Application of Policy Analysis Matrix in Measuring Marketing Efficiency of Tea in Nigeria

Abstract

Tea is one of the most important cash crops in Nigeria and has the potential to contribute to food security and the Gross Domestic Product of the nation. Despite this, there is dearth of information on the competitiveness and comparative advantage of the commodity. This study was therefore carried out with a view to analyzing the efficiency of tea marketing in Nigeria using the Policy Analysis Matrix (PAM). The study employed cross-sectional data from 211 key actors sampled through a multi-stage sampling technique. The empirical results of PAM revealed that tea marketing in Nigeria has both competitive and comparative advantages. The highest competitive advantage was obtained for medium-scale marketers with the coefficient values of PCR (Private Cost Ratio) of 0.2 and DRC (Domestic Resource Cost Ratio) of 0.18. The lowest competitive advantage was obtained for small-scale marketers with PCR and DRC of 0.45 and 0.50 respectively. As regards the comparative advantage, the social profits for small scale marketer was #393,864.16 per ton while that of the medium scale was #770, 995.82 per ton respectively at social prices. The Social cost benefit of medium-scale marketers was also higher (0.36) than that of the small scale (0.67). There is an indication that tea marketing in Nigeria has competitive and comparative advantages.