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Market Price Cointegration Of Tomato: Effects To Nepalese Farmers

Author

Listed:
  • Shrestha, Rudra Bahadur
  • Huang, Wen-Chi
  • Ghimire, Raju

Abstract

Market 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.

Suggested Citation

  • Shrestha, Rudra Bahadur & Huang, Wen-Chi & Ghimire, Raju, 2014. "Market Price Cointegration Of Tomato: Effects To Nepalese Farmers," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(2), pages 1-10, April.
    • Handle: RePEc:ags:ijfaec:168582
    DOI: 10.22004/ag.econ.168582
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    References listed on IDEAS

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    6. Shrestha, Sundar S. & Frechette, Darren L., 2003. "Transfer Costs And Spatial Price Efficiency In The Nepalese Tomato Markets," 2003 Annual meeting, July 27-30, Montreal, Canada 22076, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Hemanth Kumar, G & Gajanana, T M, 2022. "Price dynamics and market integration of tomato markets in India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 35(2), December.

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