Transaction Cost Analysis of Maize Marketing in Bangladesh

Abstract

The present study analyzed the transaction cost in maize marketing which is the first and foremost study on transaction cost in Bangladesh which will help researchers and concerns to study further on it and helps farmers to consider transaction cost as separate cost. The study used primary data collected from 55 randomly selected maize farmers and maize marketing intermediaries from two upazilas of Gaibandha district of Bangladesh. It identified five components (search cost, screening cost, bargaining cost, monitoring cost and enforcement cost) of transaction cost in channeling maize from framers to feed mills. It was found that, total transaction cost incurred by all the intermediaries was Tk. 33.02 per 100 kg of maize. Among these cost items monitoring cost was highest (31.78%) and search cost was the lowest (11.53%). Farmers or maize marketing intermediaries had not to incur any enforcement cost for maize marketing. Transaction cost incurred for trading 100 kg of maize by Farmers, Farias, wholesalers, Aratdars was Tk. 2.82, Tk. 9.95, Tk. 12.91 and Tk. 10.16, respectively. Among all marketing intermediaries, transaction cost for Farias was lowest and highest for wholesalers. The study recommended to maintain clear marketing rules for the maize farmers and traders and avail marketing information to them.