market led agriculture
TRANSCRIPT
MARKET LED AGRICULTURE:- INSTITUTIONS, ISSUES & POLICIES
SPEAKER – AMOL JAMALE
REG. NO. - J4-000905-2011
JAU.
SEMINARON
POST GRADUATE INSTITUTE OF AGRIBUSINESS MANAGEMENT
J. A. U. JUNAGADH 362001
2
CONTENT
INTRODUCTION1
EVOLUTION CONCEPT2
DIMENTIONS3
INSTITUTIONS4
ISSUES5
POLICIES6
CASE STUDIES7
CONCLUSION8
3
Market led agriculture is the market ward orientation of agriculture through extension includes agriculture & economics is the perfect blend for reaching at the door steps of farming community with the help of appropriate technology.
During last 50 years emphasis was given on PRODUCTION-LED EXTENSION (PLE). India become self reliant on food production. But the farmers at individual level are not realizing remunerative prices for their produce. They prone to sell their produce “AS IS WHERE”.
Farmers need to transform themselves from producers to producers cum sellers.
INTRODUCTION
4Source: Sheela et al, (2008)
EVOLUTION OF CONCEPT OF M. L. A.
Legitimized -led agriculture :
5
Focussed mainly on rural development Some of the attempts include,
Sevagram attempt – Mahatma Gandhiji – 1920.
Shriniketan - Rabindranath Tagore – 1921.
Marthandam project - Spencer Hatch – 1921.
Gurgaon attempt – F. L. Bryne – 1927.
Etawah pilot project - Albert Mayor – 1946.
CONT…
State -led agriculture :
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Central and State governments took responsibility.
Grow more food campaign -1947.
Intensive Agriculture Development Programme -1965.
Intensive Agriculture Area Programme -1965.
High Yielding Varieties Programme -1967.
Drought Prone Area Programme - 1971.
Agriculture Technology Management Agency - 2000.
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CONT…
Market-led agriculture :
Started in kerala in the year 1993, as an experiment by combining SHGs and market oriented production.
The GOI in collaboration with MANAGE Hyderabad as successfully pilot tested MLA with ATMA in 7 states and 28 districts.
Some of the developments are, AEZ, FIGS, Collective marketing, AGMARKNET, Rythu Bazaars (Rythara Santhe), RKVY
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To conversion of Agriculture sector into profit oriented business.
To strengthening R-E-F linkages – between various departments at various levels
To strengthening market linkages to farmers – IT application in Agricultural marketing.
To wider use of electronic mass media for Agricultural Extension.
Source : GOI, (2007) 8
NEED FOR MARKET LED AGRICULTURE
Expansion of Market - more of agribusiness and trade.
Changing consumers preference-move towards HVCs.
Revolution in Information Communication Technology (ICT).
New trade opportunities within and outside the country.
Introduction of export oriented product.
Modernization of wholesale markets with new Agricultural policy.
Conversion of P-L-A into M-L-A.
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ROLE OF EXTENSION PERSONS IN LIGHT OF MLA
Doing SWOT analysis.
Organization of Farmer Interest Groups (FIGs).
Enhancing the communication skills of farmers.
Establishing market linkages between farmers, markets and processors.
Helping in production and marketing plan.
Educating farmers about direct marketing.
Capacity building of FIGs.
10Source: Reddy and Jaya, (2002)
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DIMENSIONS
D
A
MARKETING MIX
MARKETING PLAN
MARKET ORIENTED
PRODUCTION
USE OF TECHNOLOGY
MARKET INTELLIGENCE
DIMENSIONS OF M. L. A.
E
C
B
www.agri.mah.nic.in
www.agrinto.com
www.ciks.org/agri.html
www.khetiwadi.com
www.kisan.net
www.krishiworld.com
www.nabard.org
www.nic.in/agrico
www.pravara.com
www.ycmou.com/agri
INDIAN AGRICULTURAL WEB SITES
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0%10%20%30%40%50%60%70%80%90% 84%
38%31% 31% 28% 28% 25% 22%
10%
Source : Internet and Mobile Association of India (IAMAI)
REASONS FOR NON USAGE OF INTERNET
Among rural users in India
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STATE AGRICULTURAL MANAGEMENT & EXTENSION TRAINING INSTITUTE SAMETI, JHARKHAND
A State level Training Institute of Jharkhand
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INSTITUTIONS FOR MLA
CONT…
ICAR (Indian Council of Agriculture Research).
NARSs (National Agriculture Research Systems ).
KVK (Krishi Vigyan Kendra).
APEDA (Agri. & Processed food product Export Development Authority)
SAMB (State Agriculture Marketing Boards ).
NHB (National Horticulture Board)
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Objectives.
To strengthen Research – Extension – Farmer linkages To increase the quality and type of technologies being disseminated. To develop new partnerships with the private institutions including NGOs.
Creating Farmer Advisory Committee to improve feed back. Using NGOs to organize farmers. Increased use of Information Technology (AGMARKNET, WWW)
Salient Features.
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ISSUES OF M.L.A.
Quality standards.
Marketing infrastructure building.
Bridging the information gap.
Direct marketing.
Specialized markets.
Involving corporates.
Source: GOI, (2007) 17
DIFF. BETWEEN ISSUES OF S.L.A. & M.L.A.
based on the pro-market explanations
ISSUES STATE-LED MARKET-LED
BeneficiariesSupply-driven;
beneficiaries state selected
Demand-driven; self-selected
Implementation method
Statist-centralized; transparency = low
degree
Privatized–decentralized;
transparency = high degree
Pace and nature Protracted; politically & legally contentious
Quick; politically & legally noncontentious
Land prices Higher Lower
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ISSUES STATE-LED MARKET-LED
Credit and investments
Low credit supply & low investments
Increased credit and investments
Exit options None Ample
Cost of reform High Low
Programme sequence
Farm development plans after land redistribution
Farm development plans before pace of redistribution
DevelopmentProtracted, uncertain and anaemic postland transfer development
Quick, certain, and dynamic post-land
transfer development
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POLICIES INITIATIVES
The National Agriculture Policy had highlighted the need for increase in the private sector participation in farming by leasing private land for agri-business & contract farming to private companies.
The government proposed to set up 20 Agri-Export zones in different state that would integrate the complete process from production to export stage & contract farming is being encouraged to rope in local farmers to join these export zones as members to pool in their produce.
Source : Ramasamy et al, (2008) 20
PHASES IN AGRI. POLICY & DEVELOPMENT
Phase 1.Establishing
the basics
Phase 2.Kick starting
markets
Phase 3.Withdrawal (non-agri.)
Roads/ Irrigation Systems/ Research/
Extension/(Land Reforms)
Reliable local seasonal finance, input & output
markets
Effective private sector markets
Extensive, low productivity agriculture
Profitable intensive technology. Wider uptake
inhibited by lack of inputs, finance & output markets
Effective farmer input demand & surplus prod.
Larger volumes of finance & input demand
& produce supply
GOVT. ACTION STATUS OF AGRI.
Source : Dorward, (2004) 21
NATIONAL AGRICULTURAL POLICY
Focus areas of policy document.
Sustainable Agriculture.
Food and Nutritional Security.
Generation and Transfer of Technology.
Input Management.
Incentives for Agriculture.
Investments in Agriculture.
Institutional Structure.
Risk Management.
Management Reforms.
Follow up Actions.
Cooperative Sector Reforms.
Source: GOI, (2000) 22
FUTURE POLICY DIRECTIONS
Completion of market reforms. (Min. of agriculture & state govt.)
Promotion of supply chain infrastructure. (Various ministries)
Promotion of grading, standardization and quality certification of farm produce. (Min. of agriculture)
Expansion of food processing facilities. (Min of FPI)
Ensure farmer’s linkage with future market with price discovery and price risk management. (Min. of CA. F. & PD)
23
MLA WORKS WITH DIFF. FARMING SYSTEMS
Precision farming.
Contract farming.
Corporate farming.
Cooperative farming.
Integrated farming.
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To prepare the farmers for market led Horticulture/ Agriculture. To empower the Farmers and Farmers’ Forum.
To promote Hi tech Agri. /Horticulture inbuilt with precision farming
elements. To be the model hi tech production system to maximize the productivity.
Objectives.
PRECISION FARMING
(Pierce and nowak, 1999)
An application of technologies and principles to manage spatial and temporal viability associated with all aspects of agriculture production.
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MEASURABLE OUT PUTS OF P.F.
Enhancing the Productivity of crops by 50-60%.
95 percent marketable produce .
Water economy 30 to 40 %.
Electricity economy 50 %.
Less labor dependence.
25% more weight per unit volume for the produce.
Empowerment of farmers ( Technical, Economical and social
empowerment).
Source : Ajjan et al, (2008) 26
PROFITABILITY OF P.F.
No Crop Particulars Cost of cultivation
(Rs./ha)
Gross income(Rs./ha)
Marketing cost (Rs)
Net return (Rs)
% increase
in net return
1 Cucumber Project farmers 51,579 1,20,000 12,000 56,421 221
Other farmers 49,960 75,000 7,500 17,540
2 Cabbage Project farmers 64,545 1,57,500 - 92,955 136
Other farmers 73,275 1,12,500 - 39,225
3 Chilli Project farmers 1,75,500 2,10,000 29,000 92,500 111
Other farmers 1,06,250 1,50,000 22,000 43,750
4 Potato Project farmers 84,100 2,10,000 5000 1,25,000 66
Other farmers 67,000 1,43,000 5000 76,000
5 Tomato Project farmers 2,58,280 95,971 13,068 1,49,241 62
Other farmers 2,00,304 96,430 11,824 92,051
Source : Ajjan et al, (2008) 27
Brinjal: 500MT/ha, all India record
Sugar cane 110 MT / acre (22 MT against 12 MT /ha)
Snake guard’s height, 10 feet
PRECISION FARMING SUCCESS STORIES
Carrot
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Banana double density. (6000 Plants/ha)Turmeric 3000 kg dry Vs 4500 kg dry.
Service agency. Workshop on precision vegetables. 29
CONTRACT FARMING
Major StatesMaharashtra, A.P., Karnataka, Punjab, Orissa, Tamil Nadu, Madhya Pradesh etc.
Major CropsCotton, Soybean, Potato, Sugarcane, Basmati Rice, Chilli, Spices, Medical Plants, Fruits and Vegetables, Flowers, Poultry etc.
Major Sponsoring AgenciesMahindra Shubhlabh, PepsiCo, United Breweries, Dabur, Cadbury, Godrej, Himalaya Health Care, ITC Agro-Tech etc.
Forward trade agreement between the producer and sponsor (buyer) who may be processer or supplier / exporter.
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No Particulars CF NCF % Diff. to CF over NCF
1 Preparatory cultivation. 1430 1290 10.58
2 Seeds & sowing. 196 374 -47.59
3 Manures. 1702 1490 14.23
4 Fertilizers. 2013 1499 34.32
5 Inter culture operations. 2325 2150 8.14
6 Plant protection. 4873 5595 -12.91
7 Picking cost. 1930 1755 9.97
8 Post harvest operations. 0 1800 -100
9 Total cost. 14469 15954 -9.31
10 Gross return. 32020 29705 7.79
11 Net return. 17551 13751 27.63
COMPARATIVE STUDY OF COST & RETURN OF COTTEN
in CF & NCF (Rs per acre)
Source : Senthilnathan, (2008) 31
WASTAGE ACROSS SUPPLY CHAIN ADVANTAGES OF CONTRACT FARMING
Assured market price. Financial support in kind. Assured quality of seed and pesticides. Better price for producer. Elimination of middlemen. Remunerative returns and timely payment.
Assured required supply. Assured required quality. Protection from fluctuation in market price. Buyer can plan on long term basis.
To the Farmers…
To the Buyers…
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INTEGRATED FARMING
Productivity, Economics and Employment Generation of Wetland Integrated Farming System.
Farming systems
Productivity (kg/ha)
Production cost (Rs/ha)
Gross return (Rs)
Net return (Rs)
BCR Per day return (Rs)
Employment generation (man days/
ha/yr)
Cropping alone
12995 27822 64975 37153 2.43 178 369
Crop + Fish + Poultry
29609 48303 146035 97731 3.02 400 515
Crop + Fish + Pigeon
29173 47090 145868 98778 3.06 400 515
Crop + Fish + Goat
37679 55549 186667 131118 3.36 511 576
33Source : Natarajan and Sudhalakshmi, (2008)
AGRICULTURE SUPPLY CHAIN
COMPARISON WITH DEVELOPED COUNTRIES
INDIA
FarmerConsolidator
Commission agent
Trader Wholesaler RetailerConsumer
High wastage and low margins
DEVELOPED COUNTRIES
FarmerWholesaler
Retailer
Consumer
High investments – Low wastage - better
margins
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Field Losses (e.g. Pest, Diseases, Rodents etc)
Pre-Processing(e.g. inefficient harvesting, drying, milling)
Transport(e.g. spillage, leakage)
Storage(e.g. technical deficiencies)
Processing & Packaging(e.g. excessive peeling, washing)
Marketing(e.g. spoilage, rotting in stores)
Rich Countries
– High losses at a
later stage in
the value chain
Consum
erProd
ucer
Field Fork
Wastage by Consumer(e.g. overeating, food wastage)
Developing Countries – Relatively
high losses in the initial
parts of the value chain
WASTAGE ACROSS SUPPLY CHAIN
LEADS LOWER LEVEL OF PROCESSING
Source :MOFPI (2008-2009) 35
STAGES IN A COMMODITY MARKETING SYSTEM
• Independent truckers, trucking companies, railroads, airlines etc. 2: Transportation
• Grain elevators, public refrigerated warehouses, controlled atmosphere warehouses, heated warehouses, freezer warehouses
3: Storage
• Commodity buyers specializing in specific agricultural products, such commodities as grain, cattle, beef, oil palm, cotton, poultry and eggs, milk
1:Assembly
STAGES EXAMPALS
36Source : GOI, 2001 ( Draft )
• Makers of tin cans, cardboard boxes, firm bags, and bottles for food packaging or fiber products 6:Packing
• Independent wholesalers marketing products for various processing plants to retailers (chain retail stores sometimes have their own separate warehouse distribution centers)
7:Distribution and retailing
• Commodity merchants or government grading officials
4: Grading and Classification
• Food and fiber processing plants such as flour mills, oil mills, rice mills, cotton mills, wool mills, and fruit and vegetable canning or freezing plants
5:Processing
STAGES EXAMPALS
37
Decision making & agreeing.
The marketing system.
Determining what market wants.
Audit of local resources.
Implementation.
Review stage.
1
2
3
4
5
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STAGES IN PROMOTING MARKETING LED
Source: Sheela et al, (2008) 38
PARADIGM SHIFT FROM P L A TO M L A
Aspects
• Purpose or objective.
Production-Led Agriculture
• Transfer of production technologies.
Market-Led Agriculture
• Enabling farmers to get optimum returns out of the enterprise.Expected end
results.Delivery of messages. Adoption of package of practices by most of the farmers.
High returns.
Focus. Production / yields ”Seed to seed”
Whole process as an enterprise /High Returns ”Rupee to Rupee”
39Source: Reddy and Jaya, (2002)
AspectsProduction-Led
Agriculture
Messages, Training / Motivating Recommendations .
Joint analysis of the issues Varied choices for adoption Consultancy
Establishment of marketing and agroproccessing linkages between farmer groups markets and processors
Not much importance as the focus was on production
Very important as agricultureviewed as an enterprise tounderstand the cost benefitratio and the profits generated
Extensionists’ interactions
Extensionists’ role
Maintenance of Records
Limited to delivery mode and feedback to research system
Market-Led Agriculture
40
CHALLENGES TO MARKET LED EXTENTION
Gigantic size of extension system.
Information technology.
Market intelligence.
Extension cadre development.
Reorganization of extension system.
41Source: Reddy and Jaya, (2002)
Affordability.
Acceptability.
Understanding the rural consumer.
Physical distribution.
Communication barriers.
Unauthentic arrival of products.
Availability.
42
CHALLENGES IN RURAL MARKETING SYSTEM
Source: Balaji et al, (2008)
TYPICAL QUESTIONS IN FARMER’S MIND
Market Led trying to change it
43
WE WANT SUPPORT
But not like this…..
44
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CASE STUDY
Market-led Extension, an Experience with Rubber board in India
The companies were importing rubber from other countries due to high quality and low price.
Local producers were in trouble . Factories was operating at low capacity utilization Capacity was 40
tonnes/day Were operating at 10 tonnes/day.
To tackle this situation,,,,,,,,,,,,,,
Established Rubber Producer Societies (RPS).
Linking gross root level organization like SHGs to processing factories.
Trained the producers on producing high quality rubber.
Created infrastructure facility.
Source: Kumar, (2004)45
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Result.................... Result....................
Productivity increased up to 40% .
70% of rubber is processing now .
20-30% increase in farmer income.
Farmers realizing 90% of terminal market price.
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Market-led partnership - FIGs and Chitoor Poultry Association.
Groundnut is the main crop in Chitoor.
ATMA made diversification of the farmers into maize cultivation.
Poultry association and FIGs were linked with buyback arrangements.
ATMA conducted 22 awareness camps and 6 exposure visits to A.P.
Poultry association provided 2 MT of poultry manure to networked
farmers
free of cost.Result................
Crop diversification.
Area expanded to 1150 hectares from 60 hectares.
The average income from maize was raised to 20000 rupees.
Source: Charyulu, (2007)
CASE STUDY
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CONCLUSION
The focus of the market led functionaries need to be extended beyond production.
Farmers should be sensitized on various aspects on quality, consumer’s preference, market intelligence, processing and value addition and other marketing information.
With globalization of the market, farmers need to transform themselves from producers-sellers in the domestic market to producers cum sellers in a wider market sense to best realize the high returns for the produce, minimize the production costs, and improve the product value and marketability.
Farmers should not GO through life . Farmers should GROW through life .
And at last………..
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For listening me…….
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