Spatial Analysis of Agricultural Market Integration in Nigeria: Evidence from Staple Food Markets

This study provides a spatial analysis of agricultural market integration across staple food commodity markets in Nigeria, examining the degree to which spatially separated markets are connected through price transmission mechanisms. Market integration analysis reveals whether arbitrage opportunities are exploited, whether price signals are efficiently transmitted, and whether food production and consumption are effectively coordinated through market mechanisms. Poorly integrated markets result in persistent regional price disparities, inefficient resource allocation, and food security vulnerabilities. This study uses weekly retail price data for maize, rice, cassava, and millet from 36 state capitals collected by the National Bureau of Statistics for the period 2015 to 2023. Johansen cointegration tests, vector error correction models, and threshold autoregressive models are applied to examine long-run market relationships and short-run price transmission dynamics. Spatial econometric techniques assess the role of geographic distance, road infrastructure quality, and market size in determining integration levels. Findings reveal that Nigerian staple food markets are partially integrated, with strong integration between southern markets and weaker integration between northern and southern markets. Transport infrastructure quality is the dominant spatial factor in market integration. Market integration has improved since 2018, coinciding with improvements in inter-state road connectivity. The study contributes an original spatial market integration analysis and recommends infrastructure investment prioritisation for market connectivity improvement.

Keywords: market integration, price transmission, staple food markets, Nigeria, spatial econometrics.