Grain Market Integration and Distribution Efficiency in Guizhou, China:Comparison of Rice and Soybeans

Abstract

This paper examines intra-provincial market integration in Guizhou Province, China. We measure spatial market integration by utilizing time series data of rice and soybean prices. Results indicate long run rice market integration exists in three regional markets in eight recent years. However, the rice-surplus market does not dominate rice distribution, and this market is integrated with other deficit markets with longer time lags. Long run soybean market integration exists only between transports hub and the nearest market. A remote market is separated from soybean distribution in other markets. From this result, we conclude that the intra-provincial market is inefficient for local farmers to distribute their products. In order to increase the local farmers’ incomes, more flexible incentive polices need to be adopted to improve farm gate market efficiency.

JEL Classification:Q13, D43, C22, N55