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Should they avoid the middleman? An analysis of fish processing firms in India

Author

Listed:
  • Meenakshi Rajeev
  • Pranav Nagendran

    (Institute for Social and Economic Change)

Abstract

The supply chain of fish and seafood products in India involves a vast network of intermediaries (primarily distributors) who retain a large share of the price spread between what is paid to fishermen and what is paid by consumers. This results in high fish prices and losses due to spoilage (MOFPI Report 2017). It is deemed beneficial both for producer and consumer to have fish processing firms internalise some of the intermediaries’ activities. These firms will undertake such activities only if they get adequate incentive. By considering Indian fish processing firms over three consecutive years, we examine the viability of internalising distribution and other activities using a 2SLS regression. We show that firms, which undertake the responsibility of distribution themselves, raise better returns to the factors of production (within the firm), and enjoy higher profit. These results indicate that policy support aimed at reducing the length of supply chain, for example, by forming fishermen cooperatives and linking them to the processing firms that undertake the responsibility for distribution activity, can be beneficial for both firms as well as consumers.

Suggested Citation

  • Meenakshi Rajeev & Pranav Nagendran, 2019. "Should they avoid the middleman? An analysis of fish processing firms in India," Working Papers 445, Institute for Social and Economic Change, Bangalore.
    • Handle: RePEc:sch:wpaper:445
    as

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    File URL: http://www.isec.ac.in/WP%20445%20-%20Meenakshi%20Rajeev%20and%20Pranav%20Nagendran%20-%20Final.pdf
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    References listed on IDEAS

    as
    1. Meenakshi Rajeev & Pranav Nagendran, 2018. "Decency of primary occupations in the Indian fishing industry," ICDD Working Papers 21, University of Kassel, Fachbereich Gesellschaftswissenschaften (Social Sciences), Internatioanl Center for Development and Decent Work (ICDD).
    2. Kumar, B. Ganesh & Datta, K.K. & Joshi, P.K. & Katiha, P.K. & Suresh, R. & Ravisankar, T. & Ravindranath, K. & Menon, Muktha, 2008. "Domestic fish marketing in India - changing structure, conduct, performance and policies," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 21(Conferenc).
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Seafood products;

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