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Mohammed S Sadiq
Safiyanu U Maiadua
James K Blay
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Mohammed S Sadiq
Safiyanu U Maiadua
James K Blay
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Global Journal of Agricultural Economics, Extension and Rural Development

ISSN: 2408-5480 Vol. 3 (10), pp. 330-337, November, 2015

Full Length Research Paper

Horizontal market integration and price transmission between maize, sorghum and millet in Dawanau market, Kano State, Nigeria: Evidence from non-linear vector error correction model 

James K. Blay1,Safiyanu U.Maiadua1 and Mohammed S. Sadiq2 

1Department of Agricultural Economics, Professor JayashankarTelangana State Agricultural University, Hyderabad, India

2Department of Agricultural Economics, SKRAU, Bikaner, India 

*Corresponding author. E-mail: sadiqsanusi30@gmail.com

Accepted 14 November, 2015

This present study was conducted to examine the horizontal (cross-commodity) market integration and price transmission dynamics between maize, sorghum and millet markets segments in Dawanau market Kano, Kano state, Nigeria. The dataset for the analysis was monthly average secondary prices from August 2003 to August 2015. The estimations were performed using consistent momentum threshold autoregressive model and momentum threshold error correction model (M-TECM). The results of the consistent momentum threshold autoregressive (CMTAR) model revealed co integration and asymmetric adjustment. The results from the (M-TECM) revealed that markets are characterized by asymmetric price transmission in the long-run with little adjustment for negative deviations as compared to the substantial positive perturbation or shock. This implied that intermediaries response quickly to price movements that stretch the profit margin than movements that squeezes margin indicating some level of market inefficiency which tend to push burden on consumers. The granger-causality test revealed that the market intermediaries involved in the marketing of sorghum do not utilized information from the price dynamics of maize in the determination of sorghum prices in the market. We recommend that the government should invest in expansion of communication infrastructures to improve the agricultural food market information system, as well as formulation of strong agricultural marketing policies that will regulate the activities of the marketing agents with a view to improve the structure, conduct and performance of the markets.

Keywords: Market integration, Price Transmission, Momentum Threshold Error Correction Model, Dawanau Market