Agricultural Marketing Channels and Market Prices: Evidence from High-Value Crop Producers in India

Smallholders in developing and emerging economies face significant challenges when marketing fruits and vegetables. Over the past decades, governments have increased efforts to provide smallholders with marketing outlets, including contracting firms and government-supported outlets like “mandis” in India. This study examines the marketing outlet choices of fruit and vegetable producers in this region and assesses how marketing channel choices influence the prices they receive for their products. Utilizing farm-level data, the study reveals that local crop producers receive higher prices (13 to 73 percent more) when selling through mandis compared to private traders. In comparison, farmers of high-value export crops receive lower prices (19 percent less) when selling through mandis compared to private traders. This disparity emphasizes the need for tailored marketing policies rather than one-size-fits-all approaches for smallholders in development contexts.