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Market Integration of Agricultural Products

Author

Listed:
  • Taufiq Marwa
  • Abdul Bashir
  • Azwardi
  • Mohamad Adam
  • K.M.H. Thamrin

Abstract

The study aims to investigate the relationship between the prices of agricultural products at the producer level with the prices of the same products at the consumer level in South Sumatera, Indonesia with a case study on the production and consumption of rice as the most important agricultural product in Indonesia.The analytical approach is linear regression modelling with Ordinary Least Squares (OLS), and the Approach of Index Market Connection model (IMC).The findings of the study indicated integration between the price of rice at the producer level and the price of rice at the consumer level. In addition, the three sample regions have IMC value less than 1, meaning that both markets have vertical integration in the short run.Another finding of this study is that the high price difference at the local market level is due to the long distribution of rice commodities in South Sumatera. Government intervention is particularly needed at the local market-level on pricing policy by shortening the distribution channels.

Suggested Citation

  • Taufiq Marwa & Abdul Bashir & Azwardi & Mohamad Adam & K.M.H. Thamrin, 2017. "Market Integration of Agricultural Products," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 69-82.
    • Handle: RePEc:ers:ijebaa:v:v:y:2017:i:2:p:69-82
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    References listed on IDEAS

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    2. Khalyn V.G., 2018. "Logistics Systems of Warehousing and Materials Handling," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 893-902.
    3. Sami Khedhiri, 2023. "The impact of COVID‐19 on agricultural market integration in Eastern Canada," Regional Science Policy & Practice, Wiley Blackwell, vol. 15(2), pages 371-386, April.
    4. Zhanara Y. Yesilbayeva & Marina Y. Anokhina & Gulnar K. Joldasbayeva & Dariko K. Balakhanova & Galina M. Zinchuk, 2020. "Towards sustainable development via integration of economic sectors: a case study," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 177-193, September.
    5. Anatoly Altukhov & Alexander Semin, 2018. "Increasing Interstate Integration in the Agro-Industrial Complex of the EAEU Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 753-771.
    6. Serebryakova N.A. & Sirotkina N.V. & Stukalo O.G. & Dorokhova N.V., 2019. "Networking in the Food Sector of Regional Economy," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(Special 2), pages 74-91.
    7. Gospodarev A.N., 2018. "Development of Eurasian Economic Integration in the Agro-industrial Sector," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 874-885.
    8. Anna Nowak & Renata Kubik, 2019. "Changes in Agricultural Productivity in New and Old Member States of the European Union," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 101-114.
    9. V.A. Bespalko & A.A. Voronov & O.V. Martynenko, 2019. "Marketing and Operational Aspects of the Strategy of Industrial Import Substitution," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(Special 1), pages 403-410.

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    More about this item

    Keywords

    Market; integration; distribution; production; consumption.;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • F15 - International Economics - - Trade - - - Economic Integration
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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