STUDY ON AGRICULTURE VALUE

CHAIN

MKSP- Pottangi & Semiliguda

Life Academy of Vocational Studies

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Life Academy of Vocational Studies

STUDY ON AGRICULTURE VALUE

CHAIN IN MKSP AREA IN POTTANGI

AND SEMILIGUDA BLOCKS OF ODISHA

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Executive Summary

Mahila Kisan Sashaktikaran Pariyojana (MKSP) is being implemented in Pottangi and Semiliguda

Blocks of Koraput district to bring a desirable improvement in socio-economic leverage and

provides better income to the small and marginal women farmers in the project area. The primary

objectives of the project are to empower women in agriculture by strengthening common

institutions of poor women and leverage their strength to promote sustainable agriculture.

Agriculture is the major livelihood of the tribal people in the area. Due to limited irrigation

facilities Kharif crops are cultivated in larger area under rain-fed situation with limited area under

cultivation during Rabi and summer seasons.

Value chain analysis has been undertaken to identify dynamic linkages between productive

activities, net value added instead of overall size and gross output, determine the distribution of

value added between activities, thoroughly examines information flows among actors in the value

chain unlike typical industry analysis for better understanding of the constraints and opportunities

within each segment, as well as the context in which the chain operates. The present study is

confined to a few important crops grown in the project area which substantially contributes to the

livelihoods of tribal households. The important crops grown in the area are rice, pulses, millets,

vegetables and spices. The tribal farmers are mostly taking up subsistence type of agriculture with

addition of modern technology in a small scale as a result of which the profitability of these crops

is comparatively lower than the State average. In order to understand the position and

contribution of different actors involved in the production, value addition and marketing of these

commodities a value chain study has been conducted. The average age of the dealers is 37 and all

are qualified above HSC examination. Nearly 20% of retailers are trained and 80% are untrained.

Surprisingly 60% have valid license whereas the remaining have already applied for license. The

annual sale of seeds is 154 kg and that of fertilizer is 1362 quintal. Each dealer sells about 240 liter

of pesticides and 430 farm machinery/equipment per year. Nearly 80% retailers are aware of rules

of business and 60% do not issue cash bills to customers. It is reported that the business gives 2-

3% profit on seeds, 2-5% profit on fertilizers, 2% in pesticides and 2-4% on machinery. The input

dealers are the first actors in technology dissemination to farmers.

Value chains play an important role in transforming agricultural commodities from raw material to

end products demanded by the consumers. There are a number of stakeholders involved in the

agricultural commodity value chains and the partitioning of gains among the stakeholders along

the chain is often debated and analyzed. There is however, little understanding about the various

concepts used in value chain analysis specifically addressed to developing countries like Asia and

Africa and on how smallholder farmers can participate in the value chains. Farmers, traders,

wholesalers, retailers, big retail chains and consumers are major actors in the value chain (Aksoy

2005). With the collective enlightenment of all stakeholders, proper enabling environment

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(institutions, infrastructure and policy) will be created in which various actors of value chain are

functioning.

The concept of agricultural value chain includes the full range of activities and participants

involved in moving agricultural products from input suppliers to farmers’ fields, and ultimately, to

consumers. Each stakeholder in the chain has a link to the next in order to form a viable chain. By

understanding the complete production to consumption system of different Production System, it

is possible to determine how the marketing and value-addition activities take place and who

shares how much benefit from such activities.

The value addition in different phases of production can be mapped into a value chain map

for easy understanding, which depicts interlinkages between successive stages in the value chain.

Value Chain Analysis of the project villages are consolidated outputs for different production

systems has been brought from participatory appraisal of different players.

Value chain analysis can make an important contribution to pro-poor economic development for

the following key reasons. Value chains are particularly well suited to understanding how poor

people can engage, or engage more beneficially, with domestic, regional or international trade.

Value chain analysis has economic viability and sustainability at its core because of its focus on

markets and commercial viability (as well as development concerns). This provides a framework

for engagement with both business and beneficiary groups. Successful value chain development

projects, therefore, aim for win-win outcomes for all participants. Value chain analysis focuses on

segmenting the different activities that add value in the production and sale of a product or

service. The value chain consists of the primary producer, trader, processor, wholesaler,

distributor, retailer, and consumer. The findings of the study may be useful to the producers,

businessmen, policy makers and extension workers. The primary producer produces a commodity

to meet his household need. The major actors of value chain are stated be:

Sl.

No

Activities Actor

1 Seed supply OSSC, ICRISAT, NRRI, CHES, CTCRI, RRTTS, KVK, Sale Centre in Block,

Private dealer, seedling from Horticulture nursery, Private party, local

market and farmers

2 Fertilizer supply MARKFED, RMC, Private input Dealers, farmers

3 Pesticides supply Private trader, input dealer, sale centre in Block, farmers

4 Credit Cooperative, Society, PACS/LAMPS, Bank, NBFC, Money lenders,

farmers

5 Sale of produce Farmer, Middle man, rice millers Whole seller, Retailer, Consumer and

exporter

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Contents

Executive Summary ........................................................................................................................................... 1

Acronyms ........................................................................................................................................................... 8

Chapter-1 ......................................................................................................................................................... 12

Project Background ......................................................................................................................................... 12

1.1 Introduction .......................................................................................................................................... 12

1.2 Specific Objectives of MKSP ................................................................................................................. 12

1.3 Agricultural Value Chain ...................................................................................................................... 13

1.4 Value Chain Analysis ............................................................................................................................ 14

1.5 Objectives of Value Chain .................................................................................................................... 15

1.6 Rationale for Value Chain Analysis ..................................................................................................... 15

1.7 Limitations of the Study ....................................................................................................................... 17

1.8 Report Frame ........................................................................................................................................ 17

Chapter-2 ......................................................................................................................................................... 18

Approach and Methodology ........................................................................................................................... 18

2.1 Research Design ................................................................................................................................... 18

2.2 Geographic Coverage ........................................................................................................................... 18

2.3 Sampling ............................................................................................................................................... 19

2.4 Methodology ......................................................................................................................................... 20

2.5 Tools and Techniques .......................................................................................................................... 21

2.5.1 Instruments of Data Collection..................................................................................................... 21

2.5.2 Field Work ..................................................................................................................................... 21

2.5.3 Field Briefings & Training............................................................................................................. 21

2.5.4 Supervision and Quality Control .................................................................................................. 22

2.5.5 Analysis .......................................................................................................................................... 22

1.6 Major Deliverable ................................................................................................................................. 22

Chapter-3 ......................................................................................................................................................... 23

Identification of Important Value Chains ....................................................................................................... 23

3.1 Larger Agricultural and Allied Value Chains in Koraput District ..................................................... 23

3.2 Short listing of Agricultural Value Chains .......................................................................................... 24

3.3 Short Listing of Value Chain ................................................................................................................ 25

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Chapter-4 ......................................................................................................................................................... 29

Description and Analysis of Selected Value Chains ....................................................................................... 29

4.1 Production Process .............................................................................................................................. 29

4.2 Rice ........................................................................................................................................................ 29

4.2.1 Production Scenario ........................................................................................................................ 30

4.2.2 Rice Value Chain Map ..................................................................................................................... 30

4.2.3 Constraints and Opportunities ........................................................................................................ 32

4.2.4 Identifying and mapping the main actors involved in the processes ............................................. 33

4.2.5 Mapping the volume and value addition ........................................................................................ 34

4.2.6 Mapping Relationship and Linkage between Value Chain Actors .................................................. 34

4.2.7 Research and Policy Making ........................................................................................................... 34

4.3 Maize ..................................................................................................................................................... 35

4.3.1 Production scenario and marketing ................................................................................................ 35

4.3.2 Mapping of maize value chain ................................................................................................. 35

4.4 Ragi ........................................................................................................................................................ 38

4.4.1 Mapping of Value Chain ........................................................................................................... 39

4.4.2 Constraints and Opportunities ........................................................................................................ 41

4.5 Vegetables ............................................................................................................................................. 42

4.5.1 Production and Marketing .............................................................................................................. 42

4.5.2 Supply chain .................................................................................................................................... 44

4.5.3 Identifying and mapping the main actors involved in the processes ............................................. 45

4.6 Ginger .................................................................................................................................................... 47

4.6.1 Production Scenario ........................................................................................................................ 47

4.6.2 Mapping of value chain ................................................................................................................... 48

4.6.3 Identifying and mapping the main actors involved in the processes ............................................. 48

Chapter-5 ......................................................................................................................................................... 51

Conclusion ....................................................................................................................................................... 51

Annexure-1....................................................................................................................................................... 55

Annexure-II....................................................................................................................................................... 58

Annexure-III...................................................................................................................................................... 60

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List of Tables

Table 1, Sampling from Operational Area ........................................................................................ 19

Table 2, Study Process ....................................................................................................................... 20

Table 3, Area under major crops during 2012-13 in Koraput District ‘000 ha .................................. 23

Table 4, Population of Livestock in Odisha ........................................................................................ 23

Table 5,Larger Value chains Identified in Stage I. .............................................................................. 24

Table 6,RSI and RTI of major crops of Koraput District (Area in’000 ha, Yield in kg/ha) ................... 24

Table 7,Spread Area of Crops ............................................................................................................ 25

Table 8,Land resources in sample villages (in acre) ........................................................................... 25

Table 9, Cropping pattern in Kharif.................................................................................................... 26

Table 10, Cropping pattern in Rabi and Summer .............................................................................. 27

Table 11,Total Area under cultivation by sample households .......................................................... 27

Table 12, Short-listed Agricultural Value Chains ............................................................................... 28

Table 13, Value of Rice per quintal at different stages ..................................................................... 34

Table 14, Value addition of Different Channels ................................................................................. 37

Table 15, Value addition of Different Channels ................................................................................. 41

Table 16, Seasonality calendar of vegetable cultivation ................................................................... 43

Table 17, Value addition of Different Channels ................................................................................. 46

Table 18, Value addition of Different Channels ................................................................................. 49

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List of Figures

Fig-1, Model of a simple value chain

Fig-2, Old Supply Chain

Fig-3, Simple Value chain

Fig-4, Production process of agricultural commodities

Fig-5, Simplified version of agricultural value chain

Fig-6, General value chain map

Fig-7, Schematic value chain map of rice

Fig-8, Core process of rice value chain

Fig-9, Actors in rice value chain

Fig-10, Maize value chain involving core processes

Fig-11, Mapping of relationship

Fig.12, Value chain of Ragi

Fig-13, Processing of Ragi

Fig-14, Volume of products in Ragi value chain

Fig-15, Mapping relationship in ragi value chain

Fig-16, Market players in vegetable

Fig-17, Market chain of ginger

Fig-18, Supply chain of ginger

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Acronyms

AMC Apex Monitoring Committee

APM Assistant Project Manager

ASR Adopted Seed Rearers

BAIF Bharatiya Agro Industries Foundation

BMI Body Mass Index

BPL Below Poverty Line

BRGF Backward Regions Grant Fund Programme

BSM &TC Basic Seed Multiplication & Training Centre

BSPU Basic Seed Production Unit

BSR Basic Seed Rearer

BTSSO Basic Tasar Silkworm Seed Organization

BV Bivoltine

CBO Community Based Organizations

CC Cluster Coordinator

CDP Catalytic Development Programme

CEO Chief Executive Officer

CINI Collective for Integrated Livelihood Initiative

CF Cluster Federation

CIF Community Investment Fund

CPT Cattle proof trench

CR Commercial Rearer

CRP Community Resource Person

CSB Central Silk Board

CTR & TI Central Tasar Research & Training Institute

CTSSS Central Tasar Silkworm Seed Station

DCTSC Demonstration-cum-Technical Service Centre

DF District Federation

DFL Disease Free Laying

DOS Department of Sericulture

DOT&H Department of Textiles & Handlooms

DPAP Drought Prone Areas Programme

DRDA District Rural Development Agency

EA Executing Agency

EDI Education Development Index

EMT Entrepreneurial Motivational Training

FIA Field Implementing Agency

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FIU Field Implementation Units

GOI Government of India

GP Gram Panchayat

GSDP Gross state domestic product

GDP Gross domestic product

HDI Human Development Index

ICAR Indian Council for Agricultural Research

IFAD The International Fund for Agricultural Development

IKP Indira Kranthi Patham

IMR Infant Mortality Rate

IGNOAPS Indira Gandhi National Old Age Pension

INRM Integrated Natural Resource Management

ISDS Integrate Skill Development Scheme

ISTP Inter State Tasar Project

ITDA Integrated Tribal Development Agency

KSS KosaShikar Sangha

LWE Left Wing Extremism

MACS Mutually Aided Cooperatives Societies

MAP Medicinal & Aromatic Plants

MFI Micro Finance Institution

MGNREGS Mahatma Gandhi National Rural Employment Guarantee Scheme

MITTRA Maharashtra Institute of Technology Transfer for Rural areas

MKSP Mahila Kisan Sashaktikaran Pariyojana

MMR Maternal Mortality Rate

MNAIS Modified National Agricultural Insurance Scheme

MORD Ministry of Rural Development

MOT Ministry of Textiles

MoU Memorandum of Understanding

MS Mandala Samakhya

MT Metric Tonne

NABFINS NABARD Financial Services Limited

NAIP National Agricultural Innovation Project

NAIS National Agricultural Insurance Scheme

NABARD National Bank for Agriculture and Rural Development

NFSM National Food Security Mission

NGO Non-Governmental Organization

NHM National Horticulture Mission

NIRD National Institute of Rural Development

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NREGA National Rural Employment Guarantee Act

NRHM National Rural Health Mission

NRLM National Rural Livelihoods Mission

NSR Nucleus Seed Rearer

NTFP Non Timber Forest produce

PCC Project Coordination Committee

PCDDP Per Capita District Domestic Product

PDS Public Distribution System

PEC Project Execution Committee

PHC Public Health centre

PIA Project Implementing Agency

PMB Project Management Board

PPC Pilot Project Centre

PPPP Private Public Panchayat Partnership

PRA Participatory Rural Appraisal

PRFU Project Resource and Facilitation Unit

PRI Panchayat Raj Institutions

PTG Primitive tribal Group

PVTG Particularly Vulnerable Tribal Groups

QPR Quarterly Progress Report

REC Research Extension Centre

RGJAY Rajiv Gandhi Jeevandayi Arogya Yojana

RKVY Rasthriya Krishi Vikas Yojana

RO Regional Office

RTRS Regional Tasar Research Station

RSVY Rasthriya Sam VikasYojana

SBLP SHG-Bank Linkage Programme

SC Scheduled Caste

SERIFED Orissa Co-op Tasar& Silk Federation

SFAC Small Farmers Agri-Business Consortium

SGSY Swarnajayanthi Gram Swarozgar Yojana

SHG Self Help Group

SIDBI Small Industries Development Bank of India

SLMC State Level Monitoring Committee

SLSCC State Level Sericulture Coordination Committee

SLTPSG State Level Technical Project Support Group

SMS Subject Matter Specialist

SRI Systemic Rice Intensification

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SRLM State Rural Livelihood Mission

SRLSP Sustainable Rural Livelihood Security Project

ST Scheduled Tribe

TDC Tribal Development Corporation

TDF Tribal Development Fund

ToR Terms of Reference

TOT Transfer of Technology

TRIFED Tribal Cooperative Marketing Development Federation of India LTD

TSP Tribal Sub-Plan

TTP Trainers Training Programmes

TV Trivoltine

TVS Tasar Vikas Samity

UC Utilization Certificate

UNDP United Nations Development Programme

VAPCOL Vasundhara AgriHorti Producer Company Ltd

VLC Village Level Committee

VO Village Organisation

WBCIS Weather Based Crop Insurance Scheme

WPR Work Participation Rate

WUA Water Users Associations

ZS Zilla Samakya

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Chapter-1

Project Background

1.1 Introduction

Indian agriculture not only provides food security but also ensure livelihood security of 60 percent

population. Agriculture, the single largest production endeavour in the country contributing

around 16 percent of G.D.P. is increasingly being recognized as a female activity. Agriculture sector

employees 80 percent of all economically active women, they comprise 33 percent of agriculture

labour force and 48 percent of self-employed farmers. Government of India has implemented

"Mahila Kisan Sashaktikaran Pariyojana" (MKSP), as a sub component of the National Rural

Livelihood Mission (NRLM) to improve the present status of women in Agriculture, and to enhance

the opportunities for their empowerment. The core agenda of MKSP is to create sustainable

institutions around agriculture and allied activities, create sector specific and geography-specific

best package of practices and create a wide pool of community resource persons for scaling up

livelihood interventions in the country.The socio-economic and technical empowerment of the

small, marginal, landless and socially backward women is the motto of MKSP.

1.2 Specific Objectives of MKSP

To enhance the productive participation of women in agriculture;

To create sustainable agricultural livelihood opportunities for women in agriculture;

To improve the skills and capabilities of women in agriculture to support farm and

non-farm-based activities;

To ensure food and nutrition security at the household and the community level;

To enable women to have better access to inputs and services of the government

and other agencies;

To enhance the managerial capacities of women in agriculture for better

management of bio-diversity;

To improve the capacities of women in agriculture to access the resources of other

institutions and schemes within a convergence framework.

The primary objective of the MKSP is to empower women in agriculture by

making systematic investments to enhance their participation and productivity,

as also create and sustain agriculture based livelihoods of rural women.

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The project which is being implemented in Pottangi and Semiliguda Blocks of Koraput district aims

at bringing desirable improvement in socio-economic leverage and provides better income to the

small and marginal women farmers. The project will not only provide policy leverage but also will

ensure better group cohesiveness among the women farmers in selected proposed areas where

high poverty and exclusion have been the order of the day.

As per baseline study taken up in the project area 85% households (HH) are under BPL

category and nearly 85% HHs are engaged in agriculture while 15% are engaged in ani mal

husbandry for their livelihoods. Agriculture in the area is mostly of subsistence type with

recent introduction of new technologies. Paddy and maize are cultivated by about 90% HHs

and ragi is cultivated by 10% households. Pulses, vegetables and spices (ginger) are

cultivated in limited areas. With a view to making agriculture more rewarding and

remunerative various strategies are required to be adopted. There is a need for value chain

analysis relating to important crops like rice, maize, ragi and vegetables in the project area.

1.3 Agricultural Value Chain

The agricultural value chain concept has been used earlier for agricultural product to move from

the farm to the final customer or consumer.Value chain analysis(VCA) is a strategy tool used to

analyze internal firm activities. Its goal is to recognize, which activities are the most valuable (i.e.

are the source of cost or differentiation advantage) to the firm and which ones could be improved

to provide competitive advantage. Agricultural value chain is concerned with the flows of

commodity to and within a value chain to meet the needs of chain actors for commodity, to

secure sales, to buy inputs or produce, or to improve efficiency. A “value chain‟ describes the full

range of activities required to bring a product or service from conception, through the different

phases of production (involving a combination of physical transformation and the input of various

producer services), delivery to final consumers and final disposal after use (Kaplinsky and Morris

2001). A model value chain is stated below: (Fig-1, Model of a simple value chain)

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Various actors are involved in agricultural value chain right from production to

marketing. The value chain displays a number of points that are important in value chain analysis.

First, value chains are a market-oriented approach, in the sense that all activities in the chain are

directed towards the market. Second, all stakeholders along a particular value chain have to

cooperate to achieve systematic competitiveness for supplying different inputs into the final

product. Third, the starting point for any value chain analysis is the internal working systems (e.g.

labor costs, productivity, and quality control).

1.4 Value Chain Analysis

Value chain analysis normally shows the build-up of costs along a specific commodity chain. This

can be complemented with an identification of the business service providers and what are

considered to be the main determining factors in the external policy environment. Such analysis is

well suited to understanding how poor people in rural areas can engage, or improve their terms

of engagement with trade.

Value chain analysis focuses on segmenting the different activities that add value in the

production and sale of a product or service. It differs from traditional industry sector analyses in

many ways, including the following:

Identifying dynamic linkages between productive activities, value chain analysis

transcends traditional economic and industry sectors by showing where value is added

in a production process

Value chain analysis focuses on net value added instead of overall size and gross output

Traditional industry sector analyses often do not sufficiently determine the distribution

of value added between activities, both within and between countries, or a country’s

current insertion in local markets

Value chain analysis thoroughly examines information flows among actors in the value

chain unlike typical industry analysis

Segmenting the value chain allows for better understanding of the constraints and

opportunities within each segment, as well as the context in which the chain operates.

In general, an in-depth value chain analysis considers the following:

What are the economic costs along the value chain?

Where is the most value added to the value chain?

Who are the most import actors within the value chain?

What is the institutional framework of the value chain?

Where are the bottlenecks in the value chain?

Where is there market potential for growth?

What is the size of the sector/chain?

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What is the potential for upgrading?

What possible synergies exist?

1.5 Objectives of Value Chain

The research objectives for the study on “agricultural value chain development” are:

To contribute to increasing understanding of the structure, operations and performance of

the different stages in the marketing system for selected major commodities ;

To identify major bottlenecks and constraints in agricultural marketing and value chain

development;

To assess the nature and extent of support for agri-business;

To assess the credit, technology and infrastructure requirement;

To identify the power relations in value chain

To develop a framework which outlines how the rural poor can upgrade their position

within a viable value chain; and

To learn lessons about how to use value chain analysis and development efficiently as a

tool to augment the income of poor people in rural areas sustainably.

1.6 Rationale for Value Chain Analysis

Realising the growing importance of the market in the context of state and national agriculture,

the project proposes to raise income of the primary producers, generating employment,

profitability in different value chain segments and bringing in global competitiveness in the local

market context with a holistic approach with emphasis on production to consumption system.

To achieve success in agricultural marketing, holistic approach is proposed to be adopted rather

than fragmented effort and attempt has been made to cover research in production, processing

and marketing aspects addressing production to consumption systems. The project focuses at

postharvest processing, quality management and preservation of its original value. The proposed

system will have both forward and backward linkages with the input and supply chain

management system. The project will cater to the need of small and marginal farmers and

contribute to the optimal use of available resources in a consortium mode. For sector growth,

efforts will be made to mobilise private investment which will help enhancing income of small and

marginal farmers, increasing employment status (directly or indirectly) of the people, ensuring

farmer’s profitability and bringing in competitiveness in the agriculture sector which is basically

dominated by small and marginal farmers.

It is expected that the involvement of the private sector will bring in greater efficiency, cost

effectiveness and timeliness whereas the involvement of the public sector assures inclusion,

equity and trust. The value-addition in the value chain is expected to be client driven with the

identification of critical missing links and bridging them through participation-driven interventions.

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Value chain analysis can make an important contribution to pro-poor economic development for

the following key reasons.

Value chains are particularly well suited to understanding how poor people can engage, or

engage more beneficially, with domestic, regional or international trade.

Value chain analysis has economic viability and sustainability at its core because of its focus

on markets and commercial viability (as well as development concerns). Value chain

analysis provides a framework for engagement with both business and beneficiary groups.

Successful value chain development projects, therefore, aim for win-win outcomes for all

participants.

Value chains are a strong qualitative diagnostic tool, capable, if employed with skill, of

identifying critical issues and blockages for specific target groups and then generating

robust and effective policies and development strategies.

Value chain analysis identifies the core rents and barriers to entry that determine who in

the chain benefits from production for diverse final markets. This helps to focus minds on

how best to facilitate the participation of the poor in these chains.

Value chain analysis is relatively evidence based and action oriented.

Finally, value chains provide a clear way forward as a policy and restructuring tool.

In the current marketing scenario, the agricultural produce has to go through a series of transfers

or exchanges from one hand to another before it finally arrives to the consumers. Since we have a

tradition of agriculture production as well as allied commercial activities, the time has come to

think of value added activities. It is therefore imperative to understand the existing value chain,

the way it operates, the impediments and other related issues. A value chain is very different from

a supply chain, which is simply the description of the physical flows of material from one

enterprise to another. A value chain achieves vertical integration of the business through joint

strategic planning, which requires transparency, trust and respect. A traditional supply chain is

shown in fig- 2.

Fig-2, Old Supply Chain

The value chain approach is especially applicable in food supply chains where complex issues such

as perish ability, low value products to be transported and the consumer demands for safety and

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traceability are prominent. Value chain allows organizational capital to develop, creating

relationships and systems internal to the chain.

1.7 Limitations of the Study

The research study primarily focused on primary study in the project area and interview with

various stakeholders in the area. Due to shortage of time and resources the detailed study in the

district and two blocks could not be carried out. However, available secondary information have

been compiled to complete the report.

1.8 Report Frame

The report has been presented in six chapters. After the first chapter on introduction the second

chapter deals with approach and methodology of the research study. The third chapter deals with

identification of important value chains while chapter four deals with description of selected value

chains. Chapter five deals with findings of primary research and value chain analysis. Chapter six

covers the summary and conclusion of selected value chains. The supporting tables and figures

have been annexed to the report.

*********

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Chapter-2

Approach and Methodology

2.1 Research Design

To understand the prevailing marketing practices and flow of the value chain, a collective

approach of qualitative and quantitative methodologies was adopted. While the qualitative aspect

provides glimpses in understanding and exploring the sublime dynamics of agricultural marketing

and the state of value chain in the area, the quantitative exercise helps gauge the potency and

thereby size the needs by the agro-ecological zones, types of crops across the MKSP project area.

Quantitative research was used to explore the important value chains and their potential while

qualitative research was used to gauge various stakeholders’ needs, attitudes and practices in

agricultural marketing. Both quantitative and qualitative researches were combined to understand

the dynamics of agricultural marketing and state of value chain with scope for development.Our

marketing system is not well defined to meet the needs of the growers / farmers. Farmers are

disorganized, getting no reliable market information and domination by speculative middlemen.

Moreover, there is no quality management, no quality standards and no grading. The ginger

market chain appears to be in a deadlock. Farmers are reluctant to invest because their market

outlets are unreliable and market agents are unwilling to invest because farm production is sub-

optimal.

2.2 Geographic Coverage

As noted in first chapter, the main objective of the study is to increase the understanding of the

structure, operations and performance of the different stages in the marketing system. As a

number of different agriculture commodities are being produced across the three agricultural

seasons, the components in a Value Chain would differ in different seasons and also across the

Blocks. Therefore the components of Value Chain were studied across two project Blocks. Since

the project operates in two Blocks of Koraput district of Odisha.

Commodities

Four important commodities such as rice, maize, vegetables and ginger will be covered under the

study.

Target Groups

The critical players in a Value Chain are farmers (growers), middle men, traders, processors and

community. The study has attempted to collect data from the target group to understand the

marketing system in terms of:

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Flow of agricultural produce

Characteristics of each link within the distribution channel

Demand and supply

Pricing

Other aspects of marketing

2.3 Sampling

The project is being implemented in two Blocks, 10 GPs and 90 villages involving 200 women SHGs

and 3000 women farmers. The study adopted a multi-stage sampling technique. Both the Blocks

were studied separately and 4 GPs @ 2 per Block were covered taking one GP close to Block

headquarters and the other from forest rich area.

With the confidence level of 95% and confidence interval of 30, the calculated sample size of

villages would be 10. Taking confidence level of 95% and confidence interval of 10, the sample of

women farmers would be 93. For the convenience of our study 20 villages and 100 women

farmers were studies. Five villages from each GP (both irrigated and non-irrigated) were selected

where selected commodities were extensively grown and five farmers from each village using

stratified random technique were interviewed. In addition, a few agri-input suppliers, middlemen,

agro-processor, traders, transporter, retailers and consumers were randomly interviewed during

the study.Thus the following samples were covered under the study.

Table 1, Sampling from Operational Area

Name of Block

No. of GPs

No. of villages

Farmers Input-dealer

Agro-processor

Middle men

Whole sellers

Retailers Consumer

Pottangi 2 10 50 2 4 4 1 4 10

Semiliguda 2 10 50 2 4 4 1 4 10

Different actors of value chain as indicated in the sample value chain (fig-3) were interviewed

during field research.

Fig-3, Simple Value chain

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2.4 Methodology

Desk review was made based on the secondary data collected from local government officials,

Regulated Marketing Committee(RMC), base level data of the NGOs regarding coverage of crops,

production trend, input utilization and marketing structure of the selected commodities.

household survey, focus group discussion, interviews with government officials and project staff,

primary processer as well as groups with a stake in the project including processors, NGOs, service

providers, traders, transporters and retailers were made to collect primary data. Representatives

of poor women and other disadvantaged groups were included in household survey, focus group

discussion and interviews. The processors and entrepreneurs (except wholesalers and retailers)

were confined to those conducting actual business with the farmers. The study was conduted in

three phases as outlined below:

Table 2, Study Process

Phase Step What to do? Why

Diagnosis 1 Preparation To define the intervention focus, target groups and project team

2 Map the big picture: enterprises and other actors in the value chain, links between them, demand and supply data and the pertinent context

To clarify the structure of what might seem a chaotic reality and understand the overall system

3 Map where the poor do and do not participate to avoid erroneous assumptions about poor actors

To take account of the less visible suppliers.

4 Conduct fieldwork interviews in each node of the chain, with buyers, producers and intermediaries and service providers, including current/potential poor participants

To provide data and insights for Steps 5 to 8.

5 Track revenue flows and pro-poor income. Estimate how expenditure flows through the chain and how much accrues to the poor. Consider their returns and factors that enable or inhibit earnings

To follow the dollar through the chain down to the poor and assess how returns can be increased.

6 Understand the main areas of potential income generation in the chain (that is, the nature and extent of rents).

To identify the primary potential sources of sustainable incomes.

Scope and prioritize opportunities

7 Identify where in the value chain to seek change: which node or nodes?

To select areas ripe for change drawing on Steps 1 to 6. To ensure Steps 7 to 9 are focused on priority areas

8 Analyze blockages, options and partners in the nodes selected and to generate a long list of possible interventions

To think laterally and rationally in generating the range of possible projects.

9 Priorities projects on the basis of their impact and feasibility.

To generate a project shortlist, comprising projects most likely

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to deliver impact

Feasibility and planning

10 Project feasibility and planning. To package selected projects for funding and implementation.

Source: Adapted from Mitchel and Ashely(2009)

2.5 Tools and Techniques

Participant observation, semi-structured interviews and focus group meetings were the main

instruments of the study. The market mapping was made with three inter-linked components such

as value chain actors, enabling environment and service providers. The services are input supplies,

market information, financial services, transport services, quality assurance and support for

product development and diversification. The tools that were used are indicated below.

Structured questionnaire and participatory tools

Market sketch, rapid market appraisal, focus group and quantitative market study, field

interview and household surveys

Key informant’s interview and structured direct observation

SWOT analysis

Rapid reconnaissance survey, secondary data and review of trends

Case study

2.5.1 Instruments of Data Collection

A set of structured questionnaires were employed for collecting the data in the quantitative phase of

the study. A pre-testing was done among respondents similar to the target population. It was done to

identify weaknesses, ambiguities and omissions in the instruments before they were finalized for

the survey. More specifically, the pre-testing exercise was to enable detection errors and omissions

in wording and sequencing of questions, construction of sentences, question format, coding, etc., as

also to determine the total time taken for the interview, ease of administering the instrument,

comprehension of respondents and the usefulness of data collected. The instruments were finalized

after the pre-testing. The sample questionnaire is enclosed in Annexure-1.

2.5.2 Field Work

A total of 4 investigators and 2 Experts were employed to cover 2 Blocks, 4 GPs, 20 villages and

100 farmer women. The Experts were responsible to supervise the field team during the

interviews and collect secondary data.

2.5.3 Field Briefings & Training

An extensive briefing/training session was conducted to make the investigators fully equipped to

administer the research instruments for the study. The training program of two days focused not

only on familiarizing the investigators with the schedule but also on training the investigators &

the Experts on the use of random selection procedures and methodologies.

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2.5.4 Supervision and Quality Control

To ensure high quality field work, about 20 percent of the interviews were conducted by the

Experts in presence of the investigators. After the field work was over, the questionnaires were

collected and each of the questionnaires were manually checked for errors and also for the logical

consistency.

2.5.5 Analysis

Value chains were mapped and analyzed using value chain analysis (VCA) which can include

qualitative and/or quantitative tools, the whole data after coding and punching into electronic

medium were analyzed in excel spreadsheets at the office of LAVS. The findings from qualitative

component of the study were incorporated wherever needed.

1.6 Major Deliverable

The output of the study was detailed value chain mapping of rice, maize, vegetables and ginger in

Pottangi and Semiliguda Blocks of Koraput district along with role of key players, barriers to value

development and up-gradation strategy for augmenting farm income of women farmers in the

project area sustainably.

.

**********

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Chapter-3

Identification of Important Value Chains

3.1 Larger Agricultural and Allied Value Chains in Koraput District

With the geographical area of 8, 81, 000 ha, the district has net sown area of 2, 65,000 ha and cultivated

area of 3, 04,000 ha. The annual gross cropped area of the district was 3, 97,650 ha including fruit area of

43,730 ha (Odisha Agriculture Statistics, 2012-13). The intensity of cropping was 150% against the State

average of 167%. Rice is cultivated in 1, 20,580 ha with other cereal area of 1, 06,330 ha. The area under

major crops of the district production is indicated in table 3.

Table 3, Area under major crops during 2012-13 in Koraput District ‘000 ha Crop Area in ‘000 ha Production in ‘000

tones

Rice 120.58 242.42

Maize 29.66 70.37

Ragi 70.81 63.87

Total cereals 226.91 379.92

Total pulses 39.11 18.79

Total oilseeds 35.00 14.48

Total fibres 1.55 4.88

Vegetables 28.34 384.85

Spices & condiments 11.54 67.93

Sugarcane 10.64 737.56

Tobacco 0.83 0.40

Total cropped area 353.92

Source: Orissa Agriculture Statistics, 2012-13 (DA& FP, Odisha)

Under Animal Husbandry sector the population and annual production of important livestock in

the district are indicated in table 4.

Table 4, Population of Livestock in Odisha

Livestock sp Total number ( in lakh) Annual production (‘000 ton)

Cattle 525883 70.90 (milk)

Buffalo 175993 24.94 (milk)

Poultry birds 828273 106988000 eggs

Goat/sheep 283335 609000 ton meat

Pig 51382 215510 ton meat

Source: Statistical Abstract of Odisha, 2012 (DES, Odisha)

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The following larger value chains were identified for the district in consideration of relevance to

impact population, geographical context, number of women farmers associated and contribution

to household economy. Such value chains are presented in table 5.

Table 5,Larger Value chains Identified in Stage I.

Category Name of products/commodities

Field crops Rice, maize, Ragi, Arhar, black gram, green gram, mustard, niger, , ground nut and sugar cane

Horticultural/Plantation crops Vegetables, ginger, chilli, turmeric

Livestock Cattle, Buffalo, goat & sheep, poultry birds

NTFP Mahua,lac, Siali leaves, Tamarind, Hill Brooms and Honey

3.2 Short listing of Agricultural Value Chains

The relative spread index and relative yield index of major crops were calculated using the formula

given below (ICAR).

The Area, yield and RSI and RYI of major crops grown in the district are indicated in table 6.

Table 6,RSI and RTI of major crops of Koraput District (Area in’000 ha, Yield in kg/ha)

Crop District State RSI (%) RYI (%)

Area in Yield Area Yield

Rice 120.58 2010 4022.83 2361 60.93 85.13

Maize 29.66 1759 280.67 2407 214.83 73.08

Ragi 70.81 902 172.99 863 832.12 104.52

Black gram 7.29 346 592.35 457 25.02 75.71

Green gram 1.77 469 833.11 476 4.32 98.53

Arhar 5.81 570 140.87 912 83.84 62.50

Groundnut 1.31 1328 253.41 1774 10.51 74.86

Mustard 3.35 325 116.37 422 58.52 77.01

Niger 27.98 368 76.04 360 748.03 102.22

Vegetable 28.34 13580 688.15 13753 83.72 98.74

Ginger 3.37 11335 17.03 7890 402.28 143.66

Turmeric 3.13 7831 28.33 7966 224.60 98.31

Chilli 3.45 852 77.01 965 91.07 88.29

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The index was rated high when it exceeded 90% and it was low at a level below 90%. The crops are

grouped in the following matrix as high spread-high yield (HH), low spread-high yield (LH), high

spread-low yield (HL) and low spread-low yield (LL). It reveals from the following matrix that Ragi,

Niger, ginger, turmeric, vegetables, maize, chilli and green gram are important crops of the district.

Rice being the principal crop can be added to this list.

Table 7,Spread Area of Crops

RSI/RYI H L

H Ragi, Niger, Ginger, Turmeric HH) Maize, Chilli (HL)

L Vegetables, Green gram(LH) Black gram, Arhar, Ground nut,

Mustard(LL)

3.3Short Listing of Value Chain

Total number of households in 20 project villages of Pottangi and Semiliguda Blocks is 300 with a

population of 1382. The ST population accounts for 79 and 76 % respectively in these Blocks and

nearly 13 % population belongs to OBC category. Total women cultivators of these villages are 498

which accounts for 72% of total women workforce and nearly 50% of total cultivators. The

baseline study indicated that maximum proportion of the targeted households were primarily

involved in agriculture and contributed to about 76 per cent of the total targeted households.

Animal Husbandry also seemed to be a predominant occupation amongst the sampled villages and

was taken by about 30 per cent of the targeted population.

Nearly 17 per cent of the farmers belonged to the marginal category and owned less than 1 ha of

land. Nearly 61 per cent farmers belonged to the category of small farmers with a land holding of

2 ha and above. Paddy is the subsistence crop grown in the village in all type of land. Green gram,

black gram and Arhar are the major pulse crops. During Rabi some pulse crops like gram, Khesari

and pea are taken as Pyra (under sown) crops to enhance their income and annual basic need.

Relatively very small area is covered under crops in Rabi and summer seasons. The land holdings

of sample villages under study are indicated in table 8.

Table 8,Land resources in sample villages (in acre)

Block Village Extent of Natural Resources

Agricultural land Fallow land

Forest Land

Area under fruit trees

Irrigated Land

Pottangi Deopattangi 897.45 0.03 103.26 7 102

Salapguda 278.09 0.01 23.27 4 35

Lingamguda 262.00 0.07 14.95 2 20

Chiliguda 248.06 0.01 12.47 2 12

Jhirjhira 220.08 0.01 9.85 4 17

Chandaka 537.69 0.98 40.17 15 85

Gugapuda 331.05 3.48 33.94 12 45

Dalapatiguda 108.14 1.66 2.32 9.4 20

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Table 8,Land resources in sample villages (in acre)

Block Village Extent of Natural Resources

Agricultural land Fallow land

Forest Land

Area under fruit trees

Irrigated Land

Baraj 1080.52 59.53 - 7.4 30

Karadaba 397.03 7.0 - 8.9 78

Semiliguda Charmaliput 300.23 30 - 10 15

Pitaguda 118.11 10 10 6 5

Dambaguda 145.05 19 10 12

Kumbhariput 102.03 - 12.47 2 12

Sakiaguda 302.06 - 8.85 4 17

Badmarla 150.40 0.98 40.17 15 85

Madeiguda 76.04 3.48 33.94 12 45

Durkaguda 111.06 1.66 2.32 9 20

Gelaguda 162.05 59.53 7 30

U. Gelaguda 96.00 7.00 9 78

Average 296.16 10.22 17.40 7.79 38.15

Source: primary study

The cropping patterns adopted inn sample villages presented in the following tables indicate that

rice is the principal crop in the project area followed by ragi, vegetables and spices.

Table 9, Cropping pattern in Kharif

Block Village Cropped area in acre

Paddy Ragi Maize/ millets

Pulses Oilseeds Vegetable Spices

Pottangi Deopattangi 597 1 2 6 3 148 148

Salapguda 130 30 2 30 70 10 6

Lingamguda 262 105 30 1 - - 86

Chiliguda 218 95 30 1 3 2 70

Jhirjhira 220 88 20 2 - - 70

Chandaka 537 320 80 5 - - 82

Gugaguda 331 150 50 1 - - 80

Dalapatiguda 108 60 20 - - - 10

Baraj 250 350 50 - - - 40

Karadaba 399 220 30 - - - 75

Semiliguda Chorlmaliput 20 115 5 27 65 2 22

Pitaguda 15 10 2 75 7 22 37

Dambaguda 20 52 3 17 12 12 7

Kumbhariput 15 82 2 22 25 17 17

Sakiaguda 30 162 2 7 47 32 17

Badmarla 45 37 2 2 40 2 17

Madeiguda 22 12 5 15 3 17

Durkaguda 25 45 5 5 16 7 7

Gelaguda 45 35 5 5 17 5 50

U.gelaguda 25 22 6 2 12 3 12

Average 165.7 99.55 17.55 10.4 16.6 13.25 43.5

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Table 10, Cropping pattern in Rabi and Summer

Block Village Cropped area in acre during Rabi Summer

Vegetable Pulse Oilseed Spices Other Vegetable Others

Pottangi Deopattangi 20 5 10 4 3 30 25

Salapguda 8 2 4 2 7 15 8

Lingamguda 6 2 3 4 4 5 4

Chiliguda 6 2 3 4 4 4 3

Jhirjhira 5 2 2 4 4 6 8

Chandaka 15 10 15 8 15 12 10

Gugapuda 5 2 4 2 5 5 4

Dalapatiguda 4 2 2 1 3 2 2

Baraj 4 3 4 3 5 5 5

Karadaba 7 5 4 4 6 7 6

Semiliguda Chorimaliput 50 52 7 15 28 23 18

Pitaguda 20 30 10 5 7 16 17

Dambaguda 27 25 5 10 4 6 3

Kumbhariput 20 15 2 7 4 5 4

Sakiaguda 40 45 12 20 4 9 6

Badmarla 22 7 2 15 14 8

Madeiguda 10 3 6 5 6 4

Durkaguda 15 5 2 5 3 3 2

Gelaguda 17 5 2 5 5 6 7

U.gelaguda 5 2 3 3 6 9 7

Average 15.3 10.85 5.05 5.7 6.85 9.4 7.55

The data collected from 100 sample households indicate that the area under paddy is the highest

in case of all households. The table 11 indicates the major cropping patterns in the project area

are stated below:

Table 11,Total Area under cultivation by sample households

S.No Name of crop Total area in acre

Average area per household

Percentage of total cropped area

1 Paddy 125.50 1.25 44.48

2 Maize and millets 67.35 0,67 23.96

3 Vegetables 50.45 0.54 17.95

4 Spices (ginger/turmeric) 32.93 0.32 11.71

5 Others 6.62 0.06 0.02

In consideration of the findings of above tables the value chains have been shortlisted and presented in table

12.

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Table 12, Short-listed Agricultural Value Chains

Food crops Rice, Maize, Ragi

Cash crops Ginger, vegetables

Livestock Poultry birds, Small Ruminants

********

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Chapter-4

Description and Analysis of Selected Value Chains

4.1 Production Process

The flow of seed and other agro-inputs to farmers and grain or other farm produces to the

market can be referred to as value chains because as the product moves from chain actor to

chain actor e.g. from producer to intermediary to consumer it gains value. Thus the value

chain involves the full range of activities which are required to bring a product or service

through the different phases of production, marketing, delivery to final customers, and final

disposal after use. The chain actors who actually transact a particular product as it moves

through the value chain include input (e.g. seed suppliers), farmers, traders, processors,

transporters, wholesalers, retailers and final consumers. The production process is shown in

fig-4 and a simplified version of value chain is shown in fig-5.

Fig-4, Production process of agricultural commodities

Fig-5, Simplified version of agricultural value chain

Value chains can be mapped and analyzed using value chain analysis (VCA) which can include

qualitative and/or quantitative tools. In the present study value chain analysis of selected

crops/commodities has been made based on the current situation of the concerned blocks. The

details are stated below.

4.2 Rice

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Koraput district of Odisha is considered as the secondary place of origin of rice crop. Rice, being

the staple food of people, is grown in all types of ecologies irrespective of its suitability as the crop

is easy to grow and it is cultivated from generation to generation. The tribal farmers are still in a

stage of subsistence farming with little use of agro-inputs and technology. The per ha yield of rice

is 2010 kg against the State average of 2361 kg and National average of 2279 kg. Due to limited

sources of irrigation the crop is cultivated mostly under rain-fed situation.

4.2.1 Production Scenario

Koraput district produces about 3.67 lakh tons of clean paddy which is 2.42 lakh tons in shape of

clean rice. Rice production accounts for 64% of total cereal production in the district. The yield of

paddy in the project area is 2000-3000 kg/ha or 1320-1980 kg of clean rice/ha. The cost of

production per ha or rice is around Rs. 15000 and the value of return is around Rs. 28000 which

means there is a net gain worth Rs. 13000 only. Thus rice cultivation has not become rewarding.

Still the farmers are compelled to take up rice cultivation due to domestic requirement and

suitability of land and climate.

4.2.2 Rice Value Chain Map

Rice value chain operates from input supply to final arrival at consumer level as indicated in the

General value chain map (fig-6)

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Straw Rice Husk Bran

Cattle feed Mushroom Packaging

Human

consumption

Cattle feed/

Fish feed/

Poultry feed

Rice bran oil,

Vanaspati

Fig-7, Schematic value chain map of Rice

Various actors involved in rice value chain are input suppliers, growers, processors, traders and

finally the consumers as shown in fig-7.

The core process of value chain of rice in the State of Odisha involves pre-production (supply of

inputs), cultivation, post-harvest handling, agro-processing and marketing Export and import are

usually not seen in the State. Key inputs like seeds, manures, pesticides, labour, irrigation, credit

and technology are used for production of rice. Post-harvest operations include harvesting,

threshing, cleaning and storing. Processing of paddy is made in mills or hullers to produce clean

rice which is marketed through government procurement, mill owners, whole sellers and retailers

till it reaches the consumers.

Fig-8,

Core process of Rice Value Chain

The field study indicates that about 80-85% of the produce is consumed by the households,

10% is used as seed and the remaining 5-10% goes to market. Although it is a general trend,

the big farmers sell a larger quantity in the market. FCI and Government make direct purchase

of paddy with MSP from the farmers at designated procurement centres. The product is then

processed by millers and supplied to the consumers through different channels.

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The market map is made up of three inter-linked components: (i) local traders, millers and

government, (ii) enabling environment in form of provision of infrastructure such as procurement

centers, mills, administration of minimum support price, and (iii) service providers like

government and extension service system. In most effective value chains the actors who actually

form the chain (i.e. transact the main product) are supported by business and extension services

from other enterprises and support organizations (e.g. seed suppliers and intermediaries). There is

an on-going need for chain actors to access services of different types both market and technical.

The third component of the market map framework is concerned with mapping these services

that support, or could potentially support, the value chain’s overall efficiency. The services that

can potentially add value include input supplies (seeds, livestock, fertilizers etc.), market

information (prices, trends, buyers, and suppliers), financial services (such as credit, savings or

insurance), transport services from village to procurement centers, quality assurance and support

for product development and diversification.

The various agencies engaged in the assembling of paddy / rice may belong to producer, village

merchant, wholesale merchants and commission agents, rice mill agent, cooperative organizations

and government organizations. Assembling and distribution system of marketing are closely

related. The producer makes the movement of paddy from the farm to the assembling centers,

while a number of market functionaries are involved in the distribution dealing with its

subsequent movement to the final consumer. In the Survey of Marketable Surplus and Post-

Harvest Losses of Paddy (2002), it has been estimated that the producer retained 44.54 percent of

production for their farm-family requirement. The marketable surplus was estimated to be about

55.46 percent of the total production. The total marketable surplus of paddy/rice is distributed

through different ways i.e. wholesale distribution, retail distribution, direct marketing to miller

etc. With the availability of subsidized rice at Re 1/kg, the tribals farmers often sell a bulk of their

produce at a higher price as a result of which marketed surplus exceeds marketable surplus.

4.2.3 Constraints and Opportunities

Due to its shallow root system and high water requirement the crop is very often exposed to

severe moisture stress at the critical growth stages. Rice is also cultivated in acid and degraded

soils as a result of which assured yield is not achieved. The farmers seldom apply ideal proportion

of nutrients to meet the crop requirement. Due to hot and humid climate rice crop during Kharif

suffers from severe pest attack which causes severe crop loss. Smallholder rice farmers are locked

into a near subsistence farming situation presenting few opportunities for enterprise and income

diversification. They have limited opportunities to grow crops that would complement the staple

rice diet and thus improve family nutrition status. Various market constraints are as follow:

Spurt in production and heavy arrivals

Lack of marketing information

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Adoption and grading

Inadequate storage facilities in rural areas

Transportation facilities at producers’ level

Training of producer

Financial problem

Inadequate infrastructure facilities

Middleman ship

There are many ways of utilization of rice and its by-products such as starch, rice bran, rice bran

oil, flaked rice, puffed rice, parched rice, rice broken, rice husk and rice seed. There is tremendous

scope to take up cultivation of aromatic rice, exportable non-aromatic rice, organic rice and

processed rice products. Export opportunities are available for such rice and rice-products.

Constraints/ Opportunities

Input Production Procurement Processing

Constraints Inadequacy of quality seed

Imbalance use of nutrients

Inadequate credit support

Non-availability of appropriate machinery

Inadequate irrigation

Technological gap Poor communication

system Poor REF linkage Non-availability of

skilled/ trained laborer

Limitations in soil Drudgery

Lack of skill on FAQ

Want of storage facility

Post-harvest loss

Transport difficulty

Inadequate infrastructure

Non-availability of modern rice mills

Poor recovery

Opportunities Scope for seed village scheme

Benefits under NFSM

Hybrid seed production

CIG’s/FIG’s involvement in input procurement

Implementation of NFSM

Extension Reform (ATMA) & PPP

Insurance cover Organic rice Aromatic rice

production Suitable varieties

released from OUAT/ CRRI

Scope for improvement in MSP

Collectivization at village level

Group finance for processing units

Government assistance/ incentives

4.2.4 Identifying and mapping the main actors involved in the processes

Various actors are involved in rice value chain.At the production level primary producers

(farmers), input supplying agencies, extension personnel, government departments are involved.

In post-harvest operations, the mill owners, FCI, Cooperatives etc are involved. In marketing, the

commission agents, cooperatives, FCI, Food and Consumer Welfare Department, whole sellers and

retailers are involved. Ultimately the consumers are the end users of the product (fig-9)

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Production Processing Value

addition

Marketing Consumption

Farmer Input dealer Extension personnel Credit institutions Government Departments R&D

Miller Huller owner Women

Miller Feed mixing unit Agro-industry Women Processing unit

FCI

Commission

agent

Cooperatives

F&CW

Department

Merchants

SHG

Human

beings

Cattle

Poultry

birds

Fish

Fig-9, Actors in rice value chain

4.2.5 Mapping the volume and value addition

The volume of product flow varies with different channels. Out of the total production about 45%

is retained for family consumption and 55% is marketed. However, there is limited marketable

surplus with the small holders where it is 10-15%. The following analysis gives an average picture

of value of rice per quintal at different stages of the value chain.

Table 13, Value of Rice per quintal at different stages

Value (Rs) Input 1136

Production 2121

Processing 2640

Trade 2904

Retailing 3036

Value added (Rs) 985 519 264 132

4.2.6 Mapping Relationship and Linkage between Value Chain Actors

Relationship exists between different process steps (e.g. between producers and retailers).

Farmers occupy a central position who is directly or indirectly linked to other actors as both

forward and backward linkage exists in the value chain. Various services like training on

cultivation, training on management and forwarding market information are necessary at different

levels.

4.2.7 Research and Policy Making

While rural women are knowledgeable about and use of a large amount of traditional technology,

they have very little access to modern technology that could benefit them in their activities. This is

due, in part, to women's exclusion from setting research priorities and from the generation and

dissemination of “conventional” technologies. Technology development by itself, without the

inputs and suggestions of women and men farmers cannot ensure that rice production will be

improved in sustainable ways. Their involvement in research, policy-making and planning is

essential to ensure that the most productive and effective use of resources meets present and

future food-security demands from the household to the global level.

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4.3 Maize

Maize is the king of cereals. Being a C4 plant it has enough production potential. The crop is

cultivated in 2.86 lakh ha in the State with production of 6.75 lakh tons of grains. The total area

under maize cultivation in the district is 29660 ha with production of 70370 tons of grains.

Traditionally maize is grown by the tribes both under settled upland situation and under shifting

cultivation. In irrigated area maize is cultivated thrice in a year. Maize is considered as a promising

option for diversifying agriculture in upland areas. It now ranks as the third most important food

crop in India.

4.3.1 Production scenario and marketing

Maize is cultivated in about 24% of total cropped area as per the primary study in the project

area. The yield of maize is around 2000 kg/ha. The produce is mostly used for consumption

leaving 5% as seed, and 5-10% for market. Once the production level increases greater share will

go for marketing. The cost of production of maize is around Rs. 15000 per ha and the cost of

produce is nearly Rs. 26000/ha. Thus there is a margin of Rs. 11000 per ha. Since the crop is

mostly cultivated during Kharif season under rain-fed situation the productivity is comparatively

lower. The yield rate of Kharif maize is 2373 kg/ha in the district against the national yield level of

2408 kg/ha and 2407 kg/ha in the State. The minimum support price of maize is Rs. 1325/ quintal

and the ruling market price varies from Rs. 1200-1300/ quintal.

Most of maize production is sold in local village markets, where grain prices are lower than

those in the nearest regulated market. As indicated above the grain prices in the local markets

are still lower than the government-established Minimum Support Price. Farmers continue to

sell their produce in the local village market because: (1) when grains are sold outside the

village, transportation costs tend to be higher than marginal returns due to price difference,

and (2) farmers tend to sell to local traders, especially if they need to pay back any loan they

may have taken out to purchase inputs and for consumption purposes. Farmers were of the

opinion that there is no other reliable way to sell their produce, as the volume is often very low.

Recently toasted maize has a demand in urban areas. However, a very small quantity is sold in

this route. The possibility of bulk purchase for preparation of cattle feed is meager due to

uneconomic volume.

4.3.2 Mapping of maize value chain

(i) Mapping the core process of value chain

The core process of value chain of maize in the district involves pre-production (supply of inputs),

cultivation, post-harvest handling, agro-processing and marketing through different channels. Key

inputs like seeds, manures, pesticides, labor, irrigation, credit and technology are used for

production of maize. Post-harvest operations include harvesting, threshing, cleaning and storing.

LAVS-Koraput

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Stover Green cob Grain Bran

Cattle feed

Mushroom

Compost

Human

consumption

Cattle feed/

Poultry feed,

Corn flake,

Starch

Maize

germ oil

Primary processing of maize is done in mechanical and manual methods without use of any maize

Sheller since the quantity is less. The possibility of maize value chain involving core processes is

given in fig-10.

Fig-10, Maize value chain involving core processes

(ii) Identifying and mapping the main actors involved in the processes

The main actors involved in the value chain are input suppliers, farmers, extension personnel,

traders including cooperatives, TDCC and government. Ultimately the consumers are the end

users of the product.

Activity Actor Role

Input Supply Input dealers Supply of fertilizer, seed, pesticides and machinery

Credit Institutions ( Formal & Non-formal)

Providing of credit

OUAT Research & Development, Extension

Agriculture department Extension, Demonstration and supply of critical inputs

NGOs Technology transfer and supply of inputs

Production Farmers Field management and cropping related activities & Storage

Agricultural Laborers Wage labor for field operations

Processing Women/ Maize Sheller Shelling

Collecting and marketing

Farmers Transport to hat, procurement centers

TDCC Procurement from aggregators/ farmers

Commission agent Collecting and aggregation

Cooperatives/ SHG Procurement and supply to Wholesalers/ TDCC

Consumption Human population, Cattle, Poultry birds

Purchase of maize & feed and utilization to produce value added products for human consumption and industrial use

(iii) Mapping of Volume and Value Addition

The volume of products is closely linked related to mapping of product flow. It varies with

different channels. Nearly 80% of the produce is consumed by the producers, 5% is kept as sees

and remaining 15% goes to market for sale. Due to low level of productivity marketable surplus

has also been limited. Value addition at different channels is indicated below.

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37

Farmer

Input

dealer

Credit

institute

Extension

Processor Trader Retailer

Consumer Commission

Agent

Processor/TD

CC/NAFED/TRI

FED

Table 14, Value addition of Different Channels

Value (Rs ) Input 750

Production 950

Processing 1100

Trade 1200

Retailing 1300

Value added Rs 200 150 100 100

(v)Mapping relationship and linkage between vale chain actors

Relationship exists between different process steps (e.g. between producers and retailers). The

relationship is shown in fig-11.

.

Fig-11, Mapping of relationship

(vi)Constraints& opportunities

Maize has enough production potential and the crop has fewer biotic and abiotic stresses to

production. Weeds are the major problem during the rainy season which causes loss up to 50-

75%. Excessive soil moisture in rainy season delays the planting, which in turn impedes plant

growth and adversely affects production. Zinc deficiency is common, but very few farmers apply

zinc to their maize crop because they cannot afford it, and also they are not aware of its uses.

The technology transfer process (through the public extension system is very weak.

Mechanization in shelling of maize is limited as a result of which separation of seeds from the

cobs is mostly done manually. Non-availability of quality seed and lack of knowledge of suitable

technologies are reported as major constraints by the farmers. Low prices and lack of markets

appeared not to be of much significance.

In spite such limitations maize has tremendous potential for higher production. The market

demand for green cobs, baby corn and sweet corn is increasing. Sweet corn cultivation has

started by innovative farmers in the district. There is scope for industrial use of maize and

export. Maize grains could be used as input in poultry and cattle feed industries. There is ample

scope for expansion of maize area and increasing in production through intensification and

commercialization of current maize production system. Since maize cultivation has already been

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commercialized in the neighboring district of Nabarangpur, steps are required to make

cultivation a commercial proposition in the district.

Constraints/ Opportunities

Input Production Procurement Processing

Constraints Inadequacy of quality seed

Imbalance use of nutrients

Inadequate credit support

Non-availability of appropriate machinery

Inappropriate irrigation

Non-availability of safe chemicals

Technological gap

Poor communication system

Poor REF linkage Non-availability

of skilled/ trained laborer

Limitations in soil

Drudgery

Lack of information on marketing

Weakness in implementation of MSP

Want of storage facility

Post-harvest loss Transport

difficulty

Inadequate infrastructure

Non-availability of maize processing units

Poor recovery

Opportunities Scope for seed village scheme

Hybrid seed production

Scope of sweet corn cultivation

Cultivation of high protein maize

Implementation of Government schemes

Extension Reform (ATMA)

WSD in rain fed areas

Scope for improvement in MSP

Collectivization at village level

Group finance for processing units

Government assistance

4.4Ragi

Among all the major cereals, Ragi (Finger Millet) crop is one of the most nutritious. Indeed, some

varieties appear to have high levels of methionine, an amino acid lacking in the diets of hundreds

of millions of the poor who live on starchy foods. Ragi is an important crop of tribal communities

of Odisha which mostly ensures household food security. The crop is cultivated during Kharif and

Rabi season in about 70740 ha and 7000 ha, respectively with total production of 63870 tons and

productivity of 902 kg/ha in the district. Marketable surplus of Ragi is about 30 % whereas it is

only 20% in case of small holders. The total post-harvest losses of Ragi at producers’ level (in

transport from field to threshing floor, threshing and winnowing, transportation and farm storage)

are estimated at 5 per cent of the total production. The share of direct sales by the producers to

consumers was 10 per cent while selling at local hats was10-20 per cent. The cost of production of

ragi is Rs. 10000/ha and the cost of produce is around Rs16000. Thus the margin per ha comes to

Rs. 6000/ha. The average productivity of ragi is more than the district and state average.

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4.4.1 Mapping of Value Chain

(i) Mapping the core process of value chain

The core process of value chain of Ragi in the district involves pre-production (supply of inputs),

cultivation, post-harvest handling, agro-processing and marketing Key inputs like seeds, manures,

pesticides, labour, irrigation, credit and technology are used for production of Ragi. Post-harvest

operations include harvesting, threshing, cleaning and storing. Processing of ragi is made in mills

or by locally available stone grinders. The value chain and processing of ragi are shown in fig-12

and fig-13.

Fig.12, Value chain of Ragi

Fig-13, Processing of Ragi

(ii)Identifying and mapping the main actors involved in the processes

At the production level primary producers (farmers), input supplying agencies, extension

personnel, government departments are involved. In post harvesting operations the mill owners,

FCI, Cooperatives etc are involved. In marketing the commission agents, cooperatives, FCI, Food

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Small &

marginal

producers

Medium and

large

producers

Processing

units

Milling

Marketing

Village/ Hats

Commission Agent

&CW Department

TRIFED

Commission Agent

Miller/F&CW Department

40%

60%

and Consumer Welfare Department, whole sellers and retailers are involved. Ultimately the

consumers are the end users of the product.

Activity Actor Role

Input Supply Input dealers Supply of fertiliser, seed, pesticides and machinery WR Department Supply of irrigation Credit Institutions (

Formal & Non-formal) Provision of credit

Extension Personnel Transfer of Technology OUAT & ICAR

Institutions Research & development, extension

Agriculture department Extension, demonstration and supply of critical inputs NGOs Technology transfer and supply of inputs Production Farmers Field management and cropping related activities & Storage Agricultural Laborers Wage labor for field operations Processing Mill owner Feed processing Women Shelling Collecting and marketing

Farmers Transport to hat, RMC, procurement centers

TRIFED Procurement from farmers Commission agent Collecting and aggregation F&CW Department Procurement and distribution Value addition Pvt agencies Processing &feed mixing, oil extraction Consumption Human population Purchase , processing and consumption

(iii)Mapping of Volume

The volume of products is closely linked related to mapping of product flow. It varies with

different channels (fig-14).

Fig-14, Volume of products in Ragi value chain

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(iv) Mapping of value addition

A core element of value chain mapping is to map the monetary value throughout the chain. The

following analysis gives an average picture of value of Ragi per quintal at different stages.

Table 15, Value addition of Different Channels

Value Rs Input 1000

Production 1600

Processing 1800

Trade 2000

Retailing 2100

Value added (Rs) 600 200 200 100

(v) Mapping relationship and linkage between value chain actors

Relationship exists between different process steps (e.g. between producers and retailers). The

relationship can be spot-marketing or persistent.

Fig-15, Mapping relationship in ragi value chain

4.4.2 Constraints and Opportunities

Ragi is mostly cultivated as a rain-fed crop under neglected condition. The high yielding varieties

recommended for the district are not available to meet the need of the farmers. Hardly

fertilization is done for yield improvement of the crop. Poor adoption of technologies is visible in

all cases for which the yield improvement is restricted. Procurement through MSP route is also not

available in the locality. The other constraints are neglected cultivation, absence of mechanical

milling system, inadequate market infrastructure, non-availability of desired varieties, poor

extension service and inadequate credit facilities.

Ragi as a C4 crop has tremendous potential for yield improvement. There is demand for nutritious

cereals in global market and many products like Malt etc. can be produced from Ragi. There is

scope for cultivation of pre-paddy Ragi during Kharif season and the crop can substitute paddy

and other crops which can withstand drought in adverse situations. Specific constraints at

different levels are presented below.

Farmer

Input

dealer

Credit

institute

Extension

Processor Trader Retailer

Consumer F&CW Dept

Commission

agent

Miller

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Constraint/opportunities Input supply Production Processing Marketing

Constraints Inadequacy of

quality seed

Imbalance use of

nutrients

Inadequate credit

support

Non-availability of

appropriate

machinery

Inappropriate

irrigation

Non-availability of

safe chemicals

Technological

gap

Poor

communication

system

Poor REF linkage

Lack of modern

processing

facilities

Poor recovery

Poor quality

Lack of

information on

marketing

Weakness in

implementation

of MSP

Want of storage

facility

Post-harvest loss

Opportunities Scope for seed

village scheme

Benefits of Ragi

Development

Seed exchange

programme and

seed bank

Extension

Reform (ATMA)

WSD in rain fed

areas

Scope for

improvement in

MSP

administration

Collectivisation

at village level

Group finance for

processing units

Government

assistance

4.5 Vegetables

4.5.1 Production and Marketing

Due to cold weather and high altitude of the area, year-round cultivation of vegetables is possible.

In fact the tribal farmers are in habit of growing both seasonal and off-season vegetable during

Kharif, Rabi and summer season in these Blocks. The important vegetables grown in the project

area are indicated below:

Season Type of vegetables grown Kharif Brinjal, Tomato, Okra, Bottle/Sponge/Ridge/Bitter Gourd, potato, cauliflower,

radish, beans Rabi Cabbage, Cauliflower, Chilly, Potato, Tomato, Brinjal, Green Pea, Radish, French

Bean, onion, carrot etc. Summer Cucumber, Brinjal, tomato, radish, cauliflower etc

Of the above vegetables, brinjal and tomato are cultivated in larger area. Potato is cultivated in

Kharif season as monsoon potato and during Rabi as seasonal potato. During summer Brinjal

occupies highest area among all other vegetables grown. Second comes tomato which is in high

demand during that time along with cucurbits is higher. Leafy vegetables like amaranths, and

coriander leaves are grown during Rabi and summer season, which are marketed at distant places

like AP, Cuttack and Bhubaneswar. Some farmers are practicing organic vegetables with

application of manure and locally available organic pesticides.

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The area under vegetables in the district is 28340 ha with production of 384850 tons and yield rate

of 13580 kg/ha which is higher than the State yield. During primary study it was seen that the

respondents use to cultivate vegetables in an area of one-half acre on an average. Kharif

vegetables are cultivated in about 75% of total vegetables whereas 25% area under vegetables is

seen in Rabi and summer seasons. The average productivity of vegetables is nearly 90 quintal per

ha. Of the total production of vegetables, about 10% is used for domestic consumption, 20% is lost

and 70% goes to market. Multi-channel sale is adopted to get immediate return and to avoid loss.

It has been found from the study that most of the producers i.e. 60%, like to sell their vegetables

at the market places as they get more price for vegetables in market places than at farm gate.

Again 30% of the producers sell their vegetables at both farm gate and market places whereas

10% of the producers sell at farm gate directly. If they want to sell the vegetables in the market

they go to the market by cycle with good volume of vegetables and the tribal women carry

vegetables on head-loads.

The area has been a vegetable hub for which it has attracted many businessmen. Cultivation of

vegetable as commercial crop has created a good impact in some pockets in the sampled villages.

However, the yield has not been attractive due to poor adoption of technology and stress of agro-

inputs. The seasonality of vegetable cultivation in the project area is shown in table 16.

Table 16, Seasonality calendar of vegetable cultivation

Name of vegetable

Summer Khrif Rabi

Mar April May June July Aug Sep Oct Nov Dec Jan Feb

Brinjal

Tomato

Potato

Cauliflower

Cabbage

Knolkhol

Raddish

Pea

Bean

Cucumber

Pumpkin

Bitter gourd

Ridge gourd

Spine gourd

Carrot

Chilli

Onion

The vegetable markets are well developed in Koraput as there is direct bus and train

communication from Koraput to different parts of country. In addition to daily market at Koraput,

Jeypore, Kunduli, Kusumi and Hatpada are other markets available for vegetable vending. Pottangi

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and Semiliguda has daily markets also to cater to the needs of the vegetable grower. Kunduli is a

well organised market which is open on Thursday and Friday. With the development of township,

there is heavy demand forvegetables at Damonjodi and Sunabeda town. Thus vegetable growing

has become most rewarding proposition in the project area.

Kunduli is an established market where certain infrastructures have been created by the

Government including a Krushak Bazar. Twenty commission agents operate in market days and

each of them handles 10-20 quaintals of vegetables. About 50-70 wholesellers assemble on

market days and each of them buy 5-10 quintals each from the farmers/middlemen. There are 30

ermanent shops in the market and each shop transcates about 200 kg of fresh vegetables.

Further, 400-500 small shop keepers assembe in market days and each of them transact about 50-

70 kg of vegetables. The truckload of vegetables move to Berhampur, Cuttack, Bbghubaneswar,

Vizag and Bijaynagar.

4.5.2 Supply chain

The fresh vegetable passes through multiple channels and routes before reaching to the end

consumer. There are different categories of intermediaries operating in vegetable

supply/distribution chain, catering to different markets and segments of customers. The survey

findings indicate presence of six vegetable marketing channels, involving a set of different players

with their own characteristics (Fig-16).

Fig-16, Market players in vegetable

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Profile of supply chain

Intermediary Function/profile Average volume

Destination market

Primary Aggregator (I)

Collects vegetables from door to door, targets small producers who produce for HH consumption, uses bicycle/baskets for transport.

50–100 kg Village traders, nearby hats & markets

Village Traders

Collects vegetables from farmers and village aggregators. Do sorting grading, packaging and transportation. Also acts as representatives of CA/ wholesalers/ retailers.

As per demand, generally 30-50 quintals (pick up van, Tata-407)

Wholesalers/ Retailers in different consumption centre.

Traders (Vegetable Loader)

Operate in big mandi/ aggregation centre.

As per arrival, 50-200 quintals

Commission agents in big cities. Their role becomes important when a specific vegetable is not available in local area and the produce has to be brought to market from a distant place.

Commission Agent

Operate at secondary aggregation centre\ terminal market. Act as a trade facilitators, does price negotiation, and provide credit facility and market information to different actors.

As per arrival Wholesalers and retailers operating at terminal market. Sometimes traders and also forward to distant terminal markets.

Retailers Retailer is the last – link in the chain of middleman who sells directly to the consumer. The retailers buy vegetables from the producers/ village traders/ traders or wholesalers.

They sell to the consumers directly. They normally hold the stock for maximum period - 1 to 3 days

4.5.3 Identifying and mapping the main actors involved in the processes

The main actors involved in the value chain are input suppliers, farmers, extension personnel,

wholesalers, commission agents, transporters, retailers and ultimately the consumers

Activity Actor Role

Input Supply Input dealers Supply of fertiliser, seed, pesticides and machinery

Credit Institutions ( Formal &

Non-formal)

Providing of credit

OUAT Research & Development, Extension

Agriculture department Extension, Demonstration and supply of critical inputs

NGOs Technology transfer and supply of inputs

Production Farmers Field management and cropping related activities &

Storage

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Agricultural Laborers Wage labor for field operations

Marketing Primary aggregator Collection from farm gate

Village traders Local trading

Wholesalers Collection from aggregators and mandi and supply to

retailers

Commission agents Operate in secondary aggregate centers and terminal

markets

Retailers Purchase from wholesalers and selling to consumers

Consumers Consumption

(i) Mapping of Volume and Value Addition

The volume of products is closely linked related to mapping of product flow. It varies with different

channels. Nearly 5-7% of the produce is consumed by the producers, 3% is kept as sees and remaining 70%

goes to market for sale as 20% is lost. The cost of production of vegetables is around Rs. 25,000/ha and the

cost of produce @ 9000 kg/ha is about Rs 90,000.Value addition at different channels is indicated below.

Table 17, Value addition of Different Channels

Value (Rs)/quintal Input 262

Production 594

Aggregator 720

Commission agent 810

Wholesalers 900

Retailers 1008

Value added Rs 332 126 90 90 108

(ii) Constraints and opportunities

A cash crop like vegetables face a lot of problems including limited access to quality inputs and

farming techniques, poor water and soil management, high post-harvest losses, lack of market

information leading to fluctuation in pricing, multiple middle men in value chain, perishability of

the produce and lack of access to institutional credit. Over past couple of years, the State is

witnessing a substantial rise in prices of vegetables. This is giving a positive incentive to increase

production, productivity & quality of produce. The organization of retail markets has opened up

numbers of opportunities to small producers for forward integration. Understanding the value

chain and ensuring one’s critical place in it have become important for effectively participating in

the market. Additionally, the importance of organizing small & marginal producers to enhance

their bargaining power in the market has been strongly recognized. Vegetables, being perishable

in nature, are subjected to huge loss and deterioration of quality. There is fluctuating market

demand and sometimes there is glut in market causing distress sale. In certain cases the growers

take up dumping as the cost of harvesting exceeds the market rate. Lack of cold stores and cold

chain systems of transport the farmers face lot of problems, particularly those remain in remote

areas. The critical gaps and possible strategy to alleviate the situation are given in table.

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S.N Constraints Strategy

1 Adoption of poor crop production technology leading to low production

Use of Hybrid varieties under intensive cultivation

Integrated pest and nutrient management

Use of micro-irrigation

Strengthening service delivery of extension

Encouraging farmers’ group / agriculture commodity groups to engage in vegetable production in a collective manner

Organizing existing women farmers by collectivizing them into Producer Companies/cooperatives for large scale production and profit making

Participatory technology development and capacity building of women farmers

2 Price fluctuation Encouraging farmer organization/commodity groups to create local marketing centers

Communication of market information

Staggered planting of vegetables

Establishing direct linkage between rural market and urban consumers and end consumers

Arranging buy back arrangements for farmers' produce

Regular interface of producers and traders to mitigate frequent price fluctuations

3 Poor post-harvest technology

Capacity building of growers on post-harvest technology

Operation of cold stores and cold chain system

Value addition and agro-processing

Practicing organic farming system

4 Unorganized vegetable marketing

Opening of vegetable market complex in urban areas

Establishment of cold chain transport through refer vans

Formation of vegetable growers’ societies

5 Poor backward and forward linkage

Strengthening agricultural credit system

Cash and credit system of financing

Collective marketing by vegetable growers

Stress on economy of scale through aggregation and production enhancement

Quality consciousness

4.6 Ginger

4.6.1 Production Scenario

Ginger is an important crop of Koraput district. It sis cultivated in an area of 3370 ha with production of

38220 tons and the yield level of 11335 kg/ha against the State average of 7890 kg/ha and national average

of 5022 kg/ha. It is mostly cultivated by tribal farmers. The diverse agro-climatic conditions coupled with

abundance of natural resources provide a comparative advantage for the production of ginger. However,

the tribal farmers having limited land under their occupation resort to indigenous means of production for

which the production potential has not yet been achieved. The major problems of ginger crop in these

areas include biotic and abiotic stresses, poor yield ceiling of the varieties in use, , poor quality planting

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48

material, lack of seed storage facilities and lack of adoption of improved crop production technology.

Unscientific post-harvest and storage methods causes about 20-30% of crop loss. The perishability

of freshly harvested ginger crop and lack of storage structures lead to distress sale of the

commodity. The farmers are exploited by middle men and due to lack of branding and certification

they had no access to premium domestic and international markets.

The primary study indicates that the cultivation of ginger per household is 0.33 acre which is 12%

of the total cropped area. The farmers spend about Rs 83325/ha for cultivation and get return

worth Rs 192185 with a gross margin of Rs 108860/ ha. The domestic consumption is hardly 2%

and preservation for seed is around 20%. Thus 56% of the produce goes to market after allowing

20% loss in post-harvest stage.

4.6.2 Mapping of value chain

Value chain of ginger involves input suppliers, producer, small and big traders, retailers and

consumers. Ginger is marketed mainly in fresh form. Since, it is less perishable; it is marketed to

distant markets also. The production of ginger in Odisha is mainly confined to tribal districts.

Village merchant generally collect the produce from farmers and market it either to commission

agent or whole seller in the assembling market. The marketing channels in ginger are as under.

Fig-17, Market chain of ginger Fig-18, Supply chain of ginger

4.6.3 Identifying and mapping the main actors involved in the processes

The main actors involved in the value chain are input suppliers, farmers, extension personnel,

wholesalers, commission agents, transporters, retailers and ultimately the consumers.

Activity Actor Role

Input Supply Input dealers Supply of fertilizer, seed, pesticides and machinery

Credit Institutions ( Formal & Non-formal)

Providing of credit

OUAT Research & Development, Extension

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49

Agriculture department Extension, Demonstration and supply of critical inputs

NGOs Technology transfer and supply of inputs

Production Farmers Field management and cropping related activities & Storage

Agricultural Laborers Wage labor for field operations

Marketing Primary aggregator Collection from farm gate

Village traders Local trading

Wholesalers Collection from aggregators and mandi and supply to retailers

Commission agents Operate in secondary aggregate centers and terminal markets

Retailers Purchase from wholesalers and selling to consumers

Consumers Consumption

(i) Mapping of Volume and Value Addition

The volume of products is closely linked related to mapping of product flow. It varies with

different channels. Nearly 56% of total produce goes to market. The yield of ginger is 7500 kg/ha

against the district average of 11335 kg and State average of 7890 kg/ha. The cost of production of

vegetables is around Rs 83325/ha and the cost of produce @ 7500 kg/ha is about Rs 192185.Value

addition at different channels is indicated below.

Table 18, Value addition of Different Channels

Value (Rs)/quintal Input 1110

Production 2562

Aggregator 3000

Commission agent 4000

Wholesalers

4500

Retailers 5000

Value added Rs 1452 438 1000 500 500

(ii) Constraints and opportunities

In spite of the fact that ginger is an important and oldest spice crop in the State, no major breakthrough has

been noticed in boosting the production and increasing export of ginger. The major bottlenecks are as

follows:

Cultivation of ginger under shifting cultivation with all uncertainties

Non-availability of quality planting materials and other inputs

High rainfall causing fungal diseases in Rhizomes

Non-availability of credit and insurance coverage

Low fertilizer and pesticide usage

Problems of processing and marketing

Losses due to faulty storage method and diseases like Rhizome rot.

Lack of trained personnel with sound knowledge in post-harvest technologies.

Lack of improved production technologies and management practices.

Majority of the farmers (60.8%) sold their produce to the local traders, while about 14.4% farmers sold the

produces in local market (14.4%). About 7.6% farmers sold the produce to money lenders in lieu of the

received credit. Only 6.8% ginger was sold to the outside marketers/ traders. Most of the farmers sold their

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produce just after harvest without any value addition. There was no facility for on-farm processing or

secondary processing of ginger. The seed ginger at farmers‟ level was mostly stored in underground pits.

Some farmers stored green ginger in wet sand with sprinkling of water at regular intervals, the quantity was

very less though.

Price offered to the farmers normally varied by trader category and was also largely dependent upon the

period of sell, i.e. whether it was immediately after harvest or in the off season. So, from profitability point

of view, though it is advisable to sell the produce in the off season, still it was not always possible for all the

farmers due to their financial needs. The farmers had no link to the information on existing market price

and they depended for such information on the traders to whom they sold the produce..

Most of the ginger farmers in these areas are resorting to unscientific post-harvest and storage methods

and value chain was almost absent. The farmers are hugely exploited by middle men and due to lack of

branding and certification, they have no access to premium domestic and international markets. About 20-

30% of the ginger production is reported to be lost, primarily owing to either lack of or unscientific post-

harvest management. Value loss of the produce due to immature harvesting and mishandling of crop after

harvest, absence of processing and preservation know-how and facilities had been the constraints for the

farmers in the way of getting a good remuneration.

(iii) Opportunities

Ginger is used as a spice, production of powder, paste, pickle, oil and oleoresin. With the availability of

fibreless exportable varieties Odisha has tremendous potential for increasing the production and

productivity. Availability of enough mulching material required for organic cultivation of ginger can boost

ginger production and quality which is available in Koraput district. It can be cultivated under multi-tire

cropping system in hilly and tribal districts and in agro-forestry system. There is huge potential for

improving cultural practices, post-harvest management and primary and secondary processing of ginger,

which could bring a remunerative price to ginger growers and other stakeholders involved in the value

chain. Apart from that, there is ample scope for augmentation of ginger production through cluster

approach with required technical and management support.

Key strategies

Use of high-yielding and high-quality varieties

Integrated management technologies for rhizome rot disease involving solarization of seed beds,

phytosanitation, cultural methods, bio-control agents and chemicals

Strategies for the management of shoot-borer by pruning infested shoots and application of

chemicals and bio-pesticides.

Postharvest management

Technological uses based on the recommendation of the state

Collectivization in farming and marketing

*******

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Chapter-5

Conclusion

A “value chain‟ describes the full range of activities required to bring a product or service from

conception, through the different phases of production (involving a combination of physical

transformation and the input of various producer services), delivery to final consumers and final

disposal after use (Kaplinsky and Morris 2001). The development of agriculture depends on the

relationships maintained by the farmers in the agro industry with a range of suppliers, buyers,

processors, exporters, marketers and consumers. The value chain approach, describing how

producers, processors, traders, buyers, sellers, and consumers – separated by time and space –

gradually add value to agricultural products as they pass from one link in the chain to the next, is

intensively used both by the private sector as well as government and development agencies to

pursue opportunities for agricultural development. As such, it can be seen as a tool for agricultural

development .For farmers and processors, participation in well-developed value chains presents

new income opportunities. Through the gradual upgrading of the technical and organizational

capacities/ability of weaker value chain partners as well as targeted improvement of their

connectedness to input providers, processors, marketers and knowledge/technology providers,

they can become stronger partners in better functioning value chains, enabling the reaping of a

higher share of the value generated in the value chain. There are simpler value chains that imply

less transformation, quality control and marketing offers and there are also more complex value

chains that require the involvement of many different agents.

Value chain analysis normally shows the build-up of costs along a specific commodity chain. This

can be complemented with an identification of the business service providers and what are

considered to be the main determining factors in the external policy environment. Such analysis is

well suited to understanding how poor people in rural areas can engage, or improve their terms of

engagement with trade

The project is being implemented in two Blocks, 10 GPs and 90 villages involving 200 women SHGs

and 3000 women farmers. The study adopted a multi-stage sampling technique. Both the Blocks

were studied separately and 4 GPs @ 2 per Block were covered taking one GP close to Block

headquarters and the other from forest rich area.

With the confidence level of 95% and confidence interval of 30, 20 villages and 100 women

farmers were studies. Five villages from each GP (both irrigated and non-irrigated) were selected

where selected commodities were extensively grown and five farmers from each village using

stratified random technique were interviewed. In addition, a few agri-input suppliers, middlemen,

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agro-processor, traders, transporter, retailers and consumers were randomly interviewed during

the study.

The selected crops value chains were identified for the district in consideration of relevance to

impact population, geographical context, number of women farmers associated and contribution

to household economy.The flow of seed and other agro-inputs to farmers and grain or other farm

produces to the market can be referred to as value chains because as the product moves from

chain actor to chain actor e.g. from producer to intermediary to consumer it gains value. Thus the

value chain involves the full range of activities which are required to bring a product or service

through the different phases of production, marketing, delivery to final customers, and final

disposal after use. The chain actors who actually transact a particular product as it moves through

the value chain include input (e.g. seed suppliers), farmers, traders, processors, transporters,

wholesalers, retailers and final consumers.

Throughout the world, rural women historically have played, and continue to play an important

role in rice farming systems. Their roles and those of rural men are conditioned by several inter-

related socio-economic (including class, ethnicity, age, religion), political and environmental

factors and are known as “gender roles”. However these roles are dynamic and can change over

time depending on changes in other factors noted above.

Many lessons learned over the Green Revolution experience, FAO and others now recognise the

need to develop more equitable and sustainable technologies that respond to gender-

differentiated needs and priorities identified and that aim to improve food security for all, both at

the household and national levels. Technologies and tools introduced to communities to improve

productivity or efficiency are often based on rural men's needs and perceptions, which can

substantially differ from those of women farmers.

Recognizing the fact that the value chain is an alliance of enterprises (growers, producers, traders,

etc.) working vertically to achieve a more rewarding position in the marketplace and it would

benefit the community to trace product flows, show value additions at different stages, and

identify key actors and their relationships in the chain, identify enterprises that contribute to

production, services with and required institutional support, provide a framework for sector-

specific action and identify strategies to help local enterprises to compete and improve earning

opportunities.

The different enterprises across the value chain are input supply, agro-service centres, and

production of commodity, transport, processing, packing, storage and marketing. Different actors

involved in the supply chains are input suppliers, producer farmers, traders, processors,

wholesalers, retailers and finally the consumers. Marketing channels are village merchant, weekly

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/daily markets & Krushak Bazaars, wholesale merchant, commission agents, RMCs, government

agencies like FCI, TDCC, NAFED etc.

It is mainly governed by the input suppliers, producers, traders, processors, distributors and

consumers. The impact population is mainly composed of the primary producers. Their choice is

limited within the domain of input suppliers and the traders. The women population work as per

the decision of the latter two actors. At the farm gate, weekly and Krishak Bazaars, the consumer

decides the cost of the commodity instead of the producer. But the latter regulates the primary

product flow depending on the need to meet the household requirements. The productivity and

net profit are the two key drives of the value chain. The profit of the primary producer goes up

when he gets the maximum share from the selling cost of a crop/ commodity.

There are input suppliers in Pottangi and Semiliguda who are dealing with fertilizers, seeds,

pesticides and machinery. The average age of the dealers is 37 and all are qualified above HSC

examination. Nearly 20% of retailers are trained and 80% are untrained. Surprisingly 60% have

valid license whereas the remaining have already applied for license. The annual sale of seeds is

154 kg and that of fertilizer is 1362 quintal. Each dealer sells about 240 litre of pesticides and 430

farm machinery/equipment per year. Nearly 80% retailers are aware of rules of business and 60%

do not issue cash bills to customers. It is reported that the business gives 2-3% profit on seeds, 2-

5% profit on fertilizers, 2% in pesticides and 2-4% on machinery. The input dealers are the first

actors in technology dissemination to farmers.

The value chain consists of the primary producer, trader, processor, wholesaler, distributor,

retailer, and consumer. The primary producer produces a commodity to meet his household need.

He does not know who the consumer is and what his requirement is. The trader decides the cost

of his produce. He is not aware of the processor and his need. The consumer influences the final

cost of the produce in case of the perishable goods when the primary producer wants to sell

directly to the farmer

The drivers of the competition are demand, supply, quality, price and risk reduction. A number of

intermediaries are working between the producers and the consumer. They are such as trader,

commission agent, wholesaler, retailer, processor, distributor etc. To reduce the number of

intermediate agencies, collaboration can be made with the consolidators/agencies such as

Reliance, Godrej, Cooperatives (Mothers Dairy) and NGO. The producer should get reasonable

price for his produce and the consumer should get it at a fair rate. This is only possible in reducing

the cost of production and increasing production efficiency. At the same time the transaction cost

also should be reduced. Consumer preference and quality of the produce increases the value of

the final commodity. Proper drying, grading, clearing should be done at the firm level to fetch

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good price. The infrastructure providers such as agro service centers can play a key role to help

the producer. The latter may be aware of the quality parameter through the extension agents and

NGOS. Higher risk is involved with the agricultural entrepreneurship than any other. To cover the

risk in crop and livestock production system, insurance companies can cover to help the producer.

***********

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Annexure-1

QUESTIONNARE FOR FARMERS ON VALUE CHAIN ANALYSIS

Question No.________

1. Name of Village________________ Name of Block________________

2. Name of farmer__________________

3. Age of farmer_________________ Years

4. Qualification of farmer_______________

5. Family size: Adult Male_______ Adult Female_________ Children_________

6. Total land holding (Ac)______________ Irrigated________ Non-irrigated

7. What is your cropping pattern?

Name of major crops Area in acre

Kharif Rabi/summer Total

8. What is your annual production?

Name of major crops Total production in quintal

Kharif Rabi/summer Total

9. What is the mode of utilization?

Name of crop Total annual

production (Q)

Domestic

consumption (Q)

Seeds and

other loss (Q)

Marketable

surplus (Q)

Marketed

(Q)

10. Economics of crops (Rs)

Name of

crop/commodity

Cost of

cultivation/ac

Cost of

produce/ac

Net margin/ac Actual sale value

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11.Where do you get agro-inputs?

Input Quantity (Kg/Litre) Source Cost (Rs)

Seeds

Fertilizer

Pesticide

Hormone

Credit

Machinery

12. What is type of marketing of your produce?

Name of commodity Quantity marketed (Q)

Farm gate/village Local hat Middleman Pvt Trader RMC

13. What are the challenges you face in rural marketing of agro-inputs?

_________________________________________________

_____________________________________________________

14.What are the challenges you face in rural marketing of agril. commodities?

_________________________________________________

_____________________________________________________

15. What type of agro-processing you adopt?

Commodity Agro-processing Value addition Selling price of

value added

product (Rs/q)

What is the % of

post-harvest loss

16. Where do you get better technology?

Particulars Source Frequency Whether useful or not?

Crop production technology

Post-harvest technology

Training

Exposure visit

Demonstration

17. What subsidy and incentive you receive?

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Particulars Source Amount during last year Whether useful or not?

Subsidy on inputs

Insurance

Free inputs

18.Have you face distress sale of agricultural commodities? Yes/No

19. If yes, what is the reason?

_________________________________________________________

20. Are selling your produce in MSP? Yes/No

21. If yes, what is the market price at that time?

22. What is the source of finance you avail?

(a)

(b)

23. What are the opportunities for new crops?____________________

24. What is the scope for reducing cost of production without lowering quality?

(a)

(b)

( c)

25. What is role of farm women in your farming?

(a)

(b)

( c)

26. Have you ever taken collective farming? Yes/No

27. Are you interested for contract farming? Yes/No

28. What are the major problems you face in your farming?

(a)

(b)

(c)

(d)

29. Do you get cheap labour for your farming? Yes/No

30 What type of mechanization you have adopted?

(a)

(b)

31. Do you get any information on marketing of agricultural produces? Yes/No

If yes, where from and at what frequency?

32. Have you idea of consumers’ preference of agricultural commodities? Yes/No

Signature of respondent Signature of interviewer with date

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Annexure-II

QUESTIONNARE FOR AGRO-INPUT DEALER IN POTTANGI AND SEMILIGUDA

Question No.________

1. Name of Village___________________ Block__________________

2. Name of input dealer_______________ Whether distributor or retailer

3. What is your age?______________

4. What is your qualification?

5. Have you received any training? Yes/No

6. Have you got a valid licence? Yes/No

7. What are the inputs you deal with annual quantity sold?

(a) Seed

(b) Fertiliser

(c) Micro-nutrients

(d) Pesticides/herbicides

(e) Machinery

8. Are you conversant about the rules of business? Yes/No

9. What are the major challenges do you encounter during business?

10. What are the marketing problems of agro-inputs?

11. What is the average gross margin for the products? In percentage

(a) Seeds

(b) Fertilisers

(c) Pesticides

(d) Machinery

12. What is the source of finance?

13. What assistance you provide to farmers?

(a) Technical advice: Yes/No

(b) Barter sale of produce: Yes/No

(c) Credit sale: Yes/No

14. Who makes quality testing of your products?

15. Do you sell products beyond the period of expiry? Yes/No

16. Do you issue cash bills to the farmers? Yes/No

17. Do you display the rate chart of the products? Yes/No

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18. Do you get complaint about spurious products?Yes/No

19. Are you selling ISI products? Yes/No

Signature of Interviewer

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Annexure-III

QUESTIONNAIRE FOR AGRO-PROCESSORS AND TRADERS IN POTTANGI AND SEMILIGUDA

Question No.__________

Name of village__________________ Block_____________

1. Name of Trader___________________________

2. Age of the trader____________________

3. Qualification of the trader___________________

4. What are the agricultural products you market? Rice/Maize/Vegetable/Ginger

5. How do you purchase agricultural commodities? Source

6. How do you sell agricultural commodities?

7. Do you have access to cold storage? Yes/No

8. What major operating challenges you face in running business? Threat/Weakness

9. What major challenges you encounter in selling the products?

10. Do you sell the products as such or sell after processing/value addition?

11. What is the average gross margin for the products?

12. What is the source of finance?

13. What financial challenges do you encounter?

14. What assistance (finance, operational, market) would you need to increase the flow of

products?

15. Have you ever faced distressed sale? Yes/No

16. Do you get preferred quality of consumers from the farmers?

17. What is the storage mechanism you adopt?

18. What is the approximate quantity you sell through different routes? (%)

(a) To retailers

(b) To consumers

(c) To other states/towns

19. Do you ever inspect the farmers’ fields to know the quality of the product? Yes/No

20. Have you got any processing machines for value addition? Yes/No

21. If yes, give details

Signature of interviewer with date