Market Price Cointegration Of Tomato: Effects To Nepalese Farmers
AbstractMarket price cointegration is a critical issue in Nepalese vegetable industry. This study intended to analyze the market price cointegration of tomato and its effect on Nepalese farmers, using secondary monthly time series of wholesale price data (since 2000 to 2010) of the Government of Nepal. The results of error correction model (ECM) showed that the series were stationary, and Kathmandu market was well cointegrated with source markets (Chitwan and Morang). Meanwhile, the vector error correction model (VECM) revealed that price adjustment process was much faster in source markets especially in negative price shocks in response to Kathmandu market, which affected the farmers for speedy price adjustment that leads to be hurt and discouraged. The study recommend policies to establish alternative vegetable markets that reduce the price dependency of farmers on Kathmandu market, encourage traders in involving vegetable marketing, and enhance effective market information services.
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Bibliographic InfoArticle provided by Niğde University, Faculty of Economics and Administrative Sciences in its journal International Journal of Food and Agricultural Economics (IJFAEC).
Volume (Year): 2 (2)
Issue (Month): 2 ()
Market; price adjustment; price cointegration; tomato; Nepal; Agribusiness; Crop Production/Industries;
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- Bakucs, Lajos Zoltan & Ferto, Imre & Szabo, Gabor G., 2007. "Price transmission in the Hungarian vegetable sector," Studies in Agricultural Economics, Research Institute for Agricultural Economics, issue 106, July.
- Jhih-Hong Zeng & Chun-ping Chang & Chien-chiang Lee, 2011. "Are Fruit and Vegetable Prices Non-linear Stationary? Evidence from Smooth Transition Autoregressive Models," Economics Bulletin, AccessEcon, vol. 31(1), pages 189-207.
- Sanogo, Issa & Maliki Amadou, Mahamane, 2010. "Rice market integration and food security in Nepal: The role of cross-border trade with India," Food Policy, Elsevier, vol. 35(4), pages 312-322, August.
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