Price Spread Analysis of Tezpur Litchi: A Case Study from Assam, India

Abstract

Purpose: Being a geographical indication certified fruit, Tezpur litchi enjoys the consumer price difference of Indian Rupees 10 per litchi from the common varieties of litchi. Therefore, it is crucial to consider the different aspects of price spread which will make a way out to provide maximum benefit to the litchi growers. With this motive, this study aimed to analyse the price spread and identify the pattern of marketing channels that would be feasible and give profitable returns to the litchi growers. Research Method: The empirical data were collected from 218 samples that included four channel members i.e., litchi growers, pre-harvesting contractors, retailers and final consumers who are mainly involved in the marketing and consumption of Tezpur litchi. The data were analysed using specific formulas of price spread, the share of channel members in consumer’s price and marketing efficiency. Findings: Four patterns of marketing channels were identified for Tezpur litchi. Channel III which included litchi growers, retailers and final consumers was found the most feasible in the study area where 79% of litchi growers directly sell to retailers instead of pre-harvesting contractors. It was observed that price spread, the share of channel members in consumer’s price and marketing efficiency shared an inverse relationship with the number of mediators in the marketing channel. However, from the practical point of view, channel III is suggested to the litchi growers for a feasible and profitable return. Research Limitations: Exact information on the distribution of Tezpur Litchi to the other states and countries was not available. Therefore, the geographical scope of the study is limited to Assam. Originality/ Value: Understanding price spread is considered very important to cognise the efficiency of the marketing channels operating for a product. An effective marketing channel not only meets the demand of the consumers but also creates a favourable environment for the growers and intermediaries to increase production and add value to the product.