Proceedings of the International Symposium Southeast Asia Vegetable 2021 (SEAVEG 2021)

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Transaction Cost Estimation in Vegetable Marketing Involving Modern Food Retail Chains

Impact on Profitability of Chili Growers

Authors
Kedar Vishnu1, *, Chengappa P. G.2
1Department of Data Science, CHRIST (Deemed to Be University), Lavasa, India
2University of Agricultural Sciences, Bangalore, India
*Corresponding author. Email: kedar.vishnu@christuniversity.in
Corresponding Author
Kedar Vishnu
Available Online 12 December 2022.
DOI
10.2991/978-94-6463-028-2_51How to use a DOI?
Keywords
Agricultural policy; Modern food retail chains; Transaction cost and asymmetric information
Abstract

This paper is an attempt to empirically measure the Transaction Costs (TCs) incurred by the farmers across different Modern Food Retail Chains (MRFCs). Evidence from existing studies indicate that MFRCs tend to behave opportunistically towards farmers due to an incomplete contract, lack of enforcement and asymmetric information. We estimated the TCs using the primary data collected in the year 2017 through a structured and pre-tested schedule administered to 100 each randomly chosen green Chilli farmers in Kolar district, India. The farmers were categorised into three groups; farmers undertaking production contracts, marketing contracts and traditional farmers selling their produce in spot markets. A non-parametric propensity score matching (PSM) estimator was used for measuring the asymmetric information (AS) and opportunistic behaviour (OB) by MFRCs. Our analysis indicated that AS and OB together reduced the green Chilli profit by 14.5%. A breakup of TCs indicated monitoring cost accounted for 65% followed by negotiation cost (28.7%) and information cost (6.3%). These findings have far-reaching policy implications: as how to reduce TCs and improve the profitability of Chilli growers.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Symposium Southeast Asia Vegetable 2021 (SEAVEG 2021)
Series
Advances in Biological Sciences Research
Publication Date
12 December 2022
ISBN
10.2991/978-94-6463-028-2_51
ISSN
2468-5747
DOI
10.2991/978-94-6463-028-2_51How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Kedar Vishnu
AU  - Chengappa P. G.
PY  - 2022
DA  - 2022/12/12
TI  - Transaction Cost Estimation in Vegetable Marketing Involving Modern Food Retail Chains
BT  - Proceedings of the International Symposium Southeast Asia Vegetable 2021 (SEAVEG 2021)
PB  - Atlantis Press
SP  - 495
EP  - 507
SN  - 2468-5747
UR  - https://doi.org/10.2991/978-94-6463-028-2_51
DO  - 10.2991/978-94-6463-028-2_51
ID  - Vishnu2022
ER  -