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The Relationship between the Physical Quality of Rice and the Market Price: A Case Study in Savannakhet, Laos, Using a Bayesian Approach

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Listed:
  • Kensuke D. Kawamura

    () (Japan International Research Center for Agricultural Sciences (JIRCAS), 1-1 Ohwashi, Tsukuba, Ibaraki 305-8383, Japan)

  • Hidetoshi Asai

    () (Japan International Research Center for Agricultural Sciences (JIRCAS), 1-1 Ohwashi, Tsukuba, Ibaraki 305-8383, Japan)

  • Shintaro Kobayashi

    () (Japan International Research Center for Agricultural Sciences (JIRCAS), 1-1 Ohwashi, Tsukuba, Ibaraki 305-8383, Japan)

  • Soukasdachanh Souvannasing

    () (National Agriculture and Forestry Research Institute (NAFRI), P.O. Box 7170, Vientiane Capital, Lao PDR)

  • Phonevilay Sinavong

    () (National Agriculture and Forestry Research Institute (NAFRI), P.O. Box 7170, Vientiane Capital, Lao PDR)

  • Thavone Inthavong

    () (National Agriculture and Forestry Research Institute (NAFRI), P.O. Box 7170, Vientiane Capital, Lao PDR)

Abstract

The visual characteristics of rice grains play a primary role in determining the market price, and are used for grading systems in many rice-consuming countries. Laos is a rice-consuming country in Southeast Asia, but it does not have a functioning grading system. This study investigated the relationship between the physical quality of milled rice grains and the market price based on the Bayesian approach in Savannakhet, Laos. We collected 30 rice samples and their market prices from 12 shops, including imported rice from Thailand and Vietnam. The rice samples were scanned using a Grain Scanner, and the proportion of head rice (HR, %) was determined using physical traits (length, shape, color, etc.) based on the ‘Thai standard’ grading criteria. The relationship between the HR ratios and market prices was modeled with the Bayesian approach. For Laos’s product, the market price and HR ratio were lower than those for Thailand’s product. Based on the Bayesian framework, the results of Markov Chain Monte Carlo simulations indicated that (1) the market price of Thailand’s product was mostly determined by the HR ratio, but other factors, such as aroma, were also suggested, especially in high-quality rice grains; (2) Laos’s product showed a positive correlation, but other factors had a greater influence on Laos’s product than Thailand’s product; and (3) no clear relationship was found in Vietnam’s product due to the limitation of a small number of samples, which was also considered a difference in consumer needs. These results indicated that the relationship between rice quality and market price for Laos’s product was unstable compared to that for Thailand’s product. To promote a more market-oriented agricultural sector, this pilot study has been broadened to examine other factors and extended to other cities or regions in Laos.

Suggested Citation

  • Kensuke D. Kawamura & Hidetoshi Asai & Shintaro Kobayashi & Soukasdachanh Souvannasing & Phonevilay Sinavong & Thavone Inthavong, 2018. "The Relationship between the Physical Quality of Rice and the Market Price: A Case Study in Savannakhet, Laos, Using a Bayesian Approach," Sustainability, MDPI, Open Access Journal, vol. 10(11), pages 1-11, November.
  • Handle: RePEc:gam:jsusta:v:10:y:2018:i:11:p:4151-:d:182179
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    References listed on IDEAS

    as
    1. Mhlanga, Saneliso & Naseem, Anwar, 2011. "Economic Analysis of Consumer Choices Based on Rice Attributes in the Food Markets of West Africa – The Case of Benin," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103795, Agricultural and Applied Economics Association.
    2. Headey, Derek, 2011. "Rethinking the global food crisis: The role of trade shocks," Food Policy, Elsevier, vol. 36(2), pages 136-146, April.
    3. Matty Demont & Pieter Rutsaert, 2017. "Restructuring the Vietnamese Rice Sector: Towards Increasing Sustainability," Sustainability, MDPI, Open Access Journal, vol. 9(2), pages 1-15, February.
    4. Graham, Robin, 2002. "A Proposal for IRRI to Establish a Grain Quality and Nutrition Research Center," IRRI Discussion Papers 287611, International Rice Research Institute (IRRI).
    5. B. Wade Brorsen & Warren R. Grant & M. Edward Rister, 1984. "A Hedonic Price Model for Rough Rice Bid/Acceptance Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(2), pages 156-163.
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    More about this item

    Keywords

    Bayesian framework; Laos; market value; milled rice quality; Thailand; Vietnam;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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