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International Journal of Agricultural Research

Year: 2014 | Volume: 9 | Issue: 2 | Page No.: 99-109
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Authors

M.B. Ranathilaka

Kuntoro Boga Andri

Keywords

Research Article

Market Efficiency on Vegetable Commodities in Developing Country: Case Study from Dambulla Wholesale Market in Sri Lanka

M.B. Ranathilaka and Kuntoro Boga Andri
In many developing countries, the government implemented vegetable marketing policies aiming both efficiency as well as effective distribution yet that some of the program had been ineffective or have failed. Therefore, this study analyzes vegetable market efficiency using Dabulla wholesale market in Sri Lanka as a case study. The questions are posed here that the main factors of recent vegetable market price increase trend. Was the vegetable market price hike trend policy driven or market driven? What are the short term, medium term and long term economic consequence of vegetable market price hikes? The study showed that the bargaining power of merchants and the farmers may significantly determine the MM (Net marketing margin). Another important factor is cartel behavior of middlemen within the farm-gate and wholesale markets as well as wholesale and retail markets. Therefore, policy makers have to consider the ways to reduce unnecessary middleman involvement to develop an effective marketing system which provides higher benefit to farmers and consumers. Another factor is infrastructural facilities such as roads and access to the market easier, especially, communication that provide pricing and other information. In addition, storage and processing also have an important role to play within the context of counter seasonal strategies. Marketing cost mainly depends on those factors specially post harvest losses. In this context, it is an urgent need to introduce suitable and practical techniques to reduce post harvest losses which control marketing cost and improve marketing efficiency.
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