Journal of International Development Studies
Online ISSN : 2434-5296
Print ISSN : 1342-3045
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Food Market Integration through Central Wholesale Marketing in Indonesia Revisited
Shinya IKEDA
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2019 Volume 28 Issue 1 Pages 103-121

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Abstract

This study aims to empirically investigate spatial market integration between rural shipment markets and central wholesale markets on the vegetable marketing in Java. We also clarify whether middlemen in central wholesale market work well for the spatial market integration. We first confirmed the spatial market integration had not been observed well during our field survey by using econometric tests. From our field survey, we found that efficient price transmission is suffered from mark-up by Bandar who are specialized wholesaler for settlement and observed at central wholesale market in West Java. Another factor is the high enforcement cost for Bandar, who needs vast amount of settlement fund in the case of default with Centeng who are broker in the market place. On the other hand, neither search cost nor classification cost are obstacles for achieving the spatial market integration because of auction-like nature of the transaction in the market place.

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© 2019 The Japan Society for International Development
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