Vegetable prices normally fluctuate depending on the factors that affecting it like the supply and demand condition.This is the reasons why the issue on price transmission has always been hot in agricultural commodities.Price transmission analysis explains how the change in input price of a particular marketing node is passed on to the output price of the next marketing node. In efficient markets, as in the case of perfect competition, price changes of a particular node are fully transmitted through the whole chain up to the final consumer. However, certain agricultural products have marketing nodes that operate under imperfection competition and thus the changes in price may not be adequately transmitted. Farm gate prices of potato for example, tend to fluctuate over months and these changes have corresponding changes on the prices of the next marketing nodes which may have varying degree of effects. Moreover, different marketing nodes incur different marketing costs and changes in these marketing costs may not also be reflected in the given price of the succeeding markets. This study aims to analyze any indication of inefficiency in the potato supply chain of Bukidnon through marketing margins analysis. The method basically involved two mainstream analyses, price transmission and net margins analysis. In price transmission, the elasticity price of transmission(EPT) served as the methodical apparatus on assessing the extent by which price changes on a certain node affect or influence the price set on the next marketing node. The analysis also involved using the elasticity of marketing costs where the transmissions of the changes in marketing costs are examined. The price transmission analysis was done by estimating a regression model where secondary data of prices and marketing costs were used. The estimated models covered three partial markets, farm to wholesale, wholesale to retail and farm to retail. Results of the price transmission analysis showed that price changes in potato are adequately transmitted since the EPT values were generally close to 1. Elasticities of marketing costs were recorded with very inelastic values. However, it can not be directly concluded from the low elasticity values that the market for potato is less efficient with regards to reflecting changes in marketing costs. Checking the cost distribution of various marketing costs to total marketing costs may help understand why elasticities of marketing costs were recorded to be inelastic.

Thesis, Undergraduate (BS Agribusiness Economics)--University of the Philippines, Mindanao