Price transmission in the Hungarian vegetable sector Report as inadecuate




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In this paper we analyse price transmission for the carrot, parsley, tomato, green pepper andpotato markets. Although there is a dual farm structure dominated by small individual farms, our resultsimply that price information flows from the producer to the retail level for potatoes, parsley andcarrots. Our results also suggest that farmers do not merely accept prices, but can actually influencemarket prices. Tomato and green pepper prices have large transmission elasticities, and causality runsfrom the retail to producer level. It therefore follows that tomato and green pepper producers tend toaccept prices and that the sector’s prices are determined by upper market levels (processors, wholesalers,retailers). These results are reinforced by the fact that vegetable producers sell a large share of theirproduction through procurement and processing, and therefore are more dependent on the upstreamindustries, and thus cannot influence prices. For all vegetables in this study the short-run price transmissionis symmetric while on the tomato market the long-run price transmission is asymmetric. Resultsindicate that the tomato market is not competitive and efficient; therefore processors, wholesalers, andretailers are capable of exercising market power, and can instantly transmit producer price increaseswhile just slowly and partially transmitting producer price decreases.

Keywords: Hungarian vegetable sector ; producer prices ; price transmission

Subject(s): Demand and Price Analysis

Crop Production/Industries

Issue Date: 2007-07

Publication Type: Journal Article

DOI and Other Identifiers: HU ISSN 1418 2106 (Other)

PURL Identifier: http://purl.umn.edu/47013 Published in: Studies in Agricultural Economics, Volume 106 Page range: 23-39

Total Pages: 17

Record appears in: Research Institute of Agricultural Economics > Studies in Agricultural Economics





Author: Bakucs, Lajos Zoltan ; Ferto, Imre ; Szabo, Gabor G.

Source: http://ageconsearch.umn.edu/record/47013?ln=en







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