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The impact of unifying agricultural wholesale markets on prices and farmers' profitability.

ABSTRACT: As a leading effort to improve the welfare of smallholder farmers, several governments have led major reforms in improving market access for these farmers through online agricultural platforms. Leveraging collaboration with the state government of Karnataka, India, this paper provides an empirical assessment on the impact of such a reform-implementation of the Unified Market Platform (UMP)-on market prices and farmers' profitability. UMP was created in 2014 to unify all trades in the agricultural wholesale markets of the state to be carried out within a single platform. By November 2019, 62.8 million metric tons of commodities valued at $21.7 billion (USD) have been traded on UMP. Employing a difference-in-differences method, we demonstrate that the impact of UMP on modal prices varies substantially across commodities. In particular, the implementation of UMP has yielded an average 5.1%, 3.6%, and 3.5% increase in the modal prices of paddy, groundnut, and maize. Furthermore, UMP has generated a greater benefit for farmers who produce higher-quality commodities. Given low profit margins of smallholder farmers (2 to 9%), the range of profit improvement is significant (36 to 159%). In contrast, UMP has no statistically significant impact on the modal prices of cotton, green gram, or tur. Using detailed market data from UMP, we analyze how features related to logistical challenges, bidding efficiency, in-market concentration, and the price discovery process differ between commodities with and without a significant price increase due to UMP. These analyses lead to several policy insights regarding the design of similar agri-platforms in developing countries.

SUBMITTER: Levi R

PROVIDER: S-EPMC7007571 | biostudies-literature | 2020 Feb

REPOSITORIES: biostudies-literature

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The impact of unifying agricultural wholesale markets on prices and farmers' profitability.

Levi Retsef R Rajan Manoj M Singhvi Somya S Zheng Yanchong Y

Proceedings of the National Academy of Sciences of the United States of America 20200121 5

As a leading effort to improve the welfare of smallholder farmers, several governments have led major reforms in improving market access for these farmers through online agricultural platforms. Leveraging collaboration with the state government of Karnataka, India, this paper provides an empirical assessment on the impact of such a reform-implementation of the Unified Market Platform (UMP)-on market prices and farmers' profitability. UMP was created in 2014 to unify all trades in the agricultura ...[more]

PMID: 31964822

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Project description:Sheeppox and goatpox (SGP) are important transboundary diseases, endemic in Nigeria, causing severe clinical manifestations, impacting production, and resulting in economic losses. Vaccination is an effective control measure against SGP in endemic countries but is not currently implemented in Nigeria. This study aimed to estimate SGP financial impact and assess economic viability of SGP vaccination at the herd and regional level under different scenarios in Northern Nigeria. Integrated stochastic production and economic herd models were developed for transhumance and sedentary herds. Models were run for two disease scenarios (severely and slightly affected) and with and without vaccination, with data parameterisation from literature estimates, field survey and authors' experience. Herd-level net financial impact of the disease and its vaccination was assessed using gross margin (GM) and partial budget analyses. These were then used to assess regional financial impact of disease and profitability of a 3-year vaccination programme using a cost-benefit analysis. The regional-analysis was performed under 0 %, 50 % and 100 % government subsidy scenarios; as a standalone programme or in combination with other existing vaccination programmes; and for risk-based and non-risk-based intervention. Median SGP losses per reproductive female were £27 (90 % CI: £31-£22), and £5 (90 % CI: £7-£3), in sedentary, and £30 (90 % CI: £41-21), and £7 (90 % CI: £10-£3), in transhumance herds, for severely and slightly affected scenarios respectively. Selling animals at a reduced price, selling fewer young animals, and reduced value of affected animals remaining in the herd were the greatest contributors to farmer's SGP costs. SGP-affected herds realised a GM reduction of up to 121 % in sedentary and 138 % in transhumance. Median estimated regional SGP cost exceeded £24 million. Herd-level median benefits of vaccination per reproductive female were £23.76 (90 % CI: £19.28-£28.61), and £4.01 (90 % CI: £2.36-£6.31), in sedentary, and £26.85 (90 % CI: £17.99-£37.02) and £7.45 (90 % CI: £3.47-£15.14) in transhumance herds, in severely and slightly affected scenarios, respectively. Median benefit: cost ratio (BCR) for severely affected herds at 50% subsidies was 6.62 (90% CI: 5.30-8.90) for sedentary, and 5.14 (90% CI: 3.31-13.81) for transhumance herds. The regional SGP vaccination standalone programme BCR: 7-27, regional SGP vaccination with existing vaccination programme BCR: 7-228 and vaccinating high-risk areas BCR: 19-439 were found to be economically viable for all subsidy levels explored. Vaccinating low-risk areas only realised benefits with 100 % of government subsidies. This study further increases understanding of SGP's impact within Northern Nigeria and demonstrates vaccination is an economically viable control strategy at the herd-level and also regionally, depending on the strategy and government subsidy levels considered.

Dataset Information

The impact of unifying agricultural wholesale markets on prices and farmers' profitability.

Publications

The impact of unifying agricultural wholesale markets on prices and farmers' profitability.

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