Cotton, a crucial agricultural commodity for India, plays an integral role in the nation’s economy, contributing significantly to foreign exchange earnings, industrial production, and export revenue. This paper examines the cotton marketing system, focusing on the ginning process and the efficiency of different marketing channels. The study specifically analyzes two primary channels in the cotton supply chain: Channel I, where cotton moves directly from farmers to ginning mills and then to spinning mills, and Channel II, where intermediaries (APMC traders) facilitate transactions between farmers and ginning mills. Data were collected from 15 cotton ginning mill owners in Raichur, Karnataka, to assess marketing costs, price spreads, and marketing efficiency. The results indicate that Channel I is more advantageous for farmers, offering a higher net price and a greater share of the consumer rupee (35.45%) compared to Channel II (33.65%). The marketing efficiency, measured using Acharya’s approach, is also higher in Channel I (0.55) compared to Channel II (0.51), demonstrating that a streamlined supply chain without intermediaries yields better economic outcomes for producers. The findings highlight the importance of reducing intermediaries to enhance producer returns and improve the overall efficiency of the cotton marketing system. This study provides valuable insights into optimizing marketing practices within the cotton industry to support sustainable agricultural development and improve the livelihoods of farmers.
Sushmitha et al. (2025) studied this question.