Market price relationships in regional - planning for rural development

The paper"s introductory section stresses the need for economically feasible village and regional market development projects and suggests that a regional level analysis of market price would provide an information basis for such projects. The introduction next offers some economic background pertinent to market price analyses; typical questions in market development and farmer response to market price variations are discussed. This section also delineates, the "perfect market" model, a theoretical system in which prices do not vary by more than the cost of transfer, storage, and production. The next three sections analyze the three dimensions of market price which correspond to the "perfect market" model, i.e., the space, time, and form dimensions. Discussion of the space dimension addresses the effect of various transportation options on interregional price changes; analysis of the time dimension deals with the profitability of storing goods; the section on form dimension investigates the relationship between the price of a raw product and that of its several marketable alternatives. An appendix follows, providing recommendations for planning, implementing, and evaluating strategies for product market development based on space-time-form analyses. Specific applicability of such strategies to AID activities is also detailed.