Improving agricultural marketing efficiency through the commodity exchange system in Nigeria: a review

The characteristic of informal marketing (exemplified by black maketeering, smuggling, hoarding, haggling, lack of standards, wastage during harvest periods, as well as poor infrastructural supports) in the Nigerian agriculture, which has remained a major clog in the wheel of agricultural and economic development progress is very disturbing. It involves farm inputs and farm outputs as well as traded and non-traded commodities. This prevailing disorder in Nigeria, since the abolition of the ‘commodity board’ in 1987, makes farming business more risky and unstable thereby making farm operators to be in the dark as to what to produce, when and where to produce, how to obtain inputs and what the right prices are. This paper x-rays this disorder and recommends the establishment of commodity exchange as a measure to ameliorate the inefficient marketing arrangements in the country’s agriculture. It analyses the fundamentals and features of commodity exchange with examples around the World. It further identified the risks involved and how the risks can be reduced. Importantly, the paper discussed the modalities for establishing the commodity exchange in the Nigerian situation specifying the roles of extension agency.