CHAPTER II

CONCEPTS AND REVIEW

In this chapter, the concepts used in the earlier studies have been reviewed and
those relevant to the present study with reference to the objectives are specified.
Moreover review of related concepts and past studies will give a holistic picture and that
will in turn help in analyzing and understanding the problems in proper perspective.

Review of Concepts

 Marketing
 Agricultural Marketing
 Marketing Channel
 Marketing Cost
 Marketing Margin
 Marketing Efficiency
 Price Spread
 FPO

Review of past studies

 Marketing channel, Marketing efficiency, Price spread

 FPO

MARKETING

Saraswat and Vaidya (1995) in their study defined marketing system as the mix of
activities in the transfer of produce from growers to final consumers.

According to Sherlekar (1996) marketing is a continuous process of discovering

and translating consumer wants into appropriate products and services, creating demand
for these products under keen competition and serving the demand with the help of
channels of distribution such as wholesalers and retailers.
 Kumar et al. (1997) viewed marketing as the chain of various functions
performed by the market functionaries in order to transfer the produce from producer to
ultimate consumer. The system included picking, assembling, grading, packing and
transporting functions.

Star et al. (1997) defined marketing as the process through which a business
enterprise, institution or organization would (a) select target customers or constituents,
(b) assess the need or wants of such target customers and (c) manage its resources to
satisfy those customers needs or wants.

According to Chinnappa (1998) marketing would connect different stages at

which farmers would convert their hard labour, sacrifice and other inputs into cash. It
would start with decision making to produce a particular crop and would involve all
operations in moving the produce from producer to consumer.

Ramaswamy and Namakumari (2002) defined marketing as a process of creating

and delivering value. The marketer delivers value to the customer, basically through his
market offers. He takes care to see that the offer fulfills the needs of the customer.

Earl and Grinols (2003) defined market as a group of buyers and sellers linked
together by trade in sale or purchase of particular commodity or services.

Philip Kotler (2003) defined marketing that consists of all potential customers
sharing a particular need or want that might be willing and able to engage in exchange to
satisfy that need or want.

Suresh Reddy (2003) defined marketing as one of the business function most
dramatically affected by emerging information technologies.

Townsend et al. (2004) conceptualized marketing as a complex set of functions

that involve tactics, or the act of demand stimulation and selling; culture which provides
a means to implement a customer orientation; strategy, which translates the marketing
concept into actions that create competitive advantage.
 In the present study, marketing of little millet is defined as the chain of various
functions performed by the market functionaries in order to transfer the little millet from
the producer to the consumer.

AGRICULTURAL MARKETING

Irwin (1962) stated that agricultural marketing would include all the services,
intangible and physical, rendered between farmers and ultimate consumers. The
intangible functions would include,

i. Pricing plus financing and risking,

ii. Providing products to consumers in place, form and time utility,

iii. Physical functions that would include mainly transporting, processing, storing and
grading of farm products.

Kohls (1967) defined agricultural marketing as the performance of all business

activities involved in the flow of goods and services from the point of production till they
are in hands of ultimate consumer.

According to Spinks (1972) marketing of agricultural commodities included all

operations in the movement of goods and raw materials from farm to final consumers and
also included aspects of organization of raw materials, supply to processing industries,
marketing of processed products and assessment of demand.

Singh (1992) remarked that agricultural marketing involved a series of operations,

processes and agencies in the movement of food and raw materials from the farm to final
consumers and the effect of such operations on producers and middlemen. These
included buying, assembling, processing, packing, transporting, sorting, financing, risk
bearing and selling.

According to Verma and Agarwal (1992) agricultural marketing is the study of all
activities, agencies and policies involved in the procurement of farm inputs by the farmer
and the movement of rural products from the farms to the consumer.
 Sivakumar (1996) referred agricultural marketing as one which included all
business activities that would help in flow of agricultural commodities from the point of
initial production until it reaches the exporters in the desired form, at the desired place
and time.

Selvaraj and Gandhimathi (2003) viewed agricultural marketing as the

combination of activities by which the agricultural raw materials are processed and are
made ready for consumption in suitable form.

Acharya and Agarwal (2004) viewed agricultural marketing as set of all activities
involved in supply of farm inputs to the farmers and movement of agricultural products
from the farms to the consumers. It also includes the assessment of demand for farm-
inputs and their supply, post-harvest handling of farm products, performance of various
activities required in transferring farm products from farm gate to processing industries
and (or) ultimate consumers, assessment of demand for farm products and public policies
and programmes relating to the pricing, handling and purchase and sale of farm inputs
and agricultural products.

According to Thomson (2004) agricultural marketing comprises all the operations

and the agencies involved in the movement of farm-produced foods, raw materials and
their derivatives, from the farms to the final consumers and the effects of such operations
on farmers, middlemen and consumers.

Dhanapal (2007) considered agricultural marketing as the set of all activities that
facilitated the flow of agricultural commodities from farm to ultimate consumer.

In the present study, agricultural marketing is referred to all the post production
business activities that are involved in transferring of little millet from the primary
producer to the ultimate consumer which offered time, place and form utilities to the
consumer.
MARKETING CHANNEL

Philip kotler (1988) remarked that marketing channel can be viewed as a set of
interdependent organizations involved in the process of making a product or service
available for use or consumption.

Berkowitz et al. (1989) described marketing channel as group of individuals and

firms involved in the process of making a product or service available for use by
consumers or industrial users.

Saini and Bhathi (1995) referred marketing channel as the sequence of agencies
through which a commodity would pass during process of marketing.

Prasheret al. (1996) defined complete sequence of functionaries of marketing as

marketing channel. The marketing channel involved agencies like growers, pre-harvest
contractors, forwarding and commission agents, wholesalers and retailers.

Peltonet al. (2002) defined marketing channel as exchange relationships that create
customer value in the acquisition, consumption and disposition of products and services.

Acharya and Agarwal (2004) viewed marketing channels as routes through which
agricultural products move from producers to consumers. The length of the channel
varies from commodity to commodity, depending on the quantity to be moved, the form
of consumer demand and degree of regional specialization in production.

Verma (2004) explained that the movement of the produce from producer to
ultimate consumer comprises of a chain of intermediaries called marketing channel.

Coughlan et al. (2005) defined marketing channel as a set of interdependent

organizations involved in the process of making a product or service available for use or
consumption.

Dhanapal (2007) considered marketing channel as the track or path in which the
produce moved from the farmer to the consumer.
 In the present study, marketing channel is defined as a path traced in the
movement of little millet from the primary producer to the ultimate consumer / user.

Mukherjee and Mohamed (1998) defined that the marketing cost includes market
tax, transport, wastage, rent, etc.

Rajoo (2002) defined marketing cost as the expenses incurred by farmers and
other agencies such as pre-harvest contactors, wholesalers, secondary wholesalers and
retailers for performing their functions in the movement of produce from the farmers to
the final consumers.

Acharya and Agarwal (2004) stated marketing cost as the cost involved in moving
the commodities from the producers to consumers i.e., the cost of performing various
marketing functions and various agencies.

Kumaravel (2005) referred marketing cost as the actual expenses incurred by

farmers, wholesalers, vendors and retailers for performing their functions in the
movement of produce from the farmers to the consumers.

Pushpa and Mrunalini (2006) included that items of marketing cost incurred by
producer seller in rose cultivation included packing materials such as gunny bags,
baskets, jute thread, scissors, transportation charges, loading and unloading, loss in transit
and market fee.

Sreenivasa Murthy et al.(2007) stated that marketing cost has been identified as
the major constraint in the wholesale marketing channel and bringing down the costs,
particularly the commission charges as demonstrated in the co-operative channel will
help in reducing the price spread and increasing the producers’ margin. The total
marketing cost for all stages was higher in the whole sale channel, which amounted to
Rs.4.36/kg compared to Rs. 1.30/kg in the co-operative channel.

In the present study, marketing cost is defined as the actual expenses incurred by
farmers and other market intermediaries for performing their functions in the movement
of little millet from the farmers to the consumers.
MARKETING MARGIN

Dhondyal (1981) stated that marketing margin covered all the expenses and
profits of the marketing agencies or functionaries.

According to Saraswat and Vaidya (1995) marketing margin would include all the
costs of picking, assembling, grading, transport, processing, storage, wholesaling and
retailing.

According to Keruret al. (1998) marketing margins will measure the gap between
the net price received by the cultivator and the price paid by the consumer.

Acharya and Agarwal (2004) stated that marketing margin includes the cost
involved in moving the product from the point of production to the point of consumption,
i.e., the cost of performing various marketing functions and operating agencies and profits of
the various market functionaries involved in moving the produce from the initial point of
production till it reaches the ultimate consumer. The absolute value of the marketing margin
varies from channel to channel, market to market and time to time.

Dhanapal (2007) referred to marketing margin as the profit earned by each agency
in marketing of fruits and vegetable.

Krishi and Vishwaridyalaya(2007) studied that marketing margin covers all the
expenses and profit of the market agencies and of functionaries. Marketing cost includes
all the marketing charges from local assembling to retailing in the marketing process.

Rangasamy and Dhaka (2008) stated that marketing margin of the dairy plant was
taken as the difference between the selling price of a product per unit and the total cost of
its manufacturer and distribution. In a dairy plant, the total marketing cost comprises
costs on milk procurement, its processing and distribution of dairy products.

In the present study, marketing margin is conceptualized as the profit earned by

each stakeholder in the marketing channel of little millet.
MARKETING EFFICIENCY

Jain (1971) defined marketing efficiency as the maximization of consumer

satisfaction with least cost incurred in providing that satisfaction through system of
marketing.

Kohls and Joseph (1980) defined marketing efficiency as the ratio of market
output (satisfaction) to the marketing input (cost of resources). An increase in this ratio
would represent improved efficiency and vice versa. A reduction in the cost for the same
level of satisfaction or an increase in satisfaction at a given cost would result in an
improvement of efficiency.

Kumar et al. (1997) defined marketing efficiency would be referred in terms of

average price received per quintal basis as well as share in consumers rupee.

Bilonikaret al. (1998) defined marketing efficiency as an effectiveness of the

marketing system with which it operates.

Khunt (2001) analysed the marketing efficiency by shepherd index. He found that
marketing efficiency was low about 0.43 due to high marketing cost and margins in
mango marketing.

Ramkumar (2001) defined marketing efficiency as the degree of market

performance. It is defined as having the following two major components (i) the
effectiveness with which a marketing service would be performed (ii) the effect on the
cost and the methods of performing the service on production and consumption.

Verma (2004) analysed that marketing efficiency indicates to what extent the
marketing agencies are able to move the goods at the minimum cost, extending maximum
service from producer to the final customer.

Anand and Ramesh (2007) stated that efficiency of market of any produce is
worked out by the size of the share, which the producer receives from the price paid by
the consumer. The relationship between the producer and consumer price is manifested
and it is known as price spread.
 Dhanapal (2007) referred to marketing efficiency as the effectiveness of market to
perform various functions.

Ran Dev (2008) suggested that the marketing efficiency levels at the existing
levels of resource use within the purview of public and private sectors have been
estimated and can be raised further if problems related with performing different market
functions in the light of fruits and vegetables are taken care off, for this will enhance
marketing efficiency further.

Rangasamy and Dhaka (2008) stated that the marketing efficiency is the ratio of
value addition for the goods to the marketing cost where the value added is the difference
between the cost of goods purchased by a firm and price for which it sells those goods.

In the present study, an efficient market is conceptualized as the channel in which

farmers receive maximum share in the consumer rupee i.e., minimum price spread.

PRICE SPREAD

Price-spread is the difference between the actual price received by theproducers,

the price paid by the consumers, costs incurred and margins earned bythe various market
intermediaries in the process of marketing of banana. The netprice received by the
producers, total marketing costs and margins were analysedseparately for small and large
farmers in order to evaluate the marketingefficiency of different marketing channels.
George (1972) defined price spread as the cost incurred and the profit gained by
the agencies involved. These charges included payments like assembling of raw materials
from farms, storage, transportation, wholesaling and retailing.

Krishnamoorthyet al. (1972) said that price spread would be a composite of

various costs incurred and margin of intermediaries in the various processes, such as
those of assembling, processing, storage, transport and retailing.

Singh and Balishter (1981) explained that the price spread referred to as the
difference between the prices received by the producer for an equivalent quantity of farm
product. This spread or margin included all types of costs of moving the produce from the
point of production to the place of consumption.
 Desai (1984) explained that the price spread would be broad spectrum which
disclosed the properties of various components of marketing cost of produce and thus
explained the variance between the price paid by the consumer and price received by the
producer.

Acharya and Agarwal (1994) defined price spread as the gross margin of
marketing in the marketing of farm commodities and would be measured as absolute or
percentage differences in the price paid by the consumer and price received by the
farmer.

Sharma and Tewari (1995) described price spread in relation to the agricultural
commodities as the difference between the price paid by the ultimate consumer and the
price received by grower for an equivalent amount of farm produce. This spread would
consist of marketing cost and marketing margin of intermediaries.

Venkataramana and Srinivasa (1996) explained that the price spread is one of the
important measures of market efficiency which would indicate the share of the producer
in the consumer rupee. It would also indicate the shares of various market intermediaries
in the consumer’s rupee for the services rendered by them in channeling the commodity
from producer to the consumer.

Bhatia (1996) explained that the price spread of a commodity would be the
magnitude of difference between the price received by the primary producer and the price
paid by the ultimate consumer.

Kumar et al. (1997) defined the price spread is the difference between the price
paid by the consumer and the price received by the producer per unit of a commodity.

Rajoo (2002) considered price spread as the difference between price paid by the
consumer and net price received by the producer.

Acharya and Agarwal (2004) defined price spread as the difference between the
price paid by the consumer and the price received by the producer for an equivalent
quantity of farm produce.
 Kanaka (2007) defined price spread as the difference between the price paid by the
consumer and net price received by the producer, described in supply chain management
on mango.

Baba et al. (2010) analyzed the price spread of vegetables with respect to various
marketing channels and indicated that the producers’ share has an inverse relationship
with the number of intermediaries.

Jadavet al. (2011) defined price spread as the difference between the price paid by
the ultimate consumer and the price received by the farmer for an equivalent quantity of
produce in potato crop. It includes cost of performing various marketing functions and
margins of different agencies associated in the marketing process of the commodity.

In the present study, price spread is defined as the difference between the price
received by the little millet producer and the price paid by the ultimate consumer
expressed as a percentage.

Thillairajan (1994) considered the market intermediaries as those involved in the

marketing which include village merchants, wholesalers and exporters working in
different points in the distribution channel in transforming the ownership of shrimps from
producers to ultimate users.

FPO:

PreetiSawairam(2015) consideredFarmers’ producer organizations and their

societies as hybrids between private companies and cooperative companies. The producer
company concept is aimed to combine the efficiency of a fellowship with the spirit' of
traditional cooperatives. Producer companies aim to integrate the farmers into modern
supply networks by minimizing transaction and coordination costs, while benefiting from
economies of scale.
Radhika Rani Cherukuri and A. Amarender Reddy (2014) consideredFarmers’
producer organizations as improving services to farmers and bringing positive changes to
productivity and net income of the producers through involvement in a producer
organisation.
Review of Past Studies
Marketing Channels Marketing Efficiency and Price Spread

Nadwadkar (1991) in his study on marketing efficiency of vegetables in Western

Maharastra reported that the marketing cost incurred included grading charges, packing
charges, packing materials, transport, weighing, commission and miscellaneous expenses.
They regarded higher proportion of intermediaries’ profits as the indicators of
inefficiency of the marketing system.

Sahu (1995) in his study on coconut marketing in Orissa identified two marketing
channels. In this regulated market, the producer share in consumer’s price was 62.22 per
cent. The marketing cost for 1000 coconuts from producers to consumers was worked out
to be Rs.1700 which was 37.78 per cent of the price paid by the consumers. The
maximum share of price spread to the retailers as profit (15.89 per cent) followed by
traders (6.67 per cent) and wholesalers (2.23 per cent). In the unregulated markets the
producers share in consumer’s rupee was 68.57 per cent in coconut and the price spread
was 31.43 of the price paid by the consumer. The maximum share of price spread t the
traders was 24.61 per cent of the consumer’s price as against 68.57 per cent in
unregulated markets. The marketing efficiency as per the shepherd’s formula was
calculated to be 1.65 per cent and 2.18 per cent for regulated and unregulated markets.

Bagdeet al. (1996) in their study on dynamics of marketing of selected fruits in

Nagpur used Shepherd methodology in working out the marketing efficiency. They
identified two marketing channels. In channel I producers, pre-harvest contractors,
commission agents and retailers were involved and in channel II producers, commission
agents and retailers were involved. They found that producer’s share in consumer’s rupee
was 39.34 per cent in apples, whereas the retailer got 41.06 per cent of the share. The
study revealed that marketing efficiency was higher for seedless grapes compared to
apple and mango.

Devaraja (2000) studied channels and price spread in fruits and vegetables
marketing in Mysore district, Karnataka. He identified five channels of marketing of
horticultural produce and found that commission charges dominated the marketing cost
upto an extent of 65 per cent followed by transportation cost. He found that pre-harvest
contractors prevailed in fruit marketing and suggested to stop this practice by improving
the market conditions.

Baruahet al. (2001) in their study on analysis of marketing margin, price spread
and marketing efficiency of cauliflower in Barpeta district, Assamidentified two
marketing channels for cauliflower where in Channel I comprised of producers, primary
wholesalers, secondary wholesalers, retailers and consumers and in Channel II comprised of
producers, retailers and consumers. They found that producer’s share in consumer rupee was
high in channel II and also revealed that marketing efficiency was higher in the same
channel.

Chavanet al. (2001) in their study on marketing of banana in Parbhani market of

Maharastra found two marketing channels, Channel I comprised of primary wholesalers,
commission agents/wholesalers, processors, retailers and consumers and Channel II
comprised of wholesalers, processors, retailers and consumers. The wholesaler’s shares
in consumer’s rupee were 48.25 per cent and 37.56 per cent in channel I and channel II.
Retailer’s share in consumer’s rupee was 20.18 per cent and 20.69 per cent and the
farmer’s share was 23.35 per cent and 28.53 per cent in channel I and channel II and also
reflecting better efficiency in channel II.

Jagdish (2001) in conducted a study on vegetables production and marketing in

Bihar. He found that more than 80 per cent of the farmers sold their produce through the
market intermediaries namely commission agents and village merchants. He identified
three marketing channels viz., Channel I which involved farmers, village merchants,
wholesalers/commission agents, retailers and consumers, Channel II which involved
farmers, commission agents, retailers and consumers and Channel III which involved
farmers, wholesalers, commission agents, retailers and consumers. The producer’s share in
consumer’s rupee for potato in channels I and II were 57.64 per cent and in Channel III
was 60.79 per cent. Thus, the share of producer’s marketing cost and margins were high
in all the marketing channels indicating that larger price spread was the cause for
marketing inefficiency.
 Rajput et al. (2001) conducted a study in production and marketing of potato in
Indore district of Madhya Pradesh. The results showed that the producer’s share in
consumers’ rupee at Indore vegetable Mandy in the marketing of potato was 65.08 per
cent. The producers had relatively low share and it was primarily due to higher marketing
and transportation charges at one hand and higher margin of the middlemen on the other
hand.

Choleet al. (2002) worked out price spread in different marketing channels of
bitter gourd and tomato in Raigad District. The study found three marketing channels
namely, Channel I (Producers, Retailers and Consumers), Channel II (Producers,
Wholesalers, Retailers and Consumers) and Channel III (Producers, Commission agents,
Wholesalers, Retailers and Consumers) and found that preference was given to channel-II
by the cultivators. On the basis of cost of marketing incurred on various functions in
marketing of bitter gourd and tomato, channel I was found to be efficient.

Dodkeet al.(2002) conducted a study on economics of production and marketing

of turmeric and measured price spread. This study observed that the producer received
88.45 per cent share in price paid by the consumer. Turmeric being a non-perishable
crop, the total cost of marketing was observed to be only 11.55 per cent of price paid by
the consumer.

Rajoo (2002) analysed the price spread and marketing efficiency of Sapota from
Chitradurga district of Karnataka. He defined four marketing channels for Sapota, in
which Channel I consisted of producers, local traders, wholesalers and retailers, Channel II
involved producers, wholesalers and retailers, Channel III involved farmers, wholesalers and
Rallis Kisan Kendra (Andra Pradesh) and Channel IV involved farmers and Rallis Kisan
Kendra retail outlets. He used Acharya and Agarwal’s methodology and Calkin’s index to
evaluate the efficiency of marketing channels. The study concluded that the marketing
efficiency was very high in case where, the farmers sold their produce directly to the Rallis
Kisan Kendra.

Beeraladinni (2003) estimated the cost structure and marketing of grapes in

Bijapur district of Karnataka and two marketing channels were identified in marketing of
grapes, channel II (farmers, commission agents, retailers and consumers) was popular
among sample growers. The total marketing cost of the farmers was Rs. 38.83 per
standard box and that of the commission agent and retailer were Rs. 3.94 and Rs. 38.83
per standard box. The marketing margin of commission agent and retailer were Rs. 14.06
and 61.17 per standard box which accounted for 3.52 per cent and 15.29 per cent of the
consumer’s rupee.

Jai (2003) explained about the marketing operation of Himachal apples and
identified that the popular marketing channels were marketed through a forwarding
agency to a commission agent and wholesaler in the wholesale market. The marketing
channels involved terminal markets, forwarding agency to a commission agent,
wholesaler, retailer and consumer. The produce passed through a number of
intermediaries. Accounting to rough estimates, the apple grower got approximately 20
per cent of the gross price product. The remaining cost was shared by way of packing raw
material, taxes, sales tax, traders, bankers, insurance companies and the owners of cold
storage, etc.

Ladaniyaet al. (2004) conducted a study on price spread of pomegranate in

Maharashtra. This study identified that 90 per cent of the produce was marketed through
three major marketing channels. Channel I involved producer, commission agent,
wholesaler, retailer and consumer, Channel II involved producer, co-operative society,
commission agent, retailer and consumer and Channel III involved producer, commission
agent (local), trader (distant), wholesaler, retailer and consumer. Local channels like i)
producer and consumer ii) producer, retailer and consumer iii) producer, pre-harvest
contractor, retailer and consumer existed through which 10 per cent of the produce was
marketed. Producers with small holdings preferred co-operative society and marketing of
produce through forming self help groups for transportation. Packaging, long distance
transportation and commission charges accounted for 90 per cent of the marketing costs.
The study revealed that price spread was high in channel I and channel III since the
farmers sold their produce through more intermediaries.

Chauhan and Amit Chhabra (2005) analyzed disposal channels, margins and price
spread for maize. A multi-stage stratified sampling technique was used to select 120
maize growers. The study revealed that the practice of storing maize for some time and
selling through storage lost upto 2.80 per cent of marketable surplus.

Rajavel (2005) estimated price spread in supply chain of carrot in Hoskotetaluk of

Bangalore district of Karnataka. There were two marketing channels existing for
marketing of carrot in Hoskotetaluk. Channel I involved farmers selling to consumers
through village merchant, wholesaler and retailer and Channel II involved farmers selling to
consumer through village merchant, vendor and retailer. The gross price received by the
farmer was Rs. 750 per 100 kilogram of carrot which accounted for 44.24 per cent of the
final price. The gross price received by the village merchant, wholesaler and retailer was Rs.
915 (54 per cent), Rs. 988 (58.30 per cent) and Rs. 1695 (100 per cent) of the final price
respectively.

Francis (2006) identified the market channel which involved farmer, company,
retailer and consumer as the most common type of marketing channel. The share received
by the farmer constituted 40 per cent of consumer’s rupee. The marketing margin for the
company was 27.91 per cent of consumer’s rupee while it was 5.68 per cent for the
retailers. The marketing cost was also high for the company at 24.08 per cent of
consumer’s rupee and it was low at 2.33 per cent for the retailers. The marketing
efficiency of the vanilla marketing channel was estimated using the following two
methods: Acharya and Agarwal’s method and Calkins index. The marketing channel was
found to be highly efficient because the value addition per rupee of marketing cost was
higher.

Kiruthika (2009) in her study identified six marketing channels for turmeric and
price spreads were estimated for each of the six marketing channels. The price spread
was Rs. 5335, Rs. 2335, Rs. 5145, Rs. 2145, Rs. 5085 and Rs. 1585 per kg of turmeric
respectively. It was lower in the sixth marketing channel. The share received by the
farmer constituted 40.70, 61.10, 42.8, 64.25, 43.50 and 71.20 per cent of consumer’s
rupee for six different marketing channels, respectively. The profit margin for wholesaler
constituted 35.50 per cent of consumer rupee in all different market channels and the
marketing cost borne by the wholesaler constituted 11.11 per cent of consumer’s rupee in
all three marketing channels. The profit margin for retailer constituted 7.7, 20.0, 7.7,
20.0, 7.7 and 12.7 per cent of consumer’s rupee for six different marketing channels,
whereas marketing cost borne by the retailer constituted 1.11, 13.3, 1.11, 13.3, 1.11 and
1.54 per cent of consumer’s rupee for six different marketing channels, respectively. The
marketing efficiency calculated through Shepherd’s approach and Acharya’s approach
revealed that the marketing efficiency was relatively higher in marketing channel VI, i.e.,
6.21 in Shepherd’s method and 4.98 in Acharya’s approach and the Calkin’s index was
low for the marketing channel VI.

Mabel Sulochana (2009) studiedproduction and marketing of coconut in

Kanyakumari district. They identified three marketing channels such as Channel I
(producers, village traders, wholesalers, retailers and consumers), Channel II (producers,
wholesalers, retailers and consumers) and Channel III (producers, village traders, retailers
and consumers). The study revealed that the price spread in channel II was the lowest
with Rs. 1194 per 1000 nuts because of less marketing cost and higher producer’s price
followed by Rs. 1494 per 1000 nuts in both channel I and Channel III. Among the three
channels, marketing efficiency in Channel III was found to be the most efficient with
9.65 per cent.

Shelke (2009) studied price spread of major vegetables in Parbhani market.

The study found that there was much wide difference between wholesale and retail
prices. The margin of the retailer was extremely high in all the vegetables under study.
The retailer’s share ranged between 12 to 41 per cent while the producer’s net share
ranged between 42 to 57 per cent. The retailers received more share of the consumers’
rupee. The study suggested that the producers can be highly benefited and increase their
share to 95.85 per cent from 55.35 per cent in consumers price by selling their vegetables
directly to consumer rather than selling to wholesalers.

Sidhu et al. (2010) revealed that the producer’s share in consumer’s rupee was found
to be higher in onion than in cauliflower under producer – wholesaler – retailer - consumer
and producer retailer - consumer supply chains due to relatively lower degree of
perishability. Further, as the links of supply chain got reduced, the share of producer in
consumer price increased, indicating higher market efficiency under integrated supply
chain systems.
 Rashmi Ramachandran (2010) conducted a study at Kerala to estimate the
production and marketing of cardamom. Multistage sampling technique was used to
select 100 respondents in Kerala. She identified four marketing channels and the price
spread in each channel was Rs.171.40, Rs.116.52, Rs.155.68 and Rs.131.00 per kg,
respectively. Marketing channel II had lowest price spread. The share received by the
farmers constituted 75.56, 82.52, 77.94 and 80.76 per cent of consumer’s rupee for four
different marketing channels, respectively. Finally it was revealed that the marketing
efficiency was relatively higher in marketing channel II in both the approaches.

Navadkaret al. (2012) studied that Economics of Production and Marketing of

Kharif Maize in Maharashtra in two markets of Ahmednagar market and Kajat market
estimated that the Marketing cost. The cost includes grading and packing charges,
transport charges and marketing efficiency was calculated using Acharya’s Index. The
marketing channel observed in the present study was producer, wholesaler, retailer and
consumer. They found that producer’s share in consumer’s rupee was 78.26 per cent in
Kajat market and 73.19 per cent in Ahmednagar market. In Channel I, the efficiency of
Kharif Maize in Ahmednagar market was 1.13 and in Kajat market was 1.11. In Channel
II, Marketing efficiency at local market was 1.10 and concluded that Ahmednagar was
efficient for marketing of Maize.

Dastagiriet al. (2013) conducted a study in seven different states on vegetables

production, marketing efficiency and export competitiveness in vegetables.The results
showed that the producers share in consumer rupee was highest in Punjab (100 per cent)
compared to Tamil Nadu (91 per cent to 95 per cent), Manipur (84 per cent to 94 per
cent), Andhra Pradesh (24 per cent to 48 per cent), West Bengal (26 per cent to 44 per
cent) and Rajasthan (33 per cent to 52 per cent). The efficient marketing channel was
found to be producer to consumer channel. Marketing efficiency was highest in Punjab
for all the vegetables and lowest in West Bengal. There was no price spread in Punjab
because of direct marketing.

Swaminathanet al. (2013) conducted a study on Market and Marketing

efficiencies of vegetable trading in the Coimbatore district of Tamil Nadu. He estimated
efficiency for the vegetables in the markets like Bhendi, Potato, Tomato and Small onion
in three markets in Coimbatore, i.e., (i) Wholesale market – MGR market, (ii) Retail
market – Vadavalli Sunday market and (iii) Farmer’s market at RS puram. Snowball
sampling method was adopted in the study. They revealed that Minimum price spread
was noticed for onion in retail (29.25 per cent) and wholesale (18.70 per cent) markets.
Price spread was higher in case of Bhendi. Bhendi was found to be higher in marketing
cost. With respect to Tomato, village traders and retailers carry higher marketing margin
whereas wholesalers had low marketing cost. The marketing margin varied between from
7.16 per cent to 30.46 per cent.

FPO

PreetiSawairam(2015)conducted a study on fpo inJunnarTaluka Farmers’

Producer Organization,Pune. She explained that the concept of producer companies can
be analyzed within the general trendof farmer organizations transforming into more
market oriented and business orientedforms of institutions. It represents a tool for small
and farmers to get organized and to reapbenefits not only from joint action, but also for
links to evolving high-value markets in India'surban centers. The organizational structure
of producer companies borrows much of thecooperative idea, but they are professionally
managed to ensure economic viability and toprevent political leverage. The success of
producer companies, however, depends on thefarmers' commitment to the company. The
integrity and quality of the leadership, itsacceptance within the community, as well as the
market environment are the most crucialfactors for a successful production company. It
has to be economically beneficial for theparticipating farmers to market their excess
production through the company. Finally, the researcher concludes that producer
companies are a promising new model for farmers, but one which needs continued
support and further critical analysis.
Radhika Rani Cherukuri and A. Amarender Reddy (2014)conducted research
study on FPO roles in improving services.The research reported in this article is
encouraging and suggests that support institutions should and could play a more
prominent role in making small producer agriculture more viable, especially as an
institutional support mechanism which could play a positive role in improving the income
of producers. The experiences of both Uttarakhand and Kerala suggest that although crop
yields may be reduced because of other factors, prominently a shift towards more organic
and health-conscious methods of farming, producers could still achieve better pricing
structures for their products as a result of being better organised. This is so especially
where the quality of goods, organic in these cases, and the availability of more
marketable surplus, made possible through collectivisation via producer organisations,
have become relevant factors in the market.