Tomar, S
(2017)
Gains from Agricultural Market Reform: Role and Size of Intermediaries.
Working Paper.
SSRN.
(Unpublished)
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Abstract
How does market structure and the presence of intermediaries impact the cropping pattern and agricultural trade within a country? The difference between farm-gate and consumer prices implies large intra-national trade costs but it is difficult to know the contribution of intermediary margins to these costs. This paper exploits a pro-competitive policy reform from India, that allowed free entry of intermediaries in the agricultural markets, to quantify the size of these margins. I develop a Ricardian style comparative advantage model of intra-national trade in agricultural crops, which embeds intermediaries and is suitable for this study of the market structure change. The model gives a structural equation that allows me to estimate the change in intermediary margin due to this reform. I find that post-reform the intermediary margin decreased by 16% for Groundnut, one of the major crops in this region. I then connect the model with rich micro datasets on-farm productivity and land use to estimate relevant parameters to run counter-factual experiments which reveal that the reform will increase average welfare by 1.3% through changes in cropping pattern.
Affiliation: |
Indian School of Business
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ISB Creators: |
ISB Creators | ORCiD |
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Tomar, S | UNSPECIFIED |
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Item Type: |
Monograph
(Working Paper)
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Additional Information: |
The research paper was published by the author with the affiliation of Toulouse School of Economics. |
Uncontrolled Keywords: |
Agricultural market, Intermediaries, Market structure |
Subjects: |
Economics |
Depositing User: |
Ilayaraja M
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Date Deposited: |
16 Jul 2019 16:49 |
Last Modified: |
16 Jul 2019 16:49 |
URI: |
http://eprints.exchange.isb.edu/id/eprint/1263 |
Publisher URL: |
http://dx.doi.org/10.2139/ssrn.2912434 |
Related URLs: |
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