Department of Fishery, FDF, 2000), while, according to

Adekoya and Miller (2004), fish and fish products contribute more than 60% of total protein

intake in adults especially in rural areas. Amiengheme (2005) asserts that nutrient from fish is

superior to all terrestrial meats such as beef, mutton, pork and chicken being a rich source of

high quality animal protein and also contains highly digestible energy. More so, it is a good

source of sulphur and essential amino acids such as lysine, leucine, valine and arginie. Fish is

a good source of thiamine and polyunsaturated fatty acids, fat soluble vitamins such as

vitamins A, D E and K, and water soluble vitamins for example, B complex, and minerals,

such as, calcium, phosphorous, iron, iodine and selenium. According to Ovie and Raji

(2006), Fish contains omega 111 fatty acids that are known to reduce cardiovascular diseases,

hypertension and arteriosclerosis, thus becoming a preferred source of protein for those

nearing 50years and above. These fatty acids are also known to enhance good brain cell

development in developing foetus,(thus vital diet for pregnant women) and intelligent

quotient (IQ) in developing children (FDF,2005). Hence it is evident that fish and fisheries

are crucial to the economy and health of the nation.

The geography and biodiversity of Nigeria supports fishing activities. Nigerian

coastal fishery sector is characterized by a rich resource base with a water area of

140,000km2 and about 42,000km

2 continental shelf areas, adjacent to the country’s 853km

coastline (FAO, 2007). The huge Niger Delta inland waters associated with River Niger and

3

River Benue, their tributaries and flood plains, natural lakes and wetlands, reservoirs and

purpose-built ponds, constitute the total water area in the country. Furthermore, one quarter

of Nigerian States are located at the coastal zone, including Akwa Ibom. The other states

include Lagos, Ogun, Ondo, Delta, Edo, Bayelsa, Rivers and Cross River state ( Bako, Atala,

and Kudi, 2008).

According to Federal Bureau of Statistics, FBS (2007), annual fish production in the

country in 2006 was about 700,000 metric tonnes, mainly through artisanal fishery, less than

1.5 million metric tonnes annual demand of the country. Artisanal fishery is a small scale

fishery activity that involves the use of relatively little capital, dugout canoes and other

simple fishing facilities such as gears, nets, hooks and traps around streams, rivers and within

five nautical miles in the seas. Some of the fish species found in Nigerian waters include sole,

sharks, rays, catfish, bonga fish, mud fish and tilapia. In Nigeria, agriculture has failed to

meet the food needs of the growing population. One of the possible reasons for this failure, as

asserted by Ayinde, Adewumi and Ojehomon (2009), is the malfunctioning of marketing

chain of major food leading to high rate of spoilage, constant food shortage, rising farm

products prices and huge importation costs. The role of marketing cannot be over emphasized

as production centres are fragmented and mostly in small scale. (FAO, 2009).

The marketing of fish has steadily changed due to urbanization. Thus, as the process

of urbanization progresses in Nigeria, an increasing share of national fish consumption takes

place at locations other than where fish is produced. Before increasing urbanization, fish

produced were locally and domestically consumed. With increasing urbanisation and

development, which has further increased the distance between fish producers and

consumers, fish marketing has become very important. Fish marketing involves all activities

undertaken in conveying fish from producer to consumers. It includes processing, storage,

preservation, transportation, wholesaling and retailing. The process of fish marketing is a

4

very delicate one, if the quality and nutrition of fish is to be maintained to the highest

possible value.

Efficiency in fish marketing system is essential for the growth and development of

the fishery sector. Marketing efficiency involved the movement of products from the

producers to the consumers at the lowest cost consistent with the provision of the services

consumers’ desire. It involves technical efficiency and economic efficiency. While technical

efficiency measures the effectiveness or competence with which the physical aspects of

marketing (such as storing, transportation and other activities meant to reduce wastes and

prevent deterioration) are performed, economic efficiency, measures the realization of

maximum possible output in money terms with a given resource input, or a given level of

output from the minimum possible resource input (Adegeye and Dittoh, 1985).

The use of wholesalers and retailers (intermediaries) between producers and

consumers improves marketing efficiency tremendously and, also, reduces distribution costs

to all market participants (Coughlan, Anderson, Stern and El-Ansary, 2001). The marketing

system must develop well to provide necessary services as producers sell in markets distant

from where consumers buy their fish. According to Enete (2008), the efficiency of marketing

system gets better as the number of intermediaries increases and vertically differentiate with

specialized functions like wholesale and retail. This is in line with the earlier assertion of

Adegeye and Dittoh (1985) that the overall objective of marketing efficiency is to provide

goods to consumers in the required form at the required time and place with the lowest

possible marketing costs consistent with the interests of the producers.

1.2 Problem Statement

Agricultural marketing is central to agricultural development and the overall growth

and development of the economy. Previous studies have shown that efficient marketing

system stimulates agricultural production (Awoyinka and Ikpi, 2005; Adescope, Ajiebefun,

5

and Akeremale 2005 as cited in Awoyinka, 2009). In Nigeria, the annual demand for fish far

exceeds local production such that according to the Federal Bureau of Statistics, over 800,000

metric tonnes of fish are imported. This high level of fish importation is absurd considering

nutritional and other economic importance of fish, and rich coastal heritage and endowment

of the country. As important as marketing is, most of the studies on fish have concentrated

on production (Inoni, 2007: Kudi , 2008: Dagtekin, 2009: Zabbey, 2010). Available

information shows that few of the studies on fish marketing did not investigate the efficiency

or otherwise of the process (Ali, Gaya, and Japada 2008: Gaya, Mohamed and Bawa 2010).

Efficiency in fish marketing has the potentials of stimulating fish production in the country in

view of the huge deficit between local consumption and production. This will have a

downward effect on the price of fish and thereby induce more consumption of fish by

consumers. The importance of this development cannot be over-emphasized in country like

Nigeria whose economy, life and wellbeing are immersed in agriculture, and fish alone

constituted more than 40% of total protein intake in the country (Eyo, 1992: Federal

Department of Fishery, FDF, 2000), Fish and fish products contribute more than 60% of total

protein intake in adults especially in rural areas (Adekoya and Miller 2004).

Major components of fish marketing efficiency are profitability and marketing margins

of the various participants (i.e. wholesalers and retailers).Research has shown that there is

continuous increase in the number of people involved in fish marketing as a result of growing

population of the country (Ali et al., 2008). This is an inkling of the profitability of the

enterprise as only profitable activities could be attracting increasing number of participants.

Similarly, market margin is a pointer to the level of market performance (Olukosi and Isitor,

1990). The middlemen involved in marketing are accused of earning higher profits in the

marketing system (Bryceson, 1993). Vertical differentiation, according to Dijkstra (1999),

has the capacity to reduce the transaction costs of marketing especially for producing

6

households. Unfortunately, studies have not been carried out to determine the profitability of

fish marketing as well as the marketing margins of the participants, especially, in Akwa Ibom

State, which is one of the nine costal States in the country. Thus there is a huge dearth in

knowledge.

Furthermore, the economy of Nigeria, just like other sub-Saharan African countries,

is still developing. This has imposed a lot of challenges on marketing of goods and services

in the country, especially agricultural products like fish. It has been argued that agricultural

marketing is inefficient resulting in high rate of food spoilage, poverty and unaffordable food

prices by consumers. However, not many studies have empirically evaluated the validity of

these hypotheses in fish marketing. This study seeks to analyze economics of fish marketing

and in so doing address questions affecting marketability of fish. According to Adekanye

(1988) and Abdullai (1983), as cited in Awoyinka (2009), marketing of food in Nigeria is

characterized by multitudes of deficiencies and problems. These problems cut across

processing, preservation, packaging, distribution and transportation (Rural Sector

Enhancement Programme, RUSEP, 2002). In fish marketing, problems of shortage of supply,

price fluctuations due to drying up of sources of water, and spoilage in transit, have been

identified in the country (Tomek and Robinson, 1981, as cited in Ali et al., 2008). Eze,

Onwubuya and Ezeh (2010), identified inadequate processing skills, produce deterioration

and lack of storage facilities as the major constraints perceived by women marketers.

However, this may not be exhaustive bearing in mind the paucity of research in fish

marketing, and also the rural nature of participants in fish marketing. Therefore, the

economics of fish marketing evaluates the structure, conduct and performance of fish

marketing system as indicators of the overall efficiency of the system. It is of essence in the

determination of both consumers’ living cost and producers’ income and hence, the overall

wellbeing and development of the country.

7

Furthermore, the level of gender participation in fish marketing has not been

empirically evaluated. It is a common knowledge that agricultural activities in developing

countries like Nigeria are predominantly carried out by women. According to the Federal

Bureau of Statistics, over 70 per cent of agricultural activities are carried out by women in

Nigeria (FBS, 2010). However, results from different studies on fish marketing differ from

the Federal Bureau of Statistics report. Ali et al (2008) reported that majority of fish

marketers in Maiduguri were males while a similar study carried out in Adamawa State

showed that majority of the marketers were females (Gaya et al., 2010).

From the foregoing therefore, the following fundamental issues become expedient:

a. what are the socioeconomics characteristics of fish marketers?

b. what is the structure of fish marketing?

c. is fish marketing profitable or not, and to what extent;

d. what is the level of differentiation of the channels involved in fish marketing?

e. how efficient is the process, and what is the marketing margins of the various

participants; and

f. what are the factors influencing the efficiency or otherwise of fish marketing, as well

as the problems facing fish marketers.

g. what proportion of males to females are involved in fish marketing;

These are the many issues that this study will investigate with hope of bridging the gap in

knowledge.

1.3 Objectives of the Study

The broad objective of this study is to conduct an economic study of fish marketing

in Akwa Ibom State.

The specific objectives are to:

i. describe the socio-economic characteristics of fish marketers;

8

ii. determine the structure of fish marketing;

iii. determine the factors that drive vertical differentiation of fish marketing channels;

iv. determine the efficiency of the fish marketing channels;

v. evaluate the various methods used in fish processing, storage and transportation;

vi. identify the challenges facing fish marketing; and

vii. assess the level of gender participation in fish marketing.

1.4 Research Hypotheses

The following null hypotheses were tested:

H01: there is no significant difference in efficiency among the fish marketing channels and

H02: socioeconomic factors do not affect the vertical differentiation of fish marketing

channels.

1.5 Justification of the Study

According to the United Nations estimate about 2.33 per cent of the world population live in

Nigeria thereby making the country the 7th

most populous in the world with a population of

162,471,000 in July 2011 (United Nations, 2011). Meeting the food and Agricultural needs of

current and future generation present daunting challenges. The need for increased and more

efficient agricultural production a sustainable basis therefore cannot be over-emphasised.

To ensure continuous availability of fish for human consumption, nutrition, and

wellbeing, the Nigerian economy requires effective and efficient marketing systems. Fish

marketing serves as a medium for bridging the gap between producers and consumers of fish.

This is very imperative in view of the growing human population and hence, demand for fish

globally and Nigeria in particular, compared to supply, and more so, the increasing distance

between producers and consumers (FAO, 2004; Ayo-Olalusi, et.al., 2010). The availability of

fish to consumers at the right time and place requires an effective marketing system. The

marketing of fish passes through various market participants and exchange points before they

9

reach the final consumers (Ali, et. al., 2008). As such, the marketing system must develop

well to provide the necessary services. To ensure that machineries for enhancing marketing

efficiency are put in place, a study of this nature is required as it would enable the country to

be self-sufficient in fish production, overcome food crises and mitigate the effects of various

dimensions of food insecurity. The efficiency of fish marketing therefore is derived from

these variables. As such their determination will pave way for better and improved planning

and organization by fish producers, fish consumers, fish marketers, government, policy

makers and indeed, every participant in the fishery sector. This will fast tract increased

production and consumption of fish in the country with attendant positive impact on the

nutrition, health, gross domestic product and overall wellbeing of the country. It is hoped that

the findings of this work will provide the necessary framework that would improve the

capacity of producers and middlemen to be more efficient in all aspects of fish distribution.

The result of this study will not only be useful to students, the private sector and policy

makers but also to all participants in production, processing, marketing of fish and will

provide basis for more studies in the area.

10

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Socioeconomic Characteristics of Agricultural Produce Marketers

Socioeconomic characteristics and distribution play very important roles in the

marketing of agricultural products including fish.

2.1.1 Sex of marketers

There is disparity on gender in the marketing of agricultural products like fish. The

report of a study conducted in Delta State showed that 72.2% of the respondents were

females while 27.8% were males (Nwabueze and Nwabueze, 2010). The report further

showed that 9.9% of the females were wholesalers, while 90.1% of them were retailers, and

also, 42.9% of the males were wholesalers while 57.1% were retailers. However, in another

study Okwuokenye and Onemolease (2011) found that males dominated the marketing of

agricultural products with 78.8% compared to females of 21.2%. In Adamawa State, 50% of

the fish marketers were males and females, respectively (Madugu and Edward, 2011). In

South-Western Nigeria, Afolabi (2009) reported that in the marketing of agricultural products

males were 31.33%, while females 68.67%.

2.1.2 Age of marketers

According to Nwabueze and Nwabueze (2010), there are variations in the age

distribution of fresh fish marketers in Delta State with marketers in the age range of 41 – 60

years dominating at 54.8%, while those at the range of 21 – 40 years had 38.9%; marketers at

the range of 1 – 20 years had 4.7% while those above 60 years were least at 1.6%. In another

study conducted in Bayelsa State the age distribution of fish marketers were: ≥41years –

42.22%, 31-40years – 22.22%, 26-30years – 22.22% and 15-25years – 13.33% (Kainga and

Adeyemo, 2012). A study on women agricultural produce marketers in Enugu State showed

that their age distributions were: ≤20years – 4.1%, 21-30years – 20.1%, 31-40years – 20.8%,

11

41-50years – 40.0%, while 51-60years and ≥60years – 7.5% respectively (Eze, et. al., 2010).

Furthermore, Afolabi (2009) study showed that in the marketing of agricultural products the

age distributions of the marketers were: <29years – 20%, 30-40years – 47.33%, 41-50years –

24.67% and >50years – 8%. Madugu and Edward (2011) reported that the age distribution of

processed fish marketers in Adamawa State included: ≤21years – 2.5%, 21-30years – 15%,

31-40years – 46.25%, 41-50years – 16.25%, 51-60years – 12.5% and >60years – 7.5%. A

similar study in Edo State showed that the mean age of agricultural product marketers was

48.2years while their age distributions included: <30years – 3.8%, 30-39years – 17.5%, 40-

49years – 26.3%, 50-59years – 47.5% and ≥60years – 5.0% (Okwuokenye and Onemolease,

2011).

2.1.3 Marital status of marketers

Marital status is an important feature of agricultural products marketers. These

marketers are dominated by married people (56.67%), followed by single people (26.00%),

widowed people (11.33) and divorced people (6.00%) (Afolabi, 2009). In another study

carried out by Kainga and Adeyemo (2012), fish marketers were dominated by married

people (69%), while single and divorced people were 14% each. Similarly, Eze et al (2010)

reported that in Enugu State married women constituted the majority of agricultural produce

marketers with 63.8% followed by single women (21.2%), widowed women (10.6%) and

separated women (4.4%).

2.1.4 Level of education of marketers

It is a public believe that agricultural activities are carried out by people with low

education trainings and qualifications. Okwuokenye and Onemolease (2011) reported that

highest qualification of agricultural produce marketers in Delta State was NCE/OND which

constituted about 5% of the marketers, secondary level of education was 70% followed by

primary education (22.5%) and no formal education (2.5%). In Adamawa State, processed

12

fish marketers with no formal education was 3.75%, those with primary education were

55.0%, 35.0% had secondary education while 6.25% had tertiary education (Madugu and

Edward, 2011). Furthermore, Nwabueze and Nwabueze (2010) in another study in Delta

State discovered that majority of the marketers had primary education at 60.3%, 19.8% had

post primary education, 18.3% had vocational education while 1.6% had no formal education.

Similar study in Enugu State showed among women agricultural produce marketers showed

that 37.5% had no formal education, 25.0% had First School Leaving Certificate, 17.5% had

Senior Secondary Certificate Examinations, and 13.1% had Ordinary National

Diploma/Nigeria Certificate in Education while 6.9% had Higher National Diploma/Degree

Certificate (Eze, 2010). Kainga and Adeyemo (2012) reported that most fish marketers in

Bayelsa State had no formal education and secondary education at 35.5%, respectively, 21%

had primary education while 8% had adult education. In south-western Nigeria, most

agricultural fish marketers had primary education at 51.33%, 26.67% had secondary

education while 22.0% had no formal education (Afolabi, 2009).

2.1.5 Household size of marketers

Agricultural activities in developing countries like Nigeria is highly subsistent and

labour intensive and often times depend on household labour. This assertion often explains

the relative high household sizes in Nigeria and other developing countries compared to

developed countries where agricultural activities are mechanized and capital intensive. A

study conducted in Bayelsa State Kainga and Adeyemo (2012) reported that most of the

agricultural marketers had three children at 31.10%, 27.88% had four or more children,

16.77% had two children, 8.9% had one child while 15.55 had no child. Furthermore, Eze et.

al. (2010) reported most (67.5%) of the women marketers had household size of 6-10, 10.0%

had household size of 11-15, 15.6% had household size ≤5 while 6.9% had household size

≥16.

13

2.1.6 Level of experience of marketers

The level of experience of fish marketers in Adamawa State varies considerable from

35% for ≤10years, 30% for 11-20years, 28.75% for 21-30years and 6.25% for >30years

(Madugu and Edward, 2011). Similarly, Eze et al (2010) reported that 10.5% of women

agricultural marketers had ≤5years marketing experience, 48.0%% had 6-10years experience,

24.0% had11-15years experience, 7.5% had 16-20years experience while 10.0% had

≥21years experience. Furthermore, average marketing experience of 8.6 years had been

reported, with 45% for 10-14years experience, 30% for 5-9years experience, 22.5% for

<5years experience and 2.5% for 15-19years experience (Okwuokenye and Onemolease,

2011). Similarly, Nwabueze and Nwabueze (2010) study showed that majority (41.3%) of

fresh fish marketers in Delta State had 6-10years experience, 25.4% had 11-20years

experience, 29.4% had 0-5years experience, while 4.0% had 21-30years experience.

2.2 Marketing Efficiency and Profitability

The level of efficiency and profitability of the market and marketing functions are

very important for sustainable marketing of agricultural products like fish. Nwaru et al (2011)

stated that an efficient marketing system ensures that goods which are seasonal will be

available all year round, with little variation in prices, which can be attributed to cost of

marketing functions like storage, processing, transportation, etc. An efficient marketing

system makes both the producers and consumers better off (Adegeye and Dittoh, 1985).

Nwaru et al (2011) posited that the effectiveness of the marketing process is assessed by the

ability of the market to add value to the marketed products by creating time, form, place and

possession utility. Several studies have utilized Gini-coefficient, marketing margin and gross

margin analysis to measure the efficiency and profitability of agricultural produce marketing

(Afolabi, 2009; Madugu and Edward, 2011; Nwaru et al., 2011; Okwuokenye and

14

Onemolease, 2011; Kainga and Adeyemo, 2012). According to Kainga and Adeyemo (2012)

the benefit/cost ratio of fish marketers in Yenagoa Local Government Area of Bayelsa State

ranged from 1.15 to 1.32, while the marketing margin spanned through 11.67% to 17.22%

(table 2.1).

Table 2.1Benefit/cost ratio and market margin of fish marketers in Yenagoa, Bayelsa State

Swali and edepie markets Zarama market

Parameters/month Fresh Dried Frozen Fresh Dried

Fish fish fish fish fish

Purchasing price (N) 473,144.00 94,160.00 478,614.32 185,607.00 609,700.00

Marketing price (N) 7400.00 6000.00 9100.00 2000.00 4800.00

Sales (N) 544,000.00 118,607.00 560,842.78 216,370.70 742,300.00

Net income (N) 536,600.00 112,607.00 551,742.78 214,370.70 736,500.00

B/C ratio 1.32 1.18 1.15 1.15 1.21

Market margin (%) 11.67 15.55 13.04 13.29 17.22

Source: Kainga and Adeyemo, 2012.

In India, marketing efficiency ranging from 1.89% to 2.60% had been reported across

various fish markets by Kumar et al (2010) (Table 2.2).

Table 2.2 Marketing efficiency across fish markets in India

Fish market Marketing efficiency (%)

Coimbatore 2.60

Hyderabad 2.50

Bhubaneshwar 2.36

Howrah 2.11

Mumbai 1.89

Kumar et al., 2010.

Similarly, Edward et al (2011) reported that fish marketing in Adamawa State is

profitable with a marketing margin of 39.8%. Furthermore, a marketing margin of

35.70%was reported among yam sellers in Delta State (Okwuokenye and Onemolease, 2011).

15

Also, a gross margin of N3,666.55 per week had been reported by Afolabi (2009) among

agricultural produce marketers in south-western Nigeria (table 2.3).

Table 2.3 Costs and returns of respondents

Items Amount (N) % of TC % of Total sales

Acquisition cost 955454.46 94.47 61.26

Transportation cost 13046.86 1.29 0.84

Storage cost 3843.30 0.38 0.25

Cost of labour 36308.69 3.59 2.33

Miscellaneous 809.11 0.08 0.84

Depreciation 1921.63 0.19 0.12

Total variable cost (TVC) 1009647 99.82 64.75

Total cost (TC) 1011384 100

Total revenue (TR) 1559629

Total variable cost/seller 6730.98

Total cost/seller 6742.56

Total revenue/seller 10397.53

Gross margin/seller 3666.55

Net revenue/seller 3655.00

Source: Afolabi (2009).

Nwaru et al (2011) study showed that retailers of banana in Umuahia had higher

marketing margin of 74% compared to 46% for wholesalers (Table 2.4), which differs from

earlier findings of Obasi (2008) that wholesalers had higher marketing margin than the

retailers in rice marketing. In the same vein, Echebiri and Mejeha (2004) reported a higher

marketing margin of 12.31% for wholesalers than 7.94% for retailers in Abia State.

According to Scarborough and Kydd (1992) a marketing margin of 5% and 10% should be

acceptable for storage and perishable goods.

Table 2.4 Marketing margin of the retailers and wholesalers

Marketer Average purchase price Average selling price Marketing Margin

(N) (N) (%)

Retailer 650 2500 74

Wholesaler 900 1650 46

Source: Nwaru et al (2011)

16

2.3 Marketing Channels and Vertical Differentiation of Agricultural Produce

Marketing

Marketing channels consist of the means through which agricultural products get to

the final consumers from the producers. Madugu and Edward (2011), in a study in Adamawa

State, used marketing channel as the participants and the route through which processed fish

were transferred from producers to consumers. They identified participants in processed fish

marketing based on the quantity of fish traded per month (Table 2.5) 40.1% of which were

accounted for by producers/ processors, 36.9% by wholesalers, 13.8% by merchants and

9.2% by retailers. Madugu and Edward (2011) further reported that there was a decentralized

marketing channel for processed fish in Adamawa State as both consumers and middlemen

bought directly from the producers which helped to reduce exploitative activities of

middlemen (Figure 2.1).

Table 2.5 Quantity of processed fish distributed/kg/month

Categories Quantity of fish traded Percentage (%)

Producers/Processors 4,350 40.1

Wholesalers 4,000 36.9

Merchants 1,500 13.8

Retailers 1,000 9.2

Total 10,850 100

Source: Madugu and Edward (2011).

A study on the marketing system and efficiency of Indian Major Carps (IMC) in India

showed that there were eight marketing channels for IMC from Kulleru Lake Area (KLA)

(Table 2.6) (Kumar et al., 2010). The study observed that only 5% of the fish from KLA was

marketed within the State of Andhra Pradesh and the rest (about 95%) were marketed outside

the state, comprising eastern, north-eastern and southern states.

17

Figure 2.1: Processed fish distribution channel in Adamawa State

Source: Madugu and Edward (2011).

Table2.6: Marketing channels of IMC at KLA

Source: Kumar et al. (2010).

Eze, et. al. (2010) found three major distribution channels in agricultural produce

marketing: direct distribution, indirect distribution and free entry/non-commissioned

competitive (Table 2.7).

Channel Marketing channels within the state (5% of fish)

Channel I Producers – Consumers (negligible quantities)

Channel II Producers – Wholesalers – Retailers – Consumers (2%)

Channel III Producers – Wholesalers – Vendors – Consumers (2%)

Channel IV Producers – Retailers – Consumers (<1%)

Marketing channels for other states (95% of fish)

Channel V Producers – Local traders – Other states (Tamil Nadu, Kerala, Karnataka,

Maharashtra)

Channel VI Producers – Brokers – Traders (Packers) – Other states (West Bengal,

Bihar, Assam, Tripura and Napel)

Channel VII Producers – Local Traders – Traders (Packers) – Other states (West

Bengal, Bihar, Assam, Tripura and Napel)

Fishermen Processors

Middlemen Processors Female Processors

Wholesalers

Merchants

Retailers

Consumers

18

Table 2.7: Distribution channels in agricultural produce marketing

Distribution channels Agricultural produce Garri

Milled rice

Freq. % Freq. %

Direct distribution

Centralized 18 7.1 10 5.7

Farm gate 52 20.6 32 18.4

Indirect distribution

Decentralized middlemen 21 8.3 21 12.1

Source: Eze, Onwubuya and Ezeh (2010).

2.4 Problems of fish marketing

There are lots of problems encountered in the process of marketing of fish. In

Oshimili South Local Government Area of Delta State, Nwabueze and Nwabueze (2010)

reported that seasonality, scarcity, means of preservation, poor means of transportation and

use of badly-shaped containers were the main problems of fresh fish marketing in the area.

Other problems they reported are shown in table 2.8

Table 2.8: Problems of fresh fish marketing by respondents

Problem Number of respondents Percentage (%)

Source of fish 32 25.4

Availability of fish 28 22.2

Cost of fish 51 40.5

Preservation 36 28.6

Transportation 83 65.9

Credit/loans 60 47.6

Input 45 35.7

Middlemen 59 46.8

Level of education 25 19.8

Years of experience 54 42.9

Gender 33 26.2

Source: Nwabueze and Nwabueze (2010).

19

Madugu and Edward (2011), in a study in Adamawa State, found that poor access to

capital was the most pressing problem of fish marketing in the area at 45% (Figure 2.2)

followed by the absence of co-operative society at 37.5%, poor transportation network at

10% and lastly lack of government assistance in form of tax reduction and subsidy. These

problems they attributed to inadequate sources of finance and the problem of collateral before

obtaining loan, and poor road networks linking the rural fish markets.

Figure 2.2: Problems of fish marketing in Adamawa State

Source: Madugu and Edward (2011).

Further more, there are other constraints that have been found among women

marketers of agricultural produce in Enugu South Area of Enugu State. They included

inadequate processing skill, produce deterioration and lack of storage facilities (Table 2.9)

(Eze, et. al., 2010). They reported that specific issues which loaded high and amplified

inadequate processing skill included, inadequate processing equipment (0.44), long distance

to processing centres (0.45) and inadequate packaging information (0.55). Others were poor

technical knowhow (0.42), and poor technical extension services (0.37).

Similarly, produce deterioration depicts depreciation from previous stage of

production. This could arise from inefficient processing or the inability of the women

Lack of government

assistance

Poor transportation network

Absence of co-operative

society

Poor access to capital

20

marketers to preserve their produce in stable condition. According to Njoku and Obiefuna

(1987), marketing problems such as price instability and high storage loses are attributed to

produce deterioration. Specific produce deterioration issues identified by Eze et al. (2010)

included; poor marketing facilities (0.36), poor quality produce (0.52), unpredictable bad

weather (0.49), environmental degradation (0.38) and inaccessibility to credit (0.51). Eze et

al. (2010) further underscored the challenge of lack of storage facilities as a major factor in

agricultural produce marketing which they reported are loaded under the specific issues: high

cost of shops (0.41), inadequate storage facilities (0.47), poor performance measure (0.34)

and low equity capital (0.40).

Table 2.9: Varimax rotated women perceived constraints on agricultural produce marketing

in Enugu South Area of Enugu State

Constraint variables Factor 1: Inadequate Factor 2: Produce Factor 3: Lack of

storage facilities

Inadequate processing equipment 0.44 -0.11 0.22

Long distance to processing centres 0.45 0.09 -0.02

Poor marketing facilities 0.09 0.36 0.07

High cost of shops -0.14 -0.06 0.41

Inadequate storage facilities 0.29 -0.23 0.47

Poor quality produce 0.04 0.52 0.01

Inadequate package Information 0.55 0.03 0.18

Poor performance of women groups -0.35 0.02 0.39

Poor technical knowhow of women farmers 0.42 0.21 -0.05

Unpredictable bad weather 0.21 0.49 -0.04

Inadequate government marketing policy -0.39 0.27 -0.07

Environmental degradation -0.16 0.38 0.23

Incompatible preservation measures -0.36 0.16 0.34

Inadequate extension services 0.37 -0.21 0.09

Inaccessibility to credit 0.14 0.51 0.03

Low equity capital -0.09 0.12 0.04

Source: Eze, Onwubuya and Ezeh (2010)

21

2.5 Methods of Fish Processing and Storage

According to Eyo (1991), fish processing and preservation refers to the activities

carried out on fish from the time fish is caught or harvested to the time the it is delivered to

the final consumer. Processing of fish helps to make fish attractive to the consumers and also

elongates its shelf-life (Akinneye, Amoo, and Arannilewa, 2007). This, Okonta and Ekelemu

(2003) reported, is very important since fish is highly susceptible to deterioration

immediately after harvest, thereby preventing economic losses. When fish is captured or

harvested for commercial purposes it needs some processing so they can be delivered to the

next stage of the marketing chain in a fresh and undamaged condition. If fish is not sold

fresh, some activities are needed to be carried out to prevent bacteria which cause metabolic

change that result in the loss of fish quality (Tawari, 2006). As such, the central concern of

fish processing and preservation is to prevent fish from deteriorating and this remains an

underlying concern during processing operations.

According to Davies, Davies, Inko- Tariah and Bekibele (2008), efficient

preparation of fish is important when top quality, maximum yield and highest possible profits

are to be achieved. In the view of Ajuba and Omeje (2006), processing will enable fish

storage operators achieve their primary objective of profit enhancement and waste reduction

during times of bumper harvest. The development of fishing machinery and techniques that

can be employed for effective fish handling, processing and storage can never be over

emphasized especially in the age when aquaculture development is fast gathering momentum

in Nigeria (Akinneye et al., 2007). Other methods used to preserve fish and fish products

include: control of temperature using ice, refrigeration or freezing the control of water

activity by drying, smoking or freeze drying, physical control of microbial loads via

microwave heating or ionizing irradiation and chemical control of microbial loads by adding

acids and oxygen deprivation, such as vacuum packing. (Akpabio and Ekanem, 2008).

22

In a study conducted in South western Nigeria, the predominant fish processing and

preservation methods included salting, sun-drying, smoke-drying and frying (Kolawale,

Williams and Awujola, 2010). A similar study conducted in Niger Republic revealed that

salting and smoking of fish were the popular fish preservation and processing techniques

(Kassali, Baruwa and Mariama, 2011). Further studies showed that in Liverpool market of

Lagos State, smoked fish was the sole processed fish marketed constituting about 65% of all

fish marketed both fresh and processed (Ayo-Olalusi, et. al, 2010). Kainga and Adeyemo

(2012) reported from their study in Bayelsa State that smoking, refrigeration and salting were

major methods of fish processing and preservation. Similar studies also showed that salting,

smoking, refrigeration and sun-drying were among the major fish processing measures

(Nwabueze and Nwabueze, 2010; Akankali and Jamabo, 2011; Madugu and Edward, 2011).

2.6 Role of Gender in Agricultural Produce Marketing

Gender analysis, according to Olubunmi (2008), refers to the different roles and

responsibilities of men and women, and how these affect society, culture, the economy and

politics. It focuses on the relations between men and women in the society. In this

relationship, differences exist between men and women in their quality of life, in the amount,

kind and recognition of work they do, in health and literacy levels, and in their economic,

political and social standing.

This issue of disparity in gender participation is very pronounced in Africa where

agriculture is the major economic activity. According to Ogunlela and Aisha (2009), men and

women perform different roles in the agricultural process. In other words, there are clear

differentiations in the duties and functions of men and women in the society as well as the

rewards that accrue to them. Earlier studies had reported that women were often marginalized

in the control and distribution of resources in the society (Peterman, Quisumbing and

Behrman, 2008; Inoni, 2007). They maintained that, disproportionately, women have less

23

access to, and control of, resources than men. The International Food Policy Research

Institute stated that women suffered from a lack of access to credit, land, education, decision-

making power and rights to work (Peterman, et. al., 2008). This, in the opinion of

(Ajani,2008), could be responsible for the high proportion of women among the world’s poor

in both urban and rural sectors as well as among the majority of those working in the

informal sector.

These marginalisation, notwithstanding, women play vital role in every aspect of

agricultural production and development. Odebode (2011) reported that women’s role was

very crucial to the overall success of efforts directed towards rural development for increased

agricultural productivity. Women are more involved in agricultural activities than men

especially in sub-Saharan Africa and provide most labour for a number of agricultural

activities. In the view of Ogunlela and Aisha (2009), women constitute 90% of the workforce

involved in direct arable crop production. Ajani (2008) noted that the strength of female

agricultural workers that was at 20 – 30 per cent of total workforce was on the increase. In

the view of United Nations (2006), women produced more than 50 per cent of total world

food production, and this is even higher in developing countries like Nigeria where the

estimates range from 60 to 90 per cent across different agricultural activities such as staple

food (e.g. cassava, maize, rice), vegetables and legumes productions; fish, poultry and small

animals productions; and processing, storage, transportation and marketing of agricultural

products (FAO, 2005).

According to Nwabueze and Nwabueze (2010), 72.2% of fresh fish marketers in

Delta State were women. In Adamawa State, both males and females were equally engaged in

fish processing and marketing at 50% (Madugu and Edward, 2011). Similarly, Meludu

(2008) reported that 61% and 49% of the respondents were males and females, respectively;

24

while in another study 64% and 36% of the respondents were males and females, respectively

(Akinwumi, Akinwumi and Ogundahunsi, 2011).

In a study conducted in Ondo and Ekiti States, 52% of the males engaged in fish

catching and pond rearing while majority of the females were found mainly in processing and

marketing of tilapia (Adebo and Alfred, 2008). Kolawole et.al (2010), inferred from their

study on indigenous fish processing and preservation practices amongst women in south

western Nigeria that 52.5% of them were solely engaged in fish processing and preservation,

while 47.5% were engaged in fish processing and preservation practices with other income-

generating activities. The sex distribution of fish retailers at Djamadje and Petit Marche

markets showed that all the retailers were women in Petit Marche market and vice versa in

the Djamadjie market (Table 2.10) (Kassali et al., 2011).

Table 2.10: Sex distribution of fish retailers at Djamadjie and Petit Marche markets

Sex Djamadjie Petit Marche

Freq. % Freq. %

Female 0 0 25 100

Male 15 100 0 0

Total 15 100 25 100

Source: Kassali et al. (2011).

2.7 Theoretical Framework

The theoretical framework for this study will be anchored on utility theory,

structure-conduct performance approach and the theory of demand and supply.

2.7.1 Utility theory

Utility is a measure of relative satisfaction. It refers to the total satisfaction derived

from the consumption of a good(s) and/or service(s). Utilities are created through production

activities which involve the making of goods and services useful and available, and

marketing is a major part of the production process. There are various forms of utilities that

25

can be created through the production processes. These include utility of form, utility of

place, utility of time and utility of possession (Koutsoyiannis, 1977).

Posner (2011) Form utility is created through the process of transformation of

products, goods and services from one form to another. Fish are not normally consumed the

way they are produced. Their original forms are changed to forms which can give maximum

satisfaction to different classes of consumers. Most times they have to be transported to

places where there is effective demand for them. This is made possible through marketing

activities.

Furthermore, fish are usually not consumed when they are harvested or produced.

According to Idowu, Ifegbesan, Abdul, and Olawale (2012), fish abundance is only

experienced in the rainy season; however, their consumption is year round. Time utility is

created in the process of making fish available to consumers all the year. Time utility is

created through processing and storage activities. Through marketing activities, fish may be

stored and processed by drying, smoking or boiling. This helps to preserve the fish and make

it fit for consumption throughout the year. In the same vein, according to (Adebayo and

Piton, 2001) marketing activities help in the creation of possession utility. By so doing,

marketing activities assist the consumers in acquiring and taking title to desired products. The

processes that bring about these utilities are carried out by middlemen; as such they perform

very important roles in marketing activities.

2.7.2 Structure-conduct-performance approach

Market structure can be defined as the characteristics of the organization of a market

which seem to influence strategically the nature of competition and pricing behaviour within

the market. While Market conduct refers to the market coordination mechanisms and the

pricing policies used by actors in the chain. (Anrooy, 2003). The structure-conduct-

performance (SCP) approach is often used in the investigation of agricultural subsectors. It

26

gained its strongest impetus in the sixties through Bain’s contributions to industrial

organization. The theory of SCP shows that the market structure influences market conduct

and this helps to determine the level of performance of the market (Douglas and Fortier,

1988). To determine the structure and conduct of the market, the SCP approach aims at

distinguishing marketing channels spatially and also identifies the roles and functions of

marketers in the marketing chain. It begins by determining the structure of the industry in

which a firm operates (Is it competitive, monopolistic, monopolistically competitive, or

oligopolistic?) (Posner, 2001)

This market structure is almost assumed to rigidly determine each firm’s conduct

(output decisions and pricing behaviour), which yields an industry’s overall performance (e.g.

its efficiency and profitability). This Structure-Conduct-Performance approach is shown in

Figure 2.2. The SCP approach dictates three steps in analyzing an industry. First, it

emphasizes properly categorizing an industry’s market structure according to:

i. the number of active competitors;

ii. barriers to entry and exit; and

iii. the extent of product standardization.

Secondly, conventional models conclude that certain pricing and output decisions

(conduct) predictably arise from market power or its absence (sparse competition, barriers to

entry, or product heterogeneity create market power). Finally, this theory suggests that the

equilibrium price of any imperfectly competitive firm invariably exceeds marginal social

costs; too little of the good is produced, creating allocative and productive inefficiencies.

However, the SCP approach has been criticised on several grounds. Such criticism

bothers on the degree of inference pertaining to behavioural and performance features of the

markets. It raises questions as: is it necessarily true that market structure determines the

conduct and performance of market? (Umar, Otitolaiye and Opaluwa, 2011) Furthermore, the

27

second criticism of the approach centres on industrial organization research as it concentrates

on structure and performance, particularly on the relationship between industry concentration

and average firm profitability.

Figure 2.3: Structure-Conduct-Performance approach

Source: Hormann (2010).

The Commodity Chain Theory: This draws from the SCP structure. It assumes vertical and

horizontal relations between firms in the evaluation of market performance. The SCP is more

dynamic in following the entire commodity flow from the producers to the final consumers.

This traditional structure-conduct-performance

model of industrial organization is increasingly

challenged by analysts who charge that it ignores

(a) too many factors influencing behaviour that

are specific to an industry or its dominant firms,

and (b) asymmetrics of information that put

transactors on different negotiating stances than

would occur if all information were shared. This

S-C-P approach is also indicted for

overemphasis on the number of firms in an

industry and scant attention to dynamic aspects

of competition, including ease of entry and exit

Performance

Production efficiency

Allocation efficiency

Technological progress

Profitability

Equity

Conduct

Merger and acquisition policies

Research and development

pricing strategies

Production decisions

Investment strategies

Advertising

Market structure

Numbers of buyers and sellers

Level of diversification

Product differentiation

Barriers to entry

Cost conditions

Scale economies

28

The Transaction Cost Approach: The transaction cost theory inferred that costs are

incurred in processing and exchanging goods and services for money and satisfaction. These

costs according to Lawal and Idega (2004) consist of costs of purchase of goods and services.

Transaction costs include costs of information, negotiation and monitoring or enforcement. It

has been suggested that transaction costs increase with increases in distance, market

concentration and systemic complexity, and thereby affects the level of market participation.

2.7.3 Theory of demand and supply

The theory of demand and supply plays very vital role in the marketing of fish. The

level of marketing activity going on in a market is determined primarily by the interplay of

the forces of demand and supply. The major determinant(s) of quantities demanded and

supplied for any goods and services depend on the structure and type of market. In a perfectly

competitive market, where there are many consumers (buyers) and farmers (producers), the

price mechanism is fully operational. In other words, the prices of goods and services are

determined by the forces of demand and supply. Put differently, prices guide consumers in

the choice of goods and services, and the quantities of such goods and services that they buy.

Demand is often times differentiated from effective demand. While demand refers to

willingness to buy, effective demand entails willingness backed with the ability to pay. As

such, demand is described as the quantities of goods and services that consumers are willing

and able to buy at various prices. Demand is a function of several variables, i.e., the

quantities of goods and services demanded at any given point in time is a function of several

factors. Four of such factors are often pronounced. These are the price of the good (service),

the price of substitutes and complements, income of consumers, and tastes or preferences.

This can be stated mathematically as:

Qd = f(P, Ps, Y, T)

29

where:

Qd = quantity of goods demanded,

f = functional form of the model,

P = price of the good,

Ps = price of substitutes and complements,

Y = income of consumers, and

T = tastes or preferences

Demand could also be affected by several other variables such as government

policies, advertising, peer influence, age, weather, credit availability and mode of purchase.

In a related development, supply is also an important factor in the marketing process. The

urge to sell goods and services is often described as supply. It refers to the quantities of goods

and services that producers are willing to sell at given prices. According to Enabor (1999),

supply could be physical or economical. Physical supply refers to the availability of goods

and services, while economic supply refers to the value (market price) of physical supply. In

other words, goods can be physically available, but economically unavailable. It is

economically unavailable when the prices of the physical supply are beyond the effective

demand of the consumers. Supply like demand is affected by lots of factors. These factors are

price of the goods and services, cost of production, productive capacity and available

technology. The supply function can then be expressed as follows:

Qs = f(P, C, Pc, W, Tc),

Where:

Qs = quantity supplied,

f = functional form,

P = price of the good or service,

C = cost of production, and

Tc = available technology.

30

Pe

In a perfectively competitive market, for instance, the interactions of demand and

supply functions help in the determination of prices of goods and services. When the price of

a commodity rises, it will be an incentive for producers to produce more of the products, to

take advantage of the high prices. But on the other side, the high price will be a disincentive

for consumers, and as such the quantities demanded of the goods will fall. This fall in

demand will force producers to adjust (reduce) the quantities of goods they produce, until the

quantity demanded will be equal the quantity supplied. As a corollary, a fall in prices of

goods and services will act as an incentive to consumers to buy more, while producers will

produce less. This will result in excess of demand over supply and thereby force prices up.

Producers will in response raise their production, and the process continues until equilibrium

is attained in the market where quantity demanded is equal to quantity supplied.

2.8 Analytical Framework

In carrying out analysis, several analytical techniques could be used. The choice of

which technique to use is a function of the type of analysis to be carried out (Uzoagulu,

2009). Analysis involving mere descriptions is usually undertaken using descriptive statistics

tools. Such descriptive tools of statistics that will be used in this study include likert rating

scales, tables, means, graphs and charts. However, there are other analytical techniques that

will also be used in the study. These other techniques, in the view of Uzoagulu (2011),

require more detailed analysis, and are used to achieve particular results. These include

concentration ratio, price spread, net profit margins and marketing margin analysis. The rest

are multiple regression, multinomial logit model, analysis of variance (ANOVA) and t-test

statistics.

2.8.1 Likert rating scale

The Likert scale was developed in 1932 by Rensis Likert. It is used extensively for

attitude measurements (Uzoagulu, 2011). It works by presenting a set of statements about an

31

issue and requesting respondents to indicate whether they strongly agree, agree, are

undecided, disagree, or strongly disagree. These various responses are assigned values, and

the total value is calculated through the summation of the values. This total value represents

the respondent’s rating of a particular issue, and could be in favour or against the issue

depending on the cut-off mark. The cut-off mark also depends on whether the rating is on a

five-point scale or four-point scale. The cut-off is usually 3.0 if the rating is on a five-point

scale and 2.5 if on a four-point scale.

The four-point scale will be used as it does not give room for the respondents to be

indifferent. The rating will be in this order: strongly agree (SA) = 4, agree (A) = 3, disagree

(D) = 2, and strongly disagree (SD) = 1. The mean score of the respondents based on the 4-

point scale will be 4 + 3 + 2 + 1 = 10, 10/4 = 2.50. Using the interval scale of 0.05, the upper

limit cut-off point will be 2.50 + 0.05 = 2.55. The lower limit will be 2.50 – 0.05 = 2.45.

Based on these, any mean score below 2.45 (i.e. MS < 2.45) will be regarded as not

important. Those between 2.45 and 2.55 will be considered as important (i.e. 2.45 < MS <

2.55). Mean score greater than 2.55 (MS > 2.55) will however be considered very important.

2.8.2 Concentration ratio

Measurement of concentration ratio gives a good indication of the type of market,

whether it is oligopoly or competitive. Opata (2011) reported that the concentration ratio of

the market could be determined using different techniques such as: four largest firm

concentration ratio (CR4), Herffindahl-Hirschman index (HHI), and Gini coefficient (GC).

The concentration ratio (CR4) has easy operational application especially in fish market, and

as such will be used in the study.

Four Marketers Concentration Ratio (CR4): In the CR4 technique, the sales volume of

the top four marketers is used to determine the level of concentration or decentralization of

the market. Where the sales or transactions of the top four marketers in the market account

32

significantly for the total sales or transactions in the market, the market is said to be highly

concentrated, and hence, oligopolistic. Otherwise, the market is decentralized and therefore

competitive. As a rule of thumb, according to Kohls and Uhl (1985), a concentration ratio of

50 per cent or more is strongly oligopolistic, 33 – 50 per cent is weak oligopoly and less than

33 per cent is un-concentrated. The model is specified below:

Pi = vi (1)

∑vi

Where,

Pi = market share of four largest fish marketers (%) denoting the concentration

ratio;

vi = value of fish marketed by largest four fish marketers; and

∑vi = total value of fish sold in the market

2.8.3 Market performance

The returns that accrue to the various operators (i.e. intermediaries) are used to

evaluate the performance of the market. It determines the proportion of the price paid by final

fish consumers that gets to producers, wholesalers and retailers. Price spread and market

performance is most commonly used in determining market margin.

Price Spread: Price spread of fish marketing refers to the difference between retail price of

fish and the value of fish at the point of production/harvesting. The higher the differential the

more the marketing activities, and this differential represents the cost of marketing activities

undertaken after the fish have been produced. Furthermore, price spread indicates the level of

market differentiation, i.e., the number of channels involved in the marketing process.

Price spread for the various channels involved in fish marketing can be represented

as follows:

PS = Pc - Cc

33

where:

PS = price spread,

Pc = price of fish at a particular marketing channel, and

Cc = cost incurred by the marketing channel.

The net profit margin for each marketing channel is the net earnings after paying all

marketing costs. This is specified as follows:

NM = PS – MC (5)

Where:

NM = net margin,

PS = price spread for each channel, and

MC = marketing costs for each channel.

2.8.4 Marketing Margin: Marketing margin is often described as the difference between

the price of fish producers and the price that final consumers pay for the fish of comparable

size and quality. Marketing margin depicts the nature and forms of marketing activities that

are carried out between fish producers and final consumers. These marketing activities add

utilities to the fish such as form, place, time and possession. The higher the value of the

utility added, the higher the marketing margin. According to Wadud (2011) marketing margin

is also described with respect to the differentials between one marketing channel and the

other. The marketing margin for the various channels can be derived by dividing the net

profit margin of the channel with its marketing costs and multiplying by 100. This represents

the marketing efficiency of the channel, (Wadud, 2011). It is specified as follows:

Marketing Margin = PS X 100%

SP

where:

PS = price spread for the marketing channel, and

SP = selling price of the channel.

34

2.8.5 Multiple regression

Multiple regression is one of the analytical tools that are used to determine the

effect(s) of one or more variables on another. The variables that cause the effects are known

as the explanatory or independent variables, whereas the variable that is affected is called the

explained or dependent variable. According to Koutsoyiannis (1977), multiple regression

analysis allows for the quantification of the effects of the independent variables on the

dependent variable. The simplicity and user-friendly nature of multiple regression analysis

makes for its popularity and wide application. The model is generally specified as follows:

Y = f(Xi) + µ;

where:

Y = dependent variable,

F = functional form of the model which can be linear, semi-log, double log, or exponential

Xi = independent variables, and

µ = error term.

2.8.6 Multinomial logit (MNL) model

The multinomial logit (MNL) model is commonly used in studies that require

multiple choices (Apata, Ogunyinka, Sanusi and Ogunwande, 2010). It determines the effect

of the explanatory variables on a choice of a discrete set of options, such as, choice of a

particular marketing channel in fish marketing. The MNL technique is widely used in

decision studies involving multiple choices relative to other alternative techniques such as the

multinomial probit (MNP) model, because it is easier to compute (Hausman and McFadden,

1984; Douglas and Fortier 1988, in Apata et al, 2010). This model will be applied to

determine the factors affecting the choice of various channels in fish marketing. The

independence or irrelevant alternatives (IIA) property is the main set of this model. This

independence or irrelevant alternatives (IIA) property states that the ratios of the probabilities

35

of choosing any two marketing channels remain the same irrespective of the number of

alternative channels available (Hausman and Mcfadden, 1984). It will be overcome by

making each ratio of probabilities a function of the attributes of all the alternatives (Apata et

al., 2010). The MNL model is generally specified as follows:

Pr (Ai = j) = exp(Xiβi)

∑jk = 0 exp(Xiβi) (i = 0, 1, …, J)

where:

Ai = random variable representing choice of a particular marketing channel, and

Xi = explanatory variables such as socio economic, institutional and marketing factors.

2.8.7 Analysis of variance (ANOVA)

The analysis of variance (ANOVA), according to Uzoagulu (2011) is a statistical tool

developed by R. A. Fisher for the analysis of data. It works like regression but specially

allows for the breakdown of total variance of a variable into additive components which may

be attributed to various, separate factors. These factors are the sources or causes of variation

in the variable being analyzed. The analysis of variance technique enables the determination

of the number of relevant factors (or causes) of variation and the logical significance of each

one of them. This is specified below:

Fratio = Vb

VW

Where:

Vb = the difference between the variance of all the channels and the variance of each of the

channels

VW = the mean value of the variance of each of the channels

36

2.8.8 Student’s t-test

The t-test, according to Koutsoyiannis (1977), is based on the standard normal

distribution (or Gauss Standard Normal Curve). It is applicable only if the population’s

variance is known and the sample is small (n < 30). The t-test distribution is usually applied

in determining whether variables contained in the model (s) are significant or not. Uzoagulu

(2011) stated that, t-test is essentially used to determine whether two mean (X1 and X 2) are

significantly different at a chosen level of significance. It also involves the comparison of the

actual mean difference with the difference that is expected with chance so long as the

population from which samples are drawn can be assumed to be normally distributed the t-

test can be used.

The t-test distribution is specified below:

t* = X1 + X2

S12 + S2

2

n1 + n2

where:

Xi = mean of each of the two groups

Si = standard deviation of each of the two groups

n = sample size

37

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Study Area

The study was carried out in Akwa Ibom State of Nigeria with a landmass of 8412sq

km and population 3,920,208 (NPC, 2007). The State has approximately 129km out of

Nigeria’s 800km coast-line. This expanse of coast-line places the State at highly advantaged

position to the waterways and the abundant wealth underneath it. According to Udong

(2010), such aquatic wealth included large stock of crayfish, bongafish, tilapia, shark,

croakers, catfish, sole, sardine, snapper, mackerel, tuna, mudfish, shiny nose, shrimp, lobster

and shell fishes.

The State lies between latitudes 4032

1 and 5

033

1 North and longitudes 7

025

1 and 8

0

251

East of the Equator, and is bounded in the north west by Abia State, on the south west by

Rivers State, on the east by Cross River State and on the south by Bight of Bonny. Akwa

Ibom state has 31 local government areas. Some of these local government areas are

truncated by creeks, streams and rivers (e.g. Qua Iboe River, Cross River and Imo River)

joining with larger bodies of waters and the Atlantic Ocean suitable for marine and estuary

fishing. In addition to being a maritime state, Akwa Ibom is also blessed with a number of

inland local government areas with flood plains, reservoirs and lakes which favour fresh

water artisanal fishing.

3.2 Sampling Technique

Multi-stage sampling technique was used to select 105 respondents for this study. The

first stage involved purposive selection of three agricultural zones from the six agricultural

zones in the State. The selected agricultural zones were Uyo, Eket and Oron. These zones

were the coastline zones with significant commercial fishing activities, hence their selection.

38

In the second stage, two local government areas were randomly selected from Uyo

and Eket agricultural zones, while three local government areas were selected from Oron

agricultural zone. These local government areas are coastline areas and exposed to water

ways where fishery is practised in commercial quantity. More local government areas were

selected from Oron agricultural zone because of the strategic position of the zone in terms of

fish production, processing and marketing.

The next stage involved the random selection of one fish market from each of the

selected local government areas. They were Ishiet, Ikot Offiong, Ibeno, Uta Ewa, Ibaka,

Okopedi and Oron fish markets. Thereafter six producers, three wholesalers and six retailers

were randomly selected from each of the selected fish markets giving a total of 42 producers,

21 wholesalers and 42 retailers.

3.3 Data Collection

Data for this study were mainly primary. These data were collected with the aid of

detailed and well-structured and pre-tested questionnaire administered to the respondents.

These data centred on the following parameters:

a. socio-economic characteristics, such as, age, sex, household size, level of education,

income, marital status, and level of experience in fish marketing, membership of

market union;

b. methods of fish storing, processing, preservation and transportation;

c. channels of fish marketing; and

d. costs of fish marketing, example, storage, transport, selling price, purchase price,

union dues, landing fee and rents.

3.4 Data Analyses

Descriptive tools of statistics such as tables, means, graphs, charts and likert rating

scale were used to achieve objectives (i), (v), (vi) and (vii). The likert scale rating technique

39

was used particularly in objective (v). This was done on a four-point basis. The 4-point scale

rating technique does not give room for the respondents to be indifferent. The rating was in

this order: strongly agreed (SA) = 4, agreed (A) = 3, disagree (D) = 2, and strongly disagree

(SD) = 1. The mean scores of the respondents based on the 4-point scale were 4 + 3 + 2 + 1 =

10, 10/4 = 2.50. Using the interval scale of 0.05, the upper limit cut-off point will be 2.50 +

0.05 = 2.55. The lower limit was 2.50 – 0.05 = 2.45. Based on these, any mean score below

2.45 (i.e. MS < 2.45) were regarded as not important. Those between 2.45 and 2.55 were

considered as important (i.e. 2.45 < MS < 2.55). Mean score greater than 2.55 (MS > 2.55)

were considered very important.

Objective (ii) was achieved using concentration ratio. The concentration ratio

specified as follows:

Pi = vi (1)

∑vi

where:

Pi = market share of largest four fish marketers (%) denoting the concentration

ratio

vi = value of fish marketed by largest four fish marketers

∑vi = total value of fish sold by the industry

The concentration ratio of the four largest firms was used for measuring the market

power. If the four marketers’ concentration is 50% or more of the total industry sales, it

indicates strong oligopoly, 33-50% weak oligopoly, and < 33 un-concentrated industry

(World Agricultural Group (WAG), (2011).

Objective (iii) was determined using price spread, net profit margins and marketing

margin analyses. These measures were used to determine the efficiency of the marketing

systems. The price spread for the various fish marketing channels according to Adesope, et

al., (2005) is stated below:

40

Channel 1: Producers Price – Cost of Production (2)

Channel 2: Wholesale Price – (Cost of Purchase + Marketing Cost) (3)

Channel 3: Retailer Price –( Cost of Purchase + Marketing Cost) (4)

The net profit margin for the various fish marketing channels is the net earnings after

paying all marketing costs, as stated by Afolabi (2009), is specified as follows

NM = PS – MC (5)

where:

NM = net margin;

PS = price spread for each intermediary; and

MC = marketing costs for each intermediary

The marketing margin for the various channels was gotten by dividing the net profit

margin of the each channel by its marketing costs and multiplying by 100. This represents

their marketing efficiencies. It is specified as follows:

Channel 1: Producers Price – Cost of Production X 100% (6)

Production Costs

Channel 2: Wholesale Price – (Cost of Purchase + Marketing Cost) X 100% (7)

Costs of purchase + Marketing Cost

Channel 3: Retailers Price – (Costs of Purchase + Marketing Cost) X 100% (8)

Costs of purchase + Marketing Cost

The multinomial logit (MNL) model was used to evaluate objective (iv). In this case,

three channels (channels 1, 2 and 3) are distinguished in the vertical differentiation of fish

marketing, and the dependent variable can assume any of these channels subject to the

number of intermediaries between the fish producer and the consumer. It is assigned one, if

the producer sells directly to the consumer; two, if one level of intermediary (retailer) is

involved; and three, if more than two levels of intermediary (wholesalers and retailers) are

41

involved. Channel 3 represents the most vertically differentiated marketing channel. As such,

the set of coefficients corresponding to each of these channels can be specified as follows:

Pr (Z = 1) = exp Xβ(1)

(10)

expXβ(1)

+ expXβ(2)

+ expXβ(3)

Pr (Z = 2) = expXβ(2)

(11)

expXβ(1)

+ expXβ(2)

+ expXβ(3)

Pr (Z = 3) = expXβ(3)

(12)

expXβ(1)

+ expXβ(2)

+ expXβ(3)

The model however is unidentified in the sense that there is more than one solution to β(1)

,

β(2)

, β(3)

that leads to the same probabilities for Z = 1, Z = 2 and Z = 3. To identify the model,

one of β(1)

, β(2)

, β(3)

is arbitrarily set to 0. That is, if one arbitrarily sets β(1)

= 0, the remaining

coefficients β(2)

, β(3)

would measure the change relative to the Z = 1 group. Put differently,

one would be comparing the least vertically differentiated channel (1) with the more

differentiated ones (2 & 3). Therefore, setting β(1)

= 0, the above equations can be written as:

Pr (Z = 1) = 1 (13)

expXβ(1)

+ expXβ(2)

+ expXβ(3)

Pr (Z = 2) = expXβ(2)

(14)

expXβ(1)

+ expXβ(2)

+ expXβ(3)

Pr (Z = 3) = expXβ(3)

(15)

expXβ(1)

+ expXβ(2)

+ expXβ(3)

The relative probability of Z = 2 to the base category is:

Pr(Z = 2) = expXβ(2)

(16)

Pr(Z = 1)

42

Call this the relative likelihood and assume that X and β(2)

are vectors equal to (X1, X2, ...,

Xn) and β1(2)

, β2(2)

, ..., βn(2)

, ( respectively). The ratio of relative likelihood for one unit change

in Xi relative to the base category is:

exp β1(2)

+ βi(2)

(Zi + 1) + ... + βn(2)

XK = exp βi(2)

(17)

exp β1(2)

X1 + βi(2)

Xi + ... + βk(2)

Xk

Therefore, the exponential value of a coefficient is the relative likelihood ratio for one unit

change in the corresponding variable (Enete, 2008). The model in relation to the independent

variables is specified below:

Z1 = f(Xi) + µ; Xi = 1, 2, ..., 16 (18)

Z2 = f(Xi) + µ; Xi = 1, 2, ..., 16 (19)

Z3 = f(Xi) + µ; Xi = 1, 2, ..., 16 ` (20)

where:

Z = vertical differentiation of marketing channels (1, if producers -consumer; 2, if producer –

wholesaler-consumer and 3 if producer-wholesaler –retailers-consumer);

X1 = sex of marketer (1 if male; 0 if female);

X2 = age of marketer (years);

X3 = level of education (years);

X4 = marital status (1, if single; 2 = married; 3 = widowed; 4 = divorced);

X5 = household size (number);

X6 = access to market (km);

X7 = ownership of shop (1 if yes; else 0)

X8 = access to market information (1, if yes; else 0)

X9 = source of fund (0 = personal savings; 1 = friends and relatives; 2 = other informal

sources; 3 = formal sources);

X10 = value of fish sold (N);

X11 = storage cost (N);

X12 = processing cost (N);

43

X13 = transportation cost (N);

X14 = amount of tax/levy paid (N);

X15 = membership of market/cooperative society (1, if yes; else 0); and

µ = error term.

Hypothesis (i) will be determined using the analysis of variance (ANOVA) technique.

This is specified as follows:

Fratio = Vb

VW

Where:

Vb = the difference between the variance of all the channels and the variance of each of the

Channels

VW = the mean value of the variance of each of the channels

The t-test statistics will be used to determine hypotheses (ii) The t-test distribution for

hypotheses (ii) is specified below:

t* = X1 + X2

S12 + S2

2

n1 + n2

where:

X1 = mean of the first group

X2 = mean of the second group

S1 = standard deviation of the first group

S2 = standard deviation of the second group

n = sample size

44

CHAPTER FOUR

RESULTS AND DISCUSSION

4.1 Socioeconomic Characteristics of Fish Marketers

The socioeconomic characteristics of fish marketers are shown in Table 4.1.

Table 4.1: Socioeconomic characteristics of fish marketers Socioeconomic Characteristics Producers Wholesalers Retailers

Freq % Freq % Freq %

Sex: Male 42 100 5 23.81 2 4.76

Female 0 0 16 76.19 40 95.24

Age: ≤ 20years 1 2.38 0 0 3 7.14

21 – 30years 7 16.67 3 14.28 5 11.90

31 – 40years 20 47.62 4 19.10 23 54.76

41 – 50years 9 21.43 13 61.90 8 19.05

51 – 60years 3 7.14 1 4.76 3 7.14

> 60years 2 4.76 0 0 0 0

Marital Status: Married 32 76.19 18 85.71 30 71.43

Single 2 4.76 1 4.76 10 23.81

Widowed 8 19.05 2 9.52 1 2.38

Divorced 0 0 0 0 1 2.38

Level of Education: FSLC 17 40.48 16 76 14 33.33

WASC 20 47.62 3 14.29 19 45.24

OND/NCE0 0 0 0 0 4 9.52

HND/Degree 0 0 0 0 3 7.14

No. Formal Edu. 5 11.90 2 9.52 2 4.76

Household Size: 1-5 27 64.29 17 80.95 33 78.57

6-10 9 21.43 4 19.05 7 16.67

11-15 4 9.52 0 0 0 0

>15 2 4.76 0 0 2 4.76

Marketing Experience:1-10 9 21.43 5 23.81 15 35.72

11-20 25 59.53 14 66.67 25 59.52

21-30 5 11.90 2 9.52 2 4.76

31-40 2 4.76 0 0 0 0

>40 1 2.39 0 0 0 0

Primary Occupation:Farming 7 16.67 2 9.52 0 0

Trading 5 11.90 15 71.43 42 100

Fishing 26 61.90 1 4. 76 0 0

Others 4 9.52 3 14.29 0 0

Membership of M. Union: Yes 32 76.19 17 80.95 27 64.29

No: 10 23.81 4 19.05 15 35.71

Source: Field survey, 2013

45

4.1.1 Distribution of marketers based on sex

Table 4.1 revealed that 100% of the producers were males. This is in contrast to the

proportion of females involved in various fish marketing activities at 0% in fish production,

76% in wholesale and 95% in retail. Fish production is very hazardous, energy demanding

and also carried out at odd hours of the night and, therefore, could have accounted for it being

solely dominated by males. This is unlike wholesaling and retailing of fish that are dominated

by females as they are less risky and energy demanding but require more time and patience.

This shows that both males and females participate in fish marketing, males being dominant

at the production stage while females are actively involved in fish distribution. Ali et al

(2008) asserted that women in small-scale riverine fishing villages performed other income-

earning activities to supplement the household income. Such income sources were earned

through sales of fisheries products and social services in fish distribution and marketing.

Guste and Rosario-Malonzo (2004) stated that there was a gender division of labour in the

fishery business. Women directly involved in fishing were more likely to be referred to as

helpers or auxiliary fishers assisting their husband-fishers in handling simple fishing

equipment, gleaning and fish processing. Only a few males (14.28%) engaged in fish

marketing.

Research findings for SSA, the Caribbean, South and Southeast Asia (Adeegbe, 2000)

indicate a pattern of separate and distinct income streams and expenditures, where males and

females often separately and individually meet financial responsibilities to the family. This

finding contradicts a study by Okwuokenye and Onemolease (2011) who found that males

dominated the marketing of agricultural products with 78.8% compared to females of 21.2%.

As well as that of Adamawa State, where 50% of the fish marketers were males and females,

respectively (Madugu and Edward, 2011).

46

4.1.2 Age The age of fish marketers varied across the various fishing activities. The average

ages for the marketers were 38years for producers, 42years for wholesalers and 46years for

retailers. The study further showed that for the producers, many of them (47%) were within

the age range of 31 – 40years, while the majority were between age of 41 – 50years at 61%

for the wholesalers and 31- 40years were the dominant age at 54% for the retailers. The

dominant age range for the retailers was similar to the findings of Madugu and Edward

(2011) on marketing and distribution channels of processed fish in Adamawa state, Nigeria.

They reported that the marketers between the ages of 31-40 had highest percentage (46.35%)

followed by those above 40 years (28.75%).

Another study by Idowu et al (2012) showed that majority of the marketers ranged

between 36-45years (44%) followed by 46-55years (20%) . This showed that majority of the

marketers were within their active life and there were no signs of the younger generation

taking after them.

4.1.3 Marital status

The majority of the respondent were married with 76.19%, 85.71% 71.43% of producers,

wholesalers and retailers, respectively. This indicated that fish marketing was a source of

livelihood for the marketers and their families. This is in line with study by Afolabi (2009),

who observed that marketers were dominated by married people (56.67%), followed by

single people (26.00%), widowed people (11.33) and divorced people (6.00%) as well Kainga

and Adeyemo (2012), who found that fish marketers were dominated by married people

(69%), while single and divorced people were 14% each. Similarly, Eze et al (2010) reported

that in Enugu State married women constituted the majority of agricultural produce marketers

with 63.8% followed by single women (21.2%), widowed women (10.6%) and separated

women (4.4%).

47

In the same vein, Idowu et al (2012) found that married people were 72%. Furthermore, this

dominance of married marketers could arise from the demanding nature of fish marketing

which required the support of family members in the business.

4.1.4 Distribution of marketers based on level of education

The study showed that majority of the fish marketers had West African Senior School

Certificate (SSC) (47% for producers and 45% for retailers) except the wholesalers whose

majority(76%) had First School Leaving Certificate (FSLC). Most of the marketers did not

have degree certificate as educated members of the society may not be so disposed to join the

profession. Similarly, Okwuokenye and Onemolease (2011) reported that the highest

qualification of agricultural produce marketers in Delta State was NCE/OND which

constituted about 5% of the marketers, secondary level of education was 70% followed by

primary education (22.5%) and no formal education (2.5%). Also, in Adamawa State,

Madugu and Edward (2011) stated that processed fish marketers with no formal education

was 3.75%, those with primary education were 55.0%, 35.0% had secondary education while

6.25% had tertiary education. Nwabueze and Nwabueze (2010) in another study in Delta

State found that majority of the marketers had primary education at 60.3%, 19.8% had post

primary education, 18.3% had vocational education while 1.6% had no formal education.

Similar study in Enugu State among women agricultural produce marketers showed that

37.5% had no formal education, 25.0% had First School Leaving Certificate, 17.5% had

Senior Secondary Certificate Examinations, and 13.1% had Ordinary National

Diploma/Nigeria Certificate in Education while 6.9% had Higher National Diploma/Degree

Certificate (Eze, 2010). Kainga and Adeyemo (2012) reported that most fish marketers in

Bayelsa State had no formal education and secondary education at 35.5%, respectively, 21%

had primary education while 8% had adult education. In south-western Nigeria, most

agricultural fish marketers had primary education at 51.33%, 26.67% had secondary

education while 22.0% had no formal education (Afolabi, 2009).

48

4.1.5 Household size of marketers

The average household size of the marketers was five across the marketing channels.

This is evident as the highest proportion of the respondents across the marketing channels had

their household sizes between one and five (1-5) at 50%, 80.95% and 78.57% for producers,

wholesalers and retailers respectively. Although, agricultural activities in developing

countries like Nigeria are highly subsistent and labour intensive and often times depend on

household labour, respondents are cautious of having more children than they can carter for,

perhaps due to family planning drive. This could have informed the low family sizes of the

fish marketers. This is notwithstanding that fish marketing involves buying, processing and

packaging, and these activities are done in subsistence ways which require a lot of labour.

4.1.6 Level of experience of marketers

The average level of experience for the fish marketers was 18years for producers and

15years for each of wholesalers and retailers. This drew from the dominance of fish

marketers who had 11-20years marketing experience consisting of 59.53% for producers and

retailers, respectively, and 66.67% for wholesalers. This implied that the marketers had used

a greater part of their active life in fish marketing.

4.1.7 Primary occupation

The primary occupation of the majority of producers was fishing at 61.90% while that

of the wholesalers and retailers was trading at 71.43% and 100%, respectively. Producers and

wholesalers engaged in other activities due to the seasonal nature of fish production

enterprise. It was observed that retailers often stuck only to fish trading as the source of their

income. This may be ascribed to the nature of their gradual sales per time period, which calls

for an all year round transaction.

49

4.2 Structure of Fish Marketing

The structure of fish market is shown in Table 4.2.

Table 4.2: Structure of fish marketing Value of fish marketed by largest

four fish marketers (N)

Value of fish of all fish marketers

(N)

Concentration Ratio (%)

516671 1,099,300 47

Source: Field survey, 2013

The study showed that the concentration ratio of the market was 47%. Thus it was

under weak oligopoly. It meant that the activity of the largest four fish marketers could go a

long way to affect the price and demand for fish in the market. This is so as these four

marketers alone constituted 47% of the total value of fish sold in the market. This

development portrays great threat to food security in the country as few fish marketers can

collude to make the commodity scarce in the market which will lead to a hike in the prices of

fish thereby making them unaffordable and inaccessible to majority of Nigerians who are

already being ravished by poverty, hunger and malnutrition.

The conduct of the market shows that 72% of the fish marketers belong to one trade

union or the other. This implies that there are barriers to trade. Prospective fish marketers are

expected to register and belong to this union prior to commencements of business activity.

Furthermore, there is no clear product and price differentiation in the fish market. In other

words there are no differences in the fish sold by the marketers or the fish bought by the

marketers from different sources one source or the other as such the prices as well are not

standardized. However, the oligopoly nature of the market and their membership of trade

union enable the fish marketers to regulate, fix and control the prices of fish in the market.

Furthermore, the study found that the fish marketers displayed their products on tables

to attract customers. Also, the marketers make use of referrals and price discount as

incentives for customers to buy. In some cases marketers offered to deliver the fish to the

customers especially where the volume of purchase was high.

50

4.3 Profitability and Efficiency of Fish Marketing Channels

The profitability and efficiency of various fish marketing channels are shown in table

4.3. The result showed that fish marketing is generally profitable across the three marketing

channels – channel 1, channel 2 and channel 3, although channels 2 had the highest net

margin of N141,095.00 compared to N127,850.00 for channel 1 and N137,030.00 for channel

3. The high profitability of channels 2 and 3 is in line with earlier reports that the bulk of

profits from agricultural activities go to middlemen. However, channel 1 that involved the

selling of fish directly to consumers had the highest marketing efficiency (342%) relative to

channels 2 and 3 with marketing efficiencies of 144% and 97%, respectively. This could have

resulted from the marketing costs incurred by channels 2 and 3 although the efficiency of

channel 2 was higher than that of channel 3. It could therefore be inferred that the longer the

chain of distribution, the higher the marketing cost and lower the marketing efficiency. Such

costs are transferred to the consumers which resulted in the low marketing efficiencies of

these channels. Furthermore, the analysis of variance (ANOVA) result showed that there

were significant differences in marketing efficiency among the marketing channels at P<0.01

(Appendix 1).

Table 4.3: Profitability and efficiency of fish marketing channels Cost of

Production

(N)

Wholesale

Price (N)

Retail

Price (N)

Consumer

Price (N)

Price

Spread (N)

Marketing

Cost (N)

Net

Margin

(N)

Marketing

Efficiency

(%)

Channel 1 414400 - - 579600 165200 37350 127850 342.30

Channel 2 414400 524000 - 653040 238640 97545 141095 144.65

Channel 3 414400 524000 632500 692430 278030 141000 137030 97.18

Key:

Channel I: Producer Consumer

Channel 2: Producer Wholesaler Consumer

Channel 3: Producer Wholesaler Retailer Consumer

Source: Field survey, 2013.

51

4.4 Methods of Fish Processing, Storage and Transportation

The methods of fish processing, storage and transportation among the fish marketers

is shown in Table 4.4. The study showed that smoke drying was the predominant method of

processing and preserving fish in the area among producers, wholesalers and retailers. This

could be as a result of ease of accessing firewood and also the reliability of the method to the

fish marketers compared to other methods of fish processing and preservation. For instance,

sun drying could not be widely used as the sun was not always there and the intensity could

be controlled. It is not surprising, therefore, that sun-drying accounted only for 7% for

retailers. Similarly, cold rooms existed only in few locations, were always very far from the

homes of the fish marketers and their costs were also high. As such its use was limited to

about 36% for producers and 10% for wholesalers. The study revealed that the use of the

cold room was only an interim measure when the producers and wholesalers returned home

tired. Their fish was usually preserved in the cold storage room until the next day when they

smoke-dried the fish.

Hangovers were the predominant method of storing fish by the marketers among the

producers, wholesalers and retailers at 40%, 76% and 83%, respectively. This consisted of

hangers constructed over fire-wood cooking stands in the kitchen. Also, the use of bags for

storage received high patronage among producers and wholesalers at 35% and 9%,

respectively. Other fish storage methods used by the marketers included baskets and sticks.

Sticks accounted for 14%, 4% and 9% among producers, wholesalers and retailers,

respectively.

Motor-cycle was the predominant method of transporting fish among producers and

wholesalers, while the use of bus/taxi was the dominant method of fish transportation among

the retailers. Most fish producers and wholesalers operated from their homes, and as such did

52

not always have long distances to cover compared to the retailers. This could have accounted

for their preferences in the choice of method of fish transportation.

Table 4.4: Frequency distribution of methods of fish processing, storage and transportation

Item Producers Wholesaler Retailer

Freq % Freq % Freq %

Processing: Sun drying 0 0 0 0 3 7.14

Smoke drying 27 64.29 40 90.46 39 92.86

Cold Storage room 15 35.71 2 9.52 0 0

Storage: Hangovers 17 40.48 16 76.20 35 83.33

Baskets 4 9.52 2 9.52 3 7.14

Sticks 6 14.29 1 4.76 4 9.53

Bags 15 35.71 2 9.52 0 0

Transportation: Bicycle 2 4.76 0 0 0 0

Motor-cycle 31 73.81 13 61.90 7 16.67

Bus/Taxi 9 21.43 8 38.10 32 76.17

Pick-up van 0 0 0 0 3 7.14

Source: Field survey, 2013.

4.5 Challenges of Fish Marketing

The study showed that fish marketing was constrained by lack of capital, seasonality

of product, lack of government assistance, deterioration of produce and lack of storage

facilities among others with a score 2.5 on a 4-point Likert rating scale (Table 4.5). scores

above 2.5 represented serious challenges while scores below 2.5 represented not serious

challenges.

Lack of capital, seasonality of product, lack of government assistance, deterioration of

produce, lack of storage facilities, poor technical extension services and debt were the

challenges that had the highest rating by fish marketers above 3.0. These factors were very

critical to the availability, quality and nutrition of fish consumed, and also, on the efficiency

and profitability of fish marketing. As such, these challenges if not addressed could serve as

53

disincentives to fish marketers with its resultant losses in employment, income and socio-

economic growth and development of the country.

Table 4.5: Likert scale rating of challenges of fish marketing

S/n Challenges Average Rating/Points Degree of Seriousness

1 Lack of capital/finance 3.06 Very serious

2 low demand/patronage 2.78 Serious

3 Seasonality 3.29 Very serious

4 Scarcity 2.37 Serious

5 Means of preservation 2.92 Serious

6 Poor means of transportation 2.63 Serious

7 Use of badly shaped containers 1.98 Not serious

8 Lack of government assistance 3.75 Very serious

9 Absence of Co-operative society 1.08 Not serious

10 Inadequate processing skills 2.01 Not serious

11 Produce deterioration 3.48 Very serious

12 Lack of storage facility 3.81 Very serious

13 Long distance to processing centre 1.11 not serious

14 Poor technical extension services 3.29 Very serious

15 Inadequate packaging information 2.67 Serious

16 Debt by fish marketers 3.72 Very serious

17 High storage losses 2.52 Serious

18 Unpredictable bad weather 2.87 Serious

Cut-off point/average 2.50 Key:

1.00 - 2.49: Not serious

2.50 - 3.00: Serious

3.01 - 4.00: Very serious

4.6 Factors that Drive Vertical Differentiation of Fish Marketing Channels

The factors that drive vertical differentiation of fish marketing channels are shown in

table 4.6.The multinomial result showed that socioeconomic factors significantly drove about

68.4%, 87.5% and 92.2% of vertical differentiation of fish marketing channels into channels

1, 2 and 3, respectively. Marital status, household size, value of fish and membership of

cooperative unions were the factors that had positive and significant effects on vertical

differentiation, while the effects of age and sex were significant and negative.

Source: Field survey, 2013.

54

Table 4.6: Multinomial logit result on factors that drive vertical differentiation of fish marketing

channels Variables Channel 1 Channel 2 Channel

Intercept -404.318 -429.319 -816.265

(1.375E5) (1.964E5) (6.077E5)

Age -2.196 -0.786 -2.583

(913.834)* (812.756)

** (679.934)

**

Sex -198.787 -226.762 -217.268

(6.279E4)**

(5.902E4)***

(1.993E4)**

L.edu 16.509 13.890 25.554

(3155.917) (3132.642) (2302.450)

Mar.st 63.535 67.047 48.673

(3.252E4)***

(2.055E4)**

(3.734E4)**

HHS 16.061 25.213 45.421

(7235.499)**

(1.019E4)* (6935.556)

***

Own Shop 5.533 7.924 3.272

(3897.049) (3344.222) (2217.180)

Market info 1.567 0.154 0.886

(6587.879) (5244.445) (4865.311)

Value of fish sold 43.834 28.161 42.865

(9790.680)* (1.144E4)** (8280.659)**

Storage cost -35.689 -29.353 18.470

(1.318E4) (1.904E4)**

(1.121E4)***

Processing cost 0.044 0.028 0.064

(5.191) (7.128)* (7.037)

***

Trans. cost 80.172 130.772 235.374

(8.867E4) (8.326E4) (5.999E5)

Tax 0.10 0.001 -0.014

(25.937) (14.669) (10.738)

Mem. of union coop 1.567 0.154 0.886

(6587.879)***

(5244.445)**

(4865.311)**

R2 0.684 0.875 0.922

F 21.01*** 43.25** 30.73***

Source: Field survey, 2013.

Fish marketing is a very demanding business that requires a lot of energy and this

could explain the negative relationship it had with age. Little wonder therefore that fish

marketers within the age brackets of 31 – 50years had the highest population (Table 4.6). In a

related development, fish marketing activities just like agricultural activities in general, were

carried out at subsistent level requiring mostly family labour and support. Earlier result on

profitability showed that the value of fish marketed as well as marketing costs increased as

the channels got more differentiated into wholesalers and retailers (Table 4.3). Only

55

marketers who had sufficient capital could afford the cost associated with vertical

differentiation. This could also inform why the membership of cooperative unions was

positive as the unions could be providing financial, administrative and logistics support for

the members.

Furthermore, processing cost was positively significant in wholesale and retail

channels but insignificant in the producer channels. This was expected as the producers rarely

undertook any value addition on the fish before selling to the middlemen. As such, they

incurred no processing cost unlike wholesalers and retailers who had to preserve and process

the fish in order to maintain and improve the value before they got to final consumers.

4.7 Level of Gender Participation in Fish Marketing

The various fish marketing activities and the participation of gender in them are

shown in Figure 4.1. The study identified loading and off-loading of fish, splitting of

firewood, processing of fish, smoking of fish, packaging of fish and transportation of fish as

the major fish marketing activities. From the result, loading and off-loading of fish and

transportation of fish were dominated by adult male and male children. About 68% and 32%

of adult males and male children were involved in the loading and off-loading of fish,

respectively, while 95% and 5% of adult male and male children were involved in fish

transportation. Generally, the male gender has more strength and energy, and this could have

informed their domination of the loading and transportation aspects of fish marketing.

Perhaps, this may have as well accounted for the large dominance (70% - adult male, 22%

male children, 6% adult female & 2% female children) of males in the splitting of firewood

used in fish processing.

Figure 4.1: Frequency distribution of gender participation in

Source: Field survey, 2013.

However, fish processing and packaging we

activities although less labourious

compared to splitting of firewood, loading/o

naturally suitable for females. As such, 74% and 6% of the packaging activities

out by adult females and female children, respect

by adult males and male children, respectively. Similarly,

adult females and 28% of female children as well as 19% and 10% of adult male and male

children, respectively.

However, there is fair participation of both male and female gender in fish sm

54% for male and 46% for female. The result show

male children, respectively, we

females and 2% for female children.

0

10

20

30

40

50

60

70

80

90

100P

erce

nta

ge

(%)

1: Frequency distribution of gender participation in fish marketing

fish processing and packaging were dominated by the female gender. These

rious, involved more time, patience, care and precision

compared to splitting of firewood, loading/off-loading and transportation of fish, and

naturally suitable for females. As such, 74% and 6% of the packaging activities

out by adult females and female children, respectively, unlike 10% of which we

dren, respectively. Similarly, processing of fish involved

adult females and 28% of female children as well as 19% and 10% of adult male and male

However, there is fair participation of both male and female gender in fish sm

54% for male and 46% for female. The result showed that 48% and 6% of adult male a

male children, respectively, were involved in fish smoking, while it was 44% for adult

and 2% for female children.

Fish Marketing Activities

56

re dominated by the female gender. These

more time, patience, care and precision

loading and transportation of fish, and

naturally suitable for females. As such, 74% and 6% of the packaging activities were carried

ively, unlike 10% of which were undertaken

processing of fish involved 43% of

adult females and 28% of female children as well as 19% and 10% of adult male and male

However, there is fair participation of both male and female gender in fish smoking at

that 48% and 6% of adult male and

44% for adult

Adult male

Adult female

Male children

Female children

Fish Marketing Activities (%)

57

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

This study examined the economics of fish marketing in Akwa Ibom State, Nigeria,

through the evaluation of seven specific objectives and two hypotheses. The specific

objectives were: description of the socio-economic characteristics of fish marketers;

determination of the structure and conduct of fish marketing; determination of the efficiency

and profitability of fish marketing channels; and evaluation of various methods used in fish

processing and preservation. Other objectives included: identification of the challenges facing

fish marketers; determination of the factors that drove vertical differentiation of fish

marketing channels; and assessment of the level of gender participation in fish marketing.

Multi-stage random sampling technique was utilized in the study to select 105

respondents. Data were collected using well structured and pretested questionnaire. The

questionnaire captured information on socio-economic characteristics of fish marketers,

methods of fish processing and preservation, fish marketing channels, costs and returns of

fish marketing, gender participation in fish marketing and challenges of fish marketing as

well as factors that drove vertical differentiation of fish marketing channels. Descriptive

statistics (tables, charts and likert rating scale) and inferential statistics (profitability analysis,

concentration ratio and multinomial logit) were used to analyze the data collected. Inferences

on the hypotheses were made using analysis of variance (ANOVA) and t-test techniques.

Results showed that the frequencies of male fish producers were 100%, male

wholesalers about 24% and male retailers 5%. There were no female fish producers but

female fish wholesalers were 76% and female retailers, 95%. The predominant age bracket of

fish producers was 31 – 40years at 48%, that of wholesalers was 41 – 50years at 62% while

the retailers was 31 – 40years at 55% while their average ages were 38years for producers,

58

42years for wholesalers and 46years for retailers. Most of the fish producers were married

constituting about 76%; that of wholesalers was 86% while the retailers were 71%. The

highest educational level for fish producers was the West African School Certificate (WASC)

at a frequency of 48%, First School Leaving Certificate (FSLC) for the retailers (76%) and

degree certificate for the wholesalers at 7%. The dominant household size across the

marketing channels was 1 – 5members at 64% for fish producers, 81% for fish wholesalers

and 79% for the retailers while their average household size were 5members for all

marketers. Furthermore, their marketing experience spanned through 11 – 20years for the

fish producers (60%), wholesalers (67%) and retailers (60%) with averages of 18years for

producers, 15years for wholesalers and retailers, respectively.

The fish market was under weak oligopoly at concentration ratio of 47%. The net

margins of the fish marketing channels were N127,850 (producers), N141,095.00

(wholesalers) and N137,030.00 (retailers) at corresponding marketing efficiencies of

342.30%, 144.65% and 97.18%, respectively, which were significantly (p<0.01) different.

Smoking was the predominant means of processing fish for all the marketing channels at 64%

(producers), 90% (wholesalers) and 93% (retailers) which were stored by hang-over method

at frequencies of 40% (producers), 76% (wholesalers) and 83% (retailers). Motor-cycle was

the major means of transporting fish at 74% for producers and 62% for wholesalers, while

retailers used mainly buses/taxies at 76%. Fish marketing was faced with challenges at

average likert rating of 2.74 on a 4-point scale. The most rated challenges included lack of

capital/finance (3.06), seasonality of fish production (3.29), lack of government assistance

(3.75) and produce deterioration (3.48), and lack of storage facility (3.81), poor technical

extension services (3.29) and debt (3.72).

Socioeconomic factors significantly (p<0.1) drove vertical differentiation of fish

marketing channels into producers (68.4%), wholesalers (87.5) and retailers (92.2%). The

59

factors that positively and significantly affected vertical differentiation were marital status,

household size, value of fish, membership of cooperative unions, and processing and storage

costs. Age and sex had negative effects on vertical differentiation of fish marketing channels.

The fish marketing activities carried out by the marketers were firewood splitting, fish

transportation, loading/off-loading of fish, fish packaging, fish processing and fish smoking.

The male gender dominated in the fish loading and off-loading, fish transportation and in the

splitting of firewood providing over 70% of the labour. Fish processing and packaging

activities were dominated by the female gender which provided about 75% of the labour.

There was a fair representation of both gender in fish smoking in which the male and the

female gender provided 54% and 46% of the labour, respectively.

5.2 Conclusion

Fish and fish marketing is a very important component of agriculture, which is the

mainstay of the economy of developing countries like Nigeria. Agriculture provides food for

the increasing population; supplies adequate raw materials to growing industrial sector; is a

major source of employment; generates foreign exchange earnings; and provides market for

the products of the industrial sector. Fish occupies a prime position in the country as it is

highly nutritional and medicinal and as such is largely and widely consumed across ethnic

and religious divides. However, the production of this all important product continues to lag

behind demand resulting in the importation of several millions of tonnes of fish. The

sustainability of fish production and/or importation requires efficient marketing to ensure that

the fish get to the final consumers. In Nigeria, there is growing urbanization as fish and fish

products have to be taken far away from where they produced as such they meeting system is

also changing. However, there have not been sufficient empirical studies on the economics of

fish marketing especially in Akwa Ibom State, necessitating this study.

60

The study found that fish market was under weak oligopoly, and that the wholesale

channel had the highest net margin while the producer channel had the highest marketing

efficiency. Smoke-drying and use of hangovers were the predominant methods of processing

and storing fish, respectively by the fish marketers; while the use of motor-cycle for

transportation was popular among fish producers and wholesalers, bus/taxi usage was

common among fish retailers. Lack of capital, seasonality of fish business, lack of

government assistance, produce deterioration, lack of storage facilities, poor technical

extension services and debt by fish marketers were the factors challenging fish marketing

very seriously. Marital status, household size, value of fish sold, membership of cooperative

unions, age and sex were the factors that significantly drive vertical differentiation of fish

marketing. The implications of these results on the efficiency of fish marketing were

discussed and appropriate recommendations made.

5.3 Recommendations

Based on the findings from this research the following recommendations were made:

a. the study found that the level of education of fish marketers was low. Incentives

should be provided by the government to attract trained and educated youths to the

sector especially at this period of prevailing unemployment in the country. Also

incentives such as free education, scholarship and free meal should be given to fish

marketers to encourage them to embrace adult education;

b. the study found that the fish market was under weak oligopoly and that paucity of

funds was a major challenge constraining the activities of fish marketers. Funds in

forms of aids and soft loans should be provided by the government to the marketers.

This will increase the capital base of the individual fish marketers and also attract

more people to the business which will go a long way to break the gradually building

oligopoly in the market. This will result in a more competitive market where prices of

61

fish will be determined solely by the forces of demand and supply thereby making

fish easily available and affordable to majority of Nigerians;

c. furthermore, although the three marketing channels (channel 1, channel 2 and channel

3) were profitable and efficient, the wholesalers and retailers (middlemen) channels

were far more profitable and efficient than the producer channel. Special programmes

and packages as well as trainings should be designed for fish producers to reduce their

cost of production, raise their productivity and improve their income and wellbeing;

d. in the same light, vertical differentiation of fish marketing channels into producers,

wholesalers and retailers enhanced profitability and efficiency of fish marketing,

which the study found was driven by socioeconomic factors such as marital status,

value of fish and membership of fish marketers to cooperative unions. As such, these

factors should be encouraged and improved upon to enhance the profitability and

efficiency of fish marketing.

e. the challenges of inadequate storage and preservation facilities leading to high

deterioration of fish was identified as facing fish marketing notwithstanding that

smoke drying was the predominant means of preservation and processing of fish. This

implied that this method was not highly efficient leading to loss in the value of fish.

More effective processing and preservative methods should be provided by

government at strategic locations for the fish marketers at cheap and affordable prices

as incentives to the business;

f. in the same vein, the use of motor cycle as the predominant means of transporting fish

implies low cost of transportation but the fish spends more time on the road which

could result in its deterioration before processing or getting to final consumers. It also

could imply that there are no good roads that will allow vehicles to ply them. Efforts

62

therefore should be made by the government to build road infrastructure that will

support the use of fast and cost effective means to transport fish; and

g. the various activities involved in fish marketing such as processing, splitting of

firewood, and loading/off-loading of fish, fish packaging and transportation were

carried out by both male and female gender. As such, there should not be gender

discrimination in fish marketing. Both gender therefore should be encouraged and

supported to participate in the business.

5.4 Additions to knowledge

Fish marketing is a very important in the process of production and consumption of

fish. Fish is the major protein constituent in the diets of many Nigerians, and it is widely and

largely consumed across religious and ethnic devise in the country. Evidence from literature

show that there is paucity of information on the efficiency of fish marketing in the country,

and particularly in Akwa Ibom State (Mohamed and Bawa, 2010). This study contributes to

the repository of knowledge on the efficiency of fish marketing. The study showed that the

fish market was under weak oligopoly, and that socioeconomic factors significantly drove

vertical differentiation of fish marketing into producer, wholesale and retail channels,

respectively. Furthermore, the study showed that fish marketing was generally profitable

across the marketing channels, although the wholesale channel had the highest net margin

compared to the retail and producer channels, respectively. Also, the producer channel with

the least net margin had the highest marketing efficiency. The study further showed the

urgency for the enactment of policies that will see government provide assistance to fish

marketers such capital, storage and processing facilities, road infrastructure and extension

services. This will help ameliorate the challenges constraining fish marketing thereby

increasing its profitability and efficiency.

63

5.5 Areas Needing Further Research

There is need for further research in the following areas:

a. funding and provision of capital for fish marketing.

b. fish storage and processing facilities.

c. government policies on fish marketing

64

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APPENDIX

Appendix 1: ANOVA result on marketing efficiency among the marketing channels (producers, wholesale

and retail channels

Sum of Squares df Mean Square F Sig

Between Groups 0.019 2 0.01 3.112 0.001

Within Groups 1.024 12 0.085

Total 1.043 14