Rural Marketing Assigenment

8/6/2019 Rural Marketing Assigenment

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MAHARISHI

INSTITUTE OF MANAGEMENT

Maharishi Nagar, Dadri Road,Noida-201304 (U.P.)

Assignment on:- Rural Marketing(set II)

Submitted To:- Submitted By:-

Mr. Nitin singh Bhavesh Bhanjan Dev

MIM Faculty MIM Student

Noida Roll No-15011


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1. Explain the problem of adulteration in the context of agricultural marketing in India.Agricultural Marketing:- The term agricultural marketing is composed of two words -agriculture and marketing. Agriculture, in the broadest sense means activities aimed at

the use of natural resources for human welfare, and marketing connotes a series of

activities involved in moving the goods from the point of production to the point ofconsumption. Specification, the subject of agricultural marketing includes marketingfunctions, agencies, channels, efficiency and cost, price spread and market integration,

producers surplus etc. The agricultural marketing system is a link between the farm andthe non-farm sectors.

Adulteration :- Adulteration is a legal term meaning that a food product fails to meet federal or

state standards. Adulteration usually refers to noncompliance with health or safety standards asdetermined, in the United States, by the Food and Drug Administration (FDA) and the U.S.Department of Agriculture (USDA)

Problems of Adulteration:- The Federal Food, Drug, and Cosmetic (FD&C) Act (1938)

provides that food is "adulterated" if it meets any one of the following criteria:

(1) it bears or contains any "poisonous or deleterious substance" which may render it injuriousto health;

(2) it bears or contains any added poisonous oradded deleterious substance (other than a

pesticide residue, food additive, color additive, or new animal drug, which are covered byseparate provisions) that is unsafe;

(3) its container is composed, in whole or in part, of any poisonous or deleterious substancewhich may render the contents injurious to health; or

(4) it bears or contains a pesticide chemical residue that is unsafe.


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(5) it is, or it bears or contains, an unsafe food additive;

(6) it is, or it bears or contains, an unsafe new animal drug;

(7) it is, or it bears or contains, an unsafe color additive;

(8) it consists, in whole or in part, of "any filthy, putrid, or decomposed substance" or is

otherwise unfit for food; or

(9) it has been prepared, packed, or held under unsanitary conditions (insect, rodent, or birdinfestation) whereby it may have become contaminated with filth or rendered injurious to health.

(10) it has been irradiated and the irradiation processing was not done in conformity with a

regulation permitting irradiation of the food in question (Note: FDA has approved irradiation of anumber of foods, including refrigerated or frozen uncooked meat, fresh or frozen uncooked

poultry, and seeds for sprouting

(11) it contains a dietary ingredient that presents a significant or unreasonable risk of illness or

injury under the conditions of use recommended in labeling (for example, foods or dietarysupplements containing aristolochic acids, which have been linked to kidney failure, have been

banned.);

(12) a valuable constituent has been omitted in whole or in part or replaced with anothersubstance; damage or inferiority has been concealed in any manner; or a substance has been

added to increase the product's bulk or weight, reduce its quality or strength;

A Major Side Effect of Adulteration

The food items being sold in the market are full of pesticides and preservatives. In most of the

countries, the farmers were not using pesticides, fertilizers, and chemicals until about 1960s. Theuse of pesticides and fertilizers started and this increased the agricultural yield by at least four

folds, but it is a true fact that the nutritional value of the agricultural products also got dividedaccordingly. Therefore, if a person ate four slices of bread or chapatti in 1960s,

he would be required to eat a minimum of sixteen breads or chapattis today toprovide the same nutrition to the body (a major reason for malnutrition). On

the contrary, people now eat only two slices of bread or chapattis because ofdecreased appetite due to inactivity and sedentary lifestyle.

The nutrition to the agricultural products comes from soil, water, and air.Certainly, it doesn't come from the fertilizers, chemicals, and pesticides. Incase the nutrition was available in chemicals and pesticides, farmers were not

required to grow crops and instead people would have consumed chemicals for the nutritionalneeds of the body. But in the modern medicine system, we consume synthesized chemicals as

food supplements which are available at a cheaper value to provide the nutritional strength to thebody without knowing about their severe side effects like as


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Different types of red chillies and red chilly powder which blackmarters adulterate with red brick

powder which is a cancer causing agent.The nutritional value of the food further gets reduced

substantially by the method of cooking. In addition to the above, we store cooked food in the

refrigerator and eat it again after re-heating. Every time we re-heat a meal, the nutritional value

reduces to half. This implies that we are virtually eating extremely low nutritional diet. We just

fill our stomachs with tasty food without bothering about its nutritional value.

Another major problem our world is going through for the last many years is adulteration of

food. Every now and then, we can hear of people saying that certain number of people died dueto consuming a certain type of food product available in the market. Adulteration in developing

countries has become uncontrollable and the most targeted are children who suffer from foodpoisoning.

Just a few days back at the times of Navratras (Nine Holy Dayscelebrated in India), the newswere telecasted on national channels that approximately 500 people have been hospitalized and

two or more died due to eating kuttu atta (kuttu wheat flour consumed specifically in Navratras).This is the case of excessive adulteration which was noticed by media but there are several small

cases of unnoticed adulteration which happens and even the consumer does not know that he isconsuming an adulterated food product and the most common problem that arises due to this

situation is nutritional deficiency.

The white wheat flour gets adulterated by talcum powder (cancer causing agent whenindigested), red spice powder gets mixed with red brick powder which is another carcinogen and

several other types of adulteration. So the nutritional deficiency coming from all these resourcesis disastrous to health and should be taken care of. Side effects of nutritional deficiency are

numerous including but not limited to cold, anemia, fever, rickets, beriberi, vitamin C deficiency,kwashiorkor, marasmus, scurvy, cough, skeletal malformation, pellagra, premature birth of baby,

night blindness, skin cracks, easy hair pluckability, muscular weakness, joint fragility, fatigue,tiredness, insomnia, depression, headache, goiter in hilly regions, pigmented skin, bad body

posture, food indigestion, shortness of breath, etc.


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2. How does the absence of grading and standardization effect agricultural marketing inIndia?

The Agricultural Produce (Grading & Marking) Act, 1937 empowers the Central Government to

fix quality standards, known as AGMARK standards and to prescribe terms and conditions for

using the seal of AGMARK. So far, grade standards have been notified for 159 agricultural andallied commodities. During the year 1997-98, new grade standards have been formulated for fivecommodities viz. Caraway seeds, Vermicelli, Macaroni and Spaghetti, Cloves, Mace and Large

Cardamom. As a result of special efforts initiated to increase grading under AGMARK, 271new packers have been enrolled during 1998-99 up to September, 1998.

Testing of samples in AGMARK laboratory.

The purity standards under the provision of the Prevention of Food Adulteration (PFA) Act,

1954 and Bureau of Indian Standards (BIS) Act, 1986 are invariably taken into considerationwhile framing the grade standards. International Standards framed by Codex/ International

Standards Organisation (ISO) are also considered so that Indian produce can compete in the

International market.

Directorate General of Foreign Trade, Ministry of Commerce issued a notification to the effect

that DMI would be the inspecting agency for fresh fruits and vegetables for exports to theEuropean Union countries. The standards of Litchi, Pomegranate, Mangoes, Pineapples, Guavas,

Grapes, Headed Cabbage, Spinach, Peas, Sugar Snap Peas, Ribbed Celery, Onions, Garlic,Papaya, Bananas, Plums, Brussels sprouts, Tomatoes are framed harmonised with International

standard. These fruits and vegetables are taken into Preliminary draft notification of Fruits andVegetables G & M Rules, 03 which was published in the Gazette. The Standing Committee on

harmonization of Fruits and Vegetables have approved the grade standards of Beans, Melons,Water Melons, Cherries, Strawberries, Pears, Cauliflowers formulated by the DMI. During the

year 2004-05, final notification of Fruits and Vegetables G & M Rules, Makhana G & M Rules,Pulses G & M Rules have been published in the Gazette of India. Preliminary draft notification

of Spices G & M Rules is in the process of publication in the Gazette. The core group ofStanding Committee on harmonisation of fruits and vegetables have approved the grade

standards of Capsicum, Okara, Chillies, Gherkins, Sapota, Custard apple formulated by DMI.The approval for Citrus fruits and Carrot is in process As a result of special efforts initiated to

increase grading under AGMARK, commodities valued at Rs.3,36,500 thousand were graded forexport purposes during the year 2003-04. During 2004-05 (upto December), commodities valued


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at Rs.121000 thousand have been graded for export purpose. As on 1st April, 2004, 874Certificate of Authorisation holders were operating for grading of agricultural and allied produce

for export purposes under AGMARK. During 2003-04, commodities worth Rs. 46907500thousand were graded for internal trade. During 2004-05 (upto December), commodities valued

at Rs. 325,00,000 thousand were graded for internal trade. 8669 number of authorized packers

have been operating for grading of agricultural commodities for internal trade. The CentralAgmark Laboratory (CAL) at Nagpur and Regional Agmark Laboratories (RALs) at Mumbai,Delhi, Kolkata and Chennai have also been provided with veterinary biological control testing

units.


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3. How does the problem of the absence of marketing intelligence manifest itself in theagricultural markets in India?

Market intelligence: As for as is possible marketing decisions should be based on sound

information. The process of collecting, interpreting, and disseminating information relevant to

marketing decisions is known as market intelligence. The role of market intelligence is to reducethe level of risk in decision making. Through market intelligence the seller finds out what the

customer needs and wants. The alternative is to find out through sales, or the lack of them.

Marketing research helps establish what products are right for the market, which channels of

distribution are most appropriate, how best to promote products and what prices are acceptable

to the market. As with other marketing functions, intelligence gathering can be carried out by the

seller or another party such as a government agency, the ministry of agriculture and food, or

some other specialist organisation. What is important is that it is carried out.

Market information and intelligence are crucial to enable farmers and traders to make

informed decisions about what to grow, when to harvest, to which markets produce should be

sent, and whether to store it or not. The most important marketing intelligence need of the

farmer is price intelligence. Agricultural price data are based on thousands or millions of

transactions, many of them on a small scale, that are taking place everyday all over the country.

Collecting an adequate sample and making sure that these are representative enough to be

useful is not an easy task. As farmers become more market oriented, extension workers need to

be in a position to advise them not only on how to grow crops but also on how to market them.

Knowledge of produce handling, storage and packaging is also essential.

When landholdings are small and the overall economic development has matured beyond the

basic food needs, farmers face market risks and they opt for diversifying away from grainstowards higher value commodities and products. In some states a smaller land holding size and

favorable agro-ecology push stockholders to diversify away from food grain and toward higher

value commodities such as horticultural products demanded by more sophisticated consumers,

both domestic and international.

In order to be successful in marketing high value products, stakeholders need to understand

consumer preferences, prices, and markets; they need to organize the supply chain from

producers to consumers; and they need to make investment, production and marketing

decisions based on reliable market intelligence. Most farmers today still lack a good

understanding and capacity to use market intelligence in guiding their production and

marketing decisions.

Recent advances in information technology are making it more feasible to provide farmers with

the marketing information they need. However farmers may not benefit from sophisticated

facilities, if the system is poorly managed or not designed for their needs. It is not enough for

marketing information to be collected; it must also be disseminated in a form accessible to

famers and adapted to their needs.


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In India existing agricultural market information services frequently fall short in one or more

areas. In many cases shortcomings occur because the service is not relevant to the needs of the

users, or because it is targeted primarily at policymakers, with insufficient attention paid to the

needs of farmers and traders. Much effort is therefore spent on the collection of the

information, but only a little attention is paid in timely reporting of the information collected,or to reporting the information in a manner, which is useful to farmers and traders.

Establishing and Networking of Agricultural Market Intelligence Centers are the need of the

hour, because among the Indian States, consumption and cultural patterns are similar. All the

Indian States depend on interstate trade for major agricultural and horticultural commodities

like rice, coarse grains, oilseeds, cotton, and fruits like banana, mango, and entire range of

vegetables. For example Tamil Nadu depends on Karnataka and Andhra Pradesh for rice, while

Karnataka depends on Tamil Nadu for coarse grains and turmeric. Vegetables are daily

transported from Bangalore and nearby areas to Coimbatore market of Tamil Nadu and then to

Kerala. Kerala maximum depends on Tamil Nadu for vegetables and rice. Cotton comes from

Maharashtra, Gujarat, Andhra Pradesh, and Karnataka to Tamil Nadu mills. Similar is the case

with wheat. Hence dissemination of market information (demand, production and prices) plays

a vital role in the functioning of the whole market, by harmonizing the competitive marketing

process. By helping ensure that produce goes to markets where there is a demand for it, it

shortens marketing channels and cuts down on transport costs. It helps to ensure that each

marketing transaction is a fair one, and that all participants share the risks and benefits.


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4. How does the lack of transportation facilities become a problem in agriculturalmarketing?

An efficient transport system is critically important to efficient agricultural marketing. Iftransport services are infrequent, of poor quality or expensive then farmers will be at a

disadvantage when they attempt to sell their crops. An expensive service will naturally lead to

low farm gate prices (the net price the farmer receives from selling his produce). Seasonallyimpassable roads or slow and infrequent transport services, coupled with poor storage, can leadto losses as certain crops (e.g. milk, fresh vegetables, tea) deteriorate quickly over time. If the

journey to market is made over rough roads then other crops (e.g. bananas, mangoes) may alsosuffer losses from bruising; this will also result in lower prices to the farmer.

Agriculture is best served by consistent high urban, and international, demand. This is best brought about by an efficient, high volume, transport and marketing system where the

transporting and marketing unit costs are low. If the margin between what the farmer receivesfrom the sale of his produce and what the urban consumer pays for his produce is high then the

effective demand transferred to the farmer will be correspondingly be reduced. Similarly ifinternal transport costs in a country are particularly high then the scope for agricultural exports

will also suffer in comparison with other more efficient countries.The pattern of agricultural marketing is strongly influenced by the nature of transport services.

Many developing countries suffer from monopolistic, low volume and high cost transport andmarketing systems. Economies of scale are present in both transport and marketing operations.

In the following we will consider transport costs, the impact of roads on rural development,access to markets and the potential use of IMTs.

THE IMPACT OF TRANSPORT COSTS ON AGRICULTURAL

PRODUCTIONThe proportion of transport charges to final market price will vary with a range of factors such as

commodity type, the efficiency of the transport and marketing sectors and travel distance.

Studies carried out in Ghana demonstrate this variation. As a proportion of final market pricewholesale transport to Kumasi were found to be between 3.5 and 5% for maize, yam and plantainwith mean distances of the different crops of between 120km to 200km (Hine, Riverson and

Kwakye, 1983). In another study an average of 7 to 8% were found for Koforidua. A more recentstudy carried out by the Ministry of Transport found that for Accra the proportion was 11% for

maize (420km) and 25% for tomatoes (360km). The impact of total transport costs on agriculturewill be higher than these figures indicate because the critical factor is the relationship between

transport costs and what the farmer receives for his produce at the farm gate. Both marketingmargins and transport costs (including the high cost of head loading produce to the village or

roadside) need to be subtracted from the final market price. The results will, of course, vary fromcountry to country and year to year. However, Ahmed and Rustagi (1987) found that African

farmers received only between 30-50% of final market prices compared to 70-85% received byAsian farmers with most of the difference going on transport costs. The effect of reduced

transport marketing costs on agricultural productivity can be estimated using agricultural supply price elasticities. These have been shown to lie in the range 0 to 1.5. If it is assumed that

transport costs of moving goods to a major urban market are equivalent to say 30% of farm gateprices and that agricultural prices are set at the urban market then, a reduction of total transport

costs by 20%, which is totally passed onto the farmer, will induce a rise in farm gate prices bysix per cent. If it is also assumed that the total agricultural supply elasticity is +1 then one may


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estimate that total agricultural output would rise by about 6%. Road investment has an importantpart to play in reducing transport costs, however improving short lengths of feeder roads may

have little impact if no change in transport mode occurs. It has been calculated that upgrading5km of feeder road from earth to gravel standard might only increase farmgate prices by about

one tenth of one per cent. In comparison bringing new motor vehicle access 5km closer to a

village (or farm) when the alternative was headloading by hired labour could increase farmgateprices by over a hundred times as much. The above analysis has largely assumed that changes intransport costs will be passed to farmers and not go to transporters, food wholesalers and retailers

or the final urban consumers. Competitive transport and food marketing is required to ensure thatthe benefits from reductions in transport costs are passed on to farmers and to final consumers.

Unfortunately in many parts of Africa this is far from the case. Where food prices are notgovernment controlled it is common to find a wide variation of food prices between different

regional markets in Africa which cannot be easily explained by transport costs. For example, itwas found in the Ashanti Region of Ghana that the prices of cocoyam, plantain and tomatoes

varied by more than two to one in different district markets at the same time. In one month the price of cassava was reported to be six times the price in another! Within Ashanti Region to

transport produce from the lowest price market to the highest price market would have accountedfor around 5% of the price difference for maize and plantain and around 15% for yam (Hine,

Riverson and Kwakye, 1983). Similarly in Zaire it can be calculated that transport chargesaccount for about 15 to 20% of the total difference in price of cassava for Kinshasa and village

markets 260 to 600km away (Rizet and Tshimanga, 1988).Besides transport costs, other factors that can account for a wide range of prices, these include

small volumes, poor price information, commodity perishability, differences in storage andretailing costs and a monopolistic marketing system. For example at the village level travelling

wholesalers will travel together to a village may collude and set prices to the farmer before theyarrive. Individual farmers will often have little choice as to whom they will trade with. More

often than not it will be with one travelling wholesaler with whom the farmer has a long standingrelationship, this is often strengthened by a credit agreement. For many farmers, indebtedness

will force them to sell at peak harvest time when prices are low. The price of transport is not theonly disincentive to increased agricultural production. There is evidence from all over SSA that

crops remain un-harvested, or are spoiled once they have been harvested, because of aninadequate supply of vehicles at harvest time. For example, Gaviria (1991) presents evidence

from Tanzania that in some regions after the 1987/88 harvest that up to 89% of harvest remainedstranded with typical figures in the region of 10-40%.


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5. Why is the lack of storage facilities such a big problem in agricultural marketing?The presence of markets and storage facilities play an important role in affecting choice of

vehicle. Markets and storage facilities both provide the same role of acting as a place whereagricultural produce can be amalgamated. This may be for the purpose of immediate sale or for

transportation to the next destination. Access to markets and storage facilities therefore affectvehicle choice in two main ways.

Firstly, the ease of access to these facilities, whether in terms of distance or ability to use thefacilities, will dictate the farmers decision on which vehicle to use. For example, if the storage

facility is close he/she may decide to buy a non-motorised vehicle which would have been of nouse if the facility was beyond a certain distance. Similarly, if once the farmer had reached the

facility he was unable to use it either because of its expense or because of exclusionist typepractises, the need for a vehicle becomes redundant, and the farmers produce may as well be

sold to the village trader. The farmer will only demand a more advanced vehicle if it is theperception that the vehicle will enable an effective increase in farm gate prices.

Secondly, where goods are amalgamated it means that the density of demand for vehicle servicesincreases. The density of demand is of vital importance in determining vehicle choice. The largerthe demand the more an efficient and cost effective vehicle can be justified and hence the unitary

costs of transport are reduced. The existence of markets and storage facilities are important atany level. For example, at the village level a small grain store may be able to accumulate enough

demand from all the farmers to justify the use of a donkey cart for transportation to market.Without the store individual farmers may only be able to justify headloading their surplus

produce to market. Similarly, at the district level a market could attract city traders who bringlarge trucks to transport the produce bought at the market in bulk.

The ease with which farmers and traders have access to markets and storage facilities will bereflected in their distribution costs (transport and storage). If distribution costs are low this will

effectively increase farm gate prices which will give farmers the incentive to increaseproduction. One of the factors of production in this case would be agricultural and/or transport

vehicles.


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6. What are the functions of a regulated market?A regulated market orcontrolled market, is the provision of goods or services that is regulated

by a government appointed body. The regulation may cover the terms and conditions of

supplying the goods and services and in particular the price allowed to be charged and/or towhom they are distributed. It is common for a regulated market to control natural monopolies

such as aspects of telecommunications, water, gas and electricity supply. Often regulatedmarkets are established during the partial privatization of government controlled utility assets.

Basic objectives ofRegulated Market

To ensure reasonable gain to the farmers by creating environment in markets for fair play ofsupply and demand forces, To regulate market practices and attain transparency in transactions

Aimed at providing proper method of sale, correct weighing, prompt payment and variousmarketing related services Democratic set up to control and manage markets

For controlling the activities of the marketing, there is a Market Committee. The Committeeconsists of representatives of the farmers, commission agents and the Government nominees.

The three basic functions of this committee were

1) To meet the demand of the Increase in population and industrial advancement

2) To increase the quality of agriculture produce

3) To fetch an appropriate price for the farmers

Feature of Acts are:-

(a) An elected market committee, consisting of representatives from farmer-producers,commission agents, wholesalers, and some government nominees like registrar of Cooperative

/societies, Director of State Agricultural Marketing Board and others is constituted to administerthese markets. The farmer-producer members constitute the majority in the committee to help

inane arbitration being decided in favor of farmer producers.

(b) All the functionaries in the market (commission agent, wholesaler, auctioneers, loaders, and

unloads)have to obtain a lenience from the market committee to operate.

(c) The market committee to fix all charges levied for the services rendered by the

functionaries is to be constituted. There will also be a sub-committee called Arbitration Sub-committee to deal with any serious violation.

(d) The sale proceeds have to e paid to the farmer-Producers on the day to sale itself.

(e) The sales have to be conducted very transparently, generally by open auction .No secrete

deals are allowed.


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(f) The market charges incurred in effecting the sales have to borne either by sellers or buyers,Or equally between the sellers and buyers. However, this varies from state to state .In some state,

the market charge like commission, wig men charges, loading /unloading charges are totally bornby the farmer producers, in other charges are born by the buyers, and in yet other charges are

equally born by the sellers and buyers.

(g) Any dispute arising during the process of sell process is to be referred to the arbitration sub-

committee whose decision shall be final.

(h) Licensed functionaries are required to submit complete details of the daily transactions tothe committee like the quantity of arrivals, sales, stocks and the prices of different commodities

.This information is to be published or exhibited on notice boards everyday. Such marketIntelligence is to be further disseminated to the hinterland villages of the market, to help farmers

in judging the best time to sell his produce to obtain the best possible prices.

(i) Physically facilities like rest houses, canteen, Potable water, cattle shed etc. to be providedin the regulated markets for the benefit of the farmers and their cattle.

(j) Facilities to be provided for grading and standardization of the produce brought for sale bythe farmer-producers.

(k) The packing sizes for various commodities to be stipulated by the market committee like, 75

kg bag for paddy or 180kg bales for cotton etc.

(l) The central and State warehousing Corporations are expected to establish god owns near themarket for the benefit of the farmer-producers. In the event of the prices being low or if the

produce cannot be sold on the day of arrival for any reason, they can store it in these god ownsfor a fixed charge. The receipt so issued by the warehousing authorities can be treated as a

negotiable instrument for purposes of getting loans from any bank and such loans can be cleared

when the produce is sold at a lasted date.


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7. Explain the concept of cooperation with respect to agricultural marketing.Co-operative marketing

A Cooperative is an association of persons, usually of limited means, who have voluntarily

joined together to achieve a common Economic end through the formation of a democraticallycontrolled business organization, Making equitable contributions to the capital required and

accepting a fair share of the risks and benefits of the undertaking. Some are CooperativeMarketing Institute which is mention below

Cooperative Marketing Institutions

(a) Primary, Central and State level Marketing Societies, Unions, and

Federations.

(b) Special Commodities Marketing Societies (Sugarcane, Cotton, Oilseeds,

Milk etc.)

(c) Processing Societies- Cotton Processing and Ginning Societies

- Oilseeds Processing Societies

- Fruits and Vegetables Preservation Societies

- Sugarcane Crushing Societies

- Milk Processing and Chilling Societies; etc.

(d)

National Agricultural Cooperative Marketing Federation (NAFED)(e) National Cooperative Development Corporation (NCDC)(f) Tribal Cooperative Marketing Federation (TRIFED)

The advantages of co-operative marketing can confer on the farmer:-

1.Increases bargaining strength of the farmers

Many of the defects of the present agricultural marketing system arise because often one

ignorant and illiterate farmer (as an individual) has to face well-organised mass of clever

intermediaries. If the farmers join hands and for a co-operative, naturally they will be lessprone to exploitation and malpractices. Instead of marketing their produce separately, they

will market it together through one agency.

2.Direct dealing with final buyers

In cases, the co-operatives can altogether skip the intermediaries and enter into direct


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relations with the final buyers. This practice will eliminate exploiters and ensure fair prices to

both the producers and the consumers.

3. Provision of credit

The marketing co-operative societies provide credit to the farmers to save them from the

necessity of selling their produce immediately after harvesting. This ensures better returns to thefarmers.

4. Easier and cheaper transport

Bulk transport of agricultural produce by the societies is often easier and cheaper. Sometimes the

societies have their own means of transport. This further reduces cost and botheration of

transporting produce to the market.

5. Storage facilities

The co-operative marketing societies generally have storage facilities. Thus the farmers can wait

for better prices. Also there is no danger to their crop yield from rains, rodents and thefts.

6. Grading and standardization

This task can be done more easily for a co-operative agency than for an individual farmer.

For this purpose, they can seek assistance from the government or can even evolve their own

grading arrangements.

7. Market intelligence

The co-operatives can arrange to obtain data on market prices, demand and supply and other

related information from the markets on a regular basis and can plan their activities

accordingly.

8. Influencing marketing prices

While previously the market prices were determined by the intermediaries and merchants and

the helpless farmers were mere spectators force to accept, whatever was offered to them, the

co-operative societies have changed the entire complexion of the game. Wherever strong

marketing co-operative are operative, they have bargained for and have achieved, better

prices for their agricultural produce.

9. Provision of inputs and consumer goods

The co-operative marketing societies can easily arrange for bulk purchase of agricultural

inputs, like seeds, manures fertilizers etc. and consumer goods at relatively lower price and

can then distribute them to the members.

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8. What are the basic requirements of an Ideal Storage System?India is the largest producer of fruits and second largest producer of vegetables in the world. Inspite of that per capita availability of fruits and vegetables is quite low because of post harvestlosses which account for about 25% to 30% of production. Besides, quality of a sizable quantity

of produce also deteriorates by the time it reaches the consumer. Most of the problems relating tothe marketing of fruits and vegetables can be traced to their perishability. Perishability is

responsible for high marketing costs, market gluts, price fluctuations and other similar problems.At low temperature, perishability is considerably reduced and the shelf life is increased and thus

the importance of cold storage or refrigeration. The first cold store in India was reported to havebeen established in Calcutta in 1892. However significant progress in the expansion of the cold

storage industry in the country has been made only after independence. With a view to ensuringthe observance of proper conditions in the cold stores and to providing for development of the

industry in a scientific manner, the govt of India and the ministry of agriculture promulgated anorder known as "Cold Storage Order, 1964" under Section 3 of the Essential Commodities

Act,1955. The Agricultural Marketing Advisor to the Govt of India is the Licensing Officer.A

cold storage facility accessible to them will go a long way in removing the risk of distress sale toensure better returns.

Basic requirement of an Ideal storage system

It can be two types Bag and Bulk storage which is explain below

1.) Bag storage systemIn most parts of Asia grain is stored in 40-80kg bags made from either jute or woven plastic.Depending on the size of storage, these bags are normally formed into a stack.

When using bag storage consideration needs to be given to the following:

y Jute bags should not be stacked higher than 4m and plastic bags 3m. Plastic bags aremore slippery and the stacks will be less stable.


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y Bags should be stacked under cover e.g. under a roof, in a shed or granary or under waterproof tarpaulins.

y A one meter gap should be left between and around stacks and 1.5 meters clearancebetween the top of the stack and the roof.

y Bags should be stacked on pallets or on an above ground structure to avoid the possibilityof absorbing moisture from the floor.

y Bags should not be stacked on a bed of rice husks or bags filled with rice husks, as theseare difficult to keep free from insect infestation.

y Bags should be stacked so that fumigation can be undertaken easily. The dimensions ofthe stacks should be set to facilitate sealing with a single fumigation sheet.

y The efficiency of bag storage can be improved if a hermetic plastic liner bag like theIRRI Super bag is used inside the existing storage bag especially for seeds but also forcommerical rice.

Some farmers use bag storage in outside granaries, which have been constructed from timber or

mud/cement or large woven bamboo or palm leaves.

2.) Bulk storageFarm level bulk storage

At farm level grain is often stored in bulk in small outside granaries or in woven baskets or

containers made from wood, metal or concrete, which are located under or inside the house.These storages vary in capacity from 200-1000kg.

Losses from insects, rodents, birds and moisture uptake are usually high in traditional bulk

storage systems.

Commercial bulk storage

The large export mills and collection houses sometimes use metal or concrete silos. These silos

range in size from 20 to 2,000 ton capacity. Silos have the advantage that they can be more easily

sealed for fumigation and less grain is spilt or wasted.Silos are not very common in Asia because

of problems with moisture migration inside the silo which results in hot-spots and molds.

Hermetic storage

Sealed or hermetic storage systems are a very effective means of controlling grain moisture

content and insect activity for grain stored in tropical regions. By placing an airtight barrier

between the grain and the outside atmosphere the moisture content of the stored grain will

remain the same as when the storage was sealed. Biological activity inside the sealed container


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will consume the oxygen and as a result most insects will die. Hermetic storage provides

moisture and insect control without pesticides.

Crop Storage

Three public sector agencies are involved in building large-scale storage andwarehousingcapacities in the country. These are theFood Corporation of India (FCI) - External

website that opens in a new window,Central Warehousing Corporation (CWC) - External

website that opens in a new windowand 17 State Warehousing Corporations (SWCs). While the

FCI uses its warehousesmainly for storing food grains, the storage capacities with CWC and

SWCs are usedfor the storage of food grains as well as other items. Here is a list of thestorage

capacity available with different states (External website that opens in a new window).

Indian storage status Capacity :

This capital-intensive marketing infrastructure is necessary for carrying the agricultural produce

from production seasons to consuming periods. Lack of inadequate scientific storage facilitiescause heavy losses to farmers in terms of huge wastage of quantity and quality of crops ingeneral and of fruits and vegetables in particular. Seasonal fluctuations in prices are aggravated

in the absence of these facilities. To have storage facilities in the country, the AgriculturalProduce (Development and Warehousing) Corporation Act was enacted in 1956. The State

Governments also enacted the warehousing Acts during July 1957 to August 1958. The schemeof Warehousing, Rural Godowns and Cold storage's have been initiated in public, cooperative

and private sectors in the country to meet the storage needs of the producers in different areas.The progress made in this regard is as follows:

(i) The total storage capacity available at the end of 2010 of CWC, SWC, and FCI isabout 75 million tonnes. It is estimated that about 25 million tones of grains are

stored in the form of CAP (covered & plinth).(ii) The Rural Godowns under NCRG Scheme initiated in 1979 have constructed

rural godowns of 15 million tonnes.capacity.(iii) Under the Gramen Bhandaran Yojana of GOI, about 67 M.T. capacities (Table -

3) have been created in the country up to March 2010.

Rural Marketing Assigenment

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Transcript of Rural Marketing Assigenment