BACKGROUND OF THE STUDY

Market integration measures the degree to which changes in the market conditions
in one market affect those in other markets (separated by time and space). It is all
about how the change in the price of a product in one market can influence the price
of the same product in another market. When markets are well integrated, prices
become more stable and household food security is likely to be improved as poor
households can obtain food at more affordable prices. The concept of market
integration ha retained an increased importance over the years, particularly in
developing countries where it has potential application to policy questions
regarding government interventions in markets. Unless product markets are
spatially integrated, producers and consumers will not realize the gains from trade
liberalization. If markets are not integrated, the correct price signals will not be
transmitted through the marketing channels, thus comparative advantage and gains
from trade will not be realized. There are different types of market integration, one
of which, namely Spatial market integration refers to a situation in which prices of a
commodity in spatially separated markets move together and price signals and
information are transmitted smoothly across the markets. Other types include
Horizontal integration, which involves several marketing agencies combining to
form a union to reduce their effective number and the extent of actual competition
in the market; Vertical integration occurs when a firm performs more than one
activity in the sequence of the marketing process. And lastly Conglomeration, which
is a combination of agencies or activities not directly related to each other but may
operated under a unified management, which mostly aims to meet the multiple
needs of the customers.

SIGNIFICANCE OF THE STUDY

It is imperative that people are at least made aware of the presence of market
integration and its benefits. Depending on the type of market integration utilized,
each type has it own corresponding benefits. But in general, if markets are well
integrated, it can be assumed that market forces are working properly, meaning that
price changes in one location are consistently related to price changes in other
locations and market agents are able to interact between different markets. If
markets are integrated, food will flow from surplus to deficit areas and imports will
flow from port and border areas into the hinterland. High prices in deficit areas
provide the incentive to traders to bring food from surplus to deficit areas, making
food available. As a result of these flows, prices should decline in deficit areas,
making food more accessible to households; in short, market integration can help
avoid localized food shortages. Market integration is also beneficial to the aspect of
market research as it provides basic data for understanding how specific markets
works The usefulness of such information lies in its application to policy
formulation and decisions, on the extent to which market development may be
promoted. It helps in understanding the movement of equilibrium paths of demand
and supply for a particular produce or group of commodities.
Source:

https://www.studocu.com/en/u/3181223
https://www.slideshare.net/jpsivam/maket-integration