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February 10, 2006

Liberalising Domestic Agricultural Markets: Gains for India Select Indian Agricultural Markets: A Primary Survey (Work in Progress). February 10, 2006. Outline. The issues The sample Some results. The Issues. Small quantities to sell; urgent cash needs; poor infrastructure;

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February 10, 2006

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  1. Liberalising Domestic Agricultural Markets: Gains for IndiaSelect Indian Agricultural Markets: A Primary Survey(Work in Progress) February 10, 2006

  2. Outline The issues The sample Some results

  3. The Issues Small quantities to sell; urgent cash needs; poor infrastructure; Who will bring output to distant markets: cooperatives? Traders? Who will ensure fair trading? What marketing channels exist? What do the farmers say? What do the traders say? What are the marketing issues on the ground? And what are the alternatives?

  4. The Sample

  5. Sampling Strategy: A Spatial View of the Markets with focus on farmer-market linkage Farmers: in the village Market: in nearby town Consumers: more distant

  6. Selection of the Sample • Objective is to get an understanding of the working of the markets where farmers sell their produce • To cover major crops grown and sold under a variety of agricultural conditions • The sample covers farmers, traders and market officials

  7. Selection of Sample: Crops • Crops: Crops where market interventions prevail; marketing alternatives exist; • Kharif crops • Paddy • Cotton • Tur • Groundnut

  8. Selection of Sample: States • States: Important in production of selected crops; marketing alternatives exist • Paddy: West Bengal, UP, AP, Tami Nadu, Maharashtra • Tur/ Arhar: Maharashtra, UP • Cotton: Maharashtra, Gujarat, AP • Groundnut: Gujarat, AP

  9. Selection of Sample: Paddy • Markets: Important in the selected states for selected crops; contiguous with major markets in neighbouring states • Paddy • AP: Guntur, Nellore • MT: Raigarh, Thane • UP: Pratapgarh, Jaunpur • WB: Burdwan, Birbhum • Tamil Nadu: Thanjavur, Thiruvallur

  10. Selection of Sample: Cotton • Markets: Important in the selected states for selected crops; contiguous with major markets in neighbouring states • Cotton • AP: Adilabad, Guntur, Kurnool • MT:Yeotmal, Jalgaon • Gujarat: Bhavnagar, Amreli

  11. Selection of Sample: Tur • Markets: Important in the selected states for selected crops; contiguous with major markets in neighbouring states • Tur/ Arhar • MT: Yeotmal, Wardha • UP: Pratapgarh, Jaunpur

  12. Selection of Sample: Total Markets • Total Markets Across States • AP: 5 • Gujarat: 2 • Maharashtra: 5 • UP: 2 • WB: 2 • Tamil Nadu: 2

  13. The Sample of Markets: Total Markets Three villages per market: 3 distance ranges (0-10 kms; 11-20; >20 kms from market

  14. The Sample of Farmers • Paddy: 300 • Tur/ Arhar: 100 • Cotton: 175 • Groundnut: 100 Total 675

  15. The Sample Farms: Characteristics

  16. Some Patterns Across Farm Groups, Crops, StatesPreliminary results: Do not quote

  17. Value of Output per Farm (Thousand Rupees) Avg output of the largest size group is about double the average size

  18. Market Dependence: % of Output Sold by the Farmers AP= Andhra Pradesh, MT=Maharashtra, TN= Tamilnadu, UP=Uttar Pradesh, WB = West Bengal

  19. How Big are the Sales?: Output in Rs per acre

  20. Price Realised Rs/ Qtl: Paddy

  21. Price Realised Rs/ Qtl: Cotton

  22. Average Market Distance for Sales (Kms): Paddy

  23. Average Market Distance for Sales (Kms): Tur

  24. Average Market Distance for Sales (Kms): Cotton

  25. Major Marketing Problems(% of farmers): Paddy

  26. Major Marketing Problems(% of farmers): Tur

  27. Major Marketing Problems(% of farmers): Groundnut

  28. Major Marketing Problems(% of farmers): Cotton

  29. Major Reasons for not selling in APMC: Tamil Nadu

  30. Satisfaction with the APMCs: Traders’ Response (No. of traders) No information collected in Gujarat

  31. Traders in APMCs: What other alternatives may work? • Out of those who felt that other channels offered a better deal • Only 9 out of 20 traders in AP said private markets would be better for the farmers

  32. Traders in APMCs: Is there enough competition? • When asked if there should be more traders in the market • Only in UP the traders were nearly unanimous saying no. • They felt there were not many buyers in the market • In the other cases, about 50% of the traders said more traders would be fine.

  33. Findings • Small lots to sell • Differences in patterns of market requirements for crops like paddy and Tur vs Cotton and Groundnut (larger transactions) • Smaller farms not able to bear higher marketing costs • Many transactions within village or close to village • Smaller farms growing better quality?

  34. Findings • Trader responses vary from commission agents to others • Location of the markets important for traders and farmers

  35. Moving forward • Alternative channels of marketing for the farmers: understand reasons for choice • How much do prices vary under alternative channels? • What are the merits and weaknesses in APMCs?

  36. Thank You

  37. Major Reasons for not selling in APMC: Uttar Pradesh

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