TRANSACTION COST AND PROFITABILITY DIFFERENTIALS IN THE MARKETING OF SELECTED MEAT PRODUCTS IN ABIA STATE, NIGERIA

Transcription

1 TRANSACTION COST AND PROFITABILITY DIFFERENTIALS IN THE MARKETING OF SELECTED MEAT PRODUCTS IN ABIA STATE, NIGERIA J. Onwumere Department of Agribusiness and Management, Michael Okpara University of Agriculture, Umudike and M.A Idu Department of Agricultural Economics, Michael Okpara University of Agriculture, Umudike Abstract This study aimed to determine the transaction cost and profitability differentials in the marketing of selected meat products in Abia State, Nigeria. The respondents were selected via multi stage random sampling method. A sample size of 160 (one hundred and sixty) meat product marketers in the study area was chosen. Data presentation and analyses were done using descriptive and inferential statistical tools, one-way analysis of variance test and Ordinary Least Square (OLS) regression approach. Findings from the analysis showed that value of beef purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost were significant factors that influenced the transaction cost of beef marketers. It was revealed also from the analysis that cost of beef purchased, quantity of beef sold, value of other inputs, value of capital employed, cost of hired labour, transportation cost and distance to beef market were significant factors that influenced the profitability of beef marketers. The study recommends that government price intervention programme should be introduced in order to stabilize fluctuations in prices of these selected meat commodities (beef, pork, chevon and chicken). There is also the need for a credit policy that will be targeted at increasing access to credit from commercial banks as well as to enable beef, pork, chevon and chicken marketers to derive optimum benefits from credit use. Keywords: Transaction, cost, profitability, differentials, marketing, meat-products Introduction Nigeria is a major hub of animal product consumption in West Africa. It is also one of the largest livestockraising countries in the region. Meeting the everincreasing domestic demand and access to these flourishing markets are major economic stakes for Nigeria and for the neighboring Sahel countries that raise livestock. The Livestock industry is the major source of protein supply for the large population, contributing 5-6% of the country s total gross domestic product (GDP) and 15-20% of the agricultural GDP (Mshelbwala, 2013). An industry as important as this needs support through various intervention mechanisms including obtaining the perspective of the final consumers. It is estimated that annual domestic and imported slaughtering is around 7.5 million cattle with a livestock value of N million. Many Livestock are marketed leading into the rainy season (May- June) and prices are lowest during this period (as much as 20% below normal market prices). Livestock prices peak during October-January (as much as 25-30% above normal market prices). There is no structured market pricing system in Nigeria for live animals that addresses quality issues such as animal age, fatness, conformation and carcass weight. There is however a premium paid for larger, entire male livestock in good condition which is incorporated into a per head price as weigh scales are non-existent at livestock market, slaughter-slab or abattoir level. The annual ex-fifth quarter retail value of cattle was estimated at N million generating average margins of 38.5%. Livestock move through a number of markets and incur a number of trading transactions as they move from pastoralist through to the terminal market. Livestock traders buy and sell livestock from primary producers and at intermediate markets until the livestock reach the terminal market. Animals are sold when the household needs money. Traders at local/village markets are generally small business people who only have access to sufficient capital to accumulate a single load of livestock for reasonably efficient transport to the nearest regional market. At regional markets, larger traders are operating with access to adequate finance to purchase sufficient animals for efficient transport to terminal markets. There is no known dedicated livestock-support vehicles observed at any of the livestock market or slaughter sites visited. Cattle and small stock are transported on general purpose transport vehicles including small open deck trucks, small to medium trucks and large trucks used for long distance travel to the south. Cattle rearing in Nigeria is largely supplemented by short-cycle livestock operations, estimated at

2 million head of sheep and 175 million poultry birds. Nigeria livestock industry is small and slow-growing relative to the population relying on it for meat (Agboola and Balcilar, 2012; Babatunde and Qaim, 2010). In 2010, the grazing livestock accounted for million of the total livestock production (Earth Policy Institute, 2012). It is on this basis that the study seeks to reduce transaction cost and improve the profitability level of selected meat products in Abia state, Nigeria. Methodology This research work was carried out in Abia state, Nigeria. The respondents were selected via multi stage random sampling method. The survey sample includes 160 (one hundred and sixty) respondents involved in some selected meat products marketing in the study area. Umuahia and Ohafia agricultural zones in Abia state was selected as the area to be studied. Some selected meat marketers were studied and data obtained with the use of questionnaire. The selection of these agricultural zones was informed by the dominance of meat marketers in the zones. Data presentation and analyses were done using descriptive and inferential statistical tools, one-way analysis of variance test and Ordinary Least Square (OLS) regression approach. Ordinary Least Square (OLS) regression model for estimating the determinants of transaction cost in the marketing of selected meat products is implicitly stated as follows: logy i= β 0+β 1logX 1+β 2logX 2+β 3logX 3+β 4logX 4+β 5logX 5+β 6logX 6 +β 7logX 7+β 8logX 8+e i (i) Y= Transaction cost in the marketing of selected meat products measured in naira (i= meat type; where 1= Chevon; 2= Beef; 3= Pork; 4= Chicken); X 1= Value of meat purchased measured in naira; X 2= Value of family labour measured in naira; X 3= Value of other inputs measured in naira; X 4= Capital employed measured in naira; X 5= Transportation cost measured in naira; X 6= Cost of hired labour measured in naira; X 7= Preservation cost measured in naira; X 8= Distance to meat market (km); Log= Natural logarithm; β 0 β 8= Parameter estimates; e i= error term Ordinary Least Square (OLS) regression model for estimating the determinants of profitability in the marketing of selected meat products is implicitly stated as follows: Logπ i= β 0+β 1logX 1+β 2logX 2+β 3logX 3+β 4logX 4+β 5logX 5+β 6logX 6 +β 7logX 7+β 8logX 8+e i (ii) π i= Profitability in the marketing of selected meat products measured in naira (i = meat type; where 1= Chevon; 2= Beef; 3= Pork; 4= Chicken); X 1= Value of meat purchased measured in naira; X 2= Value of family labour measured in naira; X 3= Value of other inputs measured in naira; X 4= Capital employed measured in naira; X 5= Transportation cost measured in naira; X 6= Cost of hired labour measured in naira; X 7= Preservation cost measured in naira; X 8= Distance to meat market (km); Log= Natural logarithm; β 0 β 8= Parameter estimates; e i= error term Ordinary Least Square (OLS) regression model for estimating the effect of transaction cost in the marketing of selected meat products is implicitly stated as follows: Logπ i= β 0+β 1logTC i+e i (iii) π i= Profitability in the marketing of selected meat products measured in naira (i= meat type; where 1= Chevon; 2= Beef; 3= Pork; 4= Chicken); TC i= Transaction cost in the marketing of selected meat products measured in naira (i= meat type; where 1= Chevon; 2= Beef; 3= Pork; 4= Chicken); Log= Natural logarithm; β 0 β 1= Parameter estimates; e i= error term Results and discussion Socio-economic and marketing characteristics of meat product marketers 176

3 Table 1: Distribution of respondents according to socio-economic characteristics: n= 160 Socio-economic Category Beef Pork Chevon Chicken characteristics Freq. % Freq. % Freq. % Freq. % Age Mean Gender Male Female Household size Mean Educational status Primary Secondary Tertiary Experience Mean Scale of operation Sales (Monthly) Cooperative membership turnover Training as a meat marketer Small Medium times times times >5 times Yes No Yes No Access to loan Yes No Source: Computed by the author from field data, Table (1) showed that majority (97%, 100%, 100% and 85%) of the beef, pork, chevon and chicken marketers respectively were males. This implies that meat marketing is gender specific and that more males are involved in meat marketing than their female counterparts due to the fact that females may not cope with the strenuous nature of carefully loading and offloading meat, killing animals, and dissecting cattle, pigs, goats and chicken. This finding is consistent with Igwe (2014). Majority (50%, 60%, 70% and 40%) of the beef, pork, chevon and chicken marketers respectively in the study area were within the age bracket of years old. This indicates that the meat marketers were in their active age and have been operative for a reasonable length of time and can be considered as 177

4 being matured enough to understand the rudiments and cope with the intricacies involved in meat marketing. Majority (42.5%, 55% and 65%) of the beef, pork, and chevon marketers respectively had household size of about 7-9 persons per household whereas majority (45%) of chicken marketers in the study area had household size of about persons per household. This implies that most of the marketers had a relatively high household size. Thus, the large household size might be of benefit to the marketers since it has been observed in various studies that family labour is most essential in any household business (Nnamerenwa, 2013). 67.5%, 75%, 87.5% and 77.5% of pork, chevon and chicken marketers respectively in the study area had secondary education. However, all the selected meat marketers had one form of formal education or another. This implies that beef, pork, chevon and chicken marketers in the study area are literate. According to Onyebinama (2000) education will predispose business individuals to be invocative and put them in a better position to cope with the intricacies of new factor and product market s that the adoption of new technologies and skill introduces them to. This finding is consistent with Haruna et al. (2007), Udo (2014) and Igwe (2014). Transaction cost differentials in the marketing of selected meat products Table 2: Monthly average transaction cost differentials in the marketing of selected meat products Cost items Beef Pork Chevon Chicken Rent on shop (N) 2,500 2,500 2,500 3,000 Wages (labour cost) (N) 10, , , , Marketing charges (N) 2, ,680 3, , Depreciation (N) , Total Fixed Cost (TFC) (N) 15, , , ,229 Transportation cost (N) 5, , , Loading/offloading cost (N) ,500 Purchase price (N/Kg) Quantity purchased (Kg) 1, , , Purchase cost (N) 466, , , ,888 Total Variable Cost (TVC) (N) 473, , , ,195 Total Transaction Cost (TC) (N) 488,794 a 372,223 c 400,969 b 414,423 b Source: Computed by the author from field survey, Value of total transaction cost followed by different superscripts is statistically different at (P 0.05). Mean separation was done using Duncan Multiple Range Test. The result of the transaction cost analysis presented in Table (2) showed that rent on shop, wages (labour cost), marketing charges, depreciation, transportation cost, loading/offloading cost, and purchase cost constituted the transaction cost of beef, pork, chevon and chicken marketers in the study area. The result in Table (2) showed that the Total Fixed Cost (TFC) incurred by beef, pork, chevon and chicken marketers in the study area were N15,700, N14,002, N9,499 and N1, respectively. Wages for labour constituted the highest component of the fixed cost across all the selected meat marketers in the study area. The Total Variable Cost (TVC) incurred by beef, pork, chevon and chicken marketers in the study area were N473,095, N358,221, N391,470 and N401,195 respectively. Purchase cost of meat constituted the highest component of the fixed cost across all the selected meat marketers in the study area. The total transaction cost incurred by beef, pork, chevon and chicken marketers in the study area were N488,794, N 372,223, N400,969 and N414,423 respectively. The Duncan Multiple Range Test (DMRT) was used to compare the difference in the transaction cost of the selected meat marketers in the study area and the result presented in Table (2) showed that there was significant difference in the mean transaction cost incurred by different meat marketers in the study area at P The result showed that beef marketers significantly incurred the most transaction cost in their marketing of beef in the study area. This was followed by chevon and chicken marketers in the study area whereas pork marketers in the study area significantly incurred the least transaction cost. However, there was no significant difference in the transaction cost incurred by chevon and chicken sellers in the study area (P > 0.05). The higher transaction cost of beef marketing may be due to the high price of purchasing beef in the study area occasioned by large number of beef marketers in the study area. 178

5 Profitability differentials in the marketing of selected meat products Table 3: Monthly average profitability differentials in the marketing of selected meat products Revenue items Beef Pork Chevon Chicken Purchase price (N/Kg) Quantity purchased (Kg) 1, Purchase cost (N) 466, , , ,888 Selling price (N/Kg) Quantity sold (Kg) 1, Revenue (N) 560, , , , Total transaction cost (TC) (N) 488, , , ,909 Profitability per month(n) 72,335 c 82,231 a 64,615 d 80,774 b Return per naira invested per month (N) Source: Computed by the author from field survey, Value of profitability followed by different superscripts is statistically different at (P 0.05). Mean separation was done using Duncan Multiple Range Test. The result of the profitability analysis of selected meat marketers in the study area presented in Table (3) showed that the revenue earned by beef, pork, chevon and chicken marketers in the study area were N560,383.74, N454,353.50, N459, and N544, respectively. The monthly average profitability earned by beef, pork, chevon and chicken marketers in the study area were N72,335.00, N82,231.00, N64, and N80, respectively. The return per naira invested per kilogram of beef, pork, chevon and chicken by these marketers in the study area were N14.82, N22.10, N16.35 and N17.41 respectively, indicating that for every one naira invested by beef, pork, chevon and chicken marketers in the study area, N14.82, N22.10, N and N17.41 was earned as income by beef, pork, chevon and chicken marketers respectively. Therefore, marketing of meat be it beef, pork, chevon and chicken in the study area is highly profitable. Thus, this finding is consistent with Maikasuwa (2014), Iheanacho and Ali (2010), Umaru and kazaure (2013) and Nasiru et al. (2012) in their studies on economics of beef, pork and chicken marketing in various parts of Nigeria. The Duncan Multiple Range Test (DMRT) was used to compare the difference in the profitability of the selected meat marketers in the study area and the result is presented in table (3). The result showed that there was significant difference in the mean profitability incurred by different meat marketers in the study area at P The result showed that pork marketing was significantly the most profitability meat marketed in the study area. This was significantly followed by chicken and beef whereas chevon was significantly the least profitable meat marketed in the study area. The high profitability of pork marketing in the study area may be as a result of the high demand the meat commands in the study area which is more than the other meat types. This high demand for pork in the study area with few marketers supplying pork makes the selling price of pork high and the frequent turnover enjoyed by the marketers makes pork marketing currently the most lucrative meat marketed in the study area other than beef, chicken and chevon. 179

6 Determinants of transaction cost and profitability in the marketing of selected meat products Table 4: Cobb-Douglas regression result of the determinants of transaction cost in the marketing of selected meat products Variable Beef Pork Chevon Chicken Constant (6.297)*** (9.665)*** (8.486)*** (6.780)*** Value of meat purchased (4.497)*** (2.572)** (2.460)** (2.672)** Value of family labor (-0.670) (3.100)*** (3.071)*** (-1.222) Value of other inputs (2.358)** (-1.564) (1.553) (1.965)* Value of capital employed (2.358)** (3.500)*** (0.480) (2.351)** Cost of hired labor (3.713)*** (3.313)*** (2.604)** (3.191)*** Transportation cost (3.375)*** (2.561)** (2.556)** (2.896)*** Preservation cost (-1.313) (1.061) (0.478) (0.555) Distance to meat market (0.918) (-1.159) (2.393)** (-1.255) R-Squared Adj. R-Squared F-statistic *** *** *** *** Source: Computed by the author from field data, ***,** and * represents 1%, 5%, and 10% significance level respectively. Figures in brackets are t-values. The result in Table (4) indicated that value of beef purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost were significant factors that influenced the transaction cost of beef marketers in the study area. Value of beef purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost was positively related to the transaction cost of beef marketing at 1%, 5%, 5%, 1% and 1% significance levels respectively, an indication that transaction cost of beef marketing in the study area increases with an increase in each value of beef purchased, value of other inputs, value of capital employed, cost of hired labour, transportation cost and vice versa. The response of transaction cost of beef marketers to changes in value of beef purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost were 1.753, 2.797, 1.227, 1.249, and respectively and are elastic. This suggests that a 10 percent increase in the value of beef purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost led to 17.5%, 28%, 12.3%, 12.5%, and 22.6% increase in the transaction cost of beef marketing in the study area respectively. The result in Table (4) indicated also that value of pork purchased, value of family labour, value of capital employed, cost of hired labour, and transportation cost were significant factors that influenced the transaction cost of pork marketers in the study area. Value of pork purchased, value of family labour, value of capital employed, cost of hired labour, and transportation cost were positively related to the transaction cost of pork marketing in the study area at 5%, 1%, 1%, 1% and 5% significance levels respectively, an indication that transaction cost of pork marketing in the study area increases with an increase in each value of pork purchased, value of family labour, value of capital employed, cost of hired labour, transportation cost and vice versa. The response of transaction cost of pork marketers to changes in value of pork purchased, value of family labour, value of capital employed, cost of hired labour, and transportation cost were 1.427, 1.211, 1.158, and respectively and are elastic. This suggests that a 10 percent increase in the value of pork purchased, value of family labour, value of capital employed, cost of hired labour, and transportation cost led to 14.3%, 12.1%, 11.6%, 22.2% and 13% 180

7 increase in the transaction cost of pork marketing in the study area respectively. The result in Table (4) indicated that value of chevon purchased, value of family labour, cost of hired labour, transportation cost and distance to chevon market were significant factors that influenced the transaction cost of chevon marketers in the study area. Value of chevon purchased, value of family labour, cost of hired labour, transportation cost and distance to chevon market were positively related to the transaction cost of chevon marketing in the study area at 5%, 1%, 5%, 5% and 5% significance levels respectively, an indication that transaction cost of chicken marketing in the study area increases with an increase in each value of chevon purchased, value of family labour, cost of hired labour, transportation cost, distance to chevon market and vice versa. The response of the transaction cost of chevon marketers to changes in the value of chevon purchased, value of family labour, cost of hired labour, transportation cost and distance to chevon market were 1.887, 1.029, 1.774, and respectively and are elastic. This suggests that a 10 percent increase in the value of chevon purchased, value of family labour, cost of hired labour, transportation cost and distance to chevon market led to 18.9%, 10.3%, 17.7%, 16.4% and 17.9% increase in the transaction cost of chevon marketing in the study area respectively. The result in Table (4) indicated that value of chicken purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost were significant factors that influenced the transaction cost of chicken marketers in the study area. Value of chicken purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost were positively related to the transaction cost of chicken marketing in the study area at 5%, 10%, 5%, 1% and 1% significance levels respectively, an indication that transaction cost of chicken marketing in the study area increases with an increase in each value of chicken purchased, value of other inputs, value of capital employed, cost of hired labour, transportation cost and vice versa. The response of the transaction cost of chicken marketers to changes in the value of chicken purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost were 1.024, 1.141,1.924, and respectively and are elastic. This suggests that a 10 percent increase in the value of chicken purchased, value of other inputs, value of capital employed, cost of hired labour, and transportation cost led to 10.2%, 11.4%, 19.2%, 10.6% and 14.7% increase in the transaction cost of chicken marketing in the study area respectively. 181

8 Determinants of profitability in the marketing of selected meat products Table (5): Cobb-Douglas regression result of the determinants of profitability in the marketing of selected meat products Variable Beef Pork Chevon Chicken Constant (6.173)*** (4.761)*** (5.526)*** (9.755)*** Cost of meat purchased (-4.047)*** (-3.061)*** (-5.100)*** (-3.974)*** Quantity of meat sold (2.472)** (3.002)*** (2.285)** (4.013)*** Value of family labor (-1.006) (-5.298)*** (-3.695)*** (-1.470) Value of other inputs (-2.242)** (-4.415)*** (-2.372)** (-3.417)*** Value of capital employed (-2.371)** (-2.448)** (1.100) (0.789) Cost of hired labor (-6.866)*** (1.198) (-2.159)** (-2.154)** Transportation cost (-1.917)* (-2.485)** (-3.164)*** (-2.216)** Preservation cost (0.147) (1.483) (1.500) (-3.302)*** Distance to meat market (-7.489)*** (1.105) (1.313) (-2.514)** R-Squared Adj. R-Squared F-statistic *** *** *** *** Source: Computed by the author from field data, ***,** and * represents 1%, 5%, and 10% significance level respectively. Figures in brackets are t-values. The result in Table (5) indicated that cost of beef purchased, quantity of beef sold, value of other inputs, value of capital employed, cost of hired labour, transportation cost and distance to beef market were significant factors that influenced the profitability of beef marketers in the study area. Quantity of beef sold was positively related to the profitability of beef marketing in the study area at 5% level of significance, an indication that the profitability of beef marketing in the study area increases with an increase in the quantity of beef sold and vice versa. However, cost of beef purchased, value of other inputs, value of capital employed, cost of hired labour, transportation cost and distance to beef market were negatively related to the profitability of beef marketers in the study area at 1%, 5%, 5%, 1%, 10% and 1% significance levels respectively, an indication that profitability of beef marketing in the study area decreases with an increase in the cost of beef purchased, value of other inputs, value of capital employed, cost of hired labour, transportation cost and distance to beef market and vice versa. The response of the profitability of beef marketers to changes in cost of beef purchased, quantity of beef sold, value of other inputs, value of capital employed, cost of hired labour, transportation cost and distance to beef market were 1.468, 1.208, , , , , and respectively and are elastic. This suggests that a 10 percent increase in the quantity of beef sold led to 12.1% increase in the profitability of beef marketers in the study area, whereas a 10 percent increase in the cost of beef purchased, value of other inputs, value of capital employed, cost of hired labour, transportation cost and distance to beef market led to 14.7%, 15.3%, 13.5%, 12.5%, 11.6% and 11.4% decrease in the profitability of beef marketers respectively in the study area. The result in Table (5) indicated that cost of pork purchased, quantity of pork sold, value of family labour, value of other inputs, value of capital employed, and transportation cost were significant factors that influenced the profitability of pork marketers in the study area. Quantity of pork sold was positively related to the profitability of pork marketing in the study area at 1% 182

9 level of significance, an indication that the profitability of pork marketing in the study area increases with an increase in the quantity of pork sold and vice versa. However, cost of pork purchased, value of family labour, value of other inputs, value of capital employed, and transportation cost were negatively related to the profitability of pork marketers in the study area at 1%, 1%, 1%, 5%, and 5% significance levels respectively, an indication that profitability of pork marketing in the study area decreases with an increase in the cost of pork purchased, value of family labour, value of other inputs, value of capital employed, transportation cost and vice versa. The response of the profitability of pork marketers to changes in cost of pork purchased, quantity of pork sold, value of family labour, value of other inputs, value of capital employed, and transportation cost were , 1.804, , , and respectively and are elastic. This suggests that a 10 percent increase in the quantity of pork sold led to 18% increase in the profitability of pork marketers in the study area, whereas a 10% increase in the cost of pork purchased, value of family labour, value of other inputs, value of capital employed, and transportation cost led to 21.6%, 23.4%, 13.5%, 11.1% and 12.1% decrease in the profitability of pork marketers respectively in the study area. The result in Table (5) indicated that cost of chevon purchased, quantity of chevon sold, value of family labour, value of other inputs, value of hired labour, and transportation cost were significant factors that influenced the profitability of chevon marketers in the study area. Quantity of chevon sold was positively related to the profitability of chevon marketing in the study area at 5% level of significance, an indication that the profitability of chevon marketing in the study area increases with an increase in the quantity of chevon sold and vice versa. However, cost of chevon purchased, value of family labour, value of other inputs, value of hired labour, and transportation cost were negatively related to the profitability of chevon marketers in the study area at 1%, 1%, 5%, 5%, and 1% significance levels respectively, an indication that profitability of chevon marketing in the study area decreases with an increase in the cost of chevon purchased, value of family labour, value of other inputs, value of hired labour, transportation cost and vice versa. The response of the profitability of chevon marketers to changes in cost of chevon purchased, quantity of chevon sold, value of family labour, value of other inputs, value of hired labour, and transportation cost were , 1.976, , , and respectively and are elastic. This suggests that a 10 percent increase in the quantity of chevon sold led to 19.8% increase in the profitability of chevon marketers in the study area, whereas a 10% increase in the cost of chevon purchased, value of family labour, value of other inputs, value of hired labour, and transportation cost led to 11.1%, 10.8%, 14.3%, 10.2%, and 21.4% decrease in the profitability of chevon marketers respectively in the study area. The result in Table (5) indicated that cost of chicken purchased, quantity of chicken sold, value of other inputs, cost of hired labour, transportation cost, preservation cost and distance to chicken market were significant factors that influenced the profitability of chicken marketers in the study area. Quantity of chicken sold was positively related to the profitability of chicken marketers in the study area at 1% level of significance, an indication that the profitability of chicken marketing in the study area increases with an increase in the quantity of chicken sold and vice versa. However, cost of chicken purchased, value of other inputs, cost of hired labour, transportation cost, preservation cost and distance to chicken market were negatively related to the profitability of chicken marketers in the study area at 1%, 1%, 5%, 5%, 1% and 5% significance levels respectively, an indication that profitability of chicken marketing in the study area decreases with an increase in the cost of chicken purchased, value of other inputs, cost of hired labour, transportation cost, preservation cost and distance to chicken market and vice versa. The response of the profitability of chicken marketers to changes in cost of chicken purchased, quantity of chicken sold, value of other inputs, cost of hired labour, transportation cost, preservation cost and distance to chicken market were , 1.068, , , , , and respectively and are elastic. This suggests that a 10 percent increase in the quantity of chicken sold led to 10.7% increase in the profitability of chicken marketers in the study area, whereas a 10% increase in the cost of chicken purchased, value of other inputs, cost of hired labour, transportation cost, preservation cost and distance to chicken market led to 38.4%, 12.8%, 12%, 13.2%, 22% and 21.7% decrease in the profitability of chicken marketers respectively in the study area. 183

10 Effects of transaction cost on the profitability of selected meat products Table 6: Regression result of the effects of transaction cost on profitability in the marketing of selected meat products Variable Beef Pork Chevon Chicken Constant (8.027)*** (10.991)*** (4.093)*** (6.117)*** Transaction Cost (-5.008)*** (-5.639)*** (-3.404)*** (-4.059)*** R-Squared Adj. R-Squared F-statistic *** *** *** *** Source: Computed by the author from field data, *** represents 1% significance level. Figures in brackets are t-values. The result in Table (6) indicated that transaction cost significantly affected the profitability level of meat marketers in the study area; be it beef marketers, pork marketers, chevon marketers, or chicken marketers. The coefficient of transaction cost was negatively related to the profitability in the marketing of beef, pork, chevon and chicken in the study area at 1% level of significance. This inverse relationship implies that increase in transaction cost leads to a decrease in the profitability level of beef, pork, chevon and chicken marketing in the study area. Transaction cost is the cost incurred in making an economic exchange or in marketing goods or services. Higher transaction cost implies higher marketing cost for beef, pork, chevon and chicken marketing in the study area. The ability of a marketer to make profit depends on its ability to have higher returns than costs in his/her marketing activities. High transaction cost at low revenue will translate into low profitability. This is the reason why increase in transaction cost led to decreases in the profitability of beef marketers, pork marketers, chevon marketers and chicken marketers in the study area. This finding is consistent with Cevger and Yalcin (2002); Ebraheem et al. (2012); Nmadu et al. (2014); Onyebinama and Onyejelem (2010); Ibeagwa et al. (2012) and Igwe (2014). 184

11 Challenges militating against meat marketers Table 7: Challenges militating against meat marketers Challenges militating against meat marketers Beef (n = 40) Pork (n = 40) Chevon (n = 40) Chicken (n = 40) High purchase price 40(100.0) 1st 37(92.5) 3rd 39(97.5) 2nd 40(100.0) 1st High market charges 38(95.0) 2nd 37(92.5) 3rd 38(95.0) 3rd 39(97.5) 2nd Unfavourable environment 23(57.5) 10th 33(82.5) 6th 31(77.5) 7th 38(95.0) 3rd Government policies that leads to shift in market place 32(80.0) 6th 33(82.5) 6th 26(65.0) 10th 27(67.5) 11th Meat price fluctuations 37(92.5) 3rd 38(95.0) 2nd 39(97.5) 2nd 29(72.5) 10th Inadequate capital 30(75.0) 7th 36(90.0) 4th 29(72.5) 8th 38(95.0) 3rd Poor access to credit 40(100.0) 1st 39(97.5) 1st 40(100.0) 1st 30(73.8) 9th Damage of meat products during 19(47.5) 11th 23(57.5) 11th 12(30.0) 12th 40(100.0) 1st offloading/loading Perishability of meat products after sometime 35(87.5) 5th 36(90.0) 4th 26(65.0) 10th 16(38.8) 14th High cost of livestock production 38(95.0) 2nd 37(92.5) 3rd 32(80.0) 6th 31(76.3) 8th Unavailability of fuel 27(67.5) 9th 30(75.0) 8th 24(60.0) 11th 35(87.5) 5th Bad road for transporting meat products to 30(75.0) 7th 26(65.0) 9th 33(82.5) 5th 26(63.8) 12th different markets by the marketers Harsh economic situation in the state 36(90.0) 4th 34(85.0) 5th 38(95.0) 3rd 32(78.8) 7th Adverse climatic changes 18(45.0) 12th 25(62.5) 10th 27(67.5) 9th 37(92.5) 4th Lack of government protective policies to meat marketers 32(80.0) 6th 22(55.0) 12th 35(87.5) 4th 23(56.3) 13th 29(72.5) 8th 31(77.5) 7th 11(27.5) 13th 34(83.8) 6th Poor training in meat marketing business Source: Computed by the author from field data, Ranking of the challenges faced by meat marketers is represented with the superscripts. The result in Table (7) showed the top five challenges among all the identified challenges militating against beef marketers in the study area. High purchase price and poor access to credit (100%) ranked 1 st, high market charges and high cost of cattle production (95%) ranked 2 nd, meat price fluctuations (92.5%) ranked 3 rd, harsh economic situation in the study area (90%) ranked 4 th and perishability of meat after sometime (87.5%) ranked 5 th. Correcting these anomalies will improve the profitability of beef marketers in the study area. Similarly, the result in Table (7) showed the top five challenges among all the identified challenges militating against pork marketers in the study area. Poor access to credit (97.5%) ranked 1 st, meat price fluctuations (95%) ranked 2 nd, high purchase price, high market charges and high cost of livestock production (92.5%) ranked 3 rd, inadequate capital and perishability of meat sometime (90%) ranked 4 th and harsh economic situation in the study area (85%) ranked 5 th. Correcting these anomalies will improve the profitability of pork marketers in the study area. The result in Table (7) showed the top five challenges among all the identified challenges militating against chevon marketers in the study area. Poor access to credit (100%) ranked 1 st, high purchase price and chevon price fluctuations (97.5%) ranked 2 nd, high market charges and harsh economic situation in the study area (92.5%) ranked 3 rd, lack of government protective policies for chevon marketers (87.5%) ranked 4 th and bad road for transporting chevon to different markets by the marketers (82.5%) ranked 5 th. Correcting these anomalies will improve the profitability of chevon marketers in the study area. More so, the result in Table (7) showed the top five challenges among all the identified challenges militating against chicken marketers in the study area. High purchase price and damage of meat during offloading/loading (100%) ranked 1 st, high market charges (97.5%) ranked 2 nd, unfavorable environment and inadequate capital (95%) ranked 3 rd, adverse climatic changes (92.5%) ranked 4 th and unavailability 185

12 of fuel which hike transportation cost (87.5%) ranked 5 th. Correcting these anomalies will improve the profitability of chicken marketers in the study area. Conclusion It is evident from the result that transaction cost greatly influences the profitability of the various meat (beef, pork, chevon and chicken) marketers in the study area and as such, government price interventions should be introduced in order to stabilize fluctuations in prices of these selected meats. If this is neglected, the health of the citizenry will be greatly hampered because meat makes up a great percentage of our protein intake. References Agboola, M.O. and Balcilar, M. (2012). Impact of Food Security on Urban Poverty: A Case Study of Lagos State, Nigeria. Procedia- Social and Behavioral Sciences, 65, Earth Policy Institue. (2012). Livestock and Human Populations in Nigeria. Haruna, C.J., Olawoye, J., and Nnadozie, K. (2007). Impact of International Trade and Multinational Corporations on Environmental and Sustainable Livelihoods of Rural Women in Akwa-Ibom State, Niger Delta Region, Nigeria: Ibeagwa, O.B., Nnamerenwa, G.C. and Anorue, P.C. (2012). Analysis of Returns on Investment of Cassava Processing in Kwara State, Nigeria. Proceeding of the 26 th Annual Conference of Farm Management Association of Nigeria, Michael Okpara University of Agriculture, Umudike, October 15 th - 19 th, Igwe, I.F. (2014). Comparative Relational Analyses of the Wealth Status of Selected Agro-Based Firm Entrepreneurs in Abia State, Nigeria. B.Sc. Project, Department of Agribusiness and Management, Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria Iheanacho, A.C. and Ali, E.A. (2010). Economics of Sahelia Goat Marketing: A Case Study of Maiduguri Metropolis in Borno State, Sahelian. Journal of Veterinary Science, 9 (1). Maikasawa, M.A. and Jabo, M.S.M. (2014). Analysis of Sheep and Goat Marketing in Sokoto Metropolis, Sokoto State, Nigeria. International Journal of Agricultural Science and Veterinary Medicine, 2 (1): 1-4. Mshelbwala, G.M. (2013). National Livestock Policy Focal Point Presentation, Nigeria. Paper Presented at Side-Meeting of NLPFPS on VET-GOV Programme Engagement/Targeting and Capacity Building Facilitation Abidjan, Cote D ivoire. Nnamerenwa, G.C. (2013). Credit Allocation to Crop and Livestock Subsectors under the Agricultural Credit Guaranteed Scheme Fund (ACGSF) in Nigeria: A Comparative Analysis. International Journal of Agricultural Economics, Rural Sociology and Development, 3 (1), Onyebinama, U.A.U. (2000). Economic Incentives and Strategies for Commercialization of Agriculture in Nigeria. African Journal of Business and Economic Research 1 (2): Udo, A.C. (2014). Determinants of Income and Expenditure Gap between Wholesale and Retail Yam Marketers in Abia State, Nigeria. Unpublished Thesis, Department of Agribusiness and Management, Michael Okpara University of Agriculture, Umudike, Abia State Nigeria Umaru, A.N. and Kazuare, L.A. (2012). Socio- Economic Characteristics of Goat Traders and Marketing Activities in Hadejia, Jigawa State, Nigeria. In: Proceedings Agricultural Transformation: Strategies and Policies for Livestock Development in Nigeria (Akpan eds). International Conference Cen tre, Garki Area A, Abuja