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Traders and Credit Constrained Farmers: Market Power along Indonesian Rubber Value Chains

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  • Kopp, Thomas
  • Brummer, Bernhard

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.

Suggested Citation

  • Kopp, Thomas & Brummer, Bernhard, 2015. "Traders and Credit Constrained Farmers: Market Power along Indonesian Rubber Value Chains," 2015 Conference, August 9-14, 2015, Milan, Italy 212012, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:212012
    DOI: 10.22004/ag.econ.212012
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    Keywords

    Agricultural and Food Policy; Agricultural Finance;

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