Journal of Agricultural, Life and Environmental Sciences ISSN:2233-8322(Print) 2508-870X(Online) 농업생명환경연구

As the staple food of Mozambique, common beans are one of the most produced, consumed, and commercialized agricultural commodities. Most of the agricultural products suffer from price instability, especially in developing countries such as Mozambique, where the distance between farming areas and consumer centers is large and the transportation infrastructure is poor, affecting the food safety of the lower income households. It thus becomes important to assess the market integration and price transmission between the farm, wholesale, and retail markets to provide insights into government market interventions and policy directions. In our study, we investigated market integration and price transmission in the common beans market of Mozambique, using the autoregressive distributive lag model. The bounds co-integration results showed that the farm, wholesale, and retail prices co-integrate in the long run. The Granger causality test showed that there is a causal relationship between the price series, and the error correction model showed asymmetry in price transmission, suggesting the need for policy intervention to correct the market inefficiencies. Investing on the improvement of roads and exploiting the cheaper means of transportation, such as rail and sea transport, should be considered to enable cheaper movement of people and goods.