Do the leading intermediaries in the rice supply chain exercise market power in Bangladesh?

What is it about?

Because of the increasing differential between farm and retail prices, the study proposes to investigate the extent of market power in the rice value chain of Bangladesh using advanced econometric techniques. Using a Stochastic Frontier Estimation approach on cross-sectional data, the study examines the price spread along the rice value chain to determine whether millers and wholesalers exercise market power.

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Photo by Matt J on Unsplash

Photo by Matt J on Unsplash

Why is it important?

It is important to identify the existence of market power in the rice supply chain. Because a marginal level of power would cause a welfare issue for the producer and consumer. A well-functioning market would be free from illegal power.