Are fruits and vegetables market efficient? Vertical price integration of selected crops in southern Philippines

Jon Marx P. Sarmiento, Glory Dee A. Romo, Roxanne T. Aguinaldo, Nikko L. Laorden, Leanne Orr, Anthea McClintock, Kirrily Pollock and Larry N. Digal

No 290418, 2011 ASAE 7th International Conference, October 13-15, Hanoi, Vietnam from Asian Society of Agricultural Economists (ASAE)

Abstract: One of the indicators of an efficient market is when prices are integrated. Top producing areas for mango, papaya, cabbage, eggplant tomato, and potato in Southern Philippines are considered in this study. The said crops are the priority of the Australian Centre for Agricultural Research horticulture program in the country. Market integration is assessed using vertical price integration employing the techniques of Vector Autoregression, Granger Causality, Cointegration, and Vector Error Correction model. Results suggest that cabbage is considered to have a good indicator of market integration. Retail and wholesale prices Granger cause the farmgate level prices. Mango prices are comparably better integrated than the remaining crops. NCR retail market is believed cause mango price formation in the farm. Wholesale influences the farmgate price movement in the case of eggplant and tomato. Papaya and potato suggested a segmented market especially in NCR retail market. Thus, initiatives to improve farm productivity should be focused on those crops that show efficiency in the market. Market inefficiencies could be due to logistics and marketing losses among others. Value chain analysis on the areas identified is recommended to validate the results.

Keywords: Demand and Price Analysis; Industrial Organization (search for similar items in EconPapers)
Pages: 22
Date: 2011-10-13
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Persistent link: https://EconPapers.repec.org/RePEc:ags:asae11:290418

DOI: 10.22004/ag.econ.290418

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