9. Increasing Farmers’ Share in the Value Chain: From Pain Point Analysis to Business Model Innovation in Devadurga, Raichur

Navitha Varsha and Rashi Nandwani

Indian Journal of Agricultural Marketing, 2025, vol. 39, issue 3

Abstract: This study explores strategies to enhance farmer incomes in Devadurga, Raichur by improving market access, enabling local value addition, and developing context-specific business models for key crops- paddy, dry chilies, cotton, and groundnut. It begins by identifying bottlenecks in existing value chains-such as ineficiencies in aggregation, grading, storage, and procurementand maps the unit economics of current marketing channels.A structured evaluation framework assessed national and regional interventions based on parameters like crop relevance, feasibility, value addition impact, market access improvement, and scalability. These were contextualized to Devadurga through over 30 stakeholder interviews, two farmer focus group discussions, literature review, and mandi observations. Data was analyzed using Excel, with non-probability purposive and non-probability convenience sampling for stakeholders and farmers, respectively. Findings show that while farmers have access to multiple marketing channels, low negotiation power and crop lock-ups often result in distress sales. Direct sales to mills/factories offer the highest price realization, but are difficult to access consistently. Production volumes in the region are significant, with over 500,000 metric tonnes of paddy and 113,000 metric tonnes of cotton, yet storage and price discovery mechanisms remain weak. Groundnut and dry chillies emerged as high-potential crops for local value addition. Based on a second-stage evaluation focused on crop needs, ROI, and potential for income improvement with minimal investment, five viable business models were proposed: chilli powder unit, pickle unit, cold press oil unit, groundnut roasting, and rice milling. Feasibility analysis showed chilli powder and groundnut roasting to be the most pro?table. Simple interventions like proper drying (e.g., Rs.60/q gain per 1% moisture reduction in cotton), grading (Rs.250500/q gain in groundnut), and real-time price discovery can significantly improve farm-gate prices. Aggregation models, moisture testing, and collective transport systems were also recommended to enhance negotiation power. The study concludes with a pilot implementation design to test three hypotheses around farmer collectives, service delivery, and digital tools for market access. The larger implication is that such value chain studies can inform the design of contextually relevant, financially viable, and easily implementable business models enabling farmers and producer groups to improve income with minimal investment.

Keywords: Supply; Chain (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:400121

DOI: 10.22004/ag.econ.400121

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