Role of agricultural marketing channels in price realization: an empirical analysis of selected crops in India

Abstract

PurposeThe provision of fair and remunerative prices to farmers through government intervention is one of the key debates to address the farmers' distress in India. This article identifies how different marketing channels are responsible for higher price realization over the officially announced minimum support price (MSP).Design/methodology/approachThe study uses the NSSO-SAS, 2012–13 and NSSO-SAS, 2018–19 for Aggregate level data and Unit Level Data on the Situation Assessment Survey of Farmers' households. It uses logit regression to determine the factors responsible for better price realization.FindingsOur major findings indicate that two factors importantly determine better price realization than MSP. Firstly, government agencies provide better prices for crops covered by MSP, such as paddy, wheat and cotton. However, the probability of receiving higher prices increases for some crops if the farmers belong to the upper land size classes and upper social category. Secondly, jowar, bajra, maize and ragi, other important crops that don't benefit from government agencies, may require higher levels of procurement at the state level.Research limitations/implicationsThe present study only analyzes selected major crops. Distance is an important factor in choosing a marketing channel that is not incorporated due to unavailability in NSS Data.Originality/valueThe study is based on the latest original empirical evidence and sheds light on the variation in price realization in different agricultural marketing channels in India.