Market Control and Competition Issues along the Commodity Value Chain

摘要

This paper examines from the viewpoint of microeconomic theory and, in particular, from that of the modern theory of industrial organization, issues that arise when agricultural and food markets deviate substantially from the perfectly competitive model. We review some important ways in which terms of trade, profits, and the allocation of resources are affected when markets are monopolistic or oligopolistic at various stages of the vertically related commodity value chain. We also discuss the role ofcontracts between upstream and downstream producers and how contracts affect the firms' incentives for investment, innovation, and pricing decisions. Finally, we refer to possible issues raised for vertical markets in the context of competition policy.