Cocoyam is highly perishable and considerable economic losses occur after it is harvested. This is as a result of rot, sprouting and other physiological changes. These losses could be reduced through efficient storage, processing and marketing. This study is about economic study of cocoyam marketing in south-east Nigeria. It specifically ranked market participants preference for cocoyam cultivars and the reasons for such preferences. It showed the main marketing channels and socio-economic and institutional factors affecting the choice of marketing channels. It showed the structure and conduct of cocoyam marketing and socio-economic and institutional factors affecting the volume of cocoyam marketed. It estimated the costs and benefits of cocoyam marketing as well as the net income of six storage methods. It assessed the effectiveness of six storage methods. The study was guided by null hypotheses that socio-economic and institutional factors did not determine the choice of marketing channels; that socio-economic and institutional factors did not determine volume of cocoyam marketed; that the mean income of farmers, wholesalers and retailers did not significantly differ and that the mean cocoyam rot of the six storage methods did not significantly differ. A total of 260 marketers comprising 100 producers, 60 wholesalers and 100 retailers were selected through stratified random sampling techniques. Data were collected from both primary sources. Primary data emanated from various questionnaires and weekly/monthly monitoring of the six storage methods.  Descriptive statistics such as tables, charts, percentages and mean and inferential statistics such net income analysis, four firm concentration ratios, Herfindahl-Hirschman Index and Gini-Coefficient, Multinomial logit regression model, correlation analysis, Ordinary least square regression model and Analysis of Variance were used to achieve the objectives. The results showed that producers, wholesalers and retailers preferences for cocoyam cultivars depended on culture and food pattern more than anything else. It also showed that four firm concentration ratios and Herfindahl-Hirschman Index did not indicate oligopolistic behavior although their Gini-coefficient showed unequal distribution of market sale. The average net income of producers, wholesalers and retailers per year were ₦204,246, ₦3,650,000 and ₦474,000  each respectively while the net income of the six storage methods were ₦56.92, ₦47.96, ₦47.80, ₦43.36, ₦15.25 and ₦3.00 per kg respectively. Approximately 33% of the variations in the volume of cocoyam marketed were explained by socio-economic and institutional variables. The multinomial logit regression analysis has R2 value of 0.56 and showed that age and storage cost were significant (P < 5%).The correlation results for objectives iii and vi showed that distance to market, family labour, size of land allocated to cocoyam income from other sources and purpose of marketing were significant at (p < 0.001) and thus contribute to improvement in marketing. The Analysis of Variance (ANOVA) showed statistically significant difference (P < 0.01) in the mean income of farmers, wholesalers and retailers as well as the mean disease severity of the six storage methods. So, the first, second, third and fourth hypotheses were rejected, while the alternatives were accepted.  The study therefore, recommended that government should build the capacity of market participants through seminars. Additionally financial/technical support should be provided especially to the commercial farmers. There is also need for agricultural-chain partnership between the farmers and processors.




Cover Page

Title Page                                                                                                                                i

Certification                                                                                                                            ii

Dedication                                                                                                                              iii

Acknowledgement                                                                                                                  iv

Table of contents                                                                                                                    v

List of tables                                                                                                                           ix

List of figures                                                                                                                         xi

Abstract                                                                                                                                   xii


CHAPTER ONE: INTRODUCTION                                                                                1

1.1     Background                                                                                                                   1

1.2     Statement of Problems                                                                                                  3

1.3     Objectives of the study                                                                                                 5

1.4     Hypotheses                                                                                                                   6

1.5     Justification                                                                                                                   6


 CHAPTER TWO: LITERATURE REVIEW                                                                  8

2.1       Basic concepts of market analysis                                                                              8

2.1.1:   Market                                                                                                                         8

2.1.2:   Marketing                                                                                                                   8

2.1.3:   Cocoyam marketing system                                                                                       9

2.1.4:    Marketing chain                                                                                                         9

2.1.5:    Marketing channel                                                                                                     9

2.1.6:    Market intermediaries                                                                                                11

2.1.7:    Storage technologies in cocoyam                                                                              13 Storage technologies assessment                                                                               14  Economies of storage                                                                                               15

2.2:      Theoretical framework                                                                                               16

2.2.1:   Theories of the firm                                                                                                    17 Theory of market structure                                                                                        18

2.2.2:    Theory of industrial organization                                                                              19

2.2.3:   Theory of Market Structure-Conduct-Performance                                                   20

2.2.4:   Commodity chain theory                                                                                            21

2.2.5:    Transaction costs theory                                                                                            22

2.2.6:    Discrete choice theory                                                                                               22

2.2.7:    Theory of cocoyam storage                                                                                       23

2.2.7:     Household farm model                                                                                             23

2.3:       Analytical Framework                                                                                               24

2.3.1     Concentration ratios                                                                                                   24 Four Firm Concentration Ratios                                                                                25 Herfindahl Hirschman Index                                                                                     25 Gini Coefficient (GC)                                                                                                26

2.3.2: Marketing Performance                                                                                                26 Calculation of marketing margins for cocoyam                                                        27 Net margins                                                                                                                27 Distribution of Consumer’s Naira                                                                             27 Marketing costs                                                                                                         28 Rate of return per naira investment ratio                                                                   28

2.3.3      Multinomial Logit Model                                                                                         28

2.3.4       Multiple Regression Model                                                                                                 29

2.3.5:   Analysis of Variance (ANOVA)                                                                                30


CHAPTER THREE: METHODOLOGY                                                                          32

3.1         Study Area                                                                                                                32

3.2         Sampling Procedure                                                                                                  32

3.3         Data collection                                                                                                          33

3.4         Data Analysis                                                                                                            35

3.5         Model Specification                                                                                                  36

3.5.1:    Specification of multinomial logit models                                                                36

3.5.2:     Calculation of concentration ratio                                                                            41

3.5.3:     Herfindahl Hirschman Index                                                                                    41

3.5.4:     Gini Coefficient                                                                                                        42

3.5.5:     Calculation of the marketing costs                                                                           42

3.5.5:     Breakdown of consumer’s naira or price spread                                                      42

3.5.6:      Calculation of the net margins                                                                                43

3.5.7:      Calculation of the net margins of selected storage                                                  43

3.5.9: Rate of return per naira investment ratio                                                                      44

3.5.12: Calculation of the percentage loss in fresh weight, rot and sprout                            44

3.5.13: Specification of regression model                                                                              45

3.6:      Test of hypothesis                                                                                                       47

3.6.1: Specification of ANOVA                                                                                             47



CHAPTER FOUR: RESULTS                                                                                          48

4.1:        Socio-economic characteristics of Heads of Household and their relationships with                                                .             marketing   behavior                                                                                                 48

4.1.1:  Socio-economic characteristics of respondents                                                          48

4.1.2: Socio-economic characteristics and institutional factors influencing the behavior of                   .         operators                                                                                                                     51

4.2:1:  Traders preference for cocoyam cultivars                                                                   57

4.2.2:  Reasons for preferences                                                                                               57

4.3: Description of cocoyam marketing channels                                                                   58

4.3.1: The roles and linkages of the chain actors involved in various marketing functions  58

4.3.2: Alternative marketing channels for cocoyam                                                               61

4.3.3: Problems of marketing channels                                                                                   63

4.4: Socio-economic and institutional factors influencing choice of marketing channels     63

4.4.1: Correlations between choice of marketing channel and socio-economic

Institutional variables                                                                                                   65

4.4.2: Variable definitions                                                                                                      66

4.4.3: Model empirical results                                                                                                66

4.4.4: Significant variables in the multinomial logit                                                              67

4.4.5: Test for hypothesis                                                                                                      69

4.5: Structure and conduct of cocoyam marketing systems                                                   69

4.5.1:  Analysis of marketing structure                                                                                  70 Degree of concentration                                                                                            70 Herfindahl Hirschman index                                                                                    72 Gini coefficient and Lorenz curve                                                                             76 Condition of entry and exit from cocoyam markets                                                  79 Licensing procedure                                                                                                  79  skills                                                                                                                          79 Packaging                                                                                                                   79 Standard and grades                                                                                                  79

4.5.2: Market conduct                                                                                                            80 Selling                                                                                                                        80 Buying                                                                                                                       80 Transportation                                                                                                            80 Storage                                                                                                                       80 Market information                                                                                                    81 Capital                                                                                                                       81 Risk bearing                                                                                                               81 Price information and setting                                                                                    81 Formal and informal group                                                                                        82

4.6: Marketing performance                                                                                                   82

4.6.1: Market margins                                                                                                             82 Price spread                                                                                                               83

4 .6.1.2: Share in consumer’s naira                                                                                        83  Marketing costs                                                                                                        84 Net profit margin                                                                                                       86 Percentage profit margin                                                                                           86 Return on Investment                                                                                                87 Marketing efficiency                                                                                                 88 Net income                                                                                                                 88 Test for hypothesis                                                                                                    89

4.7: Factors determining volume of cocoyam marketed                                                        90

4.7.1: Correlation between volumes of cocoyam marketed and socio-economic and

Institutional variables                                                                                                    91

4.7.2: Variable definition                                                                                                       92

4.7.3: Explanatory model for volume of cocoyam marketed                                                 92

4.7.4: Test for hypothesis                                                                                                       94

4.8: Effect of various storage methods on the fresh weight, sprout and rots                         95

4.8.1: Determination of percentage fresh weight loss                                                                        95

4.8.2: Determination of percentage sprouting                                                                                    95

4.8.3: Determination of percentage rot incidence                                                                  96

4.8.4: Test for hypothesis                                                                                                       96

4.9: Costs and returns of the six storage methods                                                                  97



5.1: Summary                                                                                                                            99

5.2: Conclusion                                                                                                                       103

5.3: Recommendation                                                                                                             104

5.4: Further studies                                                                                                                 106

REFRENCES                                                                                                                       107

APPENDIX                                                                                                                           118





Cocoyam (Colocasia spp and Xanthosomasagittifolium) originated from Southeast Asia.  It was introduced into Nigeria and other West Africa countries in 16th and 17th centuries Bown, (2000).  It is third largest root and tubers in south-east Nigeria after cassava and yam in terms of production and acreage Nwagbo, Okorji, and Ugwu (1987). Cocoyam is grown for its edible starchy corm and leaves.

Table 1.1: World Production of Edible Aroids (cocoyam) 

  2008 2007 2006 2005 2004 2003
World Production (Mt) 11,773,733 11,348,596 11,674,399 11,224,032 10,916,616 10,700,770
 Nigeria production (Mt) 5,387,000 4,996,000 5,473,000 5,068,000 5,010,000 4,980,000

Source: FAOSTAT, 2010


FAOSTAT, (2010) estimated the production of cocoyam in Nigeria in 2008 as 5,387,000 metric tons out of a total of 11.77 million metric tons of world output of cocoyam. Coastal West Africa accounts for 90% of the global output with Nigeria accounting for 50% of this (FAOSTAT, 2010). World cocoyam production increased slowly from 10.7 to 11.77 million metric tons between 2003 and 2008 (Table 1) (FAOSTAT, 2010). The table also shows production of cocoyam in Nigeria between 2003 and 2008. Production of cocoyam was approximately 46% from 2003 to 2006 in Nigeria and then decline to 45% 2007 and rose up again to approximately 46% of world output in 2008.

Cocoyam is a popular root and tuber grown and marketed in the study area where it is relatively consumed in large quantities. It thrives well in warm, humid forest areas where high annual rainfall and long wet season are conducive for its optimum yield. Considering that this climate makes up about 80 percent of land mass in South-east Nigeria, an efficient and effective cocoyam marketing system that will increase production cannot be overlooked.

During the past decades, products of cocoyam were mainly consumed at home in South-east Nigeria. Their nutrient content carbohydrates, protein, fats, crude fiber, ash, carotene, thiamine, riboflavin, Niacin and vitamin C are more digestible when compared to other root crops (Chukwu, Nwosu, Madu, Chinaka and Okoye, 2008). However, recently, there has been an increase in output and commercialization of cocoyam. Also as the processes of urbanization progresses in Nigeria, an increasing share of national food consumption takes place at locations other than where food is produced. The marketing system must develop well to satisfy the local demand and to provide necessary services as producers sell in markets distant from where consumers buy food items (Enete, 2003 and FAO, 2009).

Cocoyam marketing, like any other agricultural marketing, encompasses everything that happens between the farm gate and the consumer, including processing, storage, assembly, wholesaling, and retailing of cocoyam (Kohl and Uhl, 1985; Takele, 2010). Cocoyam industry consists of primary production by producers as well as creation of form, space and time utilities by other market participants. Economic study of cocoyam marketing is viewed as obtaining scientific evidence on the situation of cocoyam marketing and identification of potential intervention as a way of assisting the industry in contributing to socio-economic development of the nation. However, going by the estimated figure of postharvest losses in cocoyam, Chukwu, et al, (2008), reported about 50% economic losses after two months and about 95 % after five months as a result of rots, sprouting and other physiological changes. This is pointing to poor access to agricultural chain partnership, rural infrastructure, storage, processing and market for cocoyam. Storage participants used six main storage methods for cocoyam among which are storage in the basket in storage house, on the floor in storage house, storage in the shelf in storage house, storage in raised platform in the barn, heap in barn, bury in the barn. However, reliable information is not available on the relative effectiveness of these methods in reducing losses in fresh weight, rots and other changes.

Cocoyam is produced beyond the needs of the households and they desire to use the surplus in satisfying their other needs. Producers have three main options for marketing their produce. At the beginning of the marketing channel producers either sell directly to consumer or to other participants (retailer or wholesaler) depending on various factors. Other participants in the market channels such as retailers or wholesalers not only create possession utility by transferring cocoyam from surplus to deficit region but also enhance the value of cocoyam in terms of form, place and time for consumers.

However, transaction costs and other institutional and socio-economic factors could limit the volume of supply of cocoyam as well as the preferences for marketing channel. Scientific information on social and other institutional characteristics that affect marketing are needed urgently for improving the volume of cocoyam marketed as well as the decision to participate in cocoyam distribution. Imperfect  market information for buying and selling; lack of cash, and credit availability to finance short-run inventories; insufficient facilities for storage and transportation, no uniform system of grade and standard to facilitate trading at a distance, have been recognized in various studies (Mainville, 2004; Hernandez, 2009; Jari, 2009; Take, 2009; Takele, 2010). Thus attention is required in these areas for improvement of volume of supply as well as choice of marketing channels.

To unleash the potential contribution that this industry could make to improve income and food security of rural poor, assessment of costs and benefits are needed as they are the critical determinant of returns to farmers, traders and other participants in the commodity chain as determined by retail food prices they face. The major components of the analysis of marketing margin consist of gross marketing margin, net marketing margin and farmers’ share of consumers’ price. The net marketing margin accrues to the middlemen as profit (Mainville, 2004; Hernandez, 2009; Jari, 2009; Taka, 2009; Takele, 2010).

Marketing of cocoyam requires special attention also because of the diversified nature of demand of the final consumers. Cocoyam may be needed by consumers for the treatment and prevention of blood sugar disorder due to its low glycemic index (slow sustained release of energy to the body) (Daniells, Hughes, Traynor, Vawdrey and Astridge, 2009). A clear understanding of supply determinants as well as factors affecting the decision to participate in different market channels can contribute to the action and efforts of those actors that aim to implement market-led development strategies. Analysis of cocoyam marketing system will also ensure information on economic values of cocoyam and factors hampering the industrial development such as poor access to local markets infrastructure and transport facilities necessary for cocoyam sub-sector development. The outcome of market led development is to assist in sustainable development of the industry by increasing the available information on more market opportunities necessary for generating employment, increasing income, reducing poverty and increase supplies for healthier consumer nutrient.


In South East Nigeria, information on preference for cocoyam cultivars and their reasons for such preferences are needed for identifying the cultivars with highest demand and thus high potentials for improving the income of players. Marketing of cocoyam is also constrained by socio-economic and institutional factors required for maintaining standards and improving competitiveness. It is constrained by technical factors such as lack of post-harvest handling knowledge, storage and limited market (Babatunde and Oyatoye, 2009; Okoye, Dimelu, Okoye and Agwu, 2009; FAO, 2009; Enibe, Chidebelu, Onwubuya, Agbo and Mba, 2008; Jones, 1994; Hay and McCoy, 1977). The consequences have been seasonal glut, increased spoilage of cocoyam tubers, poor market access and severity of food shortages which in turn affect investment in cocoyam production. Economic study of cocoyam based on analyzing the factors influencing the choice of marketing channels as well as volume of supply reveals how weak the performance of output markets are affecting the cocoyam industry in South-east Nigeria.

The Federal Government of Nigeria is a member and signatory to World Trade Organization (WTO) since 2001 and has thus liberalized and fully integrated into global economic system (Oji et al., 2005). This implies that producers are facing increasing market competition, both in international and local markets (Jari, 2009). In liberalization markets are organized structures that link co-operatives and producers and thus can bring opportunities to farmers but at the same time great challenges (Blandon, 2006). However, in Nigeria liberalization was translated to mean removal of credit and fertilizer subsidies, increase in import duties of rice, animal and soybean. Thus economic study of cocoyam based on examining structure and conducts of the cocoyam marketing system shows the level of competition, efficiency of cocoyam market structure and where to draw attention for the overall performance.

Inequality of income between the rural and urban areas draw people away from agricultural production and this affects farm investment decision. Thus measurement of market performance based on assessment of costs and benefits are needed as they are the critical determinant of income for farmers, wholesalers and retailers. Technical development, supportive institution as well as operational and marketing efficiency motivate market players to continue in production and marketing. It is operating efficiently when the consumer price is equal to the producer price plus marketing costs. The operational efficiency of marketing system is enhanced when the marketing costs are reduced at the same level of output (Babatunde and Oyatoye, 2009; Oguntade and Mafimisebi, 2010).  However, unless the middlemen earn profit in excess of what they require to pay for the interest on borrowed capital and cater for the risk they take their interest in arbitraging across time, space and form will not be sustainable.

Insufficient facilities for storage affect arbitrage across time, space and form. Proper post harvest handling, storage and market access contribute to ensuring quality maintenance for perishable agricultural products. In order words, cocoyam has to be harvested at a specific point in time, but is consumed year-round, thus necessitating proper storage facilities.  Therefore if cocoyams are to be available throughout the year, proper storage facilities have to be implemented by all in the marketing chain: producers, wholesalers, retailers and consumers. Thus evaluation of market performance based on accessing relative effectiveness as well as efficiencies of various methods of storage in reducing loss in fresh weight and other physiological damage are required for identifying the strategies that will reduce these economic losses and increase the income of market participants.

Further, there is need for more research with respect to cocoyam marketing in South-east Nigeria. The scope of early studies on cocoyam was limited to production and gender (Okoye, Dimelu, Okoye and Agwu, 2009). Furthermore, the available research base in agricultural marketing has focused on major crops such as cassava, yam and cereals, while the cocoyam sub-sector remained under addressed.  Taking into account the problems of cocoyam markets in South-east Nigeria, three issues are important in the activities of market participants. These are arbitrage in time (storage), in space (transfer) and form (opportunity for agricultural value chain). In line with the foregoing, the following objectives would guide the research.



The broad objective of the research is to conduct an economic study of cocoyam marketing in South-east Nigeria.

Specifically, the study seeks to:

  1. rank market participants preference for cocoyam cultivars and their reasons for such preferences;
  2. describe marketing channels and their problems in south east Nigeria;
  • analyze socio-economic and institutional factors influencing selection of marketing channel by market participants;
  1. determine the structure and conduct of the cocoyam marketing system;
  2. estimate the costs and benefits of cocoyam marketing;
  3. analyze factors that determine the volume of cocoyam marketed in south east Nigeria;
  • assess the effectiveness of six methods of storing cocoyam in relation to loss in fresh weight, sprout and rot in south east Nigeria;
  • estimate the costs and returns of the six storage techniques of cocoyam in south east Nigeria;
  1. make recommendations to the appropriate authorities for intervention policies



Based on the above specific objectives, this study was guided by the following null hypotheses:

  1. Socio-economic and institutional factors do not affect producer’s marketing channels choices.
  2. Socio-economic factors do not determine the volume of cocoyam marketed.
  • The mean net income of producers, wholesalers and retailers do not significantly differ.
  1. The mean cocoyam rots of the six storage methods do not significantly differ.



Marketing systems development is critical to present and future economic growth and improvement in the welfare and livelihood systems of Nigeria and other African countries in general (Roy-Macaule, 2002). It is important to recognize the role of marketing systems in linking urban and rural food systems and providing food security especially in the face of changing food policies that affect the systems (GECAFS, 2006; FAO, 2009). Therefore development of strategies related to market structure and conduct are necessary for reducing perishability and thus increasing the productivity and viability in the industry. Improved performance of agricultural markets will therefore encourage productivity and thus enhance food availability, accessibility and utilization.

Production has to be accompanied by application of improved post harvest technologies, rural infrastructure and trade related capacity for market access. Such progress may be important for a movement towards commercial production and economic benefit to all the commodity marketing chain. Scientific information on socio-economic characteristics, marketing and other post harvest characteristics and their effects on supply of cocoyam are important in addressing the challenge of cocoyam industry in south east Nigeria.  Several researchers (Omoregie and Thomson, 2001; Gabre-Madhin, 2001; Soderbom and Teal, 2003; Raj, 2007), have indicated that access to market are limited by lack of capacity building, transportation problems, storage losses and information on grade and standard. However there is need to obtain local scientific evidence on the effect of these factors on marketing channels as well as on volume of cocoyam marketed in South east Nigeria.

Huge loss of cocoyam after harvest could be one of the courses of food insecurity of Nigerian citizens. For any meaningful development of cocoyam in Nigeria, production of cocoyam should be accompanied by improvement in marketing. This requires knowledge of the socio-economic and institutional situation as well as structure-conducts-performance of participants. This will highlight areas where intervention can have an impact in addressing the challenges of those who are interested in taking risks involved in arbitrage across time, space and form.

In various studies of microeconomic behavior of households in marketing in South East Nigeria, it has been argued that marketing margins have remained high due to inadequate infrastructure, inefficient flow of information, imperfect competition and incomplete credit and insurance. Further, agricultural marketing are also said to be inefficient resulting in high rate of food spoilage, poverty and unaffordable food prices by consumers (Mainville, 2004; Hernandez, 2009; Jari, 2009; Take, 2009; Takele, 2010). However, not many studies have empirically evaluated the validity of these claims to obtain local scientific evidence with respect to performance of cocoyam marketing in Southeast Nigeria. There is urgent need for empirical evidence on how well marketing of cocoyam have performed in terms of costs and margins associated with it for policy options.

The knowledge of institutional, technical and socio-economic factors that determine the supply of cocoyam as well as producers’ choice of marketing channels is essential for highlighting the leaking pipes. Similarly, examination of the effectiveness of various methods of storing cocoyam will show post harvest characteristics and losses across time. These are necessary for viability of cocoyam industry and for more commercialization of cocoyam enterprises in south east Nigeria. This will be the prime concern in any strategy for bridging the gaps in supply and demand for food and poverty alleviation for farmers, middlemen as well as consumers (Onu and Iliyasu, 2008).



The study was carried out in South East Nigeria and specifically the markets with observed preponderance of cocoyam marketing.  Information collected includes input used and factors that determine the output as well as access to major markets. It was limited by data accuracy and poor records of their activities. Most of the values used or given were estimated on averages based on respondents. Sampling of states and major markets was based on consultation with chairman of various market associations. There were problems of inadequate or lack of incentives to respondents who needed immediate reward for giving information and taking their time. There was also problem of funding for this research work as this is not a funded research.