Challenges to farm produce marketing

a model of bargaining between farmers and middlemen under risk

Ram Ranjan

    Research output: Contribution to journalArticle

    5 Citations (Scopus)

    Abstract

    We present a model of bargaining between farmers and middlemen in which long-term risk considerations by farmers constrain their ability to engage in hard bargaining. In order to avoid the risk of middlemen exiting their region in the future due to hard bargaining, farmers settle for lower prices for their produce. The risks of prolonged drought-induced decline in produce quality and future oversupply of the perishable agricultural commodity also result in lower price outcomes under bargaining. If farmers join a collective that enhances their bargaining power, they tend to be better off when the group is homogeneous.
    Original languageEnglish
    Pages (from-to)386-405
    Number of pages20
    JournalJournal of Agricultural and Resource Economics
    Volume42
    Issue number3
    Publication statusPublished - Oct 2017

    Keywords

    • Agricultural produce marketing
    • Asymmetric bargaining power
    • Drought risks
    • Farm gate price
    • Horticultural price bargaining
    • Market information systems
    • Middlemen in agriculture

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