Role of marketing channels in price realization: Analysis of selected crops in India

The provision of fair and remunerative prices to farmers through the government intervention is one of the key debates in India. This is also an essential component of sustainable income provision within agriculture in India. This article identifies primarily, how marketing channels are responsible for higher price realisation by farmers over the officially announced minimum support price (MSP). Our major findings indicate that there are two factors which importantly determines this. Firstly, for crops which are covered by MSP, such as Paddy, Maize, Wheat and Cotton, government agencies do provide better prices. However, the probability of receiving higher prices increases if the farmers belong to upper land size-classes. Secondly, for Jowar and Bajra, two other important crops, which doesn‘t benefit from the government agencies, this perhaps requires higher levels of procurement at state level. The probability of better price provision improves with increase in land size and access to institutional credit.