Analysing Costs and Marketing Channels in Natural Rubber Marketing in Karnataka, India

Abstract

This study examines the costs and marketing channels involved in the trade of natural rubber in Karnataka, the third-largest rubber-producing state in India. Conducted in Dakshina Kannada and Udupi districts, the research focuses on the marketing arrangements for rubber latex and rubber sheets. The findings reveal that a significant majority (63.33%) of farmers prefer selling rubber sheets through Type-2 Rubber Producers’ Societies (RPS), which handle over 60% of the rubber production. The study highlights that transportation is the largest cost component across all channels. The study also identifies three primary marketing channels: Channel-1 (Farmer → Type-1 RPS → Manufacturers), Channel-2 (Farmer → Type-2 RPS → Marketing Co-operatives → Manufacturers), and Channel-3 (Farmer → Primary Dealer → Secondary Dealer → Manufacturers). The analysis of price spreads shows that Channel-1 provides the highest producer share in the consumer’s rupee (97.94%), followed by Channel-2 (95.72%) and Channel-3 (95.03%). The study underscores the need for optimized logistics and improved marketing efficiency.