Market Integration in the Philippine Milkfish Industry
Sufficiency in milkfish production in the Philippines was mainly attributed to the improved production technologies. However, sufficiency in food does not come from production increases alone. Efficiency in marketing should be attained to guarantee an adequate supply of milkfish in consumption a...
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| Format: | Thesis |
| Language: | English English |
| Published: |
1989
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/8023/1/FEP_1989_6_A.pdf |
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| Summary: | Sufficiency in milkfish production in the Philippines was
mainly attributed to the improved production technologies.
However, sufficiency in food does not come from production
increases alone. Efficiency in marketing should be attained to
guarantee an adequate supply of milkfish in consumption areas
at equilibrium price. An efficiently integrated market is
characterized by prices that are interrelated.
The study focuses on the analysis of milkfish prices from
1978 to 1987 with the end view of assessing the degree of
integration between Metro Manila and selected regional
production centres. Ravallion's autoregressive distributed lag model (1986)
and cross-correlation of residuals by Box and Pierce ( 1970)
revealed that the Philippine milkfish market is not well integrated.
The hypotheses of long-run integration and the
absence of local market characteristics were accepted while
short-run integration and segmentation were rejected. Hence,
the process of price adjustment in the regional market do not
fully reflect the price information from the reference market
within a short time period but equilibrium could be attained in
the long-run. Price formation runs from the wholesale to the
retail market and furthermore from the reference market to the
regional production centres.
The low levels of integration are often associated with
margins in excess of the marketing costs since arbitragers
could use information about price differences profitably. Non-economic
profits exist in markets laden with structural
imperfections. Hence, the need for the government's attention
to save the declining profitability of milkfish production
juxtaposed with the enrichment of influential intermediaries in
the face of increasing productivity. |
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