A holistic approach of investigating soybean market structure, conduct and performance for strategic insight

Abstract

Soybean (Glycine max) stands as a globally significant commodity, playing a pivotal role as a primary source for edible oilseeds, vegetable protein, and a foundational raw material for diverse chemical products. This research delves into the intricate dynamics of the soybean market by collecting primary data obtained from market intermediaries, specifically wholesalers and commission agents cum traders. The focus is on market concentration within the selected markets of Bailhongal and Hukkeri in the Belagavi district, chosen for their prominence. Employing a comprehensive approach, this study investigates the market structure, conduct, and performance of soybean markets. Utilizing metrics such as the Lorenz coefficient of inequality and Marketing efficiency index, the research aims to provide valuable insights for stakeholders. Notably, the findings indicate an oligopolistic market structure for soybean, with a Lorenz coefficient of inequality of 0.74 and 0.76 in Bailhongal and 0.77 and 0.779 in Hukkeri markets, for wholesalers and commission agents cum traders respectively. This suggests a concentration of market power in the hands of a few entities in both markets. The price dynamics of soybean are influenced by various factors, including available produce quantity, trader profit margins, and soybean quality, thereby shaping market conduct. Quality assessment primarily revolves around oil and moisture content. The study also identifies differences in the efficiency of marketing channels, highlighting that the first marketing channel demonstrates superior efficiency. Additionally, a comparative analysis reveals that both channels in Bailhongal market exhibit higher efficiency, suggesting better overall market performance in this location. To address prevailing inequalities, the study recommends policy measures directed at stabilizing the market, particularly by reinforcing Agricultural Produce Market Committees (APMCs) and regulating existing marketing practices. These insights aim to guide stake holders and policymakers in enhancing the overall performance and equity within soybean markets.