Marketing channels, price spread and constraint in the commercial egg value chain: Evidence from Manendragarh Chirmiri Bharatpur District of Chhattisgarh

Introduction

India produced 142.77 billion eggs in 2023-24, placing it among the top three egg-producing nations of the world (DAHD, 2024). Behind the aggregate growth, however, lies a sector under tightening margin pressure. Feed costs account for roughly two-thirds of operating expenditure on commercial layer farms (ICAR-DPR, 2023) [7] , while downstream realisation is shaped by the National Egg Coordination Committee's daily declared rates filtered through a chain of village aggregators, wholesalers and retailers. Producer share, therefore, depends as much on the efficiency of the marketing channel as on production economics. Marketing efficiency in this sector is not a secondary concern. Because per-unit margins are thin, small improvements in channel architecture translate into meaningful gains in producer welfare. Two analytical traditions inform the assessment of such efficiency. Shepherd (1965) [10] defined it as the ratio of value moved through the system to the marketing cost incurred. Acharya and Agarwal (2019) [1] refined this by adding intermediary margins to the denominator, producing a more conservative measure that better reflects what producers actually receive. Together, the two indices map where producers gain and lose ground within the value chain. Indian studies on egg marketing have largely concentrated on the southern and western states. Anilbhai and Shaikh (2020) [2] studied Anand in Gujarat, and Neelima et al. (2023) [8] examined East Godavari in Andhra Pradesh, both reporting channel-wise differences in producer share and efficiency. Cross-national comparisons by Baagyere et al. (2023) [3] for northern Ghana confirm that disintermediated channels tend to be more efficient but logistically demanding. For Chhattisgarh, the available evidence is older and narrower: Dileshwar (2012) [5] and Shekh (2022) [9] focused on Rajnandgaon, and Verma (2023) [11] on Raipur. None of these covers the newly constituted MCB district, and none benchmarks channel performance simultaneously through Acharya's and Shepherd's measures. The MCB district, carved from erstwhile Koriya in 2022, lies in a transitional belt where the slow contraction of coalmining employment is opening space for agribusiness diversification. Whether layer poultry can contribute to this transition depends partly on how efficiently the egg value chain functions on the ground. The present paper addresses three questions. First, how is marketable surplus distributed across channels, and does this vary with farm size? Second, how do the alternative channels compare on price spread, producer share and marketing efficiency? Third, what production and marketing constraints do producers perceive as binding, and how should these be prioritised for institutional response? www.extensionjournal.com

Materials and Methods

Study area and sampling

The MCB district lies in northern Chhattisgarh between 23°10′-23°57′ N and 81°56′-82°50′ E, sharing its northern boundary with Madhya Pradesh. Of its three administrative blocks, Manendragarh block was purposively selected on grounds of poultry concentration and accessibility to the MP consumption corridor. The sampling frame consisted of commercial layer enterprises that had operated for at least three continuous years and maintained auditable records. From this frame six enterprises were drawn, stratified following Verma (2023) [11] into three categories: small (≤10,000 birds; n = 1), medium (10,001-20,000 birds; n = 2) and large (>20,000 birds; n = 3). Mean flock strength was 19,953 birds per enterprise, ranging from 8,000 on the smallest farm to 33,111 on the largest.

Data collection

Primary data covered the year 2024-25 and were captured through a pre-tested structured schedule administered to farm operators between July 2024 and February 2025. The schedule recorded channel-wise disposal of egg output, transaction prices at each level of the value chain, marketing costs borne by producers, and rank-ordered perceptions of production and marketing constraints. Secondary references were drawn from DAHD publications, NECC daily price archives, ICAR-DPR reports, and the 20th Livestock Census.

Analytical tools

The marketing margin of the i-th intermediary was computed as Mᵢ = Pᵢ -(Pᵢ₋₁ + Cᵢ), where Pᵢ is the selling price, Pᵢ₋₁ the buying price, and Cᵢ the marketing cost borne by the intermediary. Price spread is the absolute difference between consumer purchase price and producer sale price. The producer's share in the consumer rupee was estimated as PS = (Pₚ / Pᵪ) × 100. Shepherd's marketing efficiency was estimated as ME_S = (V / I) -1, where V is the value of goods sold and I the total marketing cost (Shepherd, 1965) [10] . Acharya's modified marketing efficiency was calculated as MME = FP / (MC + MM), where FP denotes the net price received by the farmer, MC the total marketing cost, and MM the total net margins of intermediaries (Acharya and Agarwal, 2019) [1] . Higher values of either index indicate greater efficiency. Constraint analysis followed Garrett's (1969) [6] technique. Producers ranked constraints from most to least binding; the percentage position of each rank was computed as 100 (Rᵢⱼ -0.5) / Nⱼ, where Rᵢⱼ is the rank assigned by the j-th respondent to the i-th constraint and Nⱼ the total number of constraints ranked. Percentage positions were converted into Garrett scores via the standard conversion table, averaged across respondents, and used to order the constraints. The quantitative findings were triangulated through a qualitative SWOT synthesis.

Results and Discussion

Marketable surplus and channel structure

Table 1 reports marketable surplus across farm-size strata. Total egg output rose from 23.12 lakh on the small farm to 98.32 lakh on the large stratum, a 4.25-fold differential reflecting the wide flock-size range. Home consumption was uniformly 0.51 per cent across strata, suggesting that all sampled enterprises were strongly commercially oriented. Aggregate marketable surplus stood at 1.61 crore eggs per annum. Three channels were identified through stakeholder mapping. Channel I (Producer → Wholesaler → Retailer → Consumer) absorbed 89.08 per cent of the marketable surplus. Channel II added a village-level aggregator at the farm gate (Producer → Village aggregator → Wholesaler → Retailer → Consumer) and handled 10.37 per cent. Channel III bypassed the wholesaler altogether (Producer → Retailer → Consumer) and accounted for the residual 0.45 per cent, mostly to local hotels, bakeries and school hostels. Figure 1 maps the chain. Channel choice in the district is sharply scale-dependent (Table 2). Large farms route 95 per cent of their surplus through Channel I, exploiting volume-based pricing arrangements with wholesalers. The small farm, by contrast, channels 40 per cent of its surplus through Channel II. This dependence on village aggregators among smaller producers reflects the lower transaction frequencies, smaller load sizes and weaker bargaining position that characterise sub-scale enterprises. Direct retail through Channel III stays marginal across every stratum, indicating that producer-led branded or retail marketing has not yet emerged in MCB.

Price spread and marketing efficiency

Table 3 disaggregates the consumer price across the three channels at a reference retail price of ₹6.00 per egg, broadly aligned with the NECC Raipur zone-rate during the study period. The producer's net price varied from ₹4.50 per egg in Channel II to ₹4.80 in Channel III. The total price spread www.extensionjournal.com widened from ₹1.00 in Channel III to ₹1.40 in Channel II, with the additional ₹0.40 per egg in Channel II absorbed mainly by the village-aggregator margin. [8] for East Godavari and Baagyere et al. (2023) [3] for northern Ghana both report that direct or near-direct egg-marketing channels deliver higher producer share but absorb only small volumes, constrained by producer-side logistics. Figure 2 makes the contrast visible.

Constraint in production and marketing: Garrett ranking

Table 4 presents the major production and marketing constraints faced by egg producers. Among production constraints, high input costs ranked first (Garrett score 80), followed by high farm establishment costs (68) and expensive day-old chicks (59), indicating significant pressure on production expenses. Shortage of skilled labour, high electricity charges, and disease outbreaks were of moderate importance, while storage and veterinary medicine costs were ranked lower.

In marketing, unstable price trends emerged as the most serious constraint (Garrett score 73), followed by high transportation costs (57). Lack of cooperative marketing facilities (43) and low wholesale-price realization (27) were also important concerns. Overall, producers face challenges from both rising production costs and market-related uncertainties, resulting in reduced profitability and weaker bargaining power.

SWOT synthesis

Triangulating the quantitative findings with stakeholder consultations yields the SWOT mapping in Table 5. The principal strengths of the MCB layer cluster lie in its high commercial orientation, favourable sub-humid climate and proximity to MP consumption markets. The key weaknesses are its 89 per cent reliance on wholesaler-mediated Channel I, the absence of FPO infrastructure and the fragility of small-farm margins. Opportunities arise from the state's agribusiness diversification push for mining-transition districts, rising demand for branded and fortified eggs in tier-2 urban markets, and NABARD-supported credit for cold-chain and biosecurity investment. Threats are dominated by feed-price volatility, sporadic avian-influenza outbreaks and entry of vertically integrated players from neighbouring states that may compress non-integrated producer margins.

Conclusion and Suggestions

Three key findings emerged from the analysis of the egg value chain in MCB district. First, marketing channel choice is strongly influenced by farm size, with large farms selling mainly through wholesalers, while small farms rely on village aggregators who capture part of the margin. Second, the direct producer-to-retailer channel is the most efficient, but its use remains very limited due to inadequate storage, transport, and credit facilities at the producer level. Third, rising input costs and price fluctuations are the major constraints faced by producers, along with the absence of cooperative marketing infrastructure. These findings suggest the need to promote Farmer Producer Organisations (FPOs) to strengthen aggregation, storage, and market access. Establishing local egg-grading and cold-storage facilities can help producers obtain better prices and reduce marketing losses. Improved market information through platforms such as NECC and AgmarkNet can reduce information gaps, while subsidized poultry insurance can protect farmers from price risks. The study is limited by its small sample size and cross-sectional nature; future research should cover larger areas and assess the long-term impact of FPOs on producer welfare.

References

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