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MARKETINGMARKETINGOFOF

AGRICULTURE AGRICULTURE PRODUCEPRODUCE

Mukesh VatsMukesh Vats

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TOPICS COVEREDTOPICS COVERED

• Introduction• Size of the market• Types of produce• Unique characteristics of products• Unique characteristics of agricultural

marketing• Basic contents of rural marketing

infrastructure• Marketing infrastructure• Types of markets• Requirements of a modern terminal

market

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Contd….Contd….

• Statistics of infrastructureStatistics of infrastructure• Institutional support to marketingInstitutional support to marketing• Present scenario and problemsPresent scenario and problems• Present regulatory frame workPresent regulatory frame work• Agriculture marketing-why reformsAgriculture marketing-why reforms• I Phase of reformsI Phase of reforms• II Phase of reformsII Phase of reforms• Contract farming related reformsContract farming related reforms• Specific issues related to reformsSpecific issues related to reforms• Contract farmingContract farming

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Contd…Contd…

• Agmarknet - objectivesAgmarknet - objectives

• Cooperative sector and agriculture Cooperative sector and agriculture marketingmarketing

• Role of corporate sectorRole of corporate sector

• Direct marketingDirect marketing

• Case study – ITC - e chaupalsCase study – ITC - e chaupals

• Way aheadWay ahead

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INTRODUCTIONINTRODUCTION

• The rural people were exchanging goods with surplus food grains even after independence.

• The progress in the fields of transport and, banking has resulted in reach of currency to the remote rural areas.

• This resulted in creation of organized markets for rural produce.

• The green revolution and white revolution brought enough surplus with the rural people to market it in organized way and influence the price of produce.

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• The various activities involved in taking produce from farm to consumer are included in agricultural marketing.

• The marketing chain is said to be successful if the produce reaches the consumer in desired quantity and quality.

• The marketing of agricultural inputs is also covered in the agricultural marketing.

• Taking the produce out of country for marketing is called agricultural trades.

• The agricultural marketing has covered a long journey i.e. from subsistence to high income generating exports after green revolution and introduction of technology in the sector.

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SIZE OF THE MARKETSIZE OF THE MARKET

ItemItem Average annual Average annual productionproduction

grainsgrains 220 million tons220 million tons

milkmilk 9595

Fruits and vegetablesFruits and vegetables 130130

sugarcanesugarcane 245245

Oil seedsOil seeds 2525

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TYPES OF PRODUCETYPES OF PRODUCE• The various types of produce can be

classified according to shelf life, nature or level of processing.

• The high shelf life products are food grains ,fibers or tree based products like natural gums or the handicraft items.

• The medium shelf life products are dry herbs, processed items etc.

• The low shelf life products are fruits, vegetable and animal products etc.

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• The produce can be classified as The produce can be classified as

primary, secondary or tertiary on the primary, secondary or tertiary on the basis of level of processing, the same basis of level of processing, the same has been covered under the food has been covered under the food processing module.processing module.

• The produce can also be classified The produce can also be classified according to the nature of produce i.e. according to the nature of produce i.e. horticulture ,food grains, plantation horticulture ,food grains, plantation crops, commercial forestry, forest crops, commercial forestry, forest collections ,agro waste ,fiber crops, collections ,agro waste ,fiber crops, handicrafts etc.handicrafts etc.

• The marketing of each type will be The marketing of each type will be different from the other & has to be different from the other & has to be planned.planned.

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Unique Characteristics Of ProduceUnique Characteristics Of Produce

• The produce is of low density, therefore The produce is of low density, therefore space requirement for storage is high.space requirement for storage is high.

• The produce is generally perishable in The produce is generally perishable in nature.nature.

• The produce of similar kind has large verities The produce of similar kind has large verities and grades. and grades.

• Cost of transportation and collection is high Cost of transportation and collection is high due to wide spread geographical area.due to wide spread geographical area.

• The waste generated with processing or The waste generated with processing or production is very high.production is very high.

• The rates of the produce are not governed The rates of the produce are not governed only by market forces but there are lot of only by market forces but there are lot of other factors.other factors.

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CONTD….CONTD….

• The quantity of production is subject to The quantity of production is subject to lot of risk factors like suitable weather, lot of risk factors like suitable weather, good and timely rainfall, natural good and timely rainfall, natural calamities, pest and disease etc.calamities, pest and disease etc.

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UNIQUE CHARACTERISTICS OF UNIQUE CHARACTERISTICS OF AGRICULTURAL MARKETINGAGRICULTURAL MARKETING

• The surplus available for marketing is much The surplus available for marketing is much lower than international average due to small lower than international average due to small land holdings and bigger family size.land holdings and bigger family size.

• The surplus is sold in three ways ,(a) direct The surplus is sold in three ways ,(a) direct sale to consumers-mostly vegetables are sale to consumers-mostly vegetables are sold by this method (b) selling to whole sold by this method (b) selling to whole sellers or bulk consumers visiting villages sellers or bulk consumers visiting villages for collection of produce – milk collection or for collection of produce – milk collection or sugarcane collection from villages (c) sale in sugarcane collection from villages (c) sale in the nearest mandi or market yard.the nearest mandi or market yard.

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CONTD….CONTD….

• The most important thing is The most important thing is relationship between good harvest and relationship between good harvest and remunerative price. Every bumper remunerative price. Every bumper harvest results in fall of market price harvest results in fall of market price due to lack of storage, transport and due to lack of storage, transport and processing facilities.processing facilities.

• The presence of large number of The presence of large number of intermediaries is another unique intermediaries is another unique feature.feature.

• The intervention of government in The intervention of government in determination of prices is frequent.determination of prices is frequent.

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COST ESCALATION WITHOUT VALUE ADDITIONCOST ESCALATION WITHOUT VALUE ADDITION

Cost build up for one kilogram of fruitsCost build up for one kilogram of fruits

FARMERFARMER TRADER WHOLESALER RETAILER CONSUMER PRICE

3.34.1

1.72.5 11.6

Retail MarkupsRetail Markups

FARM GATE PRICES MILK FISH FRUITS &VEGETABLES

350220

160100

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BASIC CONTENTS OF RURAL BASIC CONTENTS OF RURAL MARKETING INFRASTRUCTUREMARKETING INFRASTRUCTURE

• Communication facilities between market Communication facilities between market and rural areas. and rural areas.

• Place for interaction with buyers.Place for interaction with buyers.• Facilities for drying and cleaning.Facilities for drying and cleaning.• Facilities for grading &packaging of produce.Facilities for grading &packaging of produce.• Long term or short term storage facilities.Long term or short term storage facilities.• Modern weighing machines.Modern weighing machines.• Market information systems and other Market information systems and other

telecom facilities.telecom facilities.• The above facilities may or may not be The above facilities may or may not be

available at one place.available at one place.

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MARKETING INFRASTRUCTUREMARKETING INFRASTRUCTURE• Informal /traditional infrastructure : the Informal /traditional infrastructure : the

informal structure includes localinformal structure includes local mandis, mandis, haats, melas etc. haats, melas etc. The traditional The traditional structure is still popular in some parts of structure is still popular in some parts of country where the formal or institutional country where the formal or institutional infrastructure has not developed.infrastructure has not developed.

• Regulated market yards: developed and Regulated market yards: developed and maintained by APMC in various states. The maintained by APMC in various states. The regulated market yards generally provide all regulated market yards generally provide all required facilities depending on size of the required facilities depending on size of the market.market.

• Indirect marketing infrastructure : Indirect marketing infrastructure : contributing to stabilization of prices, like contributing to stabilization of prices, like cold storage and rural godowns.cold storage and rural godowns.

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TYPES OF MARKETSTYPES OF MARKETS

• Primary markets: the primary markets are Primary markets: the primary markets are located near to villages and serve the located near to villages and serve the farmers of its command area. The regulated farmers of its command area. The regulated primary market yards, local traditional haats primary market yards, local traditional haats or weekly markets can be classified in this or weekly markets can be classified in this category. The primary markets have some category. The primary markets have some shops to meet the daily requirements of shops to meet the daily requirements of farmers and space for traders, commission farmers and space for traders, commission agents and other market functionaries. The agents and other market functionaries. The primary markets work as feeder markets for primary markets work as feeder markets for secondary and tertiary markets. Most of the secondary and tertiary markets. Most of the small & marginal farmers have assess to small & marginal farmers have assess to primary markets.primary markets.

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CONTD……CONTD……• Secondary markets : The secondary markets Secondary markets : The secondary markets

are located in semi urban areas or towns/ are located in semi urban areas or towns/ district head quarters . The markets gets district head quarters . The markets gets produce from nearby villages and have produce from nearby villages and have facilities for storage, auction and weighing facilities for storage, auction and weighing etc. required for large number of farmers and etc. required for large number of farmers and traders. The markets also serve the farmers traders. The markets also serve the farmers for purchase of the farm inputs. Most of the for purchase of the farm inputs. Most of the secondary markets have been set up by the secondary markets have been set up by the APMC of various states. The amended APMC APMC of various states. The amended APMC act has provision for setting up of the act has provision for setting up of the markets by private players. Some of the markets by private players. Some of the traditional mandis have facilities equivalent traditional mandis have facilities equivalent to a secondary market like traditional to a secondary market like traditional markets in Hapur, Bhatinda or Khanna in markets in Hapur, Bhatinda or Khanna in North India.North India.

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CONTD….CONTD….

• Terminal markets: the terminal markets are located in big cities and get produce from entire state or some times from the near by states either by traders or the farmers in good quantity. The modern terminal markets are generally specialized in nature and cater to only one type of produce i.e. fruits, meat or grains. The markets are well equipped with the facilities like cold storage , godowns, shops, transport yards, platforms , grading and packing facilities etc.

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CONTD……CONTD……

• Now the terminal markets have been Now the terminal markets have been provided with the electronic display boards provided with the electronic display boards indicating rates prevailing for the indicating rates prevailing for the commodities and the rates in other national commodities and the rates in other national level markets. The mandis have been level markets. The mandis have been connected with national level agri -market connected with national level agri -market portal i.e. AGMARKNET.portal i.e. AGMARKNET.

• The demand for developed market places The demand for developed market places having fair dealings for farmers ,traders and having fair dealings for farmers ,traders and consumers is huge and entry of private consumers is huge and entry of private players will certainly help the farmers to get players will certainly help the farmers to get a fair price.a fair price.

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Traditional markets

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REQUIREMENTS OF A MODERN REQUIREMENTS OF A MODERN TERMINAL MARKETTERMINAL MARKET

• The terminal markets cover mainly perishable commodities.

• The markets are linked to several primary markets or collection centers for convenience of growers.

• These markets provide modern and latest facilities for grading, packing, transportation and storage facilities for domestic consumption and export.

• The aim is to provide better price to growers through integration of various components of marketing chain.

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Collection Centre Collection Centre

Modern Terminal MarketModern Terminal Market

Producers/ Farmers Producers/ Farmers and their Associationsand their Associations

Infrastructure:Infrastructure:Washing, grading, sorting, weighment, Washing, grading, sorting, weighment, transport to TMtransport to TMServices:Services:Collection & Aggregation of produce, Collection & Aggregation of produce, Settlement of payment, advisory on inputs, Settlement of payment, advisory on inputs, prices, quality, multi-modal transportprices, quality, multi-modal transport

InfrastructurInfrastructureePackhouse, Packhouse, Quality Quality Testing Testing Facility, Facility, PalletisationPalletisationServices:Services:Transport Transport (incl. cool (incl. cool chain), chain), Settlement of Settlement of Payments, Payments, Banking, Banking, Market Market informationinformation

ElectronElectronic ic AuctionAuction

Banking Banking InstitutionInstitution

Storage:Storage:Cold Cold Storage, Storage, TemperatTemperature ure controlled controlled warehouswarehouse,e,Ripening Ripening ChamberChamber

ProcessoProcessorr

ExporteExporter r

WholesalWholesaler/ er/ Trader/Trader/Retail Retail chain chain operatoroperator

Direct SellingDirect Selling

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STATISTICS OF INFRASTRUCTURESTATISTICS OF INFRASTRUCTURE

• The cold storage facilities are not properly The cold storage facilities are not properly distributed in India ,the highest number is distributed in India ,the highest number is located in UP and Uttaranchal. located in UP and Uttaranchal.

• The approximate number of regulated The approximate number of regulated markets is about 7150 against requirement of markets is about 7150 against requirement of 42000.42000.

• There are about 28000 rural haats .There are about 28000 rural haats .• The number of whole sale markets is approx. The number of whole sale markets is approx.

6500.6500.• The physical storage capacity is about 48 The physical storage capacity is about 48

million tons.million tons.

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Market yards

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CONTD……CONTD……

• The total number of cold storages is approx.5400 with 2,40,00000 tons of storage capacity.

• However most of the cold storages are fit for storing potato only.

• The capacity of rural godowns constructed under government subsidy scheme is 256 lakh tonnes.

• The storage capacity is far from satisfactory level as the thousands of tonnes of food grains have to be stored in unfit storage conditions after every harvest season.

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Scientific storage

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Cold storage

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INSTITUTIONAL SUPPORT TO MARKETINGINSTITUTIONAL SUPPORT TO MARKETING

• Various institutions have been established under government or co-operative sector after independence to promote proper marketing of produce for benefit of growers as well as consumers.

• The major organizations are:1. Food Corporation of India2. Cotton Corporation of India3. Jute Corporation of India4. National Dairy Development Board

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CONTD…..CONTD…..

5.Commodity boards like coffee board, coir 5.Commodity boards like coffee board, coir board and spices board etc.board and spices board etc.

6.Corporations owned by state / central 6.Corporations owned by state / central government for marketing or processing of government for marketing or processing of produce (like MARKFED) .produce (like MARKFED) .

7.Marketing boards established by state 7.Marketing boards established by state governmentgovernment

8.NAFED( National Cooperative Marketing 8.NAFED( National Cooperative Marketing Federation)Federation)

9. Special marketing or processing societies.9. Special marketing or processing societies.10.Tribal Cooperative Marketing Federation.10.Tribal Cooperative Marketing Federation.11.National Horticulture Board11.National Horticulture Board12.National Medicinal Plant Board etc.12.National Medicinal Plant Board etc.

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PRESENT SCENARIO AND PROBLEMSPRESENT SCENARIO AND PROBLEMS

• Considering theConsidering the importance and the vast importance and the vast scope of innovations ,the potential and scope of innovations ,the potential and value addition from farmer’s point is still value addition from farmer’s point is still untapped.untapped.

• The present scenario of the market can not The present scenario of the market can not be termed as satisfactory as the gap be termed as satisfactory as the gap between farm gate price and consumer between farm gate price and consumer price is very high i.e.50% to 300% price is very high i.e.50% to 300% depending on type of produce and its shelf depending on type of produce and its shelf life.life.

• The major concerns are listed below:The major concerns are listed below:1.1. Lack of marketing skills among farmers Lack of marketing skills among farmers

due to illiteracy and lack of information.due to illiteracy and lack of information.2.2. Lack of developed markets within the Lack of developed markets within the

reach of farmers.reach of farmers.

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CONTD….CONTD….3.3. Lack of roads and other Lack of roads and other

communication infrastructure and communication infrastructure and organized transportation in remote organized transportation in remote areas.areas.

4.4. Presence of middle men at many Presence of middle men at many stages without any value addition.stages without any value addition.

5.5. Poor processing facilities at rural Poor processing facilities at rural level ,which results in glut situation level ,which results in glut situation during harvesting season.during harvesting season.

6.6. Shortage of economical and scientific Shortage of economical and scientific storage facilities at rural level.storage facilities at rural level.

7.7. Lack of media support to rural Lack of media support to rural marketing, media coverage limited to marketing, media coverage limited to technology dissemination.technology dissemination.

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CONTD…CONTD…

8. Almost no market intelligence.8. Almost no market intelligence.

9. Presence of many languages and even 9. Presence of many languages and even more local dialects ,create more local dialects ,create problem in reach of information to problem in reach of information to people.people.

10.Production not linked to demand, 10.Production not linked to demand, instead driven by other factors.instead driven by other factors.

11.Lack of primary grading facilities.11.Lack of primary grading facilities.

12.Cold chains for perishable items are yet 12.Cold chains for perishable items are yet to be developed.to be developed.

13.Seasonal production and demand.13.Seasonal production and demand.

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PRESENT REGULATORY FRAME WORKPRESENT REGULATORY FRAME WORK

Agriculture produce (grading and marketing act)1937. Agriculture produce (grading and marketing act)1937. The act deals with grading. sampling, testing, packing The act deals with grading. sampling, testing, packing and sealing of the agriculture produce.and sealing of the agriculture produce.

The implementation is supervised by Directorate of The implementation is supervised by Directorate of Marketing & inspection. AGMARK certification is Marketing & inspection. AGMARK certification is necessary for the items proposed to be exported.necessary for the items proposed to be exported.

Prevention of food adulteration act(1954) :The act deals Prevention of food adulteration act(1954) :The act deals with the cases of adulteration in food items. The act is with the cases of adulteration in food items. The act is implemented by FDA officials of state government.implemented by FDA officials of state government.

Essential Commodities Act (1955)/(1981):the act was Essential Commodities Act (1955)/(1981):the act was formulated to protect the interest of consumers ,so that formulated to protect the interest of consumers ,so that the price, distribution and production etc. can be the price, distribution and production etc. can be regulated for both agriculture and non agriculture regulated for both agriculture and non agriculture commodities.commodities.

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CONTD…..CONTD…..

Fruit products order(1955): The order was Fruit products order(1955): The order was issued under Essential Commodities Act . issued under Essential Commodities Act . The main purpose of the act is to ensure that The main purpose of the act is to ensure that the quality is maintained during production the quality is maintained during production and storage of fruits/vegetable products like and storage of fruits/vegetable products like pickles, ketchups, syrups and cold drinks pickles, ketchups, syrups and cold drinks etc.etc.

Cold storage act (1964):This act was also Cold storage act (1964):This act was also issued under section3 of Essential issued under section3 of Essential Commodities Act.Commodities Act.

The act is aimed at conserving the quality of The act is aimed at conserving the quality of perishables during storage.perishables during storage.

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AGRICULTURE MARKETING – AGRICULTURE MARKETING – WHY REFORMS ?WHY REFORMS ?

Making agriculture a profitable venture rather Making agriculture a profitable venture rather than a subsistence activity.than a subsistence activity.

Paving way for private investment in Paving way for private investment in marketing infrastructure which is inadequate marketing infrastructure which is inadequate at present.at present.

Reducing number of middlemen from the Reducing number of middlemen from the marketing chain.marketing chain.

Removing restrictions on interstate Removing restrictions on interstate movement of produce.movement of produce.

Diversification of cropping pattern for high Diversification of cropping pattern for high returns and insured income.returns and insured income.

Linking cropping decisions to market Linking cropping decisions to market demands.demands.

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CONTD…..CONTD…..

Promoting direct sale or purchase of Promoting direct sale or purchase of produce.produce.

Creating legal frame work to support Creating legal frame work to support investment in this sector.investment in this sector.

Legal frame work for contract farming.Legal frame work for contract farming. Regulation of future trading prevalent in Regulation of future trading prevalent in

different forms in different parts of country.different forms in different parts of country. Creating a fair market for benefit of largely Creating a fair market for benefit of largely

unorganized farming community.unorganized farming community.

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I PHASE OF REFORMSI PHASE OF REFORMS

Alternative models of marketing developed & Alternative models of marketing developed & Model APMC Act was circulated.Model APMC Act was circulated.

Essential commodities act amended to Essential commodities act amended to remove some items.remove some items.

Integrated law related to food items was Integrated law related to food items was made and act passed, rules under the law are made and act passed, rules under the law are to be notified.to be notified.

Law for negotiable warehouse receipt system Law for negotiable warehouse receipt system passed by parliament.passed by parliament.

Future trading permitted in respect of some Future trading permitted in respect of some commodities.commodities.

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II PHASE OF REFORMSII PHASE OF REFORMSRural godown scheme launched to promote Rural godown scheme launched to promote

scientific storage at village level with subsidy scientific storage at village level with subsidy component.component.

Central assistance for improvement in Central assistance for improvement in marketing sector linked to reforms by state marketing sector linked to reforms by state governments.governments.

Development of cold chains, air conditioned Development of cold chains, air conditioned storage, pack houses, refrigerated cargo etc. storage, pack houses, refrigerated cargo etc. through public or private investment .through public or private investment .

Market information system like AGMARKNET Market information system like AGMARKNET was developed to provide market was developed to provide market information to farmers so as to take cropping information to farmers so as to take cropping decisions.decisions.

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RECENT REFORMS (AT VARIOUS STAGES OF RECENT REFORMS (AT VARIOUS STAGES OF IMPLEMENTATION IN STATES)-MARKETINGIMPLEMENTATION IN STATES)-MARKETING

11 Establishment of Private or Cooperative Establishment of Private or Cooperative markets/ Farmer-consumer markets.markets/ Farmer-consumer markets.

22 Direct marketing allowed.Direct marketing allowed.

33 Protection of interest of the farmers through Protection of interest of the farmers through provisions for Contract Farming.provisions for Contract Farming.

44 Single point levy & payment of market fee/ Single point levy & payment of market fee/ Single point registration of functionaries to be Single point registration of functionaries to be ensured.ensured.

55 Prohibition of Commission Agents for Prohibition of Commission Agents for agriculturists and no deduction to be made agriculturists and no deduction to be made towards commission.towards commission.

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Contd..Contd..

6. PPP in management & extension activities/ Promotion of e-trading/ Electronic Spot Exchanges.

7. Encouraging professional management in APMCs.

8. Promotion of Grading & Standardization.

9. Setting up special markets for commodities.

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CONTRACT FARMING RELATED CONTRACT FARMING RELATED REFORMSREFORMS

• Contract Farming Sponsor to register himself Contract Farming Sponsor to register himself with a prescribed officer.with a prescribed officer.

• The Contract Farming Sponsor to get the The Contract Farming Sponsor to get the contract farming agreement recorded with a contract farming agreement recorded with a prescribed officer.prescribed officer.

• No title, rights, ownership or possession No title, rights, ownership or possession shall be transferred or alienated or vest in shall be transferred or alienated or vest in the contract farming sponsor or his the contract farming sponsor or his successor or his agent as a consequence successor or his agent as a consequence arising out of the contract farming arising out of the contract farming agreement.agreement.

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Contd….Contd….

• Fast Dispute Settlement Mechanism at Fast Dispute Settlement Mechanism at local levellocal level

• Specification of Model Agreement for Specification of Model Agreement for Contract Farming to ensure inclusion Contract Farming to ensure inclusion of terms & conditions safeguarding of terms & conditions safeguarding interest of both farmers & buyersinterest of both farmers & buyers..

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SPECIFIC ISSUES RELATED TO SPECIFIC ISSUES RELATED TO REFORMSREFORMS

• In some States, no provision for registration In some States, no provision for registration of contract farming sponsors, recording of of contract farming sponsors, recording of contract farming agreement, dispute contract farming agreement, dispute settlement mechanism, indemnity against the settlement mechanism, indemnity against the alienation of producer’s land on failure of alienation of producer’s land on failure of contract and a model agreement format for contract and a model agreement format for contract farmingcontract farming

• In some States, no specific provisions for In some States, no specific provisions for setting up of private markets/ direct setting up of private markets/ direct marketing, setting up of consumers/ marketing, setting up of consumers/ producers’ markets and fast re-dressal of producers’ markets and fast re-dressal of disputes with regard to the same.disputes with regard to the same.

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Contd…Contd…

• In some States, no provision for single point In some States, no provision for single point levy of market fee in the State.levy of market fee in the State.

• In some States, Licensing provided instead In some States, Licensing provided instead of registration for market functionaries; No of registration for market functionaries; No provision for single point registration for provision for single point registration for trade and transaction in more than one trade and transaction in more than one market area.market area.

• In some States, no provision to promote and In some States, no provision to promote and encourage PPP in management of markets/ encourage PPP in management of markets/ extension activities and e-trading.extension activities and e-trading.

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Contd……Contd……• In some States, registration of contract In some States, registration of contract

farming sponsors or processors vested with farming sponsors or processors vested with the Secretary of the APMC – should be out of the Secretary of the APMC – should be out of APMC’s purview (better at State level)APMC’s purview (better at State level)

• In some States, contract farming dispute In some States, contract farming dispute settlement authority is State Level/ Divisional settlement authority is State Level/ Divisional Officer – should have been kept at below Officer – should have been kept at below District level for easy access to farmersDistrict level for easy access to farmers

• In some States, Private Markets have been In some States, Private Markets have been restricted within a specified distance from the restricted within a specified distance from the existing regulated markets under the Rules.existing regulated markets under the Rules.

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CONTRACT FARMING-AN ALTERNATIVE CONTRACT FARMING-AN ALTERNATIVE CHANNELCHANNEL

• Contract farming is not new to Indian farmers but it was informal restricted to some sectors only.

• An agreement is entered between buyer and farmer.

• The agreement covers the price offered, quality and sometimes quantity of produce also.

• In most of the cases the buyers supply the seeds, technology ,bank/institutional credit and other required facilities.

• The crops presently being grown are sugarcane, cotton ,potato, coffee, soyabean, medicinal plants and spices etc.

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Contd….Contd….

• Some of the firms entering into contracts are Some of the firms entering into contracts are Pepsi, ITC, Cargill India, Godrej, Dabur, Pepsi, ITC, Cargill India, Godrej, Dabur, Himalya, Health Care , United Breweries etc.Himalya, Health Care , United Breweries etc.

• INDIAN EXPERIENCEINDIAN EXPERIENCE• The contracts are still oral and The contracts are still oral and

documentation is poor.documentation is poor.• The well planned and implemented contracts The well planned and implemented contracts

resulted in increased farmer’s income.resulted in increased farmer’s income.• The farmers were introduced to technology, The farmers were introduced to technology,

ideas and new markets.ideas and new markets.• The farmers got inputs at door step.The farmers got inputs at door step.

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AGMARKNET - OBJECTIVESAGMARKNET - OBJECTIVES

• To establish a nation-wide information To establish a nation-wide information network for speedy collection and network for speedy collection and dissemination of market information for dissemination of market information for its efficient utilization.its efficient utilization.

• To ensure flow of regular and reliable To ensure flow of regular and reliable data to producers, traders and data to producers, traders and consumers to derive maximum benefit consumers to derive maximum benefit of their sales and purchases.of their sales and purchases.

• To increase the efficiency in marketing To increase the efficiency in marketing by effecting improvement in the by effecting improvement in the existing market information system.existing market information system.

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Contd……..Contd……..

• To computerize data on market fee, market To computerize data on market fee, market charges, total arrivals, arrivals by agencies, charges, total arrivals, arrivals by agencies, prices (variety wise/quality wise), storage, prices (variety wise/quality wise), storage, dispatches with destination, mode of dispatches with destination, mode of transportation, costs, sold and unsold stocks, transportation, costs, sold and unsold stocks, sources of supply with destination, method of sources of supply with destination, method of sale, payment, weighting, grading facilities, sale, payment, weighting, grading facilities, quantities graded, market personnel quantities graded, market personnel (trained/untrained), market functionaries, (trained/untrained), market functionaries, market finance.market finance.

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Contd……Contd……

• Development of programmes, Development of programmes, infrastructure facilities, constitution/ infrastructure facilities, constitution/ composition of Market Committee, composition of Market Committee, income and expenditure and other income and expenditure and other activities of the APMCs, State activities of the APMCs, State Marketing Boards and DirectoratesMarketing Boards and Directorates

• The network covers about 3000 nodes, The network covers about 3000 nodes, more than 300 commodities in 10 more than 300 commodities in 10 languages.languages.

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COOPERATIVE SECTOR AND COOPERATIVE SECTOR AND AGRICULTURE MARKETINGAGRICULTURE MARKETING

• The Cooperative sector can play a vital The Cooperative sector can play a vital role in marketing of agriculture role in marketing of agriculture produce.produce.

• The AMUL experiment has been The AMUL experiment has been covered in detail in earlier module.covered in detail in earlier module.

• The similar type of system can be The similar type of system can be evolved for different parts of India.evolved for different parts of India.

• The SAFAL is also doing a good job by The SAFAL is also doing a good job by direct procurement of items from direct procurement of items from farmers of even remote and hilly areas.farmers of even remote and hilly areas.

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Contd……Contd……

• The self help groups (which can be The self help groups (which can be termed as mini informal cooperatives) termed as mini informal cooperatives) can play role in marketing.can play role in marketing.

• The groups can collect the produce The groups can collect the produce from various small producers and can from various small producers and can do the primary processing like grading, do the primary processing like grading, cleaning, packing etc. cleaning, packing etc.

• The sale of produce though groups will The sale of produce though groups will also save the time of individual farmers also save the time of individual farmers and also reduce the transport cost.and also reduce the transport cost.

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ROLE OF CORPORATE SECTOR ROLE OF CORPORATE SECTOR • During pre reforms period ,the agri During pre reforms period ,the agri

marketing was out of purview of corporate marketing was out of purview of corporate sector (except public companies).sector (except public companies).

• The entire trade was carried out either by The entire trade was carried out either by traders or the public sector companies.traders or the public sector companies.

• The corporate sector entered into the The corporate sector entered into the business after reforms.business after reforms.

• The market was opened not only for The market was opened not only for purchase but also for retail sale.purchase but also for retail sale.

• The agro processing industry started the The agro processing industry started the procurement directly from the farmers and procurement directly from the farmers and also integrated them for production of also integrated them for production of specific varieties.specific varieties.

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Contd……Contd……

BENEFITSBENEFITS1.1. The farmers were able to sell the produce at The farmers were able to sell the produce at

predetermined price or pricing predetermined price or pricing methodology (SAFAL pays as per Azadpur methodology (SAFAL pays as per Azadpur Mandi rates minus transportation cost).Mandi rates minus transportation cost).

2.2. The weighing is being done through The weighing is being done through electronic machines.electronic machines.

3.3. The middlemen and commission agents The middlemen and commission agents have no role.have no role.

4.4. The consumer is also getting food at low The consumer is also getting food at low price.price.

5.5. The adulteration like colouring is avoided.The adulteration like colouring is avoided.6.6. The farmers get cash immediately.The farmers get cash immediately.

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Contd…….Contd…….7.7. The farmers are diversifying into high value The farmers are diversifying into high value

crops and off season vegetables due to crops and off season vegetables due to assured buying.assured buying.

8.8. The wastage of produce due to on availability The wastage of produce due to on availability of cold chain is reduced.of cold chain is reduced.

9.9. The traders are also offering incentives to The traders are also offering incentives to farmers to have share in the market.farmers to have share in the market.

10.10. Due to on- farm purchase ,the farmers save Due to on- farm purchase ,the farmers save their time and can use it gain fully in other their time and can use it gain fully in other activities.activities.

11. It also results in indirect saving to nation in 11. It also results in indirect saving to nation in form of fuel as the produce is generally form of fuel as the produce is generally collected from the collection centers.collected from the collection centers.

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Contd…….Contd…….

LIMITATIONS1. Only selected and quality produce is

purchased ,whereas every thing can be sold in traditional mandi at different price.

2. The supermarkets, mega stores or the food processing companies insist for specific varieties of their choice which may or may not be locally adapted. Farmers have suffered huge losses on this account. this also act as deterrent to bio –diversity. This may finally result in vanishing of local vegetables and fruits.

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Contd..Contd..

3. 3. A large number of persons engaged in trade A large number of persons engaged in trade will slowly become unemployed.will slowly become unemployed.

4. People also feel that the corporate sector 4. People also feel that the corporate sector may act as monopoly after having a grip on may act as monopoly after having a grip on the agriculture produce market and may the agriculture produce market and may determine the cropping pattern of country determine the cropping pattern of country for its own advantage.for its own advantage.

5.5. The local traders/ middlemen though The local traders/ middlemen though generally termed as cheats, sometimes generally termed as cheats, sometimes come to rescue of the poor farmers when come to rescue of the poor farmers when they need money and the organized sector they need money and the organized sector is not able to deliver due to its limitations.is not able to deliver due to its limitations.

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Contd……Contd……

6.6. Now, with introduction of reforms , Now, with introduction of reforms , the farmers have a choice to sell their the farmers have a choice to sell their produce, at least in some parts of produce, at least in some parts of rural India.rural India.

7.7. The healthy competition between The healthy competition between traders, corporate buyers or traders, corporate buyers or cooperative marketing system will be cooperative marketing system will be beneficial to farmers and consumers.beneficial to farmers and consumers.

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DIRECT MARKETINGDIRECT MARKETING• We have already discussed in various We have already discussed in various

modules that the price of agriculture produce modules that the price of agriculture produce increases up to four times without any value increases up to four times without any value addition due to presence of large number of addition due to presence of large number of middlemen. this situation can be avoided by middlemen. this situation can be avoided by encouraging direct marketing of produce by encouraging direct marketing of produce by farmers. farmers.

• Some of the states are already encouraging Some of the states are already encouraging the direct marketing by allowing Apni Mandi the direct marketing by allowing Apni Mandi or Kisan Mandi in towns or cities where the or Kisan Mandi in towns or cities where the farmers sell the produce directly to the farmers sell the produce directly to the consumers.consumers.

• The places like Dilli Haat have been created The places like Dilli Haat have been created for non farm rural produce. Similarly the for non farm rural produce. Similarly the organized marketplaces can be created for organized marketplaces can be created for farm produce.farm produce.

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Contd……Contd……• Direct marketing by farmers will not Direct marketing by farmers will not

only benefit farmers and consumers in only benefit farmers and consumers in terms of money but it empower them in terms of money but it empower them in many ways.many ways.

• The farmers will learn the various The farmers will learn the various aspects of marketing by day to day aspects of marketing by day to day experience and will be able to link the experience and will be able to link the production to market.production to market.

• The availability of this channel will also The availability of this channel will also create beneficial conditions in other create beneficial conditions in other marketing channels and the bargaining marketing channels and the bargaining power of the farmers will increase.power of the farmers will increase.

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Case study – ITC’s e-chaupalsCase study – ITC’s e-chaupals• The idea of e-chaupal was launched by ITC The idea of e-chaupal was launched by ITC

which has a agro business division.which has a agro business division.• ITCITC provided an ICT kiosk with internet provided an ICT kiosk with internet

access in the house of Sanchalak( a trained access in the house of Sanchalak( a trained farmer). Solar Energy was used to break the farmer). Solar Energy was used to break the power barrier.power barrier.

• The portal gives lot of information to farmers The portal gives lot of information to farmers related not only to market but also to related not only to market but also to weather, agriculture, education ,training etc.weather, agriculture, education ,training etc.

• The farmer can take decision on selling the The farmer can take decision on selling the produce without visiting the market and produce without visiting the market and without the pressures of middlemen.without the pressures of middlemen.

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Direct marketing

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ITC e- CHAUPAL

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Contd……Contd……

• The farmers can sell the produce to ITC The farmers can sell the produce to ITC or elsewhere.or elsewhere.

• The chaupal sagar or hubs have been The chaupal sagar or hubs have been developed to provide various physical developed to provide various physical facilities to farmers like electronic facilities to farmers like electronic weighing, supply of quality inputs etc.weighing, supply of quality inputs etc.

• The experiment is successful and The experiment is successful and slowly covering large number of slowly covering large number of villages in various parts of India.villages in various parts of India.

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Way aheadWay ahead• Huge investment is needed in the sector to Huge investment is needed in the sector to

bring the facilities at par with international bring the facilities at par with international level.level.

• Opening of the sector will definitely be Opening of the sector will definitely be beneficial to all.beneficial to all.

• A mix of all channels will not only bring A mix of all channels will not only bring competition but also restrict creation of any competition but also restrict creation of any monopoly.monopoly.

• The more e-chaupal type innovations can fill The more e-chaupal type innovations can fill the information gap at low cost.the information gap at low cost.

• Primary or secondary level processing at Primary or secondary level processing at village itself will not only generate extra village itself will not only generate extra income but it can avoid distress selling.income but it can avoid distress selling.

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SUM UPSUM UP

• The agriculture marketing is changing The agriculture marketing is changing and moving from subsistence to and moving from subsistence to business level.business level.

• The field is now open for competition.The field is now open for competition.

• The ultimate aim is to make agriculture The ultimate aim is to make agriculture a profitable activity. a profitable activity.

• The present concerns are to increase The present concerns are to increase number of organized markets, create number of organized markets, create infrastructure for saving the perishable infrastructure for saving the perishable commodities and ensure better farm commodities and ensure better farm income.income.

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Thank YouThank You