Moving rubber to a better place - and extracting rents from credit constrained farmers along the way

Thomas Kopp and Bernhard Bümmer

No 9, EFForTS Discussion Paper Series from University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)"

Abstract: While traders of agricultural products are known to often exercise market power, this power has rarely been quantified for developing countries. In order to derive a measure, we estimate the traders' revenue functions and calculate the Marginal Value Products directly from them. We subsequently find determinants affecting their individual market power. An exceptional data set with detailed information on the business practices of rubber traders in Jambi, Indonesia is employed. Results show that market power at the traders' level exists and is substantial. This market power is amplified in situations of extreme remoteness, and weakens with increasing market size.

Keywords: Trader Survey; Market Power; Lerner Index; Marginal Value Products; Indonesia (search for similar items in EconPapers)
JEL-codes: F14 L14 Q13 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:crc990:9

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