Modeling price transfer between farm and retail in Iran's horticultural market (case study of apple product)

Articles in Press

Document Type : Research Paper

Authors

1 payam noor university

2 Associate Professor, Department of Agricultural Economics, Payam Noor University, Tehran, Iran.

Abstract

The purpose of this article is to investigate the existence of asymmetric vertical price transfer in the supply chain (farm, wholesale and retail) of garden products (apple product) in Iran.

The market of agricultural products is characterized by high price fluctuations, which is mainly due to the harmful interference of the actors of this market, so that farmers in developing countries, including Iran, are not able to determine the price of their products due to the low price received for their products. They complain and consumers also complain about the high prices they have to pay for agricultural products, which has affected their purchasing power and prosperity.

The reason for this can be considered the use of marketing agents to prevent the symmetrical transfer of prices from the producer to the consumer.

Asymmetric price transmission, i.e. the increase or decrease of prices in one market level (for example, farm level) is not completely transferred to the price of other market levels (for example, retail) and thus to the consumer, and vice versa. This is important because its presence is often taken as evidence of a market failure.

Therefore, in this study, using the time series data of 1394-1399, which was extracted from the statistics center and ministries of agricultural jihad, the price transfer in the supply chain of horticultural products was investigated using the Granger causality test and the error correction model (ECM). has been As expected, the results show asymmetric price transmission along the supply chain of the selected horticultural product, meaning that price increases at the farm level are more intense and faster than price decreases are transmitted to wholesalers and retailers, and thus to consumers, and vice versa.

Keywords

Main Subjects

Majlis and Rahbord

Articles in Press, Accepted Manuscript
Available Online from 02 March 2024

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