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SPATIAL integration of the rice market: emprirical evidence from mid-west and far-west Nepal and the Nepalese-Indian border

Author

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  • Sanogo, Issa

Abstract

This paper studies the integration of rice markets in the mid-west and far-west districts of Nepal. The data were drawn mainly from the World Food Programme (WFP) database on Nepal. Results indicate that the rice markets of the hinterland are poorly integrated with the regional market of Nepalgunj. In contrast, price fluctuations are transmitted, both in the short and medium run, across the Indian-Nepali border between Nepalgunj and the Indian border districts of Rupedia and Jogbani. Large price differentials relative to transport costs indicate market inefficiencies in the mid-west and far-west districts of Nepal. Moreover, the poor road infrastructure determines the price differentials. Poor infrastructure impedes price correlation and convergence between these districts. Given its opendoor policy with India and the ongoing efforts to further align trade policies with the World Trade Organization, the findings suggest that Nepal would maintain its partnership with India and build an effective market surveillance system that covers the Indian border markets as well, to ensure food security in the short run. However, substantial investment in transport infrastructure is required to improve market integration and accessibility in the long run, especially in the hilly and mountainous areas.

Suggested Citation

  • Sanogo, Issa, 2008. "SPATIAL integration of the rice market: emprirical evidence from mid-west and far-west Nepal and the Nepalese-Indian border," MPRA Paper 14488, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:14488
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    File URL: https://mpra.ub.uni-muenchen.de/14488/1/MPRA_paper_14488.pdf
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    References listed on IDEAS

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    4. Shahidur Rashid, 2004. "Spatial Integration of Maize Markets in Post-liberalised Uganda," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(1), pages 102-133, March.
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    Citations

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    Cited by:

    1. Ntsama Etoundi, Mireille, 2012. "La relation de prix entre le Cameroun et le Gabon
      [Is there a food price transmission between Cameroon and Gabon?]
      ," MPRA Paper 54373, University Library of Munich, Germany, revised 03 May 2013.
    2. Pratap Kumar JENA, 2016. "Commodity market integration and price transmission: Empirical evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 283-306, Autumn.
    3. Hernandez-Villafuerte, Karla Vanessa, 2011. "Relationship Between Spatial Price Transmission And Geographical Distance In Brazil," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114545, European Association of Agricultural Economists.
    4. Mishra, B. & Poudel, K.L. & Mishra, D.R., 2016. "Effect of Change in Indian Rice Price on Nepalese Rice Market: A Partial Equilibrium Model," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 29(1).
    5. Pratap Kumar JENA, 2016. "Commodity market integration and price transmission: Empirical evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 283-306, Autumn.
    6. Ankamah-Yeboah, Isaac, 2012. "Spatial Price Transmission in the Regional Maize Markets in Ghana," MPRA Paper 49720, University Library of Munich, Germany.

    More about this item

    Keywords

    Rice; market integration; Nepal; India;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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