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Abstract
The argument that supermarkets might pay higher prices to farmers because of their economies of scale
remains a contentious issue in India. Using procurement price data of one of the leading supermarket
chains, Aditya Birla More (ABM), the impact of supply relationship on the premium paid to the farmers
was analysed. The findings suggest that conditional premium associated with ABM chain is positively
significant, which shows that farmers gains because of disintermediation. However, it is crop specific. At
the same time, evidence shows that it poses challenges in the form of high price volatility, compared to
traditional market, irrespective of the season. Further, season-wise mean analysis proves that ABM
manages to procure good quality produce in the lean season by paying lower premium than the peak
season.