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Rice marketing systems in the Philippines and Thailand: Do large numbers of competitive traders ensure good performance?

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  • Dawe, David C.
  • Moya, Piedad F.
  • Casiwan, Cheryll B.
  • Cabling, Jesusa M.

Abstract

Rice marketing margins are substantially greater in the Philippines than in Thailand despite many similarities between the two systems and despite the fact that Philippine rice marketing has a competitive structure. We found that rice marketing costs in the Philippines are higher than in Thailand mainly due to higher interest rates in the financial system. Other fundamental factors that also result in higher costs include endowments of water and land, rice price and trade policy, road quality and lack of non-farm job growth. However, the greater costs can only account for about a fourth of the difference in gross margins, implying much higher returns to management in the Philippines despite similar levels of risk and no evidence of collusion. The "excess profits" in the Philippine marketing system suggest there is much to learn about how developing country commodity markets with competitive structures function in actual practice.

Suggested Citation

  • Dawe, David C. & Moya, Piedad F. & Casiwan, Cheryll B. & Cabling, Jesusa M., 2008. "Rice marketing systems in the Philippines and Thailand: Do large numbers of competitive traders ensure good performance?," Food Policy, Elsevier, vol. 33(5), pages 455-463, October.
    • Handle: RePEc:eee:jfpoli:v:33:y:2008:i:5:p:455-463
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    References listed on IDEAS

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    1. A. Banerji & J.V. Meenakshi, 2004. "Buyer Collusion and Efficiency of Government Intervention in Wheat Markets in Northern India: An Asymmetric Structural Auctions Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 236-253.
    2. World Bank, 2007. "World Development Indicators 2007," World Bank Publications - Books, The World Bank Group, number 8150.
    3. Hayami, Y. & Kikuchi, M. & Marciano, E. B., 1999. "Middlemen and peasants in rice marketing in the Philippines," Agricultural Economics, Blackwell, vol. 20(2), pages 79-93, March.
    4. Ruttan, Vernon W, 1969. "Agricultural Product and Factor Markets in Southeast Asia," Economic Development and Cultural Change, University of Chicago Press, vol. 17(4), pages 501-519, July.
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    Cited by:

    1. Minten, Bart & Reardon, Thomas & Vandeplas, Anneleen, 2009. "Linking urban consumers and rural farmers in India: A comparison of traditional and modern food supply chains," IFPRI discussion papers 883, International Food Policy Research Institute (IFPRI).
    2. Arnold H. Fang, 2016. "Linkage between Rural Voters and Politicians: Effects on Rice Policies in the Philippines and Thailand," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(3), pages 505-517, September.
    3. Bart Minten & Seneshaw Tamru & Ermias Engida & Tadesse Kuma, 2016. "Feeding Africa's Cities: The Case of the Supply Chain of Teff to Addis Ababa," Economic Development and Cultural Change, University of Chicago Press, vol. 64(2), pages 265-297.
    4. Minten, Bart & Engida, Ermias & Tamru, Seneshaw, 2016. "How big are post-harvest losses in Ethiopia? Evidence from teff," ESSP working papers 93, International Food Policy Research Institute (IFPRI).
    5. Kaittisak Kumse & Nobuhiro Suzuki & Takeshi Sato, 2020. "Does oligopsony power matter in price support policy design? Empirical evidence from the Thai Jasmine rice market," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 373-385, May.
    6. Maligalig, R. & Umbeger, W. & Demont, M. & Peralta, A., 2018. "Farmer preferences for rice varietal trait improvements in Nueva Ecija, Philippines: A latent class cluster approach," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277476, International Association of Agricultural Economists.
    7. Briones, Roehlano M. & Dela Pena, Beulah, 2015. "Competition Reform in the Philippine Rice Sector," Discussion Papers DP 2015-04, Philippine Institute for Development Studies.
    8. Minten, Bart J. & Legesse, Ermias & Beyene, Seneshaw & Werako, Tadesse, 2015. "Feeding Africa's cities: The case of the Supply Chain of Teff to Addis Ababa," 2015 Conference, August 9-14, 2015, Milan, Italy 212465, International Association of Agricultural Economists.
    9. Cuevas, Agham C., 2019. "The Effect of NFA Buffer Stocks on the Retail Price of Rice in the Philippines," Journal of Economics, Management & Agricultural Development, Journal of Economics, Management & Agricultural Development (JEMAD), vol. 5(1), June.
    10. Minten, Bart & Tamru, Seneshaw & Legesse, Ermias Engida & Kuma, Tadesse, 2018. "Supply chain from production areas to Addis Ababa," IFPRI book chapters, in: The economics of teff: Exploring Ethiopia’s biggest cash crop, chapter 11, pages 263-298, International Food Policy Research Institute (IFPRI).
    11. Beltran, Jesusa C. & Pannell, David J. & Doole, Graeme J. & White, Benedict, 2012. "Economic analysis of integrated weed management strategies for annual barnyardgrass (Echinochloa crus-galli complex) in Philippine rice farming systems," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124236, Australian Agricultural and Resource Economics Society.
    12. Minten, Bart & Tamru, Seneshaw & Engida, Ermias & Kuma, Tadesse, 2013. "Using Evidence in Unraveling Food Supply Chains in Ethiopia: The Supply Chain of Teff from Major Production Areas to Addis Ababa," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 159706, African Association of Agricultural Economists (AAAE).
    13. Minten, Bart & Tamru, Seneshaw & Engida, Ermias & Kuma, Tadesse, 2013. "Using evidence in unraveling food supply chains in Ethiopia: The supply chain of teff from major production areas to Addis Ababa:," ESSP working papers 54, International Food Policy Research Institute (IFPRI).
    14. Jolejole-Foreman, Maria Christina & Mallory, Mindy L., 2011. "Analyzing Market Price Transmission, Government Intervention and Weather Shocks for Rice Market in the Philippines," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103163, Agricultural and Applied Economics Association.

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