Efficiency and Organization of The Marketing System of Potato in The River Nile State

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Osman Eltayeb Elfaki Osman
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University of Khartoum
The objectives of this study were to describe and analyze the organization and efficiency of the marketing system of potato in the River Nile State (RNS). The study was mainly based on primary data collected from the sample respondents by a structured questionnaire and interviews. The selected sample consisted of 60 potato producers in the RNS and 180 potato traders in Shendi and Bahri markets. Secondary data (mainly time series data) were obtained from different relevant sources for the six selected potato markets of Eddamer, Khartoum, Medani, Kassala, Port Sudan and Elobeid. Five different hypotheses were formulated and tested using different analytical techniques like descriptive statistical analysis, structure- conduct- performance analysis, temporal analysis, and spatial analysis (co-integration procedure). The results indicated that the marketing channel of potato is lengthy and complicated due to the remoteness of producing areas from consuming centers. Such complex and long marketing channel is one of the factors that leads to the increase of marketing costs and margins and, thus , add more burden on the consumer. The temporal analysis of monthly potato prices for the selected markets revealed that: first, the instability of potato prices, measured by the coefficients of variation are, to some extent, similar in different market locations. Second, the Grand Seasonal Indices (GSIs) indicated that the trend in seasonal prices was pronounced but unstable. Third, the lowest prices of potato tend to prevail during the harvest season and rise higher afterwards. Spatial analysis showed the following: (i) The simple correlation coefficients revealed that all the selected markets were integrated. (ii) The price series for all the selected markets during 1992-2006 were stationary (have no unit root) and, hence, can not be tested by co-integration procedure. (iii) The results of the co-integration analysis for the sub-sample during the period 1995-2006, after introducing some infrastructural facilities, (mainly construction of roads connecting Khartoum to the RNS), revealed the presence of unit root in all the series. Unit root is a prerequisite for co-integration test. All markets of the sub-sample were integrated using the co-integration test except Elobeid market, and that might be due to its remoteness, especially before the recent communications revolution in the Sudan. Before civil war, Elobeid market might also be supplied with potato from Jebel Mara area. Market structure-conduct-performance (S-C-P) analysis showed that the present potato marketing system in the River Nile State diverges from the ideal model of perfect competition. On the basis of this criterion, it can be concluded that the conduct of traders and consequently the performance of potato marketing system is unsatisfactory. The inefficiency of potato marketing system could be attributed to the oligopolistic behavior of some large potato traders at the wholesale level. This oligopolistic behavior could result in low income for producers and higher prices for consumers. The results led to the following recommendations: (i) Provision of sufficient formal finance for potato producers and traders; (ii) adoption of newly fair and efficient system of taxation and fees collection at all levels of the marketing system; (iii) construction of extra feeder roads in the RNS to connect producing areas with consuming centers; (iv) establishment of an equipped seed technology unit to propagate, to manage and disseminate certified and readily marketable seed potatoes to farmers; (v) adoption of group marketing by potato producers to overcome intermediaries; (vi) the expansion of cold stores over wide areas of the country by extending soft loans and other investment facilities to investors so as to motivate them to construct extra cold-stores
A thesis submitted to the University of Khartoum in fulfillment of the requirements of the degree of Ph.D. (Agric. Economics)
Marketing System of Potato River Nile State Sudan Agricultural Economics University of Khartoum
Osman Eltayeb Elfaki Osman, Efficiency and Organization of The Marketing System of Potato in The River Nile State. – Khartoum : University of Khartoum, 2009. - 255 P. : illus., 28 cm., Ph.D.