Vegetable cultivation as means of livelihood for smallholding farmers

Second Annual Progress Seminar Report

Submitted in partial fulfilment for PhD

By Pooja Prasad

134350003

January 2016

Under the guidance of

Prof. Milind Sohoni

Centre for Technology Alternatives for Rural Areas (CTARA),

Indian Institute of Technology Bombay,

Powai, Mumbai – 400076

1

Abstract

Land under horticulture cultivation has nearly doubled in the past twenty years. Vegetable cultivation,

which makes up 60% of horticulture production, can be an attractive proposition for farmers due to

high per hectare yield and value compared to cereals. However, poor situation with regards to

knowledge extension, water availability and market mechanisms can be deterrents. While many

government and non-government programs promote vegetable cultivation as micro-livelihood

projects, it is unclear if it can be a viable livelihood activity for marginal farmers. This work deals

with three broad questions a) characteristics of farmers who practice vegetable cultivation, the

sustainability of the practice and under what conditions it is recommended for smallholding farmers

b) how agricultural markets can be better designed for perishable commodities such as vegetables, and

c) the role of the state in planning and resource allocation to aid in activities such as knowledge

extension, irrigation management and market creation. This report gives an overview of the

experience and challenges faced by four different farmer collectives who practice vegetable

cultivation in parts of Palghar and Raigad districts. Their experience indicates that in spite of external

intervention in the form of material, financial or technical support, individual marginal farmers have

had mixed outcomes in terms of profitability. It also discusses findings from visits to different

agricultural markets in Maharashtra and the challenges observed for vegetable markets. For future

work, Sinnar taluka in Nashik district has been chosen as field area and a methodology is proposed for

addressing the above research questions.

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Table of Contents

Abstract ................................................................................................................................................... 1

1. Introduction ..................................................................................................................................... 3

2. Horticulture growth in India ........................................................................................................... 5

2.1 Changing cropping patterns .......................................................................................................... 5

2.2 Consumption ................................................................................................................................. 6

2.3 Prices ............................................................................................................................................. 7

3. Field work summary: Vegetable cultivation by farmer collectives ................................................ 8

3.1 Shedashi-Vavoshi farmer groups .................................................................................................. 8

3.2 Prakruti farmer collective - Karjat ................................................................................................ 9

3.3 Farmer collectives by Aaroehan in Mokhada ............................................................................. 11

3.4 Farmer collectives by BAIF in Jawhar ....................................................................................... 13

3.5 Summary ..................................................................................................................................... 14

4. Field work summary: Agricultural markets in Maharashtra ......................................................... 15

4.1 Markets for non-perishables........................................................................................................ 15

4.2 Onion markets ............................................................................................................................. 16

4.3 Markets for vegetables ................................................................................................................ 19

5. Research plan ................................................................................................................................ 21

5.1 Research questions ...................................................................................................................... 21

5.2 Proposed framework and methodology ...................................................................................... 21

6. Work done ..................................................................................................................................... 24

6.1 Taluka selection .......................................................................................................................... 24

6.2 Sinnar taluka resource mapping .................................................................................................. 25

6.1 Identification of village clusters .................................................................................................. 28

7. Future work ................................................................................................................................... 29

8. References ..................................................................................................................................... 30

Appendix A –APMC facts .................................................................................................................... 31

Appendix B – Market survey data ........................................................................................................ 34

Appendix C – Sinnar block depth to water level map .......................................................................... 36

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1. Introduction Horticulture production has seen a tremendous growth in the last few decades. Agricultural land under

horticulture cultivation has increased from 12.77 million Ha in 1991-92 to nearly double at 24.5

million Ha as of 2013-14 (GoI 2014a). The total horticulture production during this period has

increased almost 2.8 times. Since 2012-13, the total horticulture production (at 268.9 million MT) has

surpassed the production of food grains (at 257.1 million MT) in India. Simultaneously, there has

been a fall in the amount of cereal cultivation in the country, especially coarse cereals like millets.

Vegetables make up 60% of India’s horticulture production (with fruits making up 30% and the rest

being plantation crops, spices and flowers). Due to high per hectare yield and value compared to

cereals, vegetable cultivation can be an attractive proposition for farmers. It has been claimed (Mittal

2007) that benefit-cost ratio for vegetables is significantly higher than that for grains. Moreover, since

vegetables typically have multiple harvests they result in high liquidity for the farmer with returns

spreading out over time. Also, unlike other cash crops such as cotton and soybean, vegetables are a

protective food and can be consumed by farmers and their families.

On the other hand, vegetable cultivation requires careful practices and farming knowledge. Vegetable1

crops typically incur higher input cost as compared to others - this includes both tangible and

intangible inputs such as knowledge about different vegetable varieties, the type and frequency of

input application etc. Constraints on water availability, poor market linkages and high price volatility

can be other deterrents to farmers. Many non-government agencies (such as BAIF, Aaroehan,

MAVIM in Maharashtra) and government programs such as Maharashtra State Rural Livelihood

Mission (MSRLM) promote vegetable cultivation as important micro-livelihood projects but there are

no studies that suggest if and under what conditions vegetable cultivation (and the specific type of

vegetable cultivation) can be a viable mainstream livelihood activity for smallholding farmers.

There is a role for the state in ensuring not only that there is sufficient production of vegetables to

meet the nutrition and consumption needs of the country but also that this production is done in a

sustainable manner and that smallholding farmers have the enabling environment to participate in it.

The Mission for Integrated development of horticulture (MIDH) is a centrally sponsored scheme to

encourage horticulture production which provides financial assistance for all aspects of horticulture

including research, establishment of new orchards/fields, creation of water resources, creation of cold

chain infrastructure and new markets etc. (GoI 2014b). At the state level, the Maharashtra

Agricultural Competitiveness Project (MACP) is a World Bank sponsored project whose objective is

“to increase productivity, profitability and market access of the farming community in Maharashtra”

(GoM 2010). There is a need to assess the working of the state departments in fulfilling their role in

providing knowledge extension service, irrigation management and market services and its

appropriateness with respect to vegetable cultivation.

At the village level, vegetables are sold for local consumption in weekly vegetable markets. A large

part of the marketed surplus, however, is taken outside the growing region to meet urban demand. The

agriculture produce marketing committees (APMCs) play an important role in this. There are long-

standing and much documented (Chand 2012, Patnaik 2011) issues related to APMCs such as

impediment to free movement of produce, multiple levels of taxation, closed group of rent-seeking

traders, low transparency etc. Moreover, as compared to markets for non-perishable commodities like

food grains and oilseeds, vegetable markets are far less developed. When it comes to vegetables,

1 “vegetable” refers to different types of vegetables each having its own farming practice, input requirements,

output, seasonality etc.

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APCs tend to have significantly less monitoring and control even in primary markets. Except for some

important vegetables like onions, there is little documentation, data collection and monitoring by the

APMC staff to ensure that fair practices are followed by all. In case of non-perishable commodities,

government offers a scheme for loans against warehouse receipts to farmers to meet their immediate

cash needs while they hold on to their produce in hope of better prices. But no such scheme exists for

perishable or semi-perishable (onions) produce.

APMCs are usually at the block level but not all APMCs have a thriving vegetable market even in

vegetable producing regions. Farmers need to transport their produce to long distances to access

markets in neighbouring blocks. The unit of sale (e.g. by weight or volume), the price discovery

mechanism (e.g. auction, negotiation, secret negotiations), taxes and commissions are not standard

and vary based on location, market type (primary or secondary), commodity type etc. This makes it

difficult to compare commodity prices across markets. This is unlike the case of grains and oilseeds

which have higher standardisation of quality attributes and high degree of price transparency, more so

with the onset of e-trading platforms such as NCDEX. There is also a high degree of wastage of

produce in the APMC and through the vegetable value chain which is one of the reasons why farmers

receive a small fraction of the retail price (Kasturi 2014).

Direct marketing, private markets and contract farming are recent initiatives which farmers are taking

advantage of in select areas (Singh 2012, Narayanan 2012). However, the APMC still continues to be

an important marketplace for vegetable farmers, especially in the state of Maharashtra. There is thus a

need to design specific requirements for vegetable markets which address current problems and help

farmers get better market access and fair prices.

To summarise, there are three broad themes in the above discussion: a) characteristics of farmers who

practice vegetable cultivation, the sustainability of the practice and under what conditions it is

recommended for smallholding farmers, b) how agricultural markets can be better designed for

perishable commodities and the role of smaller (more decentralised) market yards and c) the role of

the state in planning and resource allocation to aid in the knowledge extension, irrigation management

and market creation.

The above presents the context for this research. In the past year, initial exploratory field work was

done in parts of Palghar and Raigad districts to understand the experience and challenges faced by

four different farmer collectives who practice vegetable cultivation with support from external

organisations. Their experience indicated that in spite of external intervention in the form of material,

financial or technical support, individual farmers have had mixed outcomes in terms of profitability.

The biggest problems were seen to be access to irrigation water, knowledge about vegetable farming

and access to markets. Section 3 presents their experience in more detail. Section 4 focuses on the

second thread, i.e. agricultural markets. It contains an overview of the findings from visits to different

agricultural markets in Maharashtra and the specific challenges observed for vegetable markets as

compared to grain markets. Section 5 proposes specific research questions and the research

methodology. Section 6 describes the field location and provides an overview of the work done in

mapping the resource base of the selected taluka. Section 7 concludes. However, we begin this

discussion by first providing an introduction to the growth of horticulture in India in Section 2.

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2. Horticulture growth in India It is widely known that with the structural changes in the Indian economy since independence, the

contribution of agriculture to national output has significantly decreased but the dependence of rural

workforce on agriculture continues to be tremendous. The Lewisian shift from agriculture to

manufacturing sector has not materialised as we have witnessed a “jobless growth” fuelled by the

service sector.

To address rural poverty, one line of argument has been to hasten the shift of labour out of agriculture

by stepping up growth of non-agricultural sectors to much higher levels – through a determined

pursuit of globalisation and liberalisation. As a stop gap measure, it is suggested that the livelihood

problem of the rural population be addressed through larger public sector outlays on rural

development schemes including a strong employment guarantee scheme and liberal hand-out and

subsidies. There is however, also considerable scepticism over the effectiveness of this strategy. The

other significant point of view is that the best way to raise rural incomes and employment is to invest

in increasing agricultural productivity (Vaidyanathan 2010). (Reddy et al 2009) argue that public

investment in agriculture is a better long-term strategy than subsidies. However, increasing

agricultural productivity in a sustainable and equitable manner in the face of serious resource (land,

water) constraints is a big challenge.

Since we have reached the limits to new area under cultivation, increasing the output per unit

available land will be the main contributor to growth. Since different crops vary in their yield per unit

hectare and in their market value, diversification to higher output crops has been one of the

significant, and perhaps increasing, contributors to growth in per hectare output in recent times

(Vaidyanathan 2010).

The twelfth five year plan (2012-2017) targets India’s agricultural output growth target at 4%. The

target for horticulture growth is set at 5%. Though agriculture growth rate has consistently missed

planned target in the past few plans, there has been some optimism since the eleventh plan (which

recorded an average agriculture output growth rate of 3.3%) due to the reversal of the decelerating

trend in agricultural output growth seen during the ninth and tenth plans. According to the planning

commission (GoI 2013), diversified agriculture, extended information reach, and investments in on-

farm and watershed development have had an important role to play in this. Horticulture output grew

at 4.7% during this period. Maharashtra saw a significant rise in its agricultural output growth during

the period at 5.3%.

2.1 Changing cropping patterns

In general, there has been a gradual but sustained shift in

cropping pattern away from coarse cereals and pulses

towards other crops over the last four decades. Cereal

cultivation declined by 20 million hectare from earlier

peaks to the end of Eleventh plan. Area under pulses

declined until tenth plan after which there has been a

reversal in the trend.

Figure 1 shows the average annual growth rates of area,

production and yield of the principal crops over two

periods. Area under vegetable cultivation has increased by

3.1% and 4% in period 1 (1996-96 to 2004-05) and period

Figure 1: Average annual growth rates of area, production and yield of principal crops. Source: Deokar et al 2014

6

2 (2005-06 to 2012-13) respectively and the output production has accelerated at 4.5% and 6%

respectively over these two periods (Deokar et al 2014). The initiatives of the National Horticulture

Board and the National Horticulture Mission starting 2005–06 have been important in this context

(GoI 2013).

There has also been an emerging difference between un-irrigated and irrigated crop patterns. Table 1

shows the changing cropping patterns for all India between 1971-73 to 2001-03. We find that among

irrigated crops there has been a significant increase in the shares of wheat, sugarcane, fruits,

vegetables and oilseeds. Among unirrigated crops, the share of both millets and wheat has declined

while that of oilseeds and pulses has increased. However, millets, pulses, oilseeds and fibres together

account for more than two-third of unirrigated crop area in the country (as per 2001-03). We find that

fruits and vegetables figure far more prominently in irrigated than in unirrigated crops. By contrast,

millets, pulses and oilseeds are more prominent among unirrigated crops. Similar trend is seen at the

state level in Maharashtra. There is a striking increase in the shares of pulses, oilseeds and fruits and

vegetables amongst irrigated crops and that of pulses and oilseeds in unirrigated crops. The bulk of

the unirrigated crops are grown in Kharif season while the major part of irrigated crops is raised

during Rabi, summer and as annual crops (Vaidyanathan 2010).

Table 1: Irrigated and unirrigated cropping patterns (Vaidyanathan 2010)

2.2 Consumption

Export makes up a small share of agricultural production and so the growth of demand for agricultural

produce essentially depends on the pace of increase in domestic consumption. With increase in per

capita income, there has been a shift in domestic consumption from cereals and pulses to high value

products such as milk, egg, meat and fruits and vegetables. This change is seen both in rural and urban

India (NCAER 2014). The share of vegetables and fruits in the total calorie intake has seen a small

rise from 6.87% to 7% in rural India and 7.22 to 8% in urban India between 2004-05 and 2009-10.

(GoI 2014a). The NSS consumer expenditure data shows that the share of fruits and vegetables in the

household budget has increased from 9.7% in 1983 to 13.7% for 1999-2000. Figure 2 shows the

increase in consumption levels of vegetables and fruits has been in both rural and urban India (Mittal

2007). Additionally, there is a high potential for processing and exports which are currently very low.

% share Rice WheatOther cerealsPulses Sugarcane Spices Fruits/Veg Oilseeds Fibres OthersGross Cropped area

All India (1971-73) Irrigated 36.6 27 7.9 4.8 4.8 1.5 2.8 3.1 4.3 6.9 100

unirrigated 18.4 6.4 33 16.4 0.5 0.9 2.1 11.2 6.1 4.8 100

All India (2001-03) Irrigated 28.2 30.3 4.5 4.2 5.6 2.5 7 7.9 3.6 6.2 100

unirrigated 19.6 2.7 24.3 18.4 0.3 1.2 3.5 17.6 6.3 6 100

Maharashtra (1971-73) Irrigated 20.7 18.1 21.6 3.5 12.6 4.6 10.3 1.9 4 2.8 100

unirrigated 6 3.5 44.6 13 0 0 not available 8.9 14.2 9.8 100

Maharashtra (2001-03) Irrigated 10 14.3 15 6.3 14.5 5.1 23.3 5.3 2.5 3.9 100

unirrigated 6.1 1.1 35.7 18.2 0 0 1.1 15.2 17.4 5.2 100

source: Vaidyanathan 2010

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Figure 2: Annual per capita consumption of fruits and vegetables in India (Mittal 2007)

2.3 Prices

The overall balance between supply and demand is a major determinant of prices. Prices influence the

cropping decision via their impact on net returns to cultivation which depend on the prices of output

relative to inputs as well as relative to prices of goods and services that farmers need to buy from

other sectors. The larger the net income for the farmer, the higher is the incentive to invest in better

technology and land and water management improvement to increase production. The Ministry of

Agriculture compiles terms of trade of agriculture to capture these price relationships. The index of

terms of trade of agriculture tracks changes in the relative prices received for marketed output and

those of all goods and services (inputs, consumption, investment) purchased by agriculturalist from

the rest of the economy. After some periods of dramatic rise and fall between 1950s to early 70s, the

index has been modestly rising in favour of agriculture from mid-70s onwards. (Vaidyanathan 2010)

To summarise, agriculture has seen increasing diversification in the past few decades. Changes in

consumption patterns over the decades are consistent with the changing production pattern. From an

agricultural productivity standpoint, the increase in horticulture production contributes to the growth

of agriculture. We find that the terms of trade of agriculture have been gradually rising in favour of

agriculture. Increasing farmer’s net income is important to incentivise farmers to invest in agriculture.

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3. Field work summary: Vegetable cultivation by farmer collectives In this section we describe the practice of vegetable cultivation followed by four different farmer

collectives. The marginal and small farmers in Western Maharashtra (specifically Palghar and Raigad

districts), usually cultivate paddy during the Kharif season largely for subsistence. The area cultivated

in Rabi tends to be significantly lower than in Kharif due to poor availability of water. Non-

governmental organisations (NGOs) in the regions promote the practice of vegetable cultivation as a

means of livelihood in addition to watershed activities in their work regions. They often provide

financial support, knowledge extension, market linkages and help create an institutional structure in

the form of farmer collectives.

Exploratory field work was conducted during the Rabi 2015 season to understand the process of

vegetable cultivation and the challenges faced by marginal farmers in doing so. The objective was a)

to understand the processes of vegetable cultivation with respect to cropping cycle, land and water

arrangements, knowledge inputs, market access, etc. and b) to understand the form of support being

provided by the supporting organisations and if/how this support can be mainstreamed.

Farmer collectives in four different areas were studied. This included 1) farmers of Shedashi-Vavoshi

villages in the Pen-Khalapur blocks of Raigad district. This has been the work area of the NGO Rural

Communes, 2) farmers in the Prakruti farming group from Chevane village in Karjat taluka (Raigad

district). They receive assistance from a local developer/philanthropist, 3) farmer collectives formed

by the NGO Aaroehan in Mokhada taluka (Palghar district) and 4) farmer collectives formed by BAIF

in Jawhar taluka (Palghar district).

3.1 Shedashi-Vavoshi farmer groups

Rural Communes (RC) has been involved for a long time in Shedashi, Vavoshi and nearby villages

straddling Pen and Khalapur talukas in Raigad district. It has done extensive work in watershed

development and introduced vegetable cultivation to farmers over 15 years ago. Subsequently the

NGO’s involvement has decreased except in helping farmers get loans for their practice. Farmers

largely belong to the Thakarwadi (tribal) community who practice rain-fed agriculture on their own

land and don’t have water available in their farms for a Rabi crop. Hence, groups of 3-4 families lease

up to 8-10 acres of land from a single landowner close to a water source and migrate to this land with

their entire family for the season. The lease is for 6 months and they negotiate new contracts every

year. The farmers do not lease the same land two years in a row since they believe that the land must

be left fallow for at least one season before planting vegetables again. The farmland is leased within

10-15 km of their village.

In addition to the land contract, they also get into contracts for use of water (for pump use and

electricity) and use of tractor. RC does not maintain any data for these farmers (their yield,

profitability, lease terms etc.) hence only qualitative information is collected through informal surveys

with families. The farmers plant tomatoes, brinjal and chillies in Rabi. They work together on each

other’s parts of the leased farm in the initial period of cleaning, making a boundary wall (to protect

from animals), farm preparation etc. After sowing they look after their farms individually. The

harvests are done together and the produce is taken collectively to the Pen APMC after every 3-4

days. The cost of electricity connection, motor, tempo for transportation etc. is shared.

The land contract is a fixed rate per acre for the season which ranges between Rs 2000 to Rs 3000 per

acre. Groups who don’t have their own pump also lease the pump and pipes for rates as much as Rs

3000 per acre. The electricity charge for running the pump is split between families in the group.

Tractor is used for ploughing the fields and is rented at Rs 500 per hour. Farmers tend to rent all the

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factors from the landowner if feasible. The entire output from the farm belongs to the farmer and no

produce is shared with the landowner. (This is different than the sharecropping model that is practiced

for the same land in Kharif season where landless agricultural labourers pay one-third of the paddy

produced to the landowners as rent for their land). These contracts are unwritten and informal and

most of the money is paid at the end of the harvesting season except an initial deposit. In bad years

when there is distress, the farmers are unable to pay back and attempt to renegotiate terms. Some

families have taken formal bank loans (of the order of Rs 10,000) to pay for their factor inputs which

was mediated through RC but due to a high default rate this is no longer being done.

In general, besides the cost of inputs such as seeds, fertilizers, pesticides, water etc., these families

face and additional burden of about Rs 7000-8000/acre as factor costs. With the costs of seeds and

chemical, the input costs were claimed to be around 25,000/acre. This doesn’t include the cost of own

labour and the cost (both social and material) of migration.

These families have been practicing vegetable cultivation for 15+ years when they were trained in

these practices by RC. They no longer have access to any knowledge input on a regular basis. Though

there was no record keeping by the families, the perception was that there is high variability in the

profitability of vegetable cultivation. Risks due to pest attack and market prices were high. The claim

is that in good times they have had sale up to Rs l lakh in one season (from their typical 2 acre

land/family) and at other times they have been barely able to pay for their costs. The cropping cycle is

condensed for these groups because of the time taken to clean up the fields and move to their own

land and prepare their own fields for Kharif.

3.2 Prakruti farmer collective - Karjat

This is an initiative started by a developer/philanthropist about two years ago with the goal of creating

a livelihood opportunity for the farmers in and around the village of Chevane (a largely tribal village).

He promoted vegetable cultivation and collectivised farmers under the name of Prakriti farming. A

consultant, hired by the philanthropist manages the project with the aim of helping the farmers pursue

vegetable cultivation in a financially sustainable manner after a period of handholding. The project

started with the developer paying for all upfront input costs. They have now stated providing inputs

directly (seeds, fertilisers, pesticides) and have hired a local villager to keep an account of all input

costs and output sales to be able to figure out a model through which the practice can become

financially sustainable.

The farmers farm on their own land though some also farm on the developer’s land (no rent is

charged). Water in Rabi season is provided by the philanthropist free of charge from borewells on his

property. All the costs for water including laying of pipes and drip irrigation on some plots have been

borne by the developer. A private agricultural expert is hired to visit the farms frequently and advice

the farmers on seed varieties, plant spacing, irrigation, chemicals etc. Farmers are free to decide what

they want to sow and how much. They collect seeds and chemicals from the Prakruti centre and are

also free to buy on their own. At the time of harvest, farmers coordinate and rent a truck to sell their

produce. Produce is sold in local market when the harvested volume is low. As the season picks up, it

is sold in Kalyan, Vashi or Murbad APMC yards. The farmers have contacts with traders in each of

these APMCs whom they call to know the previous day’s rate and then decide which market to sell

their produce in. Detailed records are maintained on the volume that was harvested by each farmer,

the transportation cost, the market where it was sold and the prices that it fetched.

In Kharif 2014, 30 farmers were part of this collective. Since paddy is the main crop in Kharif, they

use only a part of their land for vegetables. Bitter gourd, ridge gourd, brinjal and cucumber are grown.

10

Average land under vegetable cultivation in Kharif 2014 was 34 gunthas2 with the minimum being 6

guntha and maximum of 130 guntha. By 2015, more than 100 farmers had signed up for Kharif

season.

In Rabi season, farmers use larger areas for vegetable cultivation but significantly fewer farmers are

able to participate because of unavailability of water. 13 farmers participated in Rabi 2014. Average

land under vegetable cultivation in Rabi 2014 was 27 gunthas with the range being a minimum of 15

and a maximum of 40 gunthas. Cucumber, ladies finger, chillies, tomatoes, brinjal and cabbage are

the main crops grown in Rabi.

Table 2 gives a summary of the output for Rabi and Kharif 2014 for the group.

Table 2: Prakruti farming collective output summary for 2014

Key observations that emerge from the study of this group are:

1. Average yield varies considerably by farmer: This depends on the quantity of seeds and chemicals

used per unit land and also practices such as spacing of plants etc. Knowledge extension and farmer’s

experience, therefore, plays an important role.

2. Sowing time and length of harvesting season depends on the year-long crop-cycle. For example,

timing of Rabi sowing depends on how long the paddy was in the field in the Kharif season. Length of

harvesting season also depends on water availability. This has significant impact on revenue earned.

Again, proper planning/knowledge extension is useful.

3. Although the data points are less, in general the Kharif yield was better than Rabi. This could be

partly attributed to the low availability of water in Rabi season.

4. There appears to be significant variation in the wholesale market rates of vegetables during the

harvest season.

2 . 100 guntha = 1 hectare

Prakruti

farming

# Farmer

data points

Average area

under cultivation

in acres

Avg kg/acre yield

achieved

Avg output

sale

Rs/acre

Published

all India

yield

Kg/acre

(GoI

2014c)

Avg

Rs/kg

market

rate

received

(Rs/kg)

Min rate

and Max

wholesale

rate

received in

the season

(Rs/kg)

Ridgegourd 19 0.3 4069 84,894 NA 20.86 (9, 40)

Bitter gourd 9 0.26 4607 84,339 4530 18.9 (10, 30)

Brinjal 18 0.2 5934 1,18,104 7448 19.6 (10, 35)

Cucumber 7 0.7 3113 21,890 6250 7.3 (5, 13)

Ladies Finger 2 0.6 1380 16,535 4784 12 (7, 20)

Green chillies 2 0.5 1427 23,122 NA 15.9 (10, 20)

brinjal 1 0.4 7920 55,860 7449 7.05 (2, 20)

Cabbage 1 0.4 2384 11,981 9176 5.03 (2, 8)

Tomato 1 0.5 4754 18,342 8285 3.9 (3, 10)

Rabi 2014

Kharif 2014

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5. Input costs: Detailed records on input costs were not available per farmer/crop for the season being

studied. For now the farmers do not bear any significant part of the cost of cultivation since the

developer absorbs it for the most part. While the costs of inputs are now being recorded from the

current season, inputs such as knowledge extension, program coordinators, record-keepers, water and

pipe network, drip implementation etc. are not being accounted for.

3.3 Farmer collectives by Aaroehan in Mokhada

Aaroehan is an NGO that has been active in Mokhada taluka of Palghar district for many years. They

have worked on many watershed and livelihood initiatives in the region. They have been facilitating

the vegetable farming practice for over five years in the Mokhada block.

Farmer groups contain 8-10 farmers with a total of 7 to 8 acres between them. Each farmer in the

group takes the role of group coordinator on rotational basis. The coordinator receives a small

compensation from Aaroehan. He is given trainings and is supposed to maintain all records such as

inputs (seeds, fertilizers, pesticides) received from Aaroehan, current stock of inputs in the village

stock room, inputs applied by each farmer, produce harvested and market rates received.

Typically far more farmers participate in Kharif (374 farmers in 2014) than in Rabi (91 farmers in

2015). New farmers in the group are encouraged to start with about 10 guntha cultivation while the

more experienced farmers tend to cultivate larger areas up to an acre.

The land is hilly in Mokhada region so while paddy is planted on flat parts of farmland, the slopes are

used to grow vegetables in Kharif. Traditionally, people grow Varai and Nachni on the slopes some

of which they are replacing with vegetable cultivation. Sowing is done with the first rains. Typically

vegetables grown in Kharif are green chillies, bitter gourd, ridge gourd and okra. Harvesting is done

in September and October. It can go on till November end if rains are good. If, however, there is a dry

spell of about 15 days between two showers, the harvesting is only possible till Oct end. If water is

available, then chilly plants can last for 8-9 months.

Paddy is harvested by end of Oct. In November, tractors are used to plough the fields, remove the

paddy stubbles and loosen the earth. Nursery is prepared in November end for vegetable cultivation in

Rabi season. Nursery is kept for about 30 days after which saplings are planted on the land where

paddy was earlier cultivated (usually in early January). Typical Kharif crops here are okra, French

beans, cow peas and chillies. Harvest starts mid-March and can go on until the rains start. Once it

starts raining, the fields are flooded and it is time to grow paddy again. Farmers feel that they are not

able to make use of the entire harvest season of the vegetables (especially that of chillies) because of

either a) poor water availability, or b) need to use the same land for paddy cultivation. Some farmers

have decided to switch to a different variety of paddy which only takes 90 days to grow so that they

can plant chillies earlier and have a longer harvest season.

The produce is sold collectively in Nashik or Vashi APMC. The group coordinators call traders in

both markets to decide where to take their produce. One of the farmers has bought a truck by taking a

loan which is now used by all farmer groups – this has reduced their transportation cost. The selling

process is completely different in Nashik and Vashi. While there is a perception that the rates are

slightly higher in Vashi, farmers have had poor experience in the Vashi market because a) in Vashi

they are unable to witness the sale of the produce and have to trust the trader on the price fetched by

their produce b) they have to go back to Vashi to collect their payment and sometimes weeks pass

before they are paid. They prefer the Nashik market for the comparative ease of operation and higher

transparency.

12

From the sale of each harvest, Aaroehan collects 30% for cost recovery. This is done for every harvest

until the entire cost is recovered. In most cases, 100% cost recovery does not happen (only seed,

fertilizer, pesticides and transportation cost are accounted for). Even for the most experienced

farmers, Aaroehan tends to recover only up to 90% of the cost. 20% of the cash from the harvest is

saved by the farmer for future use and the remaining 50% is used by them for current expenses.

Aaroehan claims that, in general, approximately Rs 25k are spent on the input cost (only accounting

for seeds, pesticides and fertilizers) per acre. Typical yields are 4 ton per acre per season for bitter

gourd and green chillies. For Rabi, there is additional cost of pumping water. Diesel pumps are used

in some groups where there is no electricity (e.g. Khoch) and they tend to spend about Rs 4000 per

month on diesel. Weeding is also a problem which is very time consuming and for which they

sometimes hire agricultural labourers. Aaroehan has now invested in drip irrigation for many of the

groups. The drip infrastructure is removed every Kharif season and re-laid in Rabi season. It must be

noted that the produce is sold in Nashik market or Vashi markets which are 60km and 150 km

respectively from Mokhada hence the transportation cost for accessing markets is also a significant

cost for the farmers.

Aaroehan worked with an export company one year in which the farmers directly sold their produce

to the exporting company at a pre-decided rate. However, as per their terms the company lowered the

procurement rate by the % of produce that they found to be of lower quality. The farmers found it

unviable and decided to stop selling to the exporters.

Table 3 provides a summary for 3 farmer groups (Tulyachapada, Khoch and Pathardi) for three

different crops for 2013-14.

Table 3: Output summary for three farmer collectives in Mokhada for three vegetables (2013-14)

Some observations:

1) The output for each group varies. Pathardi’s bitter gourd season was shorter – their harvests began

when other groups were already on their seventh harvest. This shows that in areas where the same

land must be used for different crop in Kharif, timing of the cropping cycle has a significant impact on

profitability.

2) In case of chillies, the variety planted in Pathardi (Nandita variety) was different than the Demon or

Indu varieties planted by the other groups and the market rate (Rs/kg) for this variety was lower.

3) Quality aspect: Individual farmers may fetch considerably different rates for their produce on the

same day in the market. This can be attributed to the difference in quality of their produce. However,

Crop Cluster No of Area

Product

ion

Amount

Received

C o C

amount

guntha

/farme

r

MT/

acre Rs/kg rs/acre rs/farmer CoC/acre

Profit/

farmer

Farmer Acre MT (by farmer) (Aaroehan)

Bitter-gourd (Kharif) Tulyacha pada 53 7 23.3 3,26,200 1,89,789 5 3.3 14.0 46,600 6,155 27,113 2,574

Sowing ~ mid June to Aug Khoch 49 9.5 33.5 4,69,000 2,26,570 8 3.5 14.0 49,368 9,571 23,849 4,948

Harvesting: Sep to mid Nov Pathardi 10 3 5.2 47,890 23,590 12 1.7 9.2 15,963 4,789 7,863 2,430

Chilli Tulyacha pada 25 10 12.6 3,67,500 1,89,560 16 1.3 29.2 36,750 14,700 18,956 7,118

Sept sowing and Khoch 5 2 2.3 62,100 30,700 16 1.2 27.0 31,050 12,420 15,350 6,280

Harvesting: Nov to Jan Pathardi 10 3.5 4.1 69,500 60,170 14 1.2 17.0 19,857 6,950 17,191 933

Beans Tulyaha Pada 10 2.5 4.5 86,000 30,341 10 1.8 19.1 34,400 8,600 12,136 5,566

sowing ~Nov to Jan and Khoch 35 17.2 20.8 4,37,566 87,094 20 1.2 21.0 25,440 12,502 5,064 10,013

harvesting till March Pathardi 2 0.5 0.9 5,600 1,800 10 1.8 6.2 11,200 2,800 3,600 1,900

13

Aaroehan’s data shows that the same farmer doesn’t consistently get low or high prices (e.g. French

beans harvest in Rabi 2014) which points to the arbitrariness in the price discovery mechanism in the

APMC.

4) There is variation in the yield (and hence the profitability) at the farmer level within a group. Some

farmers tend to do much better than others. This could be related to the extent of inputs used or the

farmer’s experience.

3.4 Farmer collectives by BAIF in Jawhar

The practice followed by BAIF and their farmer collectives in Jawhar is very similar to that of

Aaroehan and its farmers in Mokhada since the Aaroehan team has gained a lot from BAIF’s long

experience in its neighbouring taluka. BAIF’s vegetable cultivation project was started in 2008 and

was sponsored by Syngenta. To avoid conflict of interest with the donor, BAIF only provides

technical knowledge (capacity building and skill development, agricultural extension service, market

linkage) and no material input is provided to farmers under this project.

Farmers typically start vegetable cultivation on a very small area (as small as 1 guntha). Since the area

is small, they are able to afford the input costs and as they start to make profits, they reinvest it in

growing vegetables on larger areas. Some farmers take loans from credit societies but most are able to

invest their own money. BAIF introduces them to package of practice for various crops and takes

them on demonstration visits. Produce is sold in markets in Jawhar, Nashik, Vashi and Palghar.

Table 4 shows a summary of the group’s output for the past 5 years across vegetable types (Kharif

crop is largely bitter gourd and Rabi crop is largely tomatoes). Table 5 shows the benefit-cost ratio

that has been calculated by BAIF based on their experience with their farmer groups. However it does

not include many costs such as cost of pumping water in Rabi, cost of transportation, labour cost etc.

Table 4: Summary of BAIF vegetable farming collective output (2010 to 2014) (Source :BAIF)

14

Table 5: BAIF farmer collective estimation of benefit-cost ratio (Source: BAIF)

3.5 Summary

The following conclusions can be drawn from the experience of the above NGOs and farming groups:

a) Vegetable cultivation requires careful planning and execution –crop cycle planning for the

entire year, choice of vegetables and the specific variety of the vegetable to be planted, proper

plant spacing and/or staking where required, the application of inputs, harvesting, grading etc.

– all of it requires high level of skill and care. This is unlike the traditional practice of cereal

cultivation which does not need as much overseeing. Farmers who are new to the practice of

vegetable cultivation need to be trained in this practice and cannot be expected to pick it up

on their own.

b) Knowledge extension: For above reasons, knowledge extension is important. Aaroehan,

Prakruti farming and BAIF all engage with agricultural experts who work closely with the

farmer groups. In the absence of such institutional partners farmers resort to private input

sellers (Krishi Seva Kendras) who have become the de-facto “doctors” or knowledge

providers. The more enterprising farmers (as was found in subsequent field work) hire private

agricultural experts/consultants for a fixed rate/acre/season to learn a new skill such as grapes

planting. The presence of knowledge partners in the public domain such as the state

agricultural department, krishi vigyan kendras (KVK), state agricultural universities etc. has

not been felt in these areas.

c) Water: The importance of irrigation water cannot be understated. In these areas which tend to

be largely rain-fed, watershed works go hand-in-hand with creating livelihood opportunities.

The low yield of the Rabi crop can be greatly attributed to the inadequacy of water for

irrigation. Vegetable cultivation in Kharif was found to be beneficial and can be practiced by

most farmers.

d) Markets: Farmers are impacted by poor physical access to market (distance), unfair market

practices, unpredictability of market prices, the anti-coordination problem of the market

(where a bumper crop results in prices crashing) and low negotiating power due to the

perishable nature of their produce and lack of alternatives such as cold storage.

e) Finance: Farmers face multiple risks in the form of price volatility, weather risks, pest attacks

etc. Farmers need to have the wherewithal to overcome a bad season (or have support

mechanism to tide over it) else they can fall into spiralling debts.

The following section takes up the problem of APMCs in more detail.

Other

Staking

Materi

al

Yield

in Kg

Averag

e Price

per Kg

Total

Net

Profit

Unit

No of

pkt

Unit

Rate in

Rs.

Total

Amount

in Rs.

Unit

Unit

Rate in

Rs.

Total

Amount

in Rs.

Unit

Unit

Rate

in Rs.

Total

Amoun

t in Rs.

Sutal,

Nylon

Unit

in

Bags

Total

Amount

in Rs.

UnitUnit Rate

in Rs.

Total

Amount

in Rs.

In Kharif

1 Bitter gourd(50gm/pkt) 1 350 350 120 10 1200 15 80 1200 200 2 2000 5 300 1500 6450 1750 10 17500 25800 2.71

2 Okra (250gm/pkt) 1.5 330 495 0 0 0 0 0 2 2000 4 250 1000 3495 750 10 7500 13980 2.15

3 Chilli(10gm/pkt) 2 350 700 0 0 0 0 0 3 3000 5 300 1500 5200 1250 15 18750 20800 3.61

In Rabi

4 Tomato(10gm/pkt) 1 800 800 200 8 1600 15 80 1200 1200 3.5 3500 5 300 1500 9800 3250 10 32500 39200 3.32

5 Brinjal (10gm/pkt) 2 100 200 0 0 0 0 0 3.5 3000 4 300 1200 4400 3750 8 30000 17600 6.82

6 Bottle gourd(50gm/pkt) 1 200 200 120 10 1200 15 80 1200 200 3 3000 4 300 1500 7300 4000 8 32000 29200 4.38

7 Cucumber 2 450 900 0 0 0 0 0 3 3000 4 250 1000 4900 3000 8 24000 19600 4.90

8 Cabbage 4 140 560 0 0 0 0 0 0 0 3 3000 4 250 1000 4560 3500 4 14000 18240 3.07

Benefit -

Cost

Ratio

Calcula

tions

for 10

guntha

unless

stated

Crop

Seed Support Staking Material Fertilizer Pesticides

Total

Cost

in Rs

for 10

guntha

For 10 guntha

Per acre

Cost of

Cultivati

on in Rs

Bamboo GI Wire

15

4. Field work summary: Agricultural markets in Maharashtra The experience of vegetable farmer groups in Raigad and Palghar indicates the importance of markets

in determining profitability. While the Model APMC Act has opened room for more creative channels

such as direct marketing by farmers, private markets etc., the APMCs continue to be the primary

channel through which farmers sell their produce.

The discussions and data on Indian agriculture markets predominantly focus on non-perishable

commodities like cereals and pulses. Field visits to APMCs in different parts of Maharashtra were

made to understand the process of sale of produce, the flow of information, produce and money and

the mechanism through which prices are discovered. The following APMCs were covered: Mumbai,

Karjat, Pune, Nashik, Sinnar, Lasalgaon, Nandurbar (Shahada), Parbhani and Amravati. Numerous

informal interviews were conducted with APMC officials, commission agents, traders, farmers and

retailers to understand the challenges faced by each. In addition, a database was created using data

published by the APMCs on agmarket.nic.in. This database contains daily arrival volumes and market

prices for all commodities and all markets in Maharashtra for a period of three years (2012-13, 2013-

14 and 2014-15). Appendix A contains some summary facts about APMC volumes and processes in

Maharashtra.

Salient points from the field visits are presented below. They are categorised into three sections:

market mechanism for non-perishable commodities (grains, oilseeds and fibre), semi-perishables such

as onion and perishable vegetables. The points below highlight the differences and unique aspects of

each type of market.

4.1 Markets for non-perishables

These are observations made in Amravati APMC (for tur, soyabean, cotton, chana), Parbhani APMC

(for cotton, soyabean) and Shahada APMC (chana, wheat, cotton), Karjat APMC (paddy)

NCDEX has an important role to play for price setting of non-perishables such as soyabean

and chana. There is a great deal of transparency and awareness created due to private services

that offer NCDEX, and other spot and forward market prices for different commodities and

markets all over the country. Most agents and traders subscribe to this service and receive

regular sms messages with current commodity prices in different markets.

Processing units/millers play an important role as buyers for all grains. The mills announce

their procurement price in the morning which informs their agents what rate to buy at (this is

dependent on the NCDEX opening rate that is known at 10am). The mill agents come to the

market to participate in the auctions. In general, because of the non-perishable nature of the

commodity and the transparency in nationwide prices there appears to be little variation in

market prices. Whatever variation is seen in the market (from the published price) is

attributed to difference in quality

Some markets/agents offer sorting machines to farmers to clean (removing chaff) and sort

their produce so that they can be separated into different lots and better prices can be

obtained.

The government offers a minimum support price for some food grains. In all the grain

markets visited government procurement is rare but the market rates for the grains were found

to be higher than the MSP.

Smaller markets such as Karjat find it difficult to recoup their costs (salaries) and resort to

charging market fee on roadside nakas even though they provide virtually no service to

farmers and traders. Most of the paddy produced in the region is for self-consumption and any

16

surplus is sold to traders at farmgate. Large rice mills buy paddy directly from farmers. The

purchase price is often below the MSP, but the farmers prefer to sell at the farm-gate, also

since government procurement of paddy does not happen regularly.

Other than a weekly market, no market transaction happens in the APMC market yard yet all

produce that enters Karjat (even milled products such as rice and daal and not just raw

agricultural produce) is stopped at the city entrance and a market fee is levied based on the

size of the vehicle. This was found true for many other markets as well e.g. for oranges in

Amravati.

Each APMC creates a schedule of notified commodities for commodities which would be

regulated by the market committee. Though the intent of the APMC is to protect the farmer in

the primary wholesale transactions, APMCs routinely include commodities that are not

locally produced in their notified list. Hence any commodity brought in by a trader from a

different APMC (within or outside the state) also falls under the APMC’s jurisdiction and is

taxed. Market fee is also charged on milled products such as rice and daal (as opposed to only

primary commodities such paddy and raw pulses). Maharashtra’s APMC act is vague in

suggesting how the notified commodity list should be created and there is a high degree of

non-uniformity across markets. E.g. in Amravati, a court case was filed and won by the

wholesalers against the APMC for its practice of levying tax on milled produce. However, the

practice continues in many other APMCs such as Karjat. The Model APMC Act (GoI 2003)

proposed (Section 42 of Model APMC act 2003 (2)(i)3) that the same produce should not be

taxed twice within the same state but Maharashtra state APMC Act has not included this

aspect in its State act (GoM, 1963)

There is a pledge finance system in place to avail credit against stored produce of non-

perishables such as soyabean. This helps to ensure that farmers are not forced to sell their

produce immediately after harvest when prices tend to be low in order to meet their cash

requirement. According to the RBI guidelines, credit upto 75 percent of the value of the

produce stored in a warehouse can be advanced to farmers subject to a ceiling of Rs. 1 lakh

per borrower for a period of 6 months extendable upto 12 months.

In general, the APMC processes for non-perishable commodities were found to be more

transparent than for vegetables. Sales of primary commodities (soyabean, tur, wheat etc)

happen through an increasing auction held by commission agents in which traders bid. The

commission charged by the commission agents for grains varies by APMC (e.g. 1.75% in

Amravati, 2% in Shahada, 3% in Parbhani). Additionally there are charges for weighing and

loading/unloading of produce and a 1.05% market fee). There is a comparatively better level

of documentation of transactions as compared to the market for perishables.

4.2 Onion markets

The following are observations made from visits to Lasalgaon and Sinnar onion markets

Onion is grown in three seasons: Rabi, Kharif and late Kharif. Kharif and late Kharif crops

have a high degree of moisture and cannot be stored. The Rabi harvest is in March and this

produce is stored to meet the demand until new Kharif harvest begins around September end.

Farmers who need money are forced to sell soon after harvest when the prices are low.

3 Model APMC act 2003, Section 42 (2) (i) Market fee specified in sub section (1) shall not be levied for the

second time in any market area of the State, provided that market fee has already been paid on that agricultural

produce in any market of the State and the information in this context has been furnished, as prescribed , by the

concerned person that the payment of market fee has already been made in other market.

17

Farmers who have storage structures hold on to their produce and sell when the prices are

attractive. The government scheme of loan against warehouse receipts is not available for

onions hence farmers cannot take loans against stocked onions.

Storage structures are made of bamboo with space to allow air to pass. There is apparently

significant waste due to poor storage conditions (poor temperature regulation and lack of

ventilation) but the exact numbers are not documented.

Since there is no new onion harvest between March/April to Oct, the prices of onions depend

on factors such as how good the Rabi crop was, how good the Kharif crop is expected to be

based on weather conditions, and exports/imports.

Lasalgaon is the largest primary market for onions in India. There is a small closed group of

commission agents and traders that operates here. Although the number of registered agents is

230, only 38 agents made any purchase in the year 2014-15 (data source: Lasalgaon APMC).

Of these, the top 6 traders account for 54% of the value of onions bought in the year (and

52% by volume). See Figure 3 and Figure 4 for the seasonality in volume, prices and the

number of active agents bidding for the year 2014-15 in Lasalgaon.

Figure 3: Onion arrivals and market value in Lasalgaon APMC (2014-15)

Figure 4: Monthly onion arrivals and total number of active agents bidding in Lasalgaon (2014-15)

18

Market transactions involve three agents: the seller (farmer), the buyer (trader) and the

middleman or the commission agent (CA). However, in Lasalgaon and Sinnar APMCs the

same CAs also register as traders under the name of someone else in their family. Hence, the

CA/traders essentially buy for themselves from the farmer yet deduct a 6% commission from

the sale value. Agents have access to storage where they hold the onions and then fill orders

from all over the country. Some big traders also export (typically in the months of January –

February with the late Kharif crop).

Because the market is a closed one, it is not possible for a trader from Mumbai or Tamil Nadu

to come to Lasalgaon market and purchase directly from the farmer. They are required to buy

from the Lasalgaon trader. Even though the APMC rules do not prohibit an outsider to get

licensed by fulfilling bank guarantees, they are not allowed to participate in the market

without approval from the CA/traders group. A newcomer must work as an apprentice with an

established CA/trader for a few years before he is given permission to start working

independently. The rationale is to ensure that only local traders who have an interest in

protecting the local market be allowed to participate in the market.

Price is determined through an increasing auction in Lasalgaon which is conducted by an

APMC staff. In Sinnar, the APMC staff does not get involved in bidding. Commission agents

themselves call out their bids and try to outbid one another. The reserve price or the base

price from which bidding begins is different for each lot and depends on the judgement of the

person who starts the bidding

It is claimed that agents at Lasalgaon collude to keep prices low for the farmers and raise the

peak prices of onions bought during Aug/Sept months to give a price signal to the retail

market. Once the retail prices rise, agents who had bought onions when the prices were low

and had stored them are able to sell downstream at a significantly higher rate. However, while

there are records available on the amount of onions bought by each CA/trader in the APMC,

there are no records for the onions sold/stored by them. The CA/traders are also very secretive

about sharing any information regarding this.

There is high degree of variability in the prices of onions in the same market primarily due to

the variation in the quality of the onions coming in. The difference in quality of the produce

can possibly be traced back to different agricultural practices, soil type, irrigation facility,

storage facility etc.

In theory, farmer has the ability to walk away without selling his onions if he feels that he has

not got a fair price in the market on a particular day. This is possible because of longer shelf

life of onions as compared to other vegetables and the market processes which allow this.

Figure 5 shows a two year trend of wholesale onion prices in Lasalgaon, Pune and Vashi

markets as well as the retail market price in Mumbai. The wholesale onion prices in Vashi

market are consistently higher than Lasalgaon which is expected as it is a secondary market

(an average of Rs 2 per kg higher). There is a large gap between Mumbai retail prices and

Vashi wholesale prices (by average of about 8 Rs/kg. Pune region also has significant onion

production and it is also a big market. Pune prices are closer to Lasalgaon prices.

19

Figure 5: Comparison of wholesale onion rates in Lasalgaon, Vashi and Pune with Mumbai retail rates (2013-2015) Data source: agmarket.nic.in

NAFED (National Agriculture Cooperative Marketing Federation of India) is an important

government organisation that has its own warehouse for agricultural commodities including

onions (Sharma et al 2011). It plays a limited but important role in onion auctions by buying

during the high-volume season and selling during the low-volume season thereby helping

stabilize prices for both consumers and farmers. Preliminary modelling using the real data of

Lasalgaon market for the past three years shows that there are opportunities of arbitrage

strategies such as one employed by NAFED that can be exploited profitably. This suggests

inefficiencies in the onion market which needs to be further explored.

4.3 Markets for vegetables

The following observations are through visits to the following vegetable markets: Large primary

markets: Nashik, Pune, Lasalgaon; Large secondary: Vashi APMC and Small secondary: Shahada,

Parbhani

In general, APMCs keep poor records of data on vegetables (as compared to onions or

grains). The data recorded by APMCs on the arrival volume of vegetables are only visual

estimates made at the market yard entrance. In some markets such as Nashik, majority of the

produce isn’t weighed at any point in the market (only produce such as chillies, beans are

weighed), yet arrival volume data is estimated and published. Since the APMCs collect 1% of

the value of transactions in their yard as market fees, they keep track of the total value

transacted. However, APMC data on prices and volumes are estimates at best.

Market always clears because of the perishability of vegetables. Farmers may have to sell at

throw-away prices because there is no option to take the produce back or store in a cold

storage. The volume arriving into the market has an important bearing on the price.

The commission charged by commission agents is highest for vegetables (6 to 10%) as

compared to the grain market (2-3%). This is because of higher level of wastage in case of

vegetables and also because agents claim that they have to pay the farmers immediately while

the buyers tend to buy on credit and many buyers default. There is also a practice by the

commission agents to kick back part of their commission to the buyer if payment is made

early.

Some markets (such as Pune, Nashik) have a dedicated space where farmers are free to

display and sell their own produce directly without having to go through a commission agent.

This space is generally used by farmers with “B” or lower quality produce since this produce

20

is bought by local consumers (hotels, retailers) and not by big traders who transport the

produce to other markets. The advantage in direct selling by farmers is that they don’t have to

pay any commission or market fee.

Unit of transaction differs across markets making it difficult to compare prices. In Nashik, the

unit of measure for vegetables is crates (which are not weighed); cabbage/cauliflowers are

sold in truckloads (which are also not weighed. Buyers estimate the volume and bid for the

entire truckload); only vegetables like chillies and beans are sold by weight. The prices are

thus quoted as rate per crate or rate for each truckload. When this produce is taken to a

secondary APMC like Vashi to be resold, it is repacked in bags and prices are quoted in

Rs/quintals. Hence, not knowing the exact weight of the vegetable in the crate or truckload

and the amount of wastage occurred in unpacking/repacking, it is difficult to compare prices

across markets for the same produce. It is interesting, however, that even though the primary

market transaction do not quote a rate per kilo, the APMCs are required to report the prices in

the MIS in this format and hence all numbers entered are an estimate.

Farmers travel large distances to bring their produce to Nashik/Pune markets. There are

smaller APMCs in other talukas as well, yet it is perceived that larger markets see higher

presence of big traders, more competition and thus offer better rates for the farmers. If it was

possible to do this aggregation closer, there could be more efficiency in the system. The larger

markets also tend to be extremely congested. The role of the small market sub-yard can be

important and the need for more such subyards needs to be explored.

The quality of the produce greatly impacts the prices for vegetables. The amount of water

available for irrigation, in turn, impacts the quality of produce.

When farmers bring their produce to sell in a secondary market such as Pune or Vashi they

are unable to witness the sale of their produce. This is unlike primary markets such as Nashik,

Lasalgaon etc. where produce is sold in front of them and cash is immediately received. Since

secondary markets cater to retail customers, they open early in the morning. Farmers have to

leave their produce in the markets late in the night. (They are free to stay till morning if they

wish to, but it is impractical to do so). The following day the farmers are told by the

commission agent the prices at which their produce was sold. The payment is collected by the

farmers in the following trip that they make to the market. This is problematic because, the

farmers have no way of knowing if the commission agent is being truthful about the price at

which the produce was sold. The APMC does not require any paperwork that shows the rate

at which the produce was sold by the commission agent to the retailer (in Vashi). Secondly,

they are unable to get instant payment as is required by the APMC act. This is a disincentive

for farmers who need immediate cash. These policies differ in each APMC.

A visit to a private vegetable market – Reliance Fresh’s collection centre in Girnare (Nashik)

showed that Reliance has registered farmers in the neighbouring villages. An sms message is

sent to them every evening indicating the total quantity of vegetables that need to be procured

the following day. Reliance only purchases the best quality produce and so farmers cannot

sell all their produce to them. Reliance publishes the price at which it will buy the vegetables

– which is the lowest price out of Nashik, Pune and Mumbai APMCs from the previous day.

In some cases the local collection centre may seek permission to override this rule to offer

slightly higher rates if procurement targets seem hard to meet. Farmers like the predictability

of this model and the fact that the collection centre save them transportation cost even though

they have to make a trip to the APMC anyway to sell the produce which does not meet the

Reliance Fresh standard.

The following section outlines the research plan based on the field experience described here.

21

5. Research plan This section presents the research questions that have been framed as a result of the field work

described in earlier sections.

5.1 Research questions As mentioned earlier, there has been a tremendous growth in vegetable cultivation in the past few

decades. In the context posed earlier, we ask the following questions:

a) What are the characteristics of farmers who are making the choice of moving to vegetable

cultivation and are marginal and small farmers also making this move? How sustainable are current

vegetable cultivation practices in terms of use of natural resources such as water?

b) How can the state’s role be strengthened in planning and resource allocation in order to support a

sustainable and equitable practice of vegetable cultivation? This refers to aspects such as knowledge

extension, water management, market creation etc.

c) How effective are vegetable markets currently? Specifically, what is the role of smaller market sub-

yards for smallholding farmers?

d) Based on answers to the above, what concrete interventions can be recommended to a block

administration or an agricultural market committee? Specifically, how can we design and propose a

vegetable market for the Mokhada/Jawhar region?

5.2 Proposed framework and methodology

Figure 6 shows the framework that can be used to position the above questions. The attempt is to

study the roles of the state, market, civil society and the community (and the interactions between

them) in the context of vegetable cultivation. For each of these, we specifically ask how effective they

are in promoting a sustainable and equitable practice of vegetable cultivation.

We select Nashik district, one of the largest vegetable producing districts in Maharashtra, as the field

location to study the above interactions.

Figure 6: Proposed framework

22

Figure 7 shows the proposed methodology. We select a block in Nashik district with a diverse

cropping pattern. In order to understand the resource base of the taluka, we collect village-level data

for the taluka e.g. demography, water use – both surface water and ground water, land use patterns,

landholdings, cropping patterns, market locations etc.

Based on these, we identify different “clusters” of villages which are similar in terms of the resource

base e.g. tanker-fed cluster, cluster in canal command area, cluster in groundwater dependent area,

cluster close to market etc.

We will then select villages from each of the cluster for conducting village level studies. Field level

observations will be done and village level resources (land-use, water sources, etc.) will be mapped.

Primary survey of landholding farmers (irrespective of the crops they cultivate) will be conducted to

get information on their chosen cropping pattern i.e. cultivated area for each crop in the past few

seasons. Data will be collected on factors that are related to cropping decisions e.g. season, market

rate, landholding size, water resources available, technology available, access to knowledge input,

perceived profitability, years of past experience, profitability in the past, capital, credit available,

labour available, other alternatives, distance to market etc. A list of such factors that are likely to

affect cropping decisions will be developed using a system dynamic approach (causal-loop diagram)

and included in the survey. Information on farming practice used (inputs used per unit land, water use

and frequency, technology used, markets accessed, loan taken etc.) will also be collected. Collected

data will be used to understand under what conditions farmers currently tend to cultivate specific

vegetables in the selected region and the characteristics of the farmer (in terms of his access to

resources) who cultivates different types of crops such as cereals, pulses, soyabean, cotton, onion,

sugarcane, tomatoes or other vegetables. We would then attempt to understand the implications from

an equity and sustainability standpoint.

In a related thread, a study of various different government departments and institutions which

interface with agriculture will be conducted to understand their mandate, processes, datasets and

Figure 7: Proposed methodology for village survey

23

overall effectiveness. This will include institutions involved in agricultural extension (e.g.

Agricultural Technology Management Agency - ATMA, block level agriculture and extension offices,

KVKs, state agricultural universities, etc.) and irrigation management (canal operating offices, minor

irrigation, groundwater survey department etc.). It will be evaluated if these departments have a

differentiated way of addressing the needs of marginal and small farmers and if not, how such an

approach can be adopted.

In the study of markets, our first goal is to determine how relevant APMCs are currently to the

smallholding vegetable farmer as compared to smaller decentralised markets such as village weekly

markets and smaller APMC sub-yards. An initial survey in Nashik APMC and the smaller Pandurli

subyard shows the dominance of farmers with access to capital-intensive technology (See Appendix B

for survey summary). The role of smaller vegetable market yards and their benefits to the farmers in

the market catchment area will be studied.

Based on findings of the work described above, the goal would be to recommend concrete

interventions to the taluka/district administration or marketing committee. One such intervention

would be a design and proposal for starting a vegetable market in the Mokhada/Jawhar region where

currently farmers travel anywhere from 60km to 150km to access an APMC. The study of factors that

led to the creation of a new market in Pandurli (Sinnar taluka) four years ago and the factors that

made it successful will be useful to learn the pre-requisites for starting a new vegetable market in

Mokhada/Jawhar region. These will be done by interviewing the Sinnar APMC committee, traders

and farmers to understand what factors led to the creation of the new market and the pre-requisites in

terms of production volume, quality, logistics and growth prospects for the market.

24

6. Work done Nashik district has been chosen as it is one of the agriculturally advanced districts of Maharashtra and

has a high vegetable production round the year.

The district forms part of Western Ghat and Deccan

Plateau. Normal annual rainfall in the district varies from

about 500 mm to 3400 mm. Blocks of the district that are in

the eastern parts of Western Ghats receive very high

rainfall (Igatpuri, Peth, Trambakh and Surgana) and rainfall

starts to decrease as we move eastwards towards blocks that

are partly categorised as drought area. The major vegetable

crops of the district include onion, tomato, cabbage,

cauliflower and fruit crops include grapes, pomegranate

and guava. Nashik district also has some big horticulture

markets such as Lasalgaon (considered Asia’s largest onion

market), Pimpalgaon Baswant (considered largest tomato

market in the country) and Nashik APMC (large onion and vegetable market).

6.1 Taluka selection

Table 7 shows block wise summary of cultivated area for grains, pulses, oilseeds, fruits and

vegetables (2008-09 data) (GoM 2013). Nashik, Niphad and Dindori talukas are greatly dominated by

cash crops and have a relatively small share of cereals. Sinnar block has a large share of vegetable

production but at the same time has 68% of its area under grains. Bajra is the dominant cereal grown

in this region. (Kautik et al. 2015)

For village-level surveys we select Sinnar taluka because of its high

vegetable cultivation as well as an increasing area under vegetable

cultivation (13% of cultivable land in 2008-09 and 18% as of 2014).

Sinnar taluka is located in the south east part of the district bordering

with Igatpuri, Nashik and Niphad blocks to its West and North. It

borders with Ahmednagar district in the south and east.

Sinnar receives a low average rainfall of 568.6 mm annually. According

to (CGWB 2014), the stage of ground water development in Sinnar is

“semi-critical” at 98.72% (i.e. the ratio of gross annual draft of

groundwater for all uses to the net annual ground water available)

compared to a district average of 49.33%. [See Appendix C]

Sinnar comprises of 130 villages with net cultivable area of 98 thousand

hectares. The most important crops of Sinnar are bajra, soyabean,

onions and tomato amongst vegetables and grapes and pomegranate

amongst fruits. Table 6 shows the area under cultivation for various

crop types in Sinnar taluka in 2014-15 (GoM 2016).

Figure 8: Nashik district

Table 6: Area under cultivation in Sinnar taluka for different crop categories

(2014-15) (Source GoM 2016)

Crop type

Hectares

under

cultivation

(2014-15)

% of

cultivable

land

Kharif pulses 1,182 1%

Kharif cereal 30,617 31%

Kharif onion 4,558 5%

Rabi cereal 8,330 8%

Rabi harbhara 4,650 5%

Rabi onion 5,607 6%

Sugarcane 532 1%

Cotton 1,583 2%

Oilseeds 15,990 16%

Other Vegetables 7,084 7%

Fruits 4,906 5%

Gross sown area 85,038 87%

Total Cultivable land 98,226 100%

25

Table 7: Taluka wise cropping pattern (2008-09) (Source: GoM, 2013)

.

6.2 Sinnar taluka resource mapping

To understand the resource base of Sinnar taluka, secondary data has been collected from various

sources. Figure 9 shows a view of the GIS developed by creating layers of different datasets:

secondary data (census, digital elevation map, drainage lines, watershed boundaries) and data from

taluka offices such as taluka agricultural office (cropping pattern), minor irrigation office (drinking

water scarce/ tanker-fed villages), GSDA (groundwater exploitation stage), APMC (market locations)

etc. Each polygon represents a village in the taluka.

The map in Figure 9 shows the tribal

population as a share of village

population for all villages in the

taluka. The high elevation villages

bordering Igatpuri taluka are largely

tribal villages and the ST share is

least in the central region of the

taluka.

Hectares

sown

2008-09

Total grains Total lentils

Total veg

(includes

onions)

Total

fruits

Sugarcan

eSpice oilseeds non-edible Total

24,054 5,210 92 169 6 20 - 1,959 31,510

76% 17% 0% 1% 0% 0% 0% 6%

32,935 5,693 4,646 8 1,964 1,830 1,295 175 48,546

68% 12% 10% 0% 4% 4% 3% 0%

24,734 2,097 5,997 77 671 458 1,099 900 36,033

69% 6% 17% 0% 2% 1% 3% 2%

53,676 6,307 4,115 713 3,220 754 6,037 5,062 79,884

67% 8% 5% 1% 4% 1% 8% 6%

55,620 6,445 3,831 226 412 106 - 1,634 68,274

81% 9% 6% 0% 1% 0% 0% 2%

26,715 756 8,696 25 115 29 271 226 36,833

73% 2% 24% 0% 0% 0% 1% 1%

38,853 4,261 9,429 2,073 20 547 7 4,481 59,671

65% 7% 16% 3% 0% 1% 0% 8%

23,061 7,761 9,349 6,774 6,107 1,128 5,914 9,926 70,020

33% 11% 13% 10% 9% 2% 8% 14%

16,658 4,250 29 12,497 71 9 - - 33,514

50% 13% 0% 37% 0% 0% 0% 0%

29,219 9,410 - - - - - - 38,629

76% 24% 0% 0% 0% 0% 0% 0%

8,729 2,257 6,444 1,399 811 704 - 3,227 23,777

37% 9% 27% 6% 3% 3% 0% 14%

24,700 3,525 1,100 88 2,241 96 5,592 2,818 40,160

62% 9% 3% 0% 6% 0% 14% 7%

43,970 4,957 8,260 1,079 1,319 511 1,811 2,539 64,446

68% 8% 13% 2% 2% 1% 3% 4%

21,863 2,170 12,518 15,322 8,270 469 - 798 61,410

36% 4% 20% 25% 13% 1% 0% 1%

38,750 13,002 15,373 433 28 232 4,435 572 72,825

53% 18% 21% 1% 0% 0% 6% 1%

4,63,537 78,101 89,879 40,883 25,255 6,893 26,461 34,317 7,65,532

61% 10% 12% 5% 3% 1% 3% 4%

Nandgaon

Surgana

Kalwan

Deola

Baglan

Malegaon

Sinnar

Niphad

Yevla

Total

Chandvad

Dindori

Peint

Trimbak

Nashik

Igatpuri

Figure 9: Sinnar taluka: village-wise ST population%

26

Figure 10 shows the water resources. The red coloured dots mark the villages that lie in watersheds

that are considered “critical” based on the groundwater exploitation analysis by the GSDA. The map

also shows the streams and canals in the region.

As can be seen from the map, the

highest groundwater exploited

area is along the Devnadi river

valley which flows through

Sinnar town and meets Godavari

river in the north-east just

outside Sinnar taluka boundary.

The Kadva dam in Igatpuri

taluka has a canal network part

of which flows through Sinnar

taluka in the north and north east

parts (shown in purple in the

map). Darna river, another

important source of irrigation,

touches the westernmost parts of

the taluka. The Bhojapur dam is

in the southern part of the taluka for which the canal distribution network is currently being

constructed. However, most of the reservoir is currently used for drinking water. There are other small

surface reservoirs in the taluka which play a very important role in the local agriculture. Saradwadi,

Borkhind, Konambe, Thangaon are some of the bigger ones which are marked on the map. There are

many minor irrigation structures such as farm ponds, village ponds, cement concrete bandharas and

Kolhapur style bandharas which are not marked on the map.

Sinnar APMC has six market sub-yards besides the main market yard located in Sinnar (all marked as

blue stars on the map). All sub-yards are dedicated to grains, oilseeds or onions except the Pandurli

sub-yard which is a market only for tomatoes. There are no market yards for any other vegetables.

Farmers who cultivate vegetables such as cabbage, cauliflower, green leafy vegetables etc. have to go

to Nashik APMC (30 km away) to sell their produce. The Pandurli sub-yard, close to the Kadva canal,

is a recent creation (about 4 years old) and operates seasonally from October to February.

In general, we find that the western part of the taluka is much richer in water availability and also

where most of the vegetable cultivation is done. Region between the Godavari and the tail end of

Kadva canal in the north eastern part of the taluka is another region which has comparatively better

access to water and a higher degree of cash crop plantation (including fruits and some sugarcane)

Most of the central and

eastern part of the taluka is

water stressed and needs

water tankers even to meet

drinking water needs. This

region largely grows Kharif

cereals.

Figure 11 shows in red the

villages that were

Figure 10: Sinnar taluka water resources

Figure 11: Tanker-fed villages in Sinnar block (Nov 2015)

27

dependent on tanker water for their drinking water needs in Nov 2015.

The map in Figure 12 shows the villages which are dominant in vegetable cultivation (this does not

include onions. Onion data is shown separately). The darkest green polygons (see map legend) refer to

villages which had more than 50% of their cultivable land under vegetable cultivation in Sept 2015.

These villages are concentrated close to Kadwa canal and also close to reservoirs in Borkhind,

Thangaon and Konambe.

Figure 12: Share of (non-onion) vegetable cultivation in each village, Sinnar taluka (2014-15)

The following map shows the onion growing area. The range in the legend is the ratio of the gross

area under onion cultivation (Kharif + Rabi) as a share of the cultivable land in the village. For

example, for the darkest coloured villages, the gross area under onions (for Rabi + Kharif season) is

greater than 60% of their cultivable land.

Figure 13: Village-wise onion (Kharif+Rabi) cultivation share in Sinnar taluka (2015-16)

28

Figure 14: Village-wise dominant crop in Sinnar taluka (2014-15)

The last map in Figure 14 shows for each village the crop which had the largest share of cultivated

area in 2014-15. Most of the central and eastern part of the taluka is dominated with land under cereal

cultivation. The north-west part of the taluka along the Kadwa canal is dominated with land under

soyabean cultivation. This is also where vegetable cultivation happens at a reasonably high degree and

the villages in green are the ones that are dominated with land under vegetable (non-onion)

cultivation. Fruit cultivation largely happens in the north-east parts of the taluka and two villages

(shown in brown) are dominated with fruit cultivation. Villages which have no dominant crop are left

uncoloured.

6.1 Identification of village clusters

Based on the above resource maps, we propose the following village clusters within which villages

are similar in attributes (Table 8). These clusters have been market in the map shown in Figure 15.

Figure 15: Proposed village clusters for future study

29

Table 8: Proposed village clusters and their attributes

Cluster Villages GW

exploitation

status

Surface water sources Tanker

-fed

Market access

1 203-

Swatamalinagar

204-Pandurli

205-Ghorwad,

211-Borkhid,

210-Shivade

212-Agaskhind,

Safe Kadva canal, Darna

river, Borkhind dam

No Pandurli tomato

market operates

from October to

February

2 163- Lonarwadi,

164-Wadgaon

Sinnar,

200-Paste,

201-Saradwadi

207-Harsule,

209- Sonambe,

Over-

exploited

Villages are along

Devnadi and Shivnadi

rivers (seasonal)

along which there are

minor structures,

Saradwadi dam

No Sinnar market

yard only for

onions and

grains

3 166-Somthane,

167-Sangvi,

168-Dahiwadi,

169-Mahajanpur,

178-Pimpalgaon

Safe Tail end villages of

Kadva canal, close to

Godavari river

No Vadngali market

yard (only grain

market) is about

10-15 km away

4 255- Marhal Bk,

256-Marhal Kh,

262-Dodi Bk,

264-Dodi Kh,

266-Kankori,

267-Nirhale

Safe Along Jamnadi

stream

Yes Dodi Bk. has an

onion sub-yard,

Nandur Shingote

market for grains

and onions

within 15km

5 222-Patole,

224-Shivajinagar,

225-Dattanagar,

226-Ramnagar,

230-Dapur

Over-

exploited

None

(possibly watershed

works in the minor

streams)

Yes Closest market

in Sinnar or

Dodi Bk

7. Future work Once the clusters are finalised, we will select villages from each of them to conduct village level

studies. The immediate next step is to determine the number of villages to be selected and the basis

for selection. A system dynamics causal-loop diagram will be developed to arrive at a list of factors

effecting cropping pattern which should be included in the village surveys. The village surveys will be

done over the next two cropping seasons to collect data.

In parallel, working of government extension program will be studied by visiting and interviewing the

relevant institutions.

A study of the events that led to the creation of the Pandurli vegetable market and its impact on the

cropping patterns in the neighbouring villages will be studied by interviewing Sinnar APMC members

as well as traders and farmers coming to the market.

30

8. References 1. GoI (2014)a, “Handbook on Horticulture Statistics 2014”, Ministry of Agriculture, GoI

2. Mittal, S. (2007), “Can horticulture be a success story for India?”, Working paper No. 197,

Indian Council for Research on International Economic Relations

3. GoI (2014)b, “Mission for Integrated Development of Horticulture – Operational Guidelines”,

Horticulture Division, Department of Agriculture and Cooperation, GoI

4. GoM (2010), “”Maharashtra Agricultural Competitiveness Project – Project Implementation

Plan”, Govt. of Maharashtra

5. Chand, R. (2012), “Development Policies and Agricultural Markets”, Economic and Political

Weekly, Vol XLVII No. 52

6. Patnaik, G. (2011), “Status of Agricultural Marketing Reforms”, IGIDR Workshop

Proceedings from Workshop on Policy Options and Investment Priorities for Accelerating

Agricultural Productivity and Development in India, New Delhi

7. Kasturi, K. (2014), “Have Farmers Benefitted from High Vegetable Prices in 2013?”,

Economic and Political Weekly, Vol XLIX No. 5

8. Singh, S. (2012), “New Markets for Smallholders in India- Exclusion, Policy and

Mechanisms”, Economic and Political Weekly, Vol XLVII No. 52

9. Narayanan, S. (2012), “Inflections in Agricultural Evolution- Contemporary Commodity

Complexes and Transactional Forms in Interior Tamil Nadu”, Economic and Political

Weekly, Vol XLVII No. 52

10. Vaidyanathan, A. (2010), “Agricultural Growth in India – Role of Technology, Incentives and

Institutions”, Oxford University Press, New Delhi

11. Reddy, D.N. and Mishra, S. (eds) (2009), “Agrarian Crisis in India”, Oxford University Press,

New Delhi

12. GoI (2013), “Twelfth Five Year Plan (2012-2017) - Economic Sectors”, Planning

Commission, Government of India

13. Sharma, P., Gummagolmath, K. C. , Sharma R.C. (2011), “Prices of Onions: An Analysis”,

Economic and Political Weekly, Vol XLVI No. 2

14. Deokar,B.K., Shetty, S.L. (2014), “Growth in Indian Agriculture- Responding to Policy

Initiatives since 2004-05” Economic and Political Weekly, Vol XLIX Nos. 26, 27.

15. NCAER (2014), “An Analysis of Changing Food Consumption Pattern in India”, National

Council of Applied Economic Research, New Delhi

16. GoI (2014)c, “Agricultural Statistics at a Glance 2014”, Ministry of Agriculture, GoI

17. GoI (2003), “Model Act – The State Agricultural Produce Marketing (Development and

Regulation) Act, 2003” accessed at http://agmarknet.nic.in/amrscheme/modelact.htm

18. GoM (1963), “The Maharashtra Agricultural Produce Marketing (Development and

Regulation) Act, 1963” Maharashtra Act XX of 1964 (as modified upto 2005)

19. CGWB (2014), “Ground water information, Nashik District, Maharashtra”, CGWB, Ministry

of water resources, GoI, 2014

20. Kautik, S.S., Ramdas, R.V. (2015), “Agricultural Land-use Pattern in Nashik District of

Maharashtra”, Golden Research Thoughts, Volume 4, Issue 7

21. GoM (2016), “Pik Perni Ahval 2014-15”, Various issues, Sinnar Block Agricultural

Department, Government of Maharashtra

22. GoM (2013), “District Socio-economic Summary”, Nashik district, GoM

31

Appendix A –APMC facts The database created using market data for Maharashtra APMCs gives us the following picture of

APMC volumes in the state. The highest traded commodity in Maharashtra APMCs is onion (26% by

weight and 16% by value of total), followed by Soybean and Arhar. The APMC with the highest

turnover in Maharashtra is Vashi APMC which alone accounts for one-third of the value transacted in

all Maharashtra APMCs put together. By arrival tonnes, it accounts for 20% of all volume transacted.

The produce which has the highest share in Vashi APMC’s value is Mango (accounting for 11% of

the Vashi marketed value). Vashi is followed by Pune and Nagpur APMCs (See Tables 9 and 10).

A comparison of the total marketed volumes sold in Maharashtra’s APMCs with the production

volume as published by the state Department of Agriculture and National Horticulture Board shows a

poor match (see Table 11). The marketed volume is significantly less than the volume that is

estimated to be produced in Maharashtra. This points to the following possibilities. 1) a large quantum

of produced commodities do not go through the markets i.e. are used for self-consumption or sold in

markets outside the state or through alternate channels such as village weekly markets or smaller

markets where data is not captured. 2) poor quality of marketing data, 3) poor production estimates.

Field work and primary surveys indicate that all three factors are at play.

Table 9: Commodities with highest marketed value in Maharashtra markets (2014-15)

commodity Tonnes Marketed Value: Rs

Avg

rs/quintal

% share of

Maha

marketed

value

% share

of total

Maha

markete

d weight

Onion 28,70,964 36,77,96,55,769 1,281 16% 26%

Soyabean 5,66,681 18,98,14,32,880 3,350 8% 5%

Arhar (Tur) 3,25,173 17,90,31,16,346 5,506 8% 3%

Potato 6,98,230 11,76,97,29,888 1,686 5% 6%

Methi 13,55,641 11,23,42,01,398 829 5% 12%

Coriander 16,01,549 11,14,47,41,331 696 5% 14%

Mango 1,19,284 9,49,93,39,840 7,964 4% 1%

Rice 1,41,493 8,50,81,94,310 6,013 4% 1%

Wheat 3,10,682 6,38,82,81,584 2,056 3% 3%

Bengal Grams(Gram) 2,31,778 6,35,65,58,035 2,743 3% 2%

Gur(Jaggery) 1,99,525 5,70,55,20,139 2,860 2% 2%

Cotton 1,24,609 5,69,05,11,418 4,567 2% 1%

Turmeric 72,959 5,55,76,70,357 7,617 2% 1%

Pomegranate 1,15,744 5,03,19,72,360 4,348 2% 1%

Chili Red 67,483 4,91,09,69,817 7,277 2% 1%

Tomato 3,05,395 4,33,66,71,154 1,420 2% 3%

Sugar 1,41,448 4,29,53,09,392 3,037 2% 1%

Apple 1,06,796 3,78,44,67,640 3,544 2% 1%

Cashewnuts 5,669 3,45,22,81,750 60,896 2% 0%

Green Chilly 1,05,032 2,81,16,45,871 2,677 1% 1%

2014-15 Commodities with highest marketed value in Maharashtra

32

Table 10: Marketed volumes and value for the largest APMCs in Maharashtra (2014-15)

Typical agricultural supply chain:

After an agricultural product leaves the farm-gate, it may pass through one or even two wholesale

markets and a chain of other middlemen before reaching the retailer from whom the ultimate

consumer buys it. Where two wholesale markets are involved, the first may be only an assembling

market and may be called a primary wholesale market; and the second may be a distributing market,

called a secondary market. It is not necessary that the functions of assembly, distribution and export

should necessarily be performed by three separate wholesale markets; a single wholesale market may

perform one, two or all three of these functions.

For example, the Vashi market in Mumbai is essentially a secondary market where traders bring

produce from all over the country (since very little is grown in the catchment area of Vashi market).

But there is a small fraction of farmers who sell in this market as well (e.g. the farmer collectives of

Raigad, Thane and Palghar districts). On the other hand, Nashik market functions essentially as

Market

2014-15

tonnes

2014-15

Marketed Value

Weight %

of Maha

total

Value% of

Maha

total

Commodity

with highest

marketed

value for each

APMC

% share of

commodity

in APMC

marketed

value

% share of

commodity

in APMC

tonnes

Mumbai (Vashi) 22,73,353 76,73,84,64,342 20% 33% Mango 11% 4%

Pune 8,88,979 11,47,54,77,302 8% 5% Onion 33% 35%

Nagpur 5,16,712 10,19,64,63,010 5% 4% Potato 18% 25%

Solapur 8,81,779 9,94,81,05,288 8% 4% Onion 27% 31%

Khed 10,16,722 9,78,22,42,550 9% 4% Methi 60% 64%

Sangli 1,73,055 9,64,15,80,021 2% 4% Turmeric 39% 28%

Maanachar 10,06,374 9,41,00,83,808 9% 4% Methi 50% 58%

Hinganghat 1,06,856 4,14,28,32,434 1% 2% Arhar (Tur) 53% 41%

Pimpalgaon 2,59,628 4,04,03,33,403 2% 2% Onion 57% 66%

Khamgaon 98,964 3,53,58,90,497 1% 2% Soyabean 56% 61%

Lasalgaon 2,37,560 3,35,96,27,802 2% 1% Onion 93% 97%

Karanja 79,711 2,79,35,33,038 1% 1% Soyabean 50% 52%

Latur 74,377 2,69,12,64,685 1% 1% Soyabean 55% 56%

Lonar 74,078 2,61,60,72,616 1% 1% Soyabean 54% 57%

Newasa(Ghodegaon) 1,72,285 2,54,27,28,800 2% 1% Onion 100% 100%

Yeola 1,74,225 2,30,74,08,977 2% 1% Onion 97% 98%

Rahata 91,036 2,03,25,39,944 1% 1% Onion 49% 79%

Lakhani 55,163 1,84,22,67,016 0% 1% Mustard 81% 86%

Sangamner 1,46,812 1,83,53,53,556 1% 1% Onion 64% 69%

Manmad 1,31,902 1,67,47,05,082 1% 1% Onion 99% 99%

Aurangabad 3,79,376 1,66,94,87,523 3% 1% Coriander 56% 90%

Akola 44,644 1,60,60,92,998 0% 1% Soyabean 56% 64%

Kolhapur 84,689 1,59,67,78,450 1% 1% Gur(Jaggery) 57% 37%

Washim 40,908 1,51,03,72,535 0% 1% Arhar (Tur) 40% 28%

Nasik 66,528 1,45,79,35,186 1% 1% Pomegranate 29% 15%

Anajngaon 40,864 1,42,58,47,021 0% 1% Soyabean 34% 37%

Arvi 25,285 1,10,72,26,920 0% 0% Cotton 67% 61%

Murtizapur 29,123 97,82,25,815 0% 0% Soyabean 47% 50%

Sinner 75,649 94,48,58,377 1% 0% Onion 100% 100%

Malegaon 77,557 93,90,60,776 1% 0% Onion 89% 92%

Jalana 34,970 92,93,72,835 0% 0% Soyabean 43% 36%

33

assembling or primary market for vegetables because there is a lot of vegetable production in this

area.

In Maharashtra, there is generally one APMC for each taluka. There is usually one primary yard and

multiple subyards in different parts of the taluka. In addition to the APMC yards, villages also have

their own market places which run a weekly vegetable market. Individual farmers with small surplus

tend to sell their produce in these markets. For farmers or farmer groups with large surpluses, APMC

markets become the main marketing channel.

Table 11: Comparison of production estimate and marketed surplus for main crops

The purpose of having a regulated market is to assure fair and transparent transactions. Commission

agents are licensed. Often buyers (in primary markets) or sellers (in secondary markets) are also

licensed. The APMC is supposed to ensure that there is good infrastructure available to keep the

produce, weighing of produce is done accurately, auctions happen in a transparent manner, farmers

are paid in cash within 24 hours and conflicts are resolved in a fair manner. Each market committee

publishes a list of notified commodities which must be traded within the market. The market

committee charges a market fee for all the wholesale transactions that occur in the market jurisdiction

for the notified commodities. This is typically 1% of the marketed value. The APMCs largely depend

on this market fee for their budget. Although the APMCs are constituted under the state Act,

individual APMCs vary significantly from one another. Each market committee has the power to

decide their operating procedures, fees and commission for its APMC.

Vegetable type

Maharashtra Production

data (tonnes)

Source for vegetable and

fruits: NHB 2013-14 data

Source for grains: Ministry

of agriculture 2010 data

Maharashtra 2014-

15 Marketed

volume (tonnes)

Source:

agmarket.nic

Marketed

tonnes as

% of

production

Comments

Onions 58,64,040 28,70,964 49%

Most onions should pass through a primary market in

Maharashtra. This could be an overestimate of onion

production and/or an underreporting of onions marketed in

APMCs

Potato 3,70,000 6,98,230 189%Potato marketed in Maharashtra are generally produced in

other states such as UP since production in state is low

Tomatoes 12,00,000 3,05,395 25%

Cauliflower 8,13,240 1,77,023 22%

Cabbage 6,40,900 91,696 14%

Mango 12,12,500 1,19,284 10%

Pomegranate 9,45,000 1,15,744 12%

Tur 9,75,800 3,25,173 33%

Gram 13,00,200 2,31,778 18%

Sugarcane 8,56,91,500 NA Sugarcane is taken direct to sugarmills and not to APMCs

Cotton(lint) 74,72,500 1,24,609 2%Large part of cotton is directly bought by traders and ginning

mills

Soyabean 43,16,100 5,66,681 13%

Most soyabean is marketed through a primary market in

Maharashtra. This could be an overestimate of production

and/or an underreporting of marketed volume in APMCs

Jowar 34,52,300 48,118 1%

Rice 26,24,900 1,41,493 5%

Maize 25,70,700 9,930 0%

Wheat 23,00,800 3,10,682 14%

Bajra 11,23,500 20,162 2%

Moong 3,72,400 17,663 5%

Groundnut 3,45,500 12,570 4%

Urad 3,29,080 29,115 9%

Marketed data for vegetables is routinely underreported by

APMCs. There may also be some overestimation of

production

Many fruits bypass APMCs in Maharashtra and are sold

direct to traders

Some part is used for self-consumption. But very low

marketed volumes suggest that either these tend to bypass

the APMCs or are severely underreported

Some part is used for self-consumption by farmers but

indicates overestimate of production and/or under reporting of

marketed volume

34

Appendix B – Market survey data Pandurli market survey conducted on 3/12/2015 (3pm to 6pm)

Village name Taluka

km

distance

from

Pandurli

Farmer

Landholdi

ng acres

Acres under

tomato

cultivation

seasonal

tomato or

year round Other crops sown Irrigation source Drip irrigation Knowledge source

Konambe sinnar 10 1.5 0.5 year round onion, soyabean well no other farmers

Lonarwadi sinnar 15 2.5 0.5 season wheat, onion (2 acres) well x 8 months, 2 crops no

Devnadi producer company

(he is a member and used to be

an employee)

Harsule sinnar 11 3 2 season onion, garlic, wheat well x 8 months, 2 crops no i/P seller

Nandgaon Igatpuri 11 4 1/2 (1 biga) 2 acres rice well next to stream close to Darna y

Pandurli sinnar 0 4 2.5 season onions (2 acre), potatoes, soyabean, paddywell x 8 months, 2 crops no

Pandurli sinnar 0 5 5 season after tomato: kobi, flower, wheatwell x 12 months y (4 acre) no need

Shivada sinnar 5 5 1 onion, wheat well no I/P seller

Konambe sinnar 10 5 1.5 season onions well, Konambe dam y Devnadi agri mall (not member)

Shenit Igatpuri 6 5 2.5 year round sugarcane (4 acre), paddy (3)river 2000 ft away no I/P seller

Konambe sinnar 10 5 1 year round onion, carrots (1-2 acres) well , 2 crops y (1 acre) I/P seller

Belu sinnar 6 5 1 season onion(2 acres), paddy, fodderDarna river is 1.5km away, no scarcity no own

Borkhind sinnar 5 5 2 year round bajri, wheat, cucumber (2 acres - sells in Nashik)well next to pond y Had kept a BSc agri guy for one year who advised him on growing chillies. Charges Rs 10k per acre. Farmer gave him Rs 15-20k for the year. Has stopped service now

Shivada sinnar 5 5 3 season wheat, onion (2 acre) well x 12 months yes (3 acres) I/P seller

Sakur Igatpuri 8 5 2.5 year round sugarcane, cucumber (nashik mkt), rabi: wheat & onionwell, Darna dam yes (3 acres) syngenta company employee does side business as knowledge expert. Hired by 8-10 farmers collectively. He comes once a week suggest products of all companies (bayer, dupont, syngetna etc), each farmer ends up paying about 7-8k per season to this guy. He also gives the names of these farmers to input seller shops and gets a cut from the input sellers for referrals

Belu sinnar 6 5.5 1.5 season soyabean, onion Darna river is 600 ft away no I/P seller

Vadgaon Pingala sinnar 4 6 0.75 season grapes (5 acres) Darna river pipeline y (100%) Kept a BSc agri consultant who comes once in 8 days and charges 10k per acre. So farmer pays 50k for whole year. Consultant name is Mr Barkale who comes from agastkhand

Pimpalgaon dukra Igatpuri 7 2 year round paddy kadva dam downstream y (100%)

Lavit Nashik 10 7 1 season onion(1) potato, wheat darna river, no scarcity y (2 acres) I/P seller

agastkhind sinnar 5 7.5 2 paddy, fodder, onion stream 4000ft away y I/P seller

Shivada sinnar 5 7.5 3 fallow, no water well (only 1 crop)

bharvir Igatpuri 8 2 sugarcane, onion, potatoes well x 12 months, kadva dam y I/P seller

ghorwad sinnar 4 10 2.5 grapes (2.5), onion (2.5), wheatwell x 12 months y Kolhapur website - also has a phone number

Donwadi Nashik 10 10 1.5 year round onion, wheat, cauliflower darna nadi, well y (5 acre) I/P seller

Belu sinnar 6 10 5 year round maize Kadva canal - kadva river y (3 acres)

Pandurli sinnar 0 11 1.5 season wheat, onion (2 acres) etc well x 12 months

Shenit Igatpuri 6 12.5 1 year round grapes, sugarcane well x 12 months y private "doctor". Pays ~30k/year. Comes twice a month

Sawatamalinagar sinnar 1 15 3 season sugarcane, rice well, 2 crops no need

Konambe sinnar 10 15 4 year round sugarcane, paddy, grapes, pomegranate, soyabean (monsoon)well x 12 months y (3.5) has his own agri input mall

Shivada sinnar 5 15 5 grapes well almost 12 months water, 2 crops yes (5 acres)

sonari sinnar 17 25 1 8 months onion (7 acres), grapes (2) well I/P seller

Ekadare Akole, Nagar district35 25 2.5 season paddy Farmpond

35

Nashik market survey conducted on 4/12/2015 (4:30 pm to 5:30 pm)

No. Village name Taluka District

km

distanc

e from

Nashik

Landhold

ing acres

Acres

under

tomato

seasonal

tomato or

year

round Other crops Irrigation source Other information

1 Vadoli Trambekeshwar Nashik 25 2 1 seasonal paddy well x4 months, 1 crop

4 farmers brought produce together (~20 jali each).

Trans cost Rs 15/jali

2 Ashewadi Dindori Nashik 10 3 3 seasonal well x 12 months own truck

3 shimpitakli Niphad Nashik 22 3.5 0.5 seasonal sugarcane (.5), cauliflower (after tomato), onion (sells in saykheda)well , 3 crops Received rate this season Rs800/jali to Rs 200/jali

4 Khadkachapada Peth Nashik 60 4 0.5 seasonal wheat, onions Farm pond, 3 crops Rs 40/jali transportation

5 Vanjarwadi nashik Nashik 45 4 1.5 well x 8 months

2-3 farmers shared. Sold 63 jalis for Rs 411, 72 jalis

for Rs 361 and 26 jalis for Rs 191

transportation charges Rs 15/jali

6 Vadgaon Pingala Sinnar Nashik 22 5 0.5 seasonal soyabean, onion, wheat well x 8 months, 2 crops

brought produce of two farmers together (total of

100 jali).

Trans cost ~ rs 12/jali. Rs 8/jali is additional cost of

commission (rs6) and hamali (rs 2).

Believes in Pandhurli he gets Rs50/jali less than

what he gets in Nashik

7 Vadoli Trambekeshwar Nashik 25 5 1 seasonal paddy, wheat, chana well x 12 months Rs 17/jali transportation

8 Jambudke Dindori Nashik 23 5 1 seasonal grapes Darna pipeline, well has own truck but charges Rs 15/jali to others

9 Mudegaon Trambekeshwar Nashik 30 7 3 seasonal paddy well x4 months, 1 crop asking price for Rs600 per jali.

10 Jambudke Dindori Nashik 23 7 1 ghevda, grapes, paddy

wellx 8-10 months water. 2

crops + maintain orchard range of rate received (500-200)

11 Babhaleshwar Nashik Nashik 18 8 1 year round sugarcane (5 acres), paddy well x 12 months

12 Makmalabad Nashik city Nashik 3 9 3 seasonal grapes, gourd, cucumber, bhajipala (5 acres)borewell, anandi canal

13 Vadoli Trambekeshwar Nashik 25 12 0.5 seasonal paddy, wheat farm pond, 2 crops Trans cost is Rs 15/jali

14 Jategaon Nashik Nashik 20 12 2 seasonal paddy, onion, wheat valdev dharan x 12 months transportation cost Rs 15/jali

15 Jategaon Nashik Nashik 20 12 1 seasonal grapes valdev river, 5km long pipe

owns the truck. He and the above farmer shared the

truck. Rent charged to the other farmer Rs 15/jali

16 Vadoli Trambekeshwar Nashik 25 14 3 seasonal cucumber (2 acres), grapes (2.5), paddy, fallowwell (till Nov/Dec), Anjaneri pipelineVaibhav variety selling for around 300-350

17 Umbarade Nashik Nashik 18 15 5 seasonal sugarcane nalegaon dharan, well tomato variety (501)

18 Vadoli Trambekeshwar Nashik 25 20 1 seasonal paddy, onion, potato, chillies, vangi (bhaji pala total 6 acres)Anjaneri pipeline, 2 wells

vaibhav variety. Has sold from rs 600/500 to 300-

350 per jali this season

36

Appendix C – Sinnar block depth to water level map