It is crucial that formulation of market enhancing policies to improve performance hinges on a better understanding of the local market functioning. Comprehensive market performance is better understood by studying the extent of spatial market integration which in turn is affected by communication factors like telephony growth and extension services within the marketing system. Extension services are important in influencing levels of production and dissemination of trade information of both the inputs to and output from the enterprise. Unfortunately very little was known about how rice price transmission takes place. Given the importance of rice (as a food security crop & source of income) to the rural poor, many organizations have promoted it among rural farmers for improving their welfare, it was imperative that its price movements is studied to inform policy makers & implementers on the status of its spatial market integration.
The primary objective of this study was to evaluate the spatial market integration of rice markets under improving communication infrastructure particularly extension services (NAADS program) and telecommunication industry growth. This study specifically evaluated the degree of spatial market integration and strength of integration using bivariate analysis, Johansen Multiple test, and granger causality relationships. It also determined the impact of NAADS program and telecommunications on spatial rice market integration. Impulse response functions were generated to determine how long shocks in Kampala market can be eliminated in peripheral markets. Weekly prices data from sixteen markets from 2000 to 2006 were divided into three phases; full sample, pre – NAADS expansion and post NAADS program expansion to enable the study to capture the impact of these communication infrastructure.
Results from this study indicate that the markets are spatially integrated and with an incredible speed over the study period. Comparatively, there was more co integration and interdependence of rice markets in the post-NAADS expansion phase than the pre – NAADS expansion phase. A further analysis of the markets using multivariate analytical approach revealed a growing rice economic market constituting eight markets; Kampala, Jinja, Iganga, Lira and Rakai including Gulu, Mbale and Soroti markets with which growth began in the pre-expansion period. [...]
Table of Contents
DEDICATION
ACKNOWLEDGMENT
ABSTRACT
ACRONYMS
CHAPTER ONE
1.0 INTRODUCTION
1.1 The Ugandan Agricultural Sector
1.2 Rice Production in Uganda
1.2.1 Rice production trends
1.2.2 Rice supply and demand
1.3 Economic importance of rice
1.4 Rice consumption in Uganda
1.5 Problem statement
1.6 General Objectives
1.6.1 Specific objectives
1.6.2 Hypotheses of the Study
1.7 Scope of the study
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Market linkage and integration
2.1.1 The concept of Integration
2.1.2 Market integration
2.1.3 Measures of Market integration
2.1.4 Empirical Studies of market integration
2.2. Lag order determination Information Criteria
CHAPTER THREE
3.0 METHODOLOGY
3.1 Field Methods
3.1.1 Study area
3.1.2 Data Collection and handling
3.2 Analytical Methods
3.2.1 Diagnostics and testing
3.3 Testing for Co integration
3.3.1 Testing for long run co integration
3.3.2 Determination of strength of market integration
3.3.2a. Testing for bivariate co integration
3.3.2b. Testing for Granger causality relationships
3.3.2c Testing for impulse response functions of the market system
CHAPTER FOUR
RESULTS AND DISCUSSIONS
4.1 Status and extent of market integration
4.2 Co integration among price series
4.2.1. Testing for co integration by bivariate analysis
4.2.2 Determination of direction of causality relationship among markets
4.3 Results and discussion of multivariate analysis
4.3.1 Determination of co integrating market sets
4.3.2 Determination of dynamic adjustments by Impulse Response Functions
CHAPTER FIVE
5.0 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendations
REFERENCES
Appendix I: Map of Uganda Showing NAADS Program Expansion from
2001/02 to 2007/08
Appendix II: IRF graphs of Kampala market shocks against other markets
Appendix III: Proportional Difference test for market integration
Appendix IV: Bivariate analysis results for rice market co integration
- Quote paper
- Paul Waluube (Author), 2009, An Analysis of the Rice Market Integration in Uganda, Munich, GRIN Verlag, https://www.grin.com/document/340702
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