In Indonesia, chilies are a priority crop commonly produced by small farmers. Chilies are an important cash flow income for small scale producers. Farmers usually sell their chilies to a trader. Traders mostly sell fresh chilies to wholesaler but some goes to processors or directly to retail outlets. Price transmission is a key indicator of efficiency in the market. A small margin between the farm price and the retail price indicates an efficient marketing chain. This study examines the farm-retail price spread for fresh chilies grown in Kediri and Blitar region of East Java. It will focus on the role of traders in determining this price spread. From the data collection, we will know how chilies prices are transmitted from farmers to consumers and the factors that affect prices along the marketing chain.
From the results of this study, the researcher studied the market price efficiency for fresh chilies from farmers to customers through the value chain for East Java. This information can guide changes in business practices that can improve efficiency of the market. Greater efficiency means either higher farm prices, lower consumer prices, or reduced price volatility.

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