FOOD GRAIN MARKETING IN OSUN STATE, NIGERIA: A STUDY OF LONG-RUN PRICE INTEGRATION

This study examined the trend in food grain prices in urban and rural market of Osun state, Nigeria . Secondary data on rice and maize monthly prices spanning 2006/2008 were sourced from Macro-Statistics Department, Osun State Planning Commission. The data were analyzed using Augmented Dicker Fuller (ADF) test and Index of Market Connection. Empirical results revealed that the price series in all the markets accepted the null hypothesis of non-stationarity at their levels at 5% significance level. The integration test showed that none of the markets examined had prices tied together in the long- run. The Index of market connection (IMC) indicates that the markets exhibit low short run market integration. The study concludes that the agricultural commodity markets in Osun state may be subject to a high degree of marketing inefficiency and recommends a nation-wide policy to improve food marketing efficiency in Nigeria