o_19o8o2p3caodql31lkk1jkdaaa.pdf

IMPACT OF ORGANIZED RETAIL CHAINS ON REVENUE OF
FARMER (A CASE STUDY OF MOTHER DAIRY CENTRE S IN
HARYANA)
JITENDER SINGH
ASSISTANT DIRECTOR
RESEARCH STUDIES
OFFICE OF THE ECONOMIC ADVISER
DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION
MINISTRY OF COMMERCE & INDUSTRY
UDYOG BHAWAN, NEW DELHI
INDIA
2011
Views expressed in this paper are those of the author(s) and may not be attributed
to the Government of India.

Acknowledgement
This acad em ic end eavor w ou ld not h ave been pos s ible w ithou t th e
help of a num ber of people w h o w ith th ere k ind cooperation, active
supervision and steadfast support have made this research work reality.
I am extrem ely grateful to Prof. R. K. S harm a, w h os e k een
continuous encouragement and suggestions helped to complete this work.
I am th an k ful to S hri M.C. S ingh i, S en ior Econom ic Ad vis er, for his
valu able com m en ts an d encouragem en t to com plete th is w ork . I als o
extend m y s incere gratitu d e to S hri S aju K. S urend ran , Depu ty Director
and Shri Ashwani Kumar, Deputy Director for their precious comments.
I w ou ld lik e to m en tion appreciation es pecially to villagers / farm ers
w h o helped m e to th eir m axim u m th roughou t th e field w ork . I am als o
th an k ful to m y colleagues in th e Office for in s piring m e an d actively
participating in th e d ebate an d d is cu s s ion s on related is s ues .
Palace:
Date:
Jitender Singh
2 | P a g e

CONTENTS
SN Subject Pg. No.
1 Introduction 5
2 Rise of Organized Retail Chains 6
3 Studies of Marketing Efficiency 10
4 Objectives of the Study 11
5 Data & Methodology 11
6
7
Comparison of the Alternative Models of the Direct
Procurement of Vegetables
Market Integration and Uncertainty in the Prices of
Alternative Marketing Channels
8 Impact on Revenue 17
9 Conclusion 23
10 Bibliography 24
11 Annexure 32
12
15
Table Title Pg.
No.
1 Vegetable Production & Inflation in India 5
2 Augmented Dickey Fuller Unit Root Results 15
3 Co integration Results 16
4 Variability of Prices 17
5 Th e h ypoth etica l va lu es to s h ow im pa ct of price a n d 18
quantity changes on revenue of the farmer
6 Avera ge Net Reven u e of Tra dition a l Ma rket a n d MD 20
Channel
7 Results of the above equation 21
8 Ela s ticity of Prices w.r.t. Arriva ls (Arr) a n d procured 22
quantity (PR).
3 | P a g e

Abstract
The objective of the s tud y is to exam ine th e term s an d cond ition s of th e
procurem en t con tracts of Mother Dairy and Reliance Fres h and als o com paring revenue
impacts of Mother Dairy and Traditional Marketing Channel on farmer. It is found th a t th e
by la w s of the Reliance Fres h is m u ch better th an the Moth er Dairy procurem en t con tract
in term s of price inform a tion, qu ality m on itorin g, m od e of pay m en ts etc. The relatively
simple con tract of Reliance Fres h provides an ed ge to th e Com pan y to attract better
quality of the prod uct. How ever it d oes not m ean th a t th e Mother Dairy d oes not pu t u p an
incen tive to grow m ore and better quality to th e farm er. Des pite th e com plexity of the
con tract of Mother Dairy (MD), it provid es a rela tively better d eal to th e farm er as com pare
to th e trad ition al m ark et ch ain. This m ay be th e reas on th a t it h as been s ucces s ful for
s uch a long tim e in m an y areas . On th e practical s id e of the im pacts of MD it is found th a t
except Green Chilli On ion, and Mus k Melon th e prices of local m ark et are co-integrated
w ith Mother Dairy prices . How ever, th e net revenue of the MD is es tim a ted m ore vola tile
th en TM for all th e vegetables except Bh ind i and Tom a to. This is quite oppos ite to the
notion th a t the organ iz ed retail ch ains w ill s tabiliz e th e prices for the farm er and
cons equen t th e returns w ou ld be s tabiliz ed . How ever, the higher ins tability of revenue
d oes not m ean th at it affect farm ers incom e alw ay s negatively , rath er the effect m ay be
pos itive if th e prices are fluctu a ting upw ard . The net revenue of the farm er for s elected
vegetables is found on an average 17 per cent higher for carrot, 134 per cent for Lauki, 17
per cen t for Green Chilli, 45 per cen t for Onion, 50 per cen t for Bhind i, and 57 percen t
higher for Mus k Melon, in th e MD as com pare to TM except Cau liflow er. Bes id es , d irect
revenue im pact, th ere are ind irect im pact on th e revenue of the farm ers of the d irect
procurem en t of MD. And it is not only confined to thos e s upply ing to MD rath er extended
to all th os e farm ers s upply ing to the TM. The ind irect im pact als o s eem s to be
cons id erable given th e fact of low d erived d em an d elas ticity of the local m ark ets . In s hort
the direct procurement of the MD has enhanced the farmer s revenue.
4 | P a g e

I
INTRODUCTION
Why low grow th of area und er vegetable an d high rate of inflation an d
perh aps profitability in vegetable coexis t? Is it becau s e th e price
ad van tages d o not accrue to th e farm ers or producing vegetables is a risky
business?
1.2 The widening gap between dem a n d a n d produ ction of the
vegetables h a s been eviden t in ris in g p rices of vegeta bles in recen t pa s t.
The average increase in the prices of vegetables at wholesale markets was
9.5 per cen t du rin g 2006-2010. The contributory factors for this increase
have been a n in crea s e in dem a n d a n d s ticky s u pplies . On th e dem a n d
side, th e per ca pita in com e of th e cou n try is ris in g a n d th e con s u m ption
pattern is getting diversified towards vegetables.
Year
Table: 1. Vegetable Production & Inflation in India
Production
(T)
Production
Growth
(%)
Yield
(Tone/hec.)
Area
('000'
Hec.)
Area
Growth
(%)
Yield
Growth
Inflation
in
Vegetable
(%)
2006-07 114993 3 15 7581 5 -2 0.5
2007-08 128449 12 16 7848 4 8 19.9
2008-09 129077 0 16 7981 2 -1 3.5
2009-10 133738 4 17 7985 0 4 14.0
Source: National Horticulture Board, and the Office of the Economic Adviser.
1.3 On th e s u pply s ide th e produ ction of vegeta bles is n ot keepin g th e
pa ce with dem a n d. Th e low growth of th e vegeta bles produ ction du rin g
2008-09 a n d 2009-10 h a s been n ot on ly beca u s e low yield bu t a ls o
beca u s e of low growth in th e a rea u n der vegeta bles . Th is in dica tes th a t
th e in cen tives for th e crop diversification perh a ps were not sufficient
en ou gh to in du ce a lloca tion of a rea to vegeta bles. Wh y th e fa rm er is n ot
diversifying a rea towa rds vegeta ble wh en prices of vegeta bles h a ve been
very h igh ? Th e m a in rea s on for s low crop divers ifica tion towa rd
vegetables is the h igh ris k-h igh retu rn pa ttern of th e vegeta bles. Th e
high risk is due to fluctuating prices in the local markets and a low share
in a u n it of con s u m er price. Th e fa rm er m a y n ot n eces s a rily be a ris k
a vers e bu t h a s a low ris k a ppetite. La ck of credible in s titu tion a l
m ech a n is m wh ich cou ld res u lt in a n in crea s e in h is s h a re in ea ch ru pee
a consumer spends on vegetables is further reinforcing this risk aversion.
5 | P a g e

1.4 Th e s m a ll s ize of th e loca l m a rket a n d its dis in tegra tion , h a ve
m a de th e prices s u pply s en s itive. Bu t wh ile fa rm ers a re n ot a ble to
ben efit from th e in crea s e in prices , a fa ll h its th em im m edia tely. Dem a n d
for vegeta bles , in s o fa r a s th e fa rm ers a re con cern ed is a derived
dem a n d, th e dem a n d of th e in term edia ries . Th e exis ten ce of perfect
com petition a m on g th e fa rm ers a s s ellers of vegeta bles a n d a few
oligopolistic bu yers or m iddlem en , th erefore, res u lts in distortion of the
in cen tive s tru ctu re. Flu ctu a tin g prices of th e vegeta ble, wh ich a re kept
low by th e in term edia ries ; do n ot provide en ou gh in cen tives to th e
farmers to produce more vegetables. Prevalence of high prices and higher
in fla tion a re also du e to th e h igh tra n s a ction cos t of vegeta bles tra n s fer
a n d h igh m a rgin s of th e m id dlem a n . Bes ides , th e peris h a ble n a tu re of
th e vegeta ble togeth er with in a dequ a te s tora ge fa cility, im proper dem a n d
m a n a gem en t a n d in efficien cy in s u pply chains create h u ge wa s tes in
transit. In this situation, while increased supplies results in a price crash
for fa rm ers , lower s u pplies does n ot provide th em a n y econ om ic ren t.
Th is fu rth er rein forces th e ris k a vers ion of th e fa rm ers . On e option for
th e efficien cy in th e s u pply ch a in s is to encourage orga n ized reta il
chains.
2. RISE OF ORGANIZED RETAIL CHAINS
2.1 The evolu tion a n d pa ttern s of th e diffu s ion proces s of m odern food
reta il in du s try h a s varied worldwide, bu t its en try a n d con s is ten t
in crea s e in m a rket pen etra tion h a ve had sign ifica n t im plica tion s across
all countries including US, European Union and the developing countries
of La tin Am erica a n d Ea s t As ia in clu din g Ch in a 1 . For In dia , th e s ize of
food reta il in 2008-09 wa s es tim a ted a t a bou t Rs .10,700 billion, wh ich is
61 per cen t of th e tota l reta il in du s try. Wh en 95 per cen t reta il is in
unorganized sector, th e orga n ized reta il (only 5 per cen t) is likely to grow
a t a n a n n u a l ra te of a rou n d 11 per cen t a n d is projected to tou ch
bu s in es s levels of Rs 53,000 billion by 2020. The Agri-food reta ilin g
accounts for 18 per cent of the organized retail today and is likely to have
a lower share (12 per cent) by 2020 2 . According to ICREAR report annual
growth ra te of orga n ized reta il in food a n d grocery is es tim a ted at 16
percen t du rin g 2004 2007 3 . Oth er es tim a tes pu t th e growth ra te of
1
The IFPRI Discussion Paper (2008).
2 NABARD study on Organised Agri-Food Retailing in India(2011)
3 Impact of Organized Retail Chains on Income & Employment, ICREAR(2009).
6 | P a g e

orga n ized food a n d grocery a t h igh er level of 42 percen t in 2006 over
2005 4 .
2.2 The s h a re of expen ditu re towa rds food a n d bevera ge in tota l
con s u m ption expen ditu re of th e h ou s eh olds is expected to declin e. Su ch
a declin e, a s per th e En gle La w, is a n orm a l h a ppen in g a s pa rt of th e
proces s of developm en t. Th e orga n ized reta il m a y a ls o, th erefore,
experien ce a declin e in ra tio of th eir bu s in es s tu rn over derived from th e
s a le of food rela ted produ cts . Th ere wou ld, h owever, be two pos itive
fa ctors . Th e ris in g in com es a n d s ta n da rds of livin g a re expected to pu s h
u p th e dem a n d for h igh va lu e foods. Th e ch a n ges in con s u m er beh a vior
a n d preferen ces in fa vou r of proces s ed foods a s a res u lt of a n in crea s in g
pa rticipa tion of wom en in la bou r force cou ld h elp in s u s ta in in g th e
orga n ized reta il s s h a re in food a n d rela ted produ cts . Moreover,
in crea s in g u rba n iza tion is a ls o a s s ocia ted with a ch a n ge in th e s h oppin g
beh a vior of th e m iddle cla s s du e to h igh er in com es a n d increasing
opportu n ity cos t of tim e for th e con s u m ers (bu yers ), pa rticu la rly th e
women. Im provem en t in proces s in g tech n ology, progres s on a ccou n t of
roa d con n ectivity, in ves tm en t in s tora ge fa cilities , fa s t a n d s a fe tra n s port
a n d in form a tion tech n ology revolu tion is likely to s olve m a n y of th e
problem s of m a rketin g s ys tem a n d provide opportu n ities to priva te
traders.
2.3 In crea s ed in ves tm en t in orga n ized reta il by dom es tic a n d foreign
pla yers brin gs a bou t u pstrea m ch a n ges in s u pply ch a in a n d a n
in crea s ed cen tra lized procu rem en t of a gri produ cts from fa rm ers a s th e
experien ce of th e Ea s t As ia n cou n tries s u gges t. Th e ra pid ris e of
s u perm a rkets in differen t cou n tries h a s tra n s form ed th eir a gri-food
system, though the speed of transformation has been different. In case of
In dia th e tra n s form a tion a s of n ow h a s been s low both a t u pstrea m a n d
at downstream. In the downstream changes; the retail sector is now open
for th e corpora te to develop s u perm a rket in fra s tru ctu re, th e foreign
investment is likely to flow in near future.
2.4 The direct procu rem en t in fresh fru its a n d vegeta bles may offer
better price, provide kn owledge of market demand, tech n ologica l in pu ts
a n d a cces s to credit on a ccou n t of a s s u red m a rket to th e fa rm ers . While
it is es tim a ted th a t direct procurement of fres h fru its a n d vegeta bles
4 The India Retail Report, Ministry of Commerce and Industry, 2007.
7 | P a g e

could redu ce wa s ta ge by a bou t 7 per cen t a n d ca n im prove th e ch a in
efficien cy by a s m u ch a s 17 per cen t, th ere is n o con s en s u s wh eth er th e
upstream operation of supply chain would be inclusive and cover farmers
of a ll s izes of la n d h oldin gs . Th e tra dition a l ch a n n el where h u ge wa s ta ge
of com m odities , la ck of in fra s tru ctu re, m is s in g in s titu tion , la ck of
s ta n da rdiza tion a n d m oreover la ck of in cen tives to in ves t in s tora ge
facilities, standardization, packaging etc are very much evident.
Experiences of other institutional innovation in agri-marketing
2.5 The experien ces of th e con tra ct fa rm in g, pa rticu la rly regarding th e
in clu s ion of s m a ll fa rm er under con tra ct fa rm in g, th e dis tribu tion of
profits between fa rm ers a n d the con tra ctor, s h a rin g ris k by a gribu s in es s
firm s , a n d m in im iza tion of th e a dvers e im pa cts on en viron m en t a n d
society h a ve led to m ixed res u lts . Th ere a re va riou s price a n d n on -price
effects on a gricu ltu re. Some positive im pa cts of con tra ct fa rm in g in clu de
th e crop divers ifica tion , in crea s e in produ ctivity, im provem en t in th e
profita bility of fa rm ers, improved decis ion m a kin g, increase in wages a n d
em ploym en t of a gricu ltu ra l la bor a n d tech n ology tra n s m is s ion . Th e is s u e
of in clu s ion is m ore im porta n t beca u s e of em ergin g tren ds of large
n u m ber of s m a ll fa rm er in In dia a n d decreasing s ize of la n d h oldin gs . A
s m a ll fa rm er opera tin g predom in a n tly with fa m ily la bor h a s m a n y
advantages which reduce th e cos t of la bor s u pervis ion , cos t of
monitoring, screen in g of h ired la bou r, cos t of con tra ct en forcem en t a n d
cos t of n egotia tion 5 . Collectively, it is ea s ier to dea l with s m a ll fa rm ers by
the contracting firms which reduce th e pos s ibility to get involved in to a
con flict. On th e oth er h and, th ere a re disadvantages du e to high
dependency on farm in com e wh ich redu ces h is ba rga in in g power, low
capacity to invest restricts (prohibits) implementation of new technology
and to experiment with new farming practice and crops etc..
2.6 Th e s m a ll fa rm er is in teres ted in ta kin g u p con tra ct fa rm in g
beca u s e it fa cilita tes a va ila bility of m odern in pu t, wh ich a re eith er
u n a va ila ble or cou ld be obta in ed th rou gh other sources a t a very h igh
cost 6 . Con tra ct fa rm in g a ls o redu ces his price ris k and eventually
stabilizes in com e. Th e firm s , h owever, prefer la rge growers to a void
dea lin g with la rge n u m ber of s m a ll fa rm ers. It is n ot on ly ea s y to ba rga in
5
Key, Nigel and Runsten, D. 1999
6
Porter Gina and Howard Phillip K., 1997
8 | P a g e

with s m a ll n u m ber of la rge fa rm er, it is a ls o a dva n ta geou s to th e firm to
redu ce th e in pu t s u pply cos t, cos t of s u pplyin g exten s ion s ervices . La rge
fa rm s h a ve a h igh er ris k ta kin g a bility, ca n pu t in la rger in ves tm en ts in
la n d. Th ey h a ve rela tively better qu a lity la n d m ore u n iform a n d
consolidated. Ma n y s tu dies 7 reveal th a t th e s ys tem of con tra ct fa rm in g
is s kewed towa rds m ediu m a n d la rge fa rm ers , th ou gh there were n o
s ign ifica n t differen ces in produ ctivity between s m a ll, m ediu m a n d la rge
farms . Th ere wa s n o dis crim in a tion in procu rem en t by a gribu s in es s
firms as well as price obtained by small and large farmers.
2.7 Th e exclu s ion of th e s m a ll fa rm er eviden t in th e con tra ct fa rm in g,
m a y h a ve s evere con s equ en ces for ru ra l econ om y. If firm ch oos e to
con tra ct prim a rily with la rge com m ercia l fa rm s , then small fa rm er of th e
ru ra l popu la tion may fa il to ben efit directly from con tra ct a rra n gem en ts .
In th e con text of libera lized m a rkets , con tra ct fa rm in g th a t exclu des
s m a ll fa rm er ca n lea d to m ore con cen tra ted la n d own ers h ip a n d
dis pla cem en t of ru ra l poor 8 . Th e wa y con tra cts a n d th e in com e ea rn ed
from con tra ctin g is dis tribu ted with in a ru ra l com m u n ity ca n h a ve
important implication for economic and social differentiations within that
community 9 . Th es e is s u es a re pa rticu la rly im porta n t in th e con text of
In dia wh ere 85 percen t of la n d h oldin g are s m a ll a n d m a rgin a l h oldings
a n d m ore th a n 40 percen t of ru ra l popu la tion is la n d les s . Addition a lly,
th ere is a s ocia l s tra tifica tion with h igh -in com e in equ a lities in ru ra l
areas.
2.8 Even if small farmers are incorporated in contract farming, there is
n o gu a ra n tee th a t th e contracting firm wou ld n ot exploit or a t lea s t
provide s om e ben efits to th e s m a ll fa rm er. In th e absence of
representative farmer s orga n iza tion s , th e con tra ct-fa rm in g s ch em e may
have a limited regional/ local impact. 10 Large number of small farmer are
more pron e to rem a in u n orga n ized du e to m is s in g n etworkin g, la ck of
information a n d lim ited a wa ren es s of orga n iza tion ben efits . In th e lon ger
run, h owever, if th e con tra ctin g firm becom es perva s ive, th e fa rm er m a y
n ot h a ve any option but to s ell th eir produ ce through th es e ch a n n els,
but if these channel become nonoperational, farmers may need to reverse
their con tra ct a n d s witch over to oth er firm . Th ere a re oth er pos s ibilities
7
Kumar Promod (2006)
8
Key, Nigel and Runsten, D. 1999
9
Korovkin, 1992
10
Porter Gina and Howard Phillip K., 1997
9 | P a g e

a ls o; th e firm ca n m a xim ize its s h ort ru n profits with ou t con cern in g
a bou t s u s ta in a bility of the fa rm a n d the fa rm er a n d by exh a u s tin g th e
potential of the region it may switch over to other relatively regions.
2.9 Th is ea s y s witch over by firm to oth er region to con tra ct or to
procu re th e produ ce a n d any lim its on th e exit of th e fa rm er from
con tra ct m a y dis tort th e ba rga in in g power equ a tion in th e lon g ru n in
fa vors of th e firm . Som e a ltern a tives , h owever, h a ve em erged. The
s ch em es to prom ote direct m a rketin g ch a n n els a re Apn i Ma n di, Ryth u
Ba za rs , Ha dspa r, Uzh a va r Sa n dies etc. in va riou s Sta tes. Th e prom otion
of in ves tm en t in s u perm a rkets a n d reta il ch a in s a ls o is th e s tep in th is
direction.
Studies of Marketing Efficiency
2.10 Th ere a re m a n y s tu dies on es tim a tion of opera tion a l m a rketin g
efficien cy of tra dition a l m a rketin g ch a in s , m os tly u s in g th e fa rm er s
s h a re in th e con s u m er price. Th e s tu d y of Th a k u r, (1994) h a s observed
that in ca s e of Tom a to, Ca u liflower, Capsicum, a n d Pea s in Him a ch a l
Pa rdes h du rin g 1991-92, m a rket efficien cy wa s between 46-52 %. In
a n oth er s tu dy of Karnataka state, du rin g 1985-86, by Kires u r et a l,
(1989) a ls o revea led th e low m a rketin g efficien cy (36 to 51 %) in
peris h a ble com m odities like Tom a to, Brin ja l, wh ile in ca s e of pota to a n d
on ion , wh ich a re rela tively du ra ble vegeta bles with a lon ger s h elf life, th e
m a rketin g efficien cy was between 60 to 67 %. In a s tu dy of wholesale
market in Bangalore by Chengappa and Nagaraj (2005), it was found that
reta il ch a in s h a d en h a n ced th e fa rm ers profita bility by 10-15% as
com pa red to th e tra dition a l ch a n n el a n d redu ced the m a rketin g cos t by
about 4.25% to 8%..
2.10 Des pite, th e cla im s th a t orga n ized reta il ch a in s wou ld im pa ct
fa rm ers in a better wa y in term s of en h a n cem en t of in com e, fa rm
efficiency a n d, u pda tin g fa rm ers with m a rket rela ted in form a tion etc,
thes e pos itive im pa cts on fa rm ers a re depen den t on th e term s a n d
con dition of th e procu rem en t con tra ct. These term s a n d con d ition s
defin e th e lega lity a n d en forcea bility of th e con tra ct. Th e des ign of th e
procurement contract also provides for some obligations on company and
the fa rm er, wh ich once in s titu tion a lized cou ld s erve a s a m odel con tra ct,
beneficial to both the contracting firm and the farmers.
10 | P a g e

2.11 The direct procu rem en t con tra cts , with bin din g or flexible s u pply
option s , n eed to des ign a n in cen tive m ech a n is m wh ich ben efits fa rm ers .
The focu s of th is pa per is , th erefore, also on th e a n a lys is of th e
a ltern a tive m odels of direct procu rem en t of fres h vegeta bles . Th ere a re
m a n y con tra cts with differen t term s a n d con dition s operating
simultaneously ba s ed on th e va ryin g ba rga in in g powers of th e
con tra ctin g pa rties . However, n ot a ll th ese con tra cts a re s u s ta in a ble in
th e fu tu re. It m a y, th erefore, be n eces s a ry to s tu dy of th e n a tu re of
contracts clos ely to assess th eir efficien cy a n d s u s ta in a bility a n d their
impact on parties. This study examines the relative efficiency of vegetable
procu rem en t con tra cts of Moth er Da iry a n d Relia n ce Fres h a n d the
tra dition a l ch a n n els of m a rketin g of th es e produ cts a n d va lida tes th e
impact through field observation.
3. OBJECTIVES OF THE STUDY
I. Exa m in a tion of th e des ign of th e a ltern a te Models of direct
procurement.
II. Tes tin g co-m ovem en t a n d u n certa in ty of th e p rices of a ltern a te
channels.
III. Es tim a tion of In com e effect of th e a ltern a tive m a rketin g ch a n n els
on the farmers.
4. DATA & METHODOLOGY
4.1 Th e s tu d y is ba s ed on prim a ry da ta on prices a n d qu a n tity,
collected from growers payment sheets s u pplied by Mother Dairy centers
from 2005-2007. Procurement cen tres s elected for th e s tu dy in clu ded
Pu th i, Moi, Ra bh ra , Ba lya n a a n d Kh a n dra i in Son epa t dis trict in
Haryana. Th e wh oles a le prices for res pective vegeta bles were collected
from th e records of th e Ma rketin g Com m ittee of th e n ea res t m a rket. Th e
m a rketin g cos t da ta was collected from fa rm ers du rin g th e prim a ry
survey. A s et of ra n dom ly s elected fa rm ers a re in terviewed. Th e
vegetables covered u n der s tu dy were s elected on th e ba s is of da ta
a va ila bility from th e Moth er Da iry cen tres , wh ich a re a ls o la rges t grown
vegetables in the sample villages. The vegetables e.g. bottle gourd, carrot,
on ion , green ch illi, tom a to, la dy fin ger, ca u liflower, and m u s k m elon are
included in this study.
11 | P a g e

5. COMPARISON OF THE ALTERNATIVE MODELS OF THE
DIRECT PROCUREMENT OF VEGETABLES
Model: Mother Dairy
5.1 Moth er da iry (MD) u n der th e Na tion a l Da iry Developm en t Boa rd
(NDDB) s ta rted in 1985 a s a n orga n ized reta il ch a in of fru its a n d
vegetables in In dia . The procurement in 1985 was just 250 kg of
vegetables wh ich in crea s ed over th ou s a n d folds to rea ch 250,000 kg in
recen t yea rs . In th is s h ort s pa n of tim e it h a s becom e la rges t reta il ch a in
in As ia a n d th e s econ d la rges t in the World. Th e popu la r Bra n d u n der
which MD is doin g bu s in es s is Sa fa l . It procu res 40-45 s ea s on a l item s
of fru its a n d vegeta ble from over 17 s ta tes in In dia . Arou n d 22,000 s m a ll
and big farmers a re s u pplyin g th eir produ ce to MD wh ich a re directly
lin ked to it a t u pstrea m of th e ch a in . At down s trea m , th ere a re a rou n d
350 outlets spread across the National Capital Region (NCR) Delhi selling
th e procu red fru its & vegeta bles . Th e dis tribu tion centres a t
Pa lla ba kh ta va rpu r a n d Ma n golpu ri in Delh i lin k th e fa rm ers a n d the
consumers. At distribution centre huge storage and logistic facilities have
been put in palace.
5.2 At u pstrea m MD opera tes th rou gh procu rem en t cen ters spread
a cros s th e cou n try to procu re fres h a n d qu a lity vegeta ble from growers .
Th e loca lly produ ced top qu a lity vegeta bles a n d fru its a re procu red a t
remunerative prices from th e fa rm ers . Fa rm ers As s ocia tion s also exists
wh ere fa rm ers elects on e Pres iden t from among themselves. The
Secreta ry, wh o is a ls o res pon s ible for th e en tire a rra n gem en t of
procu rem en t a n d record m a in ten a n ce, is a ppoin ted by MD. Secreta ry is
en titled to get s a la ry for h is s ervices a t procu rem en t cen tre. Ma jor cos ts
incurred during procu rem en t s u ch a s pa ym en t of s a la ries to secretary,
helper, safai ka ra m ch a ri a n d ren t pa ym en t for th e la n d a n d s h ed of th e
centre a re pa id from th e As s ocia tion s fu n ds. Th ese fu n ds a re gen era ted
from th e con tribu tion of th e 1.75 per cen t of th e tota l va lu e of procured
qu a n tity from th e cen tre. All th es e cos ts in clu din g the transportation
a n d h a n d lin g ch a rges in clu din g th e m a rket fee a re dedu cted from th e
growers price. The price pa id to th e fa rm er is net of a ll th e ch a rges a n d
costs incurred until the produce reaches the distribution centre.
5.3 Farmers brin g th eir vegeta bles to th e procu rem en t cen tre on da ily
ba s is a n d a fter pa cka gin g a n d weigh tin g, th es e a re tra n s ported to th e
12 | P a g e

distribution centre of MD every evening. During procurement special care
is ta ken by th e s ta ff a t procu rem en t cen tre to en s u re th a t th e
procu rem en t m eets th e qu a lity n orm s of MD. Res t of produ ct is retu rn ed
to th e fa rm ers to be dis pos ed of by th em a t th e n ea res t Ma n di. Mandi,
th erefore, fa ces a n a dvers e s election a s th e produ cts brou gh t a re in a
wa y rejects of MD. Bes ides a los s in term s of th e prices , fa rm ers a re
requ ired to in cu r expen ditu re on tra n s porta tion a n d m a rketin g. It a ls o
in volves s pen din g a m in im u m of th ree to fou r h ou rs a n d h a ve a n
opportu n ity cos t. 11 . MD does n ot lift th e en tire qu a n tity produ ced. The
s ecreta ry a t th e procurement centre, a s th e key a gen t of th e MD
coordinates th e procu rem en t. MD in form s th e s ecreta ry of its
requ irem en ts on a da ily ba s is a n d th es e a re com m u n ica ted to th e
fa rm ers . Tota l qu a n tity procu red by MD on d a ily ba s is , particularly
during th e pea k tim e of s ea s on in term s of th e produ ce, is les s th a n th e
total produce of the day. Consequently only a part of the farmers produce
is procu red and n ot th e wh ole produ ce, in depen den t of its qu a lity. Bein g
in th e n a tu re of peris h a bles, th e vegeta ble ca n n ot be h old, th e exces s
produce, therefore, a fter s u pply to MD, is s old in th e loca l Ma n di,
(Annexure 2).
5.4 MD does n ot provide th e fa rm ers a n y credit or in pu t s u pport.
Vegeta ble growers , wh o do n ot h a ve m a rket s u rplu s of food gra ins,
depen d on com m is s ion a gen ts for m eetin g th eir credit a n d in pu t n eeds.
Since these farmers bring relatively poor quality of vegetables (as the first
gra de h a s a lrea dy been offered to MD), its a ffects th eir credit ra tin g. The
farmers vis ited du rin g th e survey were requ es ted to give th eir opin ion on
th e is s u e of difficu lties fa ced by th em in gettin g credit. It wa s observed
th a t th e s m a ll fa rm ers wh o m os tly grow vegeta bles h a ve a rela tively
grea ter depen den cy on com m is s ion a gen ts for credit a n d in pu ts a n d they
are the worst affected.
5.5 The famers a ls o m en tion ed th a t th e qu oted price of th e s u pply is
n ot kn own a t th e tim e of s u pply. It is on ly on th e n ext da y wh en th e
ten ta tive prices are informed. Th e a ctu a l price is delivered to th e fa rm ers
after ten days when their payment sheet is received by the secretary from
MD. Th e a ctu a l weigh ts a n d qu a n tity th a t h a s fin a lly been a ccepted is
indicated on ly in th e grower pa ym en t s h eet, though ten ta tive qu a n tity
a n d percen ta ge of rejection is in form ed to th e fa rm er on th e n ext da y of
11 IFPRI 2010
13 | P a g e

th e s u pply. Th e pa ym en t made a fter ten da ys of th e s u pply th rou gh a
bearer cheque.
5.6 Th e prices a re a little m ore u n certa in in MD th a n in Ma n di, in th e
s en s e th a t in Ma n di th e prices a re kn own to th e fa rm er on th e s pot.
Wh ile in MD, firs t th e produ cts a re s u pplied a n d on n ext da y prices a re
told to farmers. Comparing with contract farming, in MD there is no price
or qu a n tity con tra ct form a lized with fa rm er. Th e MD is n ot bou n d to
procu re th e qu a n tity offered by th e fa rm ers . On th e other hand MD gives
freedom to th e fa rm ers to n ot to s u pply to th em , or s ell a n ywh ere els e.
Com pa red to formal con tra ct fa rm in g, th e flexibility wh ich MD offers to
fa rm ers is often is ris ky, pa rticu la rly to a s m a ll fa rm er, beca u s e th e
prices and quantities procured are determined on daily basis.
5.7 Ma n y of th e fa rm ers m en tion ed du rin g th e s u rvey th a t if th ey are
in form ed of th e prices a t th e tim e of s u pply of th eir p rodu ce, th eir
decis ion to s ell to MD or in a Ma n di cou ld be ba s ed on better
information. Th e qu a lity con trol of MD was also reported to be of a
s ign ifica n tly h igh er level a n d s trin gen t wh ich lea ves a s iza ble portion of
produ ce to be m a rketed th rou gh th e Ma n di. Som e of th e fa rm ers a ls o
informed th a t th e price told a t th e tim e of procu rem en t were h igh er th a n
th e a ctu a l prices fin a lly pa id. Th ere wa s a ls o a gen era l observa tion th a t
MD s procu rem en t wa s rela ted to th e p reva ilin g prices , declin in g du rin g
th e period wh en prices were depres s ed a n d th a t a ccen tu a ted th e ris k of
the farmers.
Model of Reliance Fresh:
5.8 Reliance Fresh (RF) operates through a procurement centre at each
selected villa ge. Th ere is n o form a l written con tra ct between the farmers
and RF they a re free to s ell to MD or a n y oth er ch a n n el. However RF
centre is m ore s oph is tica ted and uses better tech n ology in clu din g a
com pu ter to con s olida te procu rem en t in form a tion . Th e m a n power a t RF
is better tra in ed a n d qu a lified u n like MD wh ere s ecreta ry m a y n ot h a ve
a n y tech n ica l qu a lifica tion . Th e procu rem en t term s and conditions of RF
are simple and th ey give th e price in form a tion a n d a ccept or reject the
qu a lity a n d qu a n tity a t th e s pot. Both , MD a n d RF procu re on ly bes t
qu a lity produ cts from th e fa rm ers a n d th e rest is left with th e fa rm ers to
be sold by them. Th ere is n o fa rm ers association like in MD. The mode of
payment in RF is both cash and cheque.
14 | P a g e

5.9 In th is con text of th e a bove a n a lys is of th e procu rem en t con tra cts
of th e MD a n d RF it s eem s th a t th e Relia n ce Fres h con tra ct is relatively
better th a n th e Moth er Da iry procu rem en t con tra ct in term s of price
in form a tion , qu a lity m on itorin g, m ode of pa ym en ts etc. Des pite th e
com plexity of th e con tra ct of Moth er Da iry, it provides a rela tively better
deal to the farmer as compare to the traditional marketing channels.
6. MARKET INTEGRATION AND UNCERTAINITY IN THE PRICES OF
ALTERNATIVE MARKETING CHENNELS
Market Integration
6.1 Th e MD pricin g policy is n ot ba s ed on th e loca l m a rket prices . The
prices given to th e fa rm ers a re determ in ed on th e ba s is price qu ota tion
of good qu a lity vegetable from Aja dpu r m a rket (term in a l m a rket or TM),
Delhi. Th e tra n s porta tion cos t, h a n dlin g ch a rges a n d oth er fees s u ch a s
s a la ry to th e s ecreta ry, ren t of th e la n d etc a re a ls o n etted from qu oted
price. Therefore the price paid by MD to a farmer excludes these charges.
However, it m a y n ot m a ke s ign ifica n t differen ce to th e tes t of coin
tegra tion beca u s e th es e ch a rges a re a lm os t a fixed a m ou n t dedu cted
from price qu ota tion . Th e dis in tegra tion , if a n y, between th e MD a n d TM
prices s im ply in dica te th a t th e well con n ected m a rkets of Son epa t a n d
Delh i a re n ot s h a rin g price s ign a ls . To tes t m a rket in tegra tion th e
res pective price s eries a re tes ted for s ta tion a ry. It is fou n d th a t a ll s eries
a re n on -stationary a t level bu t in tegra ted a t firs t differen ce (ADF re s ults
may be seen in table 2).
Table: 2. Augmented Dickey Fuller Unit Root Results
Traditional Market Price
Mother Dairy Price
Vegetables At Level Critical Value At First Difference Critical Value At Level Critical Value At First Difference Critica
Carrot -2.57 -3.51 -5.1 -3.5 -2.23 -4.07 -7.45 -4
Lauki -2.63 -4.23 -5.14 -4.25 -2.62 -4.23 -4.43 -4
Green Chilli -2.35 -4.73 -3.99 -3.76 -0.7 -4.73 -1.52 -4
Onion -2.47 -4.39 -4.97 -3.62 -1.79 -4.39 -4.05 -3
Bhindi -2.9 -4.05 -7.29 -3.45 -3.31 -4.05 -5.65 -3
Tomato -2.57 -4.37 -3.98 -3.61 -2.74 -4.35 -5.52 -4
Musk Melon -2.61 -4.32 -3.63 -4.33 -2.01 -4.32 -3.15 -2
Cauliflower -3.3 -4.35 -3.66 -3.6 -1.7 -4.33 -3.74 -3
6.2 Th e s econ d s tep towa rds tes tin g co-in tegra tion is to ru n biva ria te
co-in tegra tion tes t of En gle-Granger. It is fou n d th a t except Green Ch illi
15 | P a g e

Onion, and Musk Melon, the prices of local market are co-integrated with
MD prices . Th e n on exis ten ce of price in tegra tion for th e green ch illi m a y
be beca u s e it is n ot produ ced in la rge volu m e in th e villa ges of th e s tu dy
areas. Non-in tegra tion of Onion prices m a y be beca u s e of th e n ea rby
Pa n ipa t m a rket, wh ich is th e m a jor m a rket for on ion in th is region a n d
ju s t 32 km from th e s tu dy a rea . Th is n ea rn es s m a y be exerting more
in flu en ce on loca l m a rkets th a n th e TM. Lon ger s h elf life of on ion cou ld
be oth er rea s on . Mu s k Melon s TM prices a re a ls o wea kly co-integrated
with MD, though th e region produ ces it in good qu a n tity. TM prices of
Carrot, Lauki, Bhindi, Tomato and Cauliflower are co integrated with MD
(results are Table.3.).
Table:3. Co integration Results
Vegetables Eigen Value Likelihood Ratio Leg Co-integration
Carrot 0.06 5.66* 2 Yes
Lauki 0.15 5.99* 2 Yes
Green Chilli 0.23 3.68 2 No
Onion 0.04 0.99 2 No
Bhindi 0.106 11.29* 2 Yes
Tomato 0.15 4.32* 2 Yes
Musk Melon 0.11 3.43 2 Weak
Cauliflower 0.15 4.33* 2 Yes
* Significant at 5% level, Critical value is 3.76.
Variation of Prices
6.3 Th e Sta n da rd Devia tion (SD) a n d Coefficien t of Va ria tion (CV) is
u s ed a s a m ea s u re of th e prices va ria tion . Th e n et reven u e of th e MD is
observed to be m ore vola tile for a ll th e vegeta bles except Bh in di a n d
Tom a to wh ere a s the CV is es tim a ted to be les s in MD th a n TM. Th is is
qu ite oppos ite to th e n otion th a t th e orga n ized reta il ch a in s will redu ce
th e vola tility of prices for th e fa rm ers a n d con s equ en tly s ta bilize th e
returns. (Table 4)
Table: 4. Variability of Prices
Vegetables TM MD
16 | P a g e

SD CV (%) SD CV (%)
Carrot 114 62 143 63
Lauki 24 111 44 120
Green Chilli 18 76 35 104
Onion 197 50 375 62
Bhindi 38 129# 53 125
Tomato 76 0.86# 80 0.71
Musk Melon 43 0.67 90 0.81
Cauliflower 47 94 51 146
*SD is Standard Deviation, CV is coefficient of Variation
Impact on Revenue
Theoretical relation between elasticity of demand and total revenue:
6.4 As s u m in g th a t th ere a re h omogeneous goods a n d m a n y s m a ll
s eller a n d bu yers, objective of a s eller is to m a xim ize his profits; with a n
a u ction in g s ys tem to determ in e th e price in the market through
com petitive biddin g, th e m arket equ ilibriu m is determ in ed by equality of
demand and supply and prices are market clearing. The demand curve is
a s s u m ed to be a n ega tively s loped a n d th e s u pply fixed in a da y. In th e
dynamic equilibrium if there are change in the demand and supply in the
m a rket th is wou ld im pa ct on th e fa rm er trou gh res pective ch a n ges in
tota l reven u e. Th e qu es tion is h ow it is goin g to im pa ct a n d to wh a t
extent?
Suppose
p = is net price (netted by marketing cost) received by farmer
q = quantity sold in the market by a farmer
R = revenue
So, a profit maximizing farmer will calculate its R as
R = p .q
Taking first derivative of R w.r.t. p
or
where
..(1)
(2)
Taking first derivative of R w.r.t. q
17 | P a g e

..(4)
In th e s itu ation of profit m axim iz ing th e ch an ge in total revenue of th e
farm er w ould be either becau s e of ch ange in th e price or ch an ge in th e
qu an tity or both . Therefore th e total ch an ge in th e revenue of the farmer is:-
(5)
1+ ) dp + p (1+ ) d q .. (6)
Table: 5. The hypothetical values to show impact of price and quantity changes on revenue of the farmer
Elasticity of demand 100% increase in price 100% increas e in qu an tity
0.5 66 33
1 50 50
2 33 66
6.5 Th e equ ation (6) expla in s th e rela tion s h ip between th e ch a n ges in
th e reven u e of th e fa rm er with res pect to th e ch a n ges in th e price a n d
quantity. The ch a n ges in tota l reven u e con s equ en t u p on th e ch a n ges in
price a n d qu a n tity are in oppos ite direction for a given ela s ticity of
demand. The higher th e elas ticity of d em an d th e lower w ou ld be th e
increas e in th e revenue w ith an increas e in th e price. There is , th erefore, a
negative relation betw een price ch an ges an d revenue ch anges at h igh
elas ticity of d em an d vice vers a. At h igh ela s ticity of dem a n d, a declin e in
price is more effective to increase revenue and at low elasticity of demand
th e price in crea s e wou ld be a good s tra tegy for h a vin g a increa s e in tota l
reven u e. For th e qu a n tity changes, th ere a re pos itive rela tion s between
increase in revenue and the elasticity of demand. The increas e in qu an tity
in th e m ark et at h igh elas ticity of the d em an d w ou ld als o increas e th e
revenue of th e farm er w h ile at low er elas ticity of d em an d , an y increas e in
qu an tity w ou ld als o d ecreas e th e revenue of the farm er. Th is explain s th e
parad ox of the agricultu re w h ere good crop s eas on m ay not be
rem unerative for th e farm er becau s e of low elas ticity of d em an d of th e
products. In a s itu a tion of bu m per crop th e in crea s e in th e reven u e
would be less not only due to the depression in the prices but also due to
the low elasticity of demand in the market.
6.6 The revenue impact on the farmer generally gets aggravated in case
of th e vegeta ble m a rkets beca u s e of the n a tu re of com m odity a n d their
18 | P a g e

yield pa ttern . Vegeta bles bein g th e peris h a bles in th e n a tu re requ ire
s tora ge fa cilities to redu ce th e exten t of a fa ll in price. Als o th e s ea s on
plays an im porta n t role in th e yield pa ttern of th e vegeta ble. Bes ides , th e
s m a ll s ize of th e m a rket a n d dis in tegra tion in th e loca l m a rkets lea d to
overrea ction of th e s u pply ch a n ges on th e reven u e a n d th rou gh price
depres s ion s . Given th is inverse rela tion between qu a n tity in crea s e a n d
the low in crea s e in reven u e a t low ela s ticity of dem a n d th ere a re m ora l
h a za rd for th e produ cers . Th ere is n o in cen tive for th e fa rm ers to
in crea s e th e produ ction wh en th e m a rket dem a n d cu rve is inelastic,
beca u s e th e in crea s e in th e qu a n tity will a dd les s to th eir reven u e. This
is a ll th e m ore tru e in ca s e of vegeta bles wh ere th e dem a n d is very
inelastic. The low ela s ticity of dem a n d in th e loca l m a rket is th e gen era l
ph en om en on in In dia . Th is m a y be du e to th e s m a ll s ize of th e m a rkets ,
low integration with other markets or isolated markets.
Empirical estimation of revenue effect:
6.7 The estimation of remunerability of the prices of MD to the farmers
is es tim a ted in th e followin g wa y. Let P ij price of i vegeta ble for j
m a rketin g ch a n n el a n d Q ij is u n it of qu a n tity s u pplied of i vegeta ble to j
m a rketin g ch a n n el. MC ij is th e per u n it m a rketin g cos t of th e i vegeta ble
for j m a rketin g ch a n n el a n d R ij is th e ra te of rejection for i vegeta ble
under j marketing channel.
NP ij = P ij *(Q ij* R ij ) MC ij
i = vegetable, j = marketing channel
Th e rejection ra te is ca lcu la ted from th e fa rm er grower s h eets a n d th e
m a rketin g cos t is ca lcu la ted from th e prim a ry da ta of field s u rvey.
Applying rejection rate, R ij , to the quantity supplied we can get the actual
quantity for which the price, P ij , is received by the farmer.
6.8 Table: 6 s h ows th a t if th e fa rm er s ells th e s a m e a m ou n t of
vegeta ble to eith er of m a rketin g ch a n n els h ow m u ch a vera ge n et reven u e
will a ccru e to h im . For exa m ple, for ca rrot in Novem ber 2005, if th e Q1
qu a n tity is s old to MD th e a vera ge n et reven u e received by fa rm er is
h igh er a t Rs . 221 a s com pa re in Tra dition a l Ma rket on ly Rs . 192 for th e
s a m e qu a n tity of ca rrot. Th erefore MD is a ddin g 16 per cen t m ore to th e
reven u e of th e fa rm er for th e ca rrot in Novem ber 2005. Except 2007, in
2005 a n d 2006 th e MD h a s been a m ore rem u n era tive ch a n n el for ca rrot
as compared to traditional market.
19 | P a g e

Table: 6. Average Net Revenue of Traditional Market and MD Channel
Vegetables Year Month Average Net
Revenue MD
(Rs.)
Carrot
2005
Lauki
Green
Chilli
Onion
Bhindi
2006
Average Net
Revenue TM Price
(Rs.)
MD
Premium
(%)
Nov 221.2 192.4 16.4
Dec 312.0 263.4 15.3
Nov 251.3 161.7 54.1
Dec 135.5 113.2 10.6
2007 Jan 77.9 85.8 -10.7
2005 Jun 15.8 6.5 189.4
Jul 87.4 43.8 179.0
Aug 19.4 6.2 223.0
Sep 28.3 26.7 47.1
Oct 13.5 11.1 33.8
2005 May 8.0 7.7 14.5
Jun 22.4 17.6 17.3
Jul 65.5 42.9 43.9
Aug 29.3 31.7 -7.6
2005 Jun 581.7 372.7 50.7
Aug 611.3 390.0 70.0
2006 Jun 510.7 435.6 16.1
2005 May 65.2 47.1 46.4
Jun 45.0 29.1 75.1
Jul 22.9 16.1 42.5
Aug 23.9 19.1 21.7
Sept 55.4 33.7 66.8
Oct 26.9 22.8 14.1
2006 May 26.1 19.8 33.1
Jun 20.1 10.4 103.4
Tomato 2005 May 7.8 24.7 7.8
Musk 2005 May 83.8 41.3 104.4
Melon Jun 114.4 72.1 59.6
Jul 51.6 40.2 7.1
Cauliflower 2005 Nov 16.3 34.6 -51.7
Dec 53.4 47.7 -5.3
2006 Jan 42.8 88.6 -47.2
Difference between Prices
6.9 A regres s ion equ a tion is u s ed to ch eck wh eth er th e differen ce
between th e MD a n d tra dition a l m a rket prices is s ign ifica n t or n ot. Firs t
th e differen ce between th e prices D in = P i1 -P i2 of a ltern a tive m a rketin g
20 | P a g e

channels is calculated a n d th en to tes t th e s ign ifica n ce of th e differen ce
between prices the following equation is specified:
D in = a in + b in t + u in
n = number of observations.
Hypothesis tested are
H: a in = 0
Ha: a in 0
Th e in tercept term (a ij ) in th e fu n ction will give th e differen ce in n et
m a rketin g prices . If th e prices a re s ign ifica n tly differen t th en th e
in tercept wou ld be s ign ifica n t. Th e res u lts given in ta ble-7 s h ow th a t th e
MD prices a re s ign ifica n tly h igh er th a n th e tra dition a l m a rket prices for
the vegetables except Cauliflower.
Table: 7. Results of the above equation
Vegetables a in b in t
Carrot 93.7* 0.09
Lauki 270* -2.7*
Chilli 111* -0.15
Onion 131* -0.47
Bhindi 222* -0.01
Tomato 86* 1.77*
Musk Melon 198* 0.26
Cauliflower -83* 4.02*
Indirect Impact of the MD on Prices:
6.10 Th e direct procu rem en t of th e reta il ch a in s a ls o im pa cts th e
reven u e of th e fa rm ers in directly. Bein g a credible option for th e fa rm er
to s ell its produ cts oth er th a n loca l m a rket, it redu ces th e depen den cy
from th e tra dition a l m a rketin g ch a in s . Th e loca l m a rkets a re rela tively
small in size and may not necessarily be integrated, and even if these are
integrated, it m a y n ot n eces s a rily res u lt in transfer of th e s u pplies
quickly, a n d a ls o m a y n ot a dd ben efits to th e fa rm ers . Th erefore a n y
extra a rriva ls m a y ca u s e s u bsta n tia l depres s ion in th e prices of th e loca l
m a rket. Su ppos e th e MD wou ld n ot h a ve been th ere for direct
procu rem en t th e qu a n tity wh ich is n ow procu red by it, th e en tire
produce wou ld h a ve been s old in to th e n ea res t m a rket. The im p a ct of
21 | P a g e

th is extra a rriva l on th e price cou ld h a ve h a d m odera tin g im pa ct on
prices. To ca lcu la te th e in direct im pa ct of th e direct procu rem en t on th e
loca l m a rket prices th e ela s ticity of th e price w.r.t. a rriva ls is ca lcu la ted
(s ee ta ble). Us in g th is ela s ticity of price th e n et price im pa ct is ca lcu la ted
for different vegetables.
Table:8 Elasticity of Prices w.r.t. Arrivals (Arr) and procured quantity (PR).
Vegetables
Carrot -0.10 -0.16
Lauki -0.016 0.11
Green Cilli -0.03 0.11
Onion -0.048 0.25
Bhindi -0.097 0.03
Tomato -0.163 -0.22
Musk Melon -0.15 -0.15
Cauliflower -0.118 -0.46
6.11 Us in g th e es tim a ted ela s ticity of prices of res pective i, it is ea s y to
ca lcu la te th e n ew price wh ich wou ld h a ve been New P i1 if a ll th e produ ce
of i vegeta ble (i.e. loca l m a rket a rriva l plu s direct procu rem en t) wou ld
h a ve been s old in n ea res t m a rket. The New P 1 is ca lcu la ted with th e
followin g form u la a n d ba s is of th e a s s u m ption s th a t th e New P i1 cannot
be negative and more than P i1, as long as dInArr is pos itive:
New P i1 = P i1 (1- e* dInArr)
Wh ere P i1 is th e price in Rs . Per Qtls . of a vegeta ble in th e loca l m a rket,
e
, wh ich is ela s ticity of loca l m a rket price w.r.t. Arriva ls and
dInArr is th e per cen t ch a n ge in th e Arriva ls . Th ere is s ign ifica n t in direct
impact of the direct procurement on the local market prices. Interestingly
th is ben efit is prim a rily a ccru ed to th os e wh o a re s ellin g in th e loca l
m a rkets . Th is s ta tes th a t th e reven u e effect is n ot on ly con fin ed to th e
fa rm ers directly lin ked to th e MD ch a in but a ls o to oth er fa rm ers wh o
s ells in th e loca l n ea res t m a rket. Th e graphs a s per Annexure 1 clea rly
indicates that the New P 1 would have been much lower than P 1 .
7. CONCLUSION
7.1 Th e s u p ply ch a in efficien cy a n d in efficien cy im pa cts wh ole
a gricu ltu re s ys tem . Th e tra dition a l m a rketin g ch a in s a re ch a ra cterized
by high margins of the middlemen, low prices to the farmer, low elasticity
22 | P a g e

of derived dem a n d, h u ge wa s ta ge of a gricu ltu re produ ce, etc. Th e n ew
m a rketin g a rra n gem en ts s u ch a s farmers m a rket e.g. Apa n i Ma n di etc,
con tra ct fa rm in g, a n d em ergen ce of d irect procu rem en t by orga n ized
reta il ch a in s a re h opes for em ergen ce of efficien t a gricu ltu re m a rketin g.
However, th ere cou ld be prob lem s of exclu s ion of s m a ll fa rm ers , s h ort
term view bein g ta ken by th e con tra ctin g com pa n y etc., in s titu tion a l
reform s n eed to redu ce th e m u ltiple la yers of in term edia tion . Th e direct
procu rem en t is s till geogra ph ica lly res tricted to th e h ot spots of th e
vegeta ble produ cin g region s , a n d n ot for a ll, and th eir im pa ct on fa rm ers
depen ds on th e term s a n d con dition of th e procu rem en t con tra ct.
Procu rem en t s ys tem a dopted by th e two a gen cies , MD a n d RF, suggest
th a t th e a pproa ch a dopted by RF is m ore in form a tive in term s of price
information, quality monitoring, mode of payments etc.
7.2 Th is s im p licity of th e con tra ct of RF cou ld be con s idered to provide
a n edge to it, bu t m u ltiple a gen cies a n d a va riety of con tra ctin g
a rra n gem en ts cou ld co-exist. Beca u s e des pite th e com p lexity of th e
contract, MD still provides a rela tively better dea l to th e fa rm er a s
compared to th e tra dition a l m a rketing ch a in s . Th is m a y be th e rea s on
that it h a s been s u cces s fu l for s u ch a lon g tim e in m a n y a rea s . On th e
practical s ide of th e im pa cts of MD it is observed th a t except Green
Chilli, On ion a n d Mu s k Melon , th e prices of loca l m a rket a re cointegrated
with MD prices . Th e n et reven u e of th e fa rm ers for s elected
vegeta bles is fou n d on a n a vera ge 17 per cen t h igh er for ca rrot, 134 per
cent for Lauki, 17 per cent for Green Chilli, 45 per cent for Onion, 50 per
cent for Bhindi, and 57 percent for Musk Melon.
7.3 Th ere a re pos itive s pillovers a n d oth er in direct im pa cts on th e
reven u e of th e fa rm ers of th e direct procu rem en t by MD. Th e in direct
ben efits a re n ot con fin ed only to th os e s u pplyin g vegetables to MD, th es e
ra th er get exten ded to a ll th os e fa rm ers s u pplyin g to loca l Ma n di or TM.
In s h ort th e direct procu rem en t of th e MD h a s en h a n ced the fa rm ers
revenue.
***
23 | P a g e

8. BIBLIOGRAPHY
1. Rao,C.H.Ha n u m a n th a ,(1971), Un certa in ty, En trepren eu rs h ip, An d
Sh a recroppin g In In dia Journ al Of Political Econom y ,Vol-79, No-3
,Pp-578-595.
2. Ch eu n g,S.N.S., Th e Th eory Of Sh a re Ten a n cy , Ch ica go Un ivers ity
Press 1969.
3. Stiglitz,J .E., (1974), In cen tive An d Ris k Sh a rin g In Sh a recroppin g
Review Of Economic Studies, Vol- 41, Pp-219-56.
4. Ba rdh a n , P.K.,(Ma rch 1980), In terlockin g Fa ctor Ma rket An d
Agra ria n Developm en t: A Review Of Is s u es , Oxford s Econom ic
Papers, Vol-32, Pp-82-98.
5. Bin s wa n ger, H. P. An d M.R. Rozen zweig (1984), Con tra ctu a l
Arra n gem en t S , Em ploym en t An d Wa ge In Ru ra l La bor Ma rkets : A
Critica l Review H.P. Bin s wa n ger An ds M.R. Ros en zweig
(Eds)Con tra ctu a l Arra n gem en ts , Em ploym en t An d Wa ges In Ru ra l
La bor Ma rkets In As ia , Econ om ic Growth Cen ter, Ya le Un ivers ity
Series New Haven And Landon Yele University Press.
6. Dileep, B. K. R.K. Grover An d K.N. Ra i (2002) Con tra ct Fa rm in g In
Tom a to : An Econ om ic An a lys is , Ind ian Journ al Of Agricultu re
Economics , 57(2), Pp- 197-200.
7. Es wa ra n , M. An d Kotwa l, A. (1985), A Th eory Of Con tra ctu a l
Structure In Agriculture, American Economic Review 75(3),Pp-352-67.
8. Ros en zeig An d Bin s wa n ger, H.P. (1993), Wea lth , Wea th er Ris k An d
Th Ecom pos ition Of Profita bility In Agricu ltu ra l In ves tm en ts , The
Economic Journal, 103(416), Pp 56-78.
9. Th a ku r, D.S., H. La l, D.R. Th a ku r, K..D. Sh a rm a An d A.S. Sa in i
(1997), Ma rket Su pply Res pon s e An d Ma rketin g Problem s Of Fa rm er
In Th e Hills , In dia n J ou rn a l Of Agricu ltu ra l Econ om ics , 52(1), Pp-
139-50.
10. Th a ku r, D.S., S.K. Ch a u h a n An d K..D. Sh a rm a (1988), Efficien cy
An d Wea kn es s Of Regu la ted Ma rkets , In dia n J ou rn a l Of Agricu ltu ra l
Marketing,2(1).
11. Ach a rya , S.S. (2001), Dom es tic Agricu ltu ra l Ma rketin g Policies ,
In cen tives An d In tegra tion , In S.S. Ach a rya An d D.P. Ch a u dh ry
(Eds.) In dia n Agricu ltu ra l Policy At Cros s Roa ds, New Delh i Ra va t
Publications.
24 | P a g e

12. Ach a rya ,S.S.(1994), Ma rketin g En viron m en t For Fa rm Produ cts
Em ergin g Is s u e An d Ch a llen ges , In dia n J ou rn a l Of Agricu ltu ra l
Marketing, 8(2)162-75, July- September.
13. Keris u r,V.R.,K.C. Hirem a th Na d Sa ra d Kires u r (1989), Econ om ics Of
Produ ction An d Ma rketin g Of Vegeta bles In Ka rn a tka A Com pa ris on
Of Orga n ized An d Un orga n ized Sector Of Ma rketin g, In dia n J ou rn a l
Of Agriculture Marketing , 3(3)98,Conference Special 98 Special.
14. Th a ku r, D.S., Sn a ja y, D.R. Th a ku r An d K.D. Sh a rm a (1994),
Econ om ics Of Off Sea s on Vegeta ble Produ ction An d Ma rketin g In
Hills, Indian Journal Of Agricultural Marketing, 8(1), 77-8 January.
15. Ka u l,(1997), Horticu ltu re In In dia - Produ ction Ma rk etin g An d
Processing, Indian Journal Of Agricultural Economics, Vol-52(3), Pp.-
561-573.
16. Sin gh ,J .P.(2006), Ch a n gin g Agra ria n Rela tion s h ip In Ru ra l In dia ,
Indian Journal Of Agriculturl Economics, Vol-16, No-1, Jan March.
17. Haque, T. (2000), Contractual Arrangements In Land Labor Market In
Ru ra l Area , In dia n J ou rn a l Of Agricu ltu ra l Econ om ics , Vol-55(3).
July Sept.
18. Sriva s ta va , Ra vi,(2000), Ch a n ges In Con tra ctu a l Rela tion In La n d
An d La bou r In In dia , In dia n J ou rn a l Of Agricu ltu ra l Econ om ics ,
Vol-55(3), July Sept.
19. Sin gh , Su kh pa l,(2000), Con tra ct Fa rm in g For Agricu ltu ra l
Divers ifica tion In Th e In dia n Pu n ja b : A Ca s e Stu dy Of Perform a n ce
An d Problem s , In dia n J ou rn a l F Agricu ltu ra l Econ om ics , Vol- 55(3),
July- Sept.
20. Sh a rm a , H.R., (2000), Ten a n cy Rela tion n Ru ra l In dia : A Tem poral
An d Cros s Section a l An a lys is , In dia n J ou rn a l Of Agricu ltu ra l
Economics, Vol-55(3), July Sept.
21. Swa in , Ma m ta (2000), Agricu ltu ra l Developm en t An d In terlocked
Ma rkets , In dia n J ou rn a l Of Agricu ltu ra l Econ om ics , Vol-55(3), J u ly
Sept.
22. Sa n gwa n S.S.(2000), Em ergin g Credit Dem a n d Of Ten a n t In
Ha rya n a , In dia n J ou rn a l Of Agricu ltu ra l Econ om ics , Vol-55(3), J u ly
Sept.
25 | P a g e

23. Birth a l, P.S.,J h a A.K.,J os h i P.K. An d Sin gh D.K. (2006),
Agricu ltu ra l Divers ifica tion in North Ea s tern Region Of In dia :
Im plica tion s For Growth An d Equ ity , In dia n J ou rn a l Of Agricu ltu ra l
Economics, Vol-61(3), July-Sept.
24. Ach a rya , S.S.(2004), Agricu ltu ra l Ma rketin g Sta te Of In dia n Fa rm er
A Millen n iu m Stu dy Aca dem ic Fou n da tiopn , New Delh i.
25. Ga ikwa d,V.R., Sa m bra n i,S., Pa rka s h , V., Ku lka rn i,S.D. An d
Mu ra ri,P.,(2004), Pos t Ha rves t Ma n a gem en t- Sta te Of In dia n
Fa rm er A Millen n iu m Stu dy Aca dem ic Fou n da tiopn , New Delh i.
26. Des h pa n de, R.S., Bh en de,M.J ., Th ip pa ia h ,P. An d Viveka n a n da ,
M.,(2004), Crops An d Cu ltiva tion - Sta te Of In dia n Fa rm er A
Millen n iu m Stu dy Aca dem ic Fou n da tion , New Delh i.
27. Ra m a s wa m y, B. Ra vi,S.An d Ch opra , S.D. (2004), Ris k Ma n a gem en t-
Sta te Of In dia n Fa rm er A Millen n iu m Stu dy Aca dem ic Fou n da tion ,
New Delhi.
28. Sh eph erd, A.W. (2007), Approa ch es To Lin kin g Produ cer To
Ma rkets : A Review Of Experien ces To Da te , Agricu ltu ra l
Management, Marketing And Finance, Occasional Paper, Fao.
29. Ba ls evih , F. Berdegu e,J .A., Flores ,L. Ma in ville,D. An d Rea don ,T.
(2003), Su perm a rket An d Produ ce Qu a lity An d Sa fety Sta n da rds In
La tin Am erica , Am erica n J ou rn a l Of Agrica u ltu ra l Econ om ics , Vol-
85(5), Pp. 1147-57.
30. Bos elie,D., Hen s on , S. An d Wea th ers poon ,D., (2003), Su perm a rket
Procu rem en t Pra ctices In Developin g Cou n tries : Redefin in g Th e Roles
Of Pu blic An d Priva te Sectors , Am erica n J ou rn a l Of Agricu ltural
Economics, Vol-85(5), Pp. 1155-61.
31. Ca rn ey, J .A., Stru ggeles Over Crop Righ ts An d La bou r With in
Con tra ct Fa rm in g Hou s eh olds In A Ga m bia n Irriga ted Rice Project ,
Journal Of Peasent Studies.
32. Glower, D., (1990), Con tra ct Fa rm in g An d Ou tgrover Sch em es In
Ea s t An d Sou th ern Africa , J ou rn a l Of Agricu ltu ra l Econ om ics , Vol-
41, No-3, Pp. 303-315.
33. Porter,G., Howa rd,K.P.,(1997), Com pa rin g Con tra cts : An Eva lu a tion
Of Con tra ct Fa rm in g Sch em es In Africa , World Developm en t, Vol-
25,No-2, Pp.227-238.
26 | P a g e

34. Glover,D.J .,(1984), Con tra ct Fa rm in g An d Sm a llh older Ou tgrower
Sch em es In Les s Developed Cou n tries , World Developm en t, Vol-
12,No-1, Pp1143-1157.
35. Wa rn in g, M. An d Key,N.,(2002), Th e Socia l Perform a n ce An d
Dis tribu tion a l Con s equ en ces Of Con tra ct Fa rm in g: An Equilibrium
An a lys is Of Th e Arch ide De Bou ch e Progra m In Sen ega l , Word
Development, Vol-30, No-2,Pp. 255-263.
36. Dey, J en n ie (1982), Developm en t Pla n n in g In Th e Ga m bia : Th e Ga p
Between Pla n n er An d Fa rm er Perception s , Expecta tion s An d
Objectives , World Development, Vol-10, No-5, Pp-377-396.
37. Porter,G. An d Howa rd, K.P.,(1995), Fa rm er, La borers An d Th e
Com pa n y: Explorin g Rela tion s h ips On A Tra n s kei Con tra ct Fa rm in g
Sch em e , J ou rn a l Of Developm en t Stu dies , Vol-32,No-1, Pp.55-73.
38. Goldsm ith ,A.,(1985), Th e Priva te Sector An d Th e Ru ra l
Developm en t: Ca n Agribu s in es s Help Th e Sm a ll Fa rm er , World
Development, Vol-13, No- 10/11, Pp. 1125-1138.
39. Sin gh , S., (2004), Cris es An d Divers ifica tion In Pu n ja b Agricu ltu re:
Role Of Sta te An d Agribu s in es s , Econ om ic An d Politica l Weekly,
December,25. Pp.5583-5590.
40. Lea th ers , H.D.,(1999), Wh a t Is Fa rm in g ? In form a tion , Con tra ct,
An d Th e Orga n iza tion Of Agricu ltu ra l Produ ction : Dis cu s s ion ,
American Journal Of Agricultural Economics, Vol-81, Pp. 621-623.
41. Dileep, B.K.,Grover,R.K.., An d Ra i, K.N., Con tra ct Fa rm in g In
Tom a to: An Econ om ic An a lys is , In dia n J ou rn a l Of Agricu ltu ra l
Economics, Vol-57,No-2, Pp-198-209.
42. Ku m a r, Pa rm od, (2006), Con tra ct Fa rm in g Th rou gh Agribu s in es s
Firm s An d Sta te Corpora tion : A Ca s e Stu dy In Pu n ja b , Econ om ic
And Political Weekly, December, 30, Pp. 5367-5375.
43. Azza m , A.M., ( ), Tes tin g Th e Com petitiven es s Of Food Price
Sprea ds ,
44. Weldegebriel,H.T., (2004), Im perfect Price Tra n s m is s ion : Is Ma rket
Rea lly To Bla m e ? , J ou rn a l Of Agricu ltu ra l Econ om ics , Vol- 55, No-
1, Pp. 101-114.
27 | P a g e

45. Mccorris ton , S., An d Sh eldon , I.M.,(1996), Th e Effect Of Vertica l
Ma rkets On Tra de Policy Reform , Oxford Econ om ic Pa per, Vol-48,
Pp. 664-672.
46. Roger, R.T., An d Sexton ,R.J ., (1994), As s es s in g Th e Im porta n ce Of
Oligopson y Power In Agricu ltu ra l Ma rkets , Am erica n J ou rn a l Of
Agricultural Economics, Vol-76, 1143-1150.
47. Hyde, C.E., An d Perloff, J .M., (1994), Ca n Mon opson y Power Be
Es tim a ted ? , Am erica n J ou rn a l Of Agricu ltu ra l Econ om ics , Vol-76,
Pp-1151-1155.
48. Love, H.A., An d Sh u m wy, C.R.,(1994), Non pa ra m etric Tes t For
Mon opson is tic Ma rket Power Exertion , Am erica n J ou rn a l Of
Agricultural Economics, Vol-76, 1156-1162.
49. Goodwin , B.K.,( 1994), Oligopson y Power: A Forgotten Dia m en s ion
Of Food Ma rketin g ? Dis cu s s ion , Am erica n J ou rn a l Of Agricu ltu ra l
Economics, Vol-76, Pp. 1163-1165.
50. Hollowa y, G. J ., (1991), Th e Fa rm - Reta il Price Sprea d In An
Im perfectly Com petitive Food In du s try , Am erica n J ou rn a l Of
Agricultural Economics, November, Pp. 979-989.
51. Sch roeter, J . An d Azza m , A., (1991), Ma rketin g Ma rgin s , Ma rket
Power, An d Price Un certa in ty , Am erica n J ou rn a l Of Agricu ltu ra l
Economics, November, Pp.-990-999.
52. Ga rdn er, B. L.,(1975), Th e Fa rm Reta il Price Sprea d In A
Com petitive Food In du s try , Am erica n J ou rn a l Of Agricu ltu ra l
Economics, August, Pp 399-409.
53. Dries , L. An d Swin n en ,J .F.M., (2004), Foreign Direct In ves tm en t,
Vertica l In tegra tion , An d Loca l Su ppliers : Eviden ce From Th e Polis h
Da iry Sector , World Developm en t, Vol-32, No-9, Pp.-1525-1544.
54. Viswanathan, K.U., An d Sa ts a i K.J .S.,(1997), Fru its An d
Vegeta bles : Produ ction Tren s An d Lin ka ges , In dia n J ou rn a l Of
Agricultural Economics, Vol-52, No-3, 574-583.
55. Dh a es e, M., Va n Hu ylen broeck, G. (2005), Th e Ris e Of Su perm a rkets
An d Ch a n gin g Expen ditu re Pa ttern s Of Poor Ru ra l Hou s eh olds: Ca s e
Study In The Transkei Area, South Africa, Food Policy, 30, 97-113
56. Dola n , C., Hu m ph rey, J . (2000), Govern a n ce An d Tra de In Fres h
Vegeta bles : Th e Im pa ct Of Uk Su perm a rkets On Th e Africa n
28 | P a g e

Horticu ltu re In du s try, J ou rn a l Of Developm en t Stu dies , 37(2), Pp .
147-176
57. Fa fch a m ps, M., Ga bre-Ma dh in , E., Min ten , B., In crea s in g Retu rn s
An d Ma rket Efficien cy In Agricu ltu ra l Tra de, J ou rn a l Of Developm en t
Economics, Forthcoming
58. Gibbon , P. (2003), Va lu e-Ch a in Govern a n ce, Pu blic Regu la tion An d
En try Ba rriers In Th e Globa l Fres h Fru it An d Vegeta ble Ch a in In Th e
EU, Development Policy Review, Vol. 21, No. 5-6, Pp. 615-625
59. Gow, H., Streeter, D. An d J . Swin n en , 2000, "How Priva te Con tra ct
Enforcement
60. Mech a n is m s Ca n Su cceed Wh ere Pu blic In s titu tion s Fa il: Th e Ca s e
Of Juhosucor A.S." Agricultural Economics, 23(3): 253-265.
61. Gow, H. An d J . Swin n en , 2001, Priva te En forcem en t Ca pita l An d
Con tra ct En forcem en t In tra n s ition Cou n tries Am erica n J ou rn a l Of
Agricultural Economics, 83(3): 686-690
62. Humphrey, J ., Mccu lloch , N., Ota , M. (2004), Th e Im pa ct Of
Eu ropea n Ma rket Ch a n ges On Em ploym en t In Th e Ken ya n
Horticu ltu re Sector, J ou rn a l Of In tern a tion a l Developm en t, Vol.
16(1), Pp. 63-80
63. J a ffee, S.M., Hen s on , S. (2004), Sta n da rds An d Agro-Food Exports
From Developin g Cou n tries : Reba la n cin g Th e Deba te, World Ba n k
Policy Research Working Paper 3348
64. Key, N., Ru n s ten , D. (1999), Con tra ct Fa rm in g, Sm a llh olders , An d
Ru ra l Developm en t In La tin Am erica : Th e Orga n iza tion Of
Agroprocessing Firms And The Scale Of Outgrower Production, World
Development, 27(2), Pp. 381-401
65. Kh erra la h , M. (2000), Acces s Of Sm a llh older Fa rm ers To Th e Fru its
And Vegetables Market In Kenya, Ifpri, Mimeo
66. Kirs ten , J ., Sa rtoriu s , K. (2002), Lin kin g Agribu s in es s An d Sm a ll-
Sca le Fa rm ers In Developin g Cou n tries : Is Th ere A New Role For
Con tra ct Fa rm in g?, Developm en t Sou th ern Africa , Vol. 19, No. 4, Pp.
503-529
67. Min ot, N., Ngigi, M. (2004), Are Horticu ltu ra l Exports A Replica ble
Su cces s Story? Eviden ce From Ken ya An d Côte D ivoire, Eptd/ Mtid
Discussion Paper, International Food Policy Research Institute
29 | P a g e

68. Rea rdon , T., Ba rrett, C.B. (2000), Agroin du s tria lis a tion , Globa liza tion
An d In tern a tion a l Developm en t: An Overview Of Is s u es , Pa ttern s An d
Determinants, Agricultural Economics, 23:195-205
69. Rea rdon , T., Berdegu é, J . (2002), Th e Ra pid Ris e Of Su perm a rkets In
La tin Am erica : Ch a llen ges An d Opportu n ities For Developm en t,
Development Policy Review, Vol. 20, No. 4, Pp.371-88.
70. Rea rdon , T., Tim m er, C.P., Ba rrett, C., Berdegu é, J . (2003), Th e Ris e
Of Su perm a rkets In Africa , As ia , An d La tin Am erica , Am erica n
Journal Agricultural Economics, Vol. 85, No. 5, Pp. 1140-1146
71. Wa ltis berger, D., Ca n trelle, P., Ra lija on a , O. (1998), La Morta lité À
An ta n a n a rivo De 1984 À 1995, Docu m en t Et Ma n u el Du Ceped No.
7, Paris
72. Weath ers poon , D., Ca ch o, J ., Ch ris ty, R. (2001), Lin kin g
Globa liza tion , Econ om ic Growth a n d Poverty: Im pa cts Of
Agribu s in es s Stra tegies On Su b-Sa h a ra n Africa , Am erica n J ou rn a l of
Agricultural Economics, 83(3), Pp. 722-729
73. Win ters , P., Sim m on s , P., Pa trick, I. (2005), Eva lu a tion of A Hybrid
Seed Con tra ct Between Sm a llh olders An d A Mu ltin a tion a l Com pa n y
In Ea s t J a va , In don es ia , Th e J ou rn a l Of Developm en t Stu dies , Vol.
41, No. 1, Pp. 62-89
74. Dr. Ra jiv Meh ta , (2005), An An a lys is of Crop Divers ifica tion ,
Mem ber Secreta ry, CACP, Min is try Of Agricu ltu re, Govern m en t Of
India,
75. National Conference On Agriculture For Kharif Campaign-2005, 22nd
23rd (March), New Delhi..
76. Sriva s ta va , Ra vi,(1989), In terlin ked Modes of Exploita tion In In dia n
Agricu ltu re Du rin g Tra n s ition : A Ca s e Stu dy , J ou rn a l Of Pea s a n t
Studies, Pp. 493-522.
77. Ta s lim ,M.A., (1988), Ten a n cy An d In terlockin g Ma rkets : Is s u es An d
Som e Eviden ce , World Developm en t, Vol-16, No-6, Pp-655-666.
78. Ba rdh a n , Pra n a b, (1989), In terlockin g Fa ctor Ma rkets a n d Agra rian
Developm en t: A Review Of Is s u es , Oxford Econ om ic Pa pers , Vol-32,
Pp.82-98.
79. Wh ite, Ben An d Da ws on ,P.J .,(2005), Mea s u rin g Price Ris k on Uk
Ara ble Fa rm s , J ou rn a l of Agricu ltu ra l Econ om ics , Vol-56, N0-2,
239-254.
30 | P a g e

80. Min ten , B., Ra n dria n a ris on ,L. An d Swin n en ,J .F.M. (2006), Globa l
Reta il Ch a in s An d Poor Fa rm ers Eviden ce From Ma da ga s ca r ,
Discussion Paper 164/2006- Www.Econ.Kuleuven.Be/Licos.
81. Dola n , C.S.,(2002), Gen der An d Witch cra ft In Agra ria n Tra n s ition :
Th e Ca s e Of Ken a n Horticu ltu re , Developm en t An d Ch a n ge, 33(4),
Pp. 659-682.
82. Fa o (2005), Fa os ta t Da ta . Acces s ed Novem ber 2004,
Htttp//Www.Fao.Org.
83. Mccu lloch , N.An d Otta , M., (2002), Export Horticu ltu re An d Poverty
In Ken ya , Ids Workin g Pa per174.Brighton, Sussex: Ids
84. Wein berger, K. An d Lu m pkin , T., (2005), High Va lu e Agricu ltu ra l
Produ cts In As ia An d Th e Pecific For Sm a ll Holder Fa rm ers : Tren ds,
Opportu n ities An d Res ea rch Priorities , Rom e,
Gfarhtpp://Www.Egfar.Org/Documents/02 Meetin g Workshop-On-
High Value Productsoct, 2005/Regionlap.Pdf.
85. Government of In dia (2007), Agricu ltu ra l Ma rketin g In fra s tru ctu re
An d Policy Requ ired For In tern a l An d Extern a l Tra de Report Of Th e
Working Group For The 11th Five Year Plan, Planning Commission.
86. Reardon, T & Gu la ti, As h ok, (2008), Ris e Of Su per Ma rket a n d Th eir
Im plica tion s , Dis cu s s ion Pa per IFPRI,
87. NABARD Study, (2011), Organized Agri-Food Reta ilin g in In dia .
88. ICREAR Report, (2009), Im pa ct of Orga n ized Reta il Ch a in s on
In com e & Em ploym en t .
31 | P a g e

Annexure-1
32 | P a g e

1 | P a g e