Grain Distribution in Ghana under Imperfectly Competitive Market Conditions

Interspatial and intertemporal grain distribution in Ghana is a private sectoractivity carried out mainly by traders. These traders sometimes collude to maximize theirjoint profits. By so doing they influence the conduct of the grains market. To examine theeffect of their actions on the informal maize market in Ghana, a spatial equilibrium modelwas estimated under three scenarios: (1) Perfect competition, (2) Cournot-Narshconjectures, and (3) Collusion. The results indicate that imperfect competition distortsgrain flows, reduces consumer welfare and depresses traders’ sales revenue. Collusivebehavior of traders, on the other hand, causes the greatest distortion of grain flows as wellas trader and consumer welfare. These results draw attention to policy makers anddevelopment agents to educate traders against using their associations to foster collusion.