Do farmers get a greater return from selling their agricultural products through e‐commerce?

Abstract E‐commerce allows farmers to cut out intermediaries and sell agricultural products to consumers directly. This raises the question of whether farmers get a greater return when they use e‐commerce to sell their products than when they use conventional marketing channels (i.e., intermediaries). To answer this question, we collected rural household data on sales of agricultural products from Zhejiang and Shandong provinces, in which we selected pairs of villages where e‐commerce was advanced and villages where e‐commerce was less advanced and households in each village that used or did not use e‐commerce. We employed a fixed effects model to investigate the impacts of e‐commerce on the selling prices and marketing costs of agricultural products. The model results revealed that compared with the conventional marketing channel through intermediaries, the marketing costs through the e‐commerce channel significantly increased, but the selling price increases much more, which results in increases in gross returns for farmers. The increases in selling prices and marketing costs using e‐commerce varied among agricultural products and between different qualities of the same product. It has important policy implications for improving farmers’ incomes and agricultural marketing channels in developing countries.