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TERM PAPER PRESENTATION- AGRICULTURAL MARKETING INFRASTRUCTURE AND POLICY

TERM PAPER PRESENTATION- AGRICULTURAL MARKETING INFRASTRUCTURE AND POLICY. LG 3. Structure of Presentation. Agriculture Marketing The Need Domestic Market Scenario Problems Road Map Marketing Channels Components of Marketing Infrastructure Initiatives Conclusion. Agriculture marketing.

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TERM PAPER PRESENTATION- AGRICULTURAL MARKETING INFRASTRUCTURE AND POLICY

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  1. TERM PAPER PRESENTATION-AGRICULTURAL MARKETING INFRASTRUCTURE ANDPOLICY LG 3

  2. Structure of Presentation • Agriculture Marketing • The Need • Domestic Market Scenario • Problems • Road Map • Marketing Channels • Components of Marketing Infrastructure • Initiatives • Conclusion

  3. Agriculture marketing Assembling Handling Storage Transport Processing Wholesaling Retailing Export Grading and sorting financing Market information system Consumer producer

  4. Why? • Even after 60 years of independence, the quality, timely and cost effective delivery of adequate inputs remains a dream • Farmers are not able to sell their surplus produce remuneratively • Plenty of distress sales among farmers We produce enough to feed the nation. -Dr M. S. Swaminathan

  5. Marketed surplus Source: Report “National Action Plan Towards Doubling of Food Production, Pg 187

  6. Domestic Market Scenario • Regulated Markets Lack Need Based Infrastructure. • Development Confined to Wholesale Markets. Rural Markets Remain Out of Development Ambit • Current Mandi System Has Multiple Intermediaries and High Value Loss • APMC Regulation Prevents Companies From Directly Sourcing From Farmers • Fragmented Industry, with no Large Organized Players • High Wastage between the Farm and the Retailer

  7. Present Scenario in Value Chain • Producer’s Share in Consumer’s Retail Price - Mere 40% to 60% depending on the commodity • Only 25% of Produced Food-grains Utilise Scientific Storage • Less Than 2% of Fruits and Vegetables Production Is Processed • Post-harvest Losses estimate 10% of Food Grain and 25% of Fruits and Vegetables Production • The value realization at the farmers end is on an average just 27%, ranging between 8-30% as compared to 60- 65% in developed countries. Source- Department of Agriculture and Cooperation, MoA

  8. Problems • Competitiveness is lost • Quality assurance is a question • Loss of Value • Export is a problem • No Grading/Standardization • Consumer Dissatisfaction • No Market Intelligence • No Price Discovery

  9. Paradigm Shift • Transition to Agri-Business • Market Driven • What Consumer Wants ? • Cutting the value Chain • Private Investment

  10. Road Map • Establish Effective Linkages Between Farm Production And Retail Chains • Public–Private-Partnership to Promote Professionalism in Existing Markets • Stepping-Up of Marketing Credit • Introduction of Storage Projects • Link Commodity Exchange with Market Yards for Price and Risk Management • Information Technology to Promote Trade/ Market Led Extension Services • Facilitate Investments

  11. Marketing Channels • Direct to consumer • Through wholesalers and retailers • Through public agencies or cooperatives • Through processors

  12. Direct marketing–farmers markets • Apni Mandi in Punjab and Haryana • Rythu bazaars in AP • Uzhavar Santhai in Tamil Nadu • Krushak bazaars in Orissa • Hadaspar vegetable market in pune

  13. Cooperative marketing • Sugar cooperatives • Dairy cooperatives • Oilseed cooperatives Farmers organizations in marketing • Mahagrapes • Amalsad and Gadat Cooperatives in Gujarat • HOPCOMS Bangalore

  14. Components of Marketing Infrastructure • Functional Infrastructure • Market user common facilities • Shortening the Value Chain • Direct Marketing • Contract Farming • E-Trading Infrastructure • Market extension and market oriented production planning • Input Supply

  15. Assembling Combine harvesters Cleaning Assembling yards Collection centers Pre-cooling Chambers Grading Mechanical graders Color sorters Standardisation Quality Certification Establishing a Quality Lab Accredited Certified agency Infrastructure On-Farm Quality Testing Infrastructure ( Sugarcane Quality Testing for timely harvesting and Maximum Sucrose Content) Grapes Certification Functional Infrastructure

  16. Labeling Bar coding Packaging Pack houses Packing material manufacturing as part of the integrated project Retailing & wholesaling Food world Nilgiris Namdharis in Delhi Reliance Fresh ITC- Choupal Sagar Value addition Decortication of Groundnut Waxing of Kinnows Curing of Honey

  17. Market user common facilities • Market yards • Platforms for loading/ assembling and auctioning of the produce etc • Modern auction Systems • Weighing and Mechanical Equipment

  18. Shortening the Value Chain • Infrastructure for Direct marketing from producers to consumers/ processing units/ bulk buyers etc • Infrastructure for supporting Contract farming arrangements between processing/ trading units and farm producers • Infrastructure for E-Trading, market extension and market oriented production planning.

  19. Scope of Infrastructure Projects • Infrastructure for supply of production inputs and need based services to farmers • Fertilizer storage units • Feed storage units • Marketing Intelligence • Mobile infrastructure for post-harvest operations • Market extension and market oriented production planning

  20. Features of Scheme Credit Linked Back-ended Subsidy on Capital Investment for • Setting up of General or Commodity Specific Infrastructure for Marketing of Agricultural Commodities; and • Strengthening and Modernization of Existing Agricultural Markets, Wholesale, Rural Periodic or in Tribal Areas Players • Individuals, Farmers, Consumers, NGOs, APMC, Corporations, Cooperatives and Marketing Boards in the Entire Country. • State Projects Assisted by NABARD/NCDC for Modernization of Existing Markets Subject to States allowing • Competitive Markets in Private Sector • Direct Marketing and Contract Farming • Rationalize levy of Market Fee

  21. Initiatives • Ministry of Agriculture- terminal markets for perishable goods based on European model- Kolkata and Chandigarh. Rabo Bank estimates- terminal markets would increase price realization for the farmer from 27% to 50% while price for consumers would come down by 15-20% and wastage in the value chain would come down from 22% to 5%. • Ministry of Food Processing is supporting concept of Mega Parks (we already have 60-70). Investments to the tune of Rs. 400-500 crore per park is planned for development of this infrastructure

  22. Rural Hub/ agri business centres- ITC, Tatas, and Mahindras • Risk management covered by the commodity exchanges like NCDX and MCX who are also setting up spot markets. The spot market set up by MCX in collaboration with NDDB at Bangalore is a good beginning.

  23. Conclusion • Greater investments in infrastructure to improve the overall performance of agriculture sector • Reduce the huge wastages • Provide direct access to markets by the farmers • Increased focus on post harvest management infrastructure including refrigerated vans and cold storage units, etc. Retail of food items is a great business and many large industrial houses are making a foray into the same.

  24. Extension Services are extremely important- provided by KVKs, Universities and State Governments. Good agriculture practices adopted in field level needs to be in line with market demand. The extension services also need to be integrated with other services like off take of procurement and input supplies.

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