The paper has examined the market segmentation in spice wholesale markets across the country and has drawn some policy implications for enhancing market efficiency of spices. The study is based on eight major spice commodities (black pepper, cardamon, chilli, turmeric, ginger, garlic, coriander and cumin) for price dispersion during the years 2003–04 and 2013–2014. The study has examined the effect of major market reforms in improving the efficiency of wholesale spice markets through reduction in market segmentation using data on monthly price dispersion of these spices across wholesale markets in the country. The study has found that magnitude of reduction in market segmentation in response to market reforms is low and varies across domestically traded spice commodities. The persistence of high degree of price dispersion in spice markets creates a significant price wedge between producer prices and consumer prices, resulting in higher cost for both farmers and consumers. The study has highlighted the need for strengthening and pursuing the reform agenda for agricultural markets to create a unified market for agricultural commodities in the country.
Market reforms, spices, marketing efficiency, price dispersion
