April-June,2002

Vol. XLV. No. 1

I.S.S.N.-0002-1555

 

AGRICULTURAL  

MARKETING

 

 

 

A National Level Quarterly Journal

on Agricultural Marketing

 

 

 

Directorate of Marketing & Inspection

Ministry of Agriculture

(Deptt. Of Agriculture & Cooperation)

Government of India

 

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INVESTMENT OPPORTUNITY IN STORAGE INFRASTRUCTURE

 

GRAMEEN BHANDRAN YOJANA

(SPONSORED BY MINISTRY OF AGRICULTURE, GOVERNMENT OF INDIA)

 

A COMMERCIAL PROGRAMME FOR CREATION OF COUNTRY WIDE NETWORK OF RURAL GODOWNS FOR SCIENTIFIC STORAGE OF AGRICULTURAL COMMODITIES, PROCESSED FARM PRODUCE, FARM INPUTS ETC.

 

·                     INCENTIVES OFFERED :

 

0              LONG TERM FROM BANKS TOWARDS CAPITAL COST OF PROJECT

 

0              CREDIT LINKED BACK-ENDED SUBSIDY @ 25 PER CENT OF THE CAPITAL COST OF EACH PROJECT

 

0              HIGHER SUBSIDY @ 33.33 PER CENT FOR NE STATES, HILLY AREAS ABOVE 1000 MTS MSL AND FOR        

                ENTREPRENEURS BELONGING TO SC/ST

 

0              BANK FACILITY OF PLEDGE FINANCING ON STOCKS AT LOWER RATES OF INTEREST

 

·                     PERSONS ELIGIBLE :

 

0              INDIVIDUAL, FARMERS, PARTNERSHIP/PROPRIETARY FIRMS

 

0              COMPANIES, CORPORATIONS, COOPERATIVES

 

0              AGRICULTURAL MARKETING COMMITTEES, MARKETING BOARDS

 

0              AGRO-PROCESSING UNITS

 

·                     LOCATION & SIZE

 

0              ANY PLACE OUTSIDE THE LIMITS OF MUNICIPAL CORPORATION AREA

 

0              ANY SIZE SUBJECT TO A MINIMUM CAPACITY OF 100 MT

 

·                     SIMPLIFIED PROCEDURE :

 

0             AUTOMATIC RELEASE OF SUBSIDY THROUGH FINANCING BANKS IN TWO INSTALLMENTS Viz.

                       (i) SANCTION OF BANK LOAN and (ii) COMPLETION  OF PROJECT

 

·                     PROGRAM TARGET :

 

0              NEW STORAGE CAPACITY OF 18.50 LAKH TONNES BY MARCH, 31, 2003

0              MODERNIZATION OF COOPERATIVE GODOWNS 1.50 LAKH TONNES

 

OPERATIONAL GUIDELINES OF THE SCHEME CAN BE OBTAINED FROM ANY COMMERCIAL BANK/NABARD AND ITS REGIONAL OFFICES/NCDC AND THE DIRECTORATE OF MARKETING AND INSPECTION, FARIDABAD OR ANY OF ITS BRANCH OFFICES IN STATE CAPITALS OR AT THE WEBSITE agmarknet.nic.in OR BY E-MAIL REQUEST TO dm@fbd.nic.in

 

BUILDING INFRASTRUCTURE FOR FARMERS’ PROSPERITY

 

 

Vol.XLV-No. 1                                                                                                                       ISSN.002-1555

PAMA-116,VOL-XLV,No.-I

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                          APRIL-JUNE, 2002                                                                                                                        500

 

AGRICULTURAL MARKETING

 

 

 

ANY ARTICLE PUBLISHED IN THIS JOURNAL CAN BE REPRODUCED PROVIDED DUE ACKNOWLEDGEMENT IS MADE TO THE SOURCE.  THE VIEWS EXPRESSED IN THE ARTICLE ARE THOSE OF THE AUTHORS AND NOT NECESSARILY OF THE DIRECTORATE OF MARKETING & INSPECTION AND THE GOVERNMENT OF INDIA.

READERS MAY SEND POPULAR ARTICLES OF TOPICAL INTEREST IN  HINDI AND ENGLISH TO THE EDITOR, AGRICULTURAL MARKETING, DIRECTORATE OF MARKETING & INSPECTION, NEW C.G.O. BUILDING, N.H. IV. FARIDABAD-121001.

 

 

 

 

 

-         P.K. AGARWAL**

1.0       Agricultural Export and Sanitary Standards.

 

Agriculture plays a central role in the economies of developing countries, accounts for a large share of gross domestic products (GDP), accounts for a large proportion of the total population; and represents a major source of foreign exchange (see Annexure-I).  The potential for food export is enhanced by the 1994 GATT agreement on agriculture, but sanitary and phyto-sanitary standards pose a potential constraint to expanded trade.  The new Agreement on Sanitary and Phyto-sanitary (SPS) Measures as part of the GATT Agreement 1994 came into force with the establishment of the World Trade Organization on 1 January, 1995.  The SPS Agreement prevails over the GATT Agreement 1994.   The aim of the Agreement is to protect and improve the current human health, animal health, and phyto-sanitary situation of all member countries and protect the members from arbitrary or unjustifiable discrimination due to different sanitary and phyto-sanitary standards.

 

1.1       The SPS standards commonly applied by Governments as they affect imports are (i) Import Ban (Total/Partial); (ii) Technical Specifications (Process Standards/Product standards/Technical standards); and (iii) Information Requirements (Labeling Requirements/Control on Voluntary Claims).  Import bans are generally  applied when there is a significant and acute risk about a hazard.  Technical specifications are most widely applied measures and permit import subject to compliance with pre-determined specifications. Information requirements permit imports provided they are appropriately labeled.

 

1.2       As trade participation grows with reduced trade barriers and development, a country’s ability to meet and apply sanitary and phyto-sanitary standards become more important for market access and domestic consumers.  Applying such standards means building effective systems to control or eradicate plant and animal diseases and to ensure the safety of exported and imported food products.

 

1.3       Sanitary standards are particularly important for fresh food items, such as meat products, seafood, fruits, and vegetables.  Exports of these products account for half of the value of all food exports from developing countries in the 1990s.  Seafood is the single largest fresh food category in developing country exports, and is especially important in South Asia and sub-Saharan Africa.  There are other categories of fresh food exports, which are growing rapidly in low-income countries, and are important in many regions of the world. (see Chart below).

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* Paper presented in the International Seminar on “Challenges to smallholders’ sector towards globalization” from 12-19 

   May 2002 at Kualalumpur.

** Jt. Secretary (Marketing) and Agril. Marketing Adviser to the Govt. of India, Dte. of Marketing and Inspection,

    Deptt. Of Agriculture & Cooperation, Govt. of India, New Delhi.

 

 

1.4       Fresh food products are subjected to strict sanitary measures.  First, they are shipped and consumed in fresh form, so handling at all points of the food chain influences food safety and quality.  Manufactured or processed food products have more widely established and recognized standards, and may not deteriorate during shipping and handling.  Second, standards in developed country markets are based on sanitation and good manufacturing practices.  Meeting such standards required greater initial investments in quality control and sanitation in developing countries.  Third, fresh¹ commodities are subject to increasing scrutiny are regulation in developed economies as food safety hazards are better understood and more often traced to their sources.  Taken together, these concerns pose challenges for expanding food exports from developing countries.

 

2.0       SPS Measures and Developing Countries.

 

In a case study commissioned by FAO in 1999 in selected Afro-Asian countries to review national experience with the implementation of the Uruguay Round (UR) Agreement on Agriculture (AoA), the experiences with regard to implementation of SPS/TBT Agreements are found to be as follows.  First, the SPS/TBT Agreements were considered as positive developments for safeguarding the interests of small trading countries without much retaliatory clout.  Second, the key problem was the wide gap in the ability to meet international standards between the developing and developed countries, which cannot be narrowed in the short run, no least because it requires much investments.  This state of affairs will continue to limit their export trade.  Third, for obvious reasons, traditional agricultural exporters gave much more prominence to these Agreements (Brazil and Thailand among the selective centers).  Fourth, several instances of both favourable and unfavourable experiences were reported in the case studies, in particular those of Brazil, Egypt, Jamaica, Pakistan and Thailand.  Fifth, some of the problem encountered by these countries were lack of mutual recognition of inspections and standards (with several large importing countries often asking for “sameness” in the process rather than “equivalence”) and “trade harassment”, where the Agreements did not provide clear guidelines.  Finally, all studies were critical of the fact that the promised technical an financial assistance had so far not been forthcoming *.

 

 

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¹ Research Study commissioned by DFID on trade -- Impact of Sanitary and Phytosanitary Measures on Developing Countries.

 

2.1       In the study, the chart below indicated the proportion of countries that responded to the survey that had been prevented from exporting agricultural and food products to the EU in the last three years due to SPS requirements.  The products for which SPS requirements had been a particular problem were meat/meat products, fish/fish products and fruit and vegetable/fruit and vegetable products.  In many cases where SPS requirements had not impeded trade, for example dairy products, the countries concerned did not currently produce sufficient volumes of the product to export to the EU.

 

 

Figure 4.  Number of developing countries for which exports of agricultural and food products to the EU have been prevented as a direct result of SPS requirements in the last three years.

 

 

 

2.2       A major problem faced by developing countries is access to the resources required to comply with SPS standards in developed countries.  These include information on SPS standards themselves, scientific and technical expertise, appropriate technologies, skilled labour, general finance etc.  Supply chains tend to be longer and more fragmented than in developed countries and, as a result, the cost of establishing systems of traceability and supplied quality assurance can be prohibitive, in particular for small producers.  In certain cases the SPS standards of develop countries are not compatible with the production systems employed in developing countries.  Logistics can represent a major barrier to products which otherwise might have met all necessary SPS measures.   Access to the actual information on SPS requirements in foreign markets can be a problem, or can cause significant delays and confusion.  Insufficient ability on the part of developing countries to (i) assess implications of developed countries SPS requirements following notification, (ii) participate effectively in dispute settlement procedures, (iii) demonstrate that domestic SPS measures are equivalent to developed country requirements, (iv) undertake risk assessment of SPS requirements, (v) attend SPS Committee and international standards organisation meeting, (vi) assess the scientific justification of developed country SPS requirements are other important constraints to the participation of developing countries in the SPS Agreement (see Annexure-II).

 

3.0       Farm to Table Approach in Food Safety

 

3.1       Increasingly  farm to table approaches are being adopted in developed world.  Such approaches address hazards that are introduced at various points in the food chain or are difficult to measure.  While the concept of controlling hazards throughout the system originated in the private sector, it is increasingly being used as a standards by the public sector.  Hazard Analysis and Critical Control Points (HACCP) methodology is increasingly being implemented world-wide to improve food safety and reduce the incidence of foodborne illness.  The HACCP system seeks to incorporate animal/plant health and food safety controls into the growing and processing of foods (i.e. preventing failure) rather than focusing on testing of the end-product.  (see Annexure-III &IV).  An advantage of the HACCP approach is to focus resources on the most important control points, which can minimize resources used to improve safety.  An additional benefit is that responsibility can be identified at various segments along with process.  Thus problems at the farm can be separated from problems at the plant level, at the processing level, and distribution level.  However, implementation of full HACCP evaluation may be costly and our clients may lack the institutional capacity or finances to do so.

 

3.2       The manner in which the developed countries, specially the EU countries are coming out with new SPS measures at regular intervals, demands a situation of constant shifting of goal-posts for developing countries.  Once a SPS requirement is complied with, a new requirement is introduced and by the time the second one is met with, a third one is created.  This creates difficulties in continuation of trade because of the intervening gaps between introduction of a regulation and its compliance.  The EU as a SPS measure is contemplating to introduce official controls at the national and EU levels with the ability to trace products through the while food supply chain as a key issue.  In case, this procedure is introduced, it will be a major challenge to exports from developing countries because of lack of mechanism within these countries to trace and track products through their supply chain.

 

4.0       India’s Agri-Business Interests and SPS Status.

 

4.1       Agriculture accounts for close to 20% of India’s total export basket.  Agricultural exports in rupee terms in 1998-99 were of the order of more than Rs. 30,000 crores.  The break up of these in terms of major product groups is as follows :

 

Break-up of India Agri-business Export.

Marine products	14.3%	Coffee	5.6%
Oil Meals and Caster oil	8.5%	Spices	5.3%
Tea	7.4%	Cashew	5.3%
Basmati Rice	6.1%	Tobacco	2.5%
		Others	19.6%

 

4.2       Geographically, India’s exports are all round the world.  Marine products are mainly exported to Japan, followed by EU and USA.  Castor oil, tea, coffee, cashew and basmati rice are mainly exported to EU.  Spices are exported to EU, US and the middle east countries.  There is, therefore, a heavy reliance on the developed country markets.  A number of East-European countries which, presently, do not have many SPS barrier will soon be governed by the EU regulations and are likely to pose market access problems governed by SPS measures.  It would be necessary for India to comply with various SPS restrictions currently being imposed by importing countries and possible SPS restrictions it might face in the years to come.  There is now a need to frame standards for manufacturing/production units, products including additives and contaminants, packaging, storage as well as transportation.  Presently, there is not infrastructure for regular monitoring of contaminants, additives, hygiene, pesticide residues, etc., either for the domestic market, which would cover, imported products or for the purposes of exports.

 

4.3       Insofar as the domestic market is concerned, while people are aware that quantitative restrictions have been phased out, the possibility of surge in imports is not ruled out.  In so far as agricultural products are concerned, India could anticipate possibility of import of animal based products (meat, poultry, dairy), fresh fruits, plating material, dried fruits, canned and bottled fruit and vegetables including frozen products, certain value-added sea food items, honey, sugar, cereal products and other convenience and packaged food items.  In most of the items, India does not have any SPS measures to monitor imports which have a direct bearing on the domestic industries and market.  Whatever standards and inspection procedures have been stated have all been framed quite a few years ago,  keeping the then existing domestic production facilities in mind.    The Bureau of Indian Standards and the Ministry of Agriculture frame the standards.  Organisations like APEDA, MPEDA, Spices Board have taken the initiative to frame standards with a view to comply with the importing countries’ requirements so that the exports can be sustained.   Some of these standards have either been notified under the EIC Act or under the AGMARK Act.  Still there are many products for which there are no standards and inspection procedures, either for exports or for imports or for the domestic market. Moreover, there is no organisation to monitor contaminants, additives, hygiene, packaging, pesticide residues, etc. in imported food products.  India need to address this issue as early as possible.

 

5.0       Role of Public Sector in Implementation of SPS Measures

 

5.1       Plant and animal health problems are often external to the decision making process of individual producers, creating a free rider situation. That is, an individual producer may take steps to eliminate a plant or animal health problem, but cannot do so completely without the cooperation of other producers.  This can create a public good problem and the underproduction of animal or plant health.  The public sector has, therefore, to play a significant role in the development implementation and enforcement of animal and plant health and food safety standards and regulations, coordination with international organizations on harmonization of standards and regulations, surveillance of foodborne diseases, consumer education, training, extension, and research.  The public sector clearly has a responsibility to intervener in cases where export opportunities for many smallholders’ are threatened and the benefit of the intervention greatly exceed the costs.

 

5.2       The developing countries need to build strong institutions to ensure food safety, animal and plant health.  This includes inspection, surveillance, certification, laboratory, and public information systems.  Countries need to develop their institutional capacity to diagnose pests and diseases, approve entry of products and animals, conduct surveillance of pests and diseases, undertake risk assessments, conduct emergency actions, establish and maintain pest and disease-free (or low prevalence) areas; and to establish and enforce food standards for domestic and imported products, among other functions.  As such their institutions have the appropriate legal authorities, technical capability, efficient operations, information system, and funding mechanisms, among other requirements.

 

5.3       National surveillance programs for animal diseases, plant pests and diseases , and food borne illnesses are key components of national agricultural health and food safety systems.  They also play a vital role in international disease surveillance and control efforts.  Many countries that lack this type of surveillance are faced with continual disease problems associated with the smuggling of animals and plants across borders.  Further countries with large numbers of small producers may find it more difficult to conduct surveillance.

 

5.4       Ensuring animal/plant health and food safety purely for the export market requires considerable investments in human and institutional capacity building, and needs to be justified by increased exports.  Such investments may focus on developing processes or standards that will be recognized as equivalent to those in the importing countries.  The private sector may undertake such investments for specific products, but this often requires some public capacity to provide services.  When one firm or industry tries to improve safety to meet export market requirements, the costs will be high without basic public investments in sanitation or public institutions to certify safety.*

 

5.5       Efforts of developing countries to strengthen internal institutional capacity have to be characterized by : (1) greater participation of the private sector; (2) heightened awareness about emerging international food safety and agricultural health events and concerns; (3) increased attention to domestic and international consumer requirements; (4) greater focus on the entire process from production to consumption; and (5) increased efforts to incorporate good agricultural practices (GAP) and hazard analysis and critical control points (HACCP).

 

5.6       The legal framework plays an important role in addressing market failures by defining responsibility for agricultural health and food safety.  As a food systems develops, this responsibility shifts upstream away from the consumer towards the food processor and food producer.  Establishing liability for animal and plant health and food safety will help to create incentives for private actions as an economy develops.  An effective animal and plant health and food safety system requires a framework of science based regulations and standards.  Developing countries will have to strengthen their legislation and standards affecting the production, distribution and processing of foods.  This includes regulation of inputs that affect animal, plant and human health.

 

 

 

 

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* Cato J.C. and Dos Santos, C.A.L. 1999 “ Costs Upgrade the Bangladesh Frozen Shrimp Processing Sector to Adequate Technical and Sanitary Standards” in The Economics of HACCP, Eagan Press, forthcoming.

 

 

6.0       Regional Cooperation to solving Problems associated with SPS measures.

 

There are a number of initiatives required within the forum of developing countries to address the problems arising due to SPS requirements.  Efforts are required to enhance the capability to comply with the SPS requirements of developed countries.  These might include improved access to scientific and technical expertise and development of domestic SPS control systems that are effective and appropriate to local circumstances.  Effectively targeted and appropriate technical assistance and greater regional cooperation between developing countries are likely to be important elements of these initiatives.  Regional cooperation can facilitate (i) active participation of developing countries in the SPS Committee and international standards organisations through collective action, sharing the responsibility to attend meetings etc; (ii) sharing of information and scientific and technical expertise on SPS matters; (iii) to better assess the implications for new SPS measures in developed countries, to demonstrate that the measures they apply are equivalent to developed country requirements, and to justify through risk assessment their own SPS requirements; (iv) development of effective system of SPS control in developing countries that best meet local needs and priorities; (v) effective conduit for technical assistance in cases where problems/issues are common to countries in particular regions.

 

7.0       Domestic Market Reforms

 

7.1       Liberalization of world trade in agriculture has opened opportunities to the farm sector to access markets of agricultural commodities world-wide.  However, to actualize the new market access opportunities for the benefit of smallholders, there is a need to strengthen internal agricultural marketing system, encompassing all areas from production to post- harvest management, quality standards, processing, storage, transport and warehousing.  Second generation reforms have to be brought in agriculture sector to remove all barriers, whether legal or policy induced, which introduce inefficiencies and monopoly rents in the functioning of agricultural markets and to promote and institutional framework for private sector participation.  The heart of second generation reforms in agriculture sector lies in ‘market place’.

 

7.2       In India, though at present agricultural production is largely free from controls, the same is not true of marketing and processing of agricultural commodities.  There are restrictions that block free movement of foods in the country, impose stocking limits on private traders and processors, prohibits forward contracts and futures trading in most commodities, keep processing of agricultural commodities still reserved for the small sector and so on.  Under the Marketing legislations, only the provincial Governments are empowered to initiate the process of setting up of markets for agricultural commodities in notified areas.  Existing legal provisions do not permit processing industries to buy directly from the farmers, except through the notified markets where intermediaries take away a sizable share from the price of the produce.  Processed foods derived from agricultural commodities suffer from multiple taxes at various stages starting from the sale after harvest till the sale of final processed products.  This has not only cascading effect on the prices but also sets a barrier to free flow of materials from farm to the factory and ultimately to the consumers.   All these controls are now widely recognized as going against marketing and processing efficiencies.

 

7.3       The other area of importance is the need to substantially enhance investment in agriculture sector by motivating private and cooperative sectors to invest in marketing infrastructure, primarily in the area of markets, grading and standardization, storage, post-harvest handling, processing, transport and cold chain.  A system of negotiable warehouse receipts need to be devised and expanded and a scheme of certification of warehouses initiated in the country so that not only the quantity but also quality of the produce can be certified and the banks enabled to treat these receipts as acceptable collaterals for loans.  Credit margin requirements for stocks of agricultural commodities need to be reduced and futures markets introduced in all agricultural commodities.

 

7.4       The competitiveness of Indian agriculture has to be enhanced to realize new market access initiatives.  In this process compliance with international quality including hygienic and safety standards will become increasingly essential.  There is, therefore, an urgent need to adopt internationally recognized quality management systems and establish a credible system of accredited laboratories for quality certification.  Grading, sorting and packaging facilities need to be established in all markets in the country to not only increase the farmers income, but also to help in marketing of agricultural products in domestic as well as international markets.

 

8.0       Sensitizing Farmers on the Requirement of SPS

 

8.1       Agricultural extension services to farmers in India have so far been in the domain of Government agencies, focusing essentially on production and productivity enhancement related activities.   In the liberalized trade regime, focus of extension has to shift on promotion of appropriate agricultural technologies and agro-management practices to respond to diversifying market demands and export opportunities.  In addition to promotion of grading and standardization, the farmers have to be made aware of the requirements of sanitation and hygiene at all stages right from the primary production during preparation, processing and cleaning, application of pesticides, packaging, transport, distribution etc. for improving their marketability in large markets.  Under total quality management, HACCP is recognized as a tool to quality production of agricultural products.  Good agricultural practices envisaged in the HACCP have to be widely disseminated in the entire food chain right from primary production to processing, cleaning, storage, grading and distribution for consumption.  Preventive approach to safety of agricultural commodities has to be made popular amongst farming community.

 

8.2       So far as agricultural extension has been considered the monopoly of the public sector.   However, in the changing scenario there is growing recognition that public extension itself cannot provide market related services to farmers.  Private extension services, therefore, has to be supported.  Farmers have increasingly begun to perceive marketing rather than production as the major constraint to enhancing farm incomes.  With major thrust of extension agencies on production techniques, marketing extension so far has not received the attention it deserves.  This assumes greater significance in the light of the new international trading regime under the WTO and the export opportunities being opened up.  The multi-agency extension service will need to address these issues through strengthening capacity of the public agency, supporting private sector in marketing extension and making extensive use of media and IT in information and technology dissemination.  Marketing extension so far a peripheral issue in the extension scenario will need to be brought center-stage.  Indeed, production will now need to be significantly dictated by market requirements.

 

8.3       The Ministry of Agriculture, Government of India has recently launched a unique programme to take improved methods of farming to each and every farmer across the country. This programme aims to tap the expertise available in the large pool of Agriculture Graduates to set up Agriclinic or Agribusiness center and offer professional extension services to innumerable farmers.  Committed to this programme, the Government is now also providing start-up training to graduates in Agriculture, or any subject allied to Agriculture like Horticulture, Sericulture, Veterinary Sciences, Forestry, Dairy, Poultry Farming, Fisheries, etc.  Those completing the training can apply for special start-up loans for the venture.

 

8.4       Agriclinics and Agribusiness Centres would provide paid services for enhancement of agricultural production and income of farmers.  These centers would advise farmers on crop selection, best farm practices, post-harvest value-added options, key agricultural information (including Internet-based weather forecast), price trends, market news, risk mitigation and crop insurance, credit and input access, as well as critical sanitary and phyto-sanitary considerations, which the farmers  have to keep in mind.

 

8.5       Farmers’ Cooperatives can be an important vehicle for the dissemination of market related information to a large number of small farmers.  Though farmers’ cooperatives were very active in the 1960s and 1970s, but Government interference in their working saw their popularity dwindle among small holders greatly.  Yet in this era of liberalization, farmers’ Cooperatives hold the key to their playing an active role in new markets.  In India cooperatives have been playing an important role in the agricultural and rural economy.  They are engaged in several economic activities such as disbursement of credit, distribution of agricultural inputs like seeds, fertilizers, agro-chemicals, arranging storage, processing and marketing of farm produce.  Cooperatives have enabled farmers in getting good quality inputs at a reasonable price as well as in getting remunerative returns for their farm produce when marketed through cooperatives.  The cooperative agro-processing units add value to their precious farm produce such as milk, sugarcane, cotton, fruits and vegetable and thus facilitate better returns.  The cooperative sector in India is one of the largest in the world with 528 thousand societies of various types with a membership of 228 millions and working capital of Rs. 2856 billions as on 31.03.2001.  Almost 100 percent villages are covered under the cooperative fold and about 67 percent of the rural household are the members of the cooperative institutions.

 

8.6       Government extension services can effectively utilize the existing framework of farmers’ cooperatives through their federations in promoting SPS requirements in relation to modern markets.  Promotion of nationally and internationally accepted standards of grading and standardization, packaging and labeling, storage and warehouses and sanitary and phyto-sanitary measures and quality certification in farm sector will also enable trade and processing sector to undertake large scale agricultural marketing operations in domestic markets.  Once the farm produce is standardized and labeled backed by reputed quality certification, it can be directly offered for sale in national and international markets.  For this purpose, training and education modules will have to be prepared for reaching the region specific farmers in vernacular languages to create and ambience of good marketing practices in the country.

 

 

 

ANNEXURE – I

 

Indicators of Importance of Agriculture in the Economy

(Percentage Shares in 1995-97)

 

 

Country	Share of agriculture in GDP	Share of population in agriculture	Share of agricultural produce in total merchandise exports.
Bangladesh	30.0	59.6	3.4
Botswana	3.4	45.3	5.0
Brazil	14.0	18.7	29.9
Egypt	16.0	39.3	13.8
Guyana	n.a.	19.3	41.0
India	27.0	56.8	16.5
Jamaica	8.0	22.2	21.0
Kenya	29.0	77.1	54.5
Morocco	20.0	40.3	17.9
Pakistan	26.0	52.6	13.4
Peru	7.0	32.0	9.4
Senegal	18.0	75.0	10.3
Sri Lanka	22.0	47.5	20.8
Thailand	11.0	52.0	14.1
Developing countries	26.3	50.4	27.3
Developed countries	3.0	8.7	8.3

 

 

 

 

Annexure – II

 

Summary of problems in meeting SPS requirements identified in case studies.

 

Nature of problem	Countries affected	Products affected	Notes
Access to compliance resources.	India Zimbabwe   Vietnam Ghana	Meat Meat General General General	Technical expertise lacking Poor abattoir facilities Lack of resources Lack of trained personnel and laboratory facilities.
Compliance period	India     Zimbabwe Vietnam	Shrimps     General General General	Delays in adaptation of competent authority to EU requirements. Periods too short EU takes time to inspect Periods too short.
Response by own government	Ghana       Zimbabwe Kenya   Cameroon	Fish       General Fish   General	Time taken to get Ghana Standards Board approval : slow response of own government to EU changes (and to ban).   Slow response of Competent Authority following ban. Demise of state extension service.
Nature of marketing chain.	Zimbabwe       Ghana   India     Ethiopia            Cameroon	Beef       Fish   Milk   Fish General     Coffee     Coffee	Traceability required-huge problem for small-holders; capital investment required, reliability problems. Artisanal methods-wooden boats, lack of ice. Hand-milking; proving TB and Brucellosis free.   Poor packaging and handling facilities; long distances to ports from production areas. Small-holder production; sun-dried-unripe product; no specialist drying. New system of payment does not encourage orderly marketing.
Production methods	Bolivia     India     Ghana   Vietnam Ethiopia Kenya Cameroon   The Gambia	Brazil nuts     General   Milk Fish   Poultry Coffee Fish Coffee   Groundnut	Traditional growing and harvesting techniques; transportation delays. EU takes little notice of local conditions. Hand-milking. Artisanal methods of catching and marketing.     Catching and filleting methods. Humidity and rancidity; lack of scale. New aflatoxin levels will be hard to meet.
Logistical problems	Kenya     Ghana     Ethiopia Cameroon	Horticultural products     Fish     General Palm oil	Small producers-lack of airfreight capacity and bargaining power. Infrastructural rigidities and lack of cold storage; lack of airfreight capacity Port and other facilities. Long-term contracts expected by US and European buyers.
Access to information	Zimbabwe   India   Ghana   Kenya	Flowers; beef; fresh produce General   Tuna   Fish	Well established trade-customer requirements paramount. Difficult to get full information on SPS requirements. Stringent standards and inspections from UK buyers.
Awareness	India Zimbabwe	General General	Problems for small businesses to get information.
Internal regulatory structure	Egypt     India       Ethiopia   Vietnam Zimbabwe	General     General   Shrimp   General   General General	Poor Competent Authority; many agencies responsible for SPS matters. Diversity of responsibility for SPS matters. Poor Competent Authority/poor inspection system. Small team responsibility for SPS matters.

 

 

 

 

Annexure – III

 

Potential Hazards to Human Health in the Food system.

 

Type of Hazard	Nature of Hazard	Where it occurs in system.
Antibiotic drugs	Residues can pose chronic risk to human health.  Use can promote antibiotic resistance, which threatens animal and human health.	Used as additive in feeds Used to treat animal infections.
Microbial pathogens	Can cause acute illness in humans or animals.  Long term sequellae in humans.	Some live in gastrointestinal systems of animals and humans, others in the environment; can be introduced at any point in food system.
Pesticides	Improper use can cause chronic or acute illness or death in farm workers.  Residues in food or water can cause chronic or acute human illness.	Applied in production, processing of distribution.
Mycotoxins	Can cause chronic illness in humans.	Occur naturally on plants and in animal products when in feed if stored under conditions that permit fungal growth.
Parasitic Diseases	Can cause acute or chronic illness in humans.	Live in animals, water, or soil.
Heavy Metals or Toxic Waste	Can cause acute or chronic illness in humans.	Enter through soil, water, or food that is contaminated.

 

 

 

 

ANNEXURE – IV

 

Responsibilities on Food Safety*

 

Production Farm	Transport of animals and Agricultural Product	Slaughter House, Packing House, First Distributor	Transport of Products.	Industrial Process	Retailers, Food Services.
Hygiene of facilities	Cleaning	Hygiene of establishments	Cleaning Vehicles	Hygiene of establishments.	Hygiene of establishments.
Hygiene of personnel	Disinfection	Hygiene of personnel	Cooling	Hygiene of personnel	Hygiene of personnel.
Use of water	-	Ante and post-mortem inspection and hygiene handling	Hygiene of personnel	Hygienic handling of products	Hygienic handling of products.
Sewage contamination	-	Hygienic handling of products	Do.	Do.	Do.
Control of use of agricultural pesticides	-	Monitoring of agro-chemical residues.	-	Microbiological monitoring	Labeling.
Control of use of veterinary pesticide, antibiotics, hormones.	-	Monitoring of residues of antibiotics, hormones, etc.     Microbiological monitoring Labeling.	-	Labeling	-

 

*Source : Dr. Kevin D. Walker, Director, Agricultural Health, HCA/HQ.

Prepared for World Bank Rural Week Conference : Political Dimensions of Food Safety. Trade and Rural Growth, March 26, 1999.

 

Acknowledgement

1. World Bank : An Issue Paper on ‘Animal and Plant and Food Safety.
2. Research Study commissioned by DFID on trade-Impact of Sanitary and Phytosanitary Measures of Developing Countries.
3. Proceedings of Conference on Rural Poverty, Poverty Research Unit, Sussex.

 

Economic Aspects of Flower Marketing in Srirangam, Trichirapalli, Tamil Nadu.

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-M. PERUMAL*

 

India’s main advantage is the availability of natural resources and cheap labour force.  They substantially reduce the overall cost of production.  In any agri-enterprise more particularly floriculture used for aesthetic purposes rather than food value, quality is the bottom line.  Acceptance of flowers and the floricultural products in the world market has established our quality.  An important point to consider is that we had a head start of serial years.  Most of these countries do not have the same trade restrictions like import duty as we have.

 

Floricultural was practiced only on small farms but now a few large ones have been set up.  The estimated area under flowers is 6,50,000 hectares, the major states being Karnataka, Tamil Nadu, West Bengal, Andhra Pradesh and Maharashtra.  It must, however, be mentioned that in view of small size of flower farms often the correct area is not reported.

 

Traditional flowers, such as marigold, jasmine, chrysanthemum, china aster, cross and tuberose, usually marketed loose, occupy nearly two thirds of the area, the rest being under contemporary flowers such as rose gladiolus, carnation, tuberose and orchids used in bouquets and arrangements.  Production is estimated to be nearly three lakh tonnes of flower and over 500 million cut flowers-rose chrysanthemum and tuberose are used in

loose farm and also with stem.

 

Export Oriented Units

 

Setting up of export oriented units in the field has emerged a viable commercial enterprises.  Nearly 75 such projects covering an area of 150 hectares have been set up around Pune, Bangalore, Delhi and Hyderabad with technical support from collaborators mainly from Holland and Israel.  Most of these units have identified rose as their products, though some units are for production of orchid, anthurium, carnation and gladiolus.

 

Marketing of flower is still disorganized.  They are brought to wholesale markets in major cities but are not packed scientifically during transportation.  Post-Harvest management for domestic markets is virtually a unheard of.   For export markets, the units for their for pre-cooling, cold storage and refrigerated transportation.

 

Wholesale flower markets and even retail shops in cities exist in open yards.  In some places there is no overhead cover to protect them from adverse weather conditions.  The affects the life of produce.  In most of the wholesale and retail market outlets, there is no cold storage facility available.  This leads to spoilage.

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* S.G. Lecturer in Economics, Urumu Dhanalakshmi College, Trichirapalli-19, Tamil nadu.

 

In view of the unorganized set up, it is not possible to correctly access the markets size for flowers.  A study conducted in 1998 estimated the trade to be worth Rs. 205 crores a year.  Considering the significant growth of this industry since then, which is evidenced by mushrooming of flower shop all over the country and increased purchase of flowers as gift items, one can put the current trade at several times the earlier estimate.   A recent study of the Delhi Market alone put the value of flowers traded wholesale at Rs. 50 crores a year.

 

Export oriented floriculture has picked up recently.  The earnings have increased from Rs. 14.4 crores in 1991-92 to Rs.201.1 crores in 1998-99.  Dried flowers and plants have a two-third share of these markets, followed by the cut flowers (17 percent) and live plants (13 percent).

 

Cut flower exports have increased 25 times to Rs. 10 crores a year.  Major markets for Indian floriculture products are Europe (Holland, Germany and the U.K.).  U.S. Gulf countries and Japan.  Cut flower exports to Australia has also begun.

 

Study Area

 

In Tamil Nadu, flower production and marketing acquired importance because of the different uses of flowers.  Flower business today is vital.  There are more than 200 families engaged in flower business in Srirangam alone.

 

The demand for flower is going up not for traditional use also for other purposes.  The wheels of flower marketing are now rotating with increased speed because new uses of flowers have been invented recently, so marketing aspects of flowers should be paid immediate attention.. 

 

In Trichy District, flower cultivation is being done by large number of farmers in more than 5,000 families of 50.  The main flower cultivation centers in Trichy District are Ettarai, Koppu and Srirangam.

 

Srirangam is not only famous for Asia’s biggest Raja Gopuram but also important Vaiashnavate temple Sri Renganathar in the area or alluvial soil found in and around Srirangam.  Flowers are largely grown with the help of the Holy River Cauvery.

 

The research focuses marketing methods of flower growers and their problems.  In general, it is an elaborate analysis of flower marketing and functional efficiency among different channels of marketing.

 

Besides regular supplies from the above town flowers are coming to Srirangam market from Salem, Thanjavur, Thiruvarur etc.

 

 

I.          Objectives

 

The present study is intended to find out the following objectives :

 

1. To find out the marketing channels of flower marketing in Srirangam.

 

2. To study the channel-wise distribution of sample farmers for flowers.

 

3. To bring out the channel-wise price spread of flower marketing in the studies area.

 

4. To explain the marketing margin and trader’s profit to flower market.

 

II.        Hypothesis

 

1. Marginal farmers of flower cultivation was higher than any other farmer category.

 

2. Producers-Local consumers channel is the most profitable in producers share in this trade.

 

3. Trader’s profit in the channel of producers-local consumers is absolutely zero in this trade.

 

4. Price of flowers and supply is inversely related.

 

III.       Significance

 

Flower is considered as a pious symbol.  It occupies a pride position in the Indian heritage.  The cultivation aspects of flowers is only for earning profit in quicker period of time.  This study is an immense importance in the sense of that it projects the marketing problems of flower growers of Srirangam area.  The comparatively high cost marketing of flower coupled with higher price pushed up the market prices making it difficult for large segments of the populations.  It is well known that a significant portion of the price of flowers in the studies area comprises of marketing costs and marketing costs and marketing margin.  It is definitely a good attempt by the researcher to project the various marketing costs of flowers and the need for Government’s intervention in this trade.

 

IV        Limitations

 

Like all researches, this research also faces some constrains.  This study is confined only in the Srirangam area alone.  Even though this area is a vast in geographical coverage this study exclusively deals with area where flower are cultivated.  Most of the growers in this area are illiterate and they have provided the information about cost and revenue which are only in their memory.  They have not maintained proper records.  Any how on the basis of the data this research is undertaken.  Hence the result of the experiments not at all affected too much.

 

Channel I

 

Producer-Wholesalers-Retailers-Consumers.

 

Producers Share

 

The total volume of goods handled by the producers for marketing.

 

Traders Profit

 

Profit is the residual portion of deducting total expenses from total revenue.

 

Marketing Costs.

 

Different costs like transportation, loading, unloading, keeping hands, storage, packaging materials and plucking of flowers cost etc.

 

Functional Analysis

 

Functional analysis is the one in which it expresses the percentage of marketing margin and percentage of consumers rupees among different marketing costs in a particular period of time.

 

Marketing Efficiency.

 

Marketing efficiency is the ratio of net value of goods marketed i.e. volume of goods marketed at minimum cost of marketing.

 

Analysis and Discussion

 

In general, flower sale is carried on through auction in every flower market and Srirangam market is not an exception to this.  Hundreds of flower growers from various place bring flowers to this market for sale.  In the market there will be a number of traders who are otherwise called as commission agents.  In Srirangam flower markets there are many traders.  Actually they are the ones who conduct the auction.  For conducting the auction they take 12% commission from the sale proceeds of each producer.  In this market the producer cannot directly sell this flower to the retailer but only through these trader.  Another secret is also there, that is the grower cannot sell his flower through any trader as he likes.  On the other hand they should effect the sale through that rrade to whom they are the customers.  The traders keep their customer under their grip by lending them a lump sum before beginning of the season for the cultivation of the flowers.  Through there are many traders in Srirangam market only five are controlling the whole market and the others are there only for name sake.  As these five traders are more well off, they are able to have more customers as stated by the methods.

 

A large number retailer will assemble there.  In Sriangam market around 1,000 retailers take part.  Price for each flower per unit of measurement will be determined by the highest bid in the first sale.   In other words the highest for the flower for that day.  For instance in the case of jasmine sale if the highest price quoted for “Oru Kai” in the beginning the auction is Rs. 4 then that becomes ruling price for the whole session.   Large number of buyer (retailer) attend early hours of the day.  A few producer may bring their flowers late. (After 11 a.m.) to this market.  But at that time there will not be enough number of buyers (retailer).  Since the retailer have to carry the flowers to their residences and get them tied in order (which takes a long time) and take them for selling spot around 3 p.m. to start their evening sale they prefer to buy the flowers in the early session itself, so that they could start their retail sales in time (Peak Shopping Time).  As a result of poor number of buyers to growers who bring flowers late to the market are able to get only low price for their flowers.  From this it is understood that for the same flower two prices are quoted, one during the peak action session and other during 11 a.m. to 1 p.m. generally the price for the late arrivals would be half of the morning price.

 

In and around area of Srirangam is well suited to agriculture are conducive for flower cultivation.   Locally enough flower cultivation is begin under taken as a product of liner-cropping some hereditary flower growers were found in the Trichy District.

 

TABLE-I

 

Number of flowers per kilogram

 

S. No.	Name of flower	In numbers (app.)	K.G.
1	Rose	700	1
2	Jasmine	4000	1
3	Crossandra	10000	1
4	Marigold	1250	1
5	Bachelor’s button	500	1

 

The following Marketing channels have been identified and take into consideration with reference to Srirangam market purposively.

 

Channel-I

Producers, Wholesalers (Srirangam), Retailers (Srirangam)-Consumers.                    

 

Channel-II

Producers-Wholesalers-Retailers-Consumers.

 

Channel-III

Producers-Local Consumers.

 

By marketing margin or spread on a particular product is meant “the difference what the farmer gets for it and what the final consumers pays.  This margin includes all the cost of moving the point of production to the point of consumption.  Thus the farmer receives what the consumer pays for the product after the various costs of marketing are taken into out.  This residual amount expressed as a percentage of the retail food rupee is referred to as the farmer’s share.

 

Channel-wise Distribution of Sample.

Farmers for Flowers

 

Table-II

Channel	Marginal Farmer	Small Farmer	Semi-medium Farmer	Medium Farmer	Large Farmer	Total
I	5	4	4	3	-	16
II	10	3	3	4	5	25
III	3	3	2	1	-	25
IV	18	10	9	8	5	66

 

It is evident from the table I, that 32 percent, 50 percent and 18 per cent of the sample farmers have performed their marketing function through channel I, Channel II, and channel III respectively.  Most of the small sized group pf farmers have performed their marketing functionaries via  channel II as channel I and channel III are based on local consumption.  As big farmers are engaged with larger volume of business, channel-I is being preferred by them.  It can be revealed from the table that as number of farmers in channel II is the highest, it can be concluded that as number of farmers vary directly with the length of the channel.

 

Channel-wise price-Spread of flower in the sample area (measured as percentage of the consumer’s rupee)

 

Price spread of flower in different channel is ensured and analysed.  (This is shown in Table-III).

 

Table-III

 

Marketing channel	Producer’s share	Marketing Margin	Marketing Cost	Traders Profit	Consumer’s Rupee.
Channel-I	69.74	30.26	10.22	20.04	100.00
Channel-II	45.19	54.81	26.76	28.05	100.00
Channel-III	90.19	9.09	-	-	100.00

 

In channel-I, the producer’s share is 69.74 percent of the consumer’s rupee.  Marketing margin, marketing cost and trader’s profit are 30.26 percent, 10.22 percent and 20.04 per cent of the consumer’s rupee respectively

 

In channel-II, producers share is 45.19 percent of the consumers rupee.  Marketing margin and marketing cost and trader’s profit are 54.81 percent, 26.76 percent and 28.05 percent of the consumer’s rupee respectively.

 

In channel-III producers’ share and marketing margin are 90.19 percent and 0.09 percent of the consumer’s rupee respectively.  Since in this channel, there is direct sale from producers to local consumers, there is no trader’s profit and marketing margin.  It includes only marketing cost which is incurred by the. producers.

 

From this study we may analyze the functional analysis of the marketing margin of channel-I per 100 flower at Srirangam market is shown.  The functional analysis show that trader’s profit comprises of 66.23 per cent of the marketing margin.  The margin for transportation is less than that of trader’s profit it is 18.54 per cent of the market margin.  Spoilage accounts 5.3 percent, loading and unloading accounts 2.65 percent, 3.97 percent of marketing margin account as cost of helping hands.  Costs of packing and storage are 1.99 percent and 1.32 percent to the marketing margin respectively.

 

TABLE-IV

Functional Analysis of the marketing margin per 100 number of flower at Srirangam wholesale and retail market.

 

S. No.	Service	Cost (Rs.)	% of the marketing Margin	% of the consumer’s Rupee.
1	Transport	7.00	18.54	5.61
2.	Loading & Unloading	1.00	2.56	0.80
3	Helping hands	1.00	2.65	0.80
4	Storage	0.50	1.32	0.40
5	Trader’s Profit	25.00	66.23	20.85
6	Packaging Materials	0.75	1.99	0.60
7	Spoilage	2.00	5.30	1.60
	Total	37.75	100.00	31.46

 

In the Table-III the functional analysis of the marketing margin of channel-I per 100 flower at Srirangam market is shown.  The functional analysis show that trader’s profit comprises of 66.23 percent of the marketing margin.  The margin for transportation is less than that of trader’s profit it is 18.54 percent of the marketing margin.  Spoilage accounts 5.30 percent, loading and unloading accounts 2.65 percent, 3.97 percent of marketing margin account as cost of helping hands.  Costs of packing and storage are 1.99 percent and 1.32 percent of the marketing margin respectively.

Functional analysis of channel-II is shown in Table-IV.  Transport cost comprise of 18.6 percent of the marketing margin.   Loading and unloading is 1.42 percent cost of packing, accounts 1.66 percent.  Storage accounts 0.47 percent.  Spoilage accounts 5.92 percent.  5.69 percent of the marketing margin accounts as rent and other charges.  Cost of handling in the market comprises of 12.80 percent and 51.18 percent of the marketing margin.  It is evident from the Table-V that index of marketing efficiency is observed to be more in Channel-I i.e. when marketing functions is performed within the village.  This may be due to higher producer’s share and lower cost of marketing in channel-I.  It is noted from the Table-V that marketing efficiency decreases with the increase in the number of intermediaries.

 

Channel-wise Marketing Efficiency.

 

Index for Flower Table-V

 

Marketing Channel	Value of goods (Consumer’s price)	Total marketing cost 1 (Rs.)	Index of Marketing efficiency.
1	124.75	12.75	8.7843
2.	192.50	51.50	2.7379
3.	110.00	10.00	10.00

 

From the above study it may be concluded that flower is a common and popular item consumed at a high rate in winter season in our country.  On completion of careful study on marketing aspects of flower, it is found that number of trader farmers directly varies with the length of the channel. 

 

1.      Marketing of flowers in Srirangam is the profitable business because in and around Srirangam, a larger community of farmers are engaged in producing as well as selling the same.

 

2.      Rose, jasmine, Marigold, Crossandra and Delhi Kanagambaram are the common varieties which are highly grown in the studied area.

 

3.      There are 3 channels of marketing followed by the farmers in this area.

 

4.      The sample number of lower growers are 50 among the sample sizes, it is found that majority are the group of margin farmer i.e. 18.

 

5.      The reason attributed for the fact is that the flower farming requires only a lesser amount of capital.  Hence, their work force on agriculture also adds up to secure more profit.

 

Suggestions

 

To improve the overall marketing activities of flower, keeping in mind, both the producers and consumers at the same time, the following suggestions may be accorded :-

 

1.      Government should take the immediate initiatives in the field of production and marketing activities can be carried out under the supervision of the appropriate agencies.

 

2.      Regulated market to some extent can do the needful to redress the grievances of producers as well as of consumers.

 

3.      Cold storage facilities can play an important role to store the surplus produce in the glut period and to supply those in the lean season.

 

4.      Installation of processing industry should be done immediately in order to serve the processes products to the consumers throughout the year at a cheaper rate.  Cheap processing techniques should be evolved to minimize the cost of processing.

 

5.      Well connected network transport facilities at least throughout the state should be developed for efficient marketing system. 

 

6.      Producers of flowers should be encouraged with and timely supply of inputs and credit for better performance in the yield of commodity.

 

7.      The Government should come forward to announce the minimum pricing policy so as to adjust the price variation and also to save from them in huge loss.

 

Bibliography

 

1.      Amarchand D. and Vardharajan B.,  An Introduction to Marketing, Vikas Publishing House Pvt. Ltd., New Delhi, 1979.

 

2.      Davar R.S. Modern marketing management in the Indian context progressive corporation private Limited, Bombay, 1977.

 

3.      Davar R.S. Davar, S.R. and Davar N.R., Salesmanship and advertising, Progressive corporation Private Limited, Madras, 1979.

 

4.      Giles G.B. Marketing,  The English Language Book Society, London, 1978.

 

5.      Kotler Pilip, Markeitng Management Analysis, and control, Prentice Hall of India Private Ltd., New Delhi, 1979.

 

6.      Shelekar S.a. Modern Marketing Principles and Practices Himalaya Publishing House Bombay, 1981.

 

7.      Shinha J. Cc.Principles of Marketing and Salesmanship, Chand & Co., New Delhi, 1977.

 

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Marketing Intervention in Shimla District

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-G.H. DHANKAR*

  LALLAN RAI.

 

Introduction

 

Shimla District lies between the longitude 77 45 55 E to 79 04 20 and latitude 30 22 40 N to 33 12 40 N and is bounded by Mandi and Kullu districts in the North, Kinnore in the east, the state of Uttar Pradesh in the south, Sirmore district in the south and by Solan district in the west.  From agricultural point of view, the district comprises (i) valley and basin areas; (ii) mid hills and (iii) high hills.  It occupies a place of pride in horticulture in the country.  During the last 20 years, there has been a silent but noticeable revolution in the sphere of horticulture in the district.  The gentle slopes of hills have underdone a good deal of modification due to terraced farming.  Soil texture varies from light sandy to heavy clay and in the deep valleys and basis, it is generally sandy and sandy loam.  It is the biggest apple growing district in the state and has earned a name for

Propagating a rich collection of many delicious varieties of apple.  Apples are grown on 83% of horticultural land in the district.  The main commercial varieties grown are Royal Delicious, Rich-a-Red, Red Delicious and Golden Delicious.  The other fruits viz. pears, peaches, apricots, plums, etc. are also grown.

 

Marketing System and Agencies

 

The present study concentrates on marketing interventions for apple and off season vegetables which are main source of earnings for the growers.  In apples, a number of market intermediaries are involved in transfer of produce from the growers/orchardists to the final consumer.  The picking of apple is commonly done manually and fruit is placed in a padded basket locally known as ‘Kilta’ to avoid bruises.  Generally, the picking maturity of fruit is judged by change of colour, size of fruit, feel of hand and growers’ experience.  The picked fruits are transported from orchards to the place where grading and packing is done.  From ‘Kilta’, each fruit is taken out, graded and placed in different lots.

 

3.         Grading is of two types : (a) quality grading; and (b) size grading.  The colour of fruit freedom from injuries, disease, spots, blemishness are the important factors which classify the fruit into three quality grades as A,B,C,A and B grade apples are marketed for dessert purpose, whereas C grade is sold for processing purposes.  After the fruit is graded according to quality, it is then graded according to the size.  The grading parameters with regard to various size grades of Himachal apple are :

 

 

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*Dy. Agricultural Marketing Adviser and Senior Marketing Officer respectively, Directorate of Marketing & Inspection, Head Office, NH. IV.,  Faridabad – 121001.

 

 

S. No.	Name of grade	Minimum diameter of fruit at any point of the base.
1.	Super large (super)	81  mm
2.	Extra large (special)	75 mm
3.	Large (fancy)	69 mm
4.	Medium (selected)	63 mm
5.	Small (commercial)	57 mm
6.	Extra small (janta)	51 mm
7.	Pittoo	45 mm

 

Size grading is based on judgment through fingers of grader/producer.  Individual fruit is then wrapped in a paper and put in the packing box.   Each fruit gets handled 5 to 6 times before it is ready for dispatch to consuming markets.  The packing of fruit is mostly done in CFB cartons of 17-20 Kg.  These boxes are supplied through different agencies like Directorate of Horticulture, HPMC, HIMFED, etc. at subsidized rates.  In some cases, wooden boxes of same capacity are also used which are imported from the neighboring states of Punjab/Haryana owing to ban on use of timber wood in the state.

 

4.         The local consumption of apple is estimated at less than 2% of the production.  The balance produce is marketed outside the state.  The various modes of transportation used from orchards to road heads are mule, human labour, rope ways and tractor/jeep, whereas, trucks are the primary mode of transporting apples to terminal markets.  The average transportation cost of apple from farm to road head (per standard box) for mule, human labour, ropeways and tractor/ jeep is Rs. 5/-, 3/-, 2/- and 1/- respectively.  Similarly, from road head to market (per standards box) cost varies from Rs. 10 to 40/- depending on the distance.  For Delhi, Bombay, Calcutta, Madras, Chandigarh and Jallandhar, it is respectively Rs. 15.00, 30.00, 35.00, 40.00, 10.00 and 12.00.  With a view to protect from exploitation by transporters to growers, during the season, the State Government prescribes transport cost per box from various producing pockets to Delhi which is a major outlet for apples.  The rates prescribed for Shimla district are indicates at Annexure-I.

 

5.         On an average, an apple grower does not market apple enough to justify hiring of a truck on his own.  The produce is, therefore,, transported along with the produce of other farmers by arranging trucks through a common pool.  There are forwarding agencies who receive farmers produce and forward to designated commission agent in Delhi through truck transport.  Forwarding agent charges separately for his services.  In peak apple season, there is Government intervention in pooling and arranging of trucks in time at pre-decided freight charges, to make timely transport available for quick dispatch of produce in the consuming markets.  Transportation through railways is cheap, but availability is insignificant.  In most of the producing areas, there are no link roads properly connected with the road heads.  This causes delay in transport of fruits, adversely affecting the quality.

 

6.         Distribution of apples is done through a number of market  in channels.  These are :

 

a)      Producer – Pre=harvest contractor;

 

b)      Producer-Forwarding Agent-Commission Agents-Wholesaler-Retailer-Consumer;

 

c)      Producer-Commission Agent/Wholesaler-Retailer-Consumer;

 

d)      Producer-HPMC-Wholesaler-Retailer-Consumer;

 

e)      Producer-HPMC=Processing Unit-HPMC retailing of juice;

 

f)        Producer-Consumer.

 

The channel ‘c’ is common in distribution of fruits followed by channel ‘b’ and ‘e’ respectively.  The channel ‘a’ is being replaced by ‘b’ and ‘c’ progressively.  For procurement of culled fruits, Directorate of Horticulture and HPMC have opened seasonal centers in the apple producing belts and these fruits are procured for processing purposes from the producers directly under Market Intervention Scheme.  Losses in the scheme are shared by Government.

 

7.         As many as 75% of the growers market their produce themselves.  The balance 25% growers give contract of their orchards to pre-harvest contractors.  The contractors evaluate crop on the basis of fruit setting, its quality and estimated production and pay the amount in 2 to 3 installments to the growers.  In this system, growers do not take care of orchards as they do, when they maintain orchards themselves.

 

8.         Delhi is main market for apple where more than 80% of produce is dispatched from the district.  In the beginning of the season, most of the commission agents who are wholesalers also, approach orchardists and advance loan to ensure the sale of fruit through them.  The growers receive their sale proceeds after deduction of the money advanced with other market charges.

 

9.         Himachal Pradesh Horticultural Produce Marketing Corporation (HPMC) is the major government agency involved in apple marketing.  It has created 10 packing/grading houses, 5 cold storages and 3 processing plants in the State.  Its role today, however, is restricted to procure the processing grade fruits for its processing plants and market the fruit juices, jams and squashes, etc.  It has cold storages, located in terminal markets of Delhi, Mumbai and Chennai.  It has also one at Parvanu.  The fruit processing plants are located out of Shimla district.  When HPMC finds it difficult to process all the processing grade fruit procured, it supplied the same to markets for consumption in fresh form.  This amounts to spoiling of market for quality fruits as consumers tend to buy cheap.  Good quality prices crashed when HPMC took such steps distorting the market price mechanism.  Although the Corporation has experience in post-harvest management of fruits it probably lacks in business acumen.  There has been gradual decrease in its activities and increase in losses.  The capacity utilization of grading and packing houses is abnormally low.  HPMC attributes the dismal low utilization to removal of free transport facilities available earlier to the growers through it.  Moreover, habits of proper grading and packing to suit buyers market is yet to be inculcated in the system as a whole.

 

10.       The HPMC’s main mandate is to provide proper marketing facilities in apple marketing and develop modern and latest technology for grading, packing, storage and processing of fruit and vegetables.  The Corporation has done better in the beginning by setting up of grading and packing houses, cold storages etc. but subsequently got ousted from active marketing.  During a visit to one of the grading and packing centers and cold storages complex at Jarol (Tikri) in Narkanda block, it was gathered that the producers are not bringing apples in sufficient quantity in the season due to scattered, hilly and distant producing regions which add more cost towards transportation from the producing area.  Besides, bringing produce from producing area to grading and packing center is time consuming, one has to wait for his turn to get produce graded having reached the place.  Apple marketing season being very short, the supplies are immediately made to the terminal market to get better returns and avoid losses.  The cold storage visited is not fully utilized and HPMC has diverted its utilization to mushroom cultivation by undertaking suitable modifications in it.  Presently, Corporation is engaged in supply of CFB catrons at subsidized rates to the growers and operation for price support scheme for ‘c’ grade apples as parastal agency.

 

11.       The Directorate of Horticulture is responsible for the development of horticulture in the state,.  It runs a number of schemes like supply of good quality plant material, insecticides, pesticides, tools and kits, latest spray, equipments and implementation of market intervention scheme.  It also undertakes supply of CFB cartons to the orchardists.  The Directorate facilitates running of ropeways at different locations depending upon the requirements of the growers in the season.  It maintains liaison with other institutions like HPMC, HIMFED, etc. to coordinate integrate efforts of public sector organisations in marketing of horticultural produce.

 

12.       Directorate of Agriculture supplies quality vegetable seeds and insecticides, pesticides, fertilizers, etc. to the growers.  There is no independent agency looking after proper marketing of vegetables produced in the district.  The vegetable trade is purely in the hands of private sector.  The produce is dispatched to markets of neighbouring states by the producers themselves.  The ills prevalent in apple marketing exist in marketing of vegetables also.  But, being available in off-season.  Vegetables fetch good returns to producers.  Delhi is again major outlet for the produce.  In Shimla district though there are six regulated markets, only three are functional.  Dispatches of vegetables made to Azadpur market are commonly through forwarding agents who arrange trucks and collect the vegetables from different road heads.  The consignment is delivered to the designated commission agent at Delhi.  There are also direct dispatches to local market at Dhalli (Shimla) especially of peas, cabbage and cauliflower.  Vegetables are auctioned in Dhalli regulated market through making different lots at the auction platform.  The buyers at Dhalli send the goods purchased to Delhi and other nearby towns.   The producers adjoining Uttar Pradesh in Chopal block normally take produce to Dehradun, Haldwani markets which absorb produce at fairly better price during peak period.  There is one Subji Mandi in Shimla near the Mall, where six to seven trucks of vegetables arrive daily.  There are thirty two commission agents functioning, having there own offices/shops in the market.  The place is severely congested and inhospitable to the market users, APMC, Shimla has no control on the marketing practices although it collect market fee regularly from this place.  The commission agents maintain their godowns at distant places to store onion and potato received from outside the State.  Fresh vegetables generally arrive from neighbouring States, apart from the local arrivals of off-season vegetables.

 

13.       For realization of better returns from the vegetable crops, right stage of their picking is equally important as in the case of apple.  In Shimla, with replacement of cereal crops by off-season vegetables to raise the income level of the farmers.  Theog, Kuandaghat, Pachhat areas have taken up cultivation of peas, cauliflower, cabbage and tomato, using high yielding varieties.  Hardly, 3 to 5 per cent is retained and rest of the production is marketed.  Picking of peas, cauliflower, cabbage, tomato is generally done by hand based on experience of pickers.  Improper handling and picking lead to wastage of vegetables in transit and deterioration in quality, adversely affecting the net cash returns to the grower.  Grading and packing according to specific quality to the grower.  Grading and packing according to specific quality standards in vegetables to enhance their marketability is not scientific.  Educating producers about reducing marketing costs, avoiding wastage through proper grading is yet to be undertaken.  A large number of growers do not appreciate the significance of proper post-harvest handling even now.  Packing is done in traditional gunny bags/baskets by putting leafy waste material as padding at the top of the container at the time of sticking bag/baskets covered with gunny sheets.

 

Marketing costs and Margins

 

14.       The cost of marketing of a box of apples or a bag of vegetables (cabbage, cauliflower, peas, tomato, etc.) from the producing areas to the wholesale market can broadly be broken into : (i) Cost of grading; (ii) cost of packing; (iii) Loading, unloading charges at road-heads; (iv) Marketing charges at wholesale market including labour; (v) Transportation cost; (vi) Commission of the various functionaries; (vii) Taxes, etc.   Some of these costs are borne by the producers; some by the wholesalers and some by retailers.  Average marketing cost per standard box of apple and per standard box/bag of vegetables from producing area to Azadpur market, Delhi borne by producer and net price received by him are as indicated below :

 

 

 

Producer’s net price, marketing cost borne and share in consumer’s rupee in apple and vegetables (upto Azadpur, Delhi)

 

Marketing channel : Producer-Forwarding/Commission agent (WS)-Retailer-Consumer

 

Variety :           (i)         apple-Royal Delicious.

                        (ii)        vegetables- FAO quality.

 

(Rs. Box/Bag)

Sl No.	Particulars	Apple	Cauliflower	Cabbage	Pea	Potato	Tomato
1	Gross price received by the grower.	530.00	300.00	250.00	500.00	200.00	60.00
2	Market expenses borne by the grower	176.40	83.00	95.00	103.00	122.00	34.60
3	Net price received by the grower	353.60	217.00	155.00	497.00	78.00	25.40
4	Producer’s share in consumer’s price	51.40%	57.87%	44.29%	62.13%	31.20%	31.75%

 

Hidden Costs

 

15.       It is pertinent to note that there are hidden costs borne by the prodders/sellers.  They include excess charges on transportation, commission, loading/unloading, payment of sale process in cash on the spot, entry gate fee in the market and, over and above,  the state border authorities.  Shimla apples after leaving the state passes through states of Haryana and NCT of Delhi before entering the market.  The truckers who often negotiate with check posts recover the amount from producers.  Whatever and wherever any excess is charges or paid is debited to producer-sellers account.  Following table provide a rough idea at conservative estimates about the hidden costs at various stages in respect of a sample case calculated for an individual box/bag of apple and cabbage respectively.

 

 

Marketing cost per box/bag of Apple/Cabbage borne by the producer upto Azadput, Delhi.

 

Sl. No.	Items	Apple Marketing cost/box (20 kg.) Normal	With hidden cost conservative estimates	Cabbage Marketing cost/bag (50Kg) Normal	With hidden cost conservative estimates.
1	Cost of Grading/packing	12.00	12.00	5.00	5.00
2	Cost of Box (CFB)	45.00	45.00	15.00	15.00
3	Transportation cost upto loading point in the orchard	2.00	2.00	-	-
4	Forwarding agents commission	1.00	1.00	2.00	2.00
5	Transportation cost upto road head	10.00	10.00	15.00	15.00
6	Loading and Chaukidari	2.00	2.00	2.00	3.00
7	Transportation cost upto Azadpur Market	20.00	20.00	28.00	28.00
8	Octoroi	2.00	2.00	2.00	2.00
9	Market fee at Parwanu	2.00	2.00	1.00	2.00
10	Dalla/Unloading	1.00	2.00	1.00	2.00
11	Commission @ 6%	30.00	40.00	15.00	20.00
12	Gate pass at APMC	5.00	5.00	5.00	5.00
13	Misc. Expenditure (Telephone, Postal Dharmada, etc.)	-	4.00	-	-
	Total Cost	132.00	147.00	92.00	102.00

 

16.       A cursory-glance at the table above reveals high incidence of marketing cost borne by the producer.  It is the high on account of packaging, transport and market charges.  As fruit and vegetables are highly perishable and the duration of marketing season short, there is pressure on demand for transport and supply of packaging material.  The producer has no option except to pay high rates on this account.  He can not even complaint for fear of losing the service and deterioration of produce.  Despite restriction of the market-charges by the Agricultural Produce Market Committee under its Act, the incidence of higher charges on account of loading/unloading, dalls, commission, and other expenses like-telephone, postal, dharmada, etc. are common for the producers.  An estimate of such hidden cost paid to different market functionaries per box of apple and bag of vegetables account to the extent of Rs. 15-20 or even more, compared to what should have normally been paid.  This is only a conservative estimate and the hidden costs may go high at the time of peak marketing period.  The magnitude of the problem can be judged if the difference between “should have been” normal cost and “recovered” actual costs is looked into.   For example, during 1998 season Shimla district alone dispatched 116.38 lakh boxes to Delhi as against a total dispatch of 177.14 lakh boxes from the State.  At a conservative estimates of Rs. 15/- per box as hidden cost a total sum of Rs. 17.46 crores has gone unauthorisedly into pockets of middlemen by robbing the producers.  For the state this figure comes to Rs. 26.57 crores during a year, rather a season.  This amount of hidden cost at such a high level of  Rs. 17.46 crores and Rs. 26.57 crores has been a net drain on income of producers from the district and the state, respectively. Unfortunately this drain has been continuing since several years-rather right from the beginning of apple marketing.

 

17.       Shimla farmers are not free in real sense to sell their produce in different markets due to their credit bondage with the commission agents for years.  They are bound to sell their produce to such fixed/pre-decided buyers without any say with regard to competitive prices or transparency in price formulation or excess cost, leave aside the hidden costs.  They consign their produce to such buyers either through forwarding agents or directly till they settle their advances.  In Azadpur market, ‘Delhi, the prescribed commission rate is 6% for perishables but in practice, it is charged at the rate of 3% i.e., 2% more under some account to compensate the money already given in advance to the growers before fruit setting/sowing of the crop in case of apples and vegetables respectively.  This amounts to hidden interest “Costs” for producers.  Large farmers, who are not under credit obligation of Delhi trade are selling their produce to different markets to get better price.  Institutional credit availability is almost absent.  The lack of credit facilities to the small and marginal farmers force selling to such traders, jeopardizing their economic interests.  Radical changes/improvements in conditions at Delhi would benefit farms more than anything else.

 

18.       The off-season vegetables grown in Shimla district have become high value cash crop for farmers.  Most of them are consigned to the Delhi Market.  Being highly perishable, they require timely and quick transport.  Freshness and its quality are the governing factors for better price realization at the time of their sale.

 

19.       Based on the enquiries from the producers of apple and vegetables an attempt was made to arrive at the total marketing cost borne by different producers-when they market their produce from their producing areas to the terminal market Delhi.  The marketing cost varies from Rs. 132.00 per box in case of apple to Rs. 83/- pr box in case of cauliflower, Rs. 92/- per box in cabbage, Rs. 103/- per box in Pea, Rs. 32.80/- per basket of tomato and Rs. 122/- per bag of potato.  It is observed that major cost goes on account of transport, packaging material and commission paid to commission agents.

 

20.       During the course of discussions with farmers in different production pockets, it was found that most of the farmers were against the subsidy component provided by the Government on various items like packaging material, planting material, pesticides, insecticides, hailnet, etc.  They favoured soft loans to them instead, well in time, so that they can arrange facilities for them without any hindrance.  The general perception of the growers in the area about overcoming their marketing problems lied in :

 

• Provision of link roads from the producing area to the road heads;

 

• Irrigation facilities, especially in vegetables growing areas;

 

• Transport vehicles without anomaly;

 

• Setting up of grading and packing houses in the areas producing 1-2 lakh boxes apple per season;

 

• Ropeways;

 

• Institutional credit facilities;

 

• Setting up of air cool stores at high altitude area where good quality apples are produced;

 

• Market infrastructure with rational market facilities/services including market information with regard to arrivals, stocks, prices, demand in consuming markets for apples and off-season vegetables.

 

• Halting exploitation at Delhi market.

 

Marketing Interventions

 

21.       Different marketing interventions are so integrally related to each other that taking up any of them in isolation would dilute their benefit effect.  The interventions, however, have been classified to facilitate focused attention on specific segment viz.:

 

• Input marketing

 

• Post-harvest management

 

• Marketing linkages

 

• Wholesale markets.

 

I.          Input Marketing

 

22.       Although vital to district’s economy, apple crop is characterized by low productivity, widely fluctuating annual production, low quality of produce, expensive labour and low financial returns per production unit.  The apple varieties grown are same over a century and plainting material-used had made many orchards overaged.  Majority of fruits being of same variety, the pressure of marketing of such fruits comes at a time and the whole operations come to an end within a span of 60-70 days.  In such situation, farmers get trapped into distress sales or difficulties in arranging transport, labour other market charges resulting into high incidence of marketing cost.  Production specialists need to consider gradual change in varietal composition of produce with emphasis on export oriented varieties.  Maturity of fruits differ from one variety to another, which would facilitate, staggered plucking and supplies at different intervals.  Raising different varieties would also facilitate proper pollination and after care.  Similarly, the varieties having different maturity period when grown would facilitate harvesting at different intervals and in turn, would facilitate smooth and profitable supply of fruit and vegetables to the markets considering the prices prevailing.  Suggested interventions are :

 

1. Development of varieties suitable to specific elevation with specific maturity so that the variety which is ideally suited for a specific location with specific maturity could be grown.  This would facilitate staggered harvesting and supplies to the market, avoiding gluts and earning better prices to producers.  Propagation of tissue culture and development of varieties incorporating genetic factors for disease/pest tolerance and high yields.

 

2. Varieties which will propagate early, bearing fruits in 5-6 years as against existing plants taking 15-20 years to bear the fruits are required to be developed and released commercially for cultivation.

 

3. Innovations available on research farms with regard to varietal developments, viz.

 

• Commercial propagation of early/semi dwarf varieties etc.

 

• Disease/pests resistant varieties; and

 

• other productivity related results.

 

need to be popularized through farm demonstrations.  Orchards are required to be rejuvenated by planning innovative varieties.

 

iv.         Farmers, by and large, expressed encountering of spurious fertilizers, insecticides and pesticides.  They strongly favoured credit at concessional rate to facilitate quality purchase of inputs instead of buying them subsidized system commonly implemented for their benefits.

 

v.         Demonstrations on “organic orchard cultivation” to explore extent of possible price advantage to producers.  This will enable to popularise use of chemical fertilizers restricted to soil requirements identified through soil analysis.  Soil testing mechanism on regular basis will have to be provided.  This will ensure check/elimination of large scale agro-ecological degradation of our orchards making them eco-friendly.

 

vi.         Availability of good quality sketchers, knives, small tillers, sprayers, etc. involved in rearing/maintaining orchards.

 

viii.       Provision of availability of good quality seeds to growers in respect of off-season vegetables grown, is a felt need.

 

II.        Post-Harvest Management

 

23.       Education and training to farmers (i) on maturity standards for harvesting.   Use of “Pressure testers” to judge maturity of apple to facilitate packing of fruits with specific level of maturity of apple to facilitate packing of fruits with specific level of maturity for specific destination considering the distance to be traveled by the fruits.  (ii) to assess apple maturity based on “Starch-Iodine Reaction”.  Preparation of iodine solution and comparing the tested fruits with starch chart before dispatching apples to particular destination.

 

24.       Facilities for testing pesticide residue on fruits and necessary certification along with dispatch of consignments to different markets.

 

25.       Regular training to farmers with regard to :

 

• Picking of fruits;
• Handling at orchards;
• Sorting based on size as well as quality;
• Wrapping of fruits;
• Lining inside boxes;
• Use of apple trays;
• Arranging boxes whole transportation to markets etc.

 

26.       Supporting setting up of  grading and Packing Houses based on feasibility in private sector preferable through local fabricators which may be cheap.  For every one lakh production area, one house could be thought of.

 

27.       Provision of ropeways for transportation to collection points for dispatch to market centers.  Standards related to thickness of wire prescribed under “Ropeway Act” pose a bottle-neck in expanding ropeways in linkages.  This needs to be looked into to hasten ropeway linkages.

 

28.       Providing road conductivity for transport trucks.  In the absence of roads, trucks have to carry consignments form interior pockets to dispatch points/dumps in installments which amounts to exorbitant transport costs subsequently soaring marketing cots.

 

29.       In spite of Government intervention in making available trucks at specified rates, the transporters dictate their terms during the season.  Increase in transport cost (unofficial) reduces producers net earning during already subdued market owing to peak arrivals in a short period.  Possibilities of tie-up with transporters in the private sector from outside government pool need to be explored to ease the situation in favour of producers.

 

30.       The concept of setting up cold storage facilities nearer to the producing areas in workable, if a system of marketing credit advance against stored box is available easily.  The construction of small air cool stores at farm or village level may also be considered as there are relatively more economical.  Provision of simple functional warehouses at higher altitude with pledge facilities could also solve storage difficulties considerably.

 

31.       Processing assumes critical importance in the entire gamut of integrating marketing concept.  In order to provide long term stable markets and to deal with post-harvest gluts, the number and efficiency of processing plants already existing in the district needs to be geared up.  State Government may consider concessions in taxes and duties of such products to make them cost-effective and competitive in overseas markets as domestic markets for processed fruit and vegetables is small, HPMC has a positive role here.

 

32.       There is no market intelligence for farmers of any kind.  Producer dispatches faithfully his produce to commission agents in terminal markets and collects his sale proceeds at the rates as given to him.  He has no habit, or any scope to give a thought to prices prevailing in different terminal wholesale markets.  It is essential to provide producers with day today market intelligence with regard to arrivals, prices, market sentiments, supply/demand information, etc. to the growers regularly so that they can think/plan for dispatches considering where favourable market exists for them.

 

33.       Institutional marketing credit is conspicuous by absence.  The producers are predominantly dependent on wholesalers at terminal market who take full advantage of their adversaries.

 

III.       Marketing Linkages

 

34.       Sole Market linkage is Delhi’s Fruit and Vegetables markets, Azadpur, which is ‘Azad’ to continue its atrocious style in apple marketing.  A common characteristic to market low quality, low elevations crop early to get better price spoils the market for high quality, high elevation crop.  Direct forward and backward linkages are badly needed to reduce Delhi’s monopoly and free simple growers from age old marketing atrocities.  An alternate marketing system could alone dilute Azadpur trade’s apple monopoly and create competitive market for simple farmers.  In the absence  of alternate strategies, the marketing of profitable off-season vegetables has also gone the apple-way.  The possible interventions for profitable assured market outlet could be :

 

1. Tie-up arrangements with NDDB for sale of fruit and vegetables through its retail network in the national capital. NDDB is already sourcing off-season peas from the district.

 

2. Marketing tie-up with HOPCOM, Bangalore and other similar organisations especially for apples and off-season vegetables.  FIG(s) and AAC(s) under ATMA may explore entering into MOU for regular bulk supplies.

 

3. Contract marketing-supplies to purchasers on regular basis directly in consumer packs as required by buyers.  This will shorten marking channel and enhance farmers net cash income.  Price risk will also get shared in the process.

 

4. State should talk to trade in nearby important market viz., Chandigarh, Ludhiana, Dehradun, to explore possibilities of diverting more produce for onward distribution shaking Delhi’s transit monopoly.

 

5. Regulation of markets in the district is restricted to collection of market fee and other revenues.  The State Agricultural Marketing Board should be involved in innovating alternative marketing strategies.  As a member of ATMA governing Board it can actively associate in framing marketing strategies for the district.

 

6. Group marketing by FIG(s) joint hiring of transport, post-harvest management can accrue additional net benefits.  Self-help groups, NGO(s) need to be actively involved in marketing.

 

7. To loosen from the financial shackles of Delhi business, creation of rolling fund to meet marketing credit needs could be useful alternative.  Unless growers are free from financial atrocities of Delhi trade they will not be able to think of alternative/innovative marketing.

 

8. Effective marketing inculcating advice on production planning and marketing based on analysis of market trends in the past is need to the hour.  Change in attitude, knowledge, skills and behaviour in respect of marketing of apples and off-season vegetables is essential component of different marketing linkages/strategies.

 

35.       District horticulture office being line department, ATMA can avail its full involvement in training, education and extension in post-harvest handling of apples and off-season vegetables.  It can also play active role in disseminating production technology, R. and D. and aspects related to horticulture development, which is main stay of district’s economy.

 

36.       It may not be out of place of point our her that ATMA needs to be known more to producers.  It needs to be strengthened to achieve effective integration of line department to plough it in input and output marketing fields.  True to its name ATMA should be omnipresent in the district with full vigour.  ATMA members, FAC people, FIG leaders, BTT people should work WITH the growers instead of working FOR them.

 

  

IV.       Wholesale Market Anomalies

 

37.       The State Government needs to take up contentious issues at Azadpur wholesale market with the concerned authorities where the market charges prescribed under regulatory provisions are by and large, followed on paper.  Recovery in excess of prescribed charges is inherent in the system.  And all the atrocities are committed over and above non-transparent transactional methods, compounding farmers woos.  An estimation of hidden costs attempted while endeavoring understanding of ground realities in the district is as presented below :

 

Sl. No.	Name of the Commodity	Unit of package	Marketing costs at normal rates	Marketing cots with hidden costs at conservative estimates (Rs.)	Marketing with hidden costs at liberal estimates (Rs.)
1.	Apple	Rs./Box @ 20 Kgs.	132/-	147/-	158/-
2.	Cabbage	Rs./Bag @ 50 Kgs.	92/-	102/-	118/-
3.	Cauliflower	Rs./Basket @ 75 Kgs.	83/-	102/-	116/-
4.	Pea	Rs./Bag @ 40 Kgs.	103/-	123/-	129/-
5.	Potato	Rs./Bag @ 80 Kgs.	122/-	137/-	148/-
6.	Tomato	Rs./Basket @ 10 Kgs.	32.80	32.80	48.80

 

38.       It is not that those concerned with marketing are ignorant about atrocious marketing environment for apples and off-season vegetables at Delhi.  But everybody feels helpless and remains a silent spectator.  A clear evidence of such helplessness is fund in the recent notification issued by the NCT.  Government of Delhi (Notification No. F8(19)/98 DAM/MR/152 date d13th January, 2000) which stipulates charging of commission at the existing rate 6% from purchasers/buyers and not from the farmers/sellers under the Delhi Agricultural Produce Marketing Regulation act applicable to Azadpur A.P.M.C.  The notification remains to be implemented even 2 years after its issue.  An alternative marketing strategy coupled with credit support, could alone bell the cat for seeking justice to the growers in the district.

 

39.       Considering the liberalized economic climate introduced in the country, development of alternate marketing strategies with full/equal involvement of private sector would be conducive to economic upliftment of growers of the district of Shimla.  The existing legal provisions posing bottlenecks to innovative marketing strategies for the country as a whole may have to be looked into for necessary revision to pave way for new system to take roots in the post WHO scenario in the country.

 

Annexure – I

 

Transport cost from various destinations of Shimla District to Azadpur, Delhi (1998).

 

Sl. No.	Place	17 to 20 Kgs. Transport Cost (Rs.)
1.	Jubbal	24.00
2.	Mashobra } Shimla	13.00
3.	Basantpur } Shimla
4.	Narkanda	18.00
5.	Rampur	24.00
6.	Rohru	27.00
7.	Theog	15.00
8.	Pujarli	29.00
9.	Fagu	14.00
10.	Gumma	18.00
11.	Sainj	18.00
12.	Ratnari	24.00
13.	Kotkhai	20.00
14.	Tikkar	25.00
15.	Maroag	24.00
16.	Kiari	22.00

 

 

 

 

 

 

 

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Estimation of Marketed Surplus Function--a study of Sali Paddy Farmers of Sonitpur District, Assam

 ---------------------------------------------------------------------------------------------------

-P.K. Baruah,*

R.N. Barman**

 

Introduction

 

Theoretically marketed surplus indicates the quantity of the produce which the farmer-producer actually sells in the market, irrespective of his requirements for family consumption, farm needs and other payments.  A number of factors at the farm level affect the actual volume offered for sale in the market.  In this study an attempt has been made to examine the effect of important farm level production and consumption factors on the marketed surplus of Sali paddy in Sonitpur District, Assam.  Among the paddy crops grown in the state and also in the selected district Sali paddy is the major one in terms of acreage and production.  The crop is mainly harvested during November/December and it captures markets from December onwards.  The main objective of the study is to identify the important factors that influence the production and consumption of Sali paddy and to study their impact on the marketed surplus of the crop.

 

Methodology

 

Altogether 8 villages within the radius of 20 km. Surrounding the Tezpur town committee market were selected in such a manner, that at least two villages fall in each direction viz. East, West, North and South of Tezpur town. A list of farmer-sellers of Sali paddy was prepared and on the basis of farm size they were categoriesed as small (upto 2.00 hectares), medium (2.01 to 3.00 hectares) and large (above 3.00 hectares).  Considering the land leasing practices prevalent in the study area, Sali paddy production has been considered to include full production from own land plus half production from rented out and rented in land.  The paddy area and farm size have also been estimated on the basis of such tenurial arrangements. A sample of 20 per cent is selected randomly from each size group.  Thus, a total of 93 farms were selected comprising 38 small, 35 medium and 20 large size.   Relevant information from the respondents were collected for the year 1999-2000 with the help of carefully designed pretested schedules.

 

A number of factors affect either directly or indirectly the volume of both production and consumption of Sali paddy in the area.  On the basis of first hand information, the following equations and functional relationships have been formulated to determine such influencial factors/variables and to study their impact on the marketed surplus of the crop.

 

 

 

------------------------------------------------------------------------------------------------------------

* &** Assistant Professor and Associate Professor, Deptt. Of Agril. Economics & Farm Management, B.N. College of Agriculture (A.A.U.), Biswanath Chariali-784176, Assam.

YLD    =          F (REN, TEN, HVT)

ARE     =          F (SZE, INT)

CON   =          F (FZE)

PRD     =          ARE X YLD

MRS    =          F (PRD, CON, PRP)

 

Where,             YLD    =          Yield of Sali paddy in quintals.

REN    =          Resource endowment of the farm family measured by on-

                        farm and off-farm annual family income in rupees.

TEN     =          Tenurial status of the farmers measured by owned and

                        cultivated Sali paddy  area in hectares.

HVT    =          HYV technology (HYV seeds, fertilizers, chemicals,

                        irrigation costs, etc.)

PRP     =          Average price of Sali paddy prevailing during December

                        to March.

ARE     =          Area of Sali paddy in hectares.

SZE     =          Size of farms in hectares.

INT      =          Intensity of Sali paddy cultivation measured by ARE x 100

                                                                                                    -------

                                                                                                     SZE

CON   =          Farm family consumption of rice (in paddy equivalent) in

                        quintals.

FZE     =          Family size measured in adult equivalent.

PRD     =          Production of Sali paddy in quintals.

MRS    =          Marketed surplus of Sali paddy.

 

In order to avoid the problems arising out of multicollinearity, the following regression equations were formulated after performing tests on the partial correlation coefficients of the variables and working out the zero order correlation coefficients (Heady and Dillon, 1964).

 

Model I.           log MRS_k         =          a_jk +  b_ijk log ARE + b_ijk log YLD – b_ijk log CON.

 

Model II.          log MRS_k         =          a_jk +  b_ijk log SZE + b_ijk log INT + b_ijk log YLD –

                                                            b_ijk log CON.

 

Model III.        log MRS_k         =          a_jk +  b_ijk log ARE + b_ijk log REN + b_ijk log TEN +

                                                            b_ijk log HVT – b_ijk log CON.

 

Model IV         log MRS_k         =          a_jk +  b_ijk log ARE + b_ijk log REN + b_ijk log TEN +

                                                            b_ijk log HVT – b_ijk log FZE.

 

Model V.         log MRS_k         =          a_jk +  b_ijk log PRD + b_ijk log PRP – b_ijk log CON.

 

Where, MRS_k                          =          Marketed surplus of Sali paddy in quintals for K’th

                                                            type of farm (K=1,2 and 3).

 

a_jk                                            =          Intercept in the Jth Model for K’th type of farm

(j = 1,2……………5)

 

b_ijk                                           =          Regression coefficient of the I’th variable in the j’th

                                                            model for the k’th type of farm (I = 1,2,………11).

 

The regression models were fitted to study the marketed surplus of Sali paddy for every size group of farms.  Thus, in total 15 regression equations were derived for estimation.

 

Results and Discussion

 

The estimates of regression equations for small, medium and large size groups of farms are presented in Tables 1 to 3 respectively.  A comparison of the tables, indicate that in model-I yield coefficients were higher than the area coefficients for small and medium size group of farms, but in case of large farms, the area coefficient (1.92416) was higher than the yield coefficient (1.70213).  Thus, it can be said that the response of marketed surplus of Sali paddy to a given percentage change in Sali paddy area is greater than that of paddy yield for large farms.  This was due to the fact that the increase in production in large farms was mainly because of more area coverage rather than increase in productivity.  The family size as a casual variable of paddy consumption exerted negative effect on the marketed surplus of medium and large farms as demonstrated by model IV.   In most cases the small farmers sell their produce to meet some specific cash requirement irrespective of home consumption need as determined by the family size.  This is also true in case of price of the produce.  The small farmers sell their produce irrespective of market prices prevalent on, account of need for hard cash. The studies of Narain (1961), Krishna (1962), Krishnan (1965) and Hariss (1982) also substantiate this finding.   From a perusal of the tables it can simply be stated that a 10 per cent increase in the size of family, other things remaining constant resulted in about 4 per cent decrease in the marketed surplus of Sali paddy for both medium and large size groups of farms.  The market price of Sali paddy (during December to March) significantly influenced the marketed surplus in case of large farms only Model V).  The medium size group of farms though, to some extent price responsive but it was not found to be significant.  The small size groups were not found to be price responsive.  This may be because the large farmers had more marketable surplus and even sufficient storage space and on account of their sound financial condition they did not require to go for distress sale.

 

The size of farm had significant influence on the marketed surplus for all the three categories of farms (Model II).  A 10 per cent increase in farm size, ceteris paribus, would result into about 13 per cent increase in marketed surplus of Sali paddy for small farms, 15 per cent increase for medium farms and 14 per cent increase for large farms.  The HYV technology and the tenurial status were found to have significantly influenced the marketed surplus in case of medium and large farms (Model II and IV).  In case of small farms a 10 per cent increase in the cultivation of owned land, ceteris paribus resulted in about 5 per cent increase in the marketed surplus.  As tenurial status came out as a significant variable having strong correlation with area, so area was not considered for inclusion in models III and IV.  The intensity of Sali paddy cultivation has significantly influenced the marketed surplus in all size groups of farms (Model II).  The regression coefficients were 1.77, 1.84 and 2.12 for small, medium and large farms respectively.  Resource endowment as a variable though was included in the formulation of the models but it failed to fulfill the criteria for inclusion (Norusis, 1986).  Other than the estimated equations in Models III and IV all the equations indicated good fit as the adjusted R values were more than 0.50.

 

Conclusion and policy issues

 

The study indicated that as compared to area the influence of yield on the marketed surplus of Sali paddy was more in small and medium farms.  The picture was totally reverse in case of large farms.  Hence, emphasis should be given to increase yield in large farms.  In the marketing of Sali paddy, only the large farms were found to be price responsive.  Though poor financial condition is the main reason, yet there is need for further analysis to identify the related factors influencing distress sale mostly in case of small farms and to some extent even in case of medium farms.  The farm size ad intensity of paddy cultivation were fund to have significant influence on the marketed surplus of Sali paddy.  These two factors may be treated as important issues for policy making.  The negative influence of family size on the marketed surplus of the crop should act as an eye opener particularly for the medium and large farmers.

 

Notes

 

(1)        Correlation coefficient between a pair of explanatory variables is considered to be high if its value is greater than 0.80.

 

(2)        The criteria for inclusion of a variable are :

 

         i.            The minimum value of 3.84 of the F statistics.

 

       ii.            The probability value of 0.05 associated with F statistics.

 

      iii.            The clearance of both tolerance and minimum tolerance (0.01) tests.

 

The criteria for removal of a variable are :

 

         i.            The minimum F-value (2.71) that a variable must have in order to remain in the equation.

 

       ii.            The maximum probability value of 0.01 associated with F-statistics.

 

 

 

 

References

 

1.      Heady, Earl, O., and J.L. Dillon (1964) : Agricultural Production Functions, Ames Iowa, USA, pp. 97-98.

 

2.      Hariss, Barbara (1982) : “The marketed surplus of paddy in North Arcot District, Tamil Nadu : A micro Level Causal Model”.  Indian Journal of Agriculture Economics, Vol. XXXVII No. 2 (April-June), pp. 145-158.

 

3.      Krishna, Raj (1962) : “A Note n the Elasticity of Marketed Surplus” Indian Journal of Agricultural Economics XVII, No. 3 (July-September), pp. 79-85.

 

4.      Krishnan, T.N. (1965) : “The Marketed Surplus of Foodgrains : Is it Inversely Related to Price?” The Economic Weekly Vol. XVII No. 5,6, & 7 (February), pp. 325-28.

 

5.      Narain, Dharm (1961) : Distribution of the Marketed surplus of Agricultural produce by Size-Level of Holding in India, 1950-51.  Institute of Economic Growth Occasional Paper No. 2, Asia Publishing House, Bombay.

 

6.      Norusis, Marija (1986) : SPSS/PC for the IBM/XT/AT Chicago :SPSS Inc.

 

 

TABLE I

 

Regression coefficients of different models for small size group of  farms

         ------------------------------------------------------------------------------------------------------------

Models

Factors	I	II	III	IV	V
ARE	1.24362* (0.16741)	-	NI	NI	-
YLD	1.63671* (0.23472)	1.33437* (0.30352)	-	-	-
CON	NI	NI	-0.31243* (0.12024)	-	NI
SZE	-	1.32723* (0.21326)	-	-	-
INT	-	1.77495* (0.36684)	-	-	-
REN	-	-	NI	NI	-
TEN	-	-	0.53546* (0.33253)	0.51342* (0.34796)	-
HVT	-	-	NI	NI	-
FZE	-	-	-	NI	-
PRD	-	-	-	-	1.63434* (0.17637)
PRP	-	-	-	-	NI
Constant	-1.24436	-2.74792	-0.25372	-0.84633	-1.31496
Adjusted R2	0.5436	0.5287	0.3889	0.4376	0.5126
F-Value	43.21*	27.96*	32.74*	37.21*	39.34*

 

Figures in parentheses are standard errors.

*indicate significant at 0.01 level.

NI indicate not included in the model due to non-fulfillment of criteria.

 

 

                                                                        TABLE 2

 

Regression coefficients of different models for medium size group of farms

                     ------------------------------------------------------------------------------------------------------------

Models

Factors	I	II	III	IV	V
ARE	1.87492* (0.31324)	-	NI	NI	-
YLD	2.34273* (0.26762)	2.21638* (0.24841)	-	-	-
CON	-123423* (0.31032)	-1.33713* (0.32433)	-0.63421* (0.31021)	-	-
SZE	-	1.52796* (0.53516)	-	-	-
INT	-`	1.84735* (0.36742)	-	-	-
REN	-	-	NI	NI	-
TEN	-	-	0.84723* (0.31542)	0.57432* (0.30462)	-
HVT	-	-	0.70693* (0.1783)	0.76326* (0.21336)	-
FZE	-	-	-	0.40236 (0.13416)	-
PRD	-	-	-	-	1.64836* (0.33427)
PRP	-	-	-	-	0.31266 (0.30126)
Constant	-0.82432	-465217	-0.07896	-0.87462	1.37726
Adjusted R2	0.5436	0.5132	0.31212	0.4531	0.7144
F-Value	31.57*	22.88*	14.39*	32.89*	36.94*

 

Figures in parentheses are standard errors.

*indicate significant at 0.01 level.

NI : indicate not included in the model due to non-fulfillment of criteria.

 

 

 

TABLE 3

 

Regression coefficients of different models for large size group of farms

                   --------------------------------------------------------------------------------------------------------

Models

Factors	I	II	III	IV	V
ARE	1.92416* (0.19786)	-	NI	NI	-
YLD	1.70213* (0.29898)	1.48793* (0.34176)	-	-	-
CON	-0.489612* (0.19894)	-0.76892* (0.244326)	-0.68490* (0.16892)	-	-
SZE	-	1.49784* (0.23712)	-	-	-
INT	-	2.12422* (0.37416)	-	-	-
REN	-	-	NI	NI	-
TEN	-	-	0.91317* (0.34427)	0.72642* (0.32477)	-
HVT	-	-	0.69843* (0.18644)	0.89724* 0.29788)	-
FZE	-	-	-	0.40817* (0.23476)	-
PRD	-	-	-	-	1.92742* (0.48716)
PRP	-	-	-	-	0.79834* (0.36812)
Constant	-59876	-4.97841	-0.38176	-0.69846	-2.14761
Adjusted R2	0.6746	0.6988	0.4821	0.4971	0.8745
F-Value	42.46*	38.42*	29.74*	38.97*	40.77*

 

Figures in parentheses are standard errors.

*indicate significant at 0.01 level.

NI : indicate not included in the model due to non-fulfillment of criteria.

 

 

 

 

-------------------------------------------------------------------------------------------------------------------

 

Micro-level Group Marketing for Fruit & Vegetables--Some Perceptions

     --------------------------------------------------------------------------------------------

-B,K. PATY*

 

In keeping with need for NUTRITIONAL SECURITY besides that for FOOD SECURITY, the emphasis on diversification of agriculture towards horticultural produce is the order of the day.   Accent on production of the horticultural produce calls for parallel efforts for their marketing also.  The traditional marketing system has met with limited success in protecting the interests of the producer and the consumer, the two vital linkages of the marketing channels.  The dominant role played by the middle agencies of the existing system puts them in a position to have the lion’s share of the consumer’s rupee, which is often substantially much more than proportionate to the value addition made by them to the commodities.  Micro-level group marketing, as an instrument of direct marketing has got tremendous potential to address to the desiderata of the traditional marketing system.  This instruments of direct marketing can not only bring economies if scale by ensuring optimum utilization of local resources, but also can go a long way towards reducing the cots and margins in the marketing of the produce.

 

India is the second largest producer of fruits (44 million tonnes) and vegetables (87.5 million tonnes) with unique position in fruits like mango, litchi, banana, pineapple, sapota and grapes etc.  Our share in the world production is about 10.1 per cent in fruits and 14.4 per cent in vegetables.  Horticultural crops cover about 8% of the total area contributing about 20% of the gross agricultural output in the country.  Thus, in view of the importance of fruit & vegetables in the agricultural economy of India, their production and marketing as well deserve the focused attention of all the stakeholders.

 

The existing system of marketing of horticultural produce leaves much to be desired, insofar as the interests of the producer-seller and that of the consumer is concerned.   There is simple scope for bringing reforms in the existing system of marketing and the structure of the market for these commodities, so that remunerative prices can be ensured for the producers and more number of consumers can be catered to by providing the commodities at a reduced price through cost reduction on the marketing count.  The  mechanism of the present system of marketing of horticultural produce is stifled by a number of bottlenecks such as (1) absence of pricing of the commodities commensurate with the quality, (2) lack of cleansing and grading before sale, (3) lack of storage facilities, (4) lack of transparency in transaction methods, (5) absence of standard weights & measures etc.  The peculiar characteristics of fruit and vegetables such as their perishability with high level of post-harvest losses (estimated at 25% to 40%), high fluctuation in the prices, need for proper storage, quick transportation to add place value to the product call for short marketing channels and customized service to the consumers through a responsive marketing system.

------------------------------------------------------------------------------------------------------------

* Marketing Officer, Dte. of Marketing & Inspection, N.H. IV, Faridabad-121001.

 

The present marketing channels put the commission agents and other middle agencies at an advantageous position and the producer’s share in the consumer’s rupee is not sufficient to give them satisfactory return on their investment, inputs and labour.  A study by the Agro Economic Centre, H.P. University, Shimla (1997) is given in the following table :-

 

TABLE-I

 

Producer’s share in consumer’s rupee in apple produced in Himachal Pradesh

 

(Rs./Box of 18 Kg.)

Particulars	Marginal	Small	Medium	Large	All	Shimla	Kullu	Mandi
I. Price levels
(a) Farm gate price	110	111	116	96	110	112	126	97
(b) Wholesale price	192	193	195	175	193	201	198	174
(c) Retailer’s Price	211	213	216	195	211	219	221	194
(d) Consumer’s price	245	247	247	215	241	259	254	214
II. Producer’s share in consumer’s rupee/%	46.1	46.1	47	46	47.7	45.1	45	46.3

 

It is evident from the above table that producer’s share in the consumer’s rupee varied between 45% to 47% only.

 

The study also covered the cost of marketing of apple which is given in Table-II.  A perusal of the Table-II reveals that out of the total marketing cost incurred in the apple crop, the preparation for fruits accounted for 45%, transportation for 32% and share of the market charges and taxes is estimated to be 23%.  Across the districts and farm sizes much difference has not been observed.  In Mandi district the cost involved in transportation of the produce is observed more (34%) as compared to Shimla and Kullu districts.  However, the share of market charges and taxes is observed to be low (21% of total cost).  In the preparation of fruits, the cost of packaging material alone accounted for 72% of the total preparation cost and 33% of the total marketing cost on average firm.  The commission of the commission agents is the major item of market charges and taxes which alone accounted for 80% of all charges and taxes.

TABLE-II

 

Cost of marketing of apple borne by sample Orchardists in Himachal Pradesh

 

(Rs./Box of 18 Kg.)

Particulars	Marginal	Small	Medium	Large	All	Shimla	Kullu	Mandi
A. Packing & Picking
(a) Picking, packing, grading & assembling	10.2	9.7	9.8	10.0	9.9	10.9	8.3	9.7
(b) Packing materials	24.8	25.4	26.7	25.0	25.6	26.7	26.0	24.0
All	35.0	35.1	36.5	35.0	35.4	37.6	34.6	33.7
B. Transportation
(a) Orchard to road head	2.3	1.8	1.7	1.5	1.8	2.6	1.2	1.4
(b) Road head to market	21.9	22.2	21.8	23.0	22.2	21.9	22.0	22.6
(c) Loading & unloading	1.6	1.6	1.3	1.0	1.4	2.0	1.0	1.0
C. Market charges & Taxes
(a) Commission to forwarding agent	1.0	1.0	1.0	1.0	1.0	1.0	1.0	1.0
(b) Commission of commission agent	14.6	14.4	14.2	12.2	14.0	16.1	13.4	12.1
(c) Sales tax	2.0	2.0	2.0	2.0	2.0	2.0	2.0	2.0
(d) Misc. Exp.	0.6	0.6	0.6	0.7	0.6	0.5	0.9	0.6
All	18.2	18.0	17.8	15.9	17.6	19.6	17.3	15.7
Total Marketing Cost (A+B)	79.0	78.7	79.1	76.4	78.4	83.7	75.8	74.6
Cost per Kg.	4.4	4.4	4.4	4.2	4.4	4.6	4.2	4.1

Group marketing, as an instrument of direct marketing with producer-sellers has the potential to bring substantial reduction in the expenses incurred on the different aforesaid heads.  Needless to say that direct marketing by a group pf producer-sellers will help them in avoiding the commission of the commission agents constituting a very high portion of all charges and taxes. In the example contained in the preceding tables it constituted about 80% of all charges and taxes.

 

Homogeneous farmers can form themselves into self-help groups at district levels for understanding the marketing of their produce collectively and reap the benefits of group-marketing through different activities like joint market intelligence, joint hiring of trucks, group bargaining, joint storing grading, preliminary processing and packing, etc.  This will not only ensure remunerative prices for their produce by putting them in a better bargaining position vis-a-vis the buyers but also will go a long way towards bringing saving in different costs both in terms of time and money.

 

Thus the need of the hour is to encourage group marketing through requisite interventions by the different facilitating agencies, if necessary.  The district level authorities of the fruit and vegetables-producing districts with sufficient marketable surplus should put their concerned efforts in drawing proper action plan for this right from facilitating the formation of such groups, identifying the most profitable channel of direct marketing for the produce, thrashing out the inter-market  linkages, arranging suitable finance from different sources with minimum weighed cost of capital and giving all types of technical assistance to these groups for their proper management.

 

Farmers groups are being formed at the district level under the aegis of the ATMA (Agricultural Technology Management Agency) constituted under the World Bank-assisted NATP (National Agricultural Technology Project).  The Shimla district of Himachal Pradesh is a project district under the NATP project.  An exercise has been attempted here for working out the different costs of establishing different direct marketing channels through the possible alternatives of direct group marketing of the fruit and vegetables by the farmers’ groups of the Shimla districts.  Though this is a hypothetical exercise, an attempt is made to throw insight into exploring the possibility of introducing direct group marketing at the micro-level (district level) after giving due weightage to the parameters of the local agricultural economy.  There being 9 blocks in the Shimla district, 9 programme centers are being envisaged under the project and the calculation/estimation has been made under three possible alternatives of direct group marketing of fruit and vegetables from the district.  Such plans can very well be drawn for different fruit & vegetables growing districts of country taking into consideration the upstream and the downstream of the flow of the commodities in different channels.

 

Alternative 1

 

Direct marketing of apples by the Farmers’ Group of the Shimla district at the premium markets of Chennai,l Trivandrum and Bangalore is an appropriate step for improving the farmer’s share in the consumer’s rupee.  The farmers will bypass the middlemen of the existing market channel, which, in its turn, will go a long way towards reducing the marketing cost through shortening of the channel and passing this cost-reduction to the final consumers in the form of reasonable prices in the retail market.  It is, however, a formidable task on the part of the farmers to break away from the existing well entrenched marketing channel formed by the so called apple barons.  Hence in order to help the farms wean themselves from the existing channel, an efficacious intervention during the project period is sine qua non for establishing a sustainable linkage of the farmers with these far-flung markets.  The functioning and the estimated financial requirement are as follows :-

 

Functioning :- At the outset, a survey of the above cited markets should be conducted for the assessment of the demand by a team comprising two marketing professionals and 5 farmer leaders representing different production pockets of the district.  The farmer groups to be formed for this purpose should enlist both apple-growers and off season vegetable growers, so that optimum utilization of the assets meant for the groups can be made throughout the year.

 

The ATMA of the Shimla district (with 9 blocks) should be provided with 9 vehicles for transportation, 5 vehicles being of the carrying capacity of 10 M.T. and 4 being of that of 3 M.T. Small vehicles will be used for short distance and the bigger ones will be used for destinations of longer distance.  Subsidy should be given towards the running expenses of the vehicles to the extent of 50%.  Every Farmers’ Group need to be provided with a supervisor and there will be a driver and a cleaner for each truck.  The trucks will collect the goods from different collecting centers to be transported directly to different metro cities like Chennai, Bangalore & Trivandrum.

 

CHANNEL

 

 

 

 

 

Estimated Financial Requirement (per Programme Centre per year)

 

Non-recurring expenditure per block in (000 Rs.)

 

         i.            Survey on assessment of demand                                              7A

 

       ii.            Truck                                                                                       700B

 

      iii.            Weighing scale (one)                                                                 25

 

     iv.            Spring balance (ten)                                                                  5

------------------------------------------------------------------------------------------------------------

a. Total                                                                                                737

 

Recurring expenditure

 

         i.            Staff-one programme supervisor @ 6000 pm x 12                    = 72

 

       ii.            One Drive @ 5000 pm x 12                                                     = 60

 

      iii.            Helper @ 3000 pm x 12                                                           = 36

 

     iv.            Running expenses of vehicles per block                                     = 265

------------------------------------------------------------------------------------------------------------

b. Total                                                                                                433

 

a + b = 737 + 433                                                                                = 1170

 

A. Expenditure on survey for the assessment of demand

 

Assuming D.S. of Rs. 200 per day for 7 persons (2 professions =5 farmer leaders) for 15 days and assuming train ticket expenditure of Rs. 3000/- per head, the total exp. Will be (200 x 7 x 15) + 3000 x 2 x 7 = 63,000 so per programme center exp. 63/9 = 7, i.e. Rs. 7000/-.

 

B. Costing vehicles

 

Cost of 10 M.T. truck 5 no. x 8 lakh                                                     = 40 lakh

 

Cost of 3 M.T. trucks 4 no. x 5 lakh                                                     = 20 lakh

                                                                                                         -------------                                                                                                                                                                    60 lakh

 

Cost of vehicle for one block = 60/9 = 7 lakh (approx.)

 

 

Costing of running expenses of vehicles per center

 

1.         10 M.T. truck-Av. 3 trips per month with av. Distances of 2000 km. i.e. 4000 km per trip to & fro.

 

Assumed cost of diesel per litre = Rs. 20/-

Assumed mileage per litre = 7 km.

Diesel exp. Of 5 trucks = 4000 x 3 x 12 x 20 x 5/7 i.e. Rs. 20.60 lakh

 

2.         3 M.T. truck-Av. Distance of 200 km per day for 200 days during apple and off-season vegetable season with av. Mileage of 10 km per litre, so for 4 trucks 200 x 200 x 20 x 4/10 i.e. Rs. 3.2 lakh.

 

Total cost for 9 blocks is 23.8 lakh and per block is Rs. 2.65 lakh.

 

Estimated Financial Requirement of the Project in the Shimla District

(Total No. of programme centers-9, i.e. 9 blocks of the district)

 

 

 

CHANNEL

 

 

 

Cost in Rs. Lakh

Item of expenditure	First Year 3 months (Jan.-march, 2001)	2nd year 2002	3rd year 2003	Total
Non-recurring
1. Expense on demand assessment	0.63	-	-	0.63
2. Cost of trucks	60.00	-	-	60.00
3. Cost of weighing balances	2.70	-	-	2.70
Recurring
1. Staff	3.78	15.12	15.12	34.02
2. Vehicle maintenance	1.35	5.40	5.40	12.15
3. Running expense vehicles	5.95	23.80	23.80	53.55
Total	74.41	44.32	44.32	163.05 or 1.63 crore

Alternative II

 

Despite all its noble objectives, the regulation of agricultural markets has met with only, limited success, in so far as the protection of the interests of the small farmers are concerned.  The present system of agricultural marketing gives an upper hand to middleman agencies like commission agents, brokers, mashakhors etc. leaving the poor farmer at the receiving end of the marketing continuum.  The direct marketing instrument of FARMERS’ MARKET in the name and style of RYTHU BAZAR (FARMERS’ MARKETS) in A.P. has been an effective exercise towards protecting the interests of the farmers and assuring fair price of the commodities to the consumers.  The concept is worth emulating for giving a boost to the marketing of apple and off-season vegetables of the Shimla district.  It is proposed that FARMERS’ MARKETS be constructed in the adjoining cities of Chandigarh, Jalandhar, Ludhiana, Dehradun and Panipat for the same.

 

Functioning

 

Farmers’ Groups in all the 9 programme centers of the district may be provided with vehicles and subsized running expenses of the vehicles by the ATMA.  The vehicles will be collecting apple and vegetables from different collection points to carry them to the FARMERS’ MARKET to be set up under the NATP project.  The individual farmers will also be given 30% subsidy in transportation in the H.P. transport corporation.  The different Non-recurring expenses are to be made on purchase of vehicles, construction of FARMERS’ NMARKETS and the recurring expenses are to be made on the running expenses of the vehicles, maintenance of the vehicles and staff (one supervisor for each programme center).

 

Estimated Financial Requirement of the Project in Shimla District

 

Total No. of programme centers-9 i.e. 9 blocks of the district

 

Unit-Rs. In Lakh

Item of expenditure	1st year Jan-March, 2001	2nd year 2002	3rd year 2003	Total
Non-recurring
1. Construction of Rythu Bazars (5 @ 60 lakh per unit)	50.00	125.00	125.00	300.00
2. Cost of trucks	60.00A			60.00
3. Cost of Weighing balances	2.70B			2.70
Recurring
1. Staff	3.78C	15.12	15.12	34.02
2. Vehicle maintenance	1.35	5.40	5.40	12.15
3.  Running expenses	4.34D	17.37	17.37	39.08
Total	122.17	162.89	162.89	447.98 or 4.48 crore

 

A.        Costing of vehicles

 

         i.            Cost of 10 M.T. truck 5 No. x 8 lakh                                       = 40 lakh

       ii.            Cost of 3 M.T. trucks 4 No. x 5 lakh                                        = 20 lakh

                                                                                                            ------------

                                                                                                               60 lakh

B.        Costing of weighing balances

 

         i.            9 weighing balances @ 25000 per piece                                   = 2.25 lakh

       ii.            10 spring balances per center, so far

9 centres @ 500 per piece                                                        = 0.45 lakh

                                                                                                            ----------------

Total                                                                                                       2.70 lakh

 

C.        Assumed salary of one programme supervisor is Rs. 6000/- per month and that of one driver is Rs. 5000/- per month and that of one helper is Rs. 3000/- per month, so the total is for 9 centres.

 

Costing of running expenses of vehicles per center

 

10 M.T. truck-Av. 8 trips per month with av. Distance of 400 Km, i.e. 800 km per trip to & fro.

 

Assumed cost of diesel per litre             = Rs. 20/-

Assumed mileage per litre                     = 7 km.

Diesel exp. Of 5 trucks = 800 x 8 x 12 x 30 x 20 x 5/7 i.e. Rs. 10.97 lakh

 

3 M.T. truck-Av. Distance of 400 km per day for 200 days during apple and off-season vegetable season with av. Mileage of 10 km per litre, so far 4 trucks.

 

400 x 200 x 20 x 4/10 i.e. 6.4 lakh

Total cost of 9 blocsk is 17.37 lakh.

 

 

Alternative III

 

The hotels and the restaurants, for their bulk consumption of fruit and vegetables, form promising potential targets of direct marketing.  These bulk consumers need assured supply of the commodities throughout the year.  The Farmers’ Groups formed under ATMA of the Shimla District should act as commercial enterprises to come upto the expectations of these bulk consumers in terms of the grading, packing and timely delivery of the commodities.  In order to assure the supply of the commodities throughout the year, the Farmers’ groups have to go in for cold storage of the commodities, for which institutional finance should be made available to them.  To begin with, the activities should be confined to the metro city of Delhi.

 

Functioning

 

At the outset, a survey should be conducted by the ATMA of the premium hotels, restaurants and hospitals in the metro city of Delhi.  Since these institutional buyers need assured supply of the commodities, the FARMERS’ GROUPS should act in a professionally commercial manner to measure upto the needs & expectations of these institutions.  The farmers’ groups in the Shimla district under ATMA may be provided with vehicles (TRUCKS) & subsidy in the running expenses of these vehicles.  Atleast two Cold storages (5000 M.T. capacity) need to be built in Delhi to enable the Farmers’ groups to store apples and vegetables in them and enter into long term contract with the institutional buyers for making steady supply to them throughout the year.  The farmers on their own can not afford to get their limited resources locked up in the storage of the commodities, especially when the waiting period is long.  Hence in order to pre-empt the entry of the usurious money leaders into the picture, requisite institutional finance should be made available to the farmers by the ATMA during the project period.  Due care should also be taken for sustainable arrangement of such finance in the post-project period.

 

CHANNEL

 

                           

 

Estimated Financial Requirement  of the project in Shimla District

 

Total No. of programme cetnres-9, i.e. 9 blocks of the district.

 

Unit-Rs. in lakh

Item of expenditure	Ist year Jan.-March, 2001	2nd year 2002	3rd year 2003	Total
Non-recurring
1. Survey of hotels, restaurants & hospitals	0.20			0.20
2. Cost of trucks	60.00A			60.00
3. Cost of weighing balances	2.70B			2.70
4. Construction of 2 cold storages of 5000 M.T. capacity-@ Rs. 2000 per M.T. construction	25.00	75.00	100.00	200.00
Recurring
1. Staff	3.78C	15.12	15.12	34.02
2. Vehicle maintenance	1.35	5.40	5.40	12.15
3. Running expenses	4.34D	17.37	17.37	39.08
Total	97.37	112.89	137.89	348.15 or 3.48 crore.

 

A. Costing of vehicles

 

1.      Cost of 10 M.T. truck 5 No. x 8 lakh                           = 40 lakh

2.      Cost of  3 M.T. trucks 4 No. x 5 lakh                           = 20 lakh

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                                                                                                   60 lakh

 

B. Costing of weighing balances

1.      9 weighing balances @ 25000 per piece                       = 2.25  lakh

2.      10 spring balance per center, so far

9 centres @ 5000 per piece                                          = 0.45 lakh

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Total                                                                                           2.70 lakh

C.        Assumed salary of one progarmme supervisor is Rs. 6000/- per month and that of one driver is Rs. 5000/- per month and that of one helper is Rs. 3000/- per month, so the total is for 9 centres.

 

D.        Costing of running expenses of vehicles per center

 

1.         10 M.T. truck-Av. 8 trips per month with av. Distance of 400 km, i.e. 800 km per trip to & fro.

 

Assumed cost of diesel per litre             = 20/-

Assumed mileage per litre                     = 7 km.

Diesel exp. Of 5 trucks             = 800 x 8 x 12 x 20 x 5/7 i.e. Rs. 10.97 lakh.

 

2.         3 M.T. truck-Av. Distance of 400 km per day for 200 days during apple and off-season vegetable season with av. Mileage of 10 km per litre, so for 4 trucks.

 

400 x 200 x 20 x 4/10 i.e. 6.4 lakh

Total cost for 9 blocks is 17.37 lakh.

 

 

 

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National Workshop on Strategies for use of IT in Agricultural Marketing

during 10^th Plan (2^nd March, 2002, NIC, New Delhi.)

 

 

1.         Addressing the workshop, the AMA to the Government of India pointed out that marketing issues of food and agricultural commodities had acquired significant importance on account of liberalization of international trade under the aegis of WTO. The concept of market was so longer confined to an area notified under the Agricultural Produce Marketing (Regulation) Acts.  Under the NDDB model, farmers were encouraged to undertake standardisation and grading of their produce and its marketing was linked to retail outlet benefiting both farmers and consumers.  Manuals had also been prepared to educate the farmers in proper grading of their produce before supplying it to the retail chain.  The AMA further said that our goods often get rejected in the international market for not adopting proper sanitary measures.  It is in this context that IT can be used as a powerful communication tool to educate farmers in the modern day requirements of profitable marketing.  Agmarknet Scheme initiated by the Department in March, 2000 had not been fully operationalised and there was a need to have better coordination to make it successful.

 

2.         Addressing the participants, Dr. N. Vijayaditya, DG, NIC, New Delhi stressed that IT was most useful for economic upliftment of rural areas. The DG cited the experience of Warna in Maharashtra where milk producers were enabled to know the price of milk before selling through IT connectivity.  Linkages were also developed to inform sugarcane farmer on when to cut and supply the sugarcane to get the best possible price.  Citing the success of IT with regard to land records information in Karnataka, the DG pointed out that all 220 blocks in that State had been provided kiosks for disseminating information with regard to land records on payment basis.

 

3.         The Dy. Director General, NIC Shri M. Moni informed that the market information scheme was well designed and had even received appreciation from foreigners also.  Any number of varieties, markets etc. can be included in the package.  The officials of DMI, NIC, market committees and State Governments were required to work in synergy to make the project successful.  The following recommendations emerged from the day-long deliberations :

 

              I.      The NIC should arrange necessary refresher course/practice sessions for the persons operating the Agmarknet nodes to ensure proper implementation of the scheme.

 

           II.      Officials from NIC, DMI and State Government located at  State and Regional Headquarters should meet regularly once in a month and review the progress to remove the constraints, if any, in functioning of the scheme. The DDG Shri M. Moni agreed to organize video conferencing with the States to resolve problems arising in day-to-day functioning of the scheme. The video conferencing will be arranged by the local NIC Office to provide direct interaction of the State level officials with the DDG.

 

         III.      In order to facilitate proper coordination and monitoring of functioning of the scheme, all the offices of DMI located at State Headquarters and the Regional Headquarters would be provided computers and internet connectivity under the Scheme without loss of time.

 

        IV.      Software packages should be developed in all regional languages for easy understanding of the farmers.

 

           V.      Financial support need to be provided to outsource experts for preparation of CDs, manuals on good farming practices etc. to impart to farmers knowledge on the marketing related fields.

 

        VI.      The NIAM need to identify State level institution for collaboration, to conduct training programmes related to agricultural marketing in local languages for the benefit of farmers and village level extension workers.

 

      VII.      The Director of Marketing in the State Government should be the nodal officer to review and coordinate various schemes related to development of agricultural marketing being operated by the Central Government.

 

   VIII.      The savings accrued with NIC out of the budget released to it for setting up of Agmarknet should be utilized to cover additional markets under the scheme to the extent possible.

 

 

 

 

 

 

 

 

(II) Inter-Ministerial Task Force on Agricultural Marketing Reforms submits its report to Hon’ble Union Agriculture Minister

 

An Inter-Ministerial Task Force constituted by the Union Ministry of Agriculture under the Chairmanship of Shri R.C.A.Jain, Additional Secretary, DAC on 4^th July, 2001 to examine the findings and recommendations of the Report of the Expert Committee on Strengthening and Developing of Agricultural Marketing headed by Shri Shankarlal Guru, submitted its report to Shri Ajit Singh, Hon’ble Union Minister of Agriculture on 28^th June, 2002.  The Task force has made radical suggestions to reform the existing agricultural marketing system.  The Hon’ble Minister, while receiving the report, stated that a meeting of the State Agriculture/Cooperation Ministers would be convened soon to request the State Governments to implement the recommendations of the Task fore for revamping farm marketing. The reforms package suggested by the Task Force would enhance the competitiveness of the Indian farmer in the global market empowering him to take advantage of the emerging market access opportunities in the wake of WTO.  The major recommendations of the Task Force are presented below :

 

1.         All the State Governments should amend the State Agricultural Produce Marketing Regulations Act (APMC Act) inter alia to provide specifically for the following :

 

a)      Enabling private and cooperative sectors to establish and operate (including levy of service charge) agricultural marketing infrastructures and supporting services.

 

b)      Direct marketing of agricultural commodities from producing areas and farmers fields, without the necessity of going through licensed traders and regulated markets.

 

c)      Permitting ‘Contract farming’ programmes by processing or marketing firms.  The APMC within whose jurisdiction the area covered by contract farming agreement lies, should record the contract farming agreements and act as a protector of producer’s and processor’s interests with due legal support in its jurisdiction.  Incidence of taxes by way of market fee, cess, duties, taxes etc. on procurement of agricultural or horticultural produce under the ‘Contract farming’ programme should be waived or minimized.

 

d)      Rationalisation of levy of market fee by introducing single point levy of market fee in the entire process of marketing in the State. Levy of market fee should be more in the nature of service charge based on the quality of services provided.  The levy o f fee can be at different slabs in consonance with the type and scale of services/facilities provided to all market users.

 

e)      To attract promoting agencies to take up the marketing infrastructure development projects, all the State Governments should be requested to additionally extend support in the following areas :

 

                                I.      Deregulation of areas where new markets will be  set up, along with forward and backward linkages from the purview of the Agricultural Produce Marketing Act.

 

                             II.      Allocation of suitable and sufficient land with necessary approvals to set up agricultural produce markets;

 

                           III.      Provision of village and for Farmers Associations and Collection centers;

 

                          IV.      Fast approval for services like electricity, water, sewage, telephones etc;

 

                             V.      Long term credit for initial capital investment, and

 

                          VI.      Declaration of the project as an infrastructure project within the meaning of Section 10 (23G) of the Income Tax Act.

 

2.         With a view to attract requisite investment for the development of marketing infrastructure in the country, a new central scheme should be formulated to provide credit linked assistance for development of general and commodity specific agricultural produce markets and for strengthening of existing agricultural markets, wholesale, rural periodic and in tribal areas. For the construction of storage, cold storage and cold chain infrastructure, the ongoing central schemes should be further expanded to create additional capacity of rural storage of 85 lakhs MT, cold storage of 56 lakh MT and requisite cold chain infrastructure during the X Plan Period.  Central assistance should be conditional and linked to reforms by the States in the APMC Acts and deregulation.  Considering the magnitude of outlay required external funding should be sought, if need be, to augment the resources of Central and State Governments to support the infrastructure development program.

 

3.         Credit for marketing of crops (pledge financing) should be substantially stepped up to reach a level of at least Rs. 7000 crores by the end of 10^th Five Year Plan period in 2007.  RBI need to formulate appropriate marketing credit policies and to introduce a separate MIS for loans given for pledge financing in order to monitor progress.  NABARD need to augment the resources of State Marketing Cooperatives to provide pledge-financing facilities to farmers and to provide 100% refinance to RRBs, on similar lines as that of cooperative banks.  RBI should also consider evolving an appropriate arrangement to ensure that warehousing receipts/godown receipts issued by licensed operators of rural godowns are acceptable to bankers for providing credit to farmers. To facilitate easy access to pledge loan,  RBI should evolve a simplified procedure in consultation with commercial banks.

 

4.         For the introduction of a system of negotiable warehousing receipt system in respect of agricultural commodities, the Central Warehousing Corporation and the State Warehousing Corporations should evolve commercially acceptable quality standards in respect of various commodities in order to ensure quality maintenance of the stored goods over a sufficiently longer period of time.  The Warehousing Corporations should enforce standards both for quality and quantity at the warehouses, for which required infrastructure as to the measurement of grades and standards and to improve the credibility of the Warehouse Receipt.

 

5.         In order to grant the status of ‘negotiability’ to godown receipts issued by licensed godown operators, the Negotiable Instruments Act should be amended or in the alternative, a Central legislation on the pattern of The Multi-modal Transportation of Goods Act, 1993,  be enacted for the Warehouse Receipts to be made fully negotiable instrument.  Law should be framed in such a way that it gives full enforceability and transparency of the Warehouse Receipts.

 

6.         For the promotion of Forward and Futures market in agricultural commodities, the following action is recommended :

 

a.       The negative list under section 17 of the FC (R)  Act may be given a fresh look so as to drastically prune it. Prohibition and regulation of NTSD contracts under the Act may also be discontinued.

 

b.      Commodity specific approach to futures trading may be discontinued.  Instead recognized associations/exchanges could apply for permission for trading in any ‘contracts’ other than for the commodities in the negative list from the Commodity Market Regulator under the overall rules, procedures and guidelines of the regulator.

 

c.       Exchanges should come out with feasibility studies on commodities and products based on a cost benefit analysis of futures trading in such commodities/projects.  The system of piecemeal opening up and permission based on the Regulator’s/Government’s evaluation may be discontinued.  Contracts  proposed by the Exchanges based on proper feasibility studies should be studied and approved by the Regulator. 

 

d.      The design of contracts and the type of contracts (TSD futures, options) (as and when statutorily permitted) should be left to the Exchanges to be decided.  Only the appropriate regulatory mechanism and enabling provisions should be finalized with the approval of the market regulator.

 

e.       The system of warehouse receipts need to be universalized in futures trading for enhancing volumes and for minimizing transaction costs.

 

f.        The regulator (presently FMC) needs to be strengthened and made an autonomous organization similar to SEBI with adequate powers and professional capabilities to monitor and surveillance in an expanded and liberalised futures market in the country.

 

g.       The role of commodity market regulator may be redefined to regulate all derivative products, not just for commodity future-like CFTC in the US-so that their specialized expertise can be optimally used.

 

7.         The Minimum Support Price (MSP) has served the country well in the past three decade.  However, in recent years it has started encountering problems mainly because of surpluses of several agricultural commodities and also the resultant excessive foodstocks with FCI.  In the changing environment it is essential to think of an alternative policy delinking MSP from procurement particularly if the private sector is to be restored its rightful role in the marketing of agricultural produce.  The alternative policy should allow market forces to determine the price and provide financial support through an insurance programme to farmers for protection of their incomes in falling markets.  The income protection programme could be taken up initially in a few selected States for agricultural commodities like oilseeds, pulses, rice and wheat.  Till the alternative policies are developed and implemented, the existing nodal/central agencies and State organisations need to be strengthened to undertake decentralized procurement of foodgrains.

 

8.         The Fair Average Quality (FAQ) norms fixed for different agricultural commodities should not be relaxed frequently as such relaxation breeds inefficiency and difficulties in disposal of stocks.  At present, there is no reliable and transparent system existing at the field level and the grading is done more or less on discretionary basis.  This system of subjective assessment needs to be replaced by a system of objective criteria by  providing moisture measuring equipments and other equipments, which can help in measuring Fair Average Quality.  FAQ norms have to be strictly enforced while providing wide publicity and educating the farmers on quality issues.  The nodal agencies should be set up much in advance of the marketing season.  The information regarding number and location of purchase centers should be given wide publicity through media, radio, television, leaflets, etc.

 

9.         The Market Intervention Scheme (MIS) needs to be reviewed to make it more flexible and easy.  The provision of sharing of losses by the State Government(s) under the Scheme also needs to be re-examined.

 

10.       Use of Information Technology needs to be extensively promoted to provide market-led extension services to farmers and other market functionaries.

 

11.       Marketing Research, Training and Extension services to stake holders would aim to create an ambiance of good marketing Practices in the country to protect the interest of farmers as well as consumers.

 

 

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