The effect of transportation rates on interregional competition in agriculture: A general case

A general model for spatially separated markets is used to find the effects of transportation rates on interregional competition in agriculture. The results show that producers are affected much more than consumers, especially producers in the importing region. The solution is sensitive to the elasticity of supply, especially in the importing region. The elasticity of demand has little effect on the solution. The self‐sufficiency ratio is not particularly important, but the size of both the transportation price and the farm price relative to the retail price is quite important. In general, the farmers in the importing region are quite sensitive to transportation prices.