Rice Price Differentials in Rural Markets of Edo State, Nigeria

Abstract

The dispersion in price of rice across different markets in exclusive location, and the astronomic annual increase of 30% in the past 7-8 years in Edo state cannot be attributed mainly to transport costs. Consequently, the study examined spatial price variation of rice vis-à-vis beans, garri, and palm oil as typically consumed substitutes/complements food commodities from a segment of 286 food commodity marketers in Ovia North-East Local Government Area (LGA) of Edo state, Nigeria using the spatial lag model of price-cost of transport data set. The outcomes of the descriptive data showed that the price of 1Kg rice under random test became N1576.82. The consequences of Moran's I (3.652) and Lagrange multiplier exams (10.753) for spatial lag, and Moran's I (0.175) and Geary's c check (0.460) for spatial autocorrelation suggest evidence of clustering in the spatial price of rice at the nearby markets and spatial price of rice between markets than might be under a random experiment. However, the results confirmed no spatial structure, no spatial dependence in the error term, nor spatial dependence within the costs of garri, beans and palm oil. The effects of the spatial lag model showed a mean price of 1kg of rice as N1597.77 with an average total effect of 0.406 comprising 0.274 direct effect and 0.132 indirect effects. Hence, the own-market price of rice in the study area is affected by the across-market price in the nearby markets, in addition to the cost of transportation from market of purchase.