Price Discovery Mechanism in Unified Market Platform (UMP): A Case Study of APMC Raichur

Abstract

The study attempted to analyze how prices were discovered under the e-tending method in the Raichur market, Karnataka, during 2017-18. Correlation, multiple regression and Gini concentration ratio were used to analyse data. The major findings of the study include the e-tendering system under UMP had considerable potential to infuse competition and fetch better prices for farmers; the pricing mechanism of paddy showed there was a clear indication if one bid increases for a lot, there was a 13.8 per cent increase in the price, the numbers of bids per lot and lot size had a positive effect; moisture content had a negative impact on the price of paddy. The study suggested the policy options were: market performance has improved under UMP, so the scope for expansion of e-trading in other markets in Karnataka as well as India, there is a need to create awareness among farmers about to follow quality parameters according to UMP guidelines, and Government needs to strengthen the infrastructure for assaying of agricultural commodities at farm level or community level; Strengthen the IT infrastructure for resolving all UMP related queries of stakeholders in a single window. Keywords: Assaying, competition, efficiency, price, transparency. JEL Codes: M31, O24, Q13