An Evaluation of the Malaysian Padi and Rice Market Structure, Conduct and Performance

It has always been alleged that the padi market is monopoly-monopsonistic in structure, inclUding the traders to behave collusively and unethically, thus reaping excessively high profit margins. However, the market in reality is competitive but the existence of credit-tie has defied the benefits of a competitive market from being passed on to the farmers. The instability of the rice market and the pressure of the fixed minimum support and ceiling prices, forced the traders to indulge in various malpractices to maintain their profit margin. Though on the whole, the profit made by the traders is reasonable, the evidence of unethical behaviour suggests that the profit earned is higher than it should be under a fair marketing practice

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