It is understood that intermediaries are an important bridge between supply of and demand for agricultural products.  In many cases they identify buyers in foreign markets.  It is apparent that their activity has direct effects on the welfare and efficiency of local producers.  Whether or not these effects are positive depends on intermediaries’ bargaining power, producers’ decisions about verticalization and/or the institutional environment of the home country, including state and legal capacities.  Globalization has the potential to magnify these effects.

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Bardhan P., D. Mookherjee and M. Tsumagari, (2012);”Middleman Margins and Globalization.” American Economic Journal: Microeconomics, forthcoming. [Earlier version]

Fafchamps M., E. Gabre-Madhin and M. Bart, (2005); “Increasing returns and market efficiency in agricultural trade.” Journal of Development Economics, 78(2): 406-442. [Earlier version]

Fafchamps M. and R. V. Hill, (2008); “Price Transmission and Trader Entry in Domestic Commodity Markets.” Economic Development and Cultural Change, 56(4): 729-766. [Earlier version]

Krishna K. and Y. Sheveleva, (2012); “Wheat or Strawberries? Intermediated Trade with Limited Contracting.” Working Paper.