Agricultural Marketing

Management
Section II- Agricultural Input
Planning
Ullas P Ramakrishnan

Agricultural Marketing
Defn: AM consists of functions & services used in moving
commodities from producer to the final consumer
Defn: AM as a process starts with a decision 2 produce a
saleable farm commodity. It involves all aspects of market
strucure or system, both functional & institutional, based on
economic considerations and includes pre & post harvest
operations, assembling, grading, storage, transportation &
distribution- National Commission for Agriculture
Marketable Surplus: Surplus that is available 4 sale after
meeting (i) family needs, (ii) seed requirements, (iii) kind
wages (crop instead of money given as wages 2 employees, (iv)
gifts to friends & relatives
Marketable Surplus for
Foodgrains (45-50%)
Cash Crops (80-100%)
Fruits & Vegetables (>90%)

Agricultural vs Manufactured goods mktg

Sl
No

Base

Agricultural
Goods

Manufactured Goods

Perishable

Yes

No

Seasonal

Yes

No

Variations in quality

Natural

By design

Processing

Needed

Finished

Size

Bulk

Varying quantities

Essential functions of agricultural mktg

Assembling: Collection of produce for sale in mandis or
larger mkts
Grading & standardization: is the sorting of commodities
into different groups on the basis of size, variety, taste,
quality, colour etc.. Standardization fixes the grades and does
not allow them to vary from season to season and year2year.
Grading & standardization are used interchangeably
Processing: is the conversion of farm produce into more
consumable forms . Eg. wheat>flour, paddy>rice. Processing
imparts form utility.
Transporting: takes place through different means such as
road, rail, air and water and aims at creating place utility.
Storing: Storage is the holding of produce from the time of
production until it is needed by the consumers. Storing
created time utility. Some products such as fruits and
vegetables are stored for short periods. Also they require
facilities like cold storage.
Distributing: It relates to channels that take product to a
large number of consumers.

Types of Agricultural Mkts

1. Based on LOCATION
Primary mkts {shandies(periodical),haats (1 particular day)};
Features: convenient place, cash payments.
Secondary mkts { mandis, gunjs} Features: location-district
headquarters, towns, bulk quantities; middlemen,marketing
agents, commission agents r involved in mktg system; Facilities:
grading, packaging, warehousing, loading, transportation,
telephone & banking facilities r available.
Terminal mkts { pdt to customer, processed or assembled 4
exports) Features: r located @ highly populated cities like
mumbai, chennai, delhi, kolkata) Functions performed:
assembling of goods, grading, warehousing, distribution for
processing, financing & risk bearing, price maintenance,
commodity exchange

Types of Agricultural Mktscont

2. Based on the FREQUENCY they r held (daily, weekly, biweekly &
monthly mkts)
3. Based on the TYPES of product traded (grains, cotton, fish, fruit
& vegetable mkts etc)
4. Based on the VOLUME of transaction (Wholesale
mkts>primary, secondary, terminal; Retail mkts)
5. Based on the NATURE of transaction (spot or cash mkts,
forward mkts)
6. Based on the NUMBER of commodities {General Mkts- all types
of commodities, foodgrains, oilseeds, fibre crops, Specialized
mkts- one or two commodities, eg. Foodgrain mkts, vegetable
mkts, wool mkts, cotton mkts)

Agricultural Input Marketing

Agricultural Inputs; 2 types
Consumable Inputs: manures, fertilizers, seeds,
insecticides/pesticides, diesel, electricity
Capital Inputs: tractors, trailers, harvesters,
threshers, pump sets etc.

Nature of Demand
From marketers point of view, agricultural inputs show a
mix of consumer & industrial products characteristics
Consumption; Farmers do not consume like consumer
pts, but demand comes from demand for agricultural
production. So it is derived demand. Therefore
characteristic of an industrial pdt
Distribution & Promotion: is like consumer pdts as
these are targeted towards customers.
Product & Price: also like industrial pdt as it has derived
demand, complementary to other inputs, also bulky &
high cost.

Sales of inputs depend on

Weather in a season
Cropping pattern changes
Nature and health of the crop
Other facilities like govt price policy,
subsidies, loans and physical facility for
the product.

Promotion
Retailers: as most farmers are illeterate,
they play a very important role for agri
input company sales
Also kisan mela, fairs, haats etc

Nature of Competition/Competitive Environment

1. WTO & Trips & MNCS
2. Seeds/Planting/ Breeding Material:
Accouns for 20-25percent of productivity
Seed sector in India consists of two national- level corporations
i.e. National Seeds Corporation (NSC) and State Farms
Corporation of India (SFCI).
At the State level, there are State Seed Corporations (SSCs).
Besides, there are private seed companies.
The Seeds Act, 1966; Seeds Rule, 1968; Seed Control, 1983;
National Seeds Policy, 2002; and New Policy on Seed
Development, 1988 provide the framework for seed development.
The Central Seed Committee (CSC), Central Seed Certification
Board are apex agencies set up under the Seed Act. Under the
Act, State Seed Certification Agencies (SSCs),State Seed Testing
Laboratories (STLs),Central Seed Testing Laboratories (CSTLs),
Seed Law Enforcement Authorities (at the state level) and
National Seed Research and Training Centre (NSRTC) have been
set up to deal with all matters relating to quality regulation of
seeds.

Nature of Competition/Competitive Environment

3. Protection of Plant Varieties and Farmers Rights Authority
(PPV&FR)
Varieties of crops can have proprietary or Intellectual Property
Rights (IPRs) on them through either patent or plant variety
protection or a combination of both. Legislation for Protection of
Plant Varieties and Farmers Rights was enacted in 2001.
The legislation provides for the establishment of a sui generis and
an effective system for both the protection of plant varieties, the
rights of farmers and plant breeders on the one hand and to
encourage the development of new varieties of plants on the other.
The PPV&FR Authority registers plant varieties to protect plant
breeders rights, thereby stimulating R&D investment in
development of new plant varieties.
4. New Policy on Seed Development (NPSD)
New Policy on Seed Development (NPSD), 1988 was formulated
with a view to provide the best planting material available abroad to
Indian farmers. The policy has, over the years facilitated import of
seeds under various categories such as coarse cereals, pulses,
seeds of vegetables, flowers, etc. to improve agricultural production

Nature of Competition/Competitive Environment

5. National Seeds Policy, 2002
The National Seeds Policy, 2002 was formulated keeping in view
the rapid changes that had been taking place in the national
economic as well as agricultural sector and also the changes in the
international markets. The policy aims at enhancing food production
targets achievable by enhancing significantly, the Seed
Replacement Rates (SRR).

Challenges
There is a mismatch between the seed multiplication
ratio from breeder seed to foundation seed and from
foundation seed to certified seed, which needs to be
addressed.
The unorganized sector comprising a source mainly of
farm-saved seeds accounts for nearly 80 percent of this
seed supply. This requires attention.
Comprehensive and authentic databases on seed
production and trade in India by public and private
sectors as required under the seed and plant variety
laws need to be built up.
The seed chain and the norms for quality control should
be followed without any compromises or shortcuts.

Challenges
For horticulture crops which have a long gestation period
, it is imperative to ensure that only such varieties are
imported that are suited to Indian conditions .
A number of transgenics particularly in cotton and
vegetable crops, are sought to be introduced into the
country. The potential loss of production on account of
non introduction of transgenics has to be carefully
balanced against the dangers that transgenics may pose
to ecology. However if a crop is safe for environmental
release and beneficial to the farmers, such transgenics
may need to be taken up in order to ensure that food
security in the country is achieved and maintained.

Frame work for understanding market for

inputs
Four major components
Agronomic potential: demand for output,
output price, pesticide price.
Agro-economic
Potential:
infrastructure,
services, scale, information, organization,
entrepreneurship.
Effective demand: food processing, transport ,
storage, etc
Actual Consumption: Even after having good
production, consumpion is function of supply
and effective distribution (eg onions)