Market Structure and Pricing System: Their Impact on the Level of Income of Coconut Farmers, Alaminos, 1982

Date

1984

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Ma. Eden S. Piadozo

Abstract

This study was an attempt to analyze a rural marketing structure of coconut, focusing on the effect of the pricing system emerging from such a structure on the living conditions of small farmers.

It was found out that at the village level, the market per- formed under imperfect conditions. There were numerous sellers faced with only a few buyers and this situation had brought about the oligopsonistic nature of the market. Product differentiation did not exist as sellers preferred to sell their nuts whole. Unstable price was the major barrier to entry while its being the main source of income was claimed to be the most determinant factor responsible for coconut farmers' not leaving the business. The buyers were the most common source of information especially on price.

The pricing system that emerged from such an imperfect market was one wherein the price was dominantly set by the buyers. Farmers did not have enough bargaining power because most of them were tied up to their particular buyers, i. e., buyers extended cash advances to coconut farmers on conditions that they sell their nuts to them after harvest.

The average price received by the respondents was 28 centavos per nut. This was rather low because it generated an annual income of only P1860. 56 per hectare.

To determine the factors that affected the income of the farmers, the regression technique was used and it was found out that price and output level had positive effects on income; their coefficients were statistically significant at one percent. Cash costs contributed a negative influence and its coefficient was likewise significant at one percent. Tenure status and educational attainment were found to be insignificant.

To test the price differences under varied situations, the t-test of means was employed. Results showed that only credit- marketing tie-up and type of buyer (i. e. barrio buyer vs. dealer) gave significant price differences at one percent and ten percent respectively.

Language

English

LC Subject

Pricing, Finance, Coconut industry

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 1984 A14 O23

Notes

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Document Type

Thesis

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