Marketing efficiency of cassava products in Delta State, Nigeria: A stochastic profit frontier approach

Abstract

The present study estimates the level of marketing margin and marketing efficiency of cassava products (i.e., root tuber, gari, fufu, tapioca, starch, and flour) of 105 marketers from three regions of Delta State, Nigeria using a stochastic profit frontier approach. Results reveal that a rise in purchase price of cassava products as well as unit marketing cost significantly reduce marketing margin. A rise in sale price of cassava products increase marketing margin as expected. Marketing experience significantly improves marketing margin as expected. The mean level of marketing efficiency is very low estimated at 55% implying that marketing margin can be substantially increased by eliminating inefficiency arising out of inappropriate allocation of resources, response to prices and scale of operation. Marketing efficiency is significantly higher for marketers who are farmers and the gender of marketer has no impact on efficiency. However, marketers in the Northern Delta region are relatively efficient but inefficient in Central Delta relative to Southern Delta. Policy implications include investment in market infrastructure to reduce fluctuation in prices and marketing costs and training on marketing and market functions for marketers to develop marketing experience.