Marketing Efficiency of India's Horticultural Commodities under Different Supply Chains

Abstract

India's horticulture sector is growing and playing a vital role in the continent's agricultural economy. India is the second largest producer of fruit and vegetables globally, but horticultural development is currently constrained by poor marketing. The gap between prices received by farmers and those paid by consumers is large, reflecting inefficient marketing arrangements. This study estimates the market costs, market margins, price spread, the producer's share of the consumer's rupee and the market efficiency of horticultural commodities under different supply chains, and suggests measures to improve marketing efficiency. The study was conducted in the states of Andhra Pradesh, Karnataka, Tamil Nadu, Punjab, Rajasthan, West Bengal, Manipur and Mizoram, covering 29 crop types. The results show that, in the case of most commodities, marketing costs, marketing margins, transport costs and labour charges adversely affect marketing efficiency, and open market price, volume of produce handled and net price received increase market efficiency or have a positive effect. The highest marketing efficiency was found in the producer-to-consumer channel. Government policies should promote direct marketing models for more efficient horticultural marketing.