In this paper, the authors explore the level of market integration among regional vegetable markets in Indonesia and the movement of prices at the producer and wholesale market levels. Studying price integration among regions is important in order to increase the marketing efficiency of vegetables in the country. The main vegetables included in the study are shallots, large red chilli, potatoes, cabbage and tomatoes. The research uses secondary time-series data from 2001 to 2008 and analyses variables and integration using co-integration analyses. While results from the analyses vary as to whether producer prices do integrate with the reference market, they both indicate that the large red chilli commodity should receive more attention as market efficiency has not yet been reached. The authors suggest that government intervention, especially in the form of pricing policies, is needed both at the producer and consumer level to stabilize vegetable prices in Indonesia. However, the success of this intervention depends heavily on government's understanding of price transmission in the vegetable market. This research makes a solid contribution to this end.
Download reference document (PDF 136.54 KB)
Firdaus M. and Gunawan I.
Journal of International Society for Southeast Asian Agricultural Sciences 18(2), 96-106