Chapter - IV

MARKETING ASPECTS OF JAGGERY

4.1 Introduction

This chapter attempts to identify and study various aspects relating to

marketing of jaggery in India, There are many important centres in our country in
respect of jaggery marketing and trade. But Muzaffamagar in Uttar Pradesh, Kolhapur
in Maharastra and Anakaplle in Andhra Pradesh are the big marketing centres1.

As far as jaggery , marketing is concerned direct sale of jaggery to the ultimate

consumer by the producer is not possible. The reason behind this is the places of
production and consumption are widely scattered. Therefore, the role of middlemen
becomes significant. Jaggery moulds or lumps are brought to the market by the
jaggery producers or farmers. Middlemen or commission agents rarely visit the
villages to buy jaggery. They are allotted shops and godowns by the market
committee on rental basis. Jaggery markets in all the selected areas of study are of two
types viz, weekly market and assembling markets.

4.2 Marketing of Jaggery

1. Weekly markets

These markets are called ‘mandies’ in some part of the county. These markets
comprises of a large number of buyers and sellers. Trade transaction are carried at a
particular place and are organized on a weekly basis, jaggery producers mostly bring
their product for sale in these markets. Mostly retail transaction takes place in such
markets.

2. Assembling markets

These markets are basically wholesale market. These wholesale markets can
be categorized into three groups which include the primary, the secondary and the
terminal markets2. Primary markets operate in the villages and the secondary markets
function usually in the urban areas where facilities storage and banking are available.
Terminal markets are found in the urban areas like cities and big towns and perform
the function of disposal jaggery directly to the consumers or retailers, jaggery
producers bring jaggery in such markets for the sale which is arranged by the
commission agents. The commission agent is responsible for the process of sale of
jaggery lumps in the market for which he obtained a commission from the market
committee. The jaggery lumps are exhibited in front of the shops of the commission
agents. These are sold in open auction. The commission agents then pay the proceeds
to the producer after deducting marketing charges on the same day or same other day
agreed upon by them.

1 Prasada Rao, K. K. ‘Jaggery Marketing’ op - cit pp. 12-13

2 Sivarama Prasad, A, ‘Agricultural Marketing in India, Mittal Publications New Delhi 1985, pp 28-29

42
3. Market Yard

A market yard is a statutorily declared situated area within the market where
the sellers bring,the notified commodities and effect transactions with licensed traders
directly or through the other licensed intermediaries under the supervision of the
employees of the committee3. A properly planned market yard is necessary for orderly
marketing of agricultural commodities. The market yard should possess some basic
amenities and facilities. Its location is also important to carry out day-to-day business
transactions i.e. it must be convenient and conductive for all the buyers and sellers in
the market. Indian standards Institution states that as far as possible the market yard
should be established according to standard layouts and when such standards become
available and are implemented will go long way in improving the present conditions
in the markets and will have a statutory effect on the overall improvement of
marketing in the country4. 5

The layout of a market yard involves various important aspects to carry out trade
transactions. To facilitate this, it must possess following physical facilities:

It should contain:

(a) Adequate number of shops for commission agents and traders;

(b) Office for market committee;

(c) Sufficient open and covered place;

(d) Parking place;

(e) Drinking water;

(f) Roads and lighting;

(g) Rest houses;

(h) Canteen

(i) Bank, post and telegraph offices

I

(j) Warehouses

(k) Veterinary dispensary, etc.

4.3 Market Functionaries

As mentioned earlier, about the assembling markets, market functionary is

present both in primary as well as wholesale markets. In primary markets the Village

3 Government of India, working of Regulated Markets and Inspection, Nagpur, 1968, p.37
4 Indian Standards Institution ‘Layouts for Regulated Market Yard for Agricultural Commodities, New
Delhi, February, 1960, p. 3
5 Government of India ‘Working of Regulated Markets’ op- cit, p. 41

43
merchants is the producer himself and buys locally for sale to itinerant merchants on
the other hand, in the wholesale markets, functionaries operate in the market. They are
commission agents, traders, weight men, hammals, packers (stitching or packing
workmen) etc. All these functionaries have to obtain license under the relevant state
market Acts6.

1. Commission agents

The foremost and important category of functionaries is commission agents.

The middlemen are also called as ‘Adatyas’ in all the three selected markets. They act
on behalf of another person in the consideration of commission or offer to make a
purchase or sale or offer to do anything, necessary, completing or carrying out such
purchase or sale. There are of two types of commission agents- producers’ agents and
dealers agents.

2. Traders

The next important market functionary are the traders, we can also say that
commission agents and traders are two sides of the same coin, this means both are
vital for the marketing and trade of jaggery in the market place. Traders are
wholesalers as well as retailers who make purchases on their own account from the
producers. Producer’s agents, village merchants and itinerant traders, very rarely,
resort to purchase directly from villages or weekly markets. They make payments
usually in cash within the stipulated time period as prescribed by the market
committee usually in 24 hours or within few days. These purchased jaggery lumps are
packed along with their own private labels or marks. These lumps are preferably
stored in cold storages during the slack period and same in their private godowns. The
moulds are. sold or offered for sale to the retailers as per demand. They are then
exported or transported to various states in the country.

The above two mentioned functionaries are of chief importance as they

influence the working of market to a great extent. The larger the number of these
functionaries, greater is the opportunity for developing a competitive environment
within the market. This proves fruitful to the farmers to fetch higher price and
increase the volume of sale in the market.

3. Weightmen

These categories perform the function of weighing the agricultural produce

brought into the market. They are employed either by commission agents or the
traders or both. Remuneration is fixed as for the commission agent for their service
under the market committee Act.

4. Hammals

They usually undertake service of loading and unloading of jaggery lumps or

agricultural produce incoming, storing and packing. There are women labourers too
included in this category of service. Females also have to obtained licence from the
market committee to render services. It is for handling notified commodities in the

6 Government of Andhra Pradesh ‘project report on the development of Regulated Markets of Andhra
Pradesh department of marketing 1973 p. 41

44
 market. Their services also include extended manual labour, physical handling of the
produce in the market, unloading the produce from the vehicle, carrying it for various
other operations till it is sold or stored.

4.4 Method of Sale

The method of sale adopted varies from market to market and state to state at
large. As per the working-of-.regulated markets in India different methods of sale Me
practiced in the various regulated markets of the country. These methods of~saIe
include: ------ - " ,
..Ji-
(a) Forward sale

(b) Jalap sale

(c) Moghum or Anubhav sale

Q
(d) Sale by sample

(e) Hatta sale (sale under coyer or secret sale)

(f) Dharasale

(g) Sale by open agreement

(h) Sale by open auction

(i) Tender system7, etc.

The above are explained in detail:

(a) Forward selling- is a method of sale where the farmers sell their produce in
advance to the traders at a price fixed at the time of trade transaction.

,b) Jalap sale- is selling of standing crop well in advance .of the harvesting season
at a price fixed on the date of bargain.

< (HteV'Under moghum or Anubhav sale- the producer shall be taken by the buyer
with an understanding to pay the price ruling on any day in the period
prescribed by the sellers.

(d) The sale bv sample- is done by showing sample of produce to the trader or
buyer finalised for sale and is systematically graded.

(e) Under Hatta sale- or sale under cover or secret sale method with kerchief or a
towel and invites offer from each of the buyers present. The buyers make
offers by pressing his fingers and finger joints which is a language of signs
known only to buyer and the commission agent. These methods keep the seller
under darkness and leave the scope for malpractices.

^ fo' A
- nt\ yip \ ~ ] ■ ■ /
V Government of India ‘ Working of Regulated Markets in India, op-cit, p.p. 97-115 '

45
(f) In dhara sales- heaps and bunch of jaggery moulds are sold in one lot. This
makes good and bad jaggery lot to be sold together.

(g) Sale bv open agreement- is the case where farmers enter into a sale transaction
directly with the buyer without involving any intermediary.

(h) Open auction system- refers to the system where jaggery is sold by the
commission agents through auctions organised in the presence of sellers and the
competing traders. The place of auction is usually the premises in front of the
commission agents’ shops or other places as notified by the market committee
from time to time. All commission agents exhibit the produce of jaggery lumps in
heaps and all the jaggery arrivals in the market should be sold under open auction
system in open heaps. The commencement of auction is arranged by the market
committee. All the buyers assemble at the spot of auction in advance to participate
in the auction. The bidding commences at each heap and shop in serial order as
may be notified. Almost perfect competition prevails in the market thereby
eliminating the possibility of malpractices. The highest bidder shall be given the
produce, then, follows the payment of sale procedure which is done immediately
on the day of transaction, without delay to the farmers.

(i) Tender system- invites bids from the intending buyers by the market
committee. Buyers are allowed to inspect the produce arranged or exhibited in
pots. The highest bid shall be accepted.

4.5 Market Charges

The farmers or jaggery producers have to incur certain amount of

expenditure to sell their jaggery produce in the wholesale market. These charges
or costs are deducted from the sale proceeds payable. These are commonly known
as market charges. These include commission, weightment, hamali, sweeping
charges, charity etc. Some producers who believe in charity and are rich enough,
do not charge for any services rendered. Market charges are collected from sellers
or buyers or from both of them to pay remuneration to intermediaries and other
market functionaries who facilitated the transfer of ownership title from the seller
to the buyer. These charges are briefly explained below-

a) Commission- Commission or adat is a charge payable to the

middlemen who acts as an agent on behalf of seller or buyer. It enables
the sellers or buyers to get expert or profession service and better
contacts.

b) Weightment- It is a charge payable to weight men. These charges vary

from product to product but in case of jaggery, it is usually paid on the
basis of weight.

c) Hamali- It is the charge payable to the labourers undertaking the work

of loading and unloading of goods sold or purchased. It is generally
paid as per the units of jaggery handled.

46
4.6 Physical Handling and Transportation

Once jaggery is ready at the jaggery making unit, jaggery lumps are taken or
carried by the jaggery producers themselves till the market place (yard). As soon as it
reaches the market yard, jaggery lumps are usually handled by the weightmen, and
handled who are engaged in loading, unloading, grading weightment and packing
services.

Generally, jaggery lumps or moulds are covered in gunny bags or as they are
transported from farm to the market place by the jaggery producer. Basically, bullock
carts are used as a major mode of transportation for the movement of jaggery in all the
three market areas under study. But the fact is that in recent fast motorized vehicles
like vans, tmcks, mini-tracks or tempos and tractor trailers are also being used on a
large scale depending on the improvement and flexibility of the road conditions. For
inter-market transportation both railways and roadways are used. At present, tracks
are playing a major role in movement of jaggery lumps from one state to another state
and even for short and medium distance movements, then follows railways, which
cater to the need for long distance movement of jaggery. Even huge containers are
used for carrying jaggery lumps through ships for exports to other countries out side
India, especially, in case of Kolhapur jaggery which has great demand for its exports
in foreign countries. Within the country roadways have overtaken railways due to
shortage or non-availability of wagons. Thus, tracks are preferred extensively even
for long distance transportation of jaggery.

4.7 Grading and Standardisation

The fact remains that till date there is no uniform practice of grading and
standardization of jaggery actually followed in India. The producers of jaggery
understand the quality of jaggery made by them but do not grade jaggery in all the
areas under study. Jaggery is usually graded by the middlemen or commission agents
in the market. Jaggery lumps are generally sold in lots or heaps and are brought by the
individual contractors or village merchants at the wholesale markets or assembling
markets. Different qualities of jaggery lumps are arranged or assembled to exhibit for
sale. This segregation is usually done based on its colour and fixture. There is no
recognized specification for sorting and each trader or merchant has his own ideas
about grading. The grading of jaggery lumps differ from one market place to another.
The superior grade of jaggery in one market may be inferior to the average of another.
The procedure of grading of jaggery differs from market to market. Jaggery is
generally purchased after making personal inspection by usual examination8.

For instance, in Kolhapur Regulated market (APMC) jaggery was graded into
first quality, second quality, third quality and fourth black quality. The first quality
referred to hard lumps with fine crystalline (white) structure and golden (cream)
yellow in colour. It tasted normally sweet. The second quality was hard lump with
light orange colour (kesari) and fine crystalline structure but tasted less sweet
compared to the first quality. The third quality was red in colour or reddish brown. It

8 Prasad Rao, K.K. ‘Jaggery marketing’ op - cit p.2

47
was considered less superior as it was very sweet in taste. The fourth quality was
black colour jaggery with rough look and very sweet in taste.

In Anakaplle Regulated Market, jaggery was graded in three qualities 1, 2, and

3. The first quality consisted of hard lumps with cream or golden yellow in colour and
had fine crystalline structure. It was finely sweet in taste. The second quality was
chocolate colour hard lumps also with fine crystalline structure. Black and all other
types of jaggery was considered to be a inferior in quality this type of black jaggery
was mostly used in making alcohol.9

In Muzaffamagar Regulated Market there existed three types of jaggery

qualities. First quality was golden yellow or white in colour called as Khurpa made
out of variety of seeds used as 1136, 1132, and 1167. The second grade quality was
medium yellow in colour called Chaku made out of seed varieties 1164, 1168, and
1155. These were basically, in the shape of balls (laddoes). The third quality was
black jaggery called Raskat from seed varieties 8436, 767, and 8230. This type was
basically used for making jaggery syrups consumed as soft drinks or used for alcohol
making.

The grading of jaggery is a difficult task due to wide varieties in its quality,
depending upon the seed variety used, its complex chemical composition and its
inerrability to the determination of grades. According to Roy, there are two factors
determining the quality of jaggery i.e. physical and chemical factors. Physical factor
include colour texture sweetness, hardness, and flavour. While chemical factors refer
to sucrose reducing sugars diet insoluble ash and moisture. Grading of jaggery is
considered to be utmost important and therefore the Government enacted the
Agricultural Produce and Marketing Act, 1937. Five grades are identified under this
Act viz, extra special, special, A I, A II and B depending on the factor like colour,
texture, taste, consistency and preservation of foreign matter.

The Table 4.1 provides the details of grade designation of jaggery under the
Act. The Act has also prescribed a colour chart as an aid to grade jaggery. Colour is
considered to be the foremost criteria in grading jaggery followed by taste, texture,
and ingredients involved. Thus, external physical characteristics are more important
than the internal chemical factors affecting jaggery quality. However, chemical
factors are also taken into consideration while grading jaggery.

9 Government of Andhra Pradesh ‘Survey Report on Marketing of Cane Jaggery in Andhra Pradesh,
op- cit p.54

48
 Table 4.1
Grading designation and characteristics of jaggery produced in India

Grade Colour not dark General

Texture
Designation Than Characteristics
Extra Cream or Granular The jaggery
Special Light golden (rawadar or (i) Shall be prepared
danadar) Exclusively from the
clarified
(c) Juice of sugarcane
Special Golden -do-
(ii) shall be prepared in the
AI Dark golden either granular form of shaped solid lumps
(rawadar or (bheli, chakki, or ladoos,etc)
danadar) or which shall be firm
smooth consistency not sticky or
AH Light brown (chikna) plastic
-do-
B Brown (iii) shall be reasonably free
-do- from extraneous matter such
as bagasse, diet and other
impurities the combined total
of which shall be less than
one per cent by weight
(iv) shall be dried to such
extent as reasonably (d) to
maintain its colour
consistency and weight
(v) shall bear no signs of
superficial sweet or mould
(vi) shall be sweet to the
taste and not possess a sour,
\ ^ salty or other objectionable

’
V flavour
Vjw Source: '‘Jaggery (gur) Grading Instructions’ Marketing Series, Directorate of marketing and
‘yr inspection, Ministry of Food and Agriculture, Government of India, New Delhi, 1958

Notes:

• To allow for accidental errors in grading, 10 per cent by weight of jaggery in

consignments of any of the grades excepting extra special may be of a colour
not inferior to that of the next lower grade.

• Extra special grade shall be made only from cane juice which shall have been
adequately clarified by means of vegetable activated carbon in addition to the
normal method of clarification. The total impurities in such jaggery shall not
exceed 0.2 per cent by weight.

• The process of clarification may be effected by means of any of the agents

normally employed for the purpose including mucilaginous extract of sukhlai
(kydia calvcina), Deola hibiscus ficulenus Bhendi (hibiscus esculents), etc or

49
 milk soda, sodium carbonate, lime, etc. or by adequately removing the scum
clearing the boiling process. Bleaching agents shall not be used.

• Having due regards to climatic factors and conditions under which the produce
may have been handled transported or stored.

Based on these factors, Indian Institute of sugarcane Research Lucknow has also
approved certain grades of jaggery which are presented in the table 3.10 below: It is
scientific criteria for grading of jaggery.

Table 4.2
Scientific criteria for grading jaggery

Limits for classification

Grading of
Sucrose Total non-sugars Column reading of
Jaggery
Percentage Percentage N / 2 jaggery solution*
I 81 - 84 and <5.00 <135
above
u 78-81 • 5.80 135 - 25

HI 75.77 >800 >225

*65 grams ofjaggery is 500 cc of water.
Source: Ramakrishna Rao. S. - jaggery research at Anakaplle, ‘proceedings of the II work shop on All
India Coordinated Research project or processing handling and storage of jaggery, Indian Institute of
Sugarcane Research, Lucknow February, 1993.

It is clear from the table that, jaggery is classified into three grades viz, I, II,
and HI based on the sucrose percentage contained in it. Grade I jaggery contains 81
per cent of sucrose content, Grade II jaggery contains 78 to 81 per cent and Grade m
jaggery contains sucrose content with 75 to 77 per cent and less than 75 per cent.
However, the fact remains that any of the above specification for grading of jaggery is
not followed in any jaggery market in India. This fact makes the reason for
malpractices in jaggery trade or sale. The disadvantage is that consumer is not aware
of this fact and therefore, low quality of jaggery is also easily sold in the same market
to the same consumers.

4.8 Packaging '

Packing of jaggery is not actually done by the jaggery producers. It is only

covered by gunny cloth or paper and lumps are brought to the market place from the
farm of jaggery making unit. Actual packaging of jaggery takes place only after it is
sold to the trader Hammals (unskilled labour) are involved in packaging of jaggery
lumps. Also women workers are engaged in packaging. The common practice of
packing jaggery in all the three markets is to fill them in gunny bags and bulky lumps
are wrapped in Hessian cloth mostly imported from Assam and this cloth is then

50
9
^ \v*\ v\o^
stitched with thick thread or sutli. This type of packing is adopted when jaggery is
intended to be stored for longer duration or to be transported over longer distances.

In Kolhapur market, jaggery was packed using Hessian cloth, butter paper or
polythene to wrap bucket shaped jaggery lumps of 50, 30, 20, and 10 kg. Modak
shaped jaggery was covered in butter paper or white paper with attractive design and
details printed on it.

In Anakapalle regulated market and nearby villages, common method adopted

for packing of jaggery was to wrap with sugarcane trash and packed in baskets made
of palmyrah leaves. These baskets were of two feet height in round shape. A layer of
paddy straw thinly spread was used as base to the basket to give a smooth surface10.
Brick shaped jaggery was wrapped in butter paper and then in glazed paper with
attractive details printed on the product: Jaggery made in cube shapes was packed like
toffees. These shapes were usually consumed and demanded in south of India in
places like Hyderabad, Chennai, Secunderabad, Tamil Nadu, and Karnataka etc.

In. Uttar Pradesh, particularly in Muzaffamagar district, jaggery was packed

using white paper, butter paper in polythene or perforated polythene. Generally, slabs
of jaggery were stored by wrapping it in paper or gunny cloth. Laddoes were also very
famous in many parts of Uttar Pradesh. Brick shaped jaggery, jaggery powder, was
packed with white paper.

4.9 Storage

The production of jaggery is seasonal in nature and its consumption or demand

is throughout the year. Therefore, jaggery has to be stored appropriately during the
year. In India, about three million tonnes of jaggery is stored generally, for
consumption purposes, throughout the year. Out of this, two million tonnes of jaggery
is stored at the domestic level by big organised agents and traders. According to the
estimates, about 10 per cent loss takes place in the quality and quantity of jaggery
especially during the monsoon*11. Therefore, care should be taken to keep it away from
moisture and air,

The common practice of storing jaggery earlier was in ordinary earthen pots,
Hessian sacks and also in open under room where jaggery was used to liquefy at
higher RH in monsoon season. Babu and Anwar (1995)12 developed improved
methods of jaggery storage viz. painted earthen pots, drying - cum - storage bin
which improved the storability of jaggery even under high humid conditions (above
65 per cent RH) of monsoon season. They reported that uniform brick shaped jaggery
moulds Of 500, 250 and 125 grams and cubes of 25 mm made in moulding frames and
packed in double layered butter and glazed paper giving cellophane wrapping kept
away the fries, dirt, and dust and attract consumer and fetch good price. Jaggery
packed with tin foil covered with polythene or Hessian cloth remained in good

10 Ibid, pp, 38-39

11 Bengali Babu, and Singh, G.B. ‘jaggery and khandsari industry - present status and Research and
Development strategies for 2000 A.D., op - cit p. 7
12 Babu, B, and Anwar, S.1.1995 tech Bull (IISR/JRS/94/9), AICRP on processing, handling and
storage of jaggery and khandsari, II SR Lucknow

51
conditions with small changes in physico-chemical characteristics for longer period
of time (Anon, 1996)13. For handling and transportation they were later packed in
paper carton.

In Kolhapur, gur was stored as per the modem methods by the traders and
organised agencies. Hessian cloth and polythene sheets were used for bucket shaped
jaggery lumps which were sealed or stitched by the skilled labour. Also printed
earthen pots and gur drying cum storage bins were used which was proved to be more
useful than unprinted earthen pots and polythene bags of varying quality. Thus,,
jaggery stored by this method had less reduction in sucrose and less darkening of
colour; Thus, pot jaggery storage proved better for maintaining the sucrose content in
storage compared to other shapes of jaggery in the form of bucket shaped rectangular
blocks and balls.

In Andhra Pradesh, especially, in Anakapalle region of Vishakhapatnam

district, jaggery lumps were usually stored in earthen vessel or granaries whose mouth
was covered by a tide and made airtight by applying a paste of mud or flour around it.
This was usually done by farmers for small quantities of jaggery. When large
quantities were to be stored, the jaggery lumps were kept in a heap over a matting :
wooden or bamboo platform in a closed room. They were covered either by wheat-
husk, paddy husk, and cotton seed husk, sugarcane fresh basket made with Palmyrah
leaves or gunny cloth14. Also arrangements were made in the godowns to provide
smoking to keep the humidity levels intact.

The season for jaggery production is basically between October to May and
the peak season is the period between January and April. The storage problems were
faced more by the traders at the assembling point in the market than farmers, as
farmers kept small quantities with them for self consumption and saved for sale in the
vicinity areas. Hence, their storage requirements were small and thereby resort to
traditional means. On the other hand, traders faced more problems because they had
to arrange for more place and also need to keep humidity levels under control.

In Muzaffamagar, gur was stored by farmers as well as traders and agencies.

Big farmers stored gur in wheat straw. Gur was packed in gunny bags which were
embedded in thick layers (30 cm or more) of wheat cost as huge quantity of wheat
straw was required. However, a big farmer who has wheat straw and cattle of his own
to feed it, the methods appears convenient. Traders and organised agencies stored gur
in a room on first floor of the house or shop.. The doors and windows of the room face
east and west, gur was kept on first floor in bulk in 3-4 layers and door and windows
were kep( gpejuduring summer season. The hot westerly winds which prevail during }-
summerjorv the gur. Before inset of monsoon, doors and windows of the robm~were“”“
sealed whh polythene sheets. Capacities of these rooms varied from 100 to 200
quintal. '4-u, fe~v

In Muzaffamagar, the central ware housing corporation had built large gur
godowns. The capacity of each godown was 1250 tonnes. Gur was packed in special
size gunny bags (called gur bags) in which 40 kgs. of gur can be packed. Gur bags

13 Anon 1995-97 Annual Progress report of AIRCP on processing handling and storage of jaggery and
khandsari for 1992-97 RS & JRS (MPKV) Kolhapur
14 Roy, S.C. ‘Monograph on the Gur Industry of India, op - cit, p. 31

52
were stored over still racks and crates erected, were stored over each rack. Exhaust
fans were fitted on western side wall of the godowns below the air inside where
exhaust was fitted on eastern side below it, outside the godowns. These fans were
operated during day time throughout summer season. Before onset of the monsoon,
the ventilators doors and fan holes were sealed with polythene sheet.

4.10 Finance

Finance is the most significant part of the entire business. It is the engine for
the growth of business. It is required at every stage of business. . In context of jaggery,
finance is required from the stage of harvesting of cane up to transporting jaggery to
the market place. Finance influences significantly in the marketing activity1 .

In all the markets under study, it had been observed that basically, the jaggery
producers depend for finance from commission agents in the regulated market dealing
with jaggery. This is because commercial banks and co-operative credit societies lend
financial help but on a limited scale and at a high interest rate of 12 percent per
annum.

Middlemen in the regulated market usually, borrow from commercial banks and also
tap funds from co-traders, partners and other money lenders. Commission agents
provide finance to the jaggery producers on the pre-condition that farmers sell jaggery
through them. As the purchase and sales in the jaggery market are mostly on credit
basis, naturally, one section of the middlemen becomes additional source of finance to
the other section of the middlemen; on the other hand the agriculture market
committee does not provide any financial aid to the jaggery producer’s, commission
agents and traders in the market. This intermediary collect market fee and license fee
and spend on regulating activities and in the construction and maintenance of market
yards. Besides, the committee also receives grants from the State Government for the
developmental activities.

4.11 Market Risk

Marketing risk is defined as the danger of loss from unforeseeabftf”

circumstances in future16. In the context of jaggery marketing, risks are involved from
the stage of making jaggery, till delivering into the market. Even after reaching the
market place, the risk are involved such as theft, fire, destruction, deterioration in the
quality loss in storage and transportation, on the losses due to price fluctuations,
competition etc. on the part of traders in the market. Thus, the risk is to be borne by
the producer and the middlemen at different stages of marketing of jaggery. There is
no protection provided by market yard to the goods against rains, sun heat, winds etc.
Traders/merchants are bearing the risk of deterioration in weight, and quality of the
product if stored for a long time, loss during transportation etc. Middlemen bear
higher risk on account of price fluctuations. However, some risk can be reduced by

15 Memoria, C.B. and Joshi, R.L. Principle and Practice of Marketing in India, Kitab Mahal,-Allahabad
1984, p. 634
161 bid, p. 636

53
insurance coverage and some by proper planning monitoring on the part of
middlemen and traders, Hedging and forward trading /^-the'important methods to
overcome the above mentioned risks. Forward trading'is trading in future or it is on
agreement between two parties who agree to sell and deliver and other who agrees to
purchase and receive a certain kind of quality of commodity at same specified future
date and time, at a specified price and according to the conditions of trading
prescribed by the organized producer or commodity exchanges.

4.12 Market Information

Market information is a pre-requisite for the consumers, producers as well as

for the middlemen and merchants to develop the business. In context of jaggery, '
appropriate information is not available to the farmers and jaggery producers in :
villages. Whatever information is made available through research stations or markets
is not followed entirely. The producers rely on commission agents or merchants for
information. Market committees give low priority in collection and dissemination of ;
market information. The government should initiate proper steps to provide market :
information to all the marketing channels involved in marketing of jaggery at the right j
time. This can be achieved with help of association and agencies mnning through the !
market committees in the regulated markets. ;

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