Are Supermarket Supply Channels More Efficient than Traditional Market Channels

Abstract

The study on modern retail marketing of high-value agricultural commodities is of inevitable importance in the developing countries like India. The supply of vegetables by farmers to modern retail outlets has brought in a new form of organized marketing based on consumer demand. The study has assessed the marketing system by comparing marketing cost, marketing margins, price spread, producer's share in consumer's rupee, marketing efficiency and marketing constraints of supermarket channels and two traditional marketing channels in the Rangareddy district of Andhra Pradesh. Two vegetables, viz. brinjal and bhendi, have been selected for the study. It has been revealed that the net price received by the farmers and producer's share in consumer's rupee are higher in supermarket channel than in traditional channels. The supermarket channel has been found more efficient than the traditional channels. Rejections of low grade produce, procurement according to indent and lack of knowledge of grading have been identified as the major constraints of supermarket supply farmers. The major constraints expressed by the traditional market supply farmers include middlemen menace, higher distance to the market and high market charges. The study has observed that government intervention is required to create a policy environment that may ensure a mutually beneficial relationship between the farmers and the organized sector. Investment in infrastructure, development of extension activities and linkages with farmers are the important areas where government should give due attention to strengthen vegetable supply channels in the state.