DETERMINATION OF SPATIAL INTEGRATION AND SUBSTITUTION OF FOREIGN RICE FOR LOCAL RICE IN GHANA

Review of Agricultural and Applied Economics, RAAE, VOL.17, No. 2/2014

ARTICLE TYPE: REGULAR ARTICLE
PUBLISHED: 05.10.2014
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KEYWORDS:
Spatial integration; Commodity substitution; Ghana; Rice market
DOI NUMBER:
10.15414/raae.2014.17.02.49-64
ABSTRACT:
This study tested for spatial integration in the rice market and the substitution of imported rice for local rice in Ghana. It is established that the markets for domestic imported rice are well-integrated, but not complete. The imperfect spatial integration of domestic foreign rice markets implies that the market provides opportunities for arbitrage. Price leadership roles are found to be determined by the kind of sub-inter-regional-trade network defined. However, in all, the Accra market emerged as a dominant market leader in the domestic foreign rice market. There is evidence of significant regional substitution of foreign rice for local rice in the long run, but the result is mixed in the short run. The result that local rice is not a perfect substitute for imported rice implies that price disincentive measures such as increasing the import tariffs on foreign rice will only produce a mild effect on increasing the producer price faced by local rice farmers, but aggravate the burden on households’ budget.
JEL CODES:
Q00, Q1, Q11, Q18
PAGES:
49 - 64
Please Cite this Article published as:

Philip Kofi ADOM (2014) Determination Of Spatial Integration And Substitution Of Foreign Rice For Local Rice In Ghana. Review of Agricultural and Applied Economics. XVII (Number 2, 2014): 49-64. doi: 10.15414/raae.2014.17.02.49-64
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Review of Agricultural and Applied Economics | ISSN 1336-9261
Faculty of Economics and Management of the Slovak Agricultural University in Nitra and the Association of Agricultural Economists in Slovakia.
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