Himachal Pradesh

MARKET INTERVENTION TO ENSURE REMUNNERATIVE PRICES

National conference on Agriculture for Kharif campaign 26-27th February, 2014.

INTRODUCTION

• Agriculture sector provides direct employment to about 69% of the main working population in the State. Contribution from the Agriculture and allied sectors account for nearly 20% of the total state domestic product. Agriculture sector has experienced spectacular development due to progressive policy of Government and the adoption of improved/scientific production technology by the farmers. There was a great increase in the marketable surplus. Consequently the farmers were not getting remunerative price for their produce. For this purpose market intervention is essential to ensure the remunerative prices.

• Today, Himachal Pradesh has emerged as an important fruit & vegetables growing State in the country. The state is providing excellent quality of temperate fruits like apple, pear, stone fruits, nuts, etc. and sub-tropical fruits like mango, litchi, guava, citrus fruits etc. new fruits crops like-kiwi, strawberry, olive, hazelnuts etc. have been introduced in recent years, Besides flowers, vegetables, mushrooms, hops, honey, tea, medicinal and aromatic plants etc. are also being grown in the state.

• The Agro climatically the state is divided in to four zone.

AGRO CLIMATIC ZONE OF THE STATE

Name of zone Elevation in meters above Sea level

% Geographically area

% Cultivated area

Major Crops grown

SHIWALIK HILL ZONE (SubTropical, Sub mountain and low hills)

350-650 35% 40% Wheat. Maize, Paddy, Black, Gram, Sugarcane, Mustard, Potato, Vegetables, Pulses etc.

MID HILL ZONE (Sub humid Mid hills)

651-1800 32% 37% Wheat, Maize, Barley, Black Gram, Beans and Paddy Pulses and Forages ,off season vegetables, Ginger, seed production of cauliflower & root crops

Name of zone

Elevation in meters above Sea level

% Geographically area

% Cultivated area

Major Crops grown

HIGH HILL ZONE (Wet Temperate High hills)

1801-2200 35% 21% Wheat, Barley, Lesser, Millets, Pseudo-cereals (Buckwheat and Amaranthus), Maize, Rice and Potato etc.

COLD DRY ZONE (Dry Temperate High Hills)

About 2200 8% 2% Wheat, Barley, Rajmash, Pseudo cereals like Buckwheat and Amaranthus. It is ideally suited to the production of quality seed potato, temperate and European type of vegetables and their seeds, seed potato and peas seed.

• In zone, III & IV farmers are growing off season vegetables which are marketed in the within state and adjoining plains of the country. The present status of area, production of vegetables and fruits marketable surplus is as under:

Vegetable production

• Vegetable production has increased form 25000 M tonnes during 1951-52 to 5,30,000 tonnes during 1966-67 & 12.68 lac tonnes during 2010-11. It further increased during 2010-11-12 to 13,56,600 MT Major vegetables include Peas, French bean, Cauliflower, Root Crops, Potato, Cucurbits, Onion, Garlic, Capsicum, Tomato, Cauliflower, Cabbage, etc. Area and production of different vegetables in the state is as under:

CROP-WISE VEGETABLE PRODUCTION:

Crop 2010-11 2011-12 2012-13

Area (Hac.)

Production (M.T)

Area (Hac.)

Production (M.T)

Area (Hac.)

Production (M.T)

Tomato 9944 388426 9870 392061 9930 413709

Peas 22823 254177 23672 274032 23668 280231

Cabbage 4513 144233 4349 141087 4387 149671

Cauliflower 3002 60701 4180 91640 4351 101710

Beans 3013 35789 3295 39157 3436 40879

Capsicum 2136 32092 2027 31670 2072 34132

Other vegetables

19644 353479 20575 969647 21021 377716

Total 65075 1268897 67968 1356600 68865 1398048

FRUIT PRODUCTION .

• The agro-climatic conditions of Himachal Pradesh are extremely suitable for growing different varieties of fruits. Apple is the most important amongst all. The peak marketing season for apple is August to September year. During 2001, the apple production was 2, 75,036 MT alone out of total fruit production of 3.72823 MT Apart from this, there is vast potential of growing other temperate fruits. The area under fruits was 792 hac in 1950-51 with total production of 1200 tonnes which has increased drastically to 2.08 Lac hac. With total fruit production of 10.27 lac M tonnes during 2010.

AREA AND PRODUCTION OF FRUIT CROPS

Crop 2010-11 2011-12 2012-13

Area (Hac.)

Production (M.T)

Area (Hac.)

Production (M.T)

Area (Hac.)

Production (M.T)

Apple 101485 892112 103644 275036 106440 412395

Pears 7370 32075 7333 11760 7283 25212

Peach 5182 9527 5181 5101 5159 11276

Mango 39194 31463 39568 28972 39828 50001

Orange 8621 17849 8554 13889 8609 13214

Others 49443 44795 50294 38065 50984

Total 211295 1027821 214574 372823 218303 555708

THE MARKETABLE SURPLUS OF VEGETABLES

Vegetable Marketable surplus (%) Annually revenue generated through export

Peas 93 600-800 Crores

Tomato 95

Beans 94

Cabbage 93

Cauliflower 95

Capsicum 93

THE MARKETABLE SURPLUS OF FRUIT CROPS ( OUT OF STATE) (In boxes of 20 kg each)

Sr.No. Name of the Market

2011-12 2012-13 2013-14

1 Delhi 7401199 10745396 20211474

2 Chandigarh 3737729 5956535 9740069

3 Kalka 9901 14844 23270

4 Ludhiana 81865 122471 199455

5 Jalandhar 12377 18556 33243

6 Amritsar 9901 14845 26594

7 Luck now 34654 51957 93079

8 Ambala 12377 18556 33243

9 Moga 20421 30618 54850

10 Kolkata 49506 74225 132970

Sr.No. Name of the Market

2011-12 2012-13 2013-14

11 Mumbai 152232 228241 408883

12 Chennai 60645 90925 152916

13 Ahmadabad 43318 64947 116349

14 Agra 40843 61235 109700

15 Saharanpur 33417 50102 89755

16 Karnal 12377 18556 33243

17 Other markets 664003 963066 1725289

Total 1,23,76,587 1,85,57,549 3,32,42,556

THE MARKETABLE SURPLUS OF OTHER

COMMERCIAL CROPS . Name of crop Area Production Marketing

seasons Major Distract Of marketable surplus

Maize 3 Lac hectare 7.6 lac tonne

1st Spt. 15 Nov.

Mandi, Bilaspur, Kangra and Kullu

Potato 14000 hectare 1.55 lac tonne

April-October, June-October Sept. December

Shimla, Kangra, Kinnaur, Chamba, Lahul Spiti and Sirmour

Ginger 2270 hectare 25500 tonnes

Sept. -December

Sirmour, Solan, Bilaspur and Shimla

Garlic 3339 hectare 44733 tonnes

April-June Kullu, Mandi, Sirmour and Kangra

MARKETING SEASON OF MAJOR CROPS

S.No. Name of the crop

Marketing Season APMC

1 Wheat 1st April-15th June Sirmaur, Kangra, Una

2 Paddy 1st Oct.-30th Nov. Sirmour, Mandi, Solan, Kangra, Chamba

3 Maize 1st Sept.-15th Nov. Solan, Mandi, Kangra, Una, Hamirpur

4 Garlic 15th April-30th June Solan, Kullu

5 Ginger 1st Oct.-15th January Sirmaur

6 Tomato 20th June-15th Oct. Solan, Shimla & Kinnaur, Kullu & Lahaul-Spiti, Mandi

S.No.

Name of the crop Marketing Season APMC

7 Apple 1st July-30th Oct. Shimla & Kinnaur, Kullu & lahaul-Spiti, Mandi, Chamba

8 Off-Season Vegetables (Cabbage, Cauliflower, Broccoli, Beans, Capsicum, etc.

1st April-30th June Shimla & Kinnaur, Kullu & Lahaul-Spiti, Solan

9 Peas (Off-Season 1st April-30th June Kullu & Lahaul-Spiti

10 Potato 1st Sept.-15th Nov. Shimla & Kinnaur, Sirmaur, Kangra, Chamba

11 Cabbage 1st Feb.-31st March Mandi, Kangra

ARRIVALs OF FRUITS AND VEGETABLES IN APMCS

Year Vegetables in Qtls Fruits in Qtls.

2010-11 1787973 2005004

2011-12 2418056 1185784

2012-13 2332238 2144344

2013-14 --- Apples-1,29,75392 Boxes (size 20/kg. Each)(259507 M.T.)

PRESENT STATUES OF MARKETING INFRASTRUCTURE

• The H.P. State Agriculture Marketing Board has setup 54 market yards at various places in the state it is plan to expand the mostly infrastructure as per the requirement and availability of sources.

APMC’S AND MARKET SUB YARDS

Sr.No. |Name of the APMC Principal Market Yard

No. Of Sub-Market Yards

1 Shimla & Kinnaur Shimla 8

2 Hamirpur Hamirpur (Dosarka) 2

3 Chamba Chamba (Balupul) --

4 Bilaspur Bilaspur 1

5 Kullu & Lahaul Spiti Kullu 6

6 Mandi Mandi (Kangni) 5

7 Kangra Kangra 7

8 Paonta-Sahib Paonta Sahib 6

9 Solan Solan 8

10 Una Una 1

Total 10 Nos 44

MARKET INTERVENTION

• In order to ensure remunerative price for the major agricultural produce the market intervention activities divided into three categories.

• 1. Farmer level• 2. APMCs level• 3. Govt. level (State/Central sponsored

Scheme)

FARMER LEVEL

• The producer is the main contributor of every situation. His participation is expected to make up a whole intervention. He has to keep all the factors in mind before the production. The following steps may help him.

• Focus on day to day market information.• Short/long terms planning of produce as per demand. • Adoption of Scientific Cultivation Technique helps to

reduce the cost of production.• Use of post harvest technology .• Focus on grading and value addition packing.

APMCs level• The farmer along with the return some times faces the

problem of surplus production and he does not get sufficient pay for work. APMC becomes involved in that situation to improve or control it. . The points which are given may be valuable as further remarks. These factors may make the way easy. I these points are considered seriously we can not only ensure the farmers but can also gain his lost determination and confidence. In future the following plans are designed to achieve a long term aim or purpose. The mutual understanding will pave the way for the farmer. Finally with this collaboration and putting our full capacity in action will provide way and the fruitful results may be found.

• Strengthening of marketing infrastructure In production areas through involvement of Agricultural Produce Market Committees, Co-operative, Small farmers groups in clusters and Private Sector will not only help farmers to get income through greater participation in a more efficient rural market & inclusive growth but provide further impact for diversification and bring more employment and prosperity in rural areas of Himachal Pradesh.

The availability of marketing infrastructure i.e. Small markets/collection centres in the production area will also solve the problems of marketing of produce in distant markets and they will save in term of cost of transportation, transit losses and miscellaneous charges.

• Setting up more seasonal markets in production area after proper designing planning to handle the arrivals in efficient manner providing minimum facility of auction platform, storage, structure, grading and packing houses, public facilities etc.

Alternative marketing channels: Direct marketing to consumers/retail

chain/buyers i.e. Fair price shops at APMC level.

Farmers Markets ie. Apni Mandi Contract farming

Contract farming involves agreement between producer and sponsoring agency (Buyer) for Future Trade .The price of the commodities is also decided by the both party at the time of agreement.

Popularization of Grading at producers’ level, value addition through primary processing and packaging

Modernization and expansion of existing yards providing therein grading and packing lines, repining chambers cold/CA stores, adequate auction platform and other facilities.

Empowerment of farmers through market information website, news paper, Doordarshan, Ticker Board,(agmarknet) SMS portal and documentation of success stories.

Integration and strengthening of Marketing network to curb malpractices and reduce paper work through automation of market operations.

Marketing through e-trading Setting up more agro- based small processing

units

Govt. level (State/Central sponsored Scheme)

• Government intervenes through Minimum support Price (MSP). The MSP is ensured through procurement by central, state and cooperative agencies in the states. State governments have been alerted from time to time to make adequate arrangements to ensure MSP to farmers.

• In addition, Government is implementing Market Intervention Scheme (MIS) for agricultural and horticultural commodities not covered under the Price Support Scheme. The MIS is implemented on the request of State/UT Government in order to protect the growers of these commodities from making distress sale in the event of bumper crop when the prices tend to fall below the cost of production.

PRICE SUPPORT SCHEME (PSS) AND MARKET INTERVENTION SCHEME (MIS), MINIMUM SUPPORT PRICE (MSP)

• The Price Support Scheme (PSS) and Market Intervention Scheme (MIS) ensures remunerative prices to the growers and in case market prices fall below the MSP/MIS, central/state agencies Start the purchase operation by paying the MSP/MIS to the farmers.

STATE WISE IMPLEMENTATION OF PRICE SPORT SCHEME & MARKET INTERVENTION SCHEME (PSS AND MIS)

State Commodities under PSS Commodities under MIS

Andhra Pradesh Milling copra, Cotton, Sunflower, Tur Oil Palm, Chilly

Haryana Sunflower, Mustard

Himachal Pradesh Apple C Grade, Kinnow, Malta, Santra, Galgal, Mango

Karnataka Ball Copra, Sunflower, Safflower, Tur Oil Palm, Arecanut

Kerala Milling Copra, Ball Copra Black Pepper

Madhya Pradesh Urad, Mustard

Maharashtra Tur, Sunflower, Safflower

Mizoram Chillies, Ginger, Passion Fruit, Chow-chow (Iskut)

Rajasthan Gram, Mustard Onion, Garlic

Uttar Pradesh Groundnut, Mustard Potato

Uttarakhand Apple C Grade

West Bengal Sesamum Potato

• Minimum Support Price (MSP) Wheat and paddy are two major agricultural commodities procured by the National cooperative marketing federation (NAFED), Food corporation of India (FCI) under MSP in order to have sufficient buffer stock from food security point of view and to feed the public distribution system. Procurement through MSP is not done in all the states like in case of wheat it is mostly done form the states of Punjab and Haryana whereas in other states it is almost negligible.

• In Punjab and Haryana farmers are able to sell their surplus wheat and paddy at MSP but this is not true in case of farmers of all other stages. The reasons are difference in procurement mechanism by the procurement agencies like procurement through commission agents in some states whereas provision of direct procurement from farmers in other states. In states where there is provision of direct procurement from farmers, no significant procurement actually takes place.

EFFICIENCY OF MARKET INTERVENTION SCHEME (MIS)

• The MIS in the state of Himachal Pradesh is being implemented through State agencies of HPMC & HIMFED. The fruits like apple, Kinnow, Malta and Santra were taken up under the scheme during the year 1990-91. Later on Galgal was included during the year 1995-96 and for mango MIS was implemented during 1998.

COVERAGE OF DISTRICTS UNDER MIS FOR DIFFERENT FRUITS

Apple Kinnow, Malta and Santra

Mango

Shimla Una Una

Kullu Solan Solan

Mandi Mandi Mandi

Sirmour Sirmour Sirmour

Kangra Kangra Kangra

Kinnaur Bilaspur Bilaspur

Chamba Hamirpur Hamirpur

Lahul Spiti Chamba Chamba

Solan

PERIOD OF IMPLEMENTATION

• The scheme is not open throughout the year and is open only during the harvesting and marketing period of fruits covered under the scheme. The duration of operation of scheme has been presented in the table.

Name of Fruit |Duration of MIS (Each year)

Apple July 20 to October 31

Santra and Malta November 21 to February 15

Kinnow, Galgal and Mango July 1 to August 15

PRICE ANNOUNCEMENT OF MIS

• The procurement of fruit under the scheme is strictly at the price announced and notified by the state government beforehand. The procurement cost is being born by the administrative department i.e. Horticulture department.

COST OF FRUIT PROCUREMENT UNDER MIS

Name of fruit Cost of procurement (Rs./Kg.) 2013-14

Apple 6.50/kg.

Kinnow, Malta and Santra

B-6.50/kg.C-6/kg.

Galgal 5.50/kg.

Mango Seedling-5.50/kg.Grafting-6.50/kg.

Details of procurement rate, quantity procured and dispatch of apple under MIS

Year Procurement Rate (Rs. Per kg.)

Quantity procured in M.T.

Procurement in bags

No. Of bags dispatched to market/processing

2007-08 4.75 29427 490448 490448

2008-09 5.25 45741 762350 659650

2009-10 5.25 912 15200 15200

2010-11 5.25 111154 1852567 931260

2011-12 5.25 5664 94400 93367

2012-13 6.00 11822 197033 *

2013-14 6.50 34229 570483 *

DISTRICT WISE PROCUREMENT OF APPLES AND VALUE OF PROCURED APPLES UNDER MIS

S. No.

Name of District

2011 2010.182 2013

Procurement price @ Rs.5.25 per kg

Procurement price @ Rs.6.00 per kg

Procurement price @ Rs.6.00 per kg

Qty.Procured (in M.T)

Value of Procured apples (in lakh Rs.)

Qty. Procured (in M.T.)

Value of Procured apples (in lakh Rs.)

Qty. Procur3ed (in M.T.)

Value of Procured apples (in lakh Rs.)

1 Shimla 5398.920 283.44 11158.800 669.53 31622.208 2055.44

2 Kullu 173.400 9.10 362.280 21.74 1140.402 74.13

3 Mandi 72.120 3.79 211.380 12.68 1163.586 75.64

4 Kinnaur 15.840 0.83 85.800 5.15 236.280 15.36

5 Chamba 0.000 0.00 -- -- 64.176 4.17

6 Sirmour 0.000 0.00 2.880 0.17 -- --

S. No.

Name of District

2011 2012 2013

Procurement price @ Rs.5.25 per kg

Procurement price @ Rs.6.00 per kg

Procurement price @ Rs.6.00 per kg

Qty. Procured (in M.T)

Value of Procured apples (in lakh Rs.)

Qty. Procured (in M.T.)

Value of Procured apples (in lakh Rs.)

Qty. Procur3ed (in M.T.)

Value of Procured apples (in lakh Rs.)

7 Lahaul & Spiti

3.360 0.18 0.840 0.05 2.520 0.16

8 Kangra 0.000 0.00 -- -- -- --

9 Solan 0.000 0.00 -- -- -- --

Grand Total 5663.64 297.34 11821.980 709.32 34229.172 2224.90

ISSUES/PROBLEMS OF MIS IN THE STATE

• Payments are not always in cash, farmers are obliged to accept inputs like fertilizers, packing materials and insecticides etc as kind payment.

• During the years of high production, significant amount of procured apples is wasted and destroyed. This is a burden on state exchequer.

• The quantum of apple used for processing is low and only apple procured b y HPMC is being used for processing.

• Most importantly, this is a loss making preposition for the state and as such has large scope for improvement in management of the scheme.

SUGGESTIONS:

• The quality of MIS produce needed to be improved so that problem of shortage of buyers is eliminated to some extent.

• Arrangements of vehicles at the time to peak season need to be improved so that produce can be handled safely, with low cost and well in time.

• There is a need of finalizing the auction place for selling of the produce and date and time of auction well in advance. This information can be passed on to interested traders through advertisement.

• Handling charges need to area specific so that the collection of produce especially in those areas where collection centres are away from road head is facilitated.

• Opening of new processing units is the immediate need in the state. With opening of these units MIS produce can be disposed off efficiently. If such arrangement are not made urgently the time may come when the scheme may become unviable.

• There should be equal distribution of collection centres to both the agencies so that competition between these does not arise.

THE POSITIVE EFFECTS OF MARKET INTERVENTION

• Assured returns• Avoid distress sale• Encourage farming• Ensure Food Security• Better agri-marketing through sorting, grading, packing and

levelling• Innovative marketing practices• Selling through APMC market yards, co-operatives, direct

marketing or through E-commerce• Ensure disposal of produce• Promote processing

Issue

• Monoculture practices• Distort Competition• Excessive use of Natural Resources.

CONCLUSION

• Market intervention is required for major surplus commodities of respective states. Like in case of HP major surplus of fruits and vegetables which are highly perishable. State/central Govt. agencies can procure surplus fruits and vegetables for processing by the PSUs and processed products can be sold through Fair Price shops, PDS etc. Market intervention for perishable, semi-perishable commodities like potato, Cauliflower, tomato, ginger, garlic, paddy, wheat, pulses etc should also be in place to prevent distress sale by the farmers.

• Boon for farmer when excessive production.• Focus on diversification and market

orientation• Intrusion of private players• More focus on perishables & semi-perishables

Thanks