Working Paper: Do Storage and Structural Factors Determine Agricultural Commercialization in India?

No: WP-2020-004

Author: A. Ganesh-Kumar and Varun Kumar Das

Title: Do Storage and Structural Factors Determine Agricultural Commercialization in India?

Abstract: This paper analyses the role of storage facility and structural factors in determining agricultural commercialization in India. Commercialization of agriculture represents an important aspect of farm market behaviour. Farmers’ commercialization decision may be represented by farmers’ decision to participate in market sale, degree of market participation, number of market transactions and diversity of market agency sale. Access to storage could significantly regulate post-harvest management and marketing decisions by farmers. It could prevent distress sale and enhance better commercialization practices by farm households. Apart from access to storage facilities, this study considers various other farm, household, and structural variables in affecting farmers’ crop sale outcomes. Results show that farm households with likely access to storage facility have higher probability to participate in market transaction, sell more number of crops, and are more likely to have higher number of market transactions. This shows that having access to storage facility is likely to raise agricultural commercialization of farmers in India. The findings also show that structural or location specific variables which are beyond the control of the farm and household could significantly affect farmers’ marketing decisions.

Keywords: Commercialization; storage; sale ratio; agency sale; sale diversity; market participation; market transaction; structural factors

JEL Code: O13; Q12; Q13; Q18