Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316890 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11776
Publisher: 
CESifo GmbH, Munich
Abstract: 
Widespread market imperfections in agricultural value chains raise the possibility that regulatory interventions may enhance efficiency and farmers' welfare. We develop a structural model of agricultural value chains and estimate it using rich data from Costa Rica's coffee sector to evaluate common regulations. Farmers supply differentiated mills that strategically decide which rural markets to source from and bilaterally bargain prices with downstream exporters. Through counterfactuals, our analysis highlights the nuanced, and potentially counter-productive, effects of commonly observed pro-competitive regulations on farmers' welfare. Tightening revenue-sharing rules to increase farm-gate prices, increases farmers' welfare on average but makes many worse off. Similarly, banning vertical integration raises farm-gate prices but harms most farmers by lowering valuable services provided by integrated mills.
Subjects: 
agricultural chains
market structure
farmers' welfare
JEL: 
O12
Q13
L22
Document Type: 
Working Paper
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