Introduction: The agricultural sector, with a 11.7 percent share of Gross Domestic Product (GDP), is recognized as a key factor in growth and food security in Iran. This sector not only serves as a source of employment in rural areas but also contributes to the supply of food and raw materials for industries. In developing countries, agricultural market policies and efficient marketing systems are considered as essential components of economic development. Choosing marketing channels is a critical decision for small-scale farmers that significantly impacts their income and livelihoods. Access to sales markets and the correct selection of marketing channels can help reduce poverty and enhance the welfare of farmers. Studies have shown that participation in modern food distribution channels and multi-product markets has a positive effect on income and food security. In Guilan province of Iran, particularly in rice production, farmers face challenges such as price fluctuations and distribution costs. Examining the distribution of benefits resulting from the selection of marketing channels in this province, especially for rice, is of particular importance. This study aimed at analyzing the effects of choosing marketing channels on the distribution of benefits and the increase of profits for farmers, especially in conditions where the issues related to channel selection impact their productivity and net income.
Materials and Methods: Farmers choose marketing channels based on their understanding of the benefits associated with each channel. These benefits can vary, making it essential to examine the advantages derived from selecting efficient channels and their impact on household welfare. One dimension of farmer household welfare is income inequality. The study primarily investigated whether the distribution and sale of agricultural products through different marketing channels contribute to improving farmers’ welfare. To gain a better understanding of the contributions of various factors to income inequality, a decomposition approach was employed. Assuming that Y represents household’s income and F denotes the cumulative distribution function, the Gini decomposition of income sources is defined as half the difference between mean Gini coefficients. In addition, the Gini coefficient for each income component is expressed as a ratio of the covariance between household’s income and the cumulative income distribution. Given the above-mentioned definitions, the data required for this study were collected through interviews and questionnaires from the rice farmers in Guilan province during 2022-2023. The sampling method of the research was convenience sampling, and supplementary data were obtained from various sources, including the Ministry of Agriculture-Jahad (MAJ) and Statistical Center of Iran (SCI). To estimate the sample size, Cochran’s formula was used, resulting in a sample size of 100 participants.
Results and Discussion: In this study, the characteristics of the statistical population of rice farmers were examined. The results indicated that 92 percent of the farmers were married and 53 percent lived in rural areas. In addition, 73 percent of the farmers had a high school diploma or lower, and 82 percent had no source of income other than agriculture. The average area under rice cultivation was two hectares, and the average production was 3,330 kilograms. The rice farmers, on average, sold 2,600 kilograms of their product in the market, with an average income from sales amounting to 257,512,500 thousand rials. The analysis of income inequality showed that processing factories had the largest share in the income inequality among the rice farmers; and in the sales income section, the retail channel also had a significant share in the income inequality among the farmers. The Gini coefficient indicated that the processing factories and retail channels exhibited the highest levels of income inequality. The study results also indicated that the processing factories accounted for 40 percent of the total sales income, playing a pivotal role in the rice value chain. Direct sales to consumers ranked second with a 28 percent share. Overall, improving the performance of marketing channels, particularly the processing factories and the retail, might help reduce the income inequality among farming households.
Conclusion and Suggestions: This study examined the impact of different marketing channels on the income inequality among the rice farmers, and the study results indicated that the choice of marketing channels based on farmers’ perceptions of the benefits of each channel significantly affects household welfare. The processing factories had a central role in creating the income inequality by capturing the largest share of income, while the retail channel also contributed notably to this inequality.