ABSTRACT
Technological development practices that enhance and support entrepreneurship are essential because they cultivate innovation which, in turn, creates new jobs, new wealth, a better quality of life and sustainable development. The downward trend in Yewa North rural smallholder farmer’s income highlights the need to examine the effect of road and market infrastructure on their income. Specifically, the study proceeded to describe the socio-economic characteristics of the respondents in the study area; assess the condition of rural roads and market infrastructure as perceived by the respondents; identify the different means of transportation of agricultural produce in the study area; and determine the effect of road condition and market infrastructure on sales of agricultural produce in the study area.
A multistage random sampling was used to select 120farmers from the study area. Questionnaire and interview schedule were used to collect data from the respondents. The analytical techniques used are descriptive statistics, and regression analysis. The result revealed that a high percentage of the respondents are married (90.7%) and male (88.7%) respectively.
The regression result shows the coefficient of determination was 78.1%, implying that the independent variables explain at least 78.1% of the variability in dependent variable on effect of road condition of farming household in the study area. The regression estimate shows that, the coefficient of variable household size and Road condition were significant but assumed negative signs that neglected the a priori expectation. The coefficient of age, household size, Farm experience, Formal educational level significantly affect the farmers income The coefficient of road condition although significant, had negative effect on income made. This was as a result of high transportation cost incurred by the farmers. It is obvious that low quality roads impose costs on people living far from market. But for people facing very high transport costs arising from inadequate roads, markets cannot be accessed except at very high cost. Bad roads are clearly an obstacle to attaining the potential benefits from market-based economic reform. Hence, communities can come together or communal effort can be applied to develop their areas. In addition to this, local government areas should be empowered to develop their localities by maintaining the existing roads as well as opening new ones to facilitate easier movement of farm produce to the markets at a reduced cost.
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
Agriculture provide primary means of employment for Nigeria and account for more than one third of the total gross domestic product (GDP) and Labour force. Marketing is defined as a process of satisfying human needs by bringing products to people in the proper form and at a proper time and place. Marketing has economic value because it gives form, time, place, utility to products and services. The marketing of agricultural products begins at the farm when the farmer harvests his products. The product when it is harvested cannot usually go directly to the consumers. Firstly, it is likely to be located some distance from the place of consumption in regular and continuous manner throughout the year Secondly storage is required to adjust supply to meet demand. Thirdly, a product when it has been harvested is rarely in a form acceptable to consumers. Therefore, it must be sorted, cleared and processed in various ways and must be presented to the consumer in convenient quality and quantities for sale. Finally the farmer expects payment when his produce leaves his possession, and hence some financial arrangements must be made to cover all the various stages until the retailer sells the products to the final consumer.
According to Olukosi and Isitor (1990), marketing includes packaging, storage, transportation, pricing, financing, risk bearing and even product design. They also observed that agricultural marketing involves all those physical, legal and economic services, which are necessary to make products from the farm available to the consumers. Thus creating of form, place, time, and possession utilities is derived from agricultural marketing.
Olukosi and Isitor (1990) defined agricultural marketing as the performance of all activities which direct the flow of goods and services to the consumer from the producers (farmers) in order to accomplish the producer’s objectives. Many people consider marketing as equivalent to selling or transferring the product to another person for a price. Selling is central on the micro concept of marketing but it is only part of it.
Transport is regarded as an important factor involved in agricultural development all over the world. It is the only means by which food produced at farm site is moved to different homes as well as markets. Transport creates market for agricultural produce, enhances interaction among geographical and economic regions and opens up new areas to economic focus.Agricultural production is very important to the economy of developing nations as a whole and Nigeria in particular.
Generally, for a nation to develop there is need to construct and maintain roads both in urban and rural areas. With particular reference to the rural areas, a key element in rural development is the ability of the nation to overcome infrastructural constraints, especially that of rural roads in our rural areas. One of the major constraints on the growth of smallholder agriculture in African countries is high transaction costs (Machethe, 2004), largely attributable to poor infrastructure. This situation is no different in Nigeria. A large proportion of rural households continue to lack access to basic services (Stilwell and Makhura, 2004). Government initiatives to improve the quality and quantity of infrastructure in the rural areas through programmes such as the construction of small dams and boreholes for rural water supply and the clearing of feeder roads for the evacuation of agricultural produce and the supply of electricity to rural areas from large irrigation Dams, the establishment of nine River Basin Development Authorities (RBDAs) in addition to the two existing ones (Sokoto and Rima RBDAs); DFRRI, the Poverty Relief and Infrastructure Investment Fund and the Comprehensive Agricultural Support Programme, have registered limited impact on the lives of many rural people (World Bank, 2006). The presence of an adequate, reliable and efficient transport system is a critical factor in local economy development. A well-developed transportation infrastructure provides adequate access to local communities, which in turn is a necessary condition for the efficient operation of manufacturing, retail, labour and housing markets. Transportation is a wealth creating industry on its own as well as the life-line of an economy. By “lifeline”, it means that transportation is extremely important for the survival of the economy (Olubomehin, 2012).
Road transportation opens up new areas of economic activities, increases agricultural production, and revitalizes trading activities and impacts positively on urbanization process. Although, there are other means of transportation such as air, rail and water, these means of transportation would have been greatly incapacitated but for the complementary role played by road transport in the economy. Road transportation is indeed the lifeline of the economy in the local regions (Olubomehin, 2012). In developing countries, the rural poor often live in isolated areas. Being far away from the market, the poor are more likely to rely on self-sufficient subsistence farming to survive.
Generally, rural areas server as the base for the production of food and fibre, the major sources of capital formation for a country, and a principal market for domestic manufactures (Olayiwola and Adeleye, 2005). In general terms, the rural areas engage in primary activities which form the foundation for any economic development. Despite this level of contribution to economic development, rural areas have been neglected in terms of development which has made it non- attractive to live in and also increase poverty level in the rural areas. This is justified by the high correlation that exists between rural living and poverty with this situation particularly exacerbated in developing countries (World Bank, 1994). Hence, Balogun (1991) identified that these constraints relate to the acute shortage and lack of basic infrastructure and social amenities such as shelter, portable water,access roads electricity, and education, among others. Sustainable rural development is a function of a number of factors in which transportation is of importance. Efficient and effective rural transportation serves as one of the channels. In Nigeria, the issue of rural transportation development has continued to be of national importance. For instance, most of the rural roads are in poor condition, and this has imposed significant cost on the national economy especially to the agricultural activities due to increased vehicle operating costs and travel times (Akintola, 2007).
The Federal Government of Nigeria (FGN) has embarked on various programmes at one time or the other to ensure the provision of adequate transport facilities to meet the needs of the rural population but these programmes have not been able to achieve hundred percent successes. Aderamo and Magaji (2010) noted that transportation constitutes the main avenue through which different parts of the society are linked together. Ajiboye and Afolayan (2009) noted that road transport is the most common and complex network. It covers a wide range, physically convenient, highly flexible and usually the most operationally suitable and readily available means of movement of goods and passenger traffic over short, medium and long distances. It is obvious that low quality roads impose costs on people living far from market centres. This is nowhere more apparent than in the study area. For historical reasons, roads in many rural areas remain badly maintained or even non-existent. Because the poorest people often reside far from urban centres, this means that these people are the most disadvantaged by the high transport costs resulting from bad roads. For these rural areas, markets cannot be accessed except at very high cost. Bad roads are clearly an obstacle to attaining the potential benefits from market-based economic development.
Rural roads are somewhat unique in terms of their capacity to literally pave the way for other investments, such as schools, health services, and security services (Fan, 2008). In agriculture, better roads can drastically reduce the cost of inputs such as fertilizers, seeds, and extension services (Gregory and Bumb, 2008; Derconet al, 2008). On the output side better roads increase the scope of profitable trade, which in turn encourages on-farm investments to raising agricultural production (Khachatryanet al, 2005). This in turn should raise rural incomes, lower food prices (and hence raise disposable income in urban areas), reduce spatial disparity in food prices, and reduce dependence on food imports. Hence, better rural roads increase net returns to other worthy investments in both the farm and non-farm sectors. It is obvious that low quality roads impose costs on people living far from market centers. This is nowhere more apparent than in the study area. For historical reasons, roads in many rural areas remain badly maintained or even non-existent this is because the poorest people often reside far from urban centers, this means that these people are the most disadvantaged by the high transport costs resulting from bad roads. For these rural areas, markets cannot be accessed except at very high cost. Bad roads are clearly an obstacle to attaining the potential benefits from market-based economic development.
1.2 Problem Statement
Generally Poor road conditions, high transport costs and distant markets have been identified as factors that hamper improved market access for emerging farmers in rural areas (Makhura and Mokoena, 2003; Nieuwoudt and Groenewald, 2003), and also contribute towards the problem of missing markets. Factors that determine access to input and output markets include distance to the markets, the state of the roads, the cost of transportation and the frequency of visits to these markets. Rural services centres and nearby towns and cities are often important sources of inputs for farmers, and also provide a market for farm produce.
Paul et al. (2009) pointed out that the impacts of road infrastructure on agricultural output and productivity are particularly important in Sub-Saharan Africa for three reasons. First, the agricultural sector accounts for a large share of gross domestic product (GDP) in most Sub-Saharan countries (Paul et.al 2009). Second, poverty is concentrated in rural areas. Finally, the relatively low levels of road infrastructure and long average travel time’s result in high transaction costs for sales of agricultural inputs and outputs, and this limits agricultural productivity and growth.
Infrastructure directly affects human welfare and equity across community and income groups. Urban and rural households in Nigeria experience widely different access to basic infrastructure services. The lowest household income groups have no or extremely limited access to infrastructure (Bogetic and Fedderke, 2005). Physical infrastructure, such as irrigation and transport and road systems, together with institutions such as banks and markets, make possible a range of production options that are translated to higher agriculture productivity through technology adoption (Pinstrup and Shimokawa, 2006). This means that investment in infrastructure has the potential to reduce poverty and income inequality between different geographical locations. The role of infrastructure is complex and its effects are indirect. Consequently development economists have not focused on infrastructure as much as they have on directly productive activities such as agriculture and industry.
1.3 Research Questions
This research work tends to provide answer the following questions;
i. What are the socio-economic characteristics of the rural farmers?
ii. What factors determine the effect of road condition on the income made by farmer?
iii. What is the Impact of rural road infrastructure on the productivity of households’ farmers?
iv. What are the different modes of transportation of agricultural produce in the study area?
1.4 Objectives of the Study
The broad objective of the study is to determine the effect of rural roads and market infrastructure on the marketing of agricultural produce in Yewa North Local Government Area of Ogun State.
The specific objectives are to;
i. describe the socio-economic characteristics of the respondents in the study area;
ii. assess the condition of rural roads and market infrastructure as perceived by the respondents;
iii. identify the different means of transportation of agricultural produce in the study area;
iv. determine the effect of road condition and market infrastructure on sales of agricultural produce in the study area:
1.5 Justification of the Study
Transport plays a significant role in the structure of food production and marketing. Easy transportation of agricultural produce to market can make all the difference in the level of rural incomes, more so improved transportation will encourage farmers to work harder in the rural areas for increase in agricultural production. The aim of this study is to determine the role of road transportation mode in marketing of agricultural produce in Yewa north local government in Ogun state. The results will enhance a quicker, clearer and more comprehensive understanding of the impact of road network in the marketing of agricultural produce.The importance of transport facilities in rural areas can be justified from both social and economic perspectives. Socially, a significant proportion of the population lives in the rural areas and demands various forms of transport to facilitate socio-political interactions. Secondly, the rural areas are indispensable in the supply of food, raw materials to urban centres and the country’s economic growth as a whole