Monitoring System for an Monitoring System for an Agricultural MarketAgricultural Market**

Research Institute, Padjadjaran UniversityResearch Institute, Padjadjaran University

* A research funded by The Indonesian Ministry of Research and Technology, 1999-2001

Ronnie S. Natawidjaja, Ph.D Ronnie S. Natawidjaja, Ph.D

Background

Agricultural product prices are more fluctuted than any other market, caused by a seasonality, uncoordinated planting, and natural disaster;

In developing country, the fluctuation has been agrevated by un-fair trading practices, speculations, and regional market disparities;

Unstable and extreem price hike for strategic food price can lead to a food insecurity condition and political instability.

Background

We need a system that can intelligently gives an early warning when and where “an indication of a problem” detected in the market so that “ a remedy can be made;

A market monitoring system will assist and maintain a free “managed” market.

Research Objectives

To identify and detect a natural flow of product and market connection of an agricultural market in the study area;

Set up a price recording and data inputing in certain important points of the market for three strategic commodities: rice, a granulated white sugar, and cooking oil;

Develop a system, which can detect and indicate an isolated price increase and price instability.

Methodology

• Run a Rapid Marketing Appraisal (RMA), to see:

• flow and direction of market distribution • possibility of market domination;

• Determine market locations and procurement method for a daily market price data collection;

• Determine an appropiate method for market integration measure and coefficient;

• Develop a web based interface for data inputing and market eficiency report.

RMA Result of Rice Physical Flow

Main rice physical distribution line is a movement of rice stock fromsurplus area/production center to a deficit or consumption area,a terminal/distribution or central market to consumer,one area to the other to exchange for suitable quality demanded by

local consumer.

TGRIDR

Pl. Cirebon

Tj. Priok

SRG

Pl. Merak

PDL RKS

LBK

BGR SBG

CRB

MJL

TSM

CJR

GRT

BKS

PW K

KRWJKT

SKB

BDG KNG

CMS

SMD

R ice from :Tega lP em a langJog jaS o loJaw a T im ur

Lokas i P em antauan H arga

A lur D is tribus i B arang

Jalan R aya

LEGENDA :

R ice fromC ilacap

ImportedRice

N

RMA Result of Gran. White Sugar Physical Flow

The flow of granulated sugar distribution in West Java is mostly depend upon business decision of distributors in Jakarta.

There are 3 entrances for imported sugar, through Jakarta, Cirebon, and Merak harbor. Sugar imported through Cirebon is mostly for local distribution.

TGRIDR

Tj. Priok

SRG

Pl. Merak

PDL RKS

LBK

BGR SBG

CRB

MJL

TSM

CJR

GRT

BKS

PW K

KRWJKT

SKB

BDG KNG

CMS

SMD

Lokas i P em antauan H arga

A lur D is tribus i B arang

Ja lan R aya

LEGENDA :

G ula dari :Jaw aTengah

Pl. Cirebon

Supply fromLampung

N

ImportedSugar

ImportedSugar

Price Acquisition Location

Price data collection locations were determine on the main distribution points of the observed commodities, those are Bandung, Jakarta, Bogor, Cirebon, Serang.

TGR IDR

Pl. Cirebon

Tj. Priok

SRG

Pl. M erak

PDL RKS

LBK

BGR SBG

CRB

M JL

TSK

CJR

GRT

BKS

PW K

KRWJKT

SKB

BDG KNG

CM S

SM D

Lokasi Pem antauan Harga

Jalan Raya

LEGEND:

N

Web Application

Database Server

Data Inputing Staff

Common GatewayInterface Modul

SecurityModul

DataManagement

Modul

GraficalModul

StatisticalModul

User

Web Server

Internet

Market Integration Model

• 1999-2000: Autoregresive Conditional Heteroskedasticity (Mendoza and Rosegrant, 1995)

• Good market eficiency measurement technic

• Very intensive computational load• Unstable results

• 2000-2001:Autoregresive Distributed Lag (Ravallion, 1986)

• Standard measurement• Managable computational work

Market Integration Model

Autoregresive Distributed Lag (Ravallion, 1986)(Hi-Hit-1) = (i-1)(Hit-1-HAt-1) + i0(HAt - HAt-

1) + (i+i0+it-1) HAt-1 + iX + itWhere:Hi = Price at market i at period t

Hit-1 = Price at market i at period t-1

HA t = Price at a destination market A at period

t

Hit-1 = Price at market i at period t-1

HA t = Price at a destination market A at period

t-1X = Seasonal faktor

Spatial Integration of Rice Market

TG R IDR

T j. Priok

SRG

Pl. M erak

PDL RKS

LBK

BGR SBG

CRB

MJL

TSK

CJR

GRT

BKS

PW K

KRWJKT

SKB

BDG KNG

CMS

SMD

0,41-0,18

0,36

0,28 0,28

0,31

0,41

-0,06

0,33 -0,08

0,630,81

0,610,44

0,61

0,44

0,81

0,62 0,33

0,51

0,19

0.36

Spatial Integration of Granulated White Sugar Market

TG R IDR

T j. Priok

SRG

Pl. M erak

PDL RKS

LBK

BGR SBG

CRB

MJL

TSK

CJR

GRT

BKS

PW K

KRWJKT

SKB

BDG KNG

CMS

SMD

0,47

0,26

0,34

0,44

0,30

0,54

0,61

0,51

0,47

0,20

0,560,23 0,14

Conclusion

• Data sustainability, accuracy and consistency is very important to ensure the information quality;

• Ravallion model coefficients are sufficient to be used for efficiency measure of the market;

• The application can detect average of 10% isolated price increase;

• Compare to 2 other data sources, Center of Statistics Beaurau is the most reliable;

• The application should be operated and maintained by the Ministry of Trade.

Thank you

www.faperta.unpad.ac.id/intelpas