The broken broker system? Transacting on horticulture wholesale markets in India (Uttarakhand)
Relying on data from a unique survey, we study the wholesale market activities of agricultural brokers in India. Three main findings emerge. First, most transactions on these wholesale markets are small cash-and-carry transactions with physical handling, quality and quantity assessment, and financial settlements all combined in a single transaction. Second, marketing regulations are ineffective as most brokers charge rates that significantly exceed the prescribed ones. Third, a majority of farmers self-select in long-term relationships with brokers, most often based on their perceived market performance. These relationships allow some of the farmers to interlink credit and insurance markets to the agricultural output market. We find that this inter-linkage does not lead to worse inputs, high interest rates, or lower implicit output prices.
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- Bell, Clive, 1988. "Credit markets and interlinked transactions," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 16, pages 763-830 Elsevier.
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