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Transaction Costs and Farm-to-Market Linkages: Empirical Evidence from China Apple Producers

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  • Hou, Jianyun
  • Huo, Xuexi

Abstract

This article estimates the impact of transaction costs on smallholders’ market participation and integration, using the data collected in two apple production belts of China. Based on an innovative measurement of the transaction costs, and a disaggregated analysis on sales costs, information costs, negotiation costs and monitoring costs. The study shows that levels of the farmers’ market participation are mainly determined by the proportional transaction costs and price, while their market integration depends on the fixed transaction costs and price. This suggests that, in order to lower the transaction costs and enable specialization and market participation, it is necessary to invest and construct the farming infrastructure, update the rural information system, improve the structure of farmer households, and subsidize the cooperative organizations.

Suggested Citation

  • Hou, Jianyun & Huo, Xuexi, 2015. "Transaction Costs and Farm-to-Market Linkages: Empirical Evidence from China Apple Producers," 2015 Conference, August 9-14, 2015, Milan, Italy 211746, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:211746
    DOI: 10.22004/ag.econ.211746
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    References listed on IDEAS

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    Cited by:

    1. Pingping Fang & David Abler & Guanghua Lin & Ali Sher & Quan Quan, 2021. "Substituting Organic Fertilizer for Chemical Fertilizer: Evidence from Apple Growers in China," Land, MDPI, vol. 10(8), pages 1-24, August.
    2. Mukoviz, Vasil & Leshchii, Lesya & Khodakivska, Olga & Prokopova, Olena & Kuzub, Mykhailo, 2022. "Accounting for transactions costs of agricultural producers in the shadow economy," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(2), June.

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    Crop Production/Industries; Marketing;

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