Marketing Price of Dry Pigeonpea Sample Clauses

Marketing Price of Dry Pigeonpea. The buying and selling prices of dry pigeonpea increase from one market to another market in a value chain as one moves from the upstream to downstream due to costs incurred when when undertaking a transaction. The price of pigeonpea is affected by the distance or geographical distribution of farmers or buying points to the market. As one moves from upstream to downstream, experience an increase in price due to cost such as payment to the buying agent, cleaning cost, transportation cost, seller/buyer search cost and loading and offloading cost (See table 6.10 ). Looking at the marketing chain, rural assemblers doing their business in first market in Babati village, they don‟t incur transportation cost to urban market, and they don‟t use the buying agent which makes their price to be low as compared to the price given by urban wholesalers and exporters. The increased in price for urban wholesaler‟s and exporter‟s channels is due to extra cost incurred during transaction such as seller search cost, payment to the buying agent, cost of transportation, loading and offloading, cleaning labor charges, storage cost and other cost associated with transaction. From the market chain starts from rural to urban market; the seller‟s carries transaction cost as the distance of the buying point increases. From the price point of view, farmers are getting lower price from the exporters which is 406 TZs per Kilogram, followed by the rural assemblers 488 TZs per kilogram and lastly by urban wholesalers 499TZs per kilogram. According to opportunism behavior in transaction cost theory, Xxxxxx, (1990) provides that decision makers may seek to serve their own interests and it is difficult to know ex-ante who is trustworthy and who is not. The price receive by farmers from exporter is by far small compared to other traders in the value chain due to control over the market and low bargaining power of farmers caused by lack of information about market price. Apart from distance and cost also the price of pigeonpea is affected by opportunistic behavior of different actors in different market points. The price increases from the rural market to urban market (as it is shown in table 6.10). Based on transaction cost theory, the private information the buyer has can affect the price because of lack of information about the price by the seller as we discussed earlier that in the first market not all participants own mobile phone and radio. This therefore reduces the chance of the seller...
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