Transcript MARKETING CHANNEL FOR RICE

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Marketing channel for rice
Importance of rice
Asia’s share is more than 90 per cent. Paddy is a primary food grain
crop of India.
More than 50 percent of country’s population depends fully or
partially on rice as it constitutes the main cereal food crop of the
diet.
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Marketing channel for rice
Varieties for International Demand
New Varieties - Pusa Basmati (IET10364), Punjab Basmati - 1
(Bauni Basmati), Haryana Basmati-1 (HKR-228/IET10367), Mahi
sugandha, Kasturi (IET-8580).
Traditional Varieties - Basmati 370, Basmati 386,Type-3, Taraori
Basmati (HBC-19), Basmati 217, Ranbir Basmati (IET 11348)
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Marketing channel for rice
Standards for International Trade
CODEX ALIMENTARIUS COMMISSION (CAC)
Government Organisations (FCI, State Government,)
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Marketing channel for rice
Means of transportation used at different stage of marketing
Stage
Stageofof
marketing
marketing
Transportation
is is
Transportation
done
by
done by
From
floor to
Fromthreshing
threshing
the village/primary
floor to the
market. market
Farmer
Farmer
village/primary
market. market
Means
Meansofoftransport
used
transport used
By
load,
pack
Byhead
head
load,
animal, bullock cart
pack animal,
or tractor’s trolley
bullock cart or
tractor’s trolley
From
market to
Fromprimary
primary
secondary
wholesale
market to secondary
market and miller
Trader
Trader/Miller
/Miller
wholesale market
and miller
From
and
Frommiller
miller
and
wholesale
wholesalemarkets
markets
to
toretailer
retailer
Miller
Miller/ retailer
/ retailer
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By trucks, railway
wagons.
By trucks, railway
wagons, mini
trucks
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Marketing channel for rice
From retailer to
consumer
By head loads,
pack animal,
bullock cart,
rickshaw, bicycle.
Consumer
Export / trader
Export
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By ship, air cargo
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Marketing channel for rice
Criteria for selection of channels:
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There are many marketing channels involved in marketing of
paddy/rice. The following are the criteria for the selection of efficient
marketing channels.
The channel, which ensures reasonable return to producer, is
considered to be good or efficient.
Transportation cost in that channel.
Commission charges and market margins received by the
intermediaries, such as trader, commission agent, wholesaler and
retailer.
Financial resources.
The shorter channel with minimum market cost should be selected.
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Marketing channel for rice
Marketing Agencies
(I) Producers
(II) Middlemen
(a) Merchant Middlemen: Wholesalers, Retailers, Commission Agents.
(c) Speculative Middlemen
(d) Processors (Miller)
(e) Facilitative Middlemen: Weigh man, Graders, Transport Agency
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Marketing channel for rice
Types of marketing channels
Institutional marketing channels
Private marketing channels
Institutional Marketing Channels
PRODUCER
PROCURING AGENCY
(FCI, STATE GOVT )
CONSUMER
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RATION SHOP/ FAIR
PRICE SHOP
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MILLER (FCI, STATE
GOVT
DISTRIBUTING AGENCY
(STATE GOVT)
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Marketing channel for rice
Private Marketing Channels
MILLER
PRODUCER
CONSUMER
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WHOLESALER
RETAILER
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Marketing channel for rice
Marketing Costs and Margins
Marketing costs
Marketing costs are the actual expenses incurred in bringing goods
and services from the producer to the consumers.
The marketing costs normally include

Handling charges at local points

Assembling charges

Transport and storage costs

Handling charges by wholesaler and retailer

Expenses on secondary services like financing, risk taking and
market intelligence,

Profit margins taken by different agencies
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Marketing channel for rice
Marketing Margins
Margin refers to the difference between the price paid and
received by a specific marketing agency such as a single retailer, or
by any type of marketing agency, i.e. retailers or wholesalers or by
any combination of marketing agencies in the marketing system as a
whole.
Market fee: It varies from 0.5 percent to 2.0 percent ad valorem.
Commission: The charges are usually made in cash and vary from
market to market
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Marketing channel for rice
Taxes: Different taxes are charged in different markets such as toll
tax, terminal tax, sales tax, octroi etc.
Miscellaneous charges: In addition, some other charges are also
levied.
Marketing Constraints for Rice
Unstable price
Spurt in production and heavy arrivals
Lack of marketing information
Adoption of grading
Inadequate storage facilities in rural areas
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Marketing channel for rice
Transportation facilities at producers’ level
Training of producer
Malpractices in markets
Financial problem
Infra-structure facilities
Superfluous middlemen
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Marketing channel for rice
Forward and futures markets :
Forward contracts are broadly of two types:
(a) Specific delivery contracts
(b) Other than specific delivery contracts.
(a) Specific delivery contracts
Specific delivery contracts are again of two types:
i) Transferable specific delivery contracts (T.S.D.).
ii) Non-transferable specific delivery contracts (NTSD).
(b) Other than specific delivery contracts
Producers: Traders/Exporters, Millers/Consumers
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Marketing channel for rice
To Sum Up
• Paddy is a primary food grain crop of India and occupies about 37
percent of the area under food grains and contributes more than 40
percent of food grains production in the country during 2010 -11.
• More than 50 percent of country’s population depends fully or partially
on rice as it constitutes the main cereal food crop.
• Village traders, Itinerant traders, Wholesale merchants, Commission
agents , Rice millers ,Co-operative organization ,Government
organization are involved in movement and distribution of paddy from the
farm to consumers.
• The private marketing channel for rice is lengthy.
• Handling & assembling charges, transport and storage cost are the
marketing cost.
• Contract marketing for rice ensures the stable price hence it reduces
the risk.
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