Small Farmers and Commodity Market-An Analysis of Market Participation and Price Discrimination

This paper analyses the marketing activities of small farmers in relation to other classes of farmers with the help of farm-level data in Kerala. The nature and extent of participation by small farmers in the commodity market as sellers and also other related issues like the question of distress sales are the focus of analysis. There is an attempt to find whether there is price bias in favour of any particular class of farmers who come to the market to sell their produce and whether these price advantages/disadvantages are specific to particular crops or choice of market outlets. The study finds no conclusive evidence to support the view that small farmers are paid less for their produce than those offered to big farmers or that there is any conscious and deliberate attempt at price discrimination against them in the commodity market. It further notes that price differentials across size-classes were smaller when the market outlet was a co-operative as against an agent.