Does the participation in modern marketing channels for dry chillies affect economic welfare? Evidence from India

Figures & data

Figure 1. Map showing selected Guntur district in Andhra Pradesh.

Table 1. Specification of market channel choice combinations and sample farmers.

Marketing channel choice	Combinations	Retail Malls		Kalgudi e-Market		Sample observations	%
		R0	R1	K0	K1
0	R0K0	√		√		162	21.32
1	R1K0		√	√		207	27.24
2	R0K1	√			√	243	31.97
3	R1K1		√		√	148	19.47
Total						760	100.00

Note: The combinations represent the possible joint adoption of marketing channel choices.

Table 2. Variable types and definitions.

Variable type	Abbreviation	Variables definition
Outcome Variable	GEW	Gross Economic Welfare of smallholders was measured using three indicators viz., Household Expenditure (HHE) + Household Assets creation (HHA) + Household Savings (HHS) (Wossen et al., 2017; Mathenge et al., 2014; Michelson, 2013)
Treatment variable	Selection of modern marketing channels	Categorical (Traditional marketing channel via APMCs (0); Modern Marketing Channels viz., Retail Malls (1); Kalgudi e-market (2) or joint participation (3)
Instrumental Variable (IV)	Farmer-Producer Organization (FPO)	Membership in FPO/Dummy (1 = Yes, 0 = otherwise) (Appendix 1)
Covariates	EDU	Education of the farmer/Dummy (1 = Yes if >10^th class, 0 = No, if < 10^th class)
	AES	Access to extension services/Dummy (1 = Yes, 0 = No)
	ATI	Access to internet /Dummy (1 = Male, 0 = Female)
	TS	Technical support received from Scientists from ANGRAU, Kalgudi e-market, Retail malls/Dummy (1 = Yes, 0 = No)
	AMI	Access to market information/Dummy (1 = Yes, 0 = No)
	DTM	Distance to market (km)
	LHS	Landholding size (ha)
	FE	Farming Experience (years)

Table 3. Summary statistics of variables, by marketing channel choice and pooled sample.

Variables	Sale in market = 0 (APMCs)		Sale in market = 1 (Retail mall)		Sale in market = 2 (e-market)		Sale in market = 3 (retail mall + e-market)		Pooled
	(n = 162)		(n = 207)		(n = 243)		(n = 148)		(n = 760)
	Mean	SD	Mean	SD	Mean	SD	Mean	SD	Mean	SD
HHE (Rs/year)	33789.01	2993.96	39374.41	2737.21	47590.74	2976.59	42135.74	2976.08	40722.47	9065.41
HHA (Rs/year)	27249.47	799.56	30741.23	2160.86	44426.15	3592.44	39459.56	2275.02	35469.08	10003.32
HHS (Rs/year)	79721.33	37541.64	88724.75	48236.24	113644.16	61281.47	99609.50	56126.01	95424.93	55635.13
GEW	140759.71	37823.92	158840.38	13857.69	205661.05	9532.18	181204.8	10431.77	171616.48	54072.06
AES	0.45	0.5	0.56	0.51	0.89	0.49	0.72	0.57	0.66	0.53
EDU	0.51	0.5	0.54	0.54	0.76	0.53	0.69	0.52	0.63	0.63
ATI	0.08	0.27	0.19	0.34	0.69	0.45	0.93	0.26	0.47	0.69
TS	0.28	0.45	0.47	0.58	0.73	0.59	0.81	0.56	0.57	0.54
AMI	0.51	0.53	0.63	0.59	0.88	0.57	0.73	0.51	0.69	0.52
FPO	0.25	0.43	0.43	0.58	0.64	0.48	0.53	0.58	0.46	0.58
DTM (km)	24.93	6.12	10.28	4.59	15.33	2.85	19.75	3.08	17.57	7.73
FE (years)	34.65	6.07	8.48	4.76	5.79	5.72	7.11	4.92	14.01	9.29
LHS (ha)	1.79	0.53	1.35	0.54	1.49	0.55	1.53	0.57	1.54	0.55

Table 4. Marginal effects for the determinants of modern marketing channels^# –Multinomial logit model (First stage of MESRM).

Variables	Sale in market = 1 (Retail mall)	Sale in market = 2 (e-market)	Sale in market = 3 (Retail mall + e-market)
AES	0.0126**	0.0054*	0.0082**
EDU	0.0091**	0.0023**	0.0194**
ATI	0.2205	0.0409**	0.2127*
TS	0.0088**	0.0150*	0.0248**
AMI	0.0026*	0.0060**	0.0134**
DTM	−0.0067**	−0.0051	−0.0054
FE	−0.0008**	−0.0159	0.0135
LHS	−0.0270	0.0073	0.0236
FPO	0.0021*	0.0098**	0.0224**
Joint Wald χ^2 (27) = 268.81**
Joint IV Wald χ2 (3) = 9.55*
Pseudo R^2 = 0.8052

Note: ** & * indicate significance levels at 1% and 5% levels, respectively.

# - Baseline category is farmers’ participating in traditional marketing channel (APMC) with (100) Bootstrapping.

Table 5. Determinants of GEW based on marketing channel choice – second stage of MESRM.

Variables	APMC (Base category)		Retail Mall		e-Market		Retail mall + e-Market
	Coeff	SE	Coeff	SE	Coeff	SE	Coeff	SE
AES	0.0478**	0.0124	0.0275**	0.0102	0.0166**	0.0057	0.0319**	0.0068
EDU	0.0038	0.0147	0.0421**	0.0090	0.0222**	0.0052	0.0145**	0.0052
INTERNET	0.0081	0.0262	0.0087	0.0463	0.0301**	0.0061	0.0924*	0.0456
TS	0.0405**	0.0149	0.0305**	0.0100	0.0135*	0.0060	0.0302**	0.0067
AMI	0.0104	0.0153	0.0214*	0.0098	0.0236**	0.0050	0.0233**	0.0066
DTM	−0.0138**	0.0021	−0.0043*	0.0018	−0.0011	0.0009	−0.0052**	0.0010
FE	0.0115**	0.0012	0.0033*	0.0016	0.0005	0.0005	0.0014	0.0012
LHS	0.5250**	0.1137	0.0099	0.0089	−0.0016	0.0044	0.0046	0.0052
FPO	0.0224	0.0151	0.0283**	0.0094	0.0225**	0.0055	0.0309**	0.0076
_m0			0.1072**	0.0409	0.1487**	0.0611	0.2132**	0.0587
_m1 (over base outcome)	−0.1352**	0.0331			0.1181*	0.0571	0.2079**	0.0365
_m2 (over base outcome)	−0.2333**	0.0402	−0.1088*	0.0542			−0.1157**	0.0277
_m3 (over base outcome)	−0.4384*	0.1761	−0.1067**	0.0345	0.9432**	0.3426
Sigma2	0.0162	0.0184	0.0045	0.0033	0.0011	0.0023	0.0021	0.0026
rho0			0.1382*	0.06123	0.5366**	0.09332	1.3383**	0.141
rho1	−1.3633*	0.5929			0.3623**	0.1274	1.2519**	0.2597
rho2	−2.3501*	1.1173	−0.169**	0.05832			−0.4227*	0.20326
rho3	−4.4206**	1.1241	−0.1286*	0.0591	0.575**	0.1251
_CONS	11.1367	0.0938	12.3459	0.0820	12.5545	0.0213	12.3277	0.1138
Hausman test for IIA					0.811^NS		0.419^NS

Note: ** and * indicate significance levels at 1% and 5% levels respectively.

Baseline category is APMC mandi, sample size is 760 farmers with (100) Bootstrapping.

Table 6. Average expected GEW from modern marketing channels of dry chillies (Rs.).

	Participants	Non-participants	Treatment effect (ATT/ATU)	% Δ in GEW
R1K0
Participants	233477.50	142229.29	ATT= 91248.21	39.08
Non-participants	171169.00	134520.30	ATU= 36648.70	21.41
R0K1
Participants	265635.70	141396.00	ATT= 124239.70	46.77
Non-participants	175072.99	134520.30	ATU = 40552.69	23.16
R1K1
Participants	245176.30	144442.89	ATT= 100733.41	41.09
Non-participants	174240.40	134520.30	ATU= 39720.10	22.80

Note: ** - statistical significance at 1% level.

The baseline category is farmers transacting dry chillies in APMC mandi.

Table A1. FPOs-Kalgudi: e-market linkages in Krishna zone of Andhra Pradesh.

Mandal	District	Name of FPO	Number of Farmers
Macherla	Guntur	Agriculture Related Producers Mutually Aided Cooperative Federation Ltd	3143
Chandarlapadu	Krishna	Utpathidarla Paraspara Sahayaka Sangam	2650
Durgi	Guntur	Vyavasaya Mariyu Anubanda Raitu Utpatti Darula Sangam	2453
Pedanandipadu	Guntur	Vyavasaya Mariyu Anubanda Raitu Utpatti Darula Sangam	2031
Veldurthy	Guntur	Agri Related Ppsss Ltd	2002
Bollapalli	Guntur	Vyavasaya Mariyu Anubanda Raitu Utpatti Darula Sangam	1975
Amaravathi	Guntur	Agri & Allied Producers Cooperative Society	1885
Vetsavai	Krishna	Vetsavai Mandal Fpo	1832
Dornala	Prakasam	Vyavasaya Mariyu Anubanda Utpatti Darula Sangam	2245
Peddakadabur	Kurnool	Agri And Allied Producers Macs Ltd.	1807

Source: Officials from Kalgudi e-market.

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