Impact of agricultural market reform on pulses market integration in Myanmar

Since 1988, agricultural market reform had been implemented with domestic and export liberalization in Myanmar. However, pulses market is only one market implemented by fully privatization of marketing activities both in domestic and abroad. This paper tests the impact of agricultural market reform on regional wholesale markets of pulses by using Johansen's multivariate co-integration method and Granger causality test. All price series were integrated order (1). One co-integrating equation was found in long-run for all markets, but there was disequilibrium condition in short run market integration. Mandalay prices Granger caused all prices of markets of black gram and green gram, and Yangon prices Granger caused all markets except Myingyan in pigeon pea. Yangon and Mandalay markets are the leading markets for price formation. Agricultural market reform with domestic and export liberalization is a necessary condition for efficient marketing system, but is not a sufficient condition for this system. It can be concluded that efficient marketing system should be improved with agricultural market reform meanwhile strengthening market information system, market facilities and institutions.