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Marketing margin
In business, a margin is the difference between two values or sums of money. Carambas (2005) views marketing margin as an equilibrium entity that is a function of the difference between equilibrium retail and farm prices. To Poudel (2013), the marketing margin is simply the difference between the farm gate price and retail price (P2 – P1), and for Wohlgenant (2001) it is a function of the difference between the farm gate price and the retail price of a given product. More broadly, Smith (1992) defines marketing margin as the difference between the value of a product at one stage in the marketing process and its value at another stage. The concept of marketing margin may also be applied to an individual or company buying a product with the intention of reselling it. When companies buy a product in order to act as its distributor or retailer, they must attempt to sell it at a higher than initial purchase price. In this context, the marketing margin is the difference between what the company pays for the product and what it charges for it. Taking into account these nuances, for the purposes of this study the maize marketing margin is defined as the difference between the farm gate price (P1) and the final market price (P2) of the smallholder’s maize grain before the grain is transformed into another product such as meal. Various actors along the maize marketing chain, including maize traders, attempt to increase their share of the marketing margin through value-adding or through activities such as extended storage, transportation and packaging. By contrast, smallholder maize farmers utilising poor and inefficient types of storage cannot wait for higher prices by storing their produce to sell later when prices increase. Thus smallholder farmers tend to sell their maize at low prices, and sometimes have to buy from the market at higher prices if the need arises.
Storage types at household level
Maize that has been properly stored to remain clean and dry commands a higher sale price and increases smallholders’ share of the marketing margin. George (2011), has found that inadequate proper storage contributes to significant maize loss in Africa. For this reason storage is an important aspect of maize production and marketing. “As smallholder maize farmers we must store to sell at a high price. That is to say, without good storage one may never sell maize at a high price and will therefore receive a low price, leading to low share of the marketing margin especially because maize is a crop which tends to get damaged so fast… if not properly stored. But we lack good stores” (Male farmer, Bualamagi sub-county, Iganga district). Smallholder maize farmers have traditionally adopted various storage methods to deal with environmental factors that can affect the quality and quantity of their maize while in store. The storage methods reported as used in the second harvest season of 2014/2015 were sacks, granaries, above the fire, pots, drums, baskets, house corner, house roof, cement bags, cribs. More specifically, respondents often used tins and old jerry-cans (because these metal and plastic containers are not easily penetrated by rats and termites), and above the fire storage (because maize infused with smoke is less vulnerable to pests and is known to germinate quickly). Smoked maize is not kept for consumption; tins, jerry-cans and above the fire storage types hold only limited quantities of maize, mainly for planting. Although some farmers continue to use granaries outside their homes as storage facilities, this practice is declining because of the vulnerability of granaries to thieves. Those few farmers who still use granaries have bought dogs to help chase the thieves.
CHAPTER ONE
1. Introduction
1.2 Background to the research
1.3 Problem statement
1.4 Purpose statement
1.5 Research questions
1.6 Objectives of the study
1.7 Motivation of the study
1.8 Scope of the study
1.9 Definitions of key concepts
1.10 Importance and benefits of the proposed study
1.11 Organization of the thesis
CHAPTER TWO: Literature review and conceptual model
2. Introduction to literature review
2.1 The theory of storage
2.2 Grain storage practices in Africa
2.3 Implications of the theory of storage
2.4 Theoretical justification
2.5 The contribution of storage
2.6 The significance of the theory of storage for this research
2.7 Assumptions of the maize business framework
2.8 Characteristics of maize markets
2.9 Smallholder farmers’ maize flow and its implication
2.10 Theoretical rationale
2.11 Storage types, marketing margin, cost of storage, spot and future price
2.12 Smallholder farmers perception of maize storage
2.13 Conceptual model Conclusion
CHAPTER THREE: Research methodology
3. Introduction
3.1 Research philosophy, paradigm and design
3.2 Research methods
3.3 Site selection, description and justification
3.4 Geographical area, sample size and sampling procedure
3.5 Unit of analysis
3.6 Data collection instruments
3.7 Data analysis, interpretation and presentation
3.8 Limitations of the study
3.9 Relationship matrix for analysis plan
3.10 Reliability and validity
3.11 Ethical considerations
CHAPTER FOUR: Smallholder farmers characteristics, associated costs and choice of storage
4. Introduction
4.1 Organization of the chapter
4.2 Socio-demographic characteristics of the respondents
4.3 Maize growing characteristics
4.4 Storage characteristics
4.5 Stored quantities by smallholder maize farmers
4.6 Factors impacting on storage choices
4.7 Characteristics of smallholder farmers who sold maize
4.8 Household characteristics and storage length
4.9 Analysis of costs by storage category
4.10 Conclusion
CHAPTER FIVE: Farmers’ perception of storage business framework
5. Introduction
5.1 Ethics, consent and permissions of the study
5.2 Storage types at household level
5.3 Benefits and challenges of traditional storage type vs. the modern ones
5.4 Challenges encountered and consequences for quality and selling price
5.5 Maize storage decisions and household decision-making dynamics
5.6 Perception of the maize market amongst smallholder farmers
5.7 Perceptions of selling costs among smallholder maize farmers
5.8 Farmers’ perception of the factors influencing smallholder maize farmers’ share of the marketing margin (MM).
5.9 Farmers’ perception of storage as a business framework
CHAPTER SIX: Integrating guidelines and framework for the theory extension
6. Introduction
6.1 Background to the guidelines for the theory extension
6.2 The business framework description
6.3 Assumptions of the theory of storage extension
6.4 Framework contribution
6.5 Framework limitation
6.6 Extending the theory of storage to a perishable commodity in an underdeveloped market
CHAPTER SEVEN: Conclusion and recommendations
7. Introduction
7.1 Conclusion
7.3 Limitation of the study
7.4 Areas of further study
