CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

The agricultural sector of Nigerian economy contributes significantly to rural employment, food security and poverty alleviation (John et al., 2014.). The food crisis in Nigeria increase the demand for staple food, such as rice, and this has not been accompanied with corresponding rise in production and processing (Adu et al., 2012). It is suffices to note that most of the processing activities in the country are carried out on a small scale, usually without huge investment and complex processing techniques. Small enterprises in rural area, no doubt have close ties with the agricultural sector, especially food processing which rely heavily on local raw materials (Gyimah et al., 2016).

        Rice, in particular, has been a key focal commodity, as consumption is estimated to be rising at 5.1% annually and is expected to reach 36 million metric tons (MT) by 2050 (Federal Ministry of Agriculture and Rural Development FMARD 2011; Johnson and Masias, 2017). However, Nigerian rice sub-sector has witness some remarkable developments, particularly in the last few years due to federal government interventions. This culminated in dropped in rice importation by 300,000 tons in 2016 (United States Department of Agriculture, 2017). As oil accounts for 70% of the government’s revenue in 2016 (US energy formation administration), a strategy to diversify the economy into agriculture has been implemented by recent administrations to reduce the strain on the country’s foreign currency reserves due to the economic risks associated with volatile global oil prices. Furthermore, rice is an important food crop and serves as a food security commodity in Nigeria (Ala and Bello, 2010).

Rice belongs to the family “Gramineae” and the genus “Oryza”. There are about 25 species of Oryza. Of these only two species are cultivated, namely Oryza sativa Linus and Oryza glaberrima Stead. The former is originated from North Eastern India to Southern China but has spread to all parts of the world. The latter is still confined to its original home land, West Africa. Rice (Oryza sativa Linu) is one of the main staple foods for 70% of the population of the world. Africa produces an average of 14.6 million tonnes of rough rice in the years 1989- 1996 on 7.3 million ha of land equivalent to 2.6 and 4.6 percent of the world total production and rice area respectively. Africa also consumes a total of 11.6 million tonnes of milled rice per year, of which 3.3 million tonnes (33.6%) is imported (FAO, 1996).

        Rice (Oryza Sativa Linu) is the staple food of over half the world's population and at least 3.5 billion people are consuming the rice (Sreepada and Vijayalaxmi , 2013). It is one of the market oriented and strategic crop in the rice producing areas of Nigeria.

1. STATEMENT OF THE PROBLEM

Rice is one of the most essential foods in Nigeria. It is widely regarded as a good source of carbohydrate for consumers. Among other agricultural products; rice tend to be more marketing because of its high demand. However there are some factors affecting the marketing margin of rice such as consumer price, grosss marketing margin etc. Lastly there have been alot of studies on rice but not even a single study is based on determinants of rice marketing margin in maiduguri metropolitan area of borno state, Nigeria hence a need for the study

1.3 AIM AND OBJECTIVES OF THE STUDY

The study seeks to examine the determinants of rice marketing in Maiduguri metropolitan area of Borno state. The objectives of the study are:

1. To determine the effect of consumer price on rice marketing in Maiduguri metropolitan area of Borno state
2. To determine the relationship between market structure and rice marketing in Maiduguri
3. To examine the performance of rice marketing in Maiduguri metropolitan area of Borno state
4. To identify other factors affect rice marketing in Maiduguri metropolitan area of Borno state

1.4 RESEARCH QUESTIONS

The following research questions guide the objectives of the study:

1. What is the effect of consumer price on rice marketing in Maiduguri metropolitan area of Borno state?
2. What is the relationship between market structure and rice marketing in Maiduguri?
3. What is the performance of rice marketing in Maiduguri metropolitan area of Borno state?
4. What are the other factors affect rice marketing in Maiduguri metropolitan area of Borno state?

1.5 SIGNIFICANCE OF THE STUDY

The findings of the study will shed more light on an understanding of how rice marketing can be improved in Maiduguri metropolitan area of Borno state.

To the policy makers in Maiduguri metropolitan area of Borno state, the findings of the study will be useful in providing information on the relationship between market structure and rice marketing in Maiduguri.

For the students, this study will serve as a source of information to other researchers and students and contribute the body of the existing literature on the determinants of rice marketing in Maiduguri metropolitan area of Borno state.

1.6 SCOPE OF THE STUDY

The study covers on the determinants of rice marketing in Maiduguri metropolitan area of Borno state

1.7 DEFINITION OF TERMS

RICE: Rice is the seed of the grass species Oryza sativa or less commonly Oryza glaberrima. The name wild rice is usually used for species of the genera Zizania and Porteresia, both wild and domesticated, although the term may also be used for primitive or uncultivated varieties of Oryza

CONSUMER: A consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, not directly related to entrepreneurial or business activities

MARKETING: Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of advertising campaigns; attendance at trade shows and public events; design of products and packaging to be more attractive to buyers; selection of the terms of sale, such as price, discounts, warranty, and return policy; product placement in media or with people believed to influence the buying habits of others; agreements with retailers, wholesale distributors, or resellers; and attempts to create awareness of, loyalty to, and positive feelings about a brand