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Rice marketing systems in the Philippines and Thailand: Do large numbers of competitive traders ensure good performance?


  • Dawe, David C.
  • Moya, Piedad F.
  • Casiwan, Cheryll B.
  • Cabling, Jesusa M.


Rice marketing margins are substantially greater in the Philippines than in Thailand despite many similarities between the two systems and despite the fact that Philippine rice marketing has a competitive structure. We found that rice marketing costs in the Philippines are higher than in Thailand mainly due to higher interest rates in the financial system. Other fundamental factors that also result in higher costs include endowments of water and land, rice price and trade policy, road quality and lack of non-farm job growth. However, the greater costs can only account for about a fourth of the difference in gross margins, implying much higher returns to management in the Philippines despite similar levels of risk and no evidence of collusion. The "excess profits" in the Philippine marketing system suggest there is much to learn about how developing country commodity markets with competitive structures function in actual practice.

Suggested Citation

  • Dawe, David C. & Moya, Piedad F. & Casiwan, Cheryll B. & Cabling, Jesusa M., 2008. "Rice marketing systems in the Philippines and Thailand: Do large numbers of competitive traders ensure good performance?," Food Policy, Elsevier, vol. 33(5), pages 455-463, October.
  • Handle: RePEc:eee:jfpoli:v:33:y:2008:i:5:p:455-463

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    References listed on IDEAS

    1. A. Banerji & J.V. Meenakshi, 2004. "Buyer Collusion and Efficiency of Government Intervention in Wheat Markets in Northern India: An Asymmetric Structural Auctions Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 236-253.
    2. Ruttan, Vernon W, 1969. "Agricultural Product and Factor Markets in Southeast Asia," Economic Development and Cultural Change, University of Chicago Press, vol. 17(4), pages 501-519, July.
    3. Hayami, Y. & Kikuchi, Masao & Marciano, E.B., 1999. "Middlemen and peasants in rice marketing in the Philippines," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 20(2), March.
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    Cited by:

    1. Minten, Bart & Tamru, Seneshaw & Engida, Ermias & Kuma, Tadesse, 2013. "Using evidence in unraveling food supply chains in Ethiopia: The supply chain of teff from major production areas to Addis Ababa:," ESSP working papers 54, International Food Policy Research Institute (IFPRI).
    2. Minten, Bart J. & Legesse, Ermias & Beyene, Seneshaw & Werako, Tadesse, 2015. "Feeding Africa's cities: The case of the Supply Chain of Teff to Addis Ababa," 2015 Conference, August 9-14, 2015, Milan, Italy 212465, International Association of Agricultural Economists.
    3. Briones, Roehlano M. & Dela Pena, Beulah, 2015. "Competition Reform in the Philippine Rice Sector," Discussion Papers DP 2015-04, Philippine Institute for Development Studies.
    4. Arnold H. Fang, 2016. "Linkage between Rural Voters and Politicians: Effects on Rice Policies in the Philippines and Thailand," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(3), pages 505-517, September.
    5. Bart Minten & Seneshaw Tamru & Ermias Engida & Tadesse Kuma, 2016. "Feeding Africa's Cities: The Case of the Supply Chain of Teff to Addis Ababa," Economic Development and Cultural Change, University of Chicago Press, vol. 64(2), pages 265-297.
    6. Jolejole-Foreman, Maria Christina & Mallory, Mindy L., 2011. "Analyzing Market Price Transmission, Government Intervention and Weather Shocks for Rice Market in the Philippines," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103163, Agricultural and Applied Economics Association.
    7. Minten, Bart & Engida, Ermias & Tamru, Seneshaw, 2016. "How big are post-harvest losses in Ethiopia? Evidence from teff," ESSP working papers 93, International Food Policy Research Institute (IFPRI).
    8. Beltran, Jesusa C. & Pannell, David J. & Doole, Graeme J. & White, Benedict, 2012. "Economic analysis of integrated weed management strategies for annual barnyardgrass (Echinochloa crus-galli complex) in Philippine rice farming systems," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124236, Australian Agricultural and Resource Economics Society.

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