The Ways to Resolve the Egg Market Disequilibrium Problem Within a Supply Chain

Abstract

The objectives of this research were to study the disequilibrium condition among different sized producers as well as the disequilibrium problem of the egg market by supply chain, analyze  the disequilibrium problem under current circumstance and propose relevant policy recommendations  to promote equilibrium in the egg market. The study found that disequilibrium problem is caused by  a monopoly of power within the supply chain. Consequently, the price mechanism cannot perform  properly even under conditions of market supply and demand. A few large-scale producers generate  profit using their market power, while many small-scale farmers are market price-takers and  powerless, which drives some farmers out of the market. Most of the attempts to alleviate  disequilibrium problems use supply-side policy by controlling the quantity of hens in order to  balance the egg supply with the demand. Unfortunately, the outcomes are not always successful and  are unsustainable as long as monopoly market power of the producers prevails.

The study suggestsed 5 policy recommendations which were (1) integration of agencies to alleviate the disequilibrium condition in the egg market, (2) rectification of the problems through different  schemes such as justification of supply -demand in the egg market and holistic management of the supply chain, (3) counterbalance the market power between buyers and sellers within the supply chain, (4) the adjustment of government agencies' role to solve the problem and (5) establishment of disequilibrium in the egg market fund.