Large land holding farmers most often directly supply their paddy to the rice processing
companies which reduces their middlemen cost and increases the revenue. Rice processing
companies also find it profitable to source directly from the farmers as it reduces their
procurement cost, logistics cost, intermediary cost and the supply chain cost. However in some
instances the Paddy farmer with large land holding, are not able to directly supply the inorganic
paddy because of: low demand, or the quantity supplied in bulk has not covered all the quantity of
paddy prepared for sales, or paddy has been stored to be sold in lower quantities in different
seasons to generate more revenue, or some other reasons. Therefore, they require following an
indirect mode of distribution generally through various forms of intermediaries for the sale of
their paddy.