by Rajib Das, Rishabh Kumar, Monika Sethi, Love Kumar Shandilya and Alice Sebastian^{^}

This study examines the dynamics of retail food price formation for major rabi crops based on a pan- India survey covering farmers, traders, and retailers. Farmers’ share in consumer prices is estimated in the range of 40 to 67 per cent across the select crops, with the highest share realised by wheat producers. The retailers’ markups are generally observed to be higher than those of the traders. While cash transactions dominate payments in the agriculture supply chain, electronic payments registered a significant increase compared to previous similar surveys. Empirical analysis suggests that policy interventions, such as enhanced market infrastructure, and expanded cold storage capacity, to reduce supply chain inefficiencies and post-harvest losses, may benefit farmers and consumers.

Introduction

Food prices remain an important driver of overall inflation in several economies, especially emerging and developing economies. At the same time, the paucity of adequate data across various segments of the supply chain limits the understanding of dynamics of price formation - a crucial input in developing appropriate policy interventions. Access to granular information about the supply chain could enhance market efficiency by improving trust among stakeholders (EU, 2024; GoI, 2025). The agriculture supply chain involves several actors, viz., farmers, aggregators, traders, commission agents, processors, wholesalers and retailers that play their due role in delivering the final agri-commodity to the consumer. An efficient agriculture supply chain maintains transparency in the price formation mechanism with information available regarding cost structures, margins, and value additions across the supply chain. Various countries have taken steps to improve the efficiency of agricultural supply chain, such as the European Union’s (EU’s) initiative on the EU Agri-food Chain Observatory (AFCO) to strengthen farmers’ position in the food supply chain and build trust among all stakeholders. A number of schemes such as the National Agriculture Market (eNAM), the formation of Farmer Producer Organizations (FPOs), Agriculture Infrastructure Funds, Agricultural Marketing Infrastructure scheme, Integrated Cold Chain, Food Processing, and Preservation Infrastructure scheme, Comprehensive Programme for Vegetables & Fruits have been introduced by the government of India in the recent years to improve the agriculture supply chain (details at Annex 1).

In this context, the Reserve Bank of India had conducted pan-India surveys to explore agriculture supply chain dynamics in 2018 and 2022 for major kharif crops. These surveys were aimed at assessing the price formation process at the retail level in major kharif crops by estimating the farmers’ share in consumer prices and capturing the perception of the participants across the supply chain regarding various challenges and efficacy of the policy measures. This study expands the coverage to major rabi crops, viz. wheat, gram, lentil, and mustard. These crops, exclusively grown in rabi season, account for around 5 per cent of the CPI basket and 11 per cent of CPI food basket. To the extent possible, a comparison of findings with the previous surveys of 2018 (Bhoi et al., 2022) and (Suganthi et al., 2024) has also been made^1,2.

The rest of the article is organised into four sections. Section II provides stylised facts on the significance of rabi crops and changing margins. Section III describes the survey methodology and coverage. Section IV presents the key survey findings and empirical analysis, and Section V provides concluding observations.

II. Stylised Facts

Rabi Season

India’s agriculture year (July-June) comprises two major seasons: kharif and rabi.³ The sowing of kharif crops, which require a hot and humid climate, starts with the onset of the southwest monsoon around the first week of June and finishes by around the end of September. The rabi (winter) season sowing starts in October and continues till the first week of February and generally requires a cold and dry climate. The rabi season accounts for around 48 per cent of the annual foodgrains production.

Crop-wise, wheat, gram and lentils within pulses, as well as rapeseed and mustard within oilseeds, are the major rabi crops grown exclusively during the rabi season. Over the years, the area and yield for rabi crops have increased (Chart 1).

Rabi crops have faced various challenges in terms of climate change and geopolitical tensions⁴ in the last two years. With significant implications for food inflation and volatility, these challenges have also attracted a series of domestic and trade-related policy interventions. Analysing the behaviour of market intermediaries in fixing their markups can help to strengthen assessment and outlook of inflation dynamics.

In line with the previous Kharif surveys of 2022 and 2018, the trends in price dispersion between retail and mandi prices⁵ have been examined by calculating margins using secondary data. Margin, as per cent of retail prices, has varied over time with some increase in wheat, and a drop in other crops (Chart 2). The margins could vary across crops for several reasons, such as transaction costs, wastage during transit, length of the holding cycle, mandi-level competition and infrastructure facilities.

Since margins at the aggregate level do not generally capture mark-ups⁶ at various stages of the supply chain (i.e., traders and retailers) and between production and consumption centres, an in-depth analysis of price build-up from farm to retail level assumes importance. While the previous surveys of 2022 and 2018 focused on Kharif crops, the present survey covers Rabi crops, thereby filling an important data gap.

III. Objectives, Coverage and Methodology of Survey

Survey Objectives

The current study uses a market structure that considers traders and retailers as intermediaries between farmers and consumers, like the practice adopted in the past RBI surveys conducted in 2018 and 2022.⁷ The primary objectives of the study are to assess the share of various market participants in consumer prices⁸, estimate the usage of different payment instruments in agricultural sales/trading, understand the perceptions of various stakeholders towards existing challenges in the agri-supply chain and assess the efficacy of the policy measures.

Survey Methodology

The survey covered mandis/villages in 86 centres across 18 states for 12 rabi crops using three separate questionnaires for farmers, traders, and retailers. It included 10,699 respondents across various consumption and production centres (Table 1). The survey was conducted during May-July 2024 in select production and consumption centres separately, considering the difference in supply chain dynamics of production centres, confined majorly in rural areas and consumption centres lying mostly in urban settlements.

Two-stage sampling was used to select the respondents. Production centres were chosen based on their production share of the select rabi crops. In the production centres, mandis were identified as the first-stage units, and traders and retailers (within mandi and 5 km of mandi) were second-stage units. For participating farmers⁹, the villages near the identified mandis were selected first, followed by the selection of the farmer households. The second stage selection process was random. The dataset was trimmed by eliminating the outliers pertaining to the estimated cost and profit margin per kilogram for traders and retailers.¹⁰

IV. Survey Findings and Empirical Analysis

Survey Findings

The average share of farmers in consumer prices varies between 40 per cent and 67 per cent for the crops covered under the Survey and the shares are generally higher for non-perishable crops (Chart 3). The farmers’ share is the highest at 67 per cent in the case of wheat which is a notified commodity¹¹ for which a significant share of produce is sold by the farmers through the public procurement system. Around one-fourth of the respondent wheat farmers in the 2024 survey reported to have sold their output to the government under a procurement system. Procurement at minimum support price (MSP) gives farmers an assured market option. The estimate of 67 per cent in this study is consistent with the available literature which suggests that wheat farmers’ share in the consumer price ranges between 53 per cent and 74 per cent (RACP, 2016 and Kumar et al., 2023).

Within pulses, lentil producers receive around 66 per cent and gram (chana) around 60 per cent¹² of the rupee spent by the consumers. A higher share of farmers is desirable for lentils to incentivise production, as it is mainly grown by small-holder farmers and there is significant import dependency (Malik et al., 2021). Within oilseeds, the survey results put farmers’ share for rapeseed and mustard (R&M) at 52 per cent, comparable with the 55 per cent estimate reported by Layek et al. (2021). R&M are the second highest in terms of area and production after soybean and they contribute the most to the total edible oil basket of India (GoI, 2022). The government is also active in procuring it through the public procurement system to provide an assured market for the farmers.

The farmers’ share in the prices of perishable commodities (fruits and vegetables) is estimated around 40-63 per cent. The share in consumer prices in case of perishable items can fluctuate widely depending upon the prevailing demand-supply conditions. The existing literature suggests farmers’ share to be in the range of 30-50 per cent of the final price in the case of fruits and vegetables (Gandhi and Namboodiri, 2002; Bhoi et al., 2019; Das et al., 2024). The perishable products are characterised by short shelf-life cycles, seasonal production, diverse quality and quantity, special logistical requirements, quality standards, demand and cost uncertainties, dependency on climatic conditions and supply chain lead time that create more uncertainties about their timely and sufficient availability in the markets (Duarte, 2024). In India, the fruit and vegetable supply chain comprises of many unorganised intermediaries, which creates difficulties in identifying the flow of products, funds and information across the supply chain, and, can compress farmers’ share in consumer prices (Patidar et al., 2018). A lower share of farmers’ can also act as a constraint for farmers in diversifying from traditional cereal crops. As per the current survey, the combined share of traders and retailers is estimated to be more than half for all surveyed fruits and vegetables except tomatoes.

Amongst the set of crops which were surveyed in previous kharif rounds and this rabi round survey, the farmers’ share in retail prices of rice is estimated at around 52 per cent in this survey.¹⁵ The shares were 45 and 49 per cent during the Kharif surveys of 2022 and 2018, respectively. The TOP (Tomato, Onion, Potato) are primarily rabi crops. The farmers’ share in consumer prices in the rabi survey is also broadly comparable to the estimates of the previous two kharif surveys (Chart 4).

Traders’ and Retailers’ Mark-ups

Regarding the price build-up across the agriculture value chain, i.e., between farmers’ price realisation and the price charged by retailers, it was observed that farmers, traders, and retailers incur various charges during transactions. For farmers, post-harvest costs primarily include commission and mandi charges, loading/unloading charges, packing, weighing and grading charges. For traders and retailers, the factors influencing their mark-ups include membership fees, transport costs, shop rentals, local taxes, and storage costs.

The mark-ups of traders and retailers, defined as revenue less total cost (cost of products and transaction costs) as a percentage of the total cost, may vary amongst crops due to factors such as variation in storage cost depending on the length of holding cycle, quality including crop loss during transit and the shelf-life of the produce. The retailers’ mark-ups across the surveyed commodities were estimated around 7-25 per cent, generally higher than those of the traders (5-23 per cent) in both production and consumption centres. Further, the traders’ and retailers’ mark-ups for perishables were observed to be higher than those for non-perishables (Chart 5). These survey findings are in consonance with other recent studies (Gulati et al., 2022). Higher traders’ markup for potatoes¹⁶ in production centres in this survey could be a reflection of the surge in wholesale prices during the survey period, outpacing the increase in retail prices.

Amongst the common crops in the previous surveys and this survey, the mark-ups of traders and retailers appear to have generally moderated over the previous survey results (Chart 6)¹⁷. At the same time, it may be noted that TOP are predominantly rabi crops; the lower mark-ups of traders and retailers in these items might be a reflection of the ample availability of perishable produce during this season (Jose et al., 2021). Further, the government’s recent policy measures, such as maintenance of buffer stock and external trade regulation of onion, supply through retail outlets such as Mother Dairy, Safal, and Kendriya Bhandar and setting up of the Price Stabilisation Fund (PSF) for TOP vegetables might have contained the intermediaries’ mark-ups.

Usage of Payment Instruments

The survey also collected data on the usage of payment instruments by farmers, traders, and retailers for transactions and these data reveal that cash payments hold the highest share in their respective total payments - around 72 per cent for farmers, 45 per cent for traders and 61 per cent for retailers; the shares have, however, declined by 7-13 percentage points relative to the 2022 survey, although it may be noted that the crop coverage in the two surveys is different. Concomitantly, the usage of electronic payments, though highest for traders, has increased for all supply chain agents in line with the growing digitalisation of payments in the country¹⁸; as per the survey, 18-31 per cent of the responses were for electronic modes of payments (Chart 7). Cashbased value chains and market barriers can lead to lower returns for farmers (APEC, 2017). Digitalising agricultural payments can help make it easier for farmers to buy directly from input providers and sell directly to consumers, developing greater resilience of farmers to income shocks, especially in the light of their increasing vulnerability to adverse weather events and climate change (World Bank, 2024).

Price Volatility

As per Rabi Survey 2024, 85 per cent of surveyed retailers believed that supply shocks are the main reason behind the sudden rise in prices, followed by seasonal factors (Chart 8a). This is endorsed by the farmer respondents, with 64 per cent of them experiencing some form of crop damage during the 2023-24 rabi season. Almost 37 per cent of the farmers held unseasonal rainfall as the primary reason for damages, followed by pest attacks and heatwaves (Chart 8b and 8c). Weather forecasts and the availability of irrigation are observed to be the primary factors that determine crop-sowing patterns for farmers (Chart 9).

According to the survey, the traders and retailers reported higher wastages in fruits and vegetables relative to other crops (Chart 10). More than 10 per cent of the output wastage was reported to be prominent in the case of fruits and vegetables. Inadequate storage facilities, power outages, poor infrastructure connectivity to agricultural areas, and insufficient road and highway networks in India contribute to high post-harvest losses and the wastage is estimated to be in the range of 20-44 per cent (Kumar et al., 2020; Kumar and Agrawal, 2023; Rais and Sheoran, 2023; NHB 2021 and Duarte, 2024).

To control price pressures, the government has in the recent years undertaken several crop-specific policy interventions such as imposition of stock limits, restricting certain exports and liberalising certain imports and open market sales to ensure ample supplies in the domestic market. As per 59 per cent of the surveyed retailers, such intervention measures could be effective in curbing price pressures in the short run. Further, external trade and stock measures are suggested to be effective by almost half of the total respondents (Chart 11).

Agricultural Marketing

Timely and reliable information on market prices can help farmers in the marketing of their produce. As per the survey, about 76 per cent of the farmers had information about prevailing market prices and they sourced it primarily from traders in their contact (Chart 12). The traders, being the main interlink between farmers and other supply chain participants, appear to serve as the dominant source of market information.

On improving marketing of agri-produce, the respondent farmers’ main policy recommendation included ‘creation of more markets in the villages’, while traders reported liberalisation of the trade policy as the most essential tool (Chart 13). Although agriculture marketing has been one of the main areas of policy focus¹⁹, agriculture being a state subject, implementing such policies is often hindered due to varying levels of regulation, willingness and consensus among the states (GoI, 2024). In terms of budgetary allocation, a significant share of government expenditure for agriculture has been observed to be apportioned more towards input subsidies like fertiliser and power, rather than supply chain development (Zafar et al., 2023).

Empirical Findings

Mark-ups in the agriculture supply chain are the crucial indicators of added value at each stage. While excessive mark-ups could lead to higher food prices, lower mark-ups could impact the stakeholders’ profitability (Bhattacharya, 2016). In the article based on the previous round of this survey, an empirical exercise was carried out to understand the factors impacting the traders’ mark-ups (Suganthi et al., 2024). In this study, an attempt has been made to identify the determinants of the mark-ups at the retailers’ level based on the data collected from the survey. Ordinary Least Square regression has been run using following equation:

Here, M_idc is the mark-up, defined as the selling price less total cost (including transaction cost) as a percentage of total cost for retailers. R_i represents retailers’ demographic profile such as age, education and gender; S_i represents the retailer’s perception about change in commodity supply over last year; TC_i is the transaction cost incurred per kg; and D_i denotes the distance of the retailer outlet from the point of procurement. W_i denotes the retailer’s perception regarding the extent of wastage experienced; N_i represents the number of commodities sold by the retailer; E_d is the dummy variable capturing the extreme weather events in terms of large excess, excess and large deficient rainfall (cumulative) in the district. CT_i represents the fixed effect for retailer’s outlet location (production/consumption centre). C_c and P_c denote the fixed effect for specific commodities and nature of commodity (perishable/non-perishable), respectively and ε_idc is the residual. Three model specifications have been presented here. While Model 1 (M1) serves as basic equation, the Model 2 (M2) utilises the interaction (W_i × P_c) of wastage with the nature of commodity (perishable/non-perishable) at multiple levels of wastage. Further, Model 3 (M3) replaces the wastage with extreme weather events and attempts to understand the impact of the latter on mark ups of perishable commodities using the interaction variable (E_d × P_c).

The regression analysis suggests that retailers are able to pass on the cost of wastage losses to consumers through higher retail prices in the case of perishable commodities (fruits and vegetables), while not being able to do so in the case of non-perishables. Accordingly, while the mark-ups are negatively impacted by product losses at the aggregate level (Model 1), for perishable commodities, the impact is positive (Model 2) [Table 2]. This suggests that retailers can draw higher mark-ups for perishable commodities, wherein the post-harvest loss incidence and product differentiation are relatively higher (Gulati et al., 2022). Additionally, the transmission appears to increase with the extent of wastage, as indicated by model 2. The same is also revealed in model 3 where the wastage dummy is replaced by extreme weather conditions dummy.²⁰ Weather disruptions are often one of the major contributors to post-harvest losses and supply chain wastage in the absence of adequate availability of temperature-controlled storage and transportation facilities (Tchonkouang et al., 2024). The higher transaction cost (transportation, labour, rent) is found to shrink the mark-ups. Among the demographic variables, male retailers realise higher mark-ups across the various model specifications.

V. Conclusion

This article provides insights into India’s agriculture supply chain across farmers, traders, and retailers based on a pan-India survey of major rabi crops conducted during May-July 2024. The survey results indicate that the farmers’ share in consumer prices ranges from 40 per cent to 67 per cent across the crops surveyed, with the wheat producers realising the highest share. The perishable crops (fruits and vegetables) have lower farmers’ share and higher trader/retailer markups than the non-perishables. The combined share of traders and retailers in consumer prices is more than half in perishables (except for tomatoes). The mark-ups of traders and retailers are observed to be lower for TOP crops during the rabi season compared to the kharif season, partially reflecting the impact of the ample availability of perishable produce during the rabi production season. While cash transactions dominate the payments in the agriculture supply chain, electronic payments registered a significant increase in 2024 survey over the previous surveys of 2018 and 2022 for all the participants. The weather forecast and irrigation availability appear to be the most critical factors in the farmers’ decision function regarding rabi sowing.

An empirical analysis of mark-ups, using the survey data, indicates that higher transaction costs (transportation, labour, rent) reduce the retailers’ markups, while higher post-harvest losses in perishables seems to permit the retailers to pass losses onto the consumers.

Overall, the survey findings and analysis indicate that further strengthening of market infrastructure through increased investment in cold storages and transportation systems can make agriculture supply chain more efficient and lower the post-harvest losses. Technology and enhanced collaboration among stakeholders can play an important role in improving such infrastructure, ultimately benefiting producers as well as consumers.

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Annex 1:
Government Schemes for Improving Supply Chain in Agriculture

To improve the agriculture supply chain, the government has implemented various schemes in recent years. Some of the important schemes include:

1. eNAM

eNational Agriculture Market (eNAM), a pan-India electronic trading portal, was launched in 2016. It networks the existing Agriculture Produce Market Committee (APMC) mandis to create a unified national market for agricultural commodities. Presently, 1410 mandis in 23 states and 4 UTs are integrated on eNAM.

2. The Agricultural Marketing Infrastructure (AMI) scheme

The AMI scheme aids with the construction or renovation of godowns and warehouses in rural areas to boost agricultural storage capacity. Since the scheme’s inception on April 1, 2001, through June 30, 2024, a total of 48,512 storage infrastructure projects, with a combined capacity of 940 lakh tonnes, have been sanctioned across 27 states with subsidy disbursement of Rs. 4,735 crore.

3. The Agriculture Infrastructure Fund (AIF) scheme

The AIF scheme aims to attract investments for agricultural infrastructure development, with a total allocation of Rs 1 lakh crore until 2025-26. Under the scheme, loans with subsidised interest rates are provided for investments in farm-gate infrastructure like cold storage, warehouses, grading and sorting units and e-marketing platforms. As of January 2025, Rs. 53,687 crore has been sanctioned for 89,028 projects under the scheme.

4. Integrated Cold Chain, Food Processing, and Preservation Infrastructure scheme

The Integrated Cold Chain, Food Processing, and Preservation Infrastructure scheme aims to facilitate the establishment of a strong cold chain facility for agricultural, horticultural, dairy, fish & marine, poultry & meat products by establishing linkage from the farm gate to the consumer, to reduce losses through efficient storage, transportation, and minimal processing. As of August 2024, there are 8,698 cold storages in the country with a capacity of 396 lakh MT. Besides, the government of India has launched Kisan Rail to cater exclusively to the movement of perishable agri-horti commodities.

5. Prime Minister Dhan-Dhaanya Krishi Yojana

The budget 2025-26 has announced the launch of ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in 100 low productivity districts wherein measures to augment post-harvest storage at the panchayat and block level would be taken.

6. Comprehensive Programme for Vegetables & Fruits

The budget 2025-26 also announced a comprehensive programme for vegetables and fruits to promote production, efficient supplies, processing, and remunerative prices for farmers in partnership with states. Appropriate institutional mechanisms for implementation and participation of farmer producer organizations and cooperatives will also be set up. The government also announced to upgrade infrastructure and warehousing for air cargo including high value perishable horticulture produce.

^{^} The authors are from the Department of Economic and Policy Research (DEPR), Reserve Bank of India (RBI). The authors are thankful to Dr. D. Suganthi; the officers from Regional Economy Monitoring Division and DEPR Regional Offices for their inputs and assistance in conducting the pan-India survey. The views expressed in the article are those of the authors and do not represent the views of the RBI.

¹ The crops overlapping with the previous two kharif surveys include - tomato, onion, potato (TOP) and rice.

² The findings can be highly sensitive to the sample coverage and timing of the survey.

³ The third cropping season is Zaid (summer) season. However, it has a minimal share, and separate data reporting for this season has started very recently. This study follows the earlier practice of clubbing it with rabi to have a longer time series of data.

⁴ With Russia and Ukraine as major global players in wheat and edible oil markets, the geopolitical tensions between the two countries led to significant increase in international prices of these commodities that affected the domestic prices in India also.

⁵ With retail prices being paid by the end-consumer and mandi prices assumed to reflect the price received by the farmer, margin is calculated as the difference between the two. Margins are presented as per cent of retail prices.

⁶ Mark-up is the difference between revenue and total cost (including transaction cost) as per cent to total cost.

⁷ Given the inherent complexity of agriculture supply chains, with variations in number and roles of intermediaries across crops and regions, this study categorises the supply chain participants into three broad groups (farmers, traders, and retailers). While the existence of other intermediaries is acknowledged, this categorisation was done to ensure consistency and facilitate a comparative analysis.

⁸ For studying the value chain of a commodity, the average prices across the intermediaries and centres are used here rather than tracing the prices of the same item across intermediaries in the same location.

⁹ Following the survey done in 2022, farmers were covered in the production centres alone.

¹⁰ While every effort has been made to ensure the quality of responses through rigorous questionnaire design, robust sampling and telephonic verification of respondents, inherent limitations of primary surveys such as social desirability bias may still exist. The data used in the study is self-reported data and hence, is subject to potential recall error. Further, there could be loss of some information due to data trimming.

¹¹ The Agricultural Produce Market Committee (APMC) Act notifies agriculture commodities produced in the region and provides that first sale in these commodities can be conducted only under the aegis of the APMC through the commission agents licensed by the APMCs set up under the Act (GoI, 2015).

¹² The farmers’ share for gram was estimated at 75 per cent in Jose et al. (2024).

¹³ The oilseeds (here R&M) are sold by farmers as seeds but purchased by the final consumers in the form of oil. Moreover, the oilcake (leftover after extracting oil) is used as feed for cattle, poultry or fisheries. Accordingly, while computing the farmer’s share, the retail price of oil has been converted to that of seed equivalent (at conversion rate of 0.4). Similarly, paddy gets converted into rice after milling which is then sold as final product at retail level. Wheat is also not generally sold as whole grain, rather purchased as atta at retail level. Accordingly, a conversion rate of 0.67 in the case of rice and a price differential for wheat (of around ₹4/kg) has been applied while computing the farmers’ share.

¹⁴ Indian Institute of Maize Research (https://iimr.icar.gov.in/?page_id=51).

¹⁵ Rice is mainly a kharif crop. Kharif rice and rabi (including zaid) rice have shares of around 80 per cent and 20 per cent, respectively, in total rice production.

¹⁶ Rabi season accounts for 90 per cent of the overall potato production.

¹⁷ The study’s comparison to previous surveys is subject to the change of agriculture marketing season as previous surveys were conducted during kharif marketing season.

¹⁸ The usage of electronic payments, reported during 2022 survey, reflected an increase of more than 3-fold for traders and 5-fold for retailers relative to 2018 survey (Suganthi et al., 2024).

¹⁹ As part of strengthening agriculture markets, government initiated e-NAM to create a unified national market, thereby improving transparency and price discovery of agriculture commodities. Besides, government has taken steps to upgrade the existing rural haats into well-equipped Gramin Agricultural Markets to connect farmers directly with buyers. Further, to provide farmers with direct market access, FPOs have been onboarded on to Open Network for Digital Commerce (ONDC) portal for selling their produce online to consumers across the country.

²⁰ a. https://seller.globallinker.com/bizforum/article/the-supply-chain-and-its-impact-on-agricultural-food-waste-in-india/8925#/overlay/signup/articleview/8925

b. https://www.wri.org/insights/climate-adaptation-agricultural-supply-chains

²¹ Although statistically insignificant, the distance of the retail outlets from the procurement points appears negatively associated with the markups.