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Market Channels, Quality Incentives and Contract Harvesting: The Case of Maize, Soybean and Groundnut

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The development of markets for maize, soybean and groundnut over the last ten years has been characterised by increasing commercialisation and increasing market differentiation, because of the diversity of end uses. Research conducted by the Department of Agriculture in 1987 and 1988 confirmed earlier findings that commercialisation has not led to opportunities at farm level to expand returns through quality improvement. At trader and factory levels, though, the market rewards qualities required for specific end uses. Findings clearly indicate that market development is commodity specific and that generalisation across the three crops encounters difficulties. The significance of imports was found to be different among the three crops. The role of contract harvesting varies independently of the degree of commercialisation; its extent is important in identifying who benefits from post-harvest research. The informal sector was found to be of particular importance in soybean. It was concluded that the only external intervention which would increase farm income was the introduction of specific varieties, which find market rewards from specific users. Large grain size is rewarded in groundnut, while the tahu and tempe industries both require specific soybean varieties.
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Document Type: Research Article

Affiliations: 1: CGPRT Centre, Bogor 2: Secondary Food Crops Development Project, Academy for Educational Development, Jakarta

Publication date: April 1, 1990

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