Efficacy of marketing channels of horticultural crops: A study in Assam

Food-grains predominated Indian agriculture, which went through a crisis epitomized by a spate of farmers ’suicide during 1995–2004 in the aftermath of remarkable success run of the Green Revolution through the 1970s and 1980s, has since managed to recover from the depth of its trouble. One of the responses of the farming community to the crisis was to diversify production towards high value segments of horticultural crops and livestock products. However realization of benefits by farmers from such diversification is critically dependent on their linkage to appropriate post-harvest chain; as livestock and horticultural products are perishable in nature and, unlike foodgrains, cannot be absorbed in the farm households by either self consumption or storage. Hence sustaining the diversification process, which is crucial for maintaining the agricultural recovery, is critically dependent on ensuring farmers ’access to post-harvest processing/marketing channels. This can be quite a challenge in areas which are far-flung and not as well connected as central regions. With this perspective in mind a study was carried out in the state of Assam located in the peripheral Northeast region of India to examine the efficacy of existing marketing channels for selected horticultural crops. Analysis of primary data collected in 2015–16 from three non-contiguous districts of two agriculturally prominent valleys of the state, show that the farmers ’profit shares tend to be lower due to higher ‘price spread ’of the crops within the studied marketing channels. Despite awareness about more rewarding channels, farmers were often found to choose a marketing channel which results in lower price realization. This behavior of the farmers necessitated an analysis of the factors affecting their marketing channel choice decision. Investigation using a Multinomial LOGIT (MNL) model reveals that differences in transaction costs, physical capital and availability of supporting services significantly influence farmer's choice of marketing channels. Creation of the basic infrastructure that enables farmers to reach the efficient market channels may minimize their returns foregone.