Time Series Trend Analysis on Nigerian Food Prices
Chapter One
Objective of the study
The objectives of the study are;
- To provide the trend of prices of Nigerian foods.
- To compare and forecast the prices of some selected food items varies due to location in Nigeria
CHAPTER TWO
LITERATURE REVIEW
Trends in prices of food grains
Trend movement as defined by Olayemi (1977) is a consistent long-term movement or change in prices. It is usually measured in terms of rates of increase or decrease in prices over long term periods. Trend in agricultural prices is associated with general inflation and deflation in the economy and with factors specific to agricultural products which include increases in population, changes in income and technology. On the other hand, Odozi and Omonona (2012) also refer to price instability as fluctuation in prices over time and reflect the short term disequilibria between supply and demand. In most studies, the coefficient of variation defined as the standard deviation divided by the mean is used to measure the fluctuation in price series. In recent years, there has been a welldocumented, dramatic increase in world food prices. From 2006 through early 2008, Jensena and Miller (2010) pointed out that the FAO Food Price Index increased by 73%, with across-the-board increases in meat (16%), dairy (100%), oils and fats (144%), and cereals (129%). Within cereals, the price of rice increased by approximately 117%, wheat increased by 100%, and maize by 65%. As a result, there has been considerable concern that such large price increases may lead to increased malnutrition, especially among the poor in the developing world (Jensena,and Miller, 2010). According to Abboth and Makeham (1990), most farm products are available only in small quantities at the start of the marketing season. After that, their supply builds up to a peak following which supplies gradually diminish until the produce supply is finished. The first supply at the market usually fetches a good price because of their newness. At this stage, only the rich can afford to buy. As the season continues, deliveries increase, prices fall so that market suppliers are discouraged. Eventually, deliveries will fall off steadily until supply is concluded. Low prices for several seasons lead many producers to reduce the amount they plant. This action will ultimately result in prices going up. Eventually, the area planted and market supplies will expand once more and so the cycle continues
Factors affecting food crop prices
Poor market knowledge and other structural imperfections have been asserted to cause inefficiency in agricultural commodity mar kets but the role of information in pricing, the dynamic process of information transmission between markets in price discovery and its implications for marketing efficiency is very important (Mendoza and Rosegrant, 1995). Okuneye (2001) pointed out in his study that the withdrawal of World Bank loan and the Federal Government Counterpart Funding in 1996/97 and the erratic nature of food crops production were major causes of rise in food prices in Nigeria. He observed that while the output of the major food crops dropped considerably between 1975 and 1985, improvement became noticeable from 1985 onwards mainly due to high rate of inflation on food prices. Other factors identified in literature as causes of increase in prices of food in Nigeria are bad and inadequate feeder roads, inadequate transport facilities to carry products to their various markets and problem of marketing, storage and processing systems. All these have resulted in increase in transportation cost, reduced market accessibility and suppressed farm gate prices (Sefa-dedah, 1995; FAO,1996; Afolami,(2001; and Ojo and Imoudu, 2001). Galtier (2009) identified other sources of price fluctuation which are natural and imported. Natural price instability arises when there is production instability caused by natural hazards such as excessive rainfall, drought and crop failure.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to time series trend analysis on Nigerian food prices. Nigeria Bureau of Statistics (NBS), Abuja forms the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain time series trend analysis on Nigerian food prices. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of time series trend analysis on Nigerian food prices
Summary
This study was on time series trend analysis on Nigerian food prices. Two objectives were raised which included; To provide the trend of prices of Nigerian foods and to compare and forecast the prices of some selected food items varies due to location in Nigeria. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Nigeria Bureau of Statistics (NBS). Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
There is an upward trend in prices of both rural and urban markets of the selected food. The variations observed in the prices are explained by time.
Recommendation
Therefore, it is recommended that government should formulate policies that will stabilize prices of these crops thereby making them affordable especially to the low income earners.
References
- Abboth, J.C, Makeham, J.P. 1990: Agricultural Economics and Marketing in the Tropics. Second Edition, Intermediate Tropical Agricultural Series, Published by Longman Group.
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- Agiri, O.I. 2000: “Price Analysis of some selected Food Crops in Nigeria : A Case Study of Lagos Metropolis”. Unpublished B.Sc. Project Report, Department of Agricultural Economics, University of Ibadan, Ibadan.
- Conceição, P; Levine, S., Brixiova, Z. 2011. The Food Price Spikes of 2008/09 and 2010/11: Country-Level Impacts and Policy Responses in Africa. Paper prepared for the 2011 African Economic Conference. 15p https://:web.undp.org/africa/ knowledge/WP-2011-003-cva-food% 20prices.pdf
- Dorosh, P.A. 2013. Rice Stocks and Trade Policy in Asia: A role for International Stock Arrangements? IFPRI. Agricultural Transformation in Asia: Policy options for food security.
- Siem Reap, Cambodia. FAO 1996: ˝Market Liberalization Impact Studies, Zambia, from Transition to Consolidation”. A Critical Review of the Liberalization of Maize and Input Market. Food and Agriculture Organization, Rome, Italy. Famine Early Warning Systems Network (FEWSNET). 2008: Nigeria Food Security Outlook, March to September, 2008.
- Galtier, F. 2009: How to Manage Food Price Instability in Developing Countries? Working Paper Moisa No. 5/2009, Montpellier F-34000, France.
