MODEL PROJECT ON DEVELOPMENT OF DIRECT MARKETING
RYTHU BAZAR / FARMERS' MARKET
marketing is a long felt need of the farmers and consumers of the country as it
goes a long way in ensuring higher remuneration to the farmers and meeting the
satisfaction level of the consumers through direct sale of the agricultural
commodity by the farmers to the consumer at affordable prices. Direct marketing
of agricultural produce helps in complete elimination of middle men and
commission agents who charge high level of commission fee from the
agriculturists/farmers coming to the market yards for selling their produce and
then artificially inflate the retail prices. The efficacy of direct agricultural
marketing infrastructure facility can be increased by providing market user
common facilities for proper
weighing, cleaning, grading and packaging of agricultural produce being brought
to the market yard by the farmers for sale. In order to give a big boost to the
development of direct agricultural marketing infrastructure facilities in the
country, the Govt. Of India, Min. Of Agriculture has announced the ďScheme for
Development/ Strengthening of Agricultural Marketing Infrastructure, Grading and
Standardization.Ē The scheme is reform linked, i.e. Desires the states to
amend their state specific APMC acts for enabling development of direct
agricultural marketing infrastructure facilities, contract farming and
participation of private and cooperative sector in creation of market yards.
Under the scheme credit linked back ended subsidy to the tune of 25% of the
total project cost (33.33% of the total project cost for projects in NE states,
hilly and tribal areas, SC/ST entrepreneurs or their cooperatives) is available.
The implementation period of the scheme is from 20.10.2004 to 31.3.2007.
Development of direct marketing infrastructure forms one of the component
of the scheme.
Rythu Bazar (Farmers' Market) is one of the farmers' friendly direct marketing
systems in operation in the country. In order to create awareness about
development of agricultural marketing infrastructure among bankers, financial
institutions, potential entrepreneurs in private and cooperative sectors, farmer
groups, govt. functionaries etc. a model bankable project for
a Rythu Bazar has been developed.
Bazars were introduced with a view to eliminate the middlemen and arrange
facilities for the farmers to sell their produce directly to the consumers at
reasonable rates fixed every day. On account of the scheme both the farmers and
the consumers are benefited.
market yards for fruits and vegetables are functioning only at a few centres.
The marketing system for fruits and vegetables is now in the hands of middlemen.
Middlemen exists at various levels between the farmers and the consumers and
exploit through malpractice in weighment, handling and payments. Large number of
small farmers are unable to effectively bargain for better price in the
wholesale market. Inefficiencies in the wholesale markets results in a long
chain of intermediaries, multiple handling, loss of quality and increase the gap
between the producer and consumer prices. Large number of small retailers, each
handling small quantities, create high overheads leading to high margin on
is, therefore, felt necessary to evolve an alternate marketing strategy where
both growers and consumers are benefited through Rythu Bazar. Rythu Bazar are
thus planned for direct interface between the farmers and the consumers
eliminating middlemen. Rythu Bazars, if function effectively, can act as price
stabilization centers. Rythu Bazars will operate outside the purview of the
Agriculture Market Committees and are to be managed by Estate Officers under the
control of Revenue Department of the State Government.
producers/farmers are supplied properly calibrated weighing scales with weights
for selling their produce. All these facilities are provided to the farmers and
customers free of cost. The Estate Office is equipped with all the latest
facilities like telephone, fax, computer with Internet facility etc.
objectives of Rythu Bazar are mainly:
1. To ensure remunerative prices to the farmers and provide fresh vegetables to the consumers at reasonable rates fixed every day.
Facilitate prompt realization of sale proceeds to the farmers without any
Curb malpractice in weighment
Provide direct interface between farmers and consumers- eliminating
intermediaries in trade.
FACTORS OF SUCCESS
operation of direct agricultural marketing infrastructure facilities viz. Rythu
Bazars depend upon location of the bazars, number of customers visiting the
bazar per day, nature, type, quantity and quality of agricultural produce being
brought by the farmers for sale, systematization of the retail price fixation
mechanism, allotment of stalls to the farmers on farmersí group/ mandal basis,
design of the stalls based on the nature, type and quantity of salable items
brought by the farmers, availability of functional infrastructure facilities
viz. cleaning, grading, weighing, packaging, short term storage etc., price
display mechanism, loud speakers and broadcasting system, availability of
utilities viz. electricity, water, garbage disposal/ cleaning facilities and
last but not the least services/ facilities for the convenience of the consumers
viz. parking, coin changing machines, grievance redressel mechanism etc. The
facilities should, therefore, match to the requirement of the farmers and the
consumers/ customers. Considering all these aspects the requirements
of a Rythu Bazar/ Farmers' Market for direct sale of agricultural
commodities are elaborated in the following paragraphs.
The Rythu Bazar/ Farmers'
Market for direct sale of agricultural commodities should be located at a
convenient location for enabling maximum number of consumers to visit the bazar
. Locations near transport head/ main road/ railway stations, bus stops/ depots/
community centers are considered ideal for establishing such bazaars. The site
must be on a raised land, have facilities for safe drainage of storm water and
sewage, should be safe from damage by surface or seepage water and not subject
to floods or inundation.
should be away from the factories and other industrial establishments, dairy and
poultry farms, kilns, sources of fire, garbage dumping grounds,
slaughter houses, hide curing centers etc.. The structure shall be
150 m away from factories and other sources of fire, 300 m away from kilns,
slaughter houses etc.
parking and maneuvering space for vehicles should be available. There should be
scope for future expansion and adequate land
available in the adjacent areas. It
should also have scope to access adequate dependable source of water,
electricity and the site should be free from all legal hurdles to take up
proposed constructions and marketing.
to be provided in Rythu Bazar/ Farmer's Market
layout of a market yard should be to facilitate easy movement of people
(consumers and farmers bringing in their commodities for sale) and vehicles. The
layout should be such that there is efficient use of the available space.
Congestion should be avoided. Each stall should face the internal walkways for
proper display of commodities and have equal opportunity for the business
development. The stalls should have sloping roofs with a minimum slope of 1:4
towards the internal walk way for proper drainage of rain water. The display
floor of the stall should have sufficient height from the ground level to
prevent inundation. The Rythu Bazar/ Farmers' Market should have a wide approach
road and adequate parking space for vehicles of consumers. Drainage arrangements
for rain water, waste and sewerage water should be made by means of covered
surface or underground drains according to site conditions. Provision for trash
arresters may be provided for preventing clogging of drains. Minimum provision
for: (a) cleaning (b) grading and sorting (c) weighing (d) packaging (e) small
storage godowns for short duration storage (f) market office (g) gate check post
(h) parking space (i) fire fighting arrangements will have to be made. The
estimates provided should be examined to see whether they are reasonable and
whether all the items of development are covered.
team is to be constituted with Mandal Revenue Officer, Horticulture Officer and
Agriculture Officer which should visit the villages, inspect the fields and
identify the farmers.
4.4 Issue of
Photo Identity Card
on the recommendations made by the team, identity cards are to be issued to the
farmers, in which photo of the land owner and his nominee with the particulars
of the village name to which the farmer belongs, survey number, extent of the
land owned by him, and the vegetables grown are mentioned. The identity cards
are to be renewed every six months with reference to the vegetables grown in
facility for pick up and dropping down of the registered farmers to the Rythu
Bazar are to be arranged by the market functionaries through tie-up with state
are to be allotted to the farmers on first come first serve basis daily. The
farmers are not allowed to occupy the stalls permanently. No fee is to be
collected from the farmers.
market committee will every day communicate the moderate wholesale prices of
vegetables through fax between 7.30 AM and 8.00 AM . Based on the same, the
prices of vegetable are fixed in consultation with the farmers committee, which
may be 20% -25% higher than the whole sale price and lower than the local retail
market prices in the area.
4.8 Sale of
vegetables to residential schools/hostels
Rythu Bazar can undertake bulk supply of vegetables to the social welfare
hostels, major residential areas and hostels
as per their requirements to encourage the farmers to bring more and
better quality vegetables to the market.
of vegetables are frequently announced through public address system to create
awareness of the rates of the vegetables among the consumers as well as farmers.
farmers and consumers face a lot of problem due to lack of change especially of
50 paise and one rupee coins. To avoid such problems, the market functionaries
may install coin exchangers at a suitable location in Rythu Bazar through tie up
of weighing scales
the farmers enter into a Rythu Bazar their names along with the particulars such
as name of the village and the quantity of vegetables brought by them are
entered in a register and they are issued a token. On the basis of the token
issued to them, all the farmers are provided with weighing scales without
collecting any fee. The farmers will return back the scales after completing
5. BRIEF CONSTRUCTION SPECIFICATIONS FOR
FUNCTIONAL INFRASTRUCTURE FACILITIES IN RYTHU BAZAR / FARMERS' MARKET
Rythu Bazar/ Farmers' Market should have wide approach road of minimum 6m width
for customers to drive in and out of the bazar compound.
The roads should be hard-surfaced and should have minimum standards
necessary to withstand the wear and tear due to the projected traffic. The roads
should be all-weather roads permitting transportation throughout the year. If
possible separate entry and exit gates may be provided for decongestion. The
internal walkways should have a minimum width of 1.8m for easy movement of
consumers. The surface of the internal walkways may be hard surfaced, tiled with
interlocking tiles or surfaced with granite slabs for preventing seepage of rain
water, minimising the cleaning and maintenance cost, avoidance of
dust in the dry seasons and accumulation of mud and water in the rainy
compound wall should have a foundation depth of 1.0 m below ground level.
Normally PCC of mix ratio (1: 5: 10) is put below the foundation wall. The
material to be used for foundation construction may be stone masonry in cement
mortar or concrete. The superstructure of the compound wall may be made up
of brick masonry in cement mortar in 1: 6 ratio mix. The compound wall should be
plastered on both the faces. The height of the compound wall should be 2 m from
the ground level. Over the superstructure, a barbed wire fencing upto a height
of 0.9m should be provided.
total number of stalls in each Rythu Bazar / Farmers' Market will depend upon
the number of stalls to be allotted by the Department of Agricultural Marketing
to each Farmers Group/ Mandal, SHG , DWACRA groups, NAFED, Khadi and Village
Industries Board, Dist. Coop. Marketing Societies etc. In this particular model,
construction of 250 number of stalls has been considered. The floor area of each
stall has been considered to be 4.66 sq.m. It has been assumed that 70% of the
stalls are along the compound wall and 30% of the stalls are on independent
walls. Of the total stalls, it is assumed that 200 stalls are allotted to farmer
groups/ mandals and the remaining 50 stalls are allotted to SHG/ DWACRA/ BPL
groups etc. for selling other commodities to the farmers and consumers so that
the farmers donot have to move to far off places to buy their consumer items.
foundation depth of the stall should be 1 meter from the ground level. The
foundation should be layered with PCC in 1:5:10 ratio. The plinth should be kept
60 cm above the finished ground level and should be filled with good and
selected earth and properly consolidated in layers. The plinth should be
provided with Damp Proof Course (DPC ) of well graded concrete of 40 to 50 mm
thickness with water proofing compound. The floor area of each stall should be
4.66 sq.m . The flooring of the stalls should be damp proof, rigid and durable.
Normally flooring provided will be 50 mm thick cement concrete 1: 2: 4 mix ratio
over a base course layer. A layer of bitumen asphalt 80/100 or equivalent should
be spread uniformly @ 1.67 kg/ sq.m between the two layers of concrete to make
the flooring damp proof. . Where stone slabs are available at cheaper rates, the
flooring may be of that material. The display floor should be sloping gently
towards the internal walkways for easy cleaning and washing. The roof height of
each stall should be atleast 1.8m from the floor level to the base of the truss.
The roof truss should be placed atop columns made of 40 mm dia. hollow iron
tubes. Hollow iron channels or angle iron may also be used as per requirement
and availability. The roofing of the stalls may be made up of corrugated
asbestos sheets hooked to the truss with J hooks. A slope of 1:4 may
be maintained while constructing the roofing of the stalls. Nearly 70% of the
stalls should be constructed in such a manner that they are lined across
the compound wall (outer stalls). The remaining 30% of the stalls (inner stalls)
needs to have a back wall to make the construction cheaper.
Provision may be made for construction of iron grills and iron rolling
shutters for the stalls to be allotted to the SHG/ DWACRA groups. Further
modifications/ renovations of the stalls as per requirement may be left to the
SHG/ DWACRA groups. Facilities for lighting of the stalls may also be provided.
Farmers rest room cum training
A room of size 3.6m x 6 m may be constructed to act as rest rooms for the farmers. The rooms may also be used as a training center for imparting training on nursery development/ vermicomposting/ biofertilizer preparation/ integrated pest management, nutrition management etc.
Small Sized Godown
may be made by the Market Functionaries/ Department of Agriculture Marketing for
construction of a small 50/ 100 MT capacity godown for the sellers/ SHGs/DWACRA
group members to store their non perishable goods and other commodities for
short durations. In Rythu Bazar/ Farmers' Market where farmers sell onions,
provision for construction of small sized onion godown for safe storage of onion
may also be explored.
on movement of perishable produce in the market yard, construction of a cold
storage may be considered.
Market User Common Facilities
should be made to provide market user common facilities such as (a) cleaning
(b) grading and sorting (c) weighing and packaging of the produce being
brought by the farmers for sale in the Rythu Bazar/ Farmers' Market. Suitable
cleaner cum grader, mechanical and electronic weighing machines along with
stitching / sealing machines with capacities commensurate to the nature, type
and quantity of daily market arrivals of agricultural produce may be provided.
Provision should also be made for displaying the rates of the commodities.
There should be provision for fire fighting, refuse bins, urinals,
latrines, drinking water, common lighting, first aid etc.
in the market yard and the properties should be properly insured.
area of 15 sq.m may be provided for the office to house the staff and equipment
like computer, printer, typewriter, telephone fax machine etc.
Watch and Ward Room
may be made for construction of a
watch and ward room near the entrance gate of the Rythu Bazar/ Farmers' Market.
of the electricity supply line to the site is advantageous.
Electricity is necessary for illumination of Rythu Bazar/ Farmers'
Market, powering fans, motors, water pumps and other uses.
Adequate supply of power should be ensured from the state electric supply
agency in the area. The total power requirement for various purposes such as
lighting, electrical equipment, fans, pumps etc. have to be calculated. The
power requirement may be in the order of 25 KVA.
7. WATER SUPPLY
market yard should have a dependable source of potable water.
When the market yard is located close to a town where municipal water
supply is available the same may be availed; otherwise suitable tubewell
arrangements should be made for the provision of water.
An overhead storage tank which can provide water, at desired pressures in
the distribution pipes should be constructed.
The pipeline should be underground to avoid damage.
8. SEWAGE SYSTEM/ GARBAGE DISPOSAL
should be made for the market yard for collection of garbage and disposal of
functioning of the Rythu Bazar/ Farmers' Market depends very much on the
communication facilities in the market area.
This should include telephone and fax, computer with printer,
calculator, furniture, filing cabinets, ventilation fans, equipment necessary
for primary quality assessment of the commodities, Cleaning, Drying and Grading
Equipment, Weighing Scales and Electronic Weighing Machines, Plastic Crates/
Baskets and Fire Fighting Equipment.
construction and developmental activities should be properly phased, taking into
consideration the time required for the acquisition of land, availability of
technical staff, availability of construction materials like cement and steel,
availability of skilled and unskilled labourers in the area etc..
The phasing should be as realistic as possible.
Arrangements should be made for supervision. Construction and
implementation schedule of the scheme should be indicated in the project.
MARKET INCOME/ REVENUE TO THE MARKET
sources of income for ensuring self sustenance of the Rythu Bazar may be
Auction of parking space
2. Auction of canteen
3. Auction of toilets
4. Other income (lease rentals of private nurseries, vermicomposting units etc.)
5. Rentals of stalls allotted to farmers
6. Rentals collected from regular shops
ensuing viability of the market yard and for sparing the farmers from paying any
fee, the scope of revenue generation through
advertisement in the market place may also be explored. However, in case of cash
crunch / poor viability of the market, a nominal fee can be charged from the
farmers and while fixing the price for the commodities , the administrator should make such a
provision in the unit cost.
12. PHYSICAL AND FINANCIAL OUTLAY
all the provisions indicated above, the average cost of a Rythu Bazar/ Farmers'
Market having 250 stalls, with average total market arrivals of vegetables per
day of 300 MT, average number of consumers visiting per day of 30,000
persons and average sales transaction per day of Rs. 30 Lakh ( which is the
cumulative value arrived at based on the average daily sales figure of farmers'
groups, SHG/ DWACRA / KVIC etc. groups as well as retail traders) comes to about
Rs 77.15 Lakh as given in Annexure -III. Accordingly, the economics of the
investment have been worked out. However, the project cost and economics will
change as per the site conditions and the nature of market operations.
13. FINANCIAL ANALYSIS
economics of a Rythu Bazar/ Farmers' Market having 250 stalls and other
parameters as given under serial 12 have been worked out and given at Annexure
-IV. Respective profitability statements for 15 years and cash flow for
financial viability analysis for this size of Rythu Bazar/ Farmers' Market is
given in annexure V and VI respectively. The repayment schedule with and without
subsidy adjustment has been worked out and are given in Annexure -VII (A) and
VII (B) respectively.
financial indicators for the investment are as under:
Worth at 15% discounting factor
Ratio at 15% discounting factor
Internal Rate of
Average Debt Service Coverage Ratio
2.39 : 1
Average Debt Service Coverage Ratio
1.54 : 1
per the repayment schedule given at Annexure VII, the term loan can be recovered
in 11 years (with graded installments linked to income generation) including a
grace period of two years.
physical infrastructure facilities and along with ancillary structures etc.
should be insured. The traders in the market yard may also be advised to insure
DOíS AND DONíTS
order to safeguard the interest of bankers and borrowers, it is necessary to
take certain precautionary measures. As a ready reckoner, some of the important
aspects are shown in the form of Doís and Doníts in Annexure I and II
16. ROLE OF NABARD
is the apex financial institution of the country for agriculture and rural
development and plays a vital role in coordinating all financial banks, state
agencies etc. to develop the countryside. As a pro active role, it formulates
broad strategies and fixes technical specifications, disseminates information
and extend financial assistance to the agencies for development of agricultural
marketing infrastructure facilities to tap the potential and protect the
interest of the rural community in general and farming community in particular.
As direct agricultural marketing infrastructure facilities like Rythu Bazars/
Farmers' Markets play an important role in the economic developmental process of
the farming community, this bulletin is prepared as a reference document for
bankers, farmers and other developmental agencies. NABARD provides refinance and
co-finanace support to various eligible financing banks for financing
development of direct agricultural marketing infrastructure under its normal
refinance programme. This bulletin can be utilised in identifying the potential
Rythu Bazars/ Farmers' Markets and formulating
schemes for the development
of the infrastructure with NABARD refinance support.
DOíS AND DONíTS
1. Locate the Rythu
Bazar/ Farmers' Market on a well raised drained site.
2. Locate it near to a
3. Locate it away from
pollution sources such as dairy, poultry, slaughter houses
4. Locate it away from
sources of fire such as kilns, factories etc.
5. Provide suitable
access, approach, internal roads and maneuvering and
parking spaces for vehicles.
6. Take necessary
permission for construction of the Rythu Bazar/ Farmers'
Market from the local bodies.
7. Take permission for
the use of land for the nonagricultural purpose from the competent authority.
8. Provide ancillary
structures such as office, chaukidarís quarters, water supply, sanitary
facilities, electricity etc..
9. Provide sufficient
plinth height for the stalls and other ancillary structures to avoid
10. Provide adequate fire fighting
the buildings, roads and equipment properly.
cleanliness and arrange for waste disposal to prevent pollution.
13. Avoid unauthorized constructions.
14. Ensure proper weighing cleaning
and grading facilities.
15. Ensure proper display of prices.
DOíS AND DONíTS
1. Do not allow poor
specification for constructions.
2. Do not allow the
vegetable waste to accumulate or rot in and around the Rythu
Bazar/ Farmers' Market.
3. Do not allow the unauthorized persons to operate in the Rythu Bazar/ Farmers' Market for dilution of efficacy of the direct agricultural marketing infrastructure system.