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Wheat market integration between Hungary and Germany

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  • Bakucs, Lajos Zoltan
  • Brümmer, Bernhard
  • von Cramon-Taubadel, Stephan
  • Ferto, Imre

Abstract

One of the most important targets of the Common Agricultural Policy (CAP) is to facilitate the spatial integration of agricultural markets within the individual member states as well as within the Community. On a spatially integrated market, price information should freely flow between member states. According to the European Commission, national Governments and their regulations should help to attain the goal of a common, integrated, and efficient market. For a small open economy, such as Hungary, market efficiency, and market information flow has at least two important political consequences. The first one is the transmission of prices by some actors of the chain either vertically or spatially. This issue is quite relevant for Hungary, considering the structure of its agri-food market. The second problem relates to the national agricultural support system completing the CAP in the New Member States (NMS). This paper focuses on the first topic, by testing for price transmission between German and Hungarian producer prices. Given the changing nature of market conditions over the past five years, a flexible Markov- Switching model for price transmission is proposed and estimated for the analysis of price transmission between Hungarian and German wheat.

Suggested Citation

  • Bakucs, Lajos Zoltan & Brümmer, Bernhard & von Cramon-Taubadel, Stephan & Ferto, Imre, 2008. "Wheat market integration between Hungary and Germany," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44171, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae08:44171
    DOI: 10.22004/ag.econ.44171
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    Cited by:

    1. Zoltán Bakucs & Štefan Bojnec & Imre Fertő, 2015. "Spatial Product Market Integration between Two Small, Open Neighbouring Economies," Agribusiness, John Wiley & Sons, Ltd., vol. 31(2), pages 171-187, April.
    2. Rumánková, L., 2016. "Evaluation of Market Relations in Soft Milling Wheat Agri-food Chain," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(4), pages 1-9, December.
    3. Nabieyan, Sedigheh & Safaei, Shiva & Mehrabi, Hosein, 2021. "Dynamics of Pistachio Prices Adjustment in Global Market and Export Market of Iran," 2021 Conference, August 17-31, 2021, Virtual 315848, International Association of Agricultural Economists.
    4. Bubáková, P., 2015. "The Law of One Price of Central European Countries – Analysis of Feed Barley," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(2), pages 1-13, June.
    5. Elina Bryngemark & Patrik Söderholm, 2022. "Green industrial policies and domestic production of biofuels: an econometric analysis of OECD countries," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(2), pages 225-261, April.

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