Abstract:
Vertical integration is important to know to see whether changes in rice prices in the reference
market (consumers) are followed by changes in rice prices in the follower market (producers)
which will have an impact on the effectiveness of the Government's policies in stabilizing rice
prices. This study aims to determine the price variation and vertical integration of local and
superior rice markets in South Kalimantan Province. This study uses local and superior rice price
data at the producer (milling) and consumer (retailer) levels from January 2014 to March 2024.
The data used was sourced from the Central Statistics Agency and the South Kalimantan
Provincial Agriculture and Food Security Office. The Coefficient of Variation is used to see
price variations in local and superior rice. VAR/VECM analysis is used to identify vertical
integration relationships between local and superior rice markets at the producer and consumer
levels. The results of the study show that the highest coefficient of variation in local and superior
rice prices occurred in the year of the Covid-19 pandemic. The coefficient of variation in local
rice prices of producers was highest in 2020 and 2022 at 10.96% and 15.68%. The coefficient of
variation in the price of superior rice for the highest producers in 2022 and 2023 is 16.23% and
12.48%. The results of the study also show that there is a vertical integration of a long-term
equilibrium relationship between the consumer and producer of local and superior rice market. In
the integration of the long-term equilibrium relationship, when the price of local and superior
rice at the consumer level increases, the price of local and superior rice at the producer level also
increases. The vertical integration of the short-term equilibrium relationship in the local rice
market is full integration because both the consumer and producer markets influence each other
but in opposite directions of price transmission. If prices in the consumer market rise, prices in
the producer market will fall. The vertical integration of the short-term equilibrium relationship
in the superior rice market is not complete because the producer market affects the consumer
market but the consumer market does not significantly affect the producer market. |
