IDEAS home Printed from https://ideas.repec.org/a/bla/rdevec/v19y2015i1p31-44.html
   My bibliography  Save this article

Farmers, Middlemen and Exporters: A Model of Market Power, Pricing and Welfare in a Vertical Supply Chain

Author

Listed:
  • Kjetil Bjorvatn
  • Anna B. Milford
  • Lars Sørgard

Abstract

Markets for cash-crops in developing countries are typically characterized by a concentration of buyer power at different levels of the supply chain. For instance, small-scale coffee farmers sell their produce to a middleman, who in turn sells the coffee onward to an exporter, often a foreign multinational, with monopsony power in the hands of the purchasers at both levels. We analyze pricing behavior and welfare with different assumptions regarding market power. In particular, we show that a more powerful exporter is likely to benefit the producers and may even lead to higher welfare for the producer country as a whole.

Suggested Citation

  • Kjetil Bjorvatn & Anna B. Milford & Lars Sørgard, 2015. "Farmers, Middlemen and Exporters: A Model of Market Power, Pricing and Welfare in a Vertical Supply Chain," Review of Development Economics, Wiley Blackwell, vol. 19(1), pages 31-44, February.
    • Handle: RePEc:bla:rdevec:v:19:y:2015:i:1:p:31-44
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/rode.12121
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leslie M. Marx & Greg Shaffer, 2010. "Slotting Allowances and Scarce Shelf Space," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 575-603, September.
    2. Swinnen Johan & Vandeplas Anneleen, 2012. "Rich Consumers and Poor Producers: Quality and Rent Distribution in Global Value Chains," Journal of Globalization and Development, De Gruyter, vol. 2(2), pages 1-30, January.
    3. Minten, Bart & Randrianarison, Lalaina & Swinnen, Johan F.M., 2009. "Global Retail Chains and Poor Farmers: Evidence from Madagascar," World Development, Elsevier, vol. 37(11), pages 1728-1741, November.
    4. Roman Inderst & Tommaso M. Valletti, 2011. "Buyer Power And The ‘Waterbed Effect’," Journal of Industrial Economics, Wiley Blackwell, vol. 59(1), pages 1-20, March.
    5. Bernard Hoekman & Will Martin, 2012. "Reducing Distortions in International Commodity Markets," World Bank Publications - Reports 10041, The World Bank Group.
    6. Richard J. Sexton & Ian Sheldon & Steve McCorriston & Humei Wang, 2007. "Agricultural trade liberalization and economic development: the role of downstream market power," Agricultural Economics, International Association of Agricultural Economists, vol. 36(2), pages 253-270, March.
    7. Milford Anna B., 2012. "The Pro-Competitive Effect of Coffee Cooperatives in Chiapas, Mexico," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-29, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stefano Corsi & Rosalia Filippini, 2023. "From Power Imbalance to Interdependence: A Case Study of the Chadian Sesame Supply Chain," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(3), pages 684-714, June.
    2. Elena Candelo & Cecilia Casalegno & Chiara Civera & Fabrizio Mosca, 2018. "Turning Farmers into Business Partners through Value Co-Creation Projects. Insights from the Coffee Supply Chain," Sustainability, MDPI, vol. 10(4), pages 1-21, March.
    3. Thomas Kopp & Richard J. Sexton, 2021. "Farmers, Traders, and Processors: Buyer Market Power and Double Marginalization in Indonesia," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 543-568, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sebastian Kunte & Meike Wollni & Claudia Keser, 2017. "Making it personal: breach and private ordering in a contract farming experiment," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(1), pages 121-148.
    2. Cuffaro, Nadia & Di Giacinto, Marina, 2015. "Credence goods, consumers’ trust in regulation and high quality exports," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(2), pages 1-19, August.
    3. Maertens, Miet & Swinnen, Johan, 2015. "Agricultural trade and development: A value chain perspective," WTO Staff Working Papers ERSD-2015-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 2, pages 13-38 World Scientific Publishing Co. Pte. Ltd..
    5. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 2, pages 13-38, World Scientific Publishing Co. Pte. Ltd..
    6. Roehlano M. Briones, 2013. "The Structure of Agricultural Trade Industry in Developing Countries," Trade Working Papers 23420, East Asian Bureau of Economic Research.
    7. Maertens, Miet & Vande Velde, Katrien, 2017. "Contract-farming in Staple Food Chains: The Case of Rice in Benin," World Development, Elsevier, vol. 95(C), pages 73-87.
    8. Rob Kuijpers & Johan Swinnen, 2016. "Value Chains and Technology Transfer to Agriculture in Developing and Emerging Economies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1403-1418.
    9. Johan F.M. Swinnen & Anneleen Vandeplas, 2010. "Market power and rents in global supply chains," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 109-120, November.
    10. Johan F.M. Swinnen & Anneleen Vandeplas, 2014. "Price Transmission and Market Power in Modern Agricultural Value Chains," Working Papers id:5787, eSocialSciences.
    11. Johan Swinnen, 2014. "Global Agricultural Value Chains, Standards, and Development," RSCAS Working Papers 2014/30, European University Institute.
    12. Unnevehr, Laurian J. & Ronchi, Loraine, 2014. "Food safety and developing markets: Research findings and research gaps:," IFPRI discussion papers 1376, International Food Policy Research Institute (IFPRI).
    13. Çakır, Metin & Nolan, James, 2015. "Revisiting Concentration in Food and Agricultural Supply Chains: The Welfare Implications of Market Power in a Complementary Input Sector," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(2), pages 1-17, May.
    14. Bart Minten & Anneleen Vandeplas & Johan Swinnen, 2011. "Regulations, Brokers, and Interlinkages: The Institutional Organization of Wholesale Markets in India," Journal of Development Studies, Taylor & Francis Journals, vol. 48(7), pages 864-886, May.
    15. Gómez, Miguel I. & Ricketts, Katie D., 2013. "Food value chain transformations in developing countries: Selected hypotheses on nutritional implications," Food Policy, Elsevier, vol. 42(C), pages 139-150.
    16. Maertens, Miet & Verhofstadt, Ellen, 2013. "Horticultural exports, female wage employment and primary school enrolment: Theory and evidence from Senegal," Food Policy, Elsevier, vol. 43(C), pages 118-131.
    17. Ulf Römer & Oliver Musshoff, 2017. "Can agricultural credit scoring for microfinance institutions be implemented and improved by weather data?," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 78(1), pages 83-97, December.
    18. Schipmann, Christin & Qaim, Matin, 2011. "Supply chain differentiation, contract agriculture, and farmers’ marketing preferences: The case of sweet pepper in Thailand," Food Policy, Elsevier, vol. 36(5), pages 667-677.
    19. Sylvia Hristakeva, 2022. "Determinants of Channel Profitability: Retailers’ Control over Product Selections as Contracting Leverage," Marketing Science, INFORMS, vol. 41(2), pages 315-335, March.
    20. Johan F.M. Swinnen & Anneleen Vandeplas, 2007. "Vertical coordination, rent distribution, and development," LICOS Discussion Papers 18407, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:19:y:2015:i:1:p:31-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.