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Market Liberalisation, Vertical Integration and Price Behaviour in Tanzania's Coffee Auction
Author(s) -
Temu Anna A.,
WinterNelson Alex,
Garcia Philip
Publication year - 2001
Publication title -
development policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.671
H-Index - 61
eISSN - 1467-7679
pISSN - 0950-6764
DOI - 10.1111/1467-7679.00131
Subject(s) - liberalization , tanzania , common value auction , investment (military) , business , international economics , economics , commerce , market economy , microeconomics , politics , socioeconomics , political science , law
Whether market liberalisation can promote agricultural development in Africa depends on how well existing institutions can facilitate trade by private agents. This article assesses the performance of the Tanzania coffee marketing system after liberalisation and the emergence of private, vertically integrated exporters (VIEs). Increasing producer prices, declining marketing margins, and the continued provision of a useful auction for coffee that is delivered by traders who are not VIEs all suggest a degree of success for liberalisation. The presence of VIEs seems to have provided investment to reduce marketing costs, whilst a sufficient number of competing firms has limited non‐competitive behaviour in the market for coffee that is traded at the auction by non‐VIEs.