Agricultural Economics Research Review 2021, 34 (1), 69-78 DOI: 10.5958/0974-0279.2021.00005.7 Reducing the buyer–seller information asymmetry in agricultural inputs markets in India Sanjeev Kapoor 1 * and Niraj Kumar 2 1 Indian Institute of Management, Off Sitapur Road, Lucknow 226 013, Uttar Pradesh 2 XIM University, Xavier Square, Chandrasekharpur, Bhubaneswar 751 013, Odisha * Corresponding author: sanjeev@iiml.ac.in Abstract Buyer–seller information asymmetry causes problems in economic exchanges between farmers and the agricultural inputs (agri-inputs) industry. This study examines farmers’ information needs regarding four important agri-inputs: seeds, fertilizers, agrochemicals, and farm machinery. The study reveals that while purchasing agri-inputs, farmers in India consider the experience and credence attributes like germination percentage, yield, packaging, impact on health, and soil condition critical to product quality and more important than price. The agri-inputs industry can reduce the buyer–seller information asymmetry while marketing their products, ensure their competitive advantage, and make farming more productive. Keywords Marketing, buyer-seller information asymmetry, agri-inputs, experience attributes, credence attributes, India JEL codes M31, O13, D82, D63 Information is a productive resource (Nair 2006) and a crucial element of economic exchange (Shen et al. 2019; Mascarenhas et al. 2008). A firm’s perception of its products’ quality may differ from that of consumers; this is a measure of information asymmetry (Parker 1995), which leads markets to fail (Stiglitz 1977; Spence 1973; Akerlof 1970) and restricts the efficient functioning of markets (Baron 2004). Buyers and sellers have complete and equal information in perfect market conditions; usually, though, sellers have more information (both quantitative and qualitative) about their products and services than prospective buyers. That is buyer–seller information asymmetry, recognized as a common feature of markets (Oberholzer-Gee and Yao 2018; Mascarenhas et al. 2008; Baron 2004: Kirmani and Rao 2000) and a serious problem in the market for agricultural inputs (agri-inputs)—‘experience’ products whose quality (for example, yield or germination rate for seeds) can be verified only after purchase and use. Agri-inputs are also ‘credence’ goods (Ford et al. 1988), where some qualities (impact of chemical fertilizers on soil health, effect of pesticides on human body) cannot be realized in the short run even after purchase and use. Farmers buy these in the belief that suppliers offer what they really need; the credentials (brand, reputation) of sellers and manufacturers dominate the decision to purchase credence goods (Mascarenhas et al. 2008). The agri-inputs industry is experiencing profound, rapid changes in all developing countries, including India. New technologies have made the industry increasingly knowledge-intensive. Purchasing has become a vital task for farmers; in the developed regions of India, about 70% of the total per-acre expenditure is on seeds (high-yielding variety (HYV) and local), fertilizers (chemical and organic), and pesticides (Venugopal and Kaundinya 2014). Farmers’ livelihoods depend on agri-inputs; therefore, farmers should be involved in both purchase and product, and they should exhibit problem-solving buying behaviour by conducting substantial search and evaluation for alternative choices. But the asymmetry of information between buyers and sellers makes it difficult to