An Estimation of the Marketing Efficiency of Existing Marketing Channel for Members and Non - Members of FPO Sample Farms of Groundnut in Tiruvannamalai District, Tamil Nadu, India

Abstract

Aims: This study estimated and compared the marketing performance, market concentration and marketing efficiency of existing groundnut marketing channels for Farmer Producer Organisation (FPO) members and non-members in Tiruvannamalai district, Tamil Nadu, India. Study Design: A multistage stratified random sampling procedure was adopted. Tamil Nadu formed the first stage, followed by districts as the second stage. Villages within the selected blocks were then identified, and groundnut growers in the selected villages were sampled as the fourth and final stage. Methodology: Market performance refers to the impact of market structure and conduct, as measured through variables such as prices, costs and output volume. The major indicators of market performance are net returns, marketing margins, marketing costs, the producer's share, value addition and marketing-channel efficiency. By analysing marketing margins and their cost components, the effects of market structure and conduct on market performance can be assessed. In this study, the profit margins of value-chain actors, marketing costs incurred by them, price spread, producer's share in the consumer's rupee and marketing efficiency were worked out to measure market performance. Results: The results revealed that FPO membership improved marketing outcomes for groundnut farmers. Among FPO members, the net price received by farmers ranged from Rs. 66.25/kg to Rs. 78.22/kg, with the highest price realised through Channel IV (Farmer-FPO Agent-Processor-Exporter). The producer's share in the consumer's rupee was also comparatively higher in most FPO channels. However, overall marketing efficiency among non-members was lower than that of FPO members because of greater dependence on village traders, wholesalers and other intermediaries. The price spread and marketing costs were generally higher in non-member channels, thereby reducing the producer's share in the final consumer price. Conclusion: Strengthening FPOs, promoting direct market linkages, expanding processing infrastructure and encouraging value addition can contribute to improving the income and livelihood security of groundnut farmers while supporting a more efficient and sustainable agricultural marketing system in Tamil Nadu.