Anatomy of agricultural product markets and transactions in developing countries

The prominence of transaction costs resulting from the uneven endowment of actors (particularly of land), asymmetrical information, and a whole constellation of institutional and structural constraints, leads to a variety of exchange channels and transactions. An approach is developed in this paper that highlights the importance of key elements (characteristic of actors, of the item exchanged and of the physical, technological, cultural and policy environment, respectively) in shaping distinct exchange configurations and corresponding transactions. Section 2 shows how specific characteristics of elements influence the prevailing exchange channels and transactions in agricultural commodity systems. Three types of foodgrains" market segmentation are identified -- parallel, spatial, and dual -- along with the specific elements that give rise to them (e.g., government intervention and poor infrastructure). A comparative evaluation is made of the degree of market integration prevailing in Africa versus Asia and of the elements giving rise to different types of exchange configurations. Section 3 focuses on Pakistan"s wheat market chain and its division into distinct configurations and transactions. The performance of the whole commodity system and of the configurations constituting it is evaluated on the basis of efficiency and equity criteria. (Author abstract)