Transcript LG 3_Term Paper ppt

TERM PAPER PRESENTATION-
AGRICULTURAL MARKETING
INFRASTRUCTURE AND
POLICY
LG 3
Structure of Presentation
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Agriculture Marketing
The Need
Domestic Market Scenario
Problems
Road Map
Marketing Channels
Components of Marketing Infrastructure
Initiatives
Conclusion
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Agriculture marketing
Assembling
Handling
Storage
Transport
Processing
Wholesaling
Retailing
producer
Consumer
Export
Grading and
sorting
financing
Market information system
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Why?
• Even after 60 years of independence, the
quality, timely and cost effective delivery of
adequate inputs remains a dream
• Farmers are not able to sell their surplus
produce remuneratively
• Plenty of distress sales among farmers
We produce enough to feed the nation. -Dr M. S. Swaminathan
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Marketed surplus
Commodity
Marketed surplus
as % of output
Production in the Surplus quantity in
year 2006-07
2006-07
In (Million Tonnes)
1950-51
2006-07
Rice
30.0
63.5
108.38
56.25
Wheat
30.0
73.3
91.06
48.99
Maize
24.0
51.6
18.14
8.38
pulses
40.6
53.9
17.94
9.67
oilseeds
35.0
79.6
31.31
24.92
Sugarcane
100.0
91.8
360.38
334.79
Cotton
100.0
86.9
NA
14.9
Fruits and
vegetables
90
88.2
205.38
181.14
Source: Report “National Action Plan Towards Doubling of Food Production, Pg 187
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Domestic Market Scenario
 Regulated Markets Lack Need Based Infrastructure.
 Development Confined to
Wholesale Markets.
Markets Remain Out of Development Ambit
Rural
 Current Mandi System Has Multiple Intermediaries and High
Value Loss
 APMC Regulation Prevents Companies From Directly Sourcing
From Farmers
 Fragmented Industry, with no Large Organized Players
 High Wastage between the Farm and the Retailer
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Present Scenario in Value Chain
 Producer’s Share in Consumer’s Retail Price - Mere 40% to
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60% depending on the commodity
Only 25% of Produced Food-grains Utilise Scientific Storage
Less Than 2% of Fruits and Vegetables Production Is
Processed
Post-harvest Losses estimate 10% of Food Grain and 25% of
Fruits and Vegetables Production
The value realization at the farmers end is on an average just
27%, ranging between 8-30% as compared to 60- 65% in
developed countries.
Source- Department of Agriculture and Cooperation, MoA
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Problems
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Competitiveness is lost
Quality assurance is a question
Loss of Value
Export is a problem
No Grading/Standardization
Consumer Dissatisfaction
No Market Intelligence
No Price Discovery
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Paradigm Shift
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Transition to Agri-Business
Market Driven
What Consumer Wants ?
Cutting the value Chain
Private Investment
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Road Map
• Establish Effective Linkages Between Farm Production And
Retail Chains
• Public–Private-Partnership to Promote Professionalism in
Existing Markets
• Stepping-Up of Marketing Credit
• Introduction of Storage Projects
• Link Commodity Exchange with Market Yards for Price and
Risk Management
• Information Technology to Promote Trade/ Market Led
Extension Services
• Facilitate Investments
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Marketing Channels
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Direct to consumer
Through wholesalers and retailers
Through public agencies or cooperatives
Through processors
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Direct marketing–farmers markets
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Apni Mandi in Punjab and Haryana
Rythu bazaars in AP
Uzhavar Santhai in Tamil Nadu
Krushak bazaars in Orissa
Hadaspar vegetable market in pune
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Cooperative marketing
• Sugar cooperatives
• Dairy cooperatives
• Oilseed cooperatives
Farmers organizations in marketing
• Mahagrapes
• Amalsad and Gadat Cooperatives in Gujarat
• HOPCOMS Bangalore
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Components of Marketing
Infrastructure
• Functional Infrastructure
• Market user common facilities
• Shortening the Value Chain
– Direct Marketing
– Contract Farming
– E-Trading Infrastructure
• Market extension and market oriented production
planning
• Input Supply
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Functional Infrastructure
• Assembling
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Combine harvesters
Cleaning
Assembling yards
Collection centers
Pre-cooling Chambers
• Grading
– Mechanical graders
– Color sorters
• Standardisation
• Quality Certification
– Establishing a Quality Lab
– Accredited Certified agency
Infrastructure
– On-Farm Quality Testing
Infrastructure ( Sugarcane
Quality Testing for timely
harvesting and Maximum
Sucrose Content)
– Grapes Certification
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• Labeling
– Bar coding
• Packaging
– Pack houses
– Packing material
manufacturing as
part of the
integrated project
• Retailing & wholesaling
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Food world
Nilgiris
Namdharis in Delhi
Reliance Fresh
ITC- Choupal Sagar
• Value addition
– Decortication of
Groundnut
– Waxing of Kinnows
– Curing of Honey
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Market user common facilities
 Market yards
 Platforms
for loading/ assembling
auctioning of the produce etc
 Modern auction Systems
 Weighing and Mechanical Equipment
and
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Shortening the Value Chain
 Infrastructure
for Direct marketing from
producers to consumers/ processing units/
bulk buyers etc
 Infrastructure for supporting Contract farming
arrangements between processing/ trading
units and farm producers
 Infrastructure for E-Trading, market extension
and market oriented production planning.
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Scope of Infrastructure Projects
• Infrastructure for supply of production inputs and
need based services to farmers
– Fertilizer storage units
– Feed storage units
– Marketing Intelligence
• Mobile infrastructure for post-harvest operations
• Market extension and market oriented production
planning
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Features of Scheme
Credit Linked Back-ended Subsidy on Capital Investment for
 Setting up of General or Commodity Specific Infrastructure for Marketing
of Agricultural Commodities; and
 Strengthening and Modernization of Existing Agricultural Markets,
Wholesale, Rural Periodic or in Tribal Areas
Players
 Individuals,
Farmers, Consumers, NGOs, APMC, Corporations,
Cooperatives and Marketing Boards in the Entire Country.
 State Projects Assisted by NABARD/NCDC for Modernization of Existing
Markets Subject to States allowing
 Competitive Markets in Private Sector
 Direct Marketing and Contract Farming
 Rationalize levy of Market Fee
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Initiatives
• Ministry of Agriculture- terminal markets for perishable goods
based on European model- Kolkata and Chandigarh. Rabo
Bank estimates- terminal markets would increase price
realization for the farmer from 27% to 50% while price for
consumers would come down by 15-20% and wastage in the
value chain would come down from 22% to 5%.
• Ministry of Food Processing is supporting concept of Mega
Parks (we already have 60-70). Investments to the tune of Rs.
400-500 crore per park is planned for development of this
infrastructure
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• Rural Hub/ agri business centres- ITC, Tatas, and
Mahindras
• Risk management covered by the commodity
exchanges like NCDX and MCX who are also setting
up spot markets. The spot market set up by MCX in
collaboration with NDDB at Bangalore is a good
beginning.
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Conclusion
• Greater investments in infrastructure to improve the
overall performance of agriculture sector
• Reduce the huge wastages
• Provide direct access to markets by the farmers
• Increased focus on post harvest management
infrastructure including refrigerated vans and cold
storage units, etc. Retail of food items is a great
business and many large industrial houses are
making a foray into the same.
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• Extension Services are extremely importantprovided by KVKs, Universities and State
Governments. Good agriculture practices adopted in
field level needs to be in line with market demand.
The extension services also need to be integrated
with other services like off take of procurement and
input supplies.
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