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Cartels and Rent Sharing at the Farmer–Trader Interface: Evidence from Ghana’s Tomato Sector

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  • Ngeleza Guyslain K.

    (International Food Policy Research Institute, Washington, DC, USA)

  • Robinson Elizabeth J.Z.

    (University of Reading, Berkshire, UK)

Abstract

Itinerant traders provide an important route for West Africa’s farmers’ to get their perishable produce rapidly to the distant urban markets. But these farmers often accuse the traders of offering “unfairly” low prices while preventing direct access to these markets. Using Ghana’s tomato sector as a case study, we provide the first detailed exploration of the interface between Ghana’s farmers and traders, combining a theoretical model with novel empirical data on daily sales prices and tomato quality. We find that although the prices traders pay farmers are lower than prices in the urban markets, taking into account transport costs, these prices are higher than farmers receive from the local rural market. Our article suggests that policymakers would do better to focus on opening up access to the urban markets rather than on strengthening farmers’ bargaining power with the traders, which restricts market volumes further and harms farmers unable to sell to traders.

Suggested Citation

  • Ngeleza Guyslain K. & Robinson Elizabeth J.Z., 2013. "Cartels and Rent Sharing at the Farmer–Trader Interface: Evidence from Ghana’s Tomato Sector," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 15-30, January.
    • Handle: RePEc:bpj:bjafio:v:11:y:2013:i:1:p:1-16:n:2
    DOI: 10.1515/jafio-2012-0011
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    References listed on IDEAS

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    1. Steven T. Buccola, 1985. "Pricing Efficiency in Centralized and Noncentralized Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 583-590.
    2. Rico Ihle & Joseph Amikuzuno & Stephan von Cramon-Taubadel, 2010. "L'intégration des marchés avec et sans échanges commerciaux directs : le cas de la tomate au Ghana," Revue d’économie du développement, De Boeck Université, vol. 18(1), pages 21-46.
    3. Marcel Fafchamps & Ruth Vargas Hill, 2005. "Selling at the Farmgate or Traveling to Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 717-734.
    4. Blair,Roger D. & Harrison,Jeffrey L., 2010. "Monopsony in Law and Economics," Cambridge Books, Cambridge University Press, number 9780521746083, November.
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    6. Key, Nigel & Runsten, David, 1999. "Contract Farming, Smallholders, and Rural Development in Latin America: The Organization of Agroprocessing Firms and the Scale of Outgrower Production," World Development, Elsevier, vol. 27(2), pages 381-401, February.
    7. William J. Furlong & George A. Slotsve, 1983. ""Will That Be Pickup or Delivery?": An Alternative Spatial Pricing Strategy," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 271-274, Spring.
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    Cited by:

    1. Scheiterle, Lilli & Birner, Regina, 2021. "The Myth of the Market Queens: a Case Study of Women and Power in Ghanaian Markets," 2021 Conference, August 17-31, 2021, Virtual 315924, International Association of Agricultural Economists.

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