Advertisement

Organized Fresh Food Retail Chains Versus Traditional Wholesale Markets: Marketing Efficiency and Farmers’ Participation

  • Seema Bathla
Chapter
Part of the India Studies in Business and Economics book series (ISBE)

Abstract

The agricultural marketing system under the aegis of the Agricultural Produce Marketing and Regulation Act 1966 has yielded to change in accordance with the amendments laid down in the Model Agricultural Produce Market Committee Act 2003. The broad policy mandate has been to develop an efficient agri-marketing system with both back-end and front-end linkages between the growers and the industry that enables farmers to receive a fair price for their produce and consumers to realize value for their money. This chapter aims to examine and compare the magnitude of marketing and pricing efficiency realized by farmers under organized retail chains and traditional wholesale marketing formats. The analysis is based on a primary survey of 380 farm households in selected districts in Haryana where farmers have the choice to market their produce to village traders, wholesalers and organized fresh food retail chains. Broad findings reveal that farmers having contract with retail chains get atleast Rs. 100 to 150 per quintal more for their produce compared to other marketing channels. However, a negligible difference in the net price received by the contract and non-contract farmers is observed, implying that gains from retail contract are more through improvement in crop productivity. High risks on account of prices and production, rejection of produce by the company along with the fact that farmers cannot forego the wholesale markets necessitate a proactive role of the State Agriculture Marketing Board in addressing the challenges.

Keywords

Farm Size Market Efficiency Large Farmer Wholesale Market Marketing Channel 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Acharya SS (2004) Agricultural marketing—state of the Indian farmer: a millennium study. Academic Foundation, New DelhiGoogle Scholar
  2. Acharya SS, Agarwal NL (2011) Agricultural marketing in India, 5th eds. Oxford and IBH Publishing Company, New DelhiGoogle Scholar
  3. Asia-Pacific Association of Agricultural Research Institutions (APAARI) and FAO (2008) Linking farmers to market: some success stories from Asia-Pacific region. FAO regional office for Asia and the Pacific, Bangkok, ThailandGoogle Scholar
  4. Bathla S, Sharma R. K (2011) Emergence of fresh food retail chains: impact on farmers. In: Thakur AK, Sharma P (eds) Economic reforms and agriculture development. Deep and Deep Publications, New DelhiGoogle Scholar
  5. Birthal PS, Joshi PK, Roy D, Thorat A (2012) Diversification in Indian agriculture toward high-value crops: the role of small farmers. Can J Agric Econ 00:1–31Google Scholar
  6. Chen K, Shepherd AW, Silva da C (2005) Changes in food retailing in Asia: implications of supermarket procurement practices for farmers and traditional marketing systems, agricultural management, marketing and finance. Occasional Paper 8. Food and agriculture Organization of the United Nations, RomeGoogle Scholar
  7. Chengappa PG (2006) Evolution of food retail chains: evidence from South India. Paper Presented at IFPRI-IEG workshop plate to plough: Agricultural diversification and its implications for the smallholders, September 20–21, 2006. New DelhiGoogle Scholar
  8. Chengappa PG, Nagaraj N (2005) Marketing of major fruits and vegetables in and around Bangalore. Report 2004-05. Department of Agricultural Economics, University of Agricultural Sciences, BangaloreGoogle Scholar
  9. Gandhi VP, Namboodiri NV (2006) Marketing of fruits and vegetables in India: a study of the wholesale markets in Ahmedabad area. CMA Publication. 216, Indian Institute of Management, AhmedabadGoogle Scholar
  10. Gopalakrishnan S, Sreenivasa P (2009) Corporate retail: dangerous implications for India’s economy. Economic and Political Weekly, XLIV (32), 48–55Google Scholar
  11. Gorton M, White J (2006) The restructuring of agri-food supply chains in CEE and the CIS: an overview and policy implications. Working Paper No. 06/01, INTAS Project: Supporting the International Development of the CIS Agricultural Sector (SIDCISA)Google Scholar
  12. Haque T (2000) Contractual arrangements in land and labour markets in rural India. Indian J Agric Econ 55(3):233–252Google Scholar
  13. IFPRI (2009) High-value crops and marketing: strategic options for development in Uttarakhand. International food policy research Institute and Asian Development Bank (IFPRI), Academic Foundation, New DelhiGoogle Scholar
  14. Kumar P (2006) Contract farming through agribusiness and state corporation. Econ Politic Wkly 41:2747–2753, (June 30)Google Scholar
  15. Kumar P (2007) Farm size and marketing efficiency: pre and post liberalization. Concept Publishing Company, New DelhiGoogle Scholar
  16. Kumar V, Patwari Y, Ayush HN (2008) Organized food retailing: a blessing or a curse? Econ Politic Wkly 43(20):67–75Google Scholar
  17. Raju VT, Venkateswarlu M (1989) Marketing of banana in Guntur district of Andhra Pradesh. Indian J Agric Mark 3(1):38–43Google Scholar
  18. Rangi PS, Sidhu MS (2000) A study on contract farming of tomato in Punjab. Agric Mark 42(4):15–23Google Scholar
  19. Reardon T, Gulati A (2008) The rise of supermarkets and their development implications: International experience relevant for India. Discussion Paper 7, International Food Policy Research InstituteGoogle Scholar
  20. Reardon T, Timmer CP, Barrett CB, Berdegue J (2003) The rise of supermarkets in Africa, Asia and Latin America. Amer J Agr Econ 85(5):1140–1146CrossRefGoogle Scholar
  21. Shepherd AW (2007) Approaches to linking producers to markets, agricultural management, marketing and finance. Occasional Paper 13. Food and Agriculture Organization of the United Nations, RomeGoogle Scholar
  22. Singh S (2000) Contract farming for agricultural diversification in the Indian Punjab: a study of performance and problems. Indian J Agric Econ 55(3):283–94, (July-Sept)Google Scholar
  23. Singh S (2013) Vertical coordination in agribusiness in India: making contract farming work for small producers. In: Ghosh N, Shekar CSC (eds) The future of Indian agriculture: technology and institutions. Academic Foundation, New DelhiGoogle Scholar
  24. Singla N, Singh S, Dhindsa PK (2011) Linking small farmers to emerging agricultural marketing systems in India-the case study of a fresh food retail chain in Punjab. Agric Econ Res Rev 24:155–159, (January-June)Google Scholar
  25. Sreenivasa P (2007) Markets vs markets. Report Submitted to the Council for Social Development, New DelhiGoogle Scholar
  26. Sulaiman VR, Kalaivani NJ, Handoo J, Reddy TSV, Kumuda D, Hall A (2011) Organised retailing of fresh fruit and vegetables: opportunities for putting research into use?. Discussion Paper 12, RIU and LINKGoogle Scholar
  27. The India Retail Report (2007) Published by the IMAGES GroupGoogle Scholar
  28. Weinberger K, Lumpkin TA (2005) Horticulture for poverty alleviation: The unfunded revolution. Working Paper No. 15, Shanhua: AVRDC—The World Vegetable CenterGoogle Scholar

Copyright information

© Springer India 2016

Authors and Affiliations

  1. 1.Centre for Study of Regional DevelopmentJawaharlal Nehru UniversityNew DelhiIndia

Personalised recommendations