Producers who are planning to sell using direct marketing to consumers only or to both consumers and retailers experience declines in total sales. Based on survey data for US farmers from 2008 to 2010, the earnings decline is 71.3 per cent when marketing direct to consumers and 36.8 per cent for the diversified marketing decision.
The direct marketing penalty is robust to inclusion of important demographic factors,
farm experience and use of the internet, and characteristics of the farm operation
such as crop choices and input use. Direct marketing is associated with higher sales
declines for female farmers, highlighting a distributional impact on farmers that has
not been discussed.
