Liberalisation and Producer Price Risk: Examining Subjective Expectations in the Ugandan Coffee Market uri icon

abstract

  • The transfer of marketing responsibilities from the state to private agents in developing country commodity markets has enhanced competitiveness in these markets. One consequence of this has been an increase in the extent to which fluctuations in international commodity prices are passed from exporters to domestic traders, and to producers. This paper presents unique data on farmer perceptions of coffee price risk in Uganda's post-liberalised market. Perceived price risk is found to be substantial, as expected. Less expectedly, perceived price risk is found to vary quite substantially across households. An analysis of this variance suggests that differences in coffee prices received in past seasons and the salience of particular prices explain a significant portion of this variation. Interventions that both provide market information and train farmers to better understand price determination would seem desirable.

publication date

  • 2010
  • 2010