Marketing of Agri Produce

Module 7
Marketing of Agri produce
• Marketing system of agri produce – “inefficient&
exploitative”. Income of the rural consumers
depends upon the efficiency of Agri marketing
– Rural Credit Survey by RBI, 1951
• Peculiar characteristics of Agri produce
• Bulkiness, perishability, availability of wide variety,
dispersed production, need for processing before
consumption, seasonality& comparative advantage
• Functions of Intermediaries in Agri
marketing
– Collection/Assembling
– Financing
– Grading& standardization
– Storage
– Transportation
– Processing
– Wholesaling&
– Retailing
 Regulated markets
• Agricultural Produce Markets Act
– Karnataka Agricultural Produce Marketing
(Regulation) Act, 1966
– Salient features
• An elected market committee
• License of all functionaries
• The market committee to fix all the charges of
functionaries
• The sale proceeds to be paid on the day of sale to
farmer-producer
• Sale through open auction
• The market charges incurred to be borne by sellers
or buyers or by both equally
• Arbitration sub-committee for disputes
• Licensed functionaries required to submit complete
details of daily transaction
• Physical facilities like rest house, canteen etc to be
provided in the regulated market for the farmer
• Facilities to be provided for grading&
standardization of the produce
• The central& State Warehousing Corporations
should establish godowns near the market for the
benefit of farmer-producers
Co-operative organization
• Co-operative marketing& processing societies
– Farmers with common interests make societies&
perform intermediary functions – processing&
marketing of Agri produce
– Processed Agri produce – value added products
» Ex:Sugar co-operatives in Maharashtra
– Marketing of milk
– Operation flood I in 1970 (metro milk supply)
– Operation flood II in 1981 (state capitals& district
HQ milk supply)
– Operation flood III in 1985 (state capitals& district
HQ milk supply)
– Dairy co-operative societies (DCS)
» Supply inputs for milk producers (cattle feed,
fodder slips, healthcare, artificial insemination
facilities etc)
» Purchase of milk at assured price etc
• Assured price would not change
• 20 million liters produces every day through
• Proportion of milk handled by them is hardly 20% of
total production of 100 million tonnes
• Dairy farmers are the shareholders
• Value addition in processing the milk in to butter,
ghee, ice cream, milk sweets etc stays with in the
organization
• Dividends and bonus to dairy farmers
• Payment for the milk supply – daily/weekly/fortnightly
basis (Cost inputs supplied will be deducted)
– Initial aid this scheme– European economic
community through National Dairy
Development Board by GOI
– Flush season: milk into white butter and
skimmed milk powder
– Lean season: milk powder into milk
– Gujarat Co-operative Milk Marketing Federation
(GCMMF) – Amul
» Amul reached the turnover of Rs.5255
crores (2007-08)
» 27 Lakh milk producer members
» Wide product range (flavoured milk, cheese,
Amulya dairy whitener, infant milk food,
Amul spray, butter etc
• Milk co-operative societies :Nandini (Karnataka); Aavin
(TN); Vijaya (AP)
• Cooperative Oilseed Growers Federation
• Edible vegitable oil – “Safal”& “Dhara” (Karnataka)
• Horticulture Producers Cooperative Marketing and
Processing Society Ltd (HOPCOMS)
• Formerly known as Grape Growers Society
• Price fixed as per market conditions
• Immediate cash Payment up to Rs.2000 and above
by cheque
• No malpractices in weight& no unnecessary
deductions for quality (since it is graded before sale)
• Fresh marketing society (AP)
– Fresh vegetables; Fixed price& accurate weight
• Marico, ITC,Lipton are in edible oil manufacturing and
marketing
• Pepsi – boost to tomato cultivation
– Tomato puree& paste requirement of 600 tonnes of
tomatoes everyday
– Supply inputs farmers: high yield tomato seeds etc
– Supervision of field by agronomists& extension staff
– Avg yield increased from 19.5 tones/hectare to 47.5
tonnes/hectare some times 75 tonnes/hectare also
• Mahagrapes
– Pune-Nasik region – comprising no.of grape growers
co-operatives societies
– Over 12,000 members
– Export seedless grapes to UK& West Asia
– Plans to reach export targets of 12000 tonnes of
Rs.30 Crores
• Govt liberalization – Private players into dairy sector
• Decontrol of molasses
– Indian Made Foreign Liquor (IMFL) and acetates
 Contract farming
• Latest trend in Agri produce marketing
• HUL, Rallies of Tatas& ICICI Bank
–Rallies will provide technology of
growing a particualr variety of wheat to
farmers of Hoshangabad district, PM
–ICICI do financial support
–HUL will procure the Agri produce
• Similar arrangement by HUL to procure
Basmati rice from Panipat district of
Hariyana
• Similar arrangement by retail chains like
“Food world”, ‘Spencers Daily’, ‘Trinetra’,
‘Reliance Fresh’, ‘Nilgris’ etc
–Daily supply through contractual
agreements
»Ex: Chikku, pomegrannate, banana&
figs by food processor “SUNSIP”
• ITC E-Choupals internet based intervention
 Problems of Agricultural
marketing
• Defective crop planning
• Lack of organization among cultivators
• Forced sales
• Inadequate storage facilites
• Inadequate means of transportation
• Lack of market information
• Insufficient grading& standardization
• Superflous middlemen
• Multiplicity of market charges
• Malpractices in the market
 Role of Govt in the Devt of Agri
Marketing
• Council of state agricultural marketing boards
– Objectives
• State trading
– Objectives
• Co-operative marketing
– NAFED (National Agricultural Co-operative Marketing)
– NCDC (National Co-operative Development Corporation)
• Public distribution system (PDS)
– Revamped public distribution (RPDS)
– Targeted public distribution (TPDS)
• Food Corporation of India (FCI)
• Directorate of marketing& inspection (DMI)
• National institute of Agricultural marketing (NIAM)