Where to Sell? Market Facilities and Agricultural Marketing

This paper analyzes the effect of
facilities and infrastructure available at the market place
on a farmer's decision to sell at the market using a
comprehensive survey of farmers, markets and villages
conducted in Tamil Nadu, India in 2005. The econometric
estimation shows that the likelihood of sales at the market
increases significantly with an improvement in market
facilities and a decrease in travel time from the village to
the market. The results suggest that wealth reduces a
farmer's cost of accessing market facilities more than
it increases her/his opportunity cost of leisure. The
wealthy farmers are able to capture a disproportionate share
of the benefits of facilities available at congested
markets. The policy simulation, however, shows that the
marginal benefits from an improvement in market facilities
will favor poorer farmers in the context of India.