Rural Market Dynamics

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Sankalp Patnaik (31042)


The theme paper is a study of rural markets in Marchak ward of Gangtok Block in East District of Sikkim. It tries to capture different forms of transactions carried out by the villagers within and outside the village. These transactions include exchange of goods (food items and consumer durables), services (labour), and financial services (loans, insurance). The study helped us in understanding the spending and consumption pattern among the villagers. We observed during our stay that the majority of villagers in Marchak grow staple food (rice), vegetables and few produce ginger as a cash crop. Rice and vegetables grown in the village is for self consumption. The surplus is then traded in the market. Market acts as a meeting point where a seller and buyer negotiate to a certain price for a product. At that price, the seller is willing to sell the good and the buyer is willing to purchase the good. The interaction between a buyer and seller brings out various aspects of rural markets. The demand and supply for certain agricultural produce is generally known to the farmers because of its widespread use and the familiarity of the farmer in trading certain types of crops. However, there are certain crops, which are traded infrequently and farmers may not be familiar with different markets where the particular produced is traded; under this condition, the demand and supply condition is not known to the farmer and prices gets dictated by the traders. The household having low asset base do not have excess of resources for transaction. They sell labour in these markets. The labour is used in agriculture, road and building constructions and in factories. The price of labour is fixed in some places like government works like NREGA, PMGSY and variable in other like house construction and agriculture. The price of labour is highly depended on seasons. During the harvesting season, the demand for labour tends to go up. The labourers get a higher price for the work they perform. Stable income groups are also considered under the labour market. Government jobs and factory workers have a stable income source. The income generated is used for consumption of the goods and the excess income is used for personal saving. Finally, the saving is used for further income generation by investing in productive assets or in banks. By and large, people use money as a medium of transaction. Sometime barter is also used for transaction where people exchange their produce for other products or service. The cyclical flow of money helps to keep the village economy vibrant. The factors which bring in money from outside and the factors which take money out of the system are observed to know whether the village has a surplus or deficit economy. Thus the understanding of rural markets gives a holistic view of the economy of the village. The local market in the village has a weekly haat and shops. In weekly haat, people from the village and neighbouring villages come to sell their agricultural produce and other items like dairy products and honey. The local market, sometime, does not give a very profitable margin on the produce. Some of the factors include information asymmetry, lack of infrastructure and location of the market in the village. We try to examine some of these factors. Finally, the theme tries to study the supply chain of ginger to understand the processes involved and the agents present in it. Ginger is a cash crop and the farmers produce it to sell in the market. The study tries to find out if problems present in the system or if more value addition can take place to the present process. This would immensely help the producer of ginger crop. It is observed that a producer takes a huge risk, spends a substantial capital, labour and time but in return, does not get proportionate gains. The paper also tries to...
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