Research article · 2024 · Full text
International Journal of Agriculture Extension and Social DevelopmentEvaluating the efficiency of marketing channels of farm enterprises: A study in Kolar district
Volume 7(8) · Pages 596–603 · DOI: 10.33545/26180723.2024.v7.i8i.993 ↗
Research areasGlobal Trade and Competitiveness
Abstract
Author-writtenThis study investigates the marketing channels and efficiency of farm enterprises in Kolar and Malur taluks of Kolar district, India. Data from 30 sample farmers were analyzed, focusing on four major farming systems: Crop + Sheep (C + Sh), Crop + Dairy (C + D), Crop + Dairy + Horticulture (C + D + H), and Crop + Dairy + Sericulture (C + D + S). Marketing efficiency was assessed using Shepherd's and Acharya's methods. The results show significant variations in marketing efficiency across different farming systems and marketing channels. For instance, the marketing efficiency of finger millet was higher when sold directly to the government through APMC (70%) compared to village-level sales. In sheep marketing, channel-I (Farmer to Farmer/Consumer) was more efficient, accounting for 74.73% of the sales. In milk marketing, the efficiency was highest in channel-I (Farmer to Consumer) with a 100% producer's share in the consumer's rupee, compared to channel-III (Farmer to Dairy Cooperative Society to Consumer) with a 78.6 percent share. The study highlights the challenges faced by farmers in marketing their produce, such as price fluctuations, inadequate market information, and high transportation costs. These inefficiencies reduce farmers' profit margins and limit their ability to compete in broader markets. The findings suggest that improving market access, reducing intermediaries, and enhancing infrastructure could significantly increase the marketing efficiency of farm enterprises, leading to better income stability for farmers.
Summary
Source-checkedPlain-language reading of the full paper, prepared with AI and checked against the text. Each point links to the authors' own words.
Why it matters
- Agriculture is a vital part of India's economy, accounting for about 18.8% of the Gross Value Added in 2022. View evidence ↗
- Traditional Indian agricultural marketing often relies on multiple intermediaries, which can lead to system inefficiencies. View evidence ↗
- Intermediaries often cause small and marginal farmers to receive a smaller portion of the final price paid by consumers. View evidence ↗
The question
- The study aims to investigate the efficiency and types of marketing channels used by farm enterprises in the Kolar and Malur taluks of India's Kolar district. View evidence ↗
What they did
- Primary data was gathered via personal interviews using a structured schedule from 30 sample farmers (15 from each taluk). View evidence ↗
- The research focused on four farming systems: Crop + Sheep, Crop + Dairy, Crop + Dairy + Horticulture, and Crop + Dairy + Sericulture. View evidence ↗
- Marketing efficiency was determined using the Shepherd's approach and Acharya's method. View evidence ↗
What they found
- Finger millet showed higher marketing efficiency (70%) when sold directly to the government via APMC than through village-level sales. View evidence ↗
- In sheep marketing, Channel-I (Farmer to Farmer/Consumer) was the dominant route, accounting for 74.73% of sales. View evidence ↗
- For milk, the producer's share of the consumer's rupee was highest in Channel-I (100%), followed by Channel-II (81%) and Channel-III (78.6%). View evidence ↗
- Silk cocoon marketing was more efficient in Channel-I (ratio of 3.14 to 3.25) compared to Channel-II (ratio of 1.90 to 1.99). View evidence ↗
- Tomato marketing efficiency was significantly higher in Channel-I (26%) than in Channel-II (4.93%) or Channel-III (2.80%). View evidence ↗
- Bean marketing efficiency was highest in Channel-I (24.45), followed by Channel-II (5.35) and Channel-III (2.71). View evidence ↗
- Green chilli marketing efficiency was highest in Channel-I (20.15), compared to Channel-II (7.60) and Channel-III (2.63). View evidence ↗
- Marigold marketing efficiency was highest in Channel-I (64.26), significantly outperforming Channel-II (6.21) and Channel-III (3.82). View evidence ↗
What it means
- The authors conclude that direct sales to consumers or government agencies are generally more efficient because they reduce marketing costs and the number of intermediaries. View evidence ↗
- To improve efficiency, the study recommends promoting Farmer-Producer Organizations (FPOs), improving rural infrastructure, and using digital platforms for market information. View evidence ↗
Visual summary
3 visualsIllustrations explain the paper; charts are replotted from the paper's own table values.
Marketing Channel Efficiency Comparison
AI-generated conceptual illustration (Agricultural produce from farms in Kolar district). It explains the idea and does not show study data.
View source evidence ↗Producer’s share in consumer’s rupee (%): Channel-I vs Channel-II vs Channel-III
Replotted from Table 5 (page 4) of the original paper. Every bar is the paper's own table value.
View source evidence ↗Marketing Efficiency (%): Channel-I vs Channel-II vs Channel-III
Replotted from Table 7 (page 6) of the original paper. Every bar is the paper's own table value.
View source evidence ↗Figures & tables
From the original paperIntroduction
Agriculture remains a cornerstone of the Indian economy, contributing approximately 18.8% to the Gross Value Added (GVA) in 2022 (Anonymous, 2023) [5] . The sector supports a significant portion of the population, with millions of people relying directly or indirectly on agriculture for their livelihoods. India boasts the world's largest net cropped area and ranks second in global farm output. The country is also a leading producer of a diverse range of agricultural commodities, including dry fruits, textile raw materials, pulses, vegetables, and a vast array of animal products. Despite these impressive statistics, the sector faces several challenges, particularly in the areas of production and marketing, which are critical for the sustainability and profitability of farm enterprises.
Traditional and Evolving Farming Systems
Indian agriculture has traditionally been characterized by mixed farming systems, where crops are grown alongside enterprises such as dairy, poultry, sericulture, and horticulture. These systems, developed over centuries, are designed to ensure stability in production, provide subsistence for farming families, and mitigate risks associated with environmental stresses, such as weather aberrations and pest outbreaks. However, the traditional cereal-based cropping systems often yield relatively low returns, prompting a gradual shift towards more diversified and high-value farming systems. In recent years, the farming system approach has gained prominence, adding a scientific touch to these traditional practices. This approach emphasizes the integration of multiple farm enterprises to create a more resilient and sustainable agricultural system. Crop diversification, particularly the inclusion of income-elastic goods like horticultural products, has been identified as a key strategy for increasing farm income, ensuring food and nutritional security, and alleviating poverty. The shift from traditional cereal-based systems to more flexible cropping systems that include high-value and export-oriented crops reflects this evolving approach. Along with agriculture, animal husbandry, and dairying activities have been an integral part of human life since the dawn of civilization. These two sectors have played significant socio-economic role in India due to favourable climate and topography. Livestock considered to be a valuable and critical asset of the rural poor in supporting their livelihoods particularly during unfavorable times. Mixed (crop-livestock) farming system provide flexible asset regime and reduce risk and vulnerability of the poor farmers. The growth of horticulture crops has become one of the driving forces for overall development of agricultural sector in India. With the emergence of urbanization and modernization, changes in cropping pattern from traditional to high value cash crops, especially the horticultural crops have been initiated in Indian agriculture. Sericulture being a profitable venture, is practiced in many countries of the world under varied agro-climatic conditions with global raw silk production of 1,09,111.10 million tonnes (mt). China is the largest producer of silk with a production of 68,620 mt of raw silk followed by India with a production of 35,820 mt of raw silk. Out of the total raw silk production in India, mulberry silk contributes 25,239 mt, of which 7,009 mt is bivoltine silk and 18,230 mt is multivoltine silk while, the rest is non-mulberry silk (Tasar, Eri and Muga) (Anonymous, 2019) [6] . Crop diversification is one of the best options to increase farm income leading to food, nutrition and ecological security as well as poverty alleviation. India is having traditional cereal crops based cropping systems which yields relatively low returns. However, significant changes in India are taking place over the last few decades resulting in change in cropping systems from cereal based to alternate systems. Flexible cropping systems that feature production of more income elastic goods like horticultural products are a means of diversifying their income sources. Further the importance of diversification to value-added export-oriented crops was also emphasized. The farming system is the result of interaction among several interdependent components. The farmer allocates certain quantities and qualities of four factors of production, to which he has access, to three processes i.e., crop, livestock, and off-farming enterprises in a manner which given the knowledge they possess, helps in attaining the set goals. The decision of component combination in a farming system will be conditioned by overall welfare of the households, resources availability, market access, endogenous factors like temperature, soil, rainfall etc. Hence, to understand the farming system and enhance farm income, there is a need for studying socio-economic characters and livelihood security of the farm households, agrarian characteristics and assets structure of the farm households.
The Importance of Marketing Channels in Agriculture
The success of any farming system is not only dependent on production but also on effective marketing. Marketing channels play a crucial role in the agricultural sector, determining how farm produce reaches the consumer and at what price. In India, marketing channels for farm produce vary widely depending on the type of crop or livestock product, the region, and the existing infrastructure. Traditional marketing channels in India often involve multiple intermediaries, including local traders, wholesalers, and retailers. These intermediaries play a significant role in the distribution of farm produce but also contribute to inefficiencies in the system. Farmers, particularly small and marginal ones, often receive a lower share of the final consumer price due to these intermediaries. Additionally, the lack of direct access to markets and inadequate infrastructure, such as roads and storage facilities, further exacerbates the challenges faced by farmers. (https://infah.org/animalhealth/animal-husbandry) The emergence of modern marketing channels, including farmer-producer organizations (FPOs), cooperatives, and ecommerce platforms, has begun to address some of these issues. These channels aim to reduce the number of intermediaries, thereby increasing the share of profits that farmers receive. For instance, FPOs enable small farmers to aggregate their produce, thereby gaining better bargaining power and access to larger markets. E-commerce platforms, on the other hand, provide a direct link between farmers and consumers, bypassing traditional intermediaries altogether.
Methodology
The primary data for the study was collected from 30 sample farmers from Kolar and Malur taluks of Kolar district (15 farmers from each taluk) through personal interview methods with the help of a pre-tested structured schedule. The four majorly practiced farm enterprises in the study area were Crop + Sheep (C + Sh), Crop + Dairy (C + D), Crop + Dairy + Horticulture (C + D + H), Crop + Dairy + Sericulture (C + D + S). The collected data pertains to the agricultural year 2022-23. The collected data were classified, processed and presented in order to bring out generalisation of facts from which meaningful inference can be drawn. The shepherd's approach and Acharya's method of marketing efficiency was used to determine the marketing efficiency of framing systems in the study area Acharya's method of marketing efficiency According to Acharya (2003), an ideal measure of marketing efficiency, particularly for comparing the efficiency of alternate market channels should consider all of the following. 1. Total marketing costs (MC). 2. Net marketing margin (MM). Further, the measure should reflect the following relationship between each of these variables and the marketing efficiency. 1. Higher the (a), lower the efficiency. 2. Higher the (b), lower the efficiency. 3. Higher the (c), higher the efficiency. 4. Higher the (d), lower the efficiency.
As there is an exact relationship among four variables, i.e., a + b + c = d, any three of these could be used to arrive at a measure for comparing the marketing efficiency. Marketing efficiency is the ratio of the net selling price of the grower to the total marketing cost and total marketing margin.
Shepherd's approach
In this study, Shepherd's approach was used to determine the marketing efficiency of framing systems in the study area. Shepherd suggested that the ratio of the total value of goods marketed to the marketing cost may be used as a measure of marketing efficiency. The higher the ratio, the www.extensionjournal.com higher efficiency and vice versa.
Results and Discussion
Marketing efficiency of major crops in different farming system: The marketing efficiency of the major crops grown in the study area including finger millet, cowpea, maize, tomato, green chilli, beans, marigold, rose, mango and guava are assessed.
Marketing channels of finger millet in study area
In this section, marketing channels identified for finger millet are presented. Two marketing channels that existed for finger millet in the study area are presented below: Channel-I: Farmer -APMC (Govt, PDS system).
Channel-II: Farmer -Consumers (Village level).
Farmers in the study region traded finger millet in two channels. In channel-I, the famers sold finger millet directly to Government through Regulated Markets for PDS system. About 70 percent of the farmers sold finger millet through channel-I. In channel-II, farmers sold their produce directly to households in the villages who do not grow finger millet. Farmers sold their produce to government through APMC for PDS system as they can sell large quantities of produce at remunerative prices. In addition, the marketing costs incurred for marketing of finger millet is very low in the absence of middlemen, and it saves time and money for marketing of finger millet. Farmers sold small quantities of their produce directly to consumers in the event of the requirement of cash to meet their immediate expenditure and to avoid transportation, loading and unloading charges to take the produce to APMC or any other markets (channel-2). The selection of the marketing channels becomes imperative for the farmers since the realization of remunerative price is mainly dependent upon the choice of the agency or the channel for disposal of their produce. Majority of the farmers sold their produce directly to the government to get a fair price for their produce and to save money and time.
Marketing of sheep
In the study area, two channels were prevalent for marketing of sheep. They are as follows.
Channel-I: Farmer -Farmer / Consumer. Channel-II: Farmer -Butcher -Consumer.
All the sample sheep farmers sold their sheep through channel-I, while 45 percent of the sheep farmers sold their sheep solely through channel-I. Around 55 percent of the sheep farmers sold their sheep through both the channels. channel-I accounted for 74.73 percent of the sheep sold while channel-II accounted for 25.27 percent.
In channel-I, the sample sheep farmers either sold their sheep to fellow sheep farmers in their own village as well as in the neighbouring villages who then used the sheep for breeding purposes; or sold their sheep to consumers of other villages who purchased sheep for several reasons, including slaughter or for social events such as festivals, weddings, etc. As sheep rearers sold their animals at farm gate, no marketing costs were involved in channel-I.
In channel-II, the farmers sold their sheep to butchers in their own village. In the study area, the butchers also performed the functions of traders. The butchers bought a large number of sheep from the local sheep rearers for both slaughter at their own shops and sale to other butchers in the neighbouring villages. None of the farmers sold their sheep in livestock markets / shandies as they could sell them in their own village without incurring marketing costs. The price paid by the ultimate buyer (farmer / consumer) in channel-I was ₹ 470/per kg of live sheep while in channel-II, the price paid by the ultimate buyer (consumer) was ₹ 640/-per kg of sheep meat. The producer's share in consumer's rupee was 70 percent in channel-II as the price received by the farmer was ₹ 450/per kg of live sheep. The sample sheep rearers sold only live sheep, and manure. Majority of the sample farmers used sheep manure for their own farms while a few of them sold to fellow farmers at about ₹ 3,140/per ton. These results are in conformity with the findings of Astiti (2021) [2] and Selvakumar and Kathiravan (2019) [4] .
Marketing channels of milk
Marketing channels through which farmers in the study area were marketed to the ultimate consumers. The three Channels were identified in the marketing of milk viz. The study reveals that farmer do not incur any marketing cost in channel-II, because in these channels' farmers do not transport the milk, as the private milk vendors directly collect the milk from farmers. Channel-I is considered to be beneficial to farmers as compared to other channels. In this channel, farmer sell milk directly to the consumer and hence farmer gets maximum share in consumer's price. However, farmers face problems of uncertainty in channel-I. Hence, most of the farmers prefer channel-III rather than channel-I. In this case, dairy co-operative society purchase milk in bulk quantities. The marketing cost incurred by the private milk vendors is shown in Table 3. The study reveals that private milk vendors is involved in case of channel-II where they collect the milk from farmers and sell the same to consumers. The cost incurred by private milk vendor is ₹ 1.85 per litre out of which transportation charges contribute maximum of ₹1.50 (81.08%) per litre, followed by labour charges of ₹ 0.20 (10.81%) per litre and spoilage of milk ₹ 0.15 (8.10%) per litre. The private milk vendor travel both the ways i.e., for milk collection as well as distribution of milk, hence the cost incurred by the private milk vendors is more as compared to farmers and dairy co-operative society. These results are in conformity with the findings of Mamo et al. (2021) [3] . It was found that the dairy cooperative society are involved only in milk marketing and operate in channel-III, where they collect milk from farmers and sell the same to consumers. The total cost incurred by the dairy co-operative society was ₹1.10 per litre. The cost incurred on electricity charges, milk spoilage, shop rent, and labour charges was found to be around 27 percent each and the same is presented in Table 4. The study also revealed that the chilling plant does not incur any marketing cost in channel-I and channel-II. After getting milk from farmer, the dairy cooperative society sell milk as much as possible at village level. For purchase of milk, the consumers come directly to the dairy co-operative society. After selling the milk at village level, the society send the remaining milk to processing units situated at taluk or district level. These results were in conformity with the findings of Mamo et al. (2021) [3] .
| Sl. No. | Item | Channel-II |
|---|---|---|
| 1. | Transportation charges | 1.50 (81.08) |
| 2. | Labour charges | 0.20 (10.81) |
| 3. | Spoilage | 0.15 (8.10) |
| Total cost | 1.85 (100) |
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| Sl. No. | Item | Channel-III |
|---|---|---|
| 1. | Shop-rent | 0.25 (22.72) |
| 2. | Labour charges | 0.25 (22.72) |
| 3. | Electricity charges | 0.30 (27.27) |
| 4. | Spoilage | 0.30 (27.27) |
| Total cost | 1.10 (100) |
Table text extracted from the original PDF; superscript letters are shown inline. The original table image is below.
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Marketing efficiency of milk
The marketing efficiency, marketing cost and marketing margins in the identified marketing channels for fresh milk is presented in Table 5. Farmer received high price for selling buffalo milk to Dairy Co-operative Society as it is fixed based on the fat percentage. The marketing efficiency is more in channel-II (4.27%) followed by channel-III (3.7%). Among these, channel-III is most efficient because of absence of involvement of intermediaries in milk marketing. The producers' share in consumer's rupee is more with respect to channel-I (100%) followed by channel-II (81%). These findings are on par with study conducted by Mamo et al. (2021) [3] .
| Sl. No. | Particulars | Channel-I | Channel-II | Channel-III |
|---|---|---|---|---|
| 1. | Price received by producer | 31 | 30.8 | 27.5 |
| 2. | Marketing cost | 0 | 1.55 | 8 |
| 3. | Marketing Margin | 0 | 5.65 | -0.5 |
| 4. | Consumer Price | 31 | 38 | 35 |
| 5. | Total Marketing cost and margin | - | 7.2 | 7.5 |
| 6. | Marketing Efficiency (%) | - | 4.27 | 3.7 |
| 7. | Producer’s share in consumer’s rupee (%) | 100 | 81 | 78.6 |
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Marketing of silk cocoon
The results of the analysis of marketing channels for silk cocoon are presented here. In general, the silk cocoon producers disposed their produce through different marketing channels. Two important marketing channels were identified in the study area. They are: 1. Channel-I: Producer-Wholesaler-Consumer (Reeler).
Channel-II:
Producer -Wholesaler -Retailer -Consumer (Reeler)
In the first channel, the producer sold his produce to the consumer through wholesaler. Out of 116 kg of cocoon, 108 kg (93.10%) was sold through channel-I which is presented in the Table 6.
| Sl. No. | Particulars | Channel-I | Channel-II |
|---|---|---|---|
| 1. | Quantity of cocoon sold (kg) | 85 (93.10) | 8 (6.61) |
| 2. | Selling price of producer (Rs.) | 442 | 342 |
| 3. | Purchase price of consumer (Rs.) | 623.25 | 646.7 |
| 4. | Price received by farmer (Rs.) | 431.58 | 323.25 |
| 5. | Marketing cost (Rs.) | 41.67 | 73.37 |
| 6. | Marketing margin (Rs.) | 150 | 250.08 |
| 7. | Price spread (Rs.) | 383.34 | 646.9 |
| 8. | Marketing efficiency (Ratio) | 3.25 | 1.99 |
| 9. | Producer’s share (%) | 70.92 | 52.88 |
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In channel-II, the producer sold his produce to the wholesaler, further wholesaler sold the produce to retailer. Finally, the produce reaches consumer through retailer for further processing. Out of 116 kg of cocoon, 7.67 kg (6.61%) was sold through channel-II. The results on quantity of cocoon marketed by sample farmers in local cocoon markets under different channels are presented in Table 6. These findings are in conformity with Arya (2022) [1] . Marketing cost and marketing margin vary considerably from channel to channel and are related directly to the length of the channel-I i.e., longer the channel, higher the marketing cost and marketing margin. Channel-II (Producer -Wholesaler -Retailer -Consumer) being the longest channel and in this channel the highest marketing cost and marketing margin per kg, i.e., Rs. 77.62 and Rs. 250.03, respectively were observed. Channel-I (Producer -Wholesaler -Consumer) is the shortest channel accounting for lowest marketing cost, i.e., Rs. 41.65 per kg and low marketing margin i.e., Rs. 150.10 per kg. Thus, it can be concluded that as the length of channel-I increases the marketing cost and marketing margin also increases and vice-versa.
In other words, the more the numbers of intermediaries involved between the producer and the ultimate consumers, the more is the marketing cost and marketing margin of the intermediaries. It can also be seen from the table that as the consumer paid the lowest price (Rs. 601.68 per kg) when they purchased from channel-I and paid the highest price (Rs. 624.98 per kg) when they purchased from channel-II with two intermediaries between the producer and consumer. The price paid by the consumer increased with the increase in the length of the marketing channel or with the increased in the number of intermediaries involved between the producer and the ultimate consumers.
Intermediaries rendered variety of services in the marketing of cocoon with a view to earn some profit. The price spread in the various channels involved in the marketing of cocoons is given in Table 6. The price spread in channel-I is found to be lowest (Rs. 389.31 per kg) and highest in channel-II (Rs. 665.3 per kg). Thus, it can be concluded that as the length of channel increases, the price spread also increases and vice-versa. A comparative view of producer's share and the shares of the various intermediaries involved in the different marketing channels is presented in Table 6. It is evident from the table that the producer's share in consumer's rupee decreased with the increase in the length of the marketing channels. The producer's net share is highest (69.84 percent) in Channel-1 while lowest (50.9 percent) in channel-II. Thus, Channel-II is the less favourable to the producers as their share is the lowest in consumer's rupee. It is due to the presence of large number of intermediaries in between the producer and the consumer. The farmers are not receiving good remunerative price for their produce in channel-II. Marketing efficiency is also calculated for the identified two channels by Shepherd's method and presented in Table 6. The higher the ratio, the higher efficiency and vice versa.
The marketing efficiency is found to be high in channel-I (3.14) and low in channel-II (1.90). It is higher in channel-I as price received by farmers is higher and both marketing cost and marketing margin were lower than channel-I. Thus, it can be concluded that the channel-I is efficient compared to channel-II, as the efficiency ratio is higher in channel-I.
Marketing of horticultural commodities
It was observed that intermediaries involved in the marketing of vegetables in C + D + H farming system were wholesalers and retailers. In the study area, three marketing channels existed for vegetables. They are: Channel-I: Producer -Consumer. Channel-II: Producer -Retailer -Consumer. Channel-III: Producer -Wholesaler -Retailer -Consumer.
Marketing efficiency in tomato
The Shepherd's method is followed for measuring the marketing efficiency of each channel for different grades.
The results of marketing efficiency are given in Table 7.
| Sl. No. | Particulars | Channel-I | Channel-II | Channel-III |
|---|---|---|---|---|
| 1. | Net Price received by producer | 2500 | 2360 | 2336 |
| 2. | Marketing cost | 100 | 275 | 440 |
| 3. | Marketing Margin | 0 | 290.64 | 765.11 |
| 4. | Consumer Price | 2600 | 2790.64 | 3381.11 |
| 5. | Marketing Efficiency (%) | 26 | 4.93 | 2.80 |
| 6. | Producer’s share in consumer’s rupee (%) | 96.15 | 81.50 | 69.08 |
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It is observed from the table 7, that the net price realized by the producer is Rs. 2500.00, Rs. 2360 and Rs. 2336 in channel-l, channel-II and channel-III, respectively. Price spread is Rs.100 in channel-l (Producer -Consumer). Price spread is maximum in channel-III (926.06), followed by channel-II (430.64). This is due to fact that as the market chain increases, price spread also increase. The price paid by consumer is highest in channel-III followed by channel-II.
Producer's share in consumer's rupee is highest in Channel-I (96.15%) followed by Channel-II (81.50%) and Channel-III (69.089%). It is revealed that the variation is seen in price received by farmers in different channels. This is because of variation in market margin and cost of marketing in different channels. As number of middlemen increased in marketing process, producer's share in consumer's rupee www.extensionjournal.com decreased. Table 7 reveals that in channel-I the marketing efficiency (26) is significantly better than in channel-II (4.93) and channel-III (2.87), respectively. Longer the channel-III, marketing margin resulted in low performance. Thus, the research showed that marketing of summer tomato directly by farmer without any intermediary is most successful and profitable but is performed rarely due to marketing constraints in the study field. Channel-I is the most effective channel in tomato marketing. The Shepherd's method is followed for measuring the marketing efficiency of each channel for different grades.
The results of marketing efficiency are given in Table 9. Table 9 states that the marketing efficiency in channel-I (20.15) is significantly higher than in channel-II (7.60) and channel-III (2.63). Channel-III being longest marketing channel resulted in low marketing efficiency due to many intermediaries. Channel-I was found to be the efficient marketing channel for green chillies in the study area due to less number intermediaries. As per the above discussion, it is observed that majority of the farmers sold their produce to village traders. Hence, the null hypothesis "Majority of the farmers sell their farm produce to traders" and is accepted.
| Sl. No. | Particulars | Channel-I | Channel-II | Channel-III |
|---|---|---|---|---|
| 1. | Net Price received by producer | 825.01 | 747.96 | 650.01 |
| 2. | Marketing cost | 42.93 | 63.36 | 189.27 |
| 3. | Marketing Margin | - | 49.04 | 198.05 |
| 4. | Consumer Price | 865.10 | 854.59 | 1019.1 |
| 5. | Marketing Efficiency | 20.15 | 7.60 | 2.63 |
| 6. | Producer’s share in consumer’s rupee (%) | 95.36 | 87.52 | 63.7 |
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Conclusion
The study concludes that the marketing channels and efficiency of farm enterprises in Kolar district vary significantly across different crops and livestock products. The analysis reveals that direct sales to consumers or government agencies (e.g., through APMC) generally yield higher marketing efficiency, as these channels minimize the involvement of intermediaries and reduce marketing costs. For instance, in milk marketing, channel-I (Farmer to Consumer) provided the highest producer's share in the consumer's rupee (100%), while channel-III (Farmer to Dairy Cooperative Society) was less efficient due to additional costs and intermediaries. Similarly, in the marketing of sheep, direct sales to other farmers or consumers (channel-I) were more efficient compared to sales through butchers (channel-II). The marketing of crops like finger millet also demonstrated higher efficiency when sold directly to government agencies rather than through local markets. The study identifies several key challenges that reduce marketing efficiency, including inadequate infrastructure, high transportation costs, and limited access to market information. These challenges often force farmers to rely on intermediaries, who capture a significant portion of the profit margins. Additionally, price fluctuations and the lack of organized markets further exacerbate the situation, making it difficult for farmers to realize fair prices for their produce. To improve the marketing efficiency of farm enterprises, the study recommends enhancing rural infrastructure, expanding access to market information through digital platforms, and promoting farmer-producer organizations (FPOs) to aggregate produce and negotiate better prices. These measures could lead to more sustainable and profitable farm enterprises, thereby improving the livelihoods of small and marginal farmers.
Future Scope of Work
Future research should focus on the long-term sustainability of different marketing channels in the context of evolving agricultural practices and market dynamics. Given the rapid advancements in digital technologies, there is significant potential to explore the role of digital platforms in improving market access and efficiency for small and marginal farmers. These platforms could provide real-time market information, reduce the reliance on intermediaries, and facilitate direct sales to consumers, thereby increasing farmers' profit margins. Another area of interest is the impact of government policies and interventions on the efficiency of agricultural marketing channels. Studies could evaluate the effectiveness of recent policy reforms, such as those related to the Agricultural Produce Market Committee (APMC) Acts, in reducing marketing costs and enhancing farmers' incomes. Additionally, research could explore the role of Farmer-Producer Organizations (FPOs) in strengthening market linkages and improving the bargaining power of smallholders. The integration of value-added processing within farm enterprises is another promising area for future research. By adding value to primary agricultural products, farmers could capture a larger share of the consumer price, thereby improving their income stability. Studies could investigate the feasibility of establishing small-scale processing units within farming communities and their impact on marketing efficiency. Lastly, there is a need to assess the environmental sustainability of different marketing channels, particularly in terms of carbon footprint and resource use. Future research could explore strategies to minimize the environmental impact of agricultural marketing, such as promoting local markets and reducing transportation distances. These efforts would contribute to the development of a more sustainable and resilient agricultural sector in India.
Figures and tables from the paper
| Sl. No. | Farm enterprises | Family labour | — | — | Hired labour | — | — | Total |
|---|---|---|---|---|---|---|---|---|
| Man days | Woman days | Bullock Pair | Man days | Woman days | Bullock Pair | |||
| 1. | C + Sh | 280 | 292 | 90 | 52 | 68 | 0 | 782 |
| 2. | C + D | 370 | 392 | 110 | 130 | 246 | 0 | 1,248 |
| 3. | C + D + S | 418 | 430 | 102 | 154 | 282 | 22 | 1,408 |
| 4. | C + D + H | 484 | 466 | 130 | 166 | 318 | 16 | 1,580 |
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| Sl. No. | Item | Channel-I | Channel-II | Channel-III |
|---|---|---|---|---|
| 1. | Transportation charges | 1.00 (68.96) | - | 1.00 (74.07) |
| 2. | Labour charges | 0.30 (20.68) | - | 0.20 (14.81) |
| 3. | Spoilage | 0.15 (10.34) | - | 0.15 (11.11) |
| Total cost | 1.45 (100) | - | 1.35 (100) |
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| Sl. No. | Particulars | Channel-I | Channel-II | Channel-III |
|---|---|---|---|---|
| 1. | Net Price received by producer | 892.16 | 850.08 | 678.5 |
| 2. | Marketing cost | 38.26 | 69.86 | 193.22 |
| 3. | Marketing Margin | - | 112.77 | 218.87 |
| 4. | Consumer Price | 930.10 | 1045.45 | 1074.15 |
| 5. | Marketing Efficiency | 24.45 | 5.35 | 2.71 |
| 6. | Producer’s share in consumer’s rupee (%) | 95.89 | 81.31 | 63.17 |
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| Sl. No. | Particulars | Channel-I | Channel-II | Channel-III |
|---|---|---|---|---|
| 1. | Net Price received by producer | 2418.75 | 1998.68 | 1828.91 |
| 2. | Marketing cost | 38.23 | 87.1 | 191.5 |
| 3. | Marketing Margin | 298.20 | 456.69 | |
| 4. | Consumer Price | 2456.98 | 2396.36 | 2481.23 |
| 5. | Marketing Efficiency | 64.26 | 6.21 | 3.82 |
| 6. | Producer’s share in consumer’s rupee (%) | 98.44 | 83.33 | 73.70 |
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References
4 in the original paper- Arya A. An economic analysis of production and marketing of silk in Bhagalpur district of Bihar. Agric Econ Res Rev. 2022;20(347-2016-16661):39-50.
- Astiti NMAGR. Bali cattle marketing channels and margins in the COVID-19 era. Int J Entrepr. 2021;49:24-28.
- Mamo T, Haji J, Bekele A, Teklewold T, Berg S, Moore HL, et al. Determinants of milk marketing www.extensionjournal.com channel selection by urban and peri-urban commercial dairy producers in Ethiopia. Ethiop J Agric Sci. 2021;31(3):69-100.
- Selvakumar KN, Kathiravan G. Marketing channels, market structure and conduct of cattle shandies in Tamil Nadu: an exploratory study. Int J Educ. Sci. Res. 2019;9(6):29-36.
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- Assessing Tomato Market Outlets Efficiency in Andhra Pradesh, India - Evidence from PCA-DEA Analysis ↗
K. Nirmal Ravi Kumar · International Journal of Agricultural Economics · 2025
The study aims to evaluate and compare the marketing efficiency of five tomato marketing channels—local wholesalers, Rythu Bazars, processors, retail malls, and restaurants—in terms of net price realization for smallholder farmers in Andhra Pradesh. A two-stage sampling framework was employed, selecting Ananthapuramu district due to its prominence in tomato cultivation and further narrowing the focus to Kalyanadurgam and Settur mandals.…
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