154 The RBHs included are Hariyali Kisaan Bazar (HKB) in Uttar Pradesh, ITC’s Choupal Saagar in Madhya Pradesh, and Viswas in Andhra Pradesh. These firms entered the scene around the mid-2000s. The major findings and conclusions concerned seed and input markets, input and output prices for small and marginal farmers, and the determinants of purchases and prices in different market channels. Seed, fertilizer, and farm chemical markets: Subsidized outlets sell subsidized inputs mostly to medium-scale farmers The findings for seed markets are similar across all three states, so the case of Uttar Pradesh and the most popular crop there—wheat—is highlighted here. Farmers have several options to purchase seed: traditional input dealers, PACS (primary agricultural credit society, a state organization of farmers), state seed stores (located mainly at the district level), agricultural universities (offering direct retail of breeder and foundation seed to selected farmers), RBH outlets, and mandi (wholesale market) traders. The major share (over 80 percent) of the seed market is supplied by the private sector (56 percent through traditional retail and 24 percent by RBHs). Marginal farmers who bought wheat seed in Uttar Pradesh purchased 12 percent of it from state/cooperative stores and 4 percent from other farmers; the overwhelming majority bought it through private channels (21 percent from HKBs and 63 percent from small traditional shops). Clearly a minority of poor and marginal farmers purchase seed from state/cooperative outlets. Viewed from a sales perspective, the findings are similar. State/cooperative outlets sold 16 percent of wheat seed to marginal farmers and 22 percent to small farmers; 62 percent of sales were to medium farmers. This finding sharply contradicts the conventional view that the (subsidized) state/cooperative outlets focus on selling to the poor. Although to some extent this sales pattern reflects the land distribution, which is dominated by medium farmers, the targeting of the seed subsidy does not appear to be pro-poor. Similar conclusions emerge for fertilizer and farm chemical markets, with a few exceptions. In Uttar Pradesh, the major share of sales from state/cooperatives of the heavily subsidized fertilizers (73 percent) and chemicals (83 percent) are to medium farmers (73 percent). One exception in Uttar Pradesh is RBH sales of urea, two-thirds (67 percent) of which are to marginal/small farmers. In general, RBH sales follow the pattern of land distribution, with their main client (by volume share) being medium and large farmers. Input and output prices do not place small and marginal farmers at a disadvantage Input prices are consistent across farm-size groups, so marginal and small farmers do not pay more than larger farmers for inputs—another finding that is contrary to expectations. Similarly, output prices show no systematic variation across farm size groups. The mandi wholesaler, RBHs, and brokers paid close to the same price for wheat and soybeans (net of transaction costs) irrespective 154 The study chose six zones by reasoned sampling around nodes (RBH centers). The survey sample is therefore not
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- Winter '11
- The Land