A new method for assessing the marketing efficiency of agricultural marketing channels

Purpose. This study aims to introduce a new method for assessing the efficiency of agricultural marketing channels. This innovative method rectifies the deficiencies inherent in earlier methods by encircling all channel participants in evaluating marketing efficiency, thereby delivering a more detailed assessment. Methodology / approach. The present study first identified the shortcomings of the old methods based on a literature review and then attempted to propose a new method for calculating marketing efficiency by overcoming these issues. The efficiency of marketing channels is calculated based on primary data collected from two randomly selected agriculture markets in Delhi, marketing cooperative societies operating in Delhi, and their respective intermediaries, flour mills, and consumers in the channel. The study’s sample size is 179 respondents, including all the channel members. After that, a comparison is made between traditional methods and the proposed method. Results. Results of this study show that the proposed method gives a better idea of the efficiency of marketing channels than the old methods, namely the Acharya’s approach, the Shepard’s method and the input-output approach. These methods ignore the crucial role of producers, focusing on overall margins and costs. They can call a channel efficient even if producers receive minimal benefits, necessitating a revised approach. The proposed method has two parts: (1) the ratio of overall channel benefit to cost, excluding consumers, to avoid misleading results, indicating higher benefits for channel members; (2) the ratio of the net price received by farmers to the price paid by consumers, reflecting farmer earnings. By separating marketing margins and costs, the proposed method simplifies previous complexities. Using the channel benefit-to-cost ratio and the farmer’s price-to-consumer price ratio, this method offers an accurate and comprehensive assessment, addressing flaws in Acharya’s approach. Originality / scientific novelty. The proposed method is the only method that takes care of every channel member rather than just focusing on producers / farmers. This method considers factors such as the price received by farmers (gross and net), marketing margins, marketing costs, and the price paid by consumers. Unlike old methods, this method focuses on adding value per channel, not on the number of intermediaries. Practical value / implications. The proposed method facilitates an effortless compa