Determinants of Marketing Channel Choices among Paddy Farmers in Andhra Pradesh, India: Insights into Electronic Negotiable Warehouse Receipts (e-NWRs)

Abstract

Warehouses are specialized storage facilities designed for scientific preservation, while receipt systems integrate credit with marketing to enhance marketing efficiency. Warehousing in India gained importance with the 1928 Royal Commission on Agriculture. Despite various interventions from the government, farmers struggle to access remunerative prices due to their reliance on traditional marketing channels. Understanding the key factors influencing farmers' choice between traditional and warehouse-based marketing is crucial for designing effective policies that enhance market participation. Electronic Negotiable Warehouse Receipts (e-NWRs) play a crucial role in improving market access and financial security for farmers. This study examined the factors affecting marketing channel choices among paddy farmers in Andhra Pradesh. A multistage sampling technique was used to select 240 farmers from Guntur and Krishna districts, including both e-NWR adopters and non-adopters. Logistic regression analysis was employed to determine key factors affecting the adoption of e-NWR. The results revealed that the education level of farmers, farm size, access to market information, and access to training significantly influenced warehouse market channel choice. Conversely, the age of the farmer and the distance to warehouses had a negative influence on the adoption of e-NWR. The findings emphasized the need for improved infrastructure, financial literacy, improved access to market information & training and awareness programs to promote e-NWR adoption and enhance farmers' market engagement. The study concluded that education, farm size, income, market information, and training encouraged adoption, while age and distance to warehouses posed challenges. Farmers with higher levels of education, larger farm sizes, and better access to market information and training were more likely to participate in warehouse-based markets. It was recommended that warehouse management should strengthen the market information systems and develop government-backed digital platforms to provide real-time price updates and establish training programs to enhance farmers’ market awareness. Improving farm-to-market infrastructure and accessibility and promoting decentralized mini-warehouses closer to farming communities to enhance the adoption of e-NWR.