Farmers, Traders, and Processors: Buyer Market Power and Double Marginalization in Indonesia
研究了印度尼西亚橡胶供应链中买方市场势力在农民-贸易商和贸易商-加工商两个环节的行使，量化了双重边际化导致的福利损失和收入再分配，并探讨了新兴经济体中供应链协调的政策创新。
Buyer market power can significantly reduce farm prices and incomes, making curtailment of such power a key strategy to improve rural livelihoods in emerging economies. A “double marginalization problem” occurs when market power is exercised at multiple stages in a supply chain. Although double marginalization has been studied extensively from a seller‐power perspective, the corresponding problem on the buyer‐power side has received scant attention. This paper addresses that lacuna through developing a vertical market model that allows buyer power to be exercised in local farmer–trader markets and also downstream at the trader–processor stage. We derive equilibrium results for output, prices, and economic welfare under alternative competition scenarios. The model is applied to the Indonesian rubber value chain by estimating the magnitude of buyer market power in farmer–trader and trader–processor interactions and quantifying the extent of welfare loss and redistribution of income among market participants due to double marginalization. Standard theory for seller double marginalization posits that it should be eliminated through vertical coordination within the supply chain. We conclude by discussing why such coordination may not occur within emerging‐economy supply chains and considering policy innovations to facilitate better coordination.