MARKET DEVELOPMENT PROPOSALS   

MANAGERIAL AND OPERATIONAL EFFICIENCY IMPROVEMENT PROPOSALS 

            An efficient agricultural marketing system is an essential prerequisite for the ultimate benefit of the farmers.  Without an efficient marketing system farmers will not get incentives to produce which linkages to an ever-growing market stimulate.  The growing population will not receive food it needs and processors will be unable to obtain regular supplies. 

            Therefore, this chapter has been designed, which can cover all the major aspects of operations and management, as indicated above, in an integrated manner.  Broadly, it has been divided into five parts and the detailed proposals furnished are as under:  
A  - Marketing Extension and training
B  - Market Information and Intelligence Network
C  - Grading and Standardization at Producer’s Level
D  - Improvement in Competition and Awareness
E  - Accessibility of Marketing Finance and Credit. 

(A) Marketing Extension and Training  

            Marketing extension is a key factor in enlighting the farmers and in removing their marketing constraints.  While the production oriented agricultural extension service is available in almost all the states, field oriented marketing extension service is absent.  The marketing extension envisages educating the farmers, traders and consumers, regarding marketing to bring desirable changes in their knowledge, attitude, skill and interest.  It includes;
-         Advice in product planning
-         Securing market for farmers.
-         Training and advice on important marketing practices, and
-         Advice on establishing and operating rural markets etc – setting up of physical distribution system for agricultural produce.

The recommendations of consultative committee of the Parliament attached to the Ministry of Rural Areas and Employment and State Secretaries meeting (dealing with agricultural marketing) held in 1992, states that existing T&V system of extension should have integral impact points on marketing management.  The High Power Committee of the Ministry of Rural Areas and Employment, constituted under the Chairmanship of Sh.  Shankar Lal Guru (1996) also advised that marketing extension should be linked with production extension system.  Keeping in view various recommendations and the storage of manpower resources available with the Directorate of Marketing, Andhra Pradesh, it is suggested that it would be desirable and cost-effective to integrate the existing system of Training and visit System or National Extension Service Scheme of the state with agricultural marketing extension.  A full fledge scheme relating to agricultural marketing extension should be introduced during IXth plan period only.  This would envisage transfer of technology and knowledge to the farmers, traders and consumers through various communication media. 

            Training in Agricultural Marketing is also an equally important subject.  Learning is a continuous process and therefore, continued arrangements for making knowledge available to the users is an important duty of the Govt.  The marketing personnel working at different levels as combination of heterogeneous academic qualification.  In order to improve the professional skill of the marketing personnel at different levels, training courses are required in the regional languages.   Regional level training centers in different regions in local languages are required to be set up.  The State Government should initiate necessary steps for the purpose.  New training programmes, induction training, operation and maintenance of cold storage, post harvest management of fruits and vegetables, entrepreneurial training in grading under Agmark etc should be initiated.  To achieve the goal, the Govt. should set up its own Post Harvest Research and Training Center. Details of the proposal have been furnished in another chapter-Marketing Infrastructure.  For training of trainers, the Government can collaborate with the National Institute of Agricultural Marketing and joint programmes on typical interest can be organized.  To institutionalize the efforts and to develop a regular system, it is necessary that sufficient literature is arranged and suitable package of practice in local language be got developed.  A separate provision of funds should be made for the purpose.  In the beginning State Agriculture Training Institute, State Institute of rural Development, State Institute of Entrepreneurial Development, Grain Storage Institute, etc may be involved at the local level. 

            The most tedious job in marketing extension is to arrange extension efforts in a systematic manner and to develop standardized and generalized impact points on the basis of which performance can be evaluated.  For village level worker, it is essential to have their vision broadened and accept the latest developments in post-harvest technologies.           

            Moreover, in view of the fast changes taking place, world over and recent economic liberalization, it becomes necessary to make our produce more competitive in the international market – both piecewise and qualitywise.   It must qualify international permissible limits of quality and environmental parameter set by different countries.  Our produce should be pesticide residue free and should be treated with organic materials only, as far as possible.  The recent non-tax barriers imposed by EEC countries in the name of environmental standards are big before us.  These levels can be attained only with high quality infrastructures and deep vision with farsightedness.  Therefore, it is necessary that we should have ‘ready’ literature on latest advancements in horticultural marketing and PH management. 

            Following paragraphs are devoted to certain broad issues and deep-rooted impact points on packaging, transport, storage etc.  This is a small example for presentation of advices.  Impact points on a larger scale by the trainers, master trainers and village level extension workers can further be developed on these lines. 

Impact Points for Extension Workers  
 (a) Packaging 
            The packaging of fruits and vegetables should aim at satisfying the requirements of both produce and market place.   The perishable nature of fresh produce means that packaging is a necessary investment in order to
-         Protect the produce at all stages of the marketing process from producer to consumer,
-         Eliminate individual handling of produce and thus greatly accelerating the marketing process,
-         Unities and rationalize the produce so that all traders handle standardized quality.
Keeping in view the requirement laid down above, it is necessary that Performance Profile of packaging should be developed by the Extension Officers.  There is possibility of high spoilage level on unsuitable packaging without carrying out a detailed analysis or entire chain.  Before carrying out any changes on commercial scales, or offering advice to the growers, it is suggested that all dimensions of new and old packs on account of the Extension worker should analyze physical and cost features before advising it to the users.  Typical items, which can be included in Performance Appraisal of packs, are as under.
1.      Type of produce to be packed.
2.      Details of Current Packing.
3.      Justification for change.
4.      Weight of produce preferred is unit trading and handling.
5.      Approximate Value of contents.
6.      Storage life of the produce.
7.      Marketing radius and transportation cost.
8.      Types of transport.
9.      Weather conditions.
10.  Produce conditions when packed – hot, cold. Wet or dry.
11.  Need for cold storage.
12.  Special treatment – fungicides, degreening, ripening etc.
13.  Filling methods – manual or automatic.
14.  Labeling – Voluntary or Mandatory.
15.  Preferred colour.
16.  Number of grades.
17.  Disposal or returnable.
18.  Export or local.
19.  Retail display method.
20.  Resistance of produce to damage.
21.  Local material availability and cost.
22.  Consumer type. 

If relevant and meaningful literature is further arranged for circulation among the farmers, traders consumers, it would be an added offer.  The Extension Workers can maintain record on these impact points in the daily dairy.  The institute concerned should offer a checklist of answers to these points and it should be well placed in the daily dairy of extension worker. 

Typical Impact Points on Storage  

Many fruits and vegetables require special post harvest treatments to make them acceptable to the markets (for example fungicide application, curing, ripening, degreening etc.) but usually because they are destined for storage before being released into the market.  Therefore, the piece of advice on storage also keeps on changing depending upon the nature of fruit, its behavior during journey, system of harvesting and handling and other resultant reasons.  Therefore, the extension worker has to be very accurate and specific in offering advice to the users.  Certain impact points which can be included in the package of advice of the VLW, could be as under:  

Generalized Storage Advise for Fresh Produce

  Indicative Impact Points on Transportation  

            If losses of perishable fruits and vegetables are to be avoided, then, transport must be suitable and available at the right time.  Some produce can withstand long transportation periods in relatively exposed conditions whereas tender crops may need rapid transportation, with or without refrigeration.  Transport operators must be acquainted with the effects of good and bad handling techniques, and they must also appreciate the consequences of bad driving on poor roads in vehicles in insufficient maintenance.  Transport by sea or air for export trade; require special consideration because of the costs involved in such transport and the perishability of the produce being transported.  Some of the recommended impact points on transportation for smooth and efficient flow of produce are given hereunder, as example of practices. 

Recommended Transport Practices 

  Loading – Handling Impact Points  

            Dropping of packages during loading and unloading is a frequent cause of damage to the produce and to the package, but can be minimized by the following impact points: 

        (i)      Using pack weights and designs, which are compatible with the handling method.   
(ii)      Correct supervision and management of loading/unloading to prevent careless handling and to ensure workers are strong enough and tall enough for the job.   
(iii)    Using ramped loading bays gives a tremendous advantage when loading truck with produce.   
(iv)    Providing shelter from sun and rain at loading and unloading areas.   
(v)    Using trolleys, conveyors and fork-lifters to reduce the amount of manual handling.   
Following are the loading method impact points for the use of extension workers:   
(i)   Loading tightly to reduce movement and make best use of space.   
(ii)   Distribute weight evenly.
(iii) In mixed commodity or dispatch loads, stack goods in reverse order to their unloading sequence.
(iv)  Provide gaps for ventilation.
(v)  Only stack to a load height, which the lowest containers can withstand   without crushing or damage.
(vi)  Do not exceed the capacity of the vehicle.
(vii) Ensure the vehicle is properly maintained; breakdowns are time   delaying and may lead to excessive or total spoilage of the produce.   
(viii) Be selective as regards the vehicle operator bad and inexperienced   drivers will mean more damage to the produce and to the vehicle.  
            Taking aforesaid impact points as guidelines for other marketing issues as described below, extension section of the department can develop or get developed such advices on:
-         Enforcement of Regulation
-         Development of Agricultural Produce Markets
-         Grading at producer’s Level
-         Marketing Extension
-         Marketing Information & Intelligence
-         Training in Marketing
-         Post Harvest Management (Including all Services)
-         Rural storage, etc.
            For that matter, the State Marketing Board Chhatisgarh can get allocated an amount of Rs. 1,00,000 per year for the state.  Moreover, it can further ensure that equal amount is also spent by APMCs on this activity.  During IXth plan period a provision of at least 4 crores can be made. 

(B) Market Information and Intelligence Network  

            For market mechanisms to work efficiently, marketing information is essential for producers, traders and consumers.  Timely information to farmers, traders; policy planners and other market users will enable than arrival at proper decision-making.  The information requirement of different components of marketing system. 

            Marketing information is essential not only for the formulation of proper price policy and its successful implementation at a macro level, but also for farmers to aid them in improving their marketing performance.  Market intelligence data provide the materials necessary for quick decision and also for understanding the behavior of relevant factors, and thereby help in the evolution of corrective and regulatory measures. 

Suggestions for Improving Market Intelligence Service  

            The chief requirement for the successful market intelligence service is accuracy, timelyness and relevancy in the collection and dissemination of market information service needs to be developed with a view to improves the service system. 

            Therefore, it is proposed that the State Government should initiate steps towards procuring national hook-up through satellite and link all major markets with online system as developed by NIAM.  On the one hand, it would bring efficiency, on the other it would help farmers fetch good price.  Details of proposal can be prepared by NIAM separately.  Following types of information may also be collected for better transactions. 

Types of Market Intelligence Data Needed  

            Prices of agricultural commodities and supplies constitute a key item in the market.  It is essential for prices to be collected in a uniform manner and on the basis of standard concepts and definitions by whole time technical reporting agencies/section and well trained market reporters.  The price data to be collected are:
(a)    Wholesale Prices
(b)    Retail Prices
(c)    Farm (harvest) prices 

            The data on farm (harvest) prices should be collected at least once a weak from number of villages during harvest season and arranged into district averages by taking their simple mean.  The state average may be worked out as a weighted average of the district prices with production of district as weights. 

            In order of importance among the market intelligence data, marketed surplus of agricultural produce comes next to prices.  It is more direct determinant of prices of the commodity than any other factor.  Keeping in view the importance of marketed surplus, the work of collecting and reporting data or arrivals of agricultural commodities in assembling as well as consuming markets, over the state, should be undertaken, at least, on a weekly basis. 

            Together with the data on arrivals, data on outgoing quantities, e.g. dispatches outside the market and sales for local consumption and stocks with traders, need to be collected and reported every week.  Thus, in the same Performa, a sort of balance sheet of the market (showing the stocks and incoming / outgoing quantities) for the week in question, can be provided with the help of the local market committee. 

            Data on market charges, cost of transportation, handling and processing etc. incurred by the producer-seller and intermediaries, and the data on prices at different stages of marketing, need to be regularly reported.  This helps to ascertain, from time to time, the share of the producer and of the intermediary involved in various stages of marketing and to keep a constant watch on the variations in the producer’s price. 

            Orderly marketing requires more than just a group of reports on production, supplies, stocks and prices.  Reports and data on population served, the level of employment, villages served, and area served, wages, average production costs by item and such must be analyzed.  These and other related data on business conditions, forecasting of prices, international scenario should brought together in the form of comprehensive situation reports as being practiced in Unites States.  The ‘Situation Reports’ are proceeded by an ‘Annual Outlook’ report, which will help farmers processors and handlers in making decisions.  An amount of Rs.20 lakhs per year or one crore for the IXth plan period may be arranged.  Therefore, it is suggested that the Market Intelligence Unit in the Marketing Board should be established with all powers. 

(C) Grading and Standardization at Producers’ Level  

            The Agricultural Produce whether foodgrains or fruits and vegetables etc arrive in market places generally in an upgraded form.  In the absence of grading, producer gets lesser price.  At the same time, owing to re-handling, repacking and grading of the produce at market place, unnecessarily create congestion in the markets and hampers the effective marketing activities.  It also increases the marketing costs, which are passed on to the consumers.  Thus, both the producers and consumer suffer on account of lack of grading at farmer’s level.  It is necessary that effective measures are initiated to introduce grading at producer level as an on farm operation to make marketing system more efficient.  What the trade accepts the grades should be introduced at the farm level and the same should be made mandatory for selling. 

            Standardization of foodgrains as well as fresh produce in terms of sizes, grades, maturities and packaging is an important goal for improvement in quality of produce and reduction of post-harvest losses.  In almost all states including Chhatisgarh, standards for fresh produce are often poorly dwelt upon.  Standardization is an important mechanism for increasing the efficiency of wholesale markets, speeding up the distribution process, and also for increasing the transparency of market place by facilitating accurate and timely market information.  Quality control is an important adjunct to standardization, and both are vital to the export industry for fresh produce particularly.  In order to satisfy the stringent legislative and market demands imposed by importing countries.  Therefore, it is suggested that the Marketing Board, Chhatisgarh should design its own standards for export and domestic markets keeping in view the international standards in mind.  For making the mission success, certain attractive schemes should be launched so as to popularize the concept of standardization and grading at farmers’ field only.  Some of the indicative schemes are explained below:. 

(i)                The Govt. of MP can create common facilities for grading of perishables in collaboration with APMCs and PRIs under which small, locally fabricated, low-cost grading machines can be made available at village panchayat level in highly intensive cultivated areas.  Responsibility of maintenance would rest with the village Panchayats.  This would become a permanent source of income to the Panchayats also.  100 such machines @ Rs.10,000 may be provided every year.  This would cost Rs.10.00 lakhs annually. 
 
(ii)     A scheme for prizes on better grading can be started wherein one village from each APMC area may be selected for a prize of Rs. say 10,000 and in lieu of this amount one local grading machine may be provided every year, at least 200 such prizes can be given which will cost Rs.20.00 lakhs annually.   
(iii)     Farmers can be supplied proper harvesting kits for different commodities. A sum of Rs. 5 lakhs per year may be earmarked for the purpose.
(iv)           Support in the form of subsidy on purchase of scientific equipment on handling, testing, grading etc may be provided which will ensure standardization in the state.  A provision of Rs.5.00 lakhs may be kept for the purpose annually.
(v)              Incentives to growers can be offered on purchase and use of post-harvest chemicals, sprout suppressants and edible waxes.  A sum of Rs.5.00 lakhs may be allocated for the purpose.
(vi)            Subsidy on corrugated boxes, palletisation and other supplementaries may be provided to the users.  An amount of Rs.5.00 lakhs per year may be kept reserve for the purpose.
            On the whole, annually Rs.50 lakhs can be spent on this activity.  For the total IXth  plan period a provision of Rs.2.00 crore may be kept for the purpose. 

(D) Improvement in Competition and Awareness  

            Considering the rampant inefficiency and non-competition in the agricultural trade and the adulteration prevalent in these days, it is suggested that special thrust should be given to improve competitiveness in the markets and generate awareness among the consumers so that better marketing techniques can be propagated in the state.  Apart from widening and improving infrastructures, which have been discussed separately, following suggestions would certainly would go a long way in bringing competitiveness in the market places.  Therefore, the role of APMCs and Marketing Board/Deptt. becomes more crucial here.  A lump sum amount of Rs.1.00 crores per year may be arranged for this purpose.  During the IXth plan period a sum of Rs.4 crore atleast may be allocated.  Following indicative measures can be taken up to improve competition and awareness in the Markets of Chhatisgarh. 

(i)     Greater Vigilance Against Collusion Among Traders/Merchants:  The code of conduct for competitive marketing should be strictly followed to ensure transparency and to enhance and maintain the confidence of farmers in the friendly marketing system. 

(ii)  Elimination of Malpractices:  The Traditional system and sequences of marketing, which causes delays and is amenable to malpractices, should be modernized and mechanized in certain respects. 

(iii)    Decreasing Marketing Margins:  The marketing margins between wholesale and retail prices for several commodities are very wide, especially for perishable and semi-perishable vegetables and fruits.  These margins should be reduced to reasonable limits by improving market information and infrastructure, storage etc. 

(iv)    Spreading Sales:  The market becomes overcrowded by concentration of sales in post-harvest periods, e.g., wheat and rice, and malpractices also occur on account of it.  The sales should be spread by allowing reasonable margins in prices in post-harvest periods for the commodities under the administered prices, improving storage, providing marketing information on seasonal variations in prices, providing facilities for storing of produce of farmers in separate containers in the markets etc.  

(v)    Eliminating Delays in Marketing:  The causes for delays in the market should be removed, e.g., downgrading of paddy varieties without timely warning, and dispute between the Government and rice millers on the rate of recovery of rice.  

(vi)   Providing Market Intelligence and Monitoring:  With the expanding role of the private sector, and for exports, adequate, effective and timely market information on several items will be required, e.g., seasonal prices, market arrivals, international prices, export competitors, perspective importers, quality standards, etc.  There is an urgent need to establish a Market Intelligence Unit in the Board/Deptt. to collect,  analyze and distribute the market intelligence information.  

(vii) Adjusting Planning and Investment Priorities:  The content and scope of planning will change, and investment priorities will later, with progress in liberalization.  The Board/Deptt. needs to build up its competence in these areas. 

(viii) Formulating Special Teams for Export Promotion:  It would be useful to formulate special teams for export promotion and send them abroad, as and when need is felt to explore the possibilities of exports of primary and processed agricultural commodities.  

(xi)   Increasing Transparency and Accountability in Operation:  Transparency in the Market operations and accountability for lapses of it, are also important factors for friendly market paradigm. 

(x)   Strengthening and Widening Training:  The training institute of the Board would need extensive reorientation, upgrading and strengthening of resources for imparting training to the staff, for efficient functioning of the market and generate competitiveness in all kinds of markets. 

 (xi)  Consumer Kits to NGOs:  To improve awareness among consumers and to educate them to detect adulteration of food items used in daily life by the common public, it is suggested that NGO in the State should be provided with quality testing kits to enable them to protect consumer interest.  The Govt. of India has already approved this scheme for funding and on an average, one kit has been estimated for Rs.6000.  It is suggested that these kits should be provided free of cost to NGO’s dedicated to consumer welfare, 100 such kits can be distributed every year and a provision of Rs.6.00 lakhs per year can be made.  

(xii)  Direct Marketing :  Direct marketing by farmers to consumers in urban areas increases their share in consumer’s rupee.  It shortens marketing channels, eliminates middleman and brings producer-seller in direct transaction with consumers.  Some experiences of direct marketing in India have been very successful.  The Punjab Govt. experimented with a market called ‘Apni Mandi’.  In Apni Mandi, commodities are reported to be sold at rates 20-30% less than the retail markets rates and 30-50% more than prevailing wholesale rates.  Another model adopted in Maharashtra is called ‘Hadapsar’ at Pune, where producers and consumers transact fruits and vegetables directly.  The producers bring graded material and entire activities are over within 3-4 hours.  NDDB model operating in New Delhi, though under cooperative management, is again quite successful venture working at very large scale.  HOPCOMS model of Bangalore is another well-tested  coop system working for the last 15 years.  

       Considering the useful role direct marketing plays in the interest of both producers and consumers, it is recommended that all the cities of Chhatisgarh with population of one lakh and above be provided with financial assistance to set up one such system.  The Govt. of India has also started financing for such projects.  As the retail trade is out of per view of the State Marketing Authorities it should not have any objection, the State Marketing Authorities should not have any objection in  organizing direct marketing.  It is estimated that one such direct marketing model would cost Rs.1.00 lakh.  Following cities have been identified where ‘Apni Mandi’  or any other model can be started.