New role of APMCs(In the context of liberalisation for direct marketing, private market yards, and contract farming

Dr. B.K.Paty National Institute of Agricultural marketing Jaipur

New role of APMCs- outline of the presentation Shift from salesmanship to marketing Dealing with Service product-intangibility,simultaneity Marketing extension Promotion of direct marketing, contract farming,

processing- leading to export, better returns to farmers, reduction of transaction costs etc.

Promotion of grading and standardisation Making the traders association responsible GAP,HACCP,GHP,traceability etc. especially from

export point of view Professionalisation of management Transparency in dealing/ auctioning Providing infrastructure and efficient services

( Promotion of PPP mode)

dealing with a service product Marketers of services face a bigger

challenge due to unique nature of services-intangibility, heterogeneity, inseparability, perishability

Go beyond 4 Ps- product, price,promotion and distribution (Place) .Also people, process and physical evidence

Key Marketing issues The unique characteristics of services

present some key marketing issues Managing differentiation amongst services

( offer, delivery, image, service premises, packaging, personnel, tools and equipment used, customer, convenience, name of the organisation)

Managing productivity (Commitment, High standards , Monitoring system, Customers’ complaint )

Managing service quality(technology,selection & training, standardisation of services, customer’s involvement, employees’ skill utilisation)

Internal marketing

External marketing

Organization

Internal Marketing

Front Line

EmployeesCustomers

MARKETING EXTENSION

Marketing extension is the order of the day in the post-WTO regime

The incidence of huge post harvest losses can be attributed to poor marketing extension to a large extent.

Role of APMC Advice on production planning:- careful selection of the

crop from marketability viewpoint-internal or export Marketing information:- price and arrivals, forecasting of

market trends, demand of other markets, facilities available in the target markets, quality requirements, market fees etc.

Securing markets for the farmers:-Awareness about regulated market laws and reforms, Information regarding procurement by Govt. agencies, contract farming arrangement for cash crops with wholesalers, processors etc.

Advice on improved marketing practices:- packaging, appropriate storing methods, standardization and grading and other post harvest management practices such as maintenance of quality, awareness about post-harvest losses etc.

Role of APMC Advice on establishing and operating

markets:-Farmers groups to set up and run their own markets within framework of rules

Processing and value addition:- Farmers to be educated about value addition through primary processing

Group action:- Promotion of informal groups and Self Help Groups(SHGs)

Marketing Credit:- Educating farmers about different schemes of marketing credits, Advice on warehousing with pledge finance scheme

Problem solving methods: micro-level Marketing extension for export market: WTO

implications, Codex, HACCP, Euro gap standards, Awareness on ill effects of pesticide/insecticides residue etc.

Promotion of Direct Marketing, contract farming, processing

Less than 2% of f & v processed in India, as against 65% in USA, Brazil, Phillipines, South Africa and 83% in Malaysia

Similarly the extent of value addition is 7 % in India as against 23% in China and 88 % in UK

Area & production of agri products

Area and production of Agricultural products(Production in million tonnes)

2186Cattle (million)

10.85Tea

2245Sugarcane

115Pulses

325Edible Oilseeds

282Vegetables

247Fruits

191Milk

329Coarse grains (including maize)

2124Rice, Paddy

272Wheat

155Irrigated Land (Million ha)

2151Arable Land (Million ha)

India’s Rank in World Production

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15 major food items of export(INR billion Rs)

APMC role in contract farming

Provisions of a model agreement- sensitisation

Awareness about dispute redressal mechanism.

Collection of market intelligence data about contract farming

Registration of contracts, whre authised

Promotion of grading and standardisation

Bureau for grades and standards- feeding information and working in close coordination with the Bureau

Awareness about existing grades and standards.

Identification of commodities and preparation of proposals for preparation of grades and standards.

Making the traders association responsible

Feedback about policy issues Involvement in waste disposal and

management. role in maintenance of food safety

and quality Role in ensuring transparency in the

business Role in training of the farmers

GAP,HACCP,GHP,traceability etc. especially from export point of view

Testing facility in the premises of APMC

Awareness about the quality management tools amongst the stakeholders.

Big APMCs can set up training centres with an attached laboratories

Professionalisation of management

Appointing professional managers as CEOs from the panel prepared by the Board

Computerisation Computerised linkage of fees with the

arrivals through automation Service orientation

Transparency

Auctioning Allocation of shops etc. Computerised linkage of market fees

with arrivals

Providing infrastructure and efficient services ( Promotion of PPP mode

Outsourcing Infrastructure in the premises in PPP

mode. Collection centres in PPP mode. Transportation, grading and packing

units etc. in PPP mode.

STOCK TAKING ( Laws / rules across states)

Status of APMC Act AmendmentsStates/ UTs having Amended Acts –1. Andhra Pradesh2. Arunachal Pradesh 3. Assam4. Chhattisgarh5. Goa6. Gujarat 7. Himachal Pradesh8. Karnataka9. Madhya Pradesh10. Maharashtra11. Nagaland 12. Orissa13. Punjab/ UT of Chandigarh 14. Rajasthan15. Sikkim16. Tripura &17. Uttar Pradesh18. Jharkhand

Reportedly no Amendment Needed –• Tamil Nadu ?

Partially Amended –• Haryana (Only Contract Farming) &• NCT of Delhi (Only Direct Marketing)

Amendment Bills under active finalization –, Uttarakhand, West Bengal, NCT of Delhi & Puducherry

Remaining States – Haryana, J&K, Meghalaya & Mizoram

States/ UTs with no APMC Act – Bihar (repealed w.e.f. 01.09.2007), Kerala, Manipur and UTs of Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu & Lakshadweep

Initiative for New Markets

Initiative for setting up of new market by any person, local authority or grower

States which have adopted the suggested provision: Chhattisgarh, Goa, M.P., Nagaland, Sikkim,

Tripura

States which have not adopted it: A.P., Arunachal Pradesh, Assam, Gujarat, H.P.,

Karnataka, Maharashtra, Orissa, Punjab/ UT of Chandigarh, Rajasthan, T.N., Uttar Pradesh

Special Markets

Provisions for setting up of Special Market and Special Commodity Market

States which have adopted the suggested provision: A.P., Gujarat, Maharashtra, Nagaland, Sikkim,

T.N., Tripura, Uttar Pradesh

States which have not adopted it: Arunachal Pradesh, Assam, Chhattisgarh, Goa,

H.P., Karnataka, M.P., Orissa, Punjab/UT of Chandigarh , Rajasthan

PPP in Management ActivitiesSet up and promote public-private partnership in

management of the Agricultural Markets States which have adopted the suggested provision: H.P., Karnataka, Nagaland, Sikkim

States which have not adopted it: A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, M.P., Maharashtra, Orissa, Punjab/UT of Chandigarh , Rajasthan, T.N., Tripura, Uttar Pradesh

PPP in Market Extension ActivitiesTo promote Public-Private Partnership in

Extension activities of Market Committee States which have adopted the suggested provision: A.P., H.P., Karnataka, Nagaland, Sikkim

States which have not adopted it: Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, M.P., Maharashtra, Orissa, Punjab/UT of Chandigarh , Rajasthan, T.N., Tripura, Uttar Pradesh

E-tradingTo promote and encourage e-trading, market committee may

establish regulatory system, create infrastructure and undertake other activities and steps needed thereto

States which have adopted the suggested provision: Gujarat, H.P., Karnataka, Nagaland, Punjab/ UT of

Chandigarh, Sikkim, Uttar Pradesh

States which have not adopted it: A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa

(only defined), M.P., Maharashtra, Orissa, Rajasthan, T.N., Tripura

CEO of Market CommitteeSecretary to be Chief Executive Officer of Market Committee.

CEO shall be appointed by the market committee from the panel maintained by Director/Board which may include

professionals from open market States which have adopted the suggested provision: Nagaland, Sikkim

States which have not adopted it: A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, H.P., Karnataka, M.P., Maharashtra, Orissa, Punjab/UT of Chandigarh, Rajasthan, T.N., Tripura, Uttar Pradesh

Contract Farming

Contract Farming Sponsor shall register himself with the Market Committee or with a prescribed officer in such a

manner as may be prescribed

States which have adopted the suggested provision: A.P., Arunachal Pradesh, Assam, Goa, H.P.,

Karnataka, Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttar Pradesh

States which have not adopted it: Chhattisgarh, Gujarat, M.P., Punjab/UT of

Chandigarh, T.N.

Contract FarmingThe Contract Farming Sponsor shall get the contract farming

agreement recorded with the prescribed officer

States which have adopted the suggested provision: A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, Karnataka, M.P., Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttar Pradesh

States which have not adopted it: H.P., Punjab/UT of Chandigarh, T.N.

Contract FarmingNo title, rights, ownership or possession shall be transferred

or alienated or vest in the contract farming sponsor or his successor or his agent as a consequence arising out of the

contract farming agreement

States which have adopted the suggested provision: Arunachal Pradesh, Assam, Goa, Maharashtra,

Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttar Pradesh

States which have not adopted it: A.P., Chhattisgarh, Gujarat, H.P., Karnataka, M.P.,

Punjab/UT of Chandigarh, T.N.

Contract FarmingDispute Settlement Mechanism

States which have adopted the suggested provision: A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, Karnataka, M.P., Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttar Pradesh

States which have not adopted it: H.P., Punjab/UT of Chandigarh, T.N.

Contract FarmingExemption of market fee on the sales to the Contract Farming

Sponsor taking place out side the market yard under the Contract Farming agreement

States allowing direct sale of produce under Contract Farming:

Arunachal Pradesh, Goa, H.P., Karnataka (fee

reduced by 30%), Maharashtra, Nagaland, Orissa, Punjab/UT of Chandigarh (fee exempted under the

Rules), Rajasthan, Sikkim, Tripura States which have no provision on contract farming: Tamil Nadu

Following States have not exempted market fee: A.P., Assam, Chhattisgarh, Gujarat, M.P., Himachal

Pradesh, T.N., Uttar Pradesh

Contract FarmingSpecification of Model Agreement for Contract Farming

States which have adopted the suggested provision: Chhattisgarh, Goa (as may be prescribed), Gujarat,

Karnataka (as may be prescribed), M.P., Maharashtra (Rules), Nagaland, Rajasthan, Sikkim,

Tripura, Uttar Pradesh (as may be prescribed)

States which have not adopted it: A.P., Arunachal Pradesh, Assam, H.P., Orissa,

Punjab/UT of Chandigarh, T.N.

Single point levy of Market FeeMarket fee shall not be levied for the second time in any

market area of the State by market committee

Market fee not to be levied more than once in commercial transactions between traders or to consumers

States which have adopted the suggested provision: Chhattisgarh, Goa, H.P., M.P., Nagaland, Punjab/UT

of Chandigarh, Sikkim

States which have not adopted it: A.P., Arunachal Pradesh, Assam, Gujarat,

Karnataka, Maharashtra, Orissa, Rajasthan, T.N.,

Tripura, Uttar Pradesh

Registration of Market FunctionariesRegistration (not licensing) of market functionaries and single

registration for trade/ transaction in more than one market

States which have adopted the suggested provision: Assam, Chhattisgarh, Goa, H.P., Maharashtra,

Nagaland, Sikkim

States which have not adopted it: A.P., Arunachal Pradesh, Gujarat, Karnataka, M.P.,

Orissa, Punjab/UT of Chandigarh, Rajasthan, T.N., Tripura, Uttar Pradesh

No Commission Agent No commission agent shall act on behalf of agriculturist seller

and no deduction to be made towards commission

States which have adopted the suggested provision: Chhattisgarh, Nagaland, Sikkim

States which have not adopted it:

A.P., Arunachal Pradesh, Assam, Goa, Gujarat, H.P., Karnataka, M.P., Maharashtra, Orissa, Punjab/UT of Chandigarh, Rajasthan, T.N., Tripura, Uttar Pradesh

Private Market / Direct Marketing

Establishment of private market yard and

direct purchase from farmers States which have adopted the suggested provision:

A.P., Arunachal Pradesh, Assam, Goa, Gujarat, H.P., Karnataka, M.P.(can be done under the bye-laws), Maharashtra, Nagaland, Orissa (excluding for paddy/ rice), Punjab/UT of Chandigarh (not for direct purchase), Rajasthan, Sikkim, Tripura, Uttar

Pradesh

States which have not adopted it: Chhattisgarh, T.N.

Consumer /Farmer Market

Establishment of consumer/ Farmer market States which have adopted the suggested provision:

Arunachal Pradesh, Assam, Goa, Gujarat, H.P., Karnataka, Maharashtra, M.P.(can be done under the bye-laws), Nagaland, Punjab /UT of Chandigarh (only enabling provision) Rajasthan, Sikkim,

Tripura, Uttar Pradesh

States which have not adopted it: A.P., Chhattisgarh, Orissa, T.N. (being set up under

Executive Orders)

Market Fee Exemption

Power to grant exemption from market fee by the

State Government

States which have adopted the suggested provision:

A.P., Chhattisgarh, Goa, Gujarat, M.P.,

Maharashtra, Nagaland, Sikkim

States which have not adopted it: Arunachal Pradesh, Assam, H.P., Karnataka, Orissa,

Punjab/UT of Chandigarh, Rajasthan, T.N., Tripura, Uttar Pradesh

Market Extension Cell & Agricultural Produce

Marketing Standards Bureau Setting up of separate Market Extension Cell in the Board

Establishment of State Agricultural Produce Marketing

Standard Bureau States which have adopted the suggested provision:

Nagaland, Sikkim

States which have not adopted it: A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, H.P., Karnataka, M.P., Maharashtra, Orissa, Punjab/UT of Chandigarh, Rajasthan, T.N., Tripura, Uttar Pradesh

THANK YOU