Economic Analysis of Price Spread and Marketing Efficiency of Vegetables in Mandya District of Karnataka

A study was taken up to assess the price spread and marketing efficiency of different vegetables under different supply chains for the period 2009–2010 in Mandya district of Karnataka State. Multistage sampling was adopted for the selection of respondents. Ninety vegetable growers and 60 output suppliers were selected randomly. In case of selected vegetables, three output supply chains were identified in study area namely, a) Farmer-Commission Agent 1-Commission Agent 2-Retailer-Consumer (SC-I), b) Farmer-Wholesaler-Retailer-Consumer (SC-II) and c) Farmer-Retailers-Consumer (SC-III). Majority of the farmers sold their vegetables though SC-I and SC-II. The reason to sell the produce through commission agents was that, farmers were getting spot payments and competitive prices. SC-III was the most efficient supply chain as the cost incurred on marketing expenses was least and marketing efficiency was highest. The maximum quantity of the produce in all the vegetables under this study was found to be routed through the SC-I. The market margin charged by retailers in case of tomato sale was maximum among all other vegetables, in all supply chains, ranging from 12.71 to 24.71 per cent of consumer's price whereas the retailers market margin for the beans was from 9.13 per cent to 15.21 of consumer's price and for the brinjal, the margin was 11.83 to 21.39 per cent. The price spread in tomato, brinjal and beans was highest in supply chain-I with 56.18 per cent, 58.51 per cent and 71.09 per cent, respectively. This may be attributed to the involvement of maximum number of intermediaries. The marketing efficiency was higher in supply chain-III than that of supply chain-II and supply chain-I in all the selected vegetables. The marketing efficiency was higher for beans with 5.10 and least for tomato with 3.19 in supply chain-III.