Understanding Market Dynamics and Profitability in Small Ruminant Marketing: An Economic Analysis in Southern Karnataka, India

Abstract

Small ruminants, particularly sheep and goats, play a crucial role in India's agricultural economy, serving as a significant source of income and livelihood for millions of small and marginalized farmers. In regions like Southern Karnataka, where livestock farming is integral part of rural households as they are not only a source of meat, wool, and milk but also provide financial security during times of economic distress. Despite their importance, the marketing of small ruminants remains largely unorganized, posing significant challenges for farmers. The marketing of small ruminants such as sheep and goat involves the procurement of animals at primary markets from farmers, selling these animals at local markets, and further distribution to terminal markets through wholesalers or commission agents. For sheep and goat farmers, selecting the appropriate marketing channel is crucial, as the benefits they receive are largely dependent on this choice. The chosen channel must minimize marketing costs while maximizing the farmer's share of the consumer's rupee. So, this study was undertaken focusing on analysing the existing marketing channels for small ruminants in Karnataka, particularly sheep and goats, and to evaluate the cost structure of different marketing channels, understand the role of middlemen, and propose measures to reduce marketing costs and improve the farmers' share of profits. In the study area, four primary marketing channels were identified: (1) Farmer → Village Trader → Wholesaler/Butcher, (2) Farmer → Local Trader → Wholesaler/Butcher, (3) Farmer → Local Trader → Farmer, and (4) Farmer → Wholesaler → Distant Trader. The cost of marketing is a significant concern for sheep and goat farmers, encompassing expenses such as transportation, feeding, market fees, middlemen charges, personnel expenses, and loading/unloading fees. The average marketing cost per animal across various channels was ₹91.71, with transportation costs making up the largest portion (49.61%), followed by feeding costs (14.72%) and middlemen charges (17.01%).This highlights the challenges related to high transportation costs and inadequate market facilities, particularly for sheep and goat marketing. So, to improve the marketing efficiency and reduce costs for sheep and goat farmers, there is a need for the establishment of regulated markets for livestock and enhancing the transportation facilities in the rural areas to help farmers realize better prices for their small ruminants.