SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS DECEMBER, 1978 A COMPUTERIZED REMOTE-ACCESS COMMODITY MARKET: TELCOT

Cotton marketing, like the marketing of teristics, the problem of price discovery is other agricultural commodities, traditionally complicated. has been done through relatively small country The traditional approach to producer spot markets. Problems for cotton producers result- marketing of cotton relies heavily on the gin ing from this type of market structure are the offices. After cotton is harvested, ginned, and limited availability of market price informa- classed, the class cards are returned to the gin tion and the limited degree of buyer competi- offices. Some producers merchandize their cot-tion for their product at the local level. Though ton themselves, but the more common ap-these are seemingly inherent problems in local proach is for the gin office staff to recap2 a markets, new technologies in the form of producer's cotton from the class cards, tele-electronic markets can help to overcome them. phone several (typically 3 to 6) merchants to The marketing of cotton is complicated be- relay the quality information from the recap(s), and seek bids. The office staff then eithercause of the official grading system which re- a s flects the heterogeneous nature of cotton fiber. relays offers to the producer or sells the cotton on his behalf.Consider that there are about 45 grade, 23 on isbehalf