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Title:Vertical integration and farm gate prices in the coffee industry in Côte d'Ivoire
Author:Benoit, Malan B.
Series:AERC research paper
City of publisher:Nairobi
Publisher:African Economic Research Consortium
Geographic term:Ivory Coast - Côte d'Ivoire
price policy
Abstract:The aim of this paper was to examine how coffee-processing firms influence the farm gate price on the domestic coffee market in Côte d'Ivoire. Two formalized models were constructed to study this domestic market. The models dealt with the interaction between its various players, the setting of the farm gate price and the performance of the current organizational structure of the industry (including the vertical integration of the coffee-processing firm), in comparison with an alternative organizational structure without vertical integration. The results of the study show that, under certain conditions, the vertical integration of the coffee-processing firms leads to an increase in the farm gate price on the world market for semi-processed coffee. The study also shows that the relative efficiency of the exporter cooperative (that is, its ability to attract new members) causes private firms to offer a high farm gate price.