Farmers’ choice of market channels and producer prices in India: Role of transportation and communication networks
This paper assesses the effect of transportation and communication networks on farmers’ choice of market channels for paddy and wheat, and subsequently on the prices they receive from these channels. It is found that smallholder farmers sell more to informal channels i.e. local traders and input dealers, and typically receive lower prices from them compared to the government-set minimum support prices (MSP). The prices realized from the sales in regulated markets are also less than the MSP despite these being claimed to be more transparent in price discovery.