The local supply chain is organized as shown in Figure 1. Our baseline survey shows that in
2006 (that is, before our intervention began), sample farmers sold 98 percent of their produce
to local intermediaries or village traders. These village traders aggregate purchases from local
farmers, transport them to wholesale markets called mandis and then sell to traders in city
markets or in neighboring states.4 They are usually residents of the same village or neighbouring
villages. Besides buying potatoes, they trade in other seasonal produce and often sell agricultural
inputs and provide credit as well. They interact with farmers with high frequency, so that it does
not appear that either farmers or village traders incur large search costs for a trade to take place.