Margins and Market Efficiency of Soybean Marketing: An empirical Study from Belagavi District of Karnataka, India

Abstract

Soybean (Glycine max L.) is a globally significant crop, valued for its edible oil, vegetable protein and industrial applications. This study investigates the marketing channels, costs, margins and efficiency of raw soybean in Belagavi district, Karnataka. Primary data were collected from farmers, food processors, wholesalers and commission agents-cum-traders. Bailhongal and Hukkeri taluks were purposively selected due to their prominence in soybean production and trade. Farmers were chosen using a multistage sampling technique, while market intermediaries were randomly selected. The marketing efficiency index was estimated using Acharya’s method, and factors influencing farmers’ preference for direct sales were analyzed through Garrett’s ranking technique. The study identified two main marketing channels, viz., Channel I, representing direct sales from producers to processors, and Channel II, involving intermediaries such as wholesalers and commission agents-cum-traders. Farmers predominantly preferred direct marketing to processors, motivated by the expectation of better prices. Findings indicate that producers and wholesalers incur the highest marketing costs, primarily due to transportation, deductions and statutory charges. The analysis highlights the relative importance of various cost components and suggests that understanding these costs can help stakeholders streamline operations, reduce inefficiencies, and improve supply chain performance. Channel I was found to be more efficient than Channel II and in overall, marketing in Bailhongal demonstrated higher efficiency compared to Hukkeri. To enhance overall marketing efficiency, the study emphasizes the need to collectivize farmers through Farmer Interest Groups (FIGs), Commodity Interest Groups (CIGs) or federated Farmer Producer Organizations (FPOs). Such collective structures can strengthen bargaining power, facilitate better price realization and optimize soybean marketing outcomes.