L12Oct09.306 - Lect 12: Integration in Food Markets FRE 306...

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Lect 12: Integration in Food Markets FRE 306 Reference material: C.P. Timmer, W. Falcon, S.R. Pearson, Food Policy Analysis, 1983 (Ch. 4)
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Lec 12: Market Integration: Spatial and Temporal Aspects Market Integration: Regional, Temporal and International Aspects Market Integration: Definition and Relevance Arbitrage/Price equalization: does this occur? “Efficient Markets” issue Types of integration: Spatial arbitrage of prices: Rural-Urban dimension Resulting price patterns and product flows Spatial price patterns (intermarket) and movements over time Storage functions in markets Impact on temporal (within-year) price patterns Integration of Domestic and International markets
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Lec 12: Market Integration: Spatial and Temporal Aspects Rural-Urban Market Integration Food raw material production occurs in rural areas Final consumption also occurs in urban areas Some storage occurs, in rural areas; adds to cost But domestic production not sufficient to supply total urban and rural demand throughout the calendar year Therefore, imports occur, during non-harvest season Imports arrive in urban areas Transport costs (+ any other movement-related costs) incurred moving food product between rural, urban areas Results in systematic price patterns over the year, and pattern somewhat different between rural and urban areas Follow trade flows and these price patterns over crop year
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Lec 12: Market Integration: Spatial and Temporal Aspects Rural-Urban Market Integration II In harvest season, rural prices so low that no imports can compete in both rural and urban areas In non-harvest period, urban prices rise until eventually
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This note was uploaded on 03/09/2010 for the course LFS FRE 306 taught by Professor Barichello during the Winter '09 term at The University of British Columbia.

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L12Oct09.306 - Lect 12: Integration in Food Markets FRE 306...

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