ABSTRACT
The modelling of international trade in agricultural products has generally treated goods as homogeneous and markets as perfectly competitive. The natural quantitative framework when transport costs are considered has been the spatial, partial equilibrium approach. Government intervention in the form of domestic agricultural sector instruments and trade policy measures has been incorporated in these models as appropriate. Recognition of barriers to imports, subsidization/taxing of exports, and particularly the existence of marketing boards and state trading organizations has led to the development of models of imperfect competition in agricultural trade, e.g., models of monopoly/monopsony and oligopoly/oligopsony. The other development, and one which has not been researched to the same extent as market structure, is trade in differentiated products. In these models differentiation has been defined more in terms of the location of production than with respect to the product’s physical characteristics.
