A Collaborative Study on Agriculture Marketing

NABARD RESEARCH STUDY - 12

A Collaborative Study on Agriculture Marketing Infrastructure in KeralaCentre for Agroecology and Public Health

Department of EconomicsUniversity of Kerala

vkfFkZdfo'ys"k.k ,oavuqla/kkufoHkkxDepartment of Economic Analysis & Research

jk"Vªh; —f"kvkSjxzkeh.kfodklcSad] eqacbZNational Bank for Agriculture and Rural Development, Mumbai

2021

NABARD

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A COLLABORATIVE STUDY ON AGRICULTUREMARKETING INFRASTRUCTURE IN KERALA

Dr Manju S NairProfessor, Department of Economics

Hon. Director, Centre for Agroecology and Public Health, University of Kerala

Centre for Agroecology and Public Health,Department of Economics

University of Kerala

National Bank for Agriculture and RuralDevelopment(NABARD)

DISCLAIMER

This study has been supported by the National Bank for Agriculture and Rural Development (NABARD) under its Research and Development (R&D) Fund. The contents of this publication can be used for research and academic purposes only with due permission and acknowledgement. They should not be used for commercial purposes. NABARD does not hold any responsibility for the facts and figures contained in the book. The views are of the authors alone and should not be purported to be those of NABARD.

About NABARD Research Study Series

The NABARD Research Study Series has been started to enable wider dissemination of research conducted/sponsored by NABARD on the thrust areas of Agriculture and Rural Development among researchers and stakeholders. ‘A Collaborative Study on Agriculture Marketing Infrastructure in Kerala’ is the twelfth in the series. The list of studies in the series is given at the end of this report.

Agricultural marketing is “a process which starts with a decision to produce a saleable farm commodity and it involves all aspects of market structure of system, both functional and institutional, based on technical and economic considerations and includes pre and post-harvest operations viz. assembling, grading, storage, transportation and distribution” (National Commission on Farmers, 2006). Well-functioning market infrastructure is essential for easy access to markets, in terms of product quality, safety and reliability of supply. It also shortens delivery times and preserves products’ freshness. The pursuit of quality and competitiveness starts from the application of modern and cost-effective production and processing techniques and technologies.

The study examines the structural and functional dimensions of existing agriculture marketing institutions with a focus on marketing infrastructure and tries to synthesise opinion of multiple stakeholders. The aim is to strengthen the marketing infrastructure facilities for future development of agriculture.

Hope this and other reports we are sharing would help generate debate on issues of policy relevance. Let us know your feedback.

Dr. KJS Satyasai Chief General Manager Department of Economic Analysis and Research

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CONTENTS

Executive Summary

Chapter 1 : Introduction

1.1 Agriculture Marketing Infrastructure in India

1.2. Agriculture Marketing Infrastructure in Kerala

1.3. Statement of the Problem

1.4. Objectives of the study

1.5. Study Area

1.6. Chapterisation

1.7. Limitations of the study

Chapter 2: Conceptual Framework and Research Methodology

2.1. Infrastructure which enables agriculture marketing functions

2.2 Conceptual Framework of the study

2.3. Primary and Secondary data

2.4. Sample Study Area

2.5. Crop specific marketing infrastructure

2.6. Data collection Tools

Chapter 3: Structure of Agricultural Marketing Institutions in Kerala

3.1. Institution wise structure of the existing agricultural markets in Kerala

3.2. Farmer Producer Organisations (FPOs) in Kerala

3.3. Institutions providing Crop Specific Marketing Infrastructure

Chapter 4: Agriculture marketing infrastructure in Kerala: An analysis of wholesale markets

4.1. Structure-Conduct-Performance Analysis

4.2. An Analysis of Wholesale Markets (Secondary data analysis)

4.2.1. Infrastructure Facilities in the markets

4.2.2. Institutional Environment

4.2.3. Structure of wholesale markets

4.2.4. Conduct of the market

4.3. Wholesale Markets – Analysis of Farmer Details

4.3.1. Distribution of buying and selling activities

4.3.2. Expenditure on selling the products

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4.3.3: Reasons for sale in WM

4.3.4. Price Determination

4.4. Whole Sale Market – Analysis of Trader Details

4.4.1. Purchase value, Sale value and profit

4.4.2. Marketing Margin

4.4.3: Details of price and price information

4.4.4. Details of resale point

4.4.5. Effectiveness and timeliness of the information

4.5. Infrastructure Facility in the Whole Sale Market

4.5.1. Infrastructure for buying, selling and demand creation.

4.5.2. Infrastructure for demand creation production decision

4.5.3. Infrastructure for the function of physical movement of goods

4.5.4. Infrastructure for facilitation

4.5.5. NIAM classification of Infrastructure facilities

4.5.6. Own infrastructure – trader

4.6. Overall satisfaction – farmers and traders

4.7. Factors contributing to the inefficiencies in WM – Principal ComponentsMethods

Chapter 5 : Agriculture Marketing Infrastructure in Kerala: WAM/RPM

5.1. Trivandrum – WAM/RPM

5.1.1. Infrastructure Facilities in the market


5.2. Idukki – WAM/RPM


5.3. Performance of Wholesale Agricultural Markets/Rural Periodic Markets

5.3.1. Socio-economic-market operation details of sample respondents

5.3.2. Infrastructure Facilities Available in the Market

5.3.3. NIAM Classification of Infrastructure Facilities

5.4. Overall Satisfaction of Sellers

5.5. Factors contributing to market inefficiencies

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Chapter 6: Agriculture Marketing Infrastructure in Kerala: VFPCK

6.1 Structure and Conduct of VFPCK markets

6.1.1 Infrastructure

6.1.2 Administrative Structure

6.1.3 Structure of market

6.1.4 Conduct

6.2. VFPCK Market – Analysis of Farmer Details

6.2.1. Reasons for sale in VFPCK

6.2.2. Marketing cost

6.3. VFPCK Markets – Analysis of Trader Details

6.3.1. Marketing Cost

6.3.2. Reason for purchase from VFPCK

6.4. Performance of VFPCK -Analysis of Available Market Infrastructure - views offarmers and traders

6.4.1 Infrastructure for buying, selling and demand creation

6.4.2. Infrastructure for the Physical Movement of Goods

6.4.3. Infrastructure for Facilitation

6.4.4. NIAM Classification

6.4.5. Own infrastructure

6.4.6. Problems identified for market inefficiencies and suggested solutions

Chapter 7: Crop Specific Infrastructure - Spices

7.1. Spices Park, Puttady

7.2. Infrastructure Facilities

7.3. Institutional Environment

7.4. Structure of the market

7.5. Conduct of the market

7.6. Monitoring

7.7. Performance of the market

7.8. Service Facility: Input supply

7.9. Issues in conduction of markets: Backward and Forward Linkages

7.10. Maintenance

7.11. Traders view: Allu Cardamom and MAS Enterprises Ltd.

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7.12. Performance of the Spices Park: Analysis of Primary Data

7.12.1. Infrastructure facilities available for the farmers

7.12.2. Problems identified by the farmers

Chapter 8: The Alternative Marketing Structures: FPO

8.1. Introduction

8.2. Tejaswini: The Coconut Farmers Producing Company

8.3. Activities and Functioning

8.4. Asset Details of the company

8.5. Revenue and Sales

8.6. Creation /Facilitation of infrastructure

8.7. Problems

8.8. Measures to overcome

8.9. Conclusion

Chapter 9 Warehousing – Problems and Prospects

9.1 Introduction

9.2. Central Warehousing Corporation (CWC)

9.3. Central Ware houses in Kerala

9.4. Kerala State Warehousing Corporation

9.4.1. Operational procedures of the SWHs

9.5. Results of primary data

9.5.1 Storage Facilities – Normal and Reservation

9.5.2 Disinfection Extension Services (DES)

9.5.3. Income, Expenditure and profit of State warehouses

9.6. Results from FGDs and Individual Interviews

Chapter 10: Required Infrastructure and estimated expenditure

10.1. Infrastructure requirements in Wholesale Markets


10.1.2. Infrastructure requirements in WAM/RPM

10.1.3. Infrastructure requirements in VFPCK markets

10.2. Required Infrastructure facilities

10.3. Specification and Cost Estimation

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Chapter 11: Summary and Conclusions

11.1. Wholesale Market

11.2. Wholesale Agriculture Markets/Rural Periodical Markets

11.3. VFPCK

11.4. State Ware Houses

11.5. FPOs

Appendices

References

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LIST OF TABLES

Title

Table 2.1: Sampling Details and information collected

Table 2.2: Details of variables identified for understanding agriculture marketinginfrastructure

Table 3.1: Wholesale Assembling Markets in Kerala

Table 3.2: Periodical markets in Kerala

Table 3.3: District wise list of FPOs under Producers Fund

Table 3.4: Quantity of produce handled by Horticorp for the last five years

Table 4.1: Infrastructure facilities

Table 4.2: Details of staff strength

Table 4.3: Farm size wise value of crops cultivated and sold in markets

Table 4.4: Distribution of buying and selling activities

Table 4.5: Expenditure on Selling of total products during last month

Table 4.6: Reason for sale in the particular market

Table 4.7: Number of pending days

Table 4.8: Details of payment to be received

Table 4.9: Price determining factors

Table 4.10: Information about the market price

Table 4.11: Effectiveness and timeliness of information

Table 4.12: Details of Transportation cost occurred for marketing

Table 4.13: Total cost incurred for marketing

Table 4.14: Mean value of total quantity

Table 4.15: Details of price and price information

Table 4.16: Details of the selling market point

Table 4.17: Effectiveness and timeliness

Table 4.18: Details of trading license

Table 4.19: Reason for buying commodities in the selected markets

Table 4.20: Details of auction hall -Farmer’s Opinion (in per cent)

Table 4.21: Details of auction hall – Trader’s Opinion (in per cent)

Table 4.22: Infrastructure for demand creation or production decisions – farmer’s opinion(in per cent)

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Table 4.23: Infrastructure for demand creation or production decisions – trader’s opinion(in per cent)

Table 4.24: Infrastructure for transportation – Farmer’s view (in per cent)

Table 4.25: Infrastructure for transportation – Trader’s view (in per cent)

Table 4.26: Infrastructure for storage – Farmer’s view (in per cent)


Table 4.28: Infrastructure for standardisation – Farmer’s view (in per cent)

Table 4.29: Infrastructure for standardisation – Trader’s view (in per cent)

Table 4.30: Infrastructure for grading and packing – Farmer’s view (in per cent)

Table 4.31: Infrastructure for grading and packing – Trader’s view (in per cent)

Table 4.32: Infrastructure for market financing – Farmer’s view (in per cent)

Table 4.33: Infrastructure for market financing – Trader’s view (in per cent)

Table 4.34: Infrastructure for market information – Farmer’s view (in per cent)

Table 4.35: Infrastructure for market information – Farmer’s view (in per cent)

Table 4.36: Infrastructure for Market integration – Farmer’s view (in per cent)

Table 4.37: Infrastructure for market integration – Trader’s view (in per cent)

Table 4.38: NIAM classification – Infrastructure for core facility – farmer’s view

Table 4.39: NIAM classification – Infrastructure for core facility – trader’s view

Table 4.40: NIAM classification – Infrastructure for support facility – farmer’s view

Table 4.41: NIAM classification – Infrastructure for support facility – trader’s view

Table 4.42: NIAM classification – Infrastructure for service facility – farmer’s view

Table 4.43: NIAM classification – Infrastructure for service facility – trader’s view

Table 4.44: NIAM classification – Infrastructure for maintenance facility – farmer’s view

Table 4.45: NIAM classification – Infrastructure for maintenance facility –trader’s view

Table 4.46: Own infrastructure trader

Table 4.47: Overall satisfaction farmer

Table 4.48: Overall satisfaction trader

Table 4.49: KMO and Bartlett’s test for factors responsible for market inefficiency andCronbach Alpha showing reliability

Table 4.50: Factors of market inefficiencies extracted by principal component analysis

Table 5.1: Wholesale Assembly Markets – Infrastructure

Table 5.2: Wholesale Assembly Markets: Infrastructure

Table 5.3: Nature of trade activity (RPM Sellers)

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Table 5.4: Marketing Expenditure incurred

Table 5.5: Expenditure incurred for shop (Percent)

Table 5.6: Mean difference in the purchase value and sales value of selected agriculturecommodities sales in a month

Table 5.7: District wise total revenue, cost, marketing cost and market margin in a month

Table 5.8: Payment Schedule

Table 5.9: Details of purchasing, storage and physical treatment

Table 5.10: Details of selling price and information

Table 5.11: Details of trading license

Table 5.12: Details of Auction Hall – views of sellers

Table 5.13: Infrastructure for physical movement of goods (Transportation) - views ofsellers

Table 5.14: Infrastructure for storage facilities – views of sellers

Table 5.15: Infrastructure for standardization – views of farmers

Table 5.16: Infrastructure for Grading and Packing – views of sellers

Table 5.17: Infrastructure for market financing (views of sellers)

Table 5.18: Infrastructure for market information – views of sellers

Table 5.19: Infrastructure for market integration – views of sellers

Table 5.20: Core facility

Table 5.21: Support facility

Table 5.22: Services Infrastructure

Table 5.23: Maintenance Facility/Green initiatives

Table 5.24: Own Infrastructure

Table 5.25: Overall satisfaction of seller

Table 5.26: Problems Identified for Market Inefficiencies

Table 6.1: Basic infrastructure facilities

Table 6.2: Value of agricultural produce sold by farmers in VFPCK

Table 6.3: Agriculture marketing activities

Table 6.4: Sale of Tapioca, Banana, Coconut, Ginger and Cowpea

Table 6.5: Sale of Spinach, Cucumber, Snake gourd, bitter gourd, and chilly

Table 6.6: Details of Auction amount, Market fee, Trader Amount and Farmer amount

Table 6.7: Reasons for selling in this market

Table 6.8: Source of information, payment schedule and pending payments

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Table 6.9: Price determination, satisfied with price determination, and price information

Table 6.10: Reselling, effectiveness and timeliness of the information

Table 6.11: Details of cost incurred for marketing

Table 6.12: Purchase and Sales details of traders in VFPCK

Table 6.13: Marketing cost incurred

Table 6.14: Overall marketing margin during last month

Table 6.15: Determining factors of choice of VFPCK and Setting of market prices

Table 6.16: Storage facility and physical treatment

Table 6.17: Effectiveness and Timeliness of the information

Table 6.18: Reason for purchase from VFPCK

Table 6.19: Auction hall

Table 6.20: Efficacy of market in demand forecasting

Table 6.21: Transportation, storage, value addition, standardization and grading – views offarmers (in percent)

Table 6.22: Transportation, storage, value addition and standardization -views of traders (inpercent)

Table 6.23: Market financing, market information and market integration - views offarmers (in percent)

Table 6.24: Market financing, information and integration views of traders (in percent)

Table 6.25: Core facility and support facility -views of farmers

Table 6.26: Core facility and support facility-views of traders

Table 6.27: Availability of Service infrastructure for farmers and traders

Table 6.28: Maintenance facility (frequency) for farmers and traders

Table 6.29: Own infrastructure for traders

Table 6.30: Problems & solution identified from farmers and traders

Table 7.1: Area wise distribution of spices

Table 7.2: Details of trade activity

Table 7.3: Details of selling last month

Table 7.4: Reasons for selling in the market

Table 7.5: Problems and solutions identified

Table 8.1: Projects by TCFPCL

Table 8.2: Asset Details of TFPCL

Table 8.3: Revenue and Expenses

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Table 8.4: Liabilities

Table 8.5: Agriculture marketing functions facilitated by TFPCL

Table 8.6: Organic manure unit: Infrastructure

Table 8.7: Horticulture Nursery Unit

Table 8.8: Agro-processing Unit – Infrastructure

Table 9.1: Performance of Central Warehouses in Kerala 1st July 2020

Table 9.2: Covered capacity (MT) of warehouses in Kerala (01.09.2019)

Table 9.3: Normal storage charges for major commodities (per bag)

Table 9.4: Monthly Reservation charges Rs. Per sq.ft fixed by Corporation for differentstorage facilities

Table 9.5: Storage Capacity, utilisation & Reservation particulars of selected SWHs(June2020)

Table 9.6: Income, Expenditure and Profit of selected SWCs in Kerala (June2020)

Table 10.1: Specification and Cost Estimation of Needed Infrastructural Facilities in WholeSale Markets

Table 10.2: Specification on different equipments

Table 10.3: Financial specification

Table 10.4: Description on cold chain components

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LIST OF FIGURES

Figure 3.1: Agriculture Marketing Institutions in Kerala

Figure 8.1: Decentralised structure of TCFPCL: Mobilisation of farmers

Figure 8.2: Administrative Structure of TFPCL

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ABBREVIATIONS

AMI Agriculture Marketing Infrastructure

AMIGS Agricultural Marketing Infrastructure, Grading and Standardization

APEDA Agriculture and Processed Food Products Export Development Authority

APEDA Agricultural and Processed Food Products Export Development Authority

APMC Agricultural Produce Market Committee

CWG Central Warehouse Godowns

DES Disinfection Extension Services

FAO Food and Agriculture Organisation

FCI Food Corporation in India

FGD Focus Group Discussions

FPO Farmer Producers Organisation

GBY GraminBhandaran Yojana

GOI Government of India

GoK Government of Kerala

GrAMs Gramin Agriculture Markets

GST Goods and Services Tax

ICAR Indian Council of Agricultural Research

ISO International Organization for Standardization

KSCSC Kerala State Civil Supplies Corporation

KSWC Kerala State Warehousing Corporation

LSG Local Self Government

MT Million Tonne

NABARD National Bank for Agriculture and Rural Development

NDD Nedumangad

NFSA National Food Security Act

NGO Non Government Organisation

NWR Negotiable Warehouse Receipts

PEG Private Entrepreneurs Guarantee

POPI Producer Organisation Promoting Institutions

PWD Public Welfare Department

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RPM Rural Periodical Markets

RRA Rapid Rural Appraisal

SD Standard Deviation

SEZ Socio Economic Zone

SHG Self Help Group

SSLC Secondary School Leaving Certificate

SWG State Warehouse Godowns

TVM Trivandrum

VFPCK Vegetables and Fruits Promotion Council of Kerala

WAM Wholesale Assembly Markets

WM Wholesale Market

WR Warehouse Receipts

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Executive Summary

‘A Collaborative Study on Agriculture Marketing Infrastructure in Kerala’ was awarded to Centrefor Agroecology and Public Health, Department of Economics, University of Kerala from R & D fundof National Bank for Agriculture and Rural Development (NABARD) during 2019-20.

The study examines the structural and functional dimensions of existing agriculture marketinginstitutions with a focus on marketing infrastructure and tries to synthesis opinion of multi stakeholders,with an aim to strengthen the marketing infrastructure facilities for future development of agriculture.

Specific Objectives of the study include,

1. To assess institution wise infrastructure associated with agriculture marketing functions

a. Infrastructure for the function of transfer of ownership of products from the farmers/ producersto the consumers- selling, buying and demand creation.

b. Infrastructure for the function of physical movement such as transportation and storage,function of changing the form of product, standardization and grading and packaging.

c. Infrastructure for the facilitation function- market financing, and market information/ marketintegration.

2. To understand the perception and opinion of both farmer and non-farmer stakeholders onagriculture marketing infrastructure.

3. To assess empirically the institution wise infrastructure requirement for agricultural marketing.

4. To assess the District- wise data of warehousing infrastructure required, available and the gapsbased on primary/ secondary data analysis.

The efficacy with which the markets perform their three major function as, being platform for exchange,infrastructure for physical movement and value addition and that of facilitation function is being analyzedin depth by adopting Structure- Conduct-Performance (S-C-P) framework. The study is supportedboth by secondary and primary data. Marketing networks, infrastructure facilities, and investmentprocedures in agriculture marketing system of the state of Kerala is evaluated on the basis of exhaustivesecondary data. For assessing institution wise, commodity wise marketing infrastructure and necessaryinvestments made for promotion of agricultural marketing infrastructure, primary survey is conducted.After analyzing the production clusters in Kerala state (calculated on the basis of the data on crop-wiseproduction (2016-2017), Directorate of Economics & Statistics), two districts Thiruvananthapuramand Idukki are selected for in-depth analysis, which are found to be distinct in (a) coverage of all majorcrops, (b) presence of agriculture marketing institutions and (c) spread of markets. (Wholesale Market/Wholesale Assembly Markets (WAMs)/ Regional Periodical Markets (RPMs)). The sample populationinclude;

• Nedumangad (Rural) &Anayara (Urban) Wholesale Markets are selected fromThiruvananthapuram district on the basis of rural urban division, out of the six wholesalemarkets in Kerala. Data is collected from a total of forty sample units (ten farmers and tentraders each from the two markets).

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• Two Wholesale Assembly Markets (five percent of total WAMs in one district) and threeRural Periodical Markets (five percent of total RPMs of each district) are randomly selected.Fifty sellers (five sellers from each market) are interviewed from the ten selected markets.

• Thejaswini, the Farmer Producer Company, Kasaragod selected for understanding the roleplayed by Farmer Producer Companies.

• To study crop specific infrastructure, the six farmer’s markets operated by VFPCK in thetwo districts are selected and data was collected from a total sample of sixty (thirty farmersand thirty traders).

• Spices Park, Puttady, Idukki, the online trading Centre is also selected and stakeholdersinterviewed.

Primary data collection started with the informal field visit to get general impression and basedon the insights, formal sample survey of farmers and traders in the selected markets was conductedusing interview schedule. In addition, qualitative techniques including Rapid Rural Appraisal, casestudy, Focus Group Discussion, in-depth interviews were used to gather information from variousstakeholders including farmers, traders, middlemen, administrative officials and consumers. Detailedorganizational visit and observation were used as a tool to understand the role and responsibilities ofvarious agencies in providing agricultural marketing facilities. The existing infrastructure provided bythem and limitations of their present role is also evaluated.

A Principal Component Analysis is used to delineate the most important factors contributing toinadequate infrastructure in agriculture markets so that appropriate policy suggestions can be done.The required infrastructure is specified after consolidating the views of different stake holders and thecost to be incurred for the same is also worked out in consultation with experts.

Results:

Wholesale Markets: Analysis of the selected Wholesale Markets in Kerala reveals that, eventhough many of the core and support facilities (as per NIAM classification) are present in the markets,conduct and performance of the Wholesale Markets are far below the benchmarks. Principle ComponentAnalysis shows that, many administrative problems including lack of enthusiasm from the part ofauthorities, bad work culture, strong trade unionism, delayed payment for farmers, inactiveadministrative councils, nepotism and functional factors such as inappropriate physical conditions todeal with perishability of produce, high operational costs, and absence of online trading facility contributetowards market inefficiencies. Competition through creating condition for transparent price discoveryis low because traders are few and, in several occasion, price is set by negotiation and this leads todistress sales. The infrastructure for storage, grading, packaging, value addition, market integrationand facilitation is very low, hence even after establishment of Wholesale Markets, post-harvest lossremains high. The provision for forward and backward linkages and demand forecasting is also absentin the market and thus, setting up of Wholesale markets has not yet yielded the cent per cent desiredresults.

Wholesale Assembly Markets/ Rural Periodical Markets (RPM): Wholesale Agriculture Markets/Rural Periodical Markets work differently from that of WAMs/RPMs in other states. WAM/RPMshave a function to mobilize the surplus products from farmers to the second round of supply chain, andthus becomes the most important place where the farmer comes in direct contact with the consumer/

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wholesale/retailer in most of the states. In Kerala, these markets are filled with sellers, who buy producefrom traders in the neighboring states and sell in these markets. There is large variability in the structure,conduct and performance of markets, where some of the markets have good infrastructure facilitieswhile others lack the basic minimum facilities such as trading halls, drainage, weighing machines, andwaste management facilities. Storage facilities, grading facilities, and quality testing mechanism arenot available in any one of the markets. Hence the WAMs/RPMs in Kerala require immediate attentionaimed at revamping the structure

Crop Specific Infrastructure: VFPCK Farmer’s market was an initiative towards establishing marketswhere farmers have an active role in the conduction of market, and infrastructure is established withthe financial support of government, and managerial functions is coordinated by both farmers andgovernment officials. The primary data reveals that both farmers and traders are satisfied with conductionof market, especially relating to dissemination of market information, price fixation and timeliness ofmarketing activities and the markets have core and supportive infrastructure facilities. However, it isimportant to convert the farmers markets from mere auction centers, to centers for storage and valueaddition, by which the current problems faced by both farmers and traders can be curtailed.Regarding marketing infrastructure for spices, Spices Park has all the modern infrastructure facilitiesincluding electronic auctioning, facilities for drying, grading and packing, but the market fails inestablishing transparent price discovery mechanism as the auctioneers and traders co-opt and few ofthem dominates the market. It keeps the original producers- the farmers away from the market. As themarketing cost and fee for storage, packing and grading are high, direct benefit to farmers arecomparatively less. In addition, the market lacks facility for quality control mechanism which adverselyaffect exporting prospects of spices.

Farmer Producers Organization: Functioning of FPO, marks the best form of alternative marketingas it succeeds in establishing the needed infrastructure and abolishes middlemen. However, the selectedFPO TFPCL, experienced procedural delays and market restrictions from the government whichnegatively affected the full-fledged establishment of its processing Centre, in turn creating problemsin repayment of loans and financial crisis. The bureaucratic delays should be avoided by eliminatingsome of the obsolete laws and issuing special allowances to FPOs, as is given to MNCs.

Ware Housing: There is shortage of scientific ware housing facility and state itself is the major user ofware housing facility in some of the districts, and in some others private companies storingnonagricultural commodities are the users. The cost of storage is high compared to neighboring states,and quality is comparatively low.

Action Points – Stakeholders

Based on the study the following infrastructure facilities are identified in each market for whichgovernment investment is required.

Wholesale Markets

- E – auction facility, infrastructure for cleaning, sorting grading, packaging, quality testinglabs, green initiatives including solar plant/biogas plant, cold chain management system(cool room, controlled atmospheric storage with supporting reefer trucks, pack houses,ripening chambers, retail shops etc.) are to be established to collect vegetables from theleading clusters in Idukki and Trivandrum and to transport it to retail outlets

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- Competitive working environment in the market by reducing procedural delays andstrengthening farmer participation. Develop/ stipulate managerial procedures so that moretraders can be attracted by which the market can be run in full capacity and can develop itsactivities further.

- Markets are reported to have issues in finding resources to meet day to day activities, especiallyelectricity bills, tax payment etc. Many of the infrastructure facilities such as cold storage isnot used citing the feasibility problem. Measures must be adopted to meet the maintenancecost.

- Measures to ensure forward and backward linkage, demand forecasting and input supply.

Wholesale Agriculture Markets/Rural Periodical Markets

- Infrastructure for quality control

- Ensuring auction platform for regional farmers: Currently farmers in the region are not ableto use the infrastructure at the market, since bulk quantities of goods are coming fromneighbouring states.

- The infrastructure in RPMs is pathetic. Auction hall, selling platform, Price display, wastemanagement system, boundary wall, crop specific infrastructure, roofing etc. are essentialin all markets.

- Technical support for LSGs: Most of the RPMs are under reconstruction with an aim toensure essential infrastructure. But, many of the reconstructed markets are not usable. Henceit is essential to have an authority that can provide with technical support in constructingmarkets so that the financing will not go waste.

- Refining the legal aspects relating to responsibility of LSGs towards markets: Even thoughthe jurisdiction of markets comes under LSGs, there is no clarity on the role and responsibilityof LSGs. There is not a single department that is wholly responsible for fair conduction ofmarket, instead it is scatted over the health, revenue and Public works department of LSGs.It is important to have a centralised authority to monitor the functioning of market so thatessential infrastructure, quality control, entry and exit can be organised efficiently.

- In many markets there exists entry restrictions, that effect the performance of markets andinfrastructure facilitation. For instance, number of selling platform, physical structure ofmarket building, etc. affect entry and exit and there by market functioning.

- Infrastructure for demand forecasting is quintessential in all markets. Given the small quantityof transaction of goods in the markets in Kerala, possibilities of clustering, online platformsetc should be mooted.

Vegetable and Fruit Promotion Council Kerala (VFPCK)

- Infrastructure like cold storage, cool chamber and concrete floors for fruits and vegetablehandling facility should be created

- Vehicles needed in VFPCK to bring agriculture products from field to the market and todistribute it to the retail shops

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- Infrastructure for value addition facilities to be provided for those VFPCKs which are readyto initiate value addition units

- Given the perishability of goods and the large geographical area covered by the dealers, it isvery important to arrange well equipped, weather sensitive transportation facilities, whichcan be very helpful for the traders.

- Establishing retail outlets can increase the acceptance of farmers markets in the locality andthis can earn more profits to farmers.

- Establishing crop specific infrastructure facilities, based on the agroclimatic zones canpromote farmers to do agriculture more scientifically and profitably.

State Ware Houses

- SWH Corporation should be provided with more warehousing facility

- Scientific ware houses must be constructed particularly in districts where spice productionis dominant

FPOs

- Infrastructure assistance should be provided to FPOs.

- Technical and managerial expertise to be provided to farmers.

- Bureaucratic delays from the part of government should be avoided by scrapping some ofthe age-old laws and issuing special allowance to FPOs.

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CHAPTER 1

Introduction

Agricultural marketing is “a process which starts with a decision to produce a saleable farmcommodity and it involves all aspects of market structure of system, both functional and institutional,based on technical and economic considerations and includes pre and post-harvest operations viz.assembling, grading, storage, transportation and distribution” (National Commission on Farmers, 2006).To get the best advantage in marketing of agriculture produce, the producer/farmer should enjoyinfrastructure facilities which should have provision for – (a) storing agricultural goods (b) holdingcapacity, (c) adequate & cheap transport (d) clear information regarding the market conditions etc. andonly with such facilities can agriculture become a vocation providing sustainable livelihoodopportunities. Well-functioning market infrastructure is essential for easy access to markets, in termsof product quality, safety and reliability of supply. It also shortens delivery times and preserves products’freshness. The pursuit of quality and competitiveness starts from the application of modern and cost-effective production and processing infrastructure techniques and technologies. It also includes accessto financial and information services and high coordination between producers and buyers. A valuechain approach with marketing infrastructure at all nodes facilitates a systemic method to thedevelopment of the agricultural sector (GIZ, 2015).

Realising the importance of market infrastructure, the country wise experiences in WorldDevelopment Report (2008) highlights the necessity of investment in all market oriented agriculturalinfrastructure (storage, processing and marketing) (FAO, 2012). Farmers are subject to a number ofsocial, economic and developmental constraints that make their participation in the market both riskyand costly, often leaving them “unconnected.” Proper investment in agricultural market infrastructuredevelopment has the potential to alter the existing traditional agriculture or subsistence farming into amodern, dynamic and commercial farming system. The report points to the inadequacy and inefficiencyof marketing infrastructure as a major problem faced by both farmers and traders in the contemporaryera and calls for integrated approach to systematically improve investment in agriculture market

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infrastructure. The report emphasizes the fact that a well-structured and managed market infrastructureis essential at all stages of the supply chain if agriculture is to be a feasible vocation.

1.1. Agriculture Marketing Infrastructure in India

Prior to independence, importance was given to ensure flow of agro-raw materials for theindustry and for the purpose markets were established and regulated by the government. Soon afterindependence, India experienced a deficit in food production and marketing system was designed tohandle deficit and there were strict regulations on agriculture trade. The precedence of British era wascontinued and the ‘Agriculture Produce Market Act’ (APMA) was passed by state governments duringthe sixties. And states set up and regulated marketing practices in wholesale markets. However, thefocus of five-year plans was to attain self-sufficiency in food production and with policies of GreenRevolution being in place, measures were adopted to ensure uninterrupted input supply to farmers forwhich new governance and research structures were introduced. Agriculture Produce Market Committee(APMC) was constituted and all whole sale markets and assembling markets were brought under thecommittee in each area. As a result, well laid out market yards and sub yards were constructed. In thepost Green revolution era technological advancement was given importance and after the liberalization,agriculture sector was opened up and there was surplus production. Currently, government is workingtowards the idea of ‘National unified market’ where ICT enabled marketing is given major thrust. Asa part of this, National Agriculture Market (e-NAM) was launched and Model Agriculture Produceand Livestock Marketing (Promotion and Facilitation) Act was passed in 2017.

However, secondary data sources show that there exist inefficiencies in market and “farmer iseffectually a bad purchaser of the inputs as well as a poor seller of his/her outputs”. Most importantmeasure of market efficiency – the magnitude of price dispersion for various products are quite largein India when price is compared among different states. Inefficiency and inadequacy of agriculturalmarket infrastructure is often pointed out as a major reason for agriculture market inefficiencies inIndia as elaborated below.

There has been a large gap in the development of storage infrastructure, transportation,mechanization, grading standards, export promotion, processing industry support and market intelligencein India which requires upgradation (NABARD, 2018). With regard to grading infrastructure, onlyaround seven percent of the total quantity sold by farmers is graded before sale. Regarding cold storagefacilities, there are about 4411 cold storages in country and three tier system exist. But these areinadequate and many of the farmers are not aware of the facilities or how to make benefit out of thesefacilities. Similarly, even though there is a network of institutions providing long/medium/short termcredit for agriculture related activities, many of the farmers depend on money lenders. (Acharya S.S,2008; Balram Dogra, 2009; Iyengare H., 2004; Gopalswamy T.P,2005; GouravBiswa, 2016). Thereare 435 market information system centres and 60 Agri export zones in the country but still marketintelligence is uncompetitive and resulting high price dispersion causes value leakage due to highlevel of value chain segmentation and non-transparent pricing structure (GOI, 2016).

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The Committee of state ministers, in charge of ‘Agriculture Marketing to Promote Reforms’noted that major challenges include fragmented supply chain with inadequate market infrastructure,long intermediation and lack of accurate and timely market information/intelligence system. Alongwith this, limited access of agriculture produces markets, licensing barriers, high wastages in supplychain, long gestation period of infrastructure projects and seasonality of agriculture produce, highmarketing cost and less farmers’ price realization are the major issues faced by agriculture marketingin India (GOI, 2017).

Considering the importance of filling market and market related infrastructural deficit,Government of India had launched reform-linked schemes on Development/ Strengthening ofAgricultural Marketing Infrastructure namely ‘Grading and Standardization – Up gradation ofLaboratories’, in 2004 to attract investments in agricultural marketing. Later in 2014, an IntegratedScheme for Agricultural Marketing (ISAM) was introduced. A new scheme for supporting agriculturalmarketing infrastructure has been approved for implementation from October 2018 for the period inconsonance with the 14th Finance Commission i.e., up to March 2020. This sub-scheme AMI laysspecial focus on developing and upgrading of GraminHaats as GrAMs through strengthening ofinfrastructure. These GrAMs may function as farmer-consumer market (retail market) and collection/aggregation points (spokes) with linkages to secondary market (hub) with participation of FPOs andother eligible promoters.

1.2. Agriculture Marketing Infrastructure in Kerala

Kerala has witnessed a remarkable transformation in agricultural sector since its formation in1956. The agro-climatic conditions in the State suit for the cultivation of a variety of seasonal cropsand perennial crops. In Kerala, small and marginal farmers grow cash crops like coconut, rubber, tea,coffee, pepper, cardamom, arecanut, ginger, nutmeg, cinnamon etc. and food crops like paddy, tapiocaand banana gives the agricultural sector of Kerala a distinct flavour. The key production highlights(Ministry of Food Processing Industries, 2017) of the state shows the state is one of the largest producersof banana, cocoa, pineapple, tapioca, and sweet potato with enabling infrastructure of two mega foodparks, four food parks, one agro-processing SEZs, and eleven quality control laboratories. Besides,Kerala is a major producer of spices including cardamom, cinnamon, clove, turmeric, nutmeg, tea,coffee and vanilla and produces about ninety six percent of the country’s national output of pepper.Besides, Kerala has a substantial share in the four plantation crops of rubber, tea, coffee and cardamom.These four crops together occupy 7.05 lakh ha, accounting for 34.6 per cent of the net cropped area inthe State. Kerala’s share in the national production of rubber is 78 per cent, cardamom 88 per cent,coffee 21 per cent and tea 4.7 per cent in the year 2017-18 (GoK, 2019)

The marketing infrastructure of the state is provided by institutions under the Central and StateGovernment in addition to Farmer Producer Organisations. The State has also attempted to reduce theproblem of middleman intervention and indirect marketing of farm produce through programmesorganized by Department of Agriculture and other allied agencies like Horticorp, VFPCK, etc.

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However, in spite of all these interventions, there is a lack of appropriate and effective linkagebetween the producers and sellers which has limited the development of agriculture in the State. TheStrategy Document for Kerala (Doubling of Farmers’ Income by 2022, ICAR, 2018) noted the need forstrengthening of existing markets by developing low cost storage structures and processing units whichis essential for the development of agriculture. Many of the commodities are sold immediately afterharvest resulting in low price realization due to market glut and incumbent distress sales. The immediatecash needs of the farmers could effectively be met if warehouse receipts are used as negotiableinstruments in getting credit. It also highlights major constraints in Kerala agriculture as, increasingshare of marginal farms, labor shortage & high wage rate, low orientation towards food crops, weakinstitutional infrastructure, lack of regulation & poor investment in agricultural marketing, limitedpresence of new forms of agriculture marketing, low adoption of resource conservation technologies,low scale of farm level value addition and processing, conversion of farm land for nonfarm purposes,losing competitiveness of niche crops in international market, etc., which requires immediate attentionand action from all stake holders.

The inappropriateness and limitations of available infrastructure is identified as a major hurdletowards the agriculture development of the state, it gets manifested into post-handling output loss inagriculture, which drastically reduces not only income share of farmers but also cuts upon the foodsecurity of the population. The above said aspects throws light to the necessity of adopting appropriatepolicies to increase and improve the quantity and quality of infrastructure facilities for agriculturemarketing, if agriculture in Kerala has to be transformed into a viable, dynamic and sustainable activity.The initiation of policies in this direction, first requires an in-depth understanding of the existingscenario and hence it becomes imperative to assess the current status of agriculture marketinginfrastructure in Kerala. Such a study will highlight the shortcomings of agriculture marketinginfrastructure and also identify the challenges faced both by farmers and non-farmer stakeholders withreference to the commodities they produce and trade. The proposed study “A Collaborative Study onAgriculture Marketing Infrastructure in Kerala” is an attempt in this direction.

1.3. Statement of the Problem

The need for a well-developed marketing network, both institution wise and infrastructurewise as a prerequisite for sustainable agricultural growth is acclaimed globally. But studies show thatIndia lags behind when compared to other developing countries in the provision of sufficient marketinginfrastructure facilities which adversely affects the prospects of farmers and other stakeholders engagedin the agricultural and trading sectors. The case of Kerala is particularly deplorable as state has notinitiated the APMC act and also lacks a well-developed market infrastructure for sales and post handlingoperations. The institution wise marketing structure reveals that public sector dominates the scenariowith the presence of State Department of Agriculture, other specialised institutions like VFPCK,HORTICORP, commodity specific boards like Spices Board, KERAFED, grading institutions likeAGMARK, information institutions like AGMARKNET etc. The landscape of marketing institutionsoff late is also noted by the presence of co-operatives and private institutions including FPOs. The

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scope of FPOs in crop planning, input supply, technology infusion, and primary marketing becomessignificant in the current scenario, where government policies are tailored to meet the infrastructuralrequirements of FPOs. Understanding the structure and functions of the government and privateinstitutions in the agriculture market scenario provides background for further examination ofinfrastructure facilities provided and required. These organisations provide different post handlinginfrastructure facilities including market place, shops, auction hall, electronic weigh bridge, dormitory,storage, cold storage and other facilities. Commodity specific post handling marketing infrastructurealso needs attention since the post handling requirements of major crops are different. The mainstakeholders connected with marketing institutions are agriculture labourer, farmers, farmer clusters,transport operators, shop owners, traders, exporters, retailers, government officials, NGOs etc.Understanding the perception and opinion of both farmer and non-farmer stakeholders in relation toagriculture marketing infrastructure can provide insights into the shortcomings, limitations andchallenges of the existing system and provide guidelines for future policy initiatives. A systematicstudy enlightening the roles, responsibilities and functioning of the existing infrastructure facilities ofagriculture marketing institutions have not been attempted in a holistic manner and the study as “ACollaborative Study on Agriculture Marketing Infrastructure in Kerala” is an attempt in this direction.

The present study on the one hand examines the structural and functional dimensions of existingagriculture marketing institutions with a focus on marketing infrastructure and on the other hand attemptsat synthesising the opinion of multi stakeholders to strengthen the marketing infrastructure facilitiesfor future development of agriculture.

1.4. Objectives of the study


a. Infrastructure for the function of transfer of ownership of products from the farmers/producers to the consumers- selling, buying and demand creation.

b. Infrastructure for the function of physical movement such as transportation and storage,function of changing the form of product, standardization and grading and packaging.

c. Infrastructure for the facilitation function- market financing, and market information/market integration.


3. To assess empirically the institution wise infrastructure requirement for agriculturalmarketing.

4. To assess the District- wise data of warehousing infrastructure required, available and thegaps based on primary/ secondary data analysis.

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1.5. Study Area

The study is supported both by secondary and primary data. Marketing networks, infrastructurefacilities, and investment procedures in agriculture marketing system of the Kerala state is evaluatedon the basis of exhaustive secondary data. Secondary data sources on agricultural marketinginfrastructure include data sources on AMIGS scheme, from Directorate of Marketing and Inspection,Faridabad, Ministry of Agriculture, Department of Agriculture Government of Kerala, VFPCK,Directorate of Economics and Statistics, Government of Kerala reports etc.

A primary survey is found necessary for assessing institution wise, commodity wise marketinginfrastructure and necessary investments made for promotion of agricultural marketing infrastructure.After analyzing the production clusters in Kerala state (calculated on the basis of the data on crop-wiseproduction (2016-2017), Directorate of Economics & Statistics), two districts Thiruvananthapuramand Idukki are found to be distinct in (a) coverage of all major crops, (b) presence of agriculturemarketing institutions and (c) spread of markets. (Wholesale Market/Wholesale Assembly Markets(WAMs)/ Regional Periodical Markets (RPMs)). Hence these two districts are selected for in-depthanalysis. On the basis of rural urban division, out of the six wholesale markets in Kerala, Nedumangad(Rural) &Anayara (Urban) Wholesale Markets are selected from Thiruvananthapuram district. SpicesPark, Puttady, major centre of spice trade in Idukki is selected for analyzing market infrastructurefacilities for spice trade. Two Wholesale Assembly Markets (which is five percent of total WAMs inone district) and three Rural Periodical Markets are randomly selected (the same methodology i.e.,five percent of total RPMs of each district). Thus, a total number of two Wholesale markets, fourWAMs and six RPMs in addition to Spices Park are selected for understanding the infrastructureavailability related to the three marketing functions such as function of transfer of ownership, functionof physical movement and facilitating functions. Thejaswini, the Farmer Producer Company withregistered office at Kasaragod is selected for understanding the role played by Farmer ProducerCompanies. Additionally, to study crop specific infrastructure, the farmer’s markets operated by VFPCKin the two districts is studied. Farmers and traders from six farmer markets run by VFPCK in the twodistricts are chosen for sample survey. Crop specific marketing infrastructural facilities, infrastructureinvestments, and infrastructure requirements is also analyzed on the basis of both primary and secondarydata.

To understand the perception and opinion of stakeholders regarding the available marketinginfrastructure and the needed infrastructure and the policies that need to be adopted, synergizing theviews of all stakeholders is needed, as such primary data is to be collected from various stakeholdersin the area of agricultural marketing. Marketing department officials, market officials, farmers, tradersand exporters are identified as the stakeholders. Survey, interviews, and FGDs are conducted to assesstheir perception regarding agriculture marketing infrastructure.

Detailed organizational visit and observation generated idea regarding the role andresponsibilities of various agencies in providing agricultural marketing facilities. The existinginfrastructure provided by them and limitations of their present role is also evaluated.

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The study examines the structural and functional dimensions of existing agriculture marketinginstitutions with a focus on marketing infrastructure on the one hand and on the other hand attempts atsynthesising the opinion of multi stakeholders to strengthen the marketing infrastructure facilities forfuture development of agriculture. The inferences derived from the study could be utilized for preparingintegrated development planning at local, district and state level.

1.6. Chapterisation

The scheme of the study is as follows. Chapter I is the introduction Chapter which places thebackground of the study, Statement of the problem, Objectives of the study and Study Area. ChapterII provides the conceptual framework and methodology of the study. It elaborates the theoreticalbackground of the study, the data sources, sampling tools, data collection methods and the variables.Structure of Agriculture marketing institutions in Kerala is given in Chapter III. The details of allmajor institutions, Wholesale Markets, Wholesale Agriculture Markets, Rural Periodical Markets,Alternative Marketing Structure, Vegetable and Fruit Promotion Council Keralaetc., are given in thischapter. Chapter four to eight analyses the collected primary data. Chapter four is on AgricultureMarketing Infrastructure in Kerala: an analysis of Whole sale markets, five is on Wholesale AgricultureMarkets/Rural Periodical Markets, six is on Vegetable and Fruit Promotion Council Kerala, and sevenis on Spices Park. The structure, conduct, performance and analysis of infrastructure facilities in eachof these markets are analysed. Chapter eight focuses on the infrastructure facilities in FPOs and nineanalyses the specifics of ware housing facilities in the state. Chapter ten specifies the infrastructurerequirement in all the above said market with cost estimations. The final chapter concludes the studyand provides policy suggestions.

1.7. Limitations of the study

The study on ‘Agriculture Marketing Infrastructure in Kerala’ is based primarily on twoWholesale Markets, ten Wholesale agricultural Markets/Rural Periodical Markets and six VFPCKsfrom Trivandrum and Idukki districts. Farmers and traders in each of these markets were the primarysource of provision of data. Care should be ensured once the results are generalised because the agroclimatic and crop specific peculiarities of these districts vary with the other districts. Also, the cropsthat are traded in other Wholesale Markets and other markets may also be different. The infrastructureand funds that are available within each Wholesale Market is different, and same is the case withdifferent WAMs/RPMs and VFPCKs. Hence the requirement of each Wholesale Market, WAM/RPM

and VFPCK is also different. Hence generalisations should be done carefully.

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CHAPTER 2Conceptual Framework and Research Methodology

Agriculture marketing- the activities, agencies and policies involved in the procurement offarm inputs by the farmers and the movement of agriculture products from the farms to consumers, isintended to make production, supply and trade of agricultural produce sustainable, economicallybeneficial and equitable. Agriculture marketing includes both pre-production and post productionfunctions and the respective (input and output) supply chains i.e., all operations related to theprocurement, collection, grading, storage, food and agro processing, transportation, financing, andselling of agriculture produce as well as market demand analytics and associated information thatinterconnects the business operations. Conversely, agriculture marketing systems- governmentalsystemic interventions in rules, regulations and policy in agriculture marketing- aims at creating anenabling environment to effectively manage the multi stakeholders associated with both productmarketing and input marketing; the farmers, traders, wholesalers, processers, importers, marketingcooperatives, regulated market committees and retailers. Thus, the marketing system include sub systemssuch as production sub systems, regulatory sub systems, distribution subsystems and consumer subsystems and the efficacy with which the conflicting interests of all stakeholders is managed forms thebase of marketing effectiveness and market efficiency.

The interventions aimed at establishing efficient marketing systems foresee a market wherefarmers being primary producers reap best possible benefits by selling adequate quantity at a fair pricewithout impairing the quality of produce and the price spread is minimum between primary producersand ultimate consumer (GOI, 1976). An efficient marketing system facilitates sale of the products andthus monetize the produce, providing sustainable livelihood for farmers. For this adequate and effectiveinfrastructure facilities forpre and post-harvest operations viz. assembling, grading, storage,transportation and distribution is necessary. Infrastructure facilities also include facilities for marketfinancing and market information/integration, which provides a demand signaling platform and thusequates supply of and demand for agriculture produce and determines equilibrium price. Inefficienciesin marketing infrastructure can hinder the profit margin received by all stakeholders and can adversely

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affect the production and distribution of agriculture produce, making an impact on both food securityof the nation and effecting the quality of life of farmers.

Coming to the state of Kerala, there is a lack of appropriate and effective linkage between theproducers and sellers which has limited the development of agriculture in the State. Kerala lacks awell-developed agricultural market infrastructure for sales, post handling, assembling, sorting, grading,processing, packing, labelling, cold storage, transportation, quality certification facilities etc. both fordomestic and export markets. The private sector is also not attracted for making sufficient investmentin agricultural marketing in the state (Govt. of Kerala, 2016). The inadequate marketing infrastructurefacilities prevents efficient post-handling of agriculture produce which in turn reduces the incomeshare of farmers and adversely affect the next production cycle, eventually threat food security of thestate. Against this backdrop, it becomes imperative to initiate steps to address the core problems relatingto quantity and quality of agriculture marketing infrastructure, so as to ensure that agriculture marketingsystems function effectively to monetize all agricultural produce. This has to start with assessing andanalysing the nuances of existing agriculture marketing infrastructure in Kerala, so that the challengesand prospectus relating to marketing infrastructure as experienced by various stakeholders includingfarmers, traders, consumers and administrative officials can be exposed. The proposed study “ACollaborative Study on Agriculture Marketing Infrastructure in Kerala” is an attempt in this direction.

2.1. Infrastructure which enables agriculture marketing functions

The focus of the study is to assess the institution wise infrastructure associated with agriculture marketingfunctions. For this purpose, infrastructure that enables the following agriculture marketing functionsare focused.


It includes infrastructure that helps in the activities of selling and buying and demand creation.The exchange function take place when seller is able to produce according to the interests of theconsumer and the consumer is able to pay something of value in return for the produce which isagreeable to the seller and thus both gets satisfied. In this demand creation process the magnitude ofprice spread is very much important. A well-organized marketing infrastructure system can communicatebackwards from Fork-to-farm, in advance to production, such that the entire supply chain will functionto serve the forecasted demand. And this naturally reduces the price spread (difference between theprice paid by consumers and the net price received by the producer) as there is shorter supply chainsand better information. To promote transparency and cross stakeholder linkage, government takenecessary steps to restrict monopolistic or oligopolistic arrangements and ensure efficient marketing.

b. Infrastructure for the function of physical movement such as transportation and storage,function of changing the form of product, standardization and grading and packagingand value addition

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Markets provide infrastructure facilities for transportation, storage, standardization, gradingand packaging. Agriculture produce, being perishable in nature need more effective storage andtransportation facilities so as to reduce the produce loss. According to statistics, currently the post-harvest losses of various commodities range from 3.9 -6.0 % for cereals, 5.8-18.0 % for fruits and 6.8to 12.4 % for vegetables. (ICAR, 2010). In order to reduce the post-harvest loss and to generate moreincome to farmers it is important to have facilities for standardization, grading and packing. In thisregard, governments can make investment towards ensuring adequate infrastructure for physicalmovement and standardization through direct investment in market infrastructure, establishinginstitutions for research and training for value addition and by ensuring uniform standards in all markets.

c. Infrastructure for the facilitation function- market financing, and market information marketintegration

Facilitating functions are not a direct part of either the exchange of title or the physical movementof produce but they are the enabling factors for marketing. There will be inevitable lags betweeninvesting in the necessary raw materials (e.g., machinery, seeds, fertilizers, packaging, flavorings,stocks etc.) and receiving the payment for the sale of produce and in smoothening the process marketfinancing, market integration/ information is very much important. The effective linking of demandcenters and supply regions has to be done by effective integration of marketing system (both verticaland horizontal) which would reduce price dispersion across regions and curtail price fluctuations.

In short, infrastructure facilitates the following flows and interconnections in the agri-markets(GOI, 2017),

i. the flow of agriculture produces, mediated by transportation, storage, processing etc.

ii. ii. the flow of money, reconciled through cost, price, income, margin, saving, credit etc.

iii. the flow of information on demand, manifested in quality, volume, specifications etc.

A well-developed marketing infrastructure which enables the three major functions of agriculturalmarkets can improve marketing efficiency and effectiveness in the marketing system which getsdemonstrated in increase in the revenue generation, rate of market expansion, success of unification inthe market (integration), increase in competitiveness, facilitation of selling channels and the efficacyin which demand signals to supply side. The interplay of various stakeholders in determining theseflows and the efficiency with which government manages the market ensure whether increase in thefarm production is translated into proportionate increase in the level of real income in the economy,good production years do not coincide with low revenues to the producers (achieved through effectivestorage and proper regional distribution) and both consumers and producers are satisfied (GOI, 2017).Along with efficiency, equity in the markets is also important in which not only ‘spread in time’ but‘spread in place’ has to be initiated as far as agriculture marketing infrastructure is concerned, since,

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otherwise production slumps with price bumps and production gluts with price slumps occur. Allthese aspects need to be examined while undertaking a study of agriculture marketing infrastructure.

2.2. Conceptual Framework of the study

Agriculture marketing is a complex process involving multi stakeholders and interlinkagesamong these actors, and, has a spatial and temporal dimension to it. Hence in order to study the detailsof agricultural marketing infrastructure it is important to adopt a research methodology which has astrong conceptual framework and uses system approach using both qualitative and quantitative researchmethods along with prudent data analysis techniques.

Marketing theories largely derives its roots from the classical economic theories of perfectcompetitive markets where demand for and supply of produce determines equilibrium price quantityrelation and assumes efficient markets with good information exchange and integration. The neoclassical model of Structure, Conduct ad Performance (S-C-P) model is a widely used tool in analysingagriculture marketing infrastructure. S-C-P framework is used for explaining how markets behave andthe various markets behave differently. This paradigm postulates that the market structure determinesthe market conduct, which then sets the performance of the market. It envisages that the number ofsellers and buyers determines the behaviour of economic agents and thereby determine how close itcomes to meeting the standard of reference of social welfare. (Caves, 1992).

Farm size, distribution, location, tenure, cropping structure, market infrastructure, marketorganisation are the important variables that determine the structure of markets. Conduct of market isanalysed by credit facilitation, market information and pricing. Performance of markets are analysedby timeliness, credibility, sustainability, efficiency, equity and technical progress in agriculture markets.To have a comprehensive understanding it is necessary to have a Commodity System Approach bywhich the horizontal and vertical integration with regard to particular commodities can be studied andthus the limitation of basic S-C-P model can be solved. The study tries to bring in dynamism into theanalysis by adopting aspects of institutional economics in which institutional aspects that include thelegal and political intervention in marketing infrastructure is analysed to understand performance inthe selected markets. Thus, a combination of neo classical model of S-C-P along with concepts ofinstitutional economics is adopted for the study and commodity wise analysis will be adopted so as tomark the various input and output supply chains in various markets. In short, the efficacy with whichthe markets perform their three major function as, being platform for exchange, infrastructure forphysical movement and value addition and that of facilitation function is being analysed in depth byadopting S-C-P framework.

2.3. Primary and Secondary data

The study starts with analysing the secondary data in order to identify gaps in current knowledgeand to place the research gap with in the context of existing knowledge. Research reports, governmentreports, data from official websites and agriculture statistics is reviewed to understand the details of

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agriculture marketing infrastructure. Marketing networks, infrastructure facilities, and investmentprocedures in agriculture marketing system of the Kerala state is thus evaluated on the basis of exhaustivesecondary data. Secondary data sources include data sources on AMIGS scheme, from Directorate ofMarketing and Inspection, Faridabad, Ministry of Agriculture, Department of Agriculture Governmentof Kerala, VFPCK, Directorate of Economics and Statistics, Government of Kerala reports etc. Thedata relating to price and market margins is analysed to understand the trend in agriculture marketingand its relation to marketing infrastructure.

Primary data collection started with the informal field visits to get general impression andbased on the insights particulars of needed data is understood. Primary data for the study consists of;

i. Implementation of a formal sample survey of farmers and traders in selected markets: Aprimary survey is found necessary for assessing institution wise, commodity wise marketinginfrastructure and investments made in promotion of agricultural marketing infrastructure.To understand the perception and opinion of stakeholders on the available marketinginfrastructure and the needed infrastructure and the policies that need to be adopted,synergizing the views of all stakeholders is needed, as such primary survey is to be conductedamong various stakeholders in the area of agricultural marketing. Marketing departmentofficials, market officials, farmers, traders, entrepreneurs and exporters are identified asthe stakeholders.

ii. Rapid Rural Appraisal of markets (use of mixture of informal surveying and interviewtechniques with various stakeholders) – the method becomes necessary as the prime objectiveof the study is to initiate an assessment of existing infrastructure and required facilitiesfrom the point of view of major stakeholders including farmers, traders, auctioneers,consumers and administrators. This demands a participatory approach where qualitativedata collection tools are used and the power of dialoguing and joint visioning is utilised.So that RRA is chosen as a major method of the study.

2.4. Sample Study Area

Sample surveys serve its purpose only if they are a true representation of the population. Hence,samples are chosen cautiously so that the selected samples are capable of providing generalisedinformation on agriculture marketing in Kerala.

For in-depth study two sample districts- Trivandrum and Idukki, are selected after analyzingthe production clusters in Kerala (calculated on the basis of the data on crop-wise production (2016-2017); Directorate of Economics & Statistics), which were found to be distinct in (a) coverage of allmajor crops, (b) presence of agriculture marketing institutions (govt. institutions and alternative markets)and (c) spread of markets.

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Regulated markets in Kerala include both wholesale markets and Assembling markets/ RuralPeriodical markets. Wholesale markets, under the direct control of state/central government standalonefrom the WAM/RPM as it has registered farmers and traders/auctioneers indulging in direct marketingand exhibits entry restrictions. The two wholesale markets in Trivandrum – World Market, Anayaraand Rural Agriculture wholesale market, Nedumangad is selected from the six-wholesale markets inKerala as samples to understand the dynamics in direct marketing. A sample of ten farmers and tentraders each from the two markets, is selected for survey, making the total sample from whole salemarkets forty. Likewise, from Idukki, Spices park, Puttady where major share of spice trade in Keralais happening is selected and fifteen farmers and three traders are selected for survey. In addition,stakeholders other than farmers and traders are interviewed to attain detailed information relating tostructure and conduct of the markets.

Two Whole Sale Assembly Markets (which is above five percent of total WAMs in one district)from each district is selected. Whole sale Assembly Market, Palayam and Wholesale Assembly Market,Nedumangad from Trivandrum district and WAM, Kattappana and WAM, Nedunkandam from Idukkidistrict are the selected ones. Similarly, six RPMs are selected for in-depth analysis, the marketsbeingKazhakootam market, Nanniyod market andPothencode market from Trivandrum district andThookupalam market, Pambanar market andElappara market from Idukki district for understandingthe infrastructure availability related to the three marketing functions such as function of transfer ofownership, function of physical movement and facilitating functions. Five sellers each are interviewedfrom the ten selected markets for sample survey and thus from the two districts fifty sellers are surveyed.

To understand the alternative marketing structure Tejaswini Farmer Producer Company,Kasaragod is selected.

2.5. Crop specific marketing infrastructure

It is important to have crop specific analysis in order to understand the input and output supplychain and crop specific infrastructure facilities in the state. Vegetable and Fruit Promotion CouncilKerala (VFPCK) the major player in vegetable and fruit marketing in Kerala with 9708 SHGs promotingorganic farming is selected for study. Three Agriculture markets (KarshakaVipani) each from the twodistricts are studied in-depth by collecting data from five farmers and five traders from each of themarkets. Thus, a total sample of sixty (thirty farmers and thirty traders) are taken to understand thedynamics of crop specific agriculture marketing. The Farmers markets in Vembayam, Maranalloorand Kovilnada (Trivandrum district), Parathode, Thankamani, Santhigram (Wayanad district) arechosen. Crop specific marketing infrastructural facilities, infrastructure investments, and infrastructurerequirements is reviewed based on the primary data.

Agriculture marketing infrastructure for Tapioca, Banana, Pepper, Coconut, Ginger, Cardamomand vegetables are given special focus in the study. Spinach, cow pea, cucumber, bitter gourd, snake

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gourd and chilly are selected since they are the commonly collected vegetables in the two district andthey have a very high demand in the market.

Following is a narration of stakeholders in each of the subsystems of agriculture marketingsystems and the information collected from each of these stakeholders is used for studying agriculturemarketing infrastructure and related challenges.

Table 2.1: Sampling Details and information collected

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2.6. Data collection Tools

Both qualitative and quantitative data collection methods are adopted since, qualitative methodsare quintessential to reveal the ‘conflict of interest’ among various stakeholders that quantitative researchtechniques may not fulfil. The study uses the following tools to obtain primary data from the stakeholders:

1. Interview schedule: From both the selected farmers and trades, data regarding farm marketsupply as a percentage of production/trade, marketing infrastructure in the respective markets,marketing costs, required facilities in the market etc is collected using interview schedule.Perception of farmers and traders on marketing infrastructure is also collected to understandthe factors that cause inefficiencies in market. Separate questionnaires are prepared for collectingdata from farmers and traders in wholesale markets and in WAM/RPM.

2. Observation: To understand the dynamics of functioning of selected markets observation is animportant tool. Information related to supply chains, process of auctioning, organisation ofmarkets, monopoly practices in markets, conduct of marketing and power relation are notedthrough participant observation in markets.

3. Open ended questionnaires: Data relating to structure and conduct of markets is collectedusing open ended questionnaires served to administrative officials and other stakeholders.

4. Rapid Rural Appraisal: The approach involves using a combination of flexible researchtechniques, including semi structured interviews with individuals or groups; the constructionof social or geographical maps, or matrix ranking of preferences; and the use of key indicatorsfor phenomena which cannot easily be measured directly. It can give a focus on the dynamicaspects of the agriculture marketing system, and on local innovations and trends; and its usewithin a ‘systems’ framework recognizes interrelationships between, economic, political andagro-ecological aspects relating to marketing. Views of various stakeholders about requiredinfrastructure in agriculture marketing can be understood by deploying these qualitativetechniques.

5. Case studies: Performance of FPOs is studied using case study approach. For this in-depthinterview is administered with stakeholders of FPOs.

Table 2.2: Details of variables identified for understanding agriculture marketinginfrastructure

Marketing Infrastructure – Variables

I. Exchange functions1. Details of production and sales2. Marketing Cost3. Auction Hall & Facilities

II. Physical Functions1. Transportation 2. Storage

a) Loading unloading a) Cold storage

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b) Transportation inside market b) Ripening chamber

c) Road facility c) Dry storage

d) Transportation from field to market d) Godowns

e) Package transportation e) Mobile storage

f) Check post f) Ware house

g) Parkingh) g) Drying yards

h) Refrigerated trucks h) Washing facility

i) Assaying

3. Value Addition 4. Standardization

a) Food irradiation unit a) Uniform standards

b) Inhouse product testing lab b) Display of samples

c) Machinery c) Economic loads

d) Skilled labours d) Quality testing labs

e) Branding e) Quality certification

f) Patenting f) Weighing machines

g) Surveillance camera

5. Grading & Packing 6. Crop Specific Infrastructure Facilities

a) Scientific lab

b) Grading apparatus

c) Electronic weighing

d) Labelling facility

e) Despatching facility

III. Facilitation Functions

1. Market Financing 2. Marketing Information

a) Credit facility to buyers a) Computerized date

b) Credit facility to sellers b) Data management

c) Bank/ ATM c) Record keeping

d) Loan facility d) Information dissemination

e) Incentives e) Market survey

f) Credit sharing f) Information counters

g) Shares g) Notice board

h) Advertisement

i) Training

3. Market Integration

a) Market intelligence d) Horizontal integration

b) Risk bearing e) Trade link

c) Vertical integration f) ICT

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A Principal Component Analysis is used to delineate the most important factors contributing toinadequate infrastructure in agriculture markets so that appropriate policy suggestions can be done.Suggestions about the agriculture marketing infrastructure from different stakeholders for each item,particularly, modernization and renovation of whole sale markets, procurement, processing centers,cold storage, market information, intelligence, outlets, labs, machines for grading, processing, dryingchamber, storage/cold storage, organic certification etc. is also evaluated. The required infrastructureis specified after consolidating the views of different stake holders and the cost to be incurred for thesame is also worked out in consultation with experts.

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CHAPTER 3

Structure of Agricultural Marketing Institutions in Kerala

Agriculture marketing infrastructure includes the infrastructure and associated logistics that isnecessary in handling the agriculture produce and empower farmers to directly connect with othermarket. Market infrastructure is important not only for the performance of various marketing functionsand expansion of the size of the market but also for transfer of appropriate price signals leading toimproved marketing efficiency. It is important to analyse the existing structure of agriculture marketinginstitutions in Kerala to have an understanding of the agriculture marketing infrastructure, since it isthese institutions which provide infrastructure facilities for marketing of agriculture produce. Thepresent chapter looks into the structure of agriculture marketing institutions in Kerala, with focus oninfrastructure faculties provide

On a whole the marketing institutions can be classified into markets directly under the controlof State Government, other institutions under the state government with objectives of providing specificmarketing infrastructure facilities or crop specific facilities, Central government sponsored institutions,all these falling under the purview of Government institutes. Additionally, there are private institutescategorised as Farmer Producer Companies which provide infrastructure facilities for marketing. Thefigure below provides details of agriculture marketing institutions in the state of Kerala.

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Figure No.3.1: Agriculture Marketing Institutions in Kerala

Agricultural Marketing

Institutional wiseMarketing Structure

State GovernmentAgricultural markets

Other AgriculturalMarketing Institutions

Central GovernmentMarketing

InstitutionsilitatingFunctions

Farmer ProducerOrganisations (121)

Vegetable and FruitPromotion Council

Kerala

Wholesale Markets(6)

Spice Board

Wholesale Assem-bling Markets

(346)

Regional PeriodicalMarkets(1100)

Kerala State Horti-cultural Product

Development Corpo-ration

Kerala KerakarshakaSahakarana Federa-

tion

Kerala State Co-opera-tive Rubber Marketing

Federation Limited(Rubber Mark)

Kerala State Co-operative Marketing

Federation(MARKETFED)

Kerala Agro IndustrisCoporation Ltd.

Kerala State Ware-housing Corporation

Oil Palm IndiaLimited

Plantation Corpora-tion of Kerala

Tea Board

Coffee Board

Tobacco Board

Coconut Develop-ment Board

Agricultural andProcessed FoodProducts Export

DevelopmentAuthority

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Agriculture markets functioning under State Government are classified into Whole Sale Markets(6), Whole Sale Agricultural Markets (346) and Regional Periodical Markets (1100). Other agriculturalmarketing institutions supporting production and distribution of agricultural crops include VFPCKand HORTICORP. Spices Board, Tea Board, Coffee Board, Tobacco Board and Coconut DevelopmentBoard are the commodity boards under the Central Government which provide infrastructure facilitiesfor marketing of specific crops. Additionally, Agriculture and Processed Food Products ExportDevelopment Authority (APEDA) which is focused on monitoring and facilitating exports of agricultureproduce has a virtual office in Kerala. APEDA’s duty is to involve in creation of cold chain infrastructurefor horticulture produce to improve quality and value addition of produce and to achieve optimumshelf life resulting into increased quality exports of agriculture produce. Detailed description ofinstitution wise structure of existing agricultural markets in Kerala is provided below.

3.1. Institution wise structure of the existing agricultural markets in Kerala

I. Regulated Markets

Regulated markets in Kerala include, markets which are established/monitored by governmentdepartments/ LSGs. The efficient management of regulated markets overcomes the deficiencies atmarket level and ensures justice to the producer-sellers as well as traders. In Kerala, the Whole salemarkets, Wholesale Assembly Markets and Rural Periodical markets function under the monitoring ofgovernment.

1. Whole sale Markets

Agricultural Wholesale Markets were designed and established under the Kerala Agricultural MarketProject (KAMP), with financial assistance from the European Union (EU) in Kerala. The marketsregulated by Agriculture Development and Welfare Department in Kerala, provides a platform for thefarmers to sell their products directly to the consumers through auctioning

Out of the six whole sale agricultural markets functioning in Kerala, three are urban wholesalemarkets, Anayara (Trivandrum), Maradu (Ernakulam), and Vengeri (Kozhikode), and three are ruralwhole sale markets, namely Nedumangadu, (Trivandrum), Muvattupuzha (Ernakulam) and SultanBathery (Wayanad).

The administrative structure of the markets includes, one secretary (Deputy Director ofAgriculture), one assistant secretary (Assistant Director of Agriculture), one accountant (JuniorSuperintendent), one lower division clerk, one attender and one driver. The market secretary is incharge of conducting the daily activities and the Executive committee headed by the District collectoras chairman, monitor the activities of the market. The executive committee is an eleven-membercommittee consisting of President, Secretary, Treasurer, Joint Secretary and Vice President amongothers. Their major function is to procure the agricultural products from farmer groups in the district,to facilitate in all activities of its trade like weighing, transportation, auction, etc., for which theirwages are paid as per the rate determined by the Executive Committee. There are district wise organisedfarmer groups as clusters which are registered as per the Societies Act (NIAM, 2012), which mainly

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engage in the collection of agricultural farm produces like vegetables and fruits from the differentparts of each concerned district, for marketing and thus ensures active participation in the market.

Major activity in the market is the process of auction. Auction is based on the public auctionmethod and the base price is determined on the basis of the relative market prices on open market inthat particular day (NIAM, 2012). Each market has fixed particular days as market day and on thespecified days auction take place. Farmers sell their produce through auctioning for which essentialsupport is given by the market officials. All major crops including plantain, tapioca, vegetables andfruits are traded in the. The market provides additional services including farmer training and facilitationprograms, so as familiarise farmers with market information, pricing and value addition activities. Themarkets are envisaged as a centre of trade where shops are rented to individual shopkeepers and facilitiesfor cold storage, warehousing and transportation and other financial services are provided. A financialassistance of Rs 30 lakhs was provided for the linking of the six wholesale markets under the electronicNational Agriculture Market (e-NAM); thereby upgrading the trading in these markets to the onlinetrading platform (The Hindu, 2017). Wholesale markets are equipped with weigh bridge, administrativeoffice, auction halls, guest house, toilet complex and a bank and is envisaged as a model market.

Entry to the markets for both farmers and traders are restricted by a registration fee, with anaim to entertain only genuine farmers and traders. Many markets collect cess from both farmers andtraders to meet the daily expenses of running markets. The presence of farmers in the governing structureshelps to ensure transparency in working of the markets. Traders in the market include both retailersand intermediary buyers. Other than meeting the maintenance expenditure, the revenue generated isused for paying transport subsidy for farmers, trader incentives, support for auctioning process and forwaste management. In short, the vision is to enable the market function as a platform where the farmersand consumers can come together and exchange information which helps in demand forecasting andefficient marketing.

2. Wholesale Assembling Markets (WAMs) in Kerala

Wholesale Assembling markets are regional markets monitored by Local Self Governments andthey aim at assembling the produce from rural periodical markets/ farmers for selling or for valueaddition. There are altogether 346 wholesale assembling markets in the state. It is assumed that lesserquantities of agricultural commodities are traded in WAM compared to the wholesale markets. Thereare 346 wholesale assembly markets that sell items including meat, fish, vegetables, fruits, spices andgrocery. (GOI,2017 Report of Committee on Doubling Farmer’s Income) However, there are marketsfor particular products such as cattle market or fish markets where the entire auction area is demarcatedfor one item.

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Table 3.1: Wholesale Assembling Markets in Kerala

S. District No. Commodities traded Godown Cold Gra No. of storage ding

mar C S P S P P kets W W S F R S

G G G G C C

1 Alappuzha 5 Banana, copra, vegetables, beans,

cucumber, fruits, yam 2 4 0 0 1 0 0

2 Ernakulam 35 Banana, coconut, tapioca, pepper,

vegetables, areca nut, copra 2 2 29 1 13 3 0

3 Idukki 28 Pepper, areca nut, cardamom,

banana, vegetables, rubber 0 3 28 3 5 1 0

4 Kannur 8 Pepper, copra, tapioca, cashew,

areca nut 0 0 8 0 0 0 0

5 Kasaragod 3 Copra, pepper, ginger, cashew,

areca nut 0 0 3 0 0 0 0

6 Kollam 13 Banana, pepper, cashew, ginger,

vegetables 0 2 0 0 0 0 0

7 Kottayam 22 Rubber, pepper, coconut, tapioca,

banana, vegetables 0 5 22 1 0 0 0

8 Kozhikode 9 Copra, coconut, areca nut, banana,

vegetables 1 1 6 2 0 2 1

9 Palakkad 14 Vegetables, coconut, tapioca, rice,

banana 0 5 12 1 4 0 0

10 Pathanamthitta 8 Banana, yam, pepper, ginger 0 2 0 0 0 0 0

11 Thiruvananthapuram 23 Pepper, coconut, tapioca, tapioca,

ginger, vegetables 0 4 0 0 0 0 0

12 Thrissur 28 Banana, vegetables, pineapple,

coconut, areca nut, vegetables 7 10 23 0 17 1 0

13 Wayanad 5 Pepper, ginger, turmeric, coffee 0 0 5 0 0 0 0

Source: Directory of Wholesale Agricultural Produce Assembling Markets in India, Govt. of India, 2004

Out of the 14 districts considered, Ernakulam has the greatest number of WAMs (35), followedby Idukki and Thrissur (28 WAMs each) and Thiruvananthapuram (23 WAMs). These four districtsalso include the greatest number of godown facilities in the wholesale assembling markets, out ofwhich majority are public sector godowns. In Kerala, a total of 136 Public Sector Godowns, 12 CWGs,38 SWGs and 8 SFGs are there, however, they are not evenly distributed across the districts. Coldstorage facilities are relatively lesser in WAMs, with 40 PRC units and 4 PSC units. No standardisedgrading facilities is present in any of the districts except Kozhikode, with a standard grading facilityavailable in Changaramkulam market where areca nut is the major commodity traded.

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All the wholesale assembling markets are under the regulation of National Natural ResourceManagement schemes of the government. Major commodities traded in WAMs in Alappuzha arecoconut, copra and banana among other vegetables and fruits. While all other WAMs in the districthad go-downs, only Chengannur market lacked such facilities. Cold storage facility is available onlyin the Alappuzha Dara WAM, whereas none of the markets had scientific grading facilities and reliedmainly on visual grading by the traders and farmers. In the case of Ernakulam district, major agriculturalcommodities traded are banana, coconut, areca nut, pepper, rubber, ginger, etc. The district has noscientific standardisation and grading facilities in its WAMs. Almost all the go-down facilities presentin the district are maintained by the public sector. Regarding cold storage facilities, there are both PSC,PRC facilities in many WAMs, except a few. In Idukki, there are 28 wholesale assembling markets, outof which two involves cattle trading. The major agricultural commodities sold in Idukki include rubber,ginger, cardamom, pepper, coffee, areca nut, lemongrass oil, cashew nut, turmeric and so on. There areno standard grading facilities in the district WAMs. All the assembling markets are under the regulationsof NRM, government of Kerala. While only a few units have cold storage facilities, majority of themare equipped with public sector controlled go-downs. In Kannur, the major products traded are pepper,cashew, yam, tapioca and areca nut apart from ginger and banana. Here, none of the eight WAMspossess cold storage or grading facilities. PSGs are available in all the market units. Kasaragod hasonly three wholesale assembling markets, at Kasaragod, Kanhangad and Neeleshwaram, respectively.All three of them lack basic trading facilities like cold storage and grading amenities. This adverselyaffects the trade of perishable agricultural products like vegetables. However, the commonly tradedcommodities here are areca nut, cashew, copra, pepper and ginger. There are go-down facilities availablein all the three markets.

Apart from the two fish markets and one cattle market, there are ten wholesale agriculturalproduces assembling markets in Kollam district. However, most of them lack the basic amenities ofcold storage, go-down facilities, etc. Scientific grading facilities are absent in all of the markets. Themajor products traded are pepper, cashew, areca nut, banana and vegetables. The Kollam district WAMsare mainly involved in the selling of rubber, banana, coconut, tapioca and pepper. None of the marketshave scientific grading facilities, which affect the standardisation of the commodities like pepper andrubber a lot.

In Kozhikode major agriculture products traded include coconut, arecanut, banana and vegetablesand is a major centre of trade. The market has infrastructure facilities for warehousing, storage andgrading. There are one Central Ware housing godown, one state warehousing godown, six PSGs, twoSFG and two PSC in the market. Additionally, there is one facility for grading of agricultural producewhich is the single facility in the state for grading.

In Palakkad, the major agricultural products traded are rice, vegetables, tapioca, pepper, coconut,banana, areca nut, etc. and like in the case of other districts, there are no standard grading facilitiesavailable in the district WAMs. Even though there are only few cold storage units, PSG and SWG go-down facilities are available in most of the WAMs.InPathanamthitta, the major crops produced and

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traded in the WAMs include yams, banana, vegetables, pepper, ginger, areca nut, etc. While onlyAnantharamapuram and Thiruvalla WAMs have go-down facilities, none of the wholesale assemblingmarkets in Pathanamthitta had proper cold storage or scientific grading facilities. In Thiruvananthapuram,apart from a few WAMs having SWG go-down facilities, none of the wholesale assembling marketshad cold storage or scientific grading facilities. The major crops traded are vegetables, banana, coconut,pepper, areca nut, etc. among which majority are easily perishable in nature. So, waste disposal anddamage to commodities are other problems that arise because of lack of proper storage infrastructure.In the case of Thrissur, there are better go-down facilities like SWC, CWC, PSG facilities, and coldstorages in almost all the WAMs. However, there is a lack of grading facilities in all the wholesaleassembling markets. The major commodities traded here are banana, areca nut, vegetables, coconut,nutmeg, tapioca and pineapple. In Wayanad, there are only five WAMs, which mainly trade pepper,ginger, turmeric and coffee. Even if there are go-down facilities in all the WAMs of the district, thereis a lack of grading and cold storage facilities in all the wholesale assembling markets.

1. Rural Periodical Markets (RPMs) in Kerala

The RPMs are shandies/ small hats operating at village level periodically, like every week orfortnight. The agricultural commodities traded include vegetables and fruits, which are usually freshfarm produce and will be to satisfy the local demand and mostly rural farmers take part in trade in suchmarkets (NABARD, 2018). In RPMs, the direct selling by small farmers is facilitated. However, thereare agents who occasionally interfere with their market interests. The major drawback with ruralperiodical markets is that there is a lack of superior infrastructural facilities compared to wholesalemarkets or WAMs. Apart from that, opportunities for small farmers to access larger markets that offerbetter values are low. Of the total 1290 Rural periodical markets in Kerala, an estimated 821 dailymarkets, 147 weekly markets, 173 markets functioning 2 days per week and 149 markets functioningonce in a week (GOI, 2017). However, with more people demanding the products on a daily basis,such periodical markets with specific operational timings are decreasing in number. As per the latestdata revealed by Report on Committee on Doubling Farmers income, the number of periodical marketshas reduced to 1014, with some markets ceased to operate.

Table 3.2: Periodical markets in Kerala

Sl. No Type of markets Number

1. Total rural primary markets (Panchayat markets) 1076

2 Urban Periodical Markets

a) Municipal corporation markets 85

b) Municipality markets 129

Total number of markets in the state 1290

Source: Report of Survey on markets in Kerala ,2005-06, Directorate of Economics and Statistics, Kerala

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Among a total of 1290 markets in the state during 2005-06, 1076 market units were ruralprimary markets or panchayat markets out of which 993 were open markets and 83 were regulatedmarkets, and apart these, 129 and 85 market units of municipality markets and municipal corporationmarkets, respectively are there (GOK, 2009). The functioning of the local self-government controlledagricultural markets were not identical or uniform, instead they were functioning in accordance withthe regional or local agricultural activities, cropping pattern and trading practices. So, the time schedulevaries considerably among these market units, when some are entirely day markets while some arepartially functioning day and partially during night.

The traders, farmers, etc have to pay a particular amount as cess to bring the commodities tothe market and sell. The cess rate is as fixed by the authorities that vary with respect to the amountbrought for sale and the type of vehicle used for its transportation. This can be Rs.2-7 per load, Rs.4-9 for two wheelers, Rs. 25-163 for large trucks or Rs. 4-193 for other vehicles (NIAM, 2012), whichvaries from district to district.

Apart from these the farmers and traders need to pay a rent to the owner of that market in returnto the facilities and amenities he/she has provided for its functioning. The amount of rent differsmostly because the nature of working of the market units also differs considerably. According to NIAMreport, 2012, a total transaction of about Rs.2744 lakh is taking place per day in Kerala in such markets.

I. Alternative Marketing Structures:

Along with the markets, alternative marketing infrastructure also play a very important role in thestate. There are alternative marketing structures arising which include direct marketing, farmercooperatives, contract farming and Farmer Producer Companies. Other institutions include,

3.2. Farmer Producer Organisations (FPOs) in Kerala

The concept of Farmer Producer Organisation (FPO) refers to collectivization of producers,especially small and marginal farmers, into producer organisations so that it emerges as one of themost effective pathways to address the many challenges of agriculture but most importantly, improveaccess to investments, technology and inputs and markets. Department of Agriculture and Cooperation,Ministry of Agriculture, Government of India has identified farmer producer organisation registeredunder the special provisions of the Companies Act, 1956 as the most appropriate institutional form tomobilize farmers and build their capacity to collectively leverage their production and marketing strength.

Farmer Producer organisations are helpful in accessing better farming inputs and financialservices along with farming techniques. Presently, out of the 5000 FPOs in India, 121 are in Kerala.The state level FPOs are funded by NABARD under Producers Fund and 105 FPOs comes under thiscategory. Another 16 FPOs are funded under the scope of Producer ID fund. FPOs are registeredbodies with farmers or producers of agricultural commodities as shareholders in it. The major objectivesof FPOs are to work for the improvement of the farming conditions and techniques, which also includesmarketing, and also the benefits and welfare of the member farmers.

The following table shows the list of district wise list of 105 FPOs under the Producers fundalong with the major commodities produced and marketed.

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Table 3.3: District wise list of FPOs under Producers Fund

S. No. District FPOs Commodities traded/ Activities

1 Trivandrum 7 Organic Vegetables, honey, food crops, jackfruit, copra, coconut, poultry

2 Kollam 3 Vegetables, food crops, multi activity, poultry

3 Pathanamthitta 6 Processed Jackfruit, vermicomposting, dairy, honey, coir

4 Alappuzha 4 Value added agricultural produce, vegetables, paddy, turmeric

5 Kottayam 5 Eco-friendly food products, contract planting, organic manure, dammer, honey,dairy

6 Ernakulam 6 Vegetables, nutmeg, neera nursery, rubber scrap, coconut oil extraction, pokkalipaddy and shrimp

7 Idukki 38 Vegetables, spices value addition, vermicompost production, coffee, cocoa,cardamom, pepper, ginger, nutmeg value addition, cocoa processing, coconut oilextraction, arrowroot powder

8 Thrissur 6 Paddy, clove, production and value addition of crops

9 Palakkad 12 Rice, mango, vegetables, plantation (banana, pepper, clove, etc.), dairy,biofertilizer, organic rice, nutmeg value addition, jackfruit, seeds, etc.

10 Kozhikode 8 Honey, organic vegetables, cocoa, cloves, neera and value-added products, coconutoil, fruit processing

11 Malappuram 6 Poultry, fish, mushroom, rice, coconut value addition

12 Wayanad 11 Coffee, jackfruit, vegetables, pulses, paddy procurement and rice marketing, tubers,pepper, etc.

13 Kannur 5 Coconut, poultry, mango

14 Kasaragod 5 Organic pepper, value added fruits and vegetables, honey

Source: NABARD, 2019

Considering the 105 FPOs under the Producers fund, a majority of them are engaged inproduction and marketing activities of commodities like vegetables, spices like pepper, clove, cardamom,coconut, honey, coffee, rice, pulses, fruits like banana, mango, cocoa, etc. There are some FPOs thattrade value added products like value added fruits and vegetables, rice flour, coconut oil, neera units,value added nutmeg, processed banana, mushroom, etc. apart from bio fertilisers, manure, seedlings,vermin compost production, etc. Fish and meat products, goat rearing and poultry farming are alsopracticed in about 14 FPOs.

There are Producer Organisation Promoting Institutions (POPI), which provide support to theFPOs and ensures that the latter reaches sustainable capacity to function, even if the POPI withdrawsits financial support. It also provides technical support to the FPOs. Some of the important functionsor responsibilities of a POPI include managing systems and procedures in an FPO, resource mobilisation,identification and promotion of activities of clusters, auditing and assessment of activities, imparting

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awareness to FPOs and interactions with them, credit support for preparing business plans, grants forstorage, sorting and grading (primary processing) facilities, grants for capacity building and skillenhancement of FPOs’ members, among others (nabkisan.org).

In Kerala, there are numerous POPIs working for providing support to the FPOs across thedistricts. The major POPIs are Santhigram, Marayamuttom Service Cooperative Bank Ltd,JaivasreeToxinfree Food Products Co Ltd, AnanthapuriCoconut FPC Ltd, Trivandrum DCB, KeralaGandhi SmarakaNidhi , Trivandrum, Venad Poultry FPC Ltd, KVK, Kannur, Pathanapuram SCB,Integrated Rural Technology Centre (IRTC), KVK, Kasargod, Kera Suraksha Federation of CoconutProducers Societies and High range Development Society.

3.3. Institutions providing Crop Specific Marketing Infrastructure:

Crop specific marketing infrastructure are very important in ensuring efficient marketing sinceperishability, demand, scope for value addition is different for diverse products. Kerala produces spices,garden crops, vegetables and fruits and Government has taken initiatives towards effective storage,grading, standardisation, value addition and selling of each product. Major departmental initiativesinclude the following;

1. Vegetable Fruit Promotion Council Kerala (VFPCK):

The VFPCK, registered under The Companies Act of 1956 is an agricultural marketingorganisation which looks into enhancing the overall development of vegetable and fruit cultivationand marketing in the state. The major share of the company belongs to farmers, financial institutionsand the government, with the Self-Help Groups (SHGs) formed by farmers acquiring about 50 percentof its share, government holding 30 percent and the VFPCK managing just 20 percent. The farmerSHGs under the VFPCK acts as the initial core units for facilitating rural credit, extension activities,group marketing, value addition methods, Participatory Technology Development, export promotion,etc.

VFPCK is indulged in both input supply to farmers and in marketing the output effectivelyprofitable to farmer; and this makes the initiatives unique. On the one hand it promotes organic farmingby starting seed nursery, and by providing organic fertilisers and pesticides to SHGs; on the other, withthe support of same SHGs ‘Farmers Market’ are created where the produce is marketed in an. Duringlast year, 98.7 metric tons of seeds were produced and distributed by setting up Hi-tech VegetablesSeed Production Centre and at the same time marketed around one lakh metric tons of fruits andvegetables worth of three crores. Along with arranging marketing infrastructure for storage andtransportation the council has established a Risk Fund to manage the price fluctuations in the marketand farmers are benefitting from them. In addition, most of the Farmers Market are having their ownbuilding, storage facility and auction hall and an Agriculture officer is appointed to overview theactivities of the market and guide the farmers. VFPCK has 288 SHGs all over Kerala and this farmers’network ensure smoothening of both input and output supply chains. To ensure the quality of productsbeing produced and distributed, Laboratory facilities are arranged. The council gives Rs. 1 per kg as

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Sales promotion incentive to farmers and currently retail outlets “thalir” is started to enter in to directretailing. With the support of APEDA, a Pack House has established in Wayanad and around 60 metrictons of produce have been exported under the aegis of VFPCK. VFPCK is trying to improve facilitiesfor value addition and prepares to explore the possibilities of export market, and the farmers with theiractive participation make the initiative a success.

However, more of such facilities are required as the need has increased with respect to tradingand storage. There is a huge requirement of more advanced information and communication technology(ICT) facilities at the units, as well as electricity or power requirement.

2. Kerala State Horticultural Products Development Corporation (HORTICORP)

HORTICORP, established in the year 1989, is another important initiative from governmenttowards facilitating agriculture marketing. The main functions include, procuring vegetables and fruits,marketing of agricultural products through its own retail outlet units, enhance storage facility, makeprovision of seeds and inputs, taking part in and organizing various agricultural exhibitions and fairs,etc. The haritha stalls under HORTICORP provides vegetables and fruits to customers at a reasonableprice, whereas procurement activities are done through the Karshakasangamam directly from farmers,thereby freeing the farmers from the exploitations from middlemen in trade. HORTICORP is functioningin all districts of Kerala except Kasaragod, and it aims to provide value added products to its customers,like cut vegetables depending on the necessity of the dish, chips, etc. Amruth honey from Mavelikkara,cut vegetables from Anayara or Amruth chips are some of the examples of such products.

Anayara (Trivandrum), Chadayamangalam (Kollam), Pathanamthitta, Kottayam, Harippad,Alappuzha, Ernakulum, Trissur, Palakkad, Mavelikkara, Kozhikode, Kannur, Malappuram, Wayanadand Munnar are the district wise procurement centres of HORTICORP. The HORTICORP also integratesits functioning and cooperates with other agencies like VFPCK or KERAFED. The table below showsthe quantity of produce handled by Horticorp for the last five years

Table 3.4: Quantity of produce handled by Horticorp for the last five years

Year Procurement from farmers Procurement from traders Total Procurement

Qty (in MT) Amt. (in crores) Qty (in MT) Amt. (in crores) Qty (in MT) Amt. (in crores)

2012-13 5721 10 7428 15 13,149 25

2013-14 13,862 28 14,224 31 28,086 59

2014-15 14,291 39 13,915 28 28,206 67

2015-16 12,478 19 13,167 24 25,645 43

2016-17 7003.92 18.38 14,333 32 21,336.92 50.38

1. Kerala KerakarshakaSahakarana Federation (KERAFED)

Being the core and apex institution of coconut cultivators of Kerala, this co-operative federationhas the highest position among the country’s coconut oil producers. For instance, the Krunagappallyunit of KERAFED in Kollam has a whopping capacity of around 200 tons per day. The federation

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ensures that the value-added products like coconut oil are of superior quality, having made from bestquality copra procured from the farmers and then marketed under the brand name of KERA.

2. Kerala State Co-operative Rubber Marketing Federation Limited (Rubber Mark)

The Rubber Mark was established in 1971, forming the supreme institution of the Rubbermarketing co-operatives in Kerala, India. There are a number of 38-member farmer societies thatcomes under Rubber Mark functioning throughout the state, along with active co-operation from thegovernment as well as the Rubber Board. Apart from procuring, processing and marketing to domesticcompanies and agents, the federation also engages in encouraging export markets through exportmarketing. For instance, the Rubber Mark had started trading with many Asian countries since 2002.

The specialty of the agency is that it is the only government agency in the country that procures naturalrubber straight from the producers, and engages in marketing them to various companies thatmanufactures tyres or shoe, after scientific processing.

3. Kerala State Co-operative Marketing Federation (MARKETFED)

The MARKETFED is an agency primary aimed at upliftment and empowerment of the farmersand agriculturalists. It was established on 24th December 1942 as the South Malabar District WholesaleCo-operative Store Ltd, which later, on 10th August 1960, was made into the MARKETFED, formingthe apex of marketing co-operative societies. The functioning of it is across the state, for the upliftmentof the farmers. Their major aims are to provide adequate marketing and infrastructural facilities to tiefarmers of the state, reasonable but fair prices for their products, elimination of middlemen and agentsby facilitating direct purchasing of the agricultural commodities from market, which can also stabilisethe product specific markets, etc. it also ensures uninterrupted supply of agricultural inputs at fairprices, credit flexibility and also export promotion by means of establishing export based marketingunits for products pepper, cardamom, cocoa, turmeric, etc.

The MARKETFED functions as an encouraging or upliftment agency of farmers also. Especiallyby dealing with several selected commodities like spices, arecanut, cashew, etc. along with otherproducts like rubber or tapioca.

4. Kerala Agro Industries Corporation Ltd.

The joint venture of the state and central governments has established the KAIC in 1968, withits major objective in ensuring technical advancement in agriculture. The institution acts as an apexbody in enhancing mechanisation and technological improvement in agricultural activities throughvarious measures like the establishment of several agro based industrial units, encouraging andpromoting the promoting the production and sale of value-added products, civil construction, betterinfrastructural development, etc.

It also engages in devising better and sustainable waste management solutions at low cost.Apart from these, the agency facilitates the sound implementation of numerous state and centralgovernment schemes for agricultural development.

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Central Government Organisations:

The majority of the Central government organisations that deals with agricultural marketingare crop or commodity-based ones like tea board, tobacco board, spices board, coffee board, etc.

5. Tea Board

Tea Board is working as a statutory body of the Ministry of Commerce of the CentralGovernment. The Board is established of 31 individuals (counting Chairman) taken from the Membersof Parliament, tea cultivators, tea traders, tea brokers, buyers, and agents of Governments from themajor tea producing states, trade unions and other worker’s organizations. The Board being reconstitutedat regular intervals of three years, has huge capacities and duties under the regulation of the CentralGovernment. The essential elements of the Tea Board are rendering financial and technically specializedhelp for cultivation, development, manufacturing and marketing of tea; export promotion; aiding researchand development exercises for increasing tea production and improvement of tea quality; extendbudgetary help with a restricted manner to the farm labourers and their wards through labour welfareplans; to promote and aid both financially and technically the unorganised small farmers sector;collection and upkeep of statistical information and publication and furthermore such different exercisesas are appointed occasionally by the Central Government. Tea Cess is required on all tea cultivated inIndia under Section 25(1) of the Tea Act, 1953. This Act accommodates for collecting cess up to 50paise per kilogram of tea produced in India. The Cess at present is levied by the Central ExciseDepartment and credited to the Consolidated Fund of India subsequent to deducting the costs ofcollection. Assets are discharged by the Central Government for Tea Board every now and then basedon the authorized spending plan after due assignment by the Parliament. Such funds are in turn utilisedfor meeting the non-plan outlays.

The regional office of Tea Board in Kerala is situated in Willington Island Kochi. The sector isreceiving financial support from the Board every year. Under the ‘small growers development scheme’346 lakh rupees was received as grant in aid to Self Help Groups and about 193.28 lakh was receivedfor promoting green tea during last year. With the financial support amounting Rs. 11 lakh a factory issetup in Idukki. For Replanting and plant rejuvenation, about 36 lakh rupees is dispersed. Around3635 small growers in Kerala are getting aid from Tea Board.

6. Coffee Board

Right from the 18th century, coffee plantations began to have major share in Indian commercialplantations. Post-World War II, after the coffee industry suffered from setbacks due to pests, diseasesand below optimum prices, the government of India put forward the Coffee Act VII in 1942 andestablished the Coffee Board, under the administrative capacity of the Ministry of Commerce andIndustry. The Board includes 33 members, from Chairman, Secretary, Chief Executive Officer tostakeholders concerned with coffee trade interests, curing establishments, interests of labour andconsumers, representatives of governments of the principal coffee growing states, and Members ofParliament.

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From 1996, the Board remains a facilitating and aiding agency for coffee cultivators andespecially for the sector’s value chain, engaging itself in major functions like promotion of researchand development, technical advancement, improvement of quality, facilitating aids to growing coffeesector, export promotion as well as domestic marketing to coffee products, among others. It emphasisesobtaining of higher value returns in the case for exports, better product quality and quantity and alsothe encouragement to domestic marketing.

Post 1996, the functions began to be deregulated, and the board gave much emphasis to ensuringfacilities like permits for Indian coffee exports, along with issuing of the Certificates of Origin as partof the International Coffee Agreement. This is realised by the 395 coffee exporters registered with theBoard. The major market destinations for Indian coffee include the USA, Japan, Australia, Canada,New Zealand, Russia, etc., the trade to which are made easier with incentivised export possibilities.

Kerala is the second largest coffee producing state in the country with predominantly robustcultivation in small holdings. In Kerala, Coffee Board regional offices are located in the districts ofIdukki and Wayanad. In order to develop appropriate technologies for Robusta suitable for this region,a regional research station was established during 1977-78 in an area of 166 hectares near Chundalevillage in Wayanad district of Kerala. The station has 30 hectares of coffee research farm, 15 scientificand technical staff and adequate laboratory facilities to pursue research in various disciplines.

7. Spice Board

The Spices Board of India is the apex organization formed by the Government of India in 1987for the development of spices sector in the country. This organization comes under the purview ofMinistry of Commerce and Industry of the Union Government. In view of Kerala’s importance as amajor producer of spices and Kochi as a major traditional port for export of spices, the headquarters ofthe Board is located in Kochi, a city in the central part of the state.

In the course of working of the Board, it has been trying for adding additional divisions orcentre and taking up newer activities. As a part of infrastructure development, Research Centres havebeen established. Indian Cardamom Research Institute (ICRI) was established by the erstwhileCardamom Board in 1978 at Myladumpara in Kerala and is now under the control of the Board. Theinstitute organized three more research stations, one at Hassan district of Karnataka, another in Dindigalof Tamil Nadu and the third at Gangtok in Sikkim. Research stations in Hassan and Dindigal concentrateon location specific research for small cardamom growing areas while the station at Gangtok initiatesresearch effort in large cardamom in the areas of Sikkim and Darjeeling district of West Bengal. TheResearch Station at Myladumpara in Kerala has grown into a major one with the setting up of separatedivisions for Crop Improvement, Biotechnology and Post-Harvest Technology. In the year 1989 theBoard made another organizational expansion by starting Quality Evaluation Laboratory at its headoffice with the intention of facilitating quality checking of the spices. The Laboratory offers analyticalservices to exporters, traders, farmers and research organizations in spices and spice products. It alsoundertakes analysis of consignment sample under the mandatory inspection of the Board. To empowerthe growers of spices and ensure better price realization, the Board has established a Spices Park at

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Chinaware, Madhya Pradesh in the year 2008. The Board formed another Park at Puttady, Idukkidistrict in 2011. Spices Parks are primarily intended to benefit the growing community through qualityimprovement, grading, packing, warehousing, etc. for value addition. Exporters can also set up theirunit in the Parks for processing spices under the terms and can avail storage and credit facilities fromthe Park.

There have been attempts by the Spices Board to expand its areas of activities as well as tomodernize them in tune with the changing times. Training on GAP, World Spice Congress, e-marketing,e-auction, setting up of web-sites, office mechanization, etc. are examples for these efforts.

8. Coconut Development Board

Coconut Development Board is a statutory body established by the Government of India forthe integrated development of coconut production and utilization in the country with focus onproductivity increase and product diversification. The Board which came into existence on 12th January1981, functions under the administrative control of the Ministry of Agriculture and Farmers Welfare,Government of India, with its Headquarters at Kochi in Kerala and Regional Offices at Bangalore inKarnataka, Chennai in Tamil Nadu, Guwahati in Assam and Patna in Bihar. There are five State Centressituated at Pitapally in Odissa, Kolkata in West Bengal, Thane in Maharashtra, Vijayawada in AndhraPradesh and Port Blair in the Union Territory of Andaman & Nicobar Islands. The Board has 12Demonstration cum Seed Production (DSP) Farms in different locations of the country and now 10farms are maintained. A Market Development cum Information Centre has established in Delhi. TheBoard has set up a Technology Development Centre at Vazhakulam near Aluva in Kerala and a Fieldoffice at Thiruvananthapuram in Kerala.

It aims at performing the following functions like working for the promotion of coconut industryin Kerala, aiding financially for increasing the area under cultivation of coconut, imparting technicalaid and advice for coconut cultivators, promoting advanced farming techniques in coconut farming,ensuring reasonable and incentive prices for coconut products to farmers, providing marketing assistanceand tips for expansion of market, export and import regulations for coconut products, financiallyassisting various schemes for improving and promoting the quality and quantity of coconut productionin the state, facilitating research and collection of information on coconut production and marketing,publicity activities and providing information regarding the coconut and its products, and also fixinggrades and standards for the coconut products.

9. Kerala State Warehousing Corporation

The Kerala State Warehousing Corporation was established in 20th February 1959, under theWarehousing Companies Act of 1962. The KSWC acts as a licensed corporation and about half of itsshare capital is held by the Central Warehousing Corporation, and the rest of the half by the Governmentof Kerala.

With head office (Ernakulam), three zonal offices, nine regional offices and 60 warehouses across thestate, the agency functions in enhancing the storage and warehousing facilities for agricultural products.

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There are no product wise distinction and almost all types of agricultural commodities are stored intheir units. The major objective is to ensure scientific and well-developed storage facilities foragricultural products, along with easy credits and holding power to the farmers, helping them in gettinga fair price for their products. Thus, a huge amount of product waste can be avoided. Apart from this,it also issues a warehousing receipt that is negotiable with provision to pledge it any bank to thefarmers who avails its facilities. The receipt ensures quantity, better quality, market value and eveninsurance from fire or theft, to the farmers who avails its facilities.

10. National Agriculture Market (e-NAM)

The major online trading platform for agricultural commodities in India is National AgricultureMarket or eNAM.The market encourages farmers, merchants and consumers with web-basedexchanging of agricultural items. Initiated by the Ministry of Agriculture, Government of India, theelectronic market platform for the country was introduced on 14 April 2016 by Prime Minister ofIndia. The Portal is overseen and controlled by Small Farmers’ Agribusiness Consortium (SFAC) withthe innovative technical support from, NFCL’s iKisan division. The eNAM is connected with 585markets (APMCs) in 16 states and 2 territories, with more than 45 lakh farmer enrolment in 15 states.The market is facilitating and aiding traders and exporters in obtaining quality items in mass, at oneplace and guarantee straight and transparent money related exchanges.

The Government intends to interconnect more than 22,000 GrAMs, neighbourhood local farmermarkets, with the domain. To give better grading services and measuring administrations, the AgricultureDepartment is facilitating through the AGMARK for proper certification and affirmation. In excess of400 agricultural markets in 13 States have joined the eNAM service since it was initiated in April2016. The Union government expects the regular e-market platform to be sent in 585 wholesaleagricultural markets all over the nation over by March 2018 (The Hindu, 2019).Dissimilar to mostdifferent States that are a piece of eNAM, Kerala doesn’t have an Agricultural Produce MarketCommittee (APMC), an administrative and regulatory system for agricultural trade. However, thestate will not find it an obstacle in benefitting from the services of eNAM. Brokers and commissionagents who have been utilized to physical money exchanges and managing in cash than onlinetransactions would need to be taught and convinced to take up online transactions.

To summarise, agriculture marketing infrastructure facilities in the state is provided by WholesaleMarkets, Wholesale Assembling Markets and Rural Periodical Markets. As the state has not implementedAPMC act, these markets do not satisfy all the features and regulations envisaged in the act. However,all these markets are regulated by State/ LSG institutions, and thus monitoring is ensured. Along withthese markets, both Central and state government has taken initiative for crop specific marketing, andthe farmers are benefitted from these additional marketing infrastructure. Major crops of Kerala includingcoconut, pepper, coffee, tea and vegetables has separate marketing infrastructure systems.The detailsof the infrastructure facilities available to farmers and traders along with requirements is to be examinedin detail and the following chapters is an attempt at this end.

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CHAPTER 4

Agriculture Marketing Infrastructure in Kerala:An Analysis of Wholesale Markets

The prime objective of the study- to assess institution wise infrastructure associated withagriculture marketing functions- is accomplished by selecting nineteen markets as samples (twowholesale markets, ten wholesale assembly markets/Rural periodical markets, six farmer’s marketsand Spices Park) and collecting data from relevant stakeholders relating to production, distribution,regulatory and consumer subsystems. The sample was selected in such a way that the samples sufficientlyprovide data relating to crop specific infrastructure, as for analysis, the major crops produced in Kerala-pepper, cardamom, coconut, banana, tapioca and vegetables- was selected for generating an in-depthunderstanding of agriculture marketing infrastructure.

The S-C-P (structure- conduct- performance) model is adopted for analyzing the data collectedfrom sample survey. The information is generated by employing both qualitative and quantitative toolsfor data collection. Data relating to structure and conduct of markets is largely derived from the indepth and unstructured interviews conducted with various stakeholders and through Rapid RuralAppraisal while analysis relating to market and market infrastructure is based on the sample surveyusing interview schedules. Chapter IV deals with the Whole sale markets governed by State Government,Chapter V with WAM/RPM which is governed by the LSG. Chapter VIand VII deals with the cropspecific infrastructure where Farmer’s markets run by VFPCK and Spices Park is analysed. Fromeach market, data is collected from farmers, traders, administrative officials and consumers.

4.1. Structure-Conduct-Performance Analysis

The framework Structure, Conduct and Performance paradigm (SCP) is used as an analyticalframework, to make relations amongst market structure, market conduct and market performance.Structure of each market is determined by the enabling environment which include the institutionalenvironment and market infrastructure and this in turn reflects in or determines the conduct andperformance of markets. Analysing the institutional environment and infrastructure can reveal howthe structure of market is determined and is maintained. Especially, the number of sellers and buyers,

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product differentiation and entry restriction are majorly dependent on the infrastructure facilities eachmarket possess and vice versa. Structure of market determines the conduct and performance of eachmarket. Conduct of market is studied by analysing the process of agriculture marketing in which thedistribution channels and market linkages are explored. Performance of markets is assessed based onvolume of revenue generated and transactions. Performance is also understood in terms of theinfrastructure facilities available in all markets. Also, the perception of all stakeholders with regard tofacilities in market and additional requirements that may improve the performance of market is analysed.

4.2. An Analysis of Wholesale Markets (Secondary data analysis)

Regulated marketing system in India is an aftermath of British legacy and even though APMCact was not passed in Kerala, the markets in Kerala are under the monitoring of Government. Wholesalemarkets are governed by Department of Agriculture Development and Welfare. Wholesale marketswere established with a view to provide infrastructure for trading by ensuring facilities for storage anddirect auctioning. This can be seen as first step towards e-nam where farmers are coming in directcontact with traders/consumers by avoiding middlemen using the possibilities of technology and thusable to sell their products directly. With a vision to ensure basic infrastructure for agriculture marketing,six wholesale markets were established in Kerala, of which two are in Trivandrum district.

The two Wholesale markets in Trivandrum, Rural Agriculture Wholesale Market, Nedumangadand Wholesale Market, Anayara were established during 2003-04 with the support from EuropeanEconomic Community and both are currently governed by Department of Agriculture Developmentand Farmer’s Welfare, Government of Kerala. PWD and Nirmitikendra were the agencies whoimplemented the project. Both markets have a mission to bring together the farmers and traders togetherso that efficient marketing of agriculture products can take place. Following is an analysis of theinfrastructure and institutional facilities in both markets and its impact on the structure, conduct andperformance of market based on primary data collected from various stakeholders.

4.2.1. Infrastructure Facilities in the markets

Infrastructure facilities in a market primarily determine the efficiency of agriculture marketingsince without essential facilities trade cannot take place. For a good market, basic infrastructure suchas auction hall, marketing stalls, market yard, facilities for storage and value addition, and servicefacilities is a necessity. Understanding the dearth of markets where farmers can sell their productsdirectly to traders, wholesale markets were established. The whole sale markets were set up with anaim to create a market with all modern infrastructure facilities and thus can act as a model market inKerala. The markets were planned such a way to make it as an agri-business centre where auction ofagriculture produce from the locality take place and facilities for storage, grading, standardization andvalue addition are available. The market was provided with essential human and physical capital for

efficient functioning. Following table 4.1 shows the infrastructure facilities in the two wholesale markets.

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Table 4.1: Infrastructure facilities

SL. No. Basic Facilities Anayara Nedumangad

1 Auction Hall 800sq.m 700 sq.m

2 Marketing stalls 3 36

3 Cold Storage 6 6

4 Cool chambers 6 0

5 Bunk Shops 84 10

6 Weigh bridge 4 1

7 Processing unit 0 1

8 Godown 0 1

9 Office Building 1 1

10 Toilet complex/rest room 1 1

11 Electrical room 1 1

12 Dormitory 1 1

13 Camera 23 0

Source: Primary data

With regard to the physical infrastructure, the most important facility is auction hall which isfunctioning effectively. The auction hall is well roofed and tiled and has good ventilation. Price index,details of online payment to farmers, guidelines, name of farmers and traders are displayed in thenotice board. Crop specific infrastructure is arranged for banana, which is the major crop. There areelectronic weighing machine and mobile tray to move the auctioned goods. Toilet facility and drinkingwater facility is arranged adjacent to the auction hall. And thus, the two markets provide to farmers thebasic facility to conduct trading.

Facility for storage is established in the market. Both markets have cold storage facility, butthey are not being used. Primary issue related to this is perishability of produce. Once they are takenoutside the cold chamber, they suddenly perish since cold storage facility is not available duringtransporting the products. So, it is important to keep the entire supply chain weather sensitive. Similarly,the high electricity charges are another issue, so that solar energy or other green energy sources has tobe experimented.

The markets have bunk shops which has been rented out. However, in Nedumangad there areten small bunk shops out of which only one is rented out. Services such as toilet facility, guest house,drinking water are available in both markets. And weigh bridge, security and office building are

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functioning. The market is surrounded with a compound wall and both the markets are easily accessiblesince they are situated near to town. Anayara market has surveillance camera on its campus.


The administrative structure of the market includes both government officials and representativesof farmers at the executive council. This combination is adopted to ensure the participation of farmersin the functioning of markets so that quality can be ensured. Following table 4.2 shows the details ofstaff strength in both the markets.

Table 4.2: Details of staff strength

Designation Anayara Nedumangad

Secretary 1 1

Assistant secretary 1 1

Accountant/ junior superintend 1 1

Clerk 2 1

Attender /DTP 1 1

Driver 1 1

Part time sweeper /cleaning 8 1

Security 3 3

Auction Assistant 4 0


The staff strength in both the market include a Secretary, Assistant secretary, Accountant, clerk,Attender who are appointed by the government as permanent staff. In addition, driver, sweeper, securities,casual labours and auction assistants including computer operators are working for daily wages forfacilitating market services. Casual labors are paid Rupees 660 per day and auction assistant andcomputer operator have Rupees 725 per day. Around 1.5 lakhs rupees is spent in the markets to pay thewages of casual labors per month, which amounts to 48 lakhs rupees per year and they are met fromthe market funds. It is visible that for paying the salary of staff, who are not farmers, more amount isspent from the market fund.

It is reported by some farmers that the farmer representatives are not paid even an honorariumfor being a part of the process of administrative structure and they are often neglected when it comesto decision making process. It was mentioned by a few farmers that, by setting up the market actualbenefit is received by staff, who are getting a good salary, while the farmers are not getting the revenueof what they sell in the market correctly. And there were opinion differences with the administrativeofficials and the farmers with regard to establishing basic infrastructure facilities. It was said that inspite of the staff strength, the infrastructure facilities are not maintained neatly. Farmers were of the

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opinion that there are minimum facilities in the auction hall and the nearby surroundings are notmaintained well and unhygienic, and they lack a platform to raise their voice. However, farmers inAnayara market, organized in clusters are more comfortable and maintains a good relation with theadministrative staff. Together they have more bargaining powers in price fixation and in committeemeetings, compared to more fragmented or individual farmers in the Nedumangad market, which is arural market. Similarly, the staff except the Agriculture officer does not have any know how with theagriculture and this creates issues during the time of auction, especially in mediating the gradingprocess. Also, input supply activities and creation of linkages which is expected to be led by theadministrative staff is not taking place as they are not having a managerial expertise in matters relatingto agriculture, as per the views of the farmers.

4.2.3. Structure of wholesale markets

The Anayara Wholesale market is established in 24-acre area and around 300 farmers and 30traders are registered in the market for trading activities. Out of these, 80 farmers and 15 traders areactive in the day-to-day auction process. The three major Farmer Clusters namely Pallichal Cluster,Venganoor Cluster and City Cluster which consist of groups of farmers are active in the auction processand there is a linkage between the Farmers, official and traders which ensure uninterrupted supply ofagriculture produce and demand forecasting. Nedumangad wholesale market started its sales operationsince 2011. About 1400 farmers and 265 traders are registered in the market and around fifty farmersand twenty traders participate daily in the auction process. Major crops for sale include banana, tapioca,coconut, ginger and vegetables (cow pea, ladies finger, ivy gourd, bitter gourd, passion fruit, yam,spinach). Major Traders in these markets include Well Gates, Amrutham, Kunnil Hyper market, BigBazar and individual retailers.

Farmers and traders have to register in the market in order to enter into trading activity, and aregistration form is available in the market for both farmers and traders. Farmers have to fill the formand submit it to the market along with a testimonial given by Krishi bhavan and for both a membershipfee of 250 rupees is charged for lifetime membership. In addition, for traders and farmers who does nothave a life time membership, the market charges Rs. 250 as entry fee. Moreover, two percentage ofvalue of quantity sold for each commodity in auction is being charged as a service charge from bothfarmers and traders in the market. This amount is utilized for giving salary for temporary staff includingcleaning and auction staffs, clerk and to pay wages of loading workers. As an income generationactivity shops are leased to vendors for a monthly rent of Rs. 10000/-. In contrast, Wholesale market inAnayara doesn’t charge registration fee and cess from both traders and farmers. Instead, they have tosubmit a certified application form from agricultural officer to the market in order to get registration.Earlier, a cess was charged from farmers and it was redistributed as bonus, however this practice hasceased. Regular inspections are conducted by the market authority to the fields at a three-monthinterval, so as to ensure that the farmers are bringing their own produce. The institutional environmentrightly reflects in the rules related to registration; Unlike Nedumangad market, in the Anayara marketwhere huge fund is mobilized through renting of shops, registration fee is not charged and the stress is

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more on including more genuine farmers which is ensured by field inspection. This ensures healthycompetition among farmers to produce more and in increasing the trade volume, and to prevent importedvegetables coming to market for auctioning.

In both markets, Horticorp is a major and regular trader and they play an active role in pricedetermination and procuring surplus amount in the market. Price is determined jointly by the farmerrepresentative, trader representative and Horticorp, in par with average commodity price in the othermajor markets such as Chala, Thembammuttam, Kalliyur and Horticorp. Auction starts with callingone rupee above the base price. However, in Nedumangad, farmers argue that they are not part of pricediscovery mechanism and the administration does not have genuine farmers as representatives in theexecutive committee. Horticorp, being the single largest trader in the market, act as a monopoly in themarket, as during harvesting season/ bumper crops, farmers do not have any other choice but to sell theproducts to Horticorp, for which they are not paid on time. Also, it is predetermined that Horticorp willprocure the remaining amount (as per the instruction from Agriculture Department), competitive auctionis not taking place for many products and market officials do not try to bring in more traders, by whichfarmers may get a better price, which is above the base price fixed by Horticorp. The pendency ofpayment is very high in Nedumangad market and the farmers in Nedumangad has approached theHon’ble high court for receiving the pending payment.

4.2.4. Conduct of the market

Both Anayaramarket and Nedumangad market conducts auction in three days in a week. Anayaramarket auction is on Sunday, Tuesday and Thursday and in Nedumangad, auction days are Monday,Wednesday and Friday. Around six to ten locally produced crops, mostly vegetables, banana and tapiocaare marketed and the volume of trade is about 400 metric tons annually.

Price index of each produce, details of money credited to farmer’s account are displayed in thenotice board of the auction hall. The auction take place in the presence of market staff and electronicweighing machine is used. Commodities are graded in to first, second and third quality and differentialbase price is fixed. The unsold commodity is procured by Horticorp. Market authorities collect theamount of commodity sold from traders and disburse the amount to the farmer’s bank account withinone week. Payment from retail traders normally take four to five days to reach farmers while fromHorticorpreaches the farmers very late. Horticorp takes a time up to 4 months for paying money tofarmers. Details of auction is recoded and digitized and the data is available to both farmers andtraders. In Nedumangad market each sold quantity is kept in the mobile tray and this helps in carryingthe commodities inside market.

With regard to the financial support to meet marketing cost to farmers, markets have adopteddifferent stance. Anayara market pays the loading and unloading charges and transportation incentiveworth of Rs. 500 is given to two farmers who bring the produce of their clusters to the market. InNedumangad market transport subsidy was given in the earlier days, but it has ceased now. An incentiveof 1.5 rupees for each one-kilogram agricultural products was given as transportation subsidy up to

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those farmers having a distance limit of 25 Km from farming area to market. After that, an amount of2 rupees would be given up to 50 Km. There exists dispute among trade unions and farmers regardingloading and unloading charges in Nedumangad market and some of the farmers have filed a caseagainst the trade unions, that the farmers should be allowed to load their products independently.

Major revenue share in each market includes the rent and security deposit collected from shopowners in the market to whom the shops are leased. And thus, a market fund is maintained. In addition,Anayara market has a ‘Revolving Fund’ that helps them to meet the day-to-day expenses, whereasNedumangad market does not have such facility. The maintenance of existing infrastructure is donewith the revolving fund in the Anayara market.

In order to ensure the quality of products sold, Nedumangad market has taken some initiatives.Pesticide residue test is conducted with the help of Agriculture University in three-month interval.However, the test is expensive and the results are received only after two months which prevents anyimmediate action.

Many functional and administrative issues can be found in the market relating to conduct ofmarketing activity. One major issue sighted by the farmers in each market is the delay in disbursementof money to the farmers account by Horticorp. Accounts shows that around one crore rupees has to begiven by Horticorp to the farmers as arrears of past four months. Lack of accuracy in payment discouragefarmer’s participation in markets. And as the online trading facility is not established in the markets,only few traders can take part in the auctioning process. If there is an online auction platform farmercan reach to more traders, which may reduce the dependency on Horticorp.

In addition, lack/ non functioning of storage/cold storage facility is an important problem. Inboth markets, cold storage facility is not functioning. And it is said that once you take out the productsfrom cold storage, as there is no network of air-conditioned transport facility the vegetables perishimmediately and so there is no use of cold storage. Also, markets are not able to pay the high electricitybills arising from functioning of cold storage. So, it is important to make investment in agricultureinfrastructure more evenly to affect the entire supply chain, and the capacity of the newly builtinfrastructure may not have practical use. An initiative to make the storage weather insensitive shouldstress on making essential facilities on both farmers and traders’ stake, so that the entire supply chainget modernized.

Another issue is lack of transparency and democracy in governance of markets. In Nedumangadmarket the executive committee in which farmers are members are not summoned for about six months.Similarly, farmers report that the actions taken by the market governing body is not finding results totransfer the arrears to farmers. And farmers complain that they are not getting any training or anyinitiative is not taken for value addition or input supply. Since the transport subsidy is ceased, farmersfind it difficult to bring in produce to market. Lack of transportation facilities are the most importantbottleneck that the farmers face.

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The markets also face competition from other super markets. Since it is government ownedand controlled, flexibility and autonomy in decision making is lacking which make it difficult for themto deal with new competition in the markets. Also, disputes of farmers organization with Kerala HeadLoad Workers Association are hindering the smooth functioning of the markets.

Fixation of output quota by market officials is another important issue. Due to the lack ofsufficient traders, the market officials limit the transaction quantity of commodity from farmers. Forexample, output quota for banana is 50 bunches of bananas from per farmer per market day. As coldstorage facility is not functioning, additional quantities perishes and leads to output loss for farmers.So that it is important to develop infrastructure for value addition. This can help farmers to generateadditional income.

Similarly, facilities for grading and standardization are very much important. Currently thereexists no guidelines relating to grading in the market. And farmers have the opinion that many firstquality products are graded as second and third quality by Horticorp and market officials, and lowerprice is fixed for these products. This compels farmers to sell products at a lower price than theirexpectation.

Performance of Wholesale Markets – Primary Data Analysis

Performance of the markets is understood by examining the benefit that farmers and tradersderive out of the market. As such the cultivation details of the farmers, the revenue generated, themarketing cost etc. are analysed. Similarly, the trade details of the traders and their marketing marginis also examined. Along with this detailed examination of the infrastructure status in the markets isalso done. In order to have an understanding of the existing infrastructure in the markets, the opinionof the major stakeholders regarding the same is required. Data is collected from ten farmers and tentraders each from both Anayara and Nedumangad Whole Sale Market with regard to their sales andmarketing details and also about the available infrastructure and utilisation. The first sub section providesthe analysis of the data collected from farmers, second on the data collected from traders and third onthe infrastructure analysis based on the views of both farmers and traders.

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Section A

4.3. Wholesale Markets – Analysis of Farmer Details

As a prelude, the socio demographic- economic details of the farmers is given. (Detailed tablesare provided in Appendix 1). The average age of a farmer registered with Anayara WM is 51.8 and thatof Nedumangad WM is 47.9. The sample consists of only one female farmer and she is fromNedumangad market. For 80 per cent of registered farmers, their main occupation is agriculture.Educational background of the farmers reveals that majority belong to SSLC or below level ofeducational qualification.

Land size distribution of farmers reveal that 50 per cent have small land holdings, 20 per centhave medium size land holdings and 30 per cent have large size holdings. Sixteen farmers have availedloans and the mean amount of loan for small, medium and large farmers are Rs.1,80,636, Rs.2,54,628and Rs.5,47,487 respectively, the average liability for the total sample being Rs.3,36,703. On an averagea farmer in Anayara has been selling in the WM since last 5.7 years and 6.1 years in Nedumangadmarket.

Year wise quantity and value of crops cultivated, amount used for own consumption and averagequantity and value of sales in WM along with RPM and other markets for each crop is given inAppendix 1. Separate average value for small, medium and large farm size holders is given for bothAnayara and Nedumangad Market. Annual sales on an average per farmer is 5696 kilos for tapioca(Rs.1,26,486), 13194 kilos for banana (Rs.2,99,324), 2650 kilos for ginger (Rs.1,33,250), 1260 kilosfor cowpea (Rs.72,962), 511 kilos of spinach (14,994), 1731 kilos of cucumber (Rs.38402), 5603 kilosof snake guard (Rs.1,35,979) and 3474 kilos of bitter guard (Rs.2,11,034).

Table 4.3: Farm size wise value of crops cultivated and sold in markets

Total Value

Own Consumption WHM WAM RPM Other mkt Total per year

Anayara

Small µ 7743.333 154418 14695 208540

N 3 2 2 3

SD 4132.219 165228.2 15054.3 138950.7

Medium µ 3210.5 486949.5 42218 511269

N 2 2 1 2

SD 651.2454 390166.7 . 420670.6

Large µ 6481 804035.2 369500 1143944

N 5 5 1 5

SD 2169.389 274511.6 . 342316

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Total µ 6205.6 589212.3 369500 23869.33 736787.8

N 10 9 1 3 10

SD 2959.24 372610.5 . 19126.45 521965.8

Nedumangad

Small µ 2506.143 247730.3 1170 34500 110116 286922

N 7 7 1 1 2 7

SD 2044.835 221323.8 . . 842.8713 257959.8

Medium µ 9462 750440 70000 13714 832959

N 2 2 1 1 2

SD 972.9789 248632.9 . . 144341.7

Large µ 35955 2434050 1160245 3630250

N 1 1 1 1

SD . . . .

Total µ 7242.2 566904.2 410471.7 34500 77982 730462.2

N 10 10 3 1 3 10

SD 10631.85 716661.4 650234.1 . 55660.91 1065988

Total

Small µ 4077.3 226994.2 1170 34500 62405.5 263407.4

N 10 9 1 1 4 10

SD 3603.05 204557.5 . . 55774.87 223799.5

Medium µ 6336.25 618694.8 70000 27966 672114

N 4 4 1 2 4

SD 3672.059 307395.3 . 20155.37 316903.1

Large µ 11393.33 1075704 764872.5 1558328

N 6 6 2 6

SD 12188.15 709302.5 559141.2 1060203

Total µ 6723.9 577471.2 400228.8 34500 50925.67 733625

N 20 19 4 1 6 20

SD 7614.09 564481 531309 . 47581.9 816900.6


The value of all the crops sold in WM is aggregated and land size wise distribution of value ofsales in each market is given in table 4.3. Out of the twenty who bring their crops to the WM, four alsosell in WAM, one sell in RPM and six sells in other markets including VFPCK. Value of output worthRs.7,33,625 is provided by each farmer per year, of which Rs.4,00,228 is generated by sales in theWM.

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4.3.2. Distribution of buying and selling activities

Sixty-five per cent of the farmers undertake agricultural activities alone but 35 per cent are engaged inagriculture activities as part of cooperatives. Sixty per cent sell agricultural produce around the yearand 50 per cent face difficulty in finding buyers near to the locality.

Table 4.4: Distribution of buying and selling activities

How do you undertake agricultural trade activity?

Number Percent

Alone 13 65.0

Cooperative 7 35.0

Total 20 100.0

Do you sell agricultural produce around the year?

Yes 12 60.0

No 8 40.0

Total 20 100.0

If no at what period of the year do you sell/buy?

During bumper crop 8

Do you face difficulties in finding buyers near to locality?

Yes 10 50.0

No 10 50.0

Total 20 100.0


The sales details of different commodities from tapioca to chilly including gross weight, netweight, floor price, auction rate, auction amount, market fee, loading charge and trader and farmeramount is provided in tables given in Appendix 1. It is inferred from the tables that farmer incurmarket fee and loading charges in Nedumangad market, whereas it doesn’t exist in Anayara market.The floor price and auction rate vary within a range of Rs.36 to Rs.38 in the case of banana to Rs.65 toRs.70 in the case of cowpea. For Anayara market, the trader amount and farmer amount are samebecause market fee and loading charge is not levied from the farmer. Whereas, in NDD both these arereduced from the farmer before the payment to him is made and hence the difference between traderamount and farmer amount.

4.3.3. Expenditure on selling the products

The major expenditure that the farmers in Nedumangad have to incur is loading charge andmarket fee. The average amount spent by farmers in Nedumangad as market fee is Rs.2367 and loadingcharge is Rs.1429/-.

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Table 4.5: Expenditure on Selling of total products during last month (Rs.)

Markets Market fee Loading charge Trader amount Farmer amount

Anayara µ 288893 288893

N 10 10

SD . . 257071.7 257071.7

Nedumangad µ 2367.3 1429.9 189494.1 114733.5

N 10 9 10 10

SD 2772.4 1763.1 245906.9 134160.1

Total µ 2367.3 1429.9 236577.8 197230.1

N 10 9 20 20

SD 2772.461 1763.114 249412.6 215297.4


4.3.4: Reasons for sale in WM

The major reasons identified for sales in the corresponding Wholesale Market is the possibilitythat extensive quantity can be sold, better prices, regularity of consumers, government market, existenceof auction platform, better transportation facilities and incentives.

Table 4.6: Reason for sale in the particular market

Anayara Nedumangad

Reasons Number Percent Number Percent

Extensive quantity can be sold 10 100 7 70

Government Market 9 90 1 10

Price better 9 90 5 50

Regular consumer 10 100 8 80

Better Infrastructure 10 100 10 100

Storage 7 70 2 20

Auction Platform 10 100 9 90

Transport facilities 10 100 10 100

Incentives 10 100 9 90


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Table 4.7 gives the details of the number of pending days for payment as reported by the farmers. Onan average, the pending days in Anayara WM is 105 days and in Nedumangad WM is 34 days. On anaverage, Rs.2,29,787 is the pending amount to be received by the farmers in the WM. The main traderthat has to pay the pending payment is Horticorp.

Table 4.7: Number of pending days

Markets Particulars N Minimum Maximum Mean SD

Anayara Number of pending days 10 0 180 105.6 74.25

Nedumangad Number of pending days 10 14 60 34.4 14.38


Table 4.8: Details of payment to be received

Goods Anayara Nedumangad Total

µ N SD µ N SD µ N SD

Tapioca Qty sold 41 1 . 2409.333 3 2591.42 1817.25 4 2424.711

Amt: pending 906 1 . 47198 3 49099.33 35625 4 46291.47

Banana Qty sold 4073 1 . 1378.5 10 1553.045 1623.455 11 1682.493

Amt: pending 93679 1 . 50028 10 53266.43 53996.27 11 52218.77

Coconut Qty sold 17 1 . 17 1 .

Amt: pending 765 1 . 765 1 .

Ginger Qty sold 625 2 813.1728 625 2 813.1728

Amt: pending 28726.25 2 33649.44 28726.25 2 33649.44

Vegetables Qty sold 186 1 . 1897 4 1835.893 1554.8 5 1764.478

Amt: pending 4650 1 . 68796.25 4 55682.4 55967 5 56110.12

Total Amt: pending 324525 8 333272.7 121515.2 7 162660.9 229787.1 15 279042.7


4.3.5. Price Determination

Details of price determination in each market, as opined by the farmers is given in table 4.9.Farmers view that both the market officials, farmer representative and Horticorp sets the price inAnayara and Market Officials determine price in Nedumangad after examining the price in differentmarkets. The process of floor price determination is done by negotiation in Anayara market. InNedumangad market farmers opine that market officials determine the price based on prices in othermarkets. Majority of farmers in Anayara are satisfied with the price determination mechanism, howeveropposite is the case with the farmers in Nedumangad. Majority do not have knowledge about the price

67

before they bring the commodity to the market. Majority also feel that there is compulsion to sellbelow the market price.

Table 4.9: Price determining factors Who sets the price at market? Number Percent

Anayara Market officials 1 10

Hoticorp 1 10

All the above 8 80

Total 10 100

Nedumangad Market officials 8 80

Hoticorp/Spice Board/VFPCK 2 20

Total 10 100

Price determination

Anayara Negotiation between farmers, Horticorp mediated by market officials 9 90

Market officials based on price in other markets 1 10

Nedumangad Market officials based on price in other markets 10 100

Satisfied with the price determining mechanism

Anayara Yes 8 80

No 2 20

Total 10 100

Nedumangad No 10 100

If_no, what are the reasons?

Anayara Price is very low 1 50

price is unanimously determined by officers 1 50

Nedumangad Price is very low 9 90

price is unanimously determined by officers 1 10


Table 4.10: Information about the market price

Knowledge about the price before you bought the produce to the market

Number Percent

Anayara Yes 2 20

No 8 80

Total 10 100

Nedumangad Yes 2 20

No 8 80

Total 10 100

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4.3.6. Effectiveness and timeliness of information

Farmers provided opinion regarding the effectiveness and timeliness of the price information.Effectiveness and timeliness are rated high in the Anayara market, but it is rated low in Nedumangadmarket.

Table 4.11: Effectiveness and timeliness of information

Effectiveness of the information Number Percent

Anayara Effective 9 90

Undecided 1 10

Total 10 100

Nedumangad Effective 1 10

Undecided 3 30

Not effective 6 60

Total 10 100

Timeliness of the information

Anayara Timely 9 90

Undecided 1 10

Total 10 100

Nedumangad Timely 1 10

Undecided 4 40

Not timely 5 50

Total 10 100

If yes, how did you get market price information

Anayara Cooperative 1 50

colleagues 1 50

Nedumangad colleagues 2 100

Compulsion to sell below the fixed prices

Anayara Yes 8 80

No 2 20

Total 10 100

Nedumangad Yes 9 90

No 1 10

Total 10 100



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Table 4.12: Details of Transportation cost occurred for marketing

Markets Daily cost Monthly cost

Anayara Mean 399.7778 5364.444

N 9 9

SD 549.259 7033.539

Nedumangad Mean 453 3942

N 10 10

SD 439.875 5310.52

Total Mean 427.7895 4615.79

N 19 19

SD 481.2202 6051.466

The average monthly transportation cost for a farmer is Rs.5364 in Anayara and Rs.3942 inNedumangad. Reimbursement facility for transportation is available in all markets. The reimbursementamount is Rs 1.5 per kg up to a distance of 25 kilometers and 2 Rs above that. Data shows that inAnayara, since the farmers are operating in a cluster it is economic load that they bring to the marketand hence reimbursed amount is greater than the transport cost. However, in the case of NDD marketindividual farmers bring their own products and the reimbursement amount does not meet their transportcost, as opined by the farmers.

Total cost incurred for marketing shows that the total cost per month is Rs.5475 and Rs.7568for a farmer in Anayara and Nedumangad respectively.

Table 4.13: Total cost incurred for marketing

Markets Daily Monthly

Anayara Mean 436.7778 5475.556

N 9 9

SD 541.491 6977.871

Nedumangad Mean 866.801 7568.076

N 10 10

SD 764.9141 9647.748

Total Mean 663.1058 6576.882

N 19 19

SD 686.6779 8326.59


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Section B

4.4. Whole Sale Market – Analysis of Trader Details

Information regarding the structure-conduct and performance of Whole Sale Market and viewsregarding the available infrastructure and analysis of infrastructure requirement can become complete,only if it is assessed from the part of the traders also. As such ten traders each form Anayara WM andNDD WM is selected. The general information, details of trade activity etc. is given below.

Of the total samples, 75 per cent are male, regarding their educational qualifications, 55 percent have SSLC, 25 per cent higher secondary and 15 per cent degree with not much difference betweentraders in Anayara and Nedumangad. The modus operandi of engaging in trade activity is alone for 50per cent and 70 per cent of traders in Anayara and Nedumangad. Out of the sample traders selected,five are super markets/restaurants e.g., Kunnil Hypermarket, Koncheril traders, Pathayappura, Welgate,Shesquare etc. Horticorp is a major trader in both the markets, which purchases the excess quantity inthe market. On an average, a trader in Anayara has been in trade business for the last eleven years andin Nedumangad the average period of trade activity of a trader is four years. The details of sale quantityand price of each crop is provided in Appendix 2.

4.4.1. Purchase value, Sale value and profit

Average value of quantity of each crop brought for both the markets and the amount atwhich it is resold is given in the table along with the differences in sales price and purchase price.For calculating the mean buy value and sales value, Horticorp is removed from both the markets.

Table 4.14: Mean value of total quantity

Goods Anayara Nedumangad Total


Tapioca Buy value 16454.29 7 18920.09 8154.286 7 3745.374 12304.29 14 13792.7

Sale value 32610 7 34777.02 8934.429 7 4120.619 20772.21 14 26775.98

Difference 16155.71 7 20257.64 780.1429 7 815.1851 8467.929 14 15917.21

Banana Buy value 49494.29 7 77135.03 69592 8 156274.7 60213.07 15 121936.6

Sale value 58897.43 7 87005.44 75328 8 171733.7 67660.4 15 134396.7

Difference 9403.143 7 11202.02 5736 8 15536.4 7447.333 15 13343.74

Coconut Buy value 30735 4 24773.55 65200 6 118132.5 51414 10 90962.99

Sale value 59150 4 48551.93 73677.67 6 140385.3 67866.6 10 108586.2

Difference 28415 4 36939.31 8477.667 6 22469.84 16452.6 10 29005.75

Ginger Buy value 42280 3 6064.85 157779.8 8 425985.9 126279.8 11 360475.7

Sale value 77400 3 30280.69 321627.5 8 888285.5 255020 11 752019.3

Difference 35120 3 24681.62 163847.8 8 462307.6 128740.2 11 391595.6

Cowpea Buy value 14690 6 10181.24 119660.6 7 280735 71212.62 13 205951.1

Sale value 15416.67 6 10832.57 87105.43 7 191110.8 54018.31 13 140336.1

Difference 726.6667 6 3594.027 -32555.1 7 89715.96 17194.3 13 65788.14

71

Spinach Buy value 6858 5 3599.1 12674 8 11509.83 10437.08 13 9500.993

Sale value 13604.8 5 9015.577 19509.5 8 25164.02 17238.46 13 20134.95

Difference 4819.143 7 6806.932 6076 9 13901.8 5526.125 16 11046.28

Cucumber Buy value 11616.43 7 15712.22 29854.29 7 46123.39 20735.36 14 34428.98

Sale value 16194.86 7 17843.59 46982.86 7 81198.8 31588.86 14 58695.75

Difference 4578.429 7 4521.157 13322.22 9 32310.13 9496.813 16 24187.1

Snakegourd Buy value 13352 5 17941.45 26352 7 52150.34 20935.33 12 40562.46

Sale value 18390 5 20644.65 38630.29 7 82402.36 30196.83 12 62986.7

Difference 5038 5 3817.652 9549.778 9 26803.32 7938.429 14 21251.37

Bitter gourd Buy value 13040 3 19901.68 10980 1 . 12525 4 16282.26

Sale value 13863.33 3 21228.71 13608 1 . 13799.5 4 17333.64

Difference 823.3333 3 1329.524 2628 1 . 1274.5 4 1411.605

Chilly Buy value 16470 3 16029.3 16470 3 16029.3

Sale value 21176 3 23674.66 21176 3 23674.66

Difference 4706 3 7893.12 4706 3 7893.12

Total Buy value 145863.6 7 149599.1 406678.2 9 992131 292571.8 16 742819.7

Sale value 216682.9 7 196877.3 569165.9 9 1453480 414954.6 16 1083901

Difference 70819.29 7 81152.16 162487.7 9 461545.2 122382.8 16 344169.8


The buy value of tapioca is Rs.12,304 and the sale value Rs.20,772, yielding a difference ofRs.8,467.9. Similarly for banana the corresponding values are Rs.60,213, Rs.67,660 and Rs.7,447,for coconut Rs.51414, Rs.67886 and Rs.16,452, for ginger 1,26,279, Rs.2,55,020 and 1,28,740, forcowpea Rs.71,212, Rs.54,018 and Rs.17,194, for spinach Rs.10437, Rs.17,238 and Rs.5,526, forcucumber, Rs.20,735, Rs.31,588 and Rs.9,496, for snake gourd Rs.2,09,35, Rs.30,196 and Rs.7,038,for bitter gourd Rs.12,525, Rs.13799 and Rs.1,274 and the total mean buy value, sale value and differenceis Rs.2,92,571, Rs.4,14,954 and Rs.1,22,382 respectively.

4.4.2. Marketing Margin

Difference between sale value and purchase value, marketing cost and marketing margin of thetraders in Anayara and Nedumangad for the selected crops is given below. Mean profit for traders inAnayara is Rs.70,819, after reducing the marketing costs the average marketing margin for a trader inAnayara is Rs.59,083. (Horticorp is avoided). In Nedumangad market, the difference between salevalue and purchase value price is Rs. 1,62,487 and marketing cost is Rs.82,652 the marketing marginbeing Rs.79,834 for Nedumangad market. On an average, the mean value of difference between salesand purchase is Rs.1,22,382, the marketing cost being Rs.51,626 and the market margin being Rs.70,756

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Table 4.14: Total profit, marketing cost and market margin

Markets Total profit Marketing cost Market margin

Anayara Mean 70819.29 11736.29 59083

N 7 7 7

Std. Deviation 81152.16 21045.06 67022.99

Nedumangad Mean 162487.7 82652.89 79834.78

N 9 9 9

Std. Deviation 461545.2 226670.7 235030.7

Total Mean 122382.8 51626.88 70755.88

N 16 16 16

Std. Deviation 344169.8 169999.3 177118.3


4.4.3: Details of price and price information

The reason for selecting the particular market has been collected from the traders. Six tradersopined each from Nedumangad and Anayara that it is because of the organic product that they purchasefrom the particular market. Horticorp purchase because of the government stipulation. Regardingprice setting, 77.8 per cent of the traders from Anayara feel that it is through negotiation, whereas 90per cent people from Nedumangad opine that it is through auction.

Table 4.15: Details of price and price information

Determination of the choice Number Percent

Anayara Price 1 11.1

Proximity 1 11.1

Government order 1 11.1

Organic 6 66.7

Total 9 100

Nedumangad Fair scaling 3 30

Government order 1 10

Organic 6 60

Total 10 100

Who sets the price you buy for?

Anayara Negotiation 7 77.8

Market officials 1 11.1

Auction 1 11.1

Total 9 100

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Nedumangad Market officials 1 10

Auction 9 90

Total 10 100

Knowledge about the market price before selling

Anayara Yes 2 22.2

No 7 77.8

Total 9 100

Nedumangad No 10 100


4.4.4. Details of resale point

For majority, the resale point is retail shops both in Anayara and Nedumangad. Some tradershave super market chains where the commodity is resold. Some others have shops in their localitywhere they resell these items. Horticorp collects the agricultural products and sell it through theirmobile vans and regional outlets.

Table 4.16: Details of the selling market point

Goods Markets WAM RPM Retail Export Own consumptionTapioca Anayara 0 0 8 1 1

Nedumangad 0 0 0 0 0

Banana Anayara 0 0 8 0 1


Coconut Anayara 0 0 4 0 1


Ginger Anayara 0 0 3 0 0


Cowpea Anayara 0 0 7 0 1


Spinach Anayara 1 0 5 0 0


Cucumber Anayara 1 0 8 0 0


Gourd Anayara 0 0 6 0 1


Bitter guard Anayara 0 0 3 0 1


Chilly Anayara 0 0 0 0 0



74

Details regarding resale and related information shows that 50 per cent traders in Anayara taketwo or three days for resale and 50 per cent take one week, whereas for Nedumangad traders the periodneeded for resale is 2 or 3 days for ninety per cent. Traders operating in Anayara and Nedumangadwho own super markets have got their own storage capacity. Small traders have their own refrigeratingfacility. The available storage facility is modern for three persons in Anayara. Majority carry outphysical treatment before bringing it for resale. Sixty, 40, 50, 40 per cent in Anayara engage in sorting,packaging, grading and cutting activities whereas the corresponding per cent is 80, 70, 70 and 30 percent in Nedumangad. Regarding the resale price, majority sets the price themselves, particularly at ahigher premium for organic products.

4.4.5. Effectiveness and timeliness of the information

Only a lesser per cent of traders consider the market as effective and timely both in Anayaraand Nedumangad. Big traders view that separate counters must be opened for local domestic purchases,because it is affecting the effectiveness of the market. They also view that they should be given moreprominence because they are big traders and their time is more valuable. There are management issuesas reported by traders in Nedumangad.

Table 4.17: Effectiveness and timeliness

Markets Effectiveness Number Percent Timeliness Number Percent

Anayara Highly effective 1 10 Very timely 1 10

Effective 1 10 Timely 1 10

Undecided 6 60 Undecided 6 60

Not effective 2 20 Not timely 2 20

Total 10 100 Total 10 100

Nedumangad Effective 3 30 Timely 3 30

Undecided 7 70 Undecided 7 70

Total 10 100 Total 10 100


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Table 4.18: Details of trading licenseDo you have a trading license?

Frequency Percent

Anayara Yes 10 90

Nedumangad Yes 10 100

Are there restrictions imposed on unlicensed?

Anayara No 9 100

Nedumangad Yes 8 80

No 2 20

Total 10 100

Are there any restrictions for entry and exit?

Anayara No 9 100

Nedumangad Yes 9 90

No 1 10

Total 10 100

Are there problems in trading and marketing?

Anayara No 9 100

Nedumangad Yes 1 10

No 9 90

Total 10 100


All the traders operating in both the markets have trading license and traders from Nedumangadopine that there are restrictions on unlicensed and restriction for entry and exit. In Nedumangad, twotypes of registration are made, one permanent registration (life time membership – Rs.250) and theother temporary registration for infrequent purchases in the market (Rs.25 per day).

Table 4.19: Reason for buying commodities in the selected markets Reasons Markets Very % Bad % Medium % Good % Very % Total

bad Good

Price better Anayara 1 11.1 1 11.1 2 22.2 4 44.4 1 11.1 9

Nedumangad 1 10.0 0 0.0 0 0.0 9 90.0 0 0.0 10

Regular Anayara 0 0.0 1 11.1 1 11.1 1 11.1 6 66.7 9

consumer Nedumangad 0 0.0 0 0.0 1 10.0 0 0.0 9 90.0 10

Storage Anayara 0 0.0 7 77.8 2 22.2 0 0.0 0 0.0 9

Nedumangad 0 0.0 7 70.0 3 30.0 0 0.0 0 0.0 10

Auction Anayara 0 0.0 0 0.0 1 11.1 2 22.2 6 66.7 9

platform Nedumangad 0 0.0 0 0.0 0 0.0 3 30.0 7 70.0 10

Transportation Anayara 0 0.0 1 11.1 2 22.2 6 66.7 0 0.0 9

facility Nedumangad 0 0.0 4 40.0 4 40.0 2 20.0 0 0.0 10

Incentives/ Anayara 6 66.7 1 11.1 1 11.1 1 11.1 0 0.0 9

subsidy Nedumangad 5 50.0 4 40.0 0 0.0 1 10.0 0 0.0 10

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Organic Anayara 0 0.0 1 11.1 8 88.9 0 0.0 0 0.0 9

Nedumangad 3 30.0 6 60.0 1 10.0 0 0.0 0 0.0 10

Credit facility Anayara 0 0.0 0 0.0 1 11.1 2 22.2 6 66.7 9

Nedumangad 1 10.0 0 0.0 0 0.0 4 40.0 5 50.0 10

Nearest Anayara 0 0.0 0 0.0 4 44.4 3 33.3 2 22.2 9

Market Nedumangad 0 0.0 3 30.0 4 40.0 3 30.0 0 0.0 10


The major reason for buying in Anayara market is because of the presence of Auction Hall,credit facility, nearness of the market followed by availability of organic products, transportation facilityand regular consumers. In Nedumangad availability of Auction Hall, regular provision of agriculturalcommodities, availability of credit facility followed by better prices and organic products are the reasonsfor purchase from this market.

Section C

4.5. Infrastructure Facility in the Whole Sale Market – Analysis Based on Opinion of Farmersand Traders

The available infrastructure in the WM is analysed below with regard to the opinion of thefarmers and traders. The satisfaction level of the market infrastructure facility is also rated on a five-point scale and the information collected in this regard is also summarized.

The major infrastructural facilities that are to be provided by a market include infrastructure for a)buying, selling and demand forecasting b) physical movement of goods c) facilitation function. Thissection analyses the availably of these infrastructure facilities according to the views of farmers andtraders along with the satisfaction level of farmers and traders.

4.5.1. Infrastructure for buying, selling and demand creation.

Auction hall is the main infrastructure facility available for buying and selling. Availability of AuctionHall and the facilities within the auction hall and the satisfaction regarding the same is provided in thetables below. Auction platform is available to both Anayara and NDD markets, however crop specificauction platform is available only in NDD WM for banana. Price display facility is available both inAnayara and NDD, but farmers notice it only in the case of Anayara. This is because in Anayara, arelatively big notice board is placed and price is written in the board, whereas in NDD, in the noticeboard, a printed paper which gives the price details is pasted, which is not noticed by many farmers.Payment display is found both in Anayara and NDD, but farmers in NDD notice it because it is displayedin the auction hall, whereas in Anayara it is displayed near the office. Weighing machines and NoticeBoard is available in both the markets. Majority have average and above satisfaction regarding theitems in Auction hall. Traders also have similar views regarding availability of infrastructure, exceptin the case of price display and payment display. They are aware of the price display mechanism inNedumangad unlike the farmers. Traders rate the facilities in the Auction Hall at a higher scale compared

77

to the farmers. All the available infrastructure in the Auction Hall is provided by the market itself. Thetables showing actual numbers are provided in the appendix 3 and the tables giving details in per centis provided below.

Table 4.20: Details of auction hall -Farmer’s Opinion (in per cent)

Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data

Facilities Markets Yes No Satisfaction

1 2 3 4 5

Auction platform Anayara 100.0 0.0 0.0 0.0 0.0 77.8 22.2

Nedumangad 100.0 0.0 0.0 20.0 0.0 80.0 0.0

Crop specific Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

auction platform Nedumangad 80.0 20.0 0.0 37.5 12.5 62.5 0.0

Price display Anayara 80.0 20.0 0.0 0.0 0.0 75.0 25.0

Nedumangad 10.0 90.0 0.0 100.0 0.0 0.0 0.0

Payment display Anayara 20.0 80.0 0.0 0.0 0.0 100.0 0.0

Nedumangad 90.0 10.0 0.0 22.2 22.2 55.6 0.0

Weighing machine Anayara 100.0 0.0 0.0 0.0 10.0 60.0 30.0

Nedumangad 100.0 0.0 0.0 20.0 10.0 70.0 0.0

Notice board Anayara 90.0 10.0 0.0 0.0 0.0 77.8 22.2

Nedumangad 80.0 20.0 0.0 37.5 25.0 37.5 0.0

Table 4.21: Details of auction hall – Trader’s Opinion (in per cent)

Facilities Markets Yes No Satisfaction

1 2 3 4 5

Auction platform Anayara 100.0 0.0 0.0 0.0 0.0 11.1 88.9

Nedumangad 100.0 0.0 0.0 0.0 0.0 20.0 80.0

Crop specific Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

auction platform Nedumangad 100.0 0.0 0.0 0.0 0.0 60.0 40.0

Price display Anayara 100.0 0.0 0.0 0.0 0.0 55.6 44.4

Nedumangad 80.0 20.0 0.0 12.5 0.0 62.5 25.0

Payment display Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Weighing machine Anayara 100.0 0.0 0.0 0.0 0.0 11.1 88.9

Nedumangad 100.0 0.0 0.0 0.0 20.0 80.0 0.0

Notice board Anayara 100.0 0.0 0.0 0.0 11.1 22.2 66.7

Nedumangad 100.0 0.0 0.0 0.0 0.0 100.0 0.0

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4.5.2. Infrastructure for demand creation and production decision

Farmers have poor opinion regarding the efficacy of markets in demand forecasting andproduction decisions, particularly in NDD WM. Fifty per cent of the farmers in Anayara opine that theonly sort of help received in demand forecasting and production decision is through informal discussions.None in Nedumangad WM provided afavourable opinion. Regarding provision of insurance also, noone from NDD WM opined that insurance facility was available, whereas 80 per cent of the farmersfrom Anayara WM had positive opinion regarding insurance. Traders also have the view that the WMdo not have methods by which demand forecasting or production decisions can be made.

The marketing channel that is operating in the Anayara WM is producer-wholesaler-retailer-consumer for 80 per cent of the farmers in Anayara, whereas for NDD, the marketing channel for all isthe same.

Table 4.22: Infrastructure for demand creation or production decisions –farmer’s opinion (in per cent)

Opinion Markets Yes % No %

Demand forecasting Anayara 5 50.0 5 50.0

Nedumangad 0 0.0 10 100.0

Market helps in production decisions Anayara 5 50.0 5 50.0


Insurance provision Anayara 8 80.0 3 30.0


Marketing channel

Producer-consumer Anayara 0 0.0 10 100.0


Producer-retailer-consumer Anayara 1 10.0 9 90.0


Producer-wholesaler-consumer Anayara 1 10.0 9 90.0


Producer-wholesaler-retailer-consumer Anayara 8 80.0 2 20.0

Nedumangad 10 100 10 100.0


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Table 4.23: Infrastructure for demand creation or production decisions – trader’s opinion(in per cent)

Opinion Markets Yes % No %

Demand forecasting Anayara 1 11.1 8 88.9


Market helps in production Anayara 1 11.1 8 88.9

decisions Nedumangad 0 0.0 10 100.0

Insurance provision Anayara 0 0.0 9 100.0


Marketing channel

Producer-consumer Anayara 0 0.0 9 100.0


Producer-retailer-consumer Anayara 0 0.0 9 100.0


Producer-wholesaler-consumer Anayara 1 11.1 8 88.9


Producer-wholesaler- Anayara 8 88.9 1 11.1

retailer-consumer Nedumangad 10 100.0 0 0.0


4.5.3. Infrastructure for the function of physical movement of goods

Infrastructure for the function of physical movement of goods include infrastructure fortransportation, storage, value addition, standardization and grading and packing.

Infrastructure for Transportation

Both markets have facility for loading/unloading facility and road facility. Transportation from field tomarket facility is not provided by the market directly, but subsidy for transport is provided. Refrigeratedtrucks/insulated vans etc. is not at all available in both the markets. Formal check post facility is notavailable, the only available one is a gate and a security counter. Regarding satisfaction of theinfrastructure facility available for transportation, 80 per cent of the farmers in NDD consider thefacilities as very bad, whereas majority of the farmers in Anayara treat it as very good. Majority arealso satisfied with road facility inside the market. Traders also have the same view regarding theinfrastructure facilities available for transportation. The facilities are provided by market itself andGovernment.

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Table 4.24: Infrastructure for transportation – Farmer’s view (in per cent)

Infrastructure Markets Facility Agency Satisfaction

Yes No Market Govt SKS 1 2 3 4 5

Loading/Unloading Anayara 90.0 10.0 33.3 66.7 0.0 0.0 11.1 0.0 55.6 33.3facility arranged Nedumangad 100.0 0.0 30.0 70.0 0.0 80.0 0.0 0.0 20.0 0.0

Transportation Anayara 90.0 10.0 77.8 11.1 11.1 0.0 0.0 0.0 77.8 22.2inside market Nedumangad 30.0 70.0 100.0 0.0 0.0 33.3 0.0 33.3 33.3 0.0(commodity)Road facility Anayara 100.0 0.0 80.0 10.0 10.0 0.0 0.0 0.0 60.0 40.0inside market Nedumangad 100.0 0.0 0.0 100.0 0.0 10.0 10.0 10.0 60.0 10.0Transportation Anayara 20.0 80.0 0.0 50.0 50.0 0.0 0.0 0.0 0.0 100.0from field to Nedumangad 10.0 90.0 0.0 100.0 0.0 0.0 0.0 0.0 100.0 0.0marketPassenger transport Anayara 90.0 10.0 0.0 100.0 0.0 0.0 0.0 0.0 88.9 11.1

Nedumangad 20.0 80.0 0.0 100.0 0.0 0.0 0.0 0.0 100.0 0.0Check post Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 20.0 80.0 100.0 0.0 0.0 0.0 0.0 100.0 0.0 0.0Parking facility Anayara 90.0 10.0 88.9 11.1 0.0 0.0 0.0 0.0 66.7 33.3

Nedumangad 100.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 50.0 50.0Refrigerated trucks/ Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0insulated van Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Maintenance of Anayara 10.0 90.0 100.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0vehicle Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0



Infrastructure Markets Facility SatisfactionYes No 1 2 3 4 5

Loading/Unloading Anayara 88.9 11.1 0.0 0.0 100.0 0.0 0.0facility arranged Nedumangad 100.0 0.0 0.0 0.0 0.0 0.0 0.0Transportation Anayara 22.2 77.8 0.0 0.0 0.0 100.0 0.0insidemarket (commodity) Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0Road facility inside Anayara 100.0 0.0 0.0 0.0 0.0 0.0 100.0market Nedumangad 100.0 0.0 0.0 0.0 0.0 30.0 70.0Transportation from Anayara 22.2 77.8 0.0 0.0 0.0 0.0 100.0field to market Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0Passenger transport Anayara 66.7 33.3 0.0 0.0 16.7 33.3 50.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0Check post Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 10.0 90.0 0.0 0.0 0.0 0.0 0.0

81

Parking facility Anayara 100.0 0.0 0.0 0.0 0.0 0.0 100.0Nedumangad 90.0 10.0 0.0 0.0 0.0 11.1 88.9

Refrigerated trucks/ Anayara 11.1 88.9 0.0 0.0 0.0 100.0 0.0insulated van Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0Maintenance of Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0vehicle Nedumangad 10.0 90.0 100.0 0.0 0.0 0.0 0.0


Storage facilities

Infrastructure for storage facilities includes cold storage, ripening chambers, dry storage,godowns, mobile storage unit, ware housing etc. As per the opinion of farmers, cold storage is availablein Anayara and Nedumangad, whereas all the other infrastructure facilities for storage are not availablein both the markets. Even though cold storage is available, currently it is not under use because of highoperating cost, particularly electricity charges. Also, farmers report that technical staff required fortaking care of the cold storage facility is also not available in the market. Hence farmers are notsatisfied with the facilities. Small godowns are available in the market for rent in both the markets, butfarmers are not using it. Traders also have the same opinion regarding the storage facilities inside themarket.

Table 4.26: Infrastructure for storage – Farmer’s view (in per cent)

Infrastructure Markets Facility Agency Satisfaction

Yes No Market Govt 1 2 3 4 5

Cold storage Anayara 70.0 30.0 100.0 0.0 0.0 0.0 42.9 57.1 0.0

Nedumangad 100.0 0.0 100.0 0.0 80.0 10.0 10.0 0.0 0.0

Ripening chambers Anayara 80.0 20.0 100.0 0.0 0.0 0.0 25.0 75.0 0.0

Nedumangad 20.0 80.0 100.0 0.0 50.0 0.0 50.0 0.0 0.0

Dry storage Anayara 10.0 90.0 100.0 0.0 0.0 0.0 0.0 100.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Godowns Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Mobile units Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Ware houses Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Drying yards Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Washing facility Anayara 20.0 80.0 50.0 50.0 0.0 0.0 50.0 50.0 0.0

Nedumangad 30.0 70.0 66.7 33.3 33.3 33.3 0.0 33.3 0.0

Assaying Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


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Facilities Markets Facility Agency SatisfactionYes No Market 1 2 3 4 5

Anayara 88.9 11.1 100.0 0.0 62.5 12.5 0.0 25.0

Nedumangad 50.0 50.0 100.0 0.0 0.0 0.0 100.0 0.0Ripening chambers Anayara 77.8 22.2 100.0 0.0 0.0 0.0 0.0 100.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Dry storage Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Godowns Anayara 66.7 33.3 100.0 0.0 33.3 33.3 0.0 33.3

Nedumangad 10.0 90.0 100.0 0.0 100.0 0.0 0.0 0.0Mobile storage Anayara 11.1 88.9 100.0 0.0 0.0 0.0 0.0 0.0

units Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Ware houses Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Drying yards Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 10.0 90.0 100.0 0.0 0.0 100.0 0.0 0.0Washing facility Anayara 66.7 33.3 100.0 0.0 0.0 33.3 50.0 16.7

Nedumangad 20.0 80.0 100.0 0.0 0.0 50.0 50.0 0.0

Assaying Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0


Value Addition

Infrastructure facilities required for value addition include food irradiation unit, inhouse productresting laboratory, machinery skilled labourers, infrastructure for branding or patenting etc. None ofthe facilities are available in these markets according to the farmers and traders. However big tradershave infrastructure facilities for value addition, they own it privately.

Standardisation

The infrastructure needed for standardization includes facilities for setting uniform standards,display of samples, economic loads, quality testing labs, quality certification, weighing machines,surveillance camera etc. Out of these seven items only weighing machines is available in both themarkets. Surveillance camera is available only in Anayara Market. Economic loads are available inAnayara market because, the farmers in Anayara operate in cluster form. Two farmers each from acluster of around twenty members collect the produce from all the farmers operating in the cluster andbring the load to the market, and hence it is termed as economic loads/collective loads. This is nothappening in NDD because, the farmers operate individually in NDD market. Traders also keep thesame opinion with regard to infrastructure available in the WM for standardization.

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Table 4.28: Infrastructure for standardisation – Farmer’s view (in per cent)

Facilities Markets Facility Satisfaction

Yes No Market 1 2 3 4 5

Uniform standards Anayara 30.0 70.0 33.3 0.0 0.0 0.0 100.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Display of samples Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Economic loads Anayara 80.0 20.0 0.0 0.0 0.0 0.0 0.0 100.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Quality testing labs Anayara 20.0 80.0 50.0 0.0 0.0 0.0 100.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Quality certification Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0

Weighing machines Anayara 90.0 10.0 66.7 11.1 0.0 11.1 44.4 33.3

Nedumangad 100.0 0.0 40.0 0.0 20.0 10.0 70.0 0.0

Surveillance camera Anayara 90.0 10.0 88.9 0.0 0.0 0.0 55.6 44.4

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0


Table 4.29: Infrastructure for standardisation – Trader’s view (in per cent) Facilities Markets Facility Satisfaction

Yes No 1 2 3 4 5

Uniform standards Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Display of samples Anayara 33.3 66.7 0.0 0.0 33.3 0.0 66.7

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Economic loads Anayara 44.4 55.6 0.0 0.0 25.0 50.0 25.0

(collective loads) Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Quality testing labs Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Quality certification Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Weighing machines Anayara 100.0 0.0 0.0 0.0 11.1 11.1 77.8

Nedumangad 60.0 40.0 0.0 0.0 33.3 33.3 33.3

Surveillance camera Anayara 100.0 0.0 0.0 0.0 0.0 11.1 88.9

Nedumangad 30.0 70.0 0.0 33.3 66.7 0.0 0.0


84

Grading and Packing

The facilities needed for grading and packing include scientific labs, grading apparatus, electronicweighing, machines for packing, labelling and dispatching facility. However out of these only Gradingapparatus and electronic weighing is available in NDD and TVM markets. Majority are satisfied withthe electronic weighing apparatus. Manual grading is done for banana and vegetables in Anayara andNDD markets.

Table 4.30: Infrastructure for grading and packing – Farmer’s view (in per cent)

Facilities Markets Facility SatisfactionYes No 1 2 3 4 5

Scientific labs Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Grading apparatus Anayara 80.0 20.0 0.0 12.5 12.5 75.0 0.0Nedumangad 30.0 70.0 33.3 33.3 33.3 0.0 0.0

Electronic Anayara 90.0 10.0 0.0 0.0 0.0 100.0 0.0weighing Nedumangad 90.0 10.0 0.0 22.2 11.1 44.4 22.2Machines for Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0packing Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0Labeling facility Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0Dispatching Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0facility Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0


Table 4.31: Infrastructure for grading & packing-Trader’s view (in per cent)Facilities Markets Facility Satisfaction

Yes No 1 2 3 4 5

Scientific labs Anayara 0.0 100.0 0 0 0 0 0

Nedumangad 10.0 80.0 0 0 100 100 0

Grading apparatus Anayara 0.0 100.0 0 0 0 0 0

Nedumangad 0.0 100.0 0 0 0 0 0

Electronic weighing Anayara 100.0 0.0 0 0 0 0 100

Nedumangad 40.0 60.0 0 0 0 100 0

Machines for packing Anayara 0.0 100.0 0 0 0 0 0

Nedumangad 40.0 60.0 0 0 0 100 0

Labelling facility Anayara 0.0 100.0 0 0 0 0 0

Nedumangad 10.0 90.0 100 0 0 0 0

Dispatching facility Anayara 0.0 100.0 0 0 0 0 0

Nedumangad 0.0 100.0 0 0 0 0 0


85

4.5.4. Infrastructure for facilitation

Facilitation function of a market are divided into three – financing, provision of informationand market integration. Infrastructure facilities needed for each of the three is given as separate tablesbelow.

Regarding market financing, the infrastructure facilities needed are credit facility to buyers,credit facility to sellers, availability of bank/ATM, loan facility, incentives, credit sharing, shares etc.Of these only two items are available according to the farmers. i.e., Bank/ATM facility for farmers inAnayara and incentives for both Anayara and NDD. Eighty per cent of farmers in NDD report thatincentives are available. However, farmers in NDD are not satisfied with the incentives, because ofthe long delay in receipt of incentives. Credit sharing facility is available to farmers in Anayara, sincethe market provides them credit as and when such schemes are available. Other facilities are not at allavailable in both markets. As far as traders are considered credit facility is available to all of them inAnayara market, but only 40 per cent of traders in Nedumangad market opine that they have creditfacility. Availability of ATM is also reported by traders in Anayara. Regarding other infrastructurefacilities for market financing, traders also report that none of the other facilities are available in themarket.

Table 4.32: Infrastructure for market financing – Farmer’s view (in per cent)Facilities Markets Facility Satisfaction

Yes No 1 2 3 4 5

Credit facility to buyers Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 10.0 80.0 0.0 0.0 0.0 100.0 0.0

Credit facility to sellers Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 10.0 90.0 0.0 0.0 100.0 0.0 0.0

Bank/ATM Anayara 80.0 20.0 0.0 0.0 12.5 62.5 25.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Loan facility Anayara 10.0 90.0 0.0 0.0 0.0 100.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Incentives(specify) Anayara 80.0 20.0 0.0 0.0 0.0 0.0 100.0

Nedumangad 40.0 60.0 25.0 25.0 25.0 0.0 0.0

Credit sharing Anayara 10.0 90.0 0.0 0.0 100.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Shares Anayara 20.0 80.0 0.0 0.0 0.0 50.0 50.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0


86

Table 4.33: Infrastructure for market financing – Trader’s view (in per cent)


Yes No 1 2 3 4 5

Credit facility to buyers Anayara 88.9 11.1 0.0 0.0 12.5 25.0 62.5

Nedumangad 40.0 60.0 0.0 0.0 0.0 25.0 75.0

Credit facility to sellers Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Bank/ATM Anayara 100.0 0.0 0.0 0.0 0.0 22.2 77.8

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Loan facility Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Incentives Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Credit sharing Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Shares Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0


Market information

The infrastructure needed for provision of market information, in terms of computerized data,data management, record keeping and notice board is available, according to all the farmers in both themarkets. However, information dissemination to farmers and traders is happening only in Anayara,and 70 per cent of farmers from Anayara also opined that education regarding market is provided tothem. Regarding satisfaction of the three infrastructure facilities available for market information,farmers in Anayara are more satisfied. A member from the cluster will be available during the pricedetermination process in Anayara along with Horticorp officials and market officials. This is nothappening in NDD, according to the farmers and that is why satisfaction regarding market informationis less in NDD market. Training to farmers is given on an average four times a year in Anayara. Exceptadvertisement and market surveys all other market information infrastructure facilities are available inthe market according to the traders and majority are satisfied by the facilities.

87

Table 4.34: Infrastructure for market information – Farmer’s view (in per cent)Facilities Markets Facility Satisfaction

Yes No 1 2 3 4 5

Computerized data Anayara 90.0 10.0 0.0 0.0 11.1 88.9 0.0

Nedumangad 100.0 0.0 0.0 30.0 20.0 50.0 0.0

Data management- record keeping Anayara 90.0 10.0 0.0 0.0 100.0 0.0 0.0

Nedumangad 100.0 0.0 0.0 0.0 100.0 0.0 0.0

Information Dissemination to Anayara 80.0 20.0 0.0 0.0 0.0 100.0 0.0

farmers and traders Nedumangad 30.0 70.0 0.0 0.0 33.3 66.7 0.0

Market surveys Anayara 10.0 90.0 0.0 0.0 100.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Information counter Anayara 70.0 30.0 0.0 0.0 0.0 100.0 0.0

Nedumangad 40.0 60.0 0.0 25.0 25.0 25.0 25.0

Notice board/price display Anayara 90.0 10.0 0.0 0.0 0.0 88.9 11.1

Nedumangad 70.0 30.0 0.0 28.6 71.4 0.0 0.0

Advertisement Anayara 10.0 90.0 0.0 0.0 0.0 100.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Market education Anayara 70.0 30.0 0.0 0.0 0.0 57.1 42.9

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0


Table 4.35: Infrastructure for market information – Farmer’s view (in per cent)Facilities Markets Facility Satisfaction

Yes No 1 2 3 4 5

Computerized data Anayara 100.0 0.0 0.0 0.0 0.0 77.8 22.2

Nedumangad 100.0 0.0 0.0 0.0 0.0 80.0 20.0

Data management- record keeping Anayara 100.0 0.0 0.0 0.0 0.0 55.6 44.4

Nedumangad 100.0 0.0 0.0 0.0 0.0 90.0 10.0

Information Dissemination to Anayara 100.0 0.0 0.0 11.1 0.0 66.7 22.2

farmers and traders Nedumangad 80.0 20.0 0.0 0.0 12.5 75.0 12.5

Market surveys Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Information counter Anayara 88.9 11.1 0.0 0.0 0.0 62.5 37.5

Nedumangad 60.0 40.0 0.0 0.0 0.0 100.0 0.0

Notice board/price display Anayara 100.0 0.0 0.0 0.0 0.0 66.7 33.3

Nedumangad 90.0 10.0 0.0 0.0 0.0 100.0 0.0

Advertisement Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Market education Anayara 33.3 66.7 0.0 0.0 0.0 100.0 0.0

Nedumangad 20.0 80.0 0.0 0.0 0.0 100.0 0.0


88

Market Integration

Of the different facilities for market integration, farmers from Anayara opine that marketintelligence facility is obtained from the market and majority are satisfied with the available facility.Vertical market integration facility is available in both the markets, whereas 90 per cent of farmers inAnayara and 60 per cent from NDD opine that horizontal integration is available, particularly indetermination of price. Some farmers from Anayara opine that market integration including digitization,ICT tools etc. are not available. However forward integration etc. is available in both markets, becausethe surplus is procured byHorticorp. Traders have difference in opinion from farmers regarding theavailability of infrastructure facilities for market integration. None of the traders in Nedumangadopined that facilities for market intelligence are available in Nedumangad market. Similar is the opinionwith regard to forward integration in both the markets.

Table 4.36: Infrastructure for Market integration – Farmer’s view (in per cent)


Yes No 1 2 3 4 5

Market intelligence Anayara 80.0 20.0 0.0 0.0 0.0 62.5 37.5

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Risk bearing Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Vertical integration Anayara 100.0 0.0 0.0 0.0 0.0 50.0 50.0

Nedumangad 100.0 0.0 0.0 0.0 30.0 70.0 0.0

Horizontal integration Anayara 90.0 10.0 0.0 22.2 0.0 77.8 0.0

Nedumangad 60.0 40.0 0.0 33.3 16.7 50.0 0.0

Trader linkage Anayara 40.0 60.0 0.0 0.0 0.0 100.0 0.0

Nedumangad 10.0 90.0 0.0 0.0 0.0 100.0 0.0

Digitization Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

ICT tools Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Forward integration Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 10.0 90.0 0.0 0.0 100.0 0.0 0.0


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Table 4.37: Infrastructure for market integration – Trader’s view(in per cent)


Yes No 1 2 3 4 5

Market intelligence Anayara 22.2 77.8 0.0 0.0 50.0 0.0 50.0

Nedumangad 20.0 80.0 0.0 0.0 0.0 100.0 0.0

Risk bearing Anayara 11.1 88.9 0.0 0.0 0.0 0.0 100.0

Nedumangad 30.0 70.0 0.0 33.3 33.3 33.3 0.0

Vertical integration Anayara 11.1 88.9 0.0 0.0 100.0 0.0 0.0

Nedumangad 70.0 30.0 0.0 0.0 42.9 57.1 0.0

Horizontal integration Anayara 88.9 11.1 0.0 0.0 12.5 87.5 0.0

Nedumangad 80.0 20.0 0.0 0.0 50.0 50.0 0.0

Trader linkage Anayara 66.7 33.3 0.0 0.0 0.0 100.0 0.0

Nedumangad 80.0 20.0 0.0 12.5 12.5 75.0 0.0

Digitization Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 10.0 90.0 0.0 0.0 0.0 100.0 0.0

ICT tools Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0

Forward integration Anayara 22.2 77.8 0.0 0.0 0.0 100.0 0.0

Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0


4.5.5. NIAM classification of Infrastructure facilities

According to NIAM classification, the infrastructure facilities needed for agriculture marketsis classified into core facility, support facility, service facility and maintenance facility. Details of therequirement in this regard as specified by farmers is provided below.

Core facilities

Regarding platform for automatic weighing, AnayaraWMhas facility, but only one out of theten farmers is aware of this facility. This facility is not at all used by any of the farmers. Platform forautomatic weighing is available in NDD too but not in use. Auction platform are available in bothmarkets. Regarding loading and unloading, such facility is enjoyed by farmers in Anayara andNedumangad.

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Table 4.38: NIAM classification – Infrastructure for core facility – farmer’s view

Facilities Facility Satisfaction

Yes No 12 3 4 5

Platforms for Automatic weighing Anayara 1 9 0 0 0 10

Nedumangad 1 9 01 0 0 0

Auction Platforms Anayara 9 1 0 0 0 3 6

Nedumangad 10 0 0 2 3 3 2

Packaging &LabelingEquipments Anayara 0 100 0 0 0 0


Drying Yards Anayara 0 10 0 0 0 0 0


Loading, Unloading & Anayara 8 2 0 1 0 5 2


Dispatch facilities Anayara 0 10 0 00 0 0


Grading facilities Anayara 8 2 0 1 2 5 0


Standardisation facilities Anayara 4 6 0 0 0 4 0


Price Display Mechanism Anayara 7 3 00 0 5 2


Information Centres Anayara 7 3 0 0 0 7 0


Storage I Cold Rooms Anayara 8 2 0 0 2 5 1


Public Address System Anayara 9 1 0 0 17 1

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The farmers in Nedumangad do not want loading and unloading facility and they went

to court to get permission to load and unload stock themselves. Existing grading facilities are

only manual one both in Anayara and Nedumangad -Although price display mechanism is

available for farmers in NDD very few notices it. Cold storage rooms are available in both

markets but it is not functional and hence the satisfaction with regard to cold storage rooms is

minimal for the farmers. In Anayara, there is a hall for provision of training and extension

services to the farmers. The traders, however are aware of the platform for automatic weighing,

but they are also not using it. Traders in Anayara are aware of the price display mechanism in

Anayara, but not in Nedumangad. Traders are also aware of information centre and storage/

cold rooms in Anayara and Nedumangad. Regarding cold room, traders are not at all satisfied,

but regarding other available facilities they are satisfied.

Table 4.39: NIAM classification – Infrastructure for core facility – trader’s viewFacilities Markets Facility Satisfaction

Yes No 1 2 3 4 5

Platforms for Automatic weighing Anayara 8 1 0 0 2 5 1


Auction Platforms Anayara 9 0 0 0 0 1 8


Packaging &LabelingEquipments Anayara 0 9 0 0 0 0 0


Drying Yards Anayara 0 9 0 0 0 0 0


Loading, Unloading & Anayara 8 1 0 0 4 3 1


Dispatch facilities Anayara 1 8 0 0 0 1 0


Grading facilities Anayara 8 1 0 0 1 5 2


Standardization facilities Anayara 2 7 0 0 1 1 0


Price Display Mechanism Anayara 8 1 0 0 0 6 2


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Information Centres Anayara 8 1 0 0 0 6 2


Storage I Cold Rooms Anayara 8 1 0 6 1 1 0


Ripening Chambers Public Anayara 7 2 0 0 0 3 4

Address System Nedumangad 0 10 0 0 0 0 0

Extension and Training to Fanners Anayara 4 5 0 0 0 3 1



Support facility

The NIAM classification of support facility includes eleven items from water supply, powersupply, sanitary facilities, posts and telephones, banking input supply and necessary outlets, repair/maintenance facilities and availability of rain proofing.

Table 4.40: NIAM classification – Infrastructure for support facility – farmer’s view


Yes No 1 2 3 4 5

Water Supply Anayara 7 3 0 0 0 5 2


Power Anayara 9 0 0 0 0 5 4


Sanitary Facilities Anayara 7 3 0 0 0 7 0


Posts Anayara 1 9 0 0 0 1 0


Telephones Anayara 2 8 0 0 0 1 1


Banking Anayara 7 3 0 0 0 7 0


Input supply und Necessity Anayara 7 3 0 1 0 6 0

Outlets POL Nedumangad 5 5 1 4 0 0 0

Repair I Maintenance Anayara 1 9 0 0 1 0 0

Service Office Nedumangad 1 9 0 1 0 0 0

Computerized systems Anayara 7 3 0 0 1 6 0


Rain Proofing Anayara 9 1 0 0 0 7 2



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Provision of water supply, power, sanitary facilities and computerized system and rain proof isavailable in both the markets. In NDD, farmers opine that sanitary facilities and water supply is verypoor because of the fact that waste and wastewater from slaughter house runs off to the source of watersupply. Cleaning and maintenance of toilet facilities is also very poor. Rain proof facility in NDDmarket is also very poor. InAnayara, the support facilities available are rated with a relatively goodlevel of satisfaction reported by the farmers. Banking facility (ATM) and input supply facility isavailable in Anayara according to 70 per cent (provision of seeds, grow bags, fertilizer, pesticide etc.)and in NDD according to 50 per cent of farmers. Postal and telephone services and repair andmaintenance services is not available in both the markets. Similar views are reported by traders operatingin both the markets regarding support facilities.

Table 4.41: NIAM classification – Infrastructure for support facility – trader’s view


Yes No 1 2 3 4 5

Water Supply Anayara 9 0 0 0 0 7 2


Power Anayara 9 0 0 0 0 0 9


Sanitary Facilities Anayara 9 0 0 0 0 7 2


Posts Anayara 0 9 0 0 0 0 0


Telephones Anayara 1 8 0 0 0 1 0


Banking Anayara 7 2 0 0 1 2 4


Input supply und Necessity Anayara 8 1 0 0 2 5 1

Outlets POL Nedumangad 0 10 0 0 0 0 0

Repair I Maintenance Anayara 0 9 0 0 0 0 0

Service Office Nedumangad 1 9 0 1 0 0 0

Computerized systems Anayara 1 8 0 0 0 0 1


Rain Proofing Anayara 9 0 0 0 0 2 7



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Service Infrastructure

The service facility ranges from availability of rest rooms, market education facilities, soiltesting facilities, drainage, covered drainage, availability of sitting facility, compound wall, toilets,parking space, fire to toilets. Rest room, market education facility is available at Anayara Market,whereas drainage, covered drainage, compound wall, toilets parking space, security etc. is available inall markets with varied degrees of satisfaction reported by farmers.

Farmers are not satisfied with the toilets and drainage facilities at NDD market. Also, in NDDthe farmers are not satisfied with the compound wall, as one portion of the wall is not maintainedproperty. Since drainage facility is poor in NDD, waste water logging is happening and this is creatingunhygienic environment in the market.

Table 4.42: NIAM classification – Infrastructure for service facility – farmer’s view

Facilities Markets Available Yes No

1 2 3 4 5

Rest rooms Anayara 0 0 0 8 0 8 2


Sheds for animals Anayara 0 0 0 0 0 0 0


Market education Anayara 0 0 1 4 3 8 2


Soil testing facilities Anayara 0 0 0 3 0 3 7


Drainage Anayara 0 0 1 8 0 9 1


Covered drainage Anayara 1 0 1 7 0 9 1


Sitting facility Anayara 0 0 3 4 0 7 3


Compound wall Anayara 0 0 0 9 0 9 1


Toilets Anayara 0 0 0 8 0 8 2


Parking space Anayara 0 0 0 4 5 9 1


Fire fighting Anayara 0 0 0 8 1 9 1


Security Anayara 0 1 7 1 0 9 1



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Maintenance facility

Maintenance facilities are also termed as green initiatives of the market. Cleaning facility and garbagecollection facility is available in both the markets, whereas facility for garbage disposal or vermincomposting is not available. Even though bio gas plant is available the plant is not functioning. Hencemany of the farmers of both the markets are not aware of the facilities. Revolving fund for maintenanceis also not available in the market. The available facilities are rated unsatisfactorily by farmers inNedumangad. Similar opinion is shared by traders in Anayara and Nedumangad.

Facilities Markets Available Not Available

1 2 3 4 5

Rest rooms Anayara 0 1 0 3 0 5


Sheds for animals Anayara 0 0 0 0 0 9


Market education Anayara 0 0 0 2 0 7


Soil testing facilities Anayara 0 0 0 0 0 9


Drainage Anayara 0 0 0 8 1 0


Covered drainage Anayara 1 0 0 6 1 1


Sitting facility Anayara 0 1 0 2 0 6


Compound wall Anayara 0 0 0 6 3 0


Toilets Anayara 0 0 0 9 0 0


Parking space Anayara 0 0 0 1 8 0


Fire fighting Anayara 0 0 0 6 2 1


Security Anayara 0 0 0 7 2 0



Table 4.43: NIAM classification – Infrastructure for service facility – trader’s view

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If yes rating of availability

Maintenance Facility/Green initiatives Yes No 1 2 3 4 5

Cleaning facility Anayara 10 0 0 1 2 6 1


Garbage collection Anayara 10 0 0 1 2 6 1


Garbage disposal Anayara 1 9 0 0 0 1 0


Waste utilization

A.Vermin composting Anayara 0 10 0 0 0 0 0


B. Biogas plant Anayara 5 5 0 2 2 1 0


C. Bio gas power Anayara 1 9 0 0 0 1 0


Revolving fund for Anayara 1 9 0 0 0 1 0

maintenance Nedumangad 0 10 0 0 0 0 0

Solar/wind energy Anayara 1 9 0 0 1 0 0



Table 4.44: NIAM classification – Infrastructure for maintenancefacility – farmer’s view

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Table 4.45: NIAM classification – Infrastructure for maintenance facility –trader’s view

If yes rating of availability

Yes No 1 2 3 4 5

Cleaning facility Anayara 9 0 1 0 1 7 0


Garbage collection Anayara 9 0 0 1 1 7 0


Garbage disposal Anayara 1 7 0 0 0 1 0


A.Vermin composting Anayara 0 9 0 0 0 0 0


B. Biogas plant Anayara 1 8 0 0 1 0 0


C. Bio gas power Anayara 0 9 0 0 0 0 0


Revolving fund for Anayara 0 9 0 0 0 0 0

maintenance Nedumangad 1 9 1 0 0 0 0

Solar/wind energy Anayara 0 9 0 0 0 0 0



4.5.6. Own infrastructure – trader

Many traders have own infrastructure as shown in the table. 50 per cent of traders in AnayaraandNedumangad has got storage facilities whereas godown facility is available for 30 per cent and 20 percent of traders in Anayara and Nedumangad. Washing facility and weighing machine is available foralmost all the traders in both the markets. Value addition infrastructure is available for 60 per cent and70 per cent of traders in Anayara and Nedumangad. Branding facility is available for 40 per cent oftraders in both the market. Grading and Packaging facilities are also available for many of the tradersbecause Kunnil, Welgate and Shesquare own super markets within the district.

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Table 4.46: Own infrastructure trader

Facilities Yes Percent No Percent

Storage Anayara 5 55.6 4 44.4


Godown Anayara 3 33.3 6 66.7

Nedumangad 2 20 8 80

Washing facility Anayara 9 100 0 0.0


Weighing machine Anayara 8 88.9 1 11.1

Nedumangad 6 60 4 40.0

Value addition Anayara 6 66.7 3 33.3

Nedumangad 7 70 3 30.0

Transportation Anayara 7 77.8 2 22.2


Branding Anayara 4 44.4 5 55.6


Packaging Anayara 6 66.7 3 33.3


Grading Anayara 6 66.7 3 33.3



4.6. Overall satisfaction – farmers and traders

Farmers and traders are satisfied with the location and accessibility of the markets, both in Anayaraand Nedumangad. Regarding the physical and operational conditions also traders are satisfied in bothmarkets, however farmers are not satisfied with the physical and operations conditions in the market.

Table 4.47: Overall satisfaction farmer

Number Markets Very Low % Moderate % High % Very %

low high

Location Anayara 0 0 0.0 4 40.0 5 50.0 1 10.0

Nedumangad 0 1 10.0 4 40.0 4 40.0 1 10.0

Accessibility Anayara 0 0 0.0 4 40.0 5 50.0 1 10.0

Nedumangad 0 1 10.0 4 40.0 5 50.0 0 0.0

Physical Anayara 0 0 0.0 3 10.0 8 80.0 1 10.0

conditions Nedumangad 3 10.0 4 30.0 3 60.0 0 0.0

Operational Anayara 0 0 0.0 2 20.0 7 70.0 1 10.0

conditions Nedumangad 0 7 70.0 2 20.0 1 10.0 0 0.0


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Table 4.48: Overall satisfaction trader

Number Markets Very low % Low % Average % High % Very high %

Location Anayara 0 0.0 1 11.1 3 33.3 3 33.3 2 22.2

Nedumangad 0 0.0 2 20.0 7 70.0 1 10.0 0 0.0

Accessibility Anayara 0 0.0 0 0.0 2 22.2 5 55.6 2 22.2

Nedumangad 0 0.0 1 10.0 7 70.0 2 20.0 0 0.0

Physical conditions Anayara 0 0.0 0 0.0 0 0.0 7 77.8 2 22.2

Nedumangad 0 0.0 0 0.0 5 50.0 5 50.0 0 0.0

Operational Anayara 0 0.0 0 0.0 1 11.1 6 66.7 2 22.2

conditions Nedumangad 0 0.0 0 0.0 5 50.0 5 50.0 0 0.0


4.7. Factors contributing to the inefficiencies in WM – Principal Components Methods

Forty-four variables are identified as contributing to inefficiencies in the market. Opinion ofthe farmers and traders is elicited in this regard in a five-point scale and Factor Analysis is undertakento derive out the major factors contributing to market inefficiencies.

Factor Analysis of Reasons for Market Inefficiencies

Table presents KMO and Bartlett’s Test for Factors responsible for market inefficiencies. Kaiser-Meyer-Olkin Measure of Sampling Adequacy is found to be 0.697 which indicates the proportion ofvariance in the variables reasonably caused by the underlying factors. High values (close to 1.0) generallyindicate that a factor analysis may be useful to explain the factors causing credit exclusion.

Table 4.49: KMO and Bartlett’s test for factors responsible for market inefficiency andCronbach Alpha showing reliability

The significance level of Bartlett’s Test of Sphericity is less than 0.05 which indicates that thevariables are related and hence the factor analysis is useful to examine the factors for credit exclusion.Factor analysis by Principal Component Method using Varimax Rotation extracted eleven factorswhich is capable of explaining 71.63 percentage of variance of all the forty-four variables related to

KMO and Bartlett’s Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.697

Bartlett’s Test of Sphericity Approx. Chi-Square 3146.24

df 946

Sig. 0.000

Cronbach’s Alpaha 0.836


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market inefficiencies. For clarity in the explanation of results small coefficients with absolute valuebelow 0.5 were suppressed and the results are given in Table 4.50.

Table 4.50: Factors of market inefficiencies extracted by principal component analysisFactors Variables Factor Loading Per cent of

VariancePolitical factors Lack of enthusiasm from authorities 0.796

Bad work culture 0.769Strong trade unions 0.767 11.81Nepotism 0.703Inactive administrative councils 0.683Political intervention 0.667

Market specific Delayed payments 0.741problems Public private partnership not included -0.703

Private investment low -0.674 10.38Disputes 0.661Cooption among traders 0.516Less market regulations 0.512

Physical and Low physical conditions 0.812Operational Condition Accessibility low 0.795 7.31of markets High operational costs 0.691

Location problems 0.672Infrastructure Issues Lack of subsidies 0.659

State policies not favourable for infrastructure 0.652Inadequate infrastructure 0.623 7.18Public investment less 0.592Less market development 0.537

Awareness/Coordination Lack of awareness 0.713issues Lack of co-ordination 0.654 6.95

Lack of knowledge 0.581Price factors Low price 0.770

Not enough price for organic products 0.642 5.52Invasion of products from other states 0.514

Exports/value addition No APMC act 0.800Processing/value addition less 0.737 5.49Export less 0.511

Marketing costs High cost of transportation 0.734No cold chain facility 0.665 5.09Tax concession low 0.546Market rate high 0.789

Land issues Lack of land available for cultivation 0.782 4.42Government policies ineffective 0.606

Financial issues Unavailability of credit 0.789 3.94High marketing cost 0.659

Demand issues Mismatch between demand and supply 0.601 3.45No demand forecasting methods 0.486


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From the Table 4.50 it can be seen that eleven factors are identified as contributing toinefficiencies. The First Factor consists of six variables viz., lack of enthusiasm from the part of theauthorities, bad work culture, strong trade unionism, nepotism, inactive administrative councils, politicalintervention etc. Since these variables are related to political factors, the factor has been identified aspolitical factors contribution to inefficiencies. These variables explain 11.81 per cent of variance.Among the variables in Factor one, the variable lack of enthusiasm from the part of the authorities(0.796 factor loading) is the most important factor reported by farmers and traders as contributing tomarket inefficiencies. Variables like bad work culture (0.767 factor loading) strong trade unionism(0.767 factor loading) also contributes to market inefficiencies. Factor two comprises of six variablesand this factor explains 10.86 per cent of variance in market inefficiency contributing factors. Theidentified variables are delayed payments, disputes, co-option, no market regulation etc. Public privatepartnership and private investment are viewed as not necessary by the farmers and traders. The secondfactor is termed as market specific factors. Factor three comprises of variables like inadequate orinappropriate physical conditions, issues relating to accessibility, operational costs, location etc. eachwith factor loading of 0.812, 0.795, 0.691 and 0.672 respectively. Factor three could explain 7.31 percent of variance in market inefficiencies. Factor four includes six variables related to infrastructureavailability and hence the factor has been termed as infrastructure factors, the variables being lack ofsubsidies, state policy not favourable or infrastructure, inadequate infrastructure, public investmentless, less market development etc. Factor four explains 7.18 per cent of variance in market inefficiencies.All the variables in factor four, are very influential variables for market inefficiencies as reported bytheir factor loadings. Factors five, six, seven, eight, nine, ten and eleven has been termed as awarenessissues, issues related to price, exports/value addition issues, marketing costs, land issues, financialissues and demand forecasting issues. Of these, lack of awareness is the most important contributor inthe awareness problems (0.713), low price (0.77) in price issues, unavailability of credit (0.781) towardsfinancial problems etc. Thus, these factors must be looked into immediately by the policy makers inorder to solve the inefficiencies related to marketing of agriculture produce.

To summarise,the Wholesale markets in the state were established to improve efficiency infood production and distribution by encouraging competition through creating conditions for transparentprice discovery at relatively low costs and by enhancing market information to various actors. Thisrole reduces per unit market cost, promotes stable market for local produce and encourages increasedoutput and productivity. By centralizing transactions at a single location, reducing the period fortransactions and separating wholesale and retail functions in the distribution system, whole sale marketspromote greater transparency and better price formation through an interplay of supply and demand.Storage and handling conditions are also enhanced, leading to significant reductions in post-harvestlost especially in the case of perishable products. Against these specified benefits expected fromWholesale Markets, analysis of the existing ones in Kerala reveals that the conduct and performanceof the Wholesale Markets are far below the benchmarks. Many functional and administrative crisiscan be found in the market relating to the conduct of market activity. Lack of accuracy in paymentsresult in discouragement of farmer’s participation in the markets. As of now, online trading facility is

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not established in the markets. Competition through creating condition for transparent price discoveryis also low because traders are few and, in several occasion, price is set by negotiation. During thetimes of bumper crops, there is distress sales and no mechanism for price regularity. The infrastructurefor storage, grading, packaging, value addition, market integration and facilitation is very low, henceeven after establishment of Wholesale Markets, post-harvest loss remains high. The provision forforward and backward linkages and demand forecasting is also absent in the market. The farmers alsofaced difficulty because of the perishability of the product and wanted the market to be opened on alldays. Hence to conclude the issues in relation to the structure, conduct and performance of the WholesaleMarkets needs to be addressed for making it meet the true requirements of farmers, traders and otherstakeholders.

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CHAPTER 5

Agriculture Marketing Infrastructure in Kerala: An Analysis ofWholesale Assembly Markets/Rural Periodical Markets in Kerala

WAM/RPM are the markets in which majority of consumers depend upon for purchasingessential commodities for living and agriculture produce forms the major commodity that is traded inthis market. In Kerala under each LSG, there is at least one market and they are entrusted with themaintenance of the markets. In order to assess the infrastructure facilities and requirement, five WAM/RPM were selected each from Trivandrum and Idukki.

5.1. Trivandrum – WAM/RPM

For in-depth analysis, from Trivandrum district two WAMs- Palayam and Nedumangad areselected. For understanding the RPM, markets in Kazhakootam, Pothencode and Nanniyodu are chosen.Unlike the other states, the structure and function of WAM/RPM are very different in Kerala, as thestate is dependent on other states for agriculture produce and imports a large share of agricultureproduce traded in the state. In other states WAM/ RPM has a function to mobilize the surplus productsfrom farmers to the second strand of supply chain, and thus becomes the most important place wherethe farmer comes in direct contact with the ultimate consumer/ wholesaler/retailer. And it is assumedthat after grading and standardization the surplus produce has to go to the wholesale markets. But theWAM/RPMs in Kerala show a unique pattern where mostly the markets are filled with sellers, whobuy produce from an ‘invisible famer’ in the neighboring state, through an intermediary. Naturally, thislarge supply chain creates ramifications in price determination, quality of products and conduct ofmarkets. From the observation of functioning of markets and discussion with stakeholders relating toadditional requirements, the following insights were revealed.

5.1.1. Infrastructure

Infrastructure facilities at the five markets are compared in the below table to understand how theabsence and presence of the infrastructure facilities may affect the structure, conduct and performanceof the markets.

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Table 5.1: Wholesale Assembly Markets – Infrastructure

Basic Facilities Palayam Nedumangad Kazhakootam Potencode Nanniyode

Auction Hall No No No No No

Individual platform Yes No Yes No No

Shops Yes Yes Yes Yes Yes

Weigh bridge No No No No No

Sitting facility Yes No No No No

Office Building Yes No No No No

Toilet complex/ rest room Yes No Yes No Yes

Electricity Yes No Yes No Yes

Crop specific platform No No No No No

Storage No No No No No

Waste management Facility Yes No Yes No Yes

Quality Test No No No No No



The two WAM- Palayam and Nedumangad and the RPMs are governed by Local SelfGovernments. Palayam and Kazhakootam markets are monitored by Trivandrum Corporation, andthere is an administrative office inside the Connemara market, Palayam where a health inspector andoffice assistants directly oversee the working of the market.

Infrastructure: Compared to other markets, the two markets – Palayam and Kazhakootam - are betterwith regard to infrastructure facilities. New Trading hall with roofing and flooring has been built in thetwo markets. In Kazhakootam market, there is separate trading platform to sell tapioca which is a highdemand commodity. And the sellers are provided with individual selling platforms. Also, corporationcleaning staff cleanses the whole area two times and the market is protected with a wall. However,there is no waste management facility inside market, but a biogas plant is installed. The waste collectedis transported to Vilapilsala and the sellers are advised to take away any waste generated since there isno facility inside market. With regard to service facilities, the market does not have any security system.But there are good toilet facilities, light and fan facility. There is parking facility for two wheelers, butthe market space is less and so during evening the market is congested. Occasional quality checks aredone from the Corporation to ensure quality of produce.

Palayam market is being renovated. The vegetables market and shops are renovated andrenovation of fish market has to start. Even though the market has toilet facilities, drainage, they arenot functioning properly. And the trading hall which is built does not accommodate all sellers. Oneimportant attraction of the market is the parking facility provided to buyers and the proper maintenanceof the facility by the security guard.

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Conduct: Sellers in the Palayam market buy produce from Chala and Vilapilsala markets and resale itin the market. Sellers have to incur floor rent, transportation expense, travel expense, waste managementcharge (Rs.150 per day), loading charge (Rs. 25 for 70 kg), in order to sell in the market. Market doesnot have a price discovery mechanism and there is variation in price.

In Kazhakootam, the new market started functioning before four months and the working timeis from 5.am to 9 p.m. Majority of the vegetables come from Tamil Nadu and Mysore and the twomajor wholesalers in the market buy the produce from them. All the other retailers are buying from thewholesalers and selling the product at a hiked rate to individual consumers. Only one shop is sellinglocal vegetables produced nearby to the market which are organic. There are individual sellers whosell tapioca, spinach, chilly and jack fruit which is produced locally, but they are of small quantity.Major trade happens with the middlemen and seller in market based on the mutually agreed price andquantity.

The sellers do not have any association and they are fragmented in their opinions. There existsmuch variation in price inside the market among different sellers and at different times of the day.There is no price discovery mechanism operate since auction facility is not there and price index is notdisplayed in the market. Every seller fixes a price, which is above the price at which they bought theproduce from wholesalers. And the margin varies between Rs.5 to 20 per kg. depending on the natureof consumer, time of sale etc. for instance, during evenings, the prices drop very much as there is arush of consumers. Retailers pack the vegetables into small quantities and sell them to consumers,who are local people. The retailers get the produce at credit which they repay once they sell all thequantities purchased from wholesaler, that may take at least two days.

As the new market starting functioning few months early, the market is not leased out. So,none of the sellers have to pay registration fee or rent. There are some disputes among the sellers andfarmers. Farmers are of the opinion that they have to compete with the cheap imports from other statesas premium price is not getting for their organic produce and there is no auction facility or a place tosell directly.

The three other markets Nedumangad, Pothencodeand Nanniyodelacks basic infrastructurefacilities. Nedumangad is Wholesale Assembly Market and is governed by the NedumangadMunicipality and Pothencode market is under Pothencode Panchayat. The market is leased for anamount of 20 lakhs and rent has been collected from sellers. However, the markets lack basicinfrastructure such as trading hall, internal roads, drainage, weighing machines, parking facility andwaste management facility. The new market building has been under construction for three years, butit is not completed yet. Traders has to give entry fee (Rs.40), floor rent (Rs.40), shop rent (Rs. 1000),loading charges in the market. They are deprived of the basic facilities such as toilet facility, drinkingwater facility. Once a famous and renowned market, the market is losing its significance as there doesnot have basic infrastructure.

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Around 110 sellers are there in the market and major trading days are Wednesday and Saturday.In Pothencode market, local farmers turn up in early morning and sell their produce just outside themarket, since the farmers are not provided with an auction hall and facility to sell. Most of the agricultureproduce come from Tamil Nadu, and the wholesalers has occupied the newly built trading hall andconverted it into a storage space. The market is very unhygienic and many of the sellers has reported tohave skin infections and other disease because of the poor infrastructure. The market is situated adjacentto the bus stand and there are space constraints. Poor infrastructure has resulted in increased productionloss. This has led to loss incurred by sellers.

5.2. Idukki – WAM/RPM

Five markets are selected from Idukki for detailed study. Two WAMs-Kattappana market andNedunkandam Market – and three RPMs- markets at Thookupalam, Elappara and Pambanar are selected.Being unique in its topography and with presence of migrant population from Theni, the markets inIdukki need to be analyzed distinctly.


Following table depicts a comparison of infrastructure facilities in the markets in Idukki. Themarketing infrastructure and requirement are discussed in detail below.

Table 5.2: Wholesale Assembly Markets: Infrastructure

Basic Facilities Kattapapna Nedumkandam Thookupalam Pambanar Elappara

Auction Hall No No No No No

Individual platform Yes No Yes No Yes

Shops Yes Yes Yes Yes Yes

Weigh bridge No No No No No

Sitting facility Yes No No No No

Office Building Yes No No No No

Toilet complex/rest room Yes No Yes No No

Electricity Yes No Yes No Yes

Crop specific platform No No No No No

Storage No No No No No

Waste management Facility Yes No Yes No No

Quality Test Yes No Yes No No


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The most important market in Idukki is Kattappana market, which is under the KattappanaMunicipality. Being set up a longtime ago, the market is a major trading center where not only vegetables,meat and fish but also all items are being trade.Municipality gains around Rs.82,09,707/-as provisionaltax rent and Rs. 2 crore 10 lakhs as property tax.

The market is situated in three lines and in the upper line, vegetables are sold. Both wholesaleshops and retail shops are in the market and they work from 7a.m. to 9p.m. A total of around 100 shopsare in the market and there are traders who comes to the market on the market day which is Saturdayand sell vegetables by paying an entry of Rs. 230. The yard is not rain proof, so they are paying aroundRs. 250 as rent for Tarpaulin sheet by which they make a temporary shed. They are paying a floor rentto the auctioneer who has taken the trading yard for one year for the amount of Rs. 10 lakhs. Others arepaying rent ranging from 3000 to 15000 based on the facilities of the shop. The market has basicfacilities such as toilet, which is use and pay and electricity and water supply, drainage and rain proofexcept the trading yard where temporary sellers sell. Traders have to meet the transportation cost andloading and unloading fees. Traders are paying a license fee of Rs.1000 and Employment tax of Rs.1000.also, they are contributing towards development of market infrastructure. For instance, the traders onan average paid Rs. 28000/- towards building drainage and doing the rain proof. The MerchantAssociation is very active and meeting are being conducted.

Almost all vegetables are coming from Theni and Kamabam, the nearby places in Tamil Nadu.Tapioca and coconut mostly come from within Kerala, mainly from Guruvayoor, and Moolamattam.VFPCK is also supplying vegetables, especially cow pea, ginger, turmeric, bitter gourd and banana inthe market. There are large traders who sell 1.5 tons of tapioca and coconut to retail shops.

Currently the waste is being collected in the early morning by Municipality workers and is sentto dumping yard at Puliyanmala. The work of Incinerator and Bio converter plant is progressing forwhich around 30 lakhs are invested by the Municipality with contribution from traders. The market isnot having storage facility, grading or assaying facility and the traders are compelled to give donationsfor every program. The market prices for spices are taken from average price at spice board auction.However, for vegetables there is no transparent system for price fixation and price is not displayed.

The other WAM, Nedumkandam literally lacks the essential infrastructure including tradinghall, electricity and toilet facilities. Most of the sellers are migrant traders from Tamil Nadu who staysin their shop itself. Around 25 shops are functioning in the market including one Haritha Kendra. Floorrent is collected from traders and for waste management Rs. 60 is collected by the Panchayat. Themarket is in grave need of essential infrastructure such as internal roads, drainage, electricity and goodshops. The market unhygienic and not accessible.

With regard to the two RPMs, Thookupalam, under Karunapuram Panchayat and Pambanarmarket under Peerumade Panchayat, the infrastructure facilities are pathetic. Auction day inThookupalam market is on Sunday and all the traders are sitting in the floor since the Panchayat hasinitiated construction of new market which may take at least three years for completion. And the

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traders are not provided with alternative infrastructure which makes the trading difficult. Vegetablescome from Kambam and Theni and traders are paying a floor rent of Rs. 40. In the Pamabanar marketthere is a lack of basic infrastructure such as drainage, drinking water, auction hall, rain roofing, pricedisplay and facility for waste management. Still the traders are paying a license fee of Rs. 1700 andshop rent about Rs. 1500. There are about 50 sellers in the market and they are employing a security bycollecting Rs. 60 from the sellers.

Market in Elappara is a best example for how lack of maintenance and imprudent constructionof market by panchayat can lead to ceasing functioning of the market. A new market was constructedwith the financial help of Rs. 25 lakhs from NABARD, in the place of old market. Once a marketwhere trade was affluently happening, after construction, the trade was stopped, owing to the poorplanning and construction of market infrastructure. The shops constructed were not spacious enoughand the materials used for construction was of poor quality. The sellers were not able to use the shopsand the market was inaccessible and the trade slowly stopped. Currently the market has less than 10sellers and the trade has been very less.

5.3. Performance of Wholesale Agricultural Markets/Rural Periodic Markets

The performance of RPM/WAM is understood by collecting and analysing primary data from tenWAM/RPM in Kerala, five each from the districts of Thiruvananthapuram and Idukki. Fifty samplessellers are also randomly selected from WAM/RPM five from each market. The socio- demographicand market operation details are reported in the first section and the infrastructure facilities as perceivedby the sample is analysed in the second section.

Section A

5.3.1. Socio-economic-market operation details of sample respondents

As given in Appendix 4 tables, five sellers are selected from each of the markets, thus forming25 from Trivandrum and 25 from Idukki. In Trivandrum, within Nanniyode market, a panchayat stalland VFPCK stall within the market is selected. Seventy per cent of the sample traders are male and 30per cent are females. Mean age of the seller is 53 in Trivandrum and 49 in Idukki, and the averageyears of engagement in trading business is 19 in both markets. The startup capital amount for a traderin Trivandrum is an average amount of Rs.46,580 and Rs.19,080 in Idukki.

Ninety-four per cent of the sellers in RPM engage in trade activity alone, with 100 percent ofIdukki traders engaging in trade alone. Seventy-six per cent of the sellers participate in trade yeararound. Regarding the products that are brought for sale, only one person out of the 50 bring his/herown product to the market (in Kazhakuttam market). Only 10 per cent collect it directly from domesticfarmers. Another 10 per cent collect it from intermediary traders in Kerala, 18 per cent from wholesaleseller in the same market, 8 per cent from different markets inside Kerala and 52 per cent from otherstates, particularly Tamil Nadu and Karnataka. Buying of agriculture produce from other states forresale in the RPM is rampant in Idukki, where 84 per cent of the sellers are doing the same thing. InTrivandrum, this is happening for five traders, that too particularly in Nanniyode and Pothencode

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market. Purchasing from WS seller in the same market and resale in the same market happens mainlyin Kazhakuttam. It is the Wholesale seller who orders bulk purchase and from them retail sellerspurchase their required quantity.

Table 5.3: Nature of trade activity (RPM Sellers)

Activities Trivandrum Idukki Total

Number % Number % Number %

Trade activity

Alone 22 88 25 100 47 94

With a partner 1 4 0 0 1 2

Others 2 8 0 0 2 4

Total 25 100 25 100 50 100

Participation in trade year around

Yes 21 84 17 68 38 76

No 4 16 8 32 12 24

Total 25 100 25 100 50 100

Nature of buying agricultural produce for sale

Own produce 1 4 0 0 1 2

Directly collect from domestic farmers 3 12 2 8 5 10

From intermediary traders in Kerala 4 16 1 4 5 10

From wholesale seller in the same market 8 32 1 4 9 18

From different market inside Kerala 4 16 0 0 4 8

From other states 5 20 21 84 26 52

Total 25 100 25 100 50 100


Marketing Expenditure Incurred

The sample collected is in such a way that some are operating shops within the market and some sitin the market and engage in selling activities. The expenditure incurred for the trade activity is givenin table; these expenses form the marketing expenses. Out of the total sample collected, seven operateshops in Trivandrum and 14 operate shops in Idukki. Per month rent is Rs.7057 for Trivandrum andRs.3759 for Idukki. The shops also have electricity expenses. Labour cost is incurred by five sellers inTrivandrum and three sellers in Idukki, the average cost of labour charges being Rs.28800 for Trivandrumand Rs.37000 for Idukki. These eight sellers that incur labour cost are big sellers owning shops withinthe market and employing two or three labourers per day, and their average sales turn over beingRs.20,000 per day. Transportation cost forms a major cost incurred by the sellers with a mean value ofRs.7839 for markets in both the districts. Loading charges to an extend of Rs.3090 and Rs.2133 isincurred by sellers in Trivandrum and Idukki respectively. Product loss to an extend of Rs.5143 in

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Trivandrum and Rs.674 in Idukki is also happening. A seller in Trivandrum incurs an average marketingcost of Rs.20,794 and the concerned value in Idukki is Rs.13,403. Considering both the markets themean expenditure incurred for marketing is Rs.17098. Table 7 shows the per cent distribution ofmarketing cost. The most important component of marketing cost is transport cost (25.55 per cent)followed by rent (16.08) and market fee (14.9 percent).

Table 5.4: Marketing Expenditure incurred

Items Trivandrum Idukki Total

Mean N SD Mean N SD Mean N SD

Rent 7057 7 7068.9 3759 14 3218 4858 21 4926

Electricity 564 7 349.7 216 15 138 327 22 274

Labour 28800 5 33544.0 37000 3 19287 31875 8 27700

Credit 100 3 173.2 6903 3 4711 3501 6 4772

Transport 7595 20 11192.0 8215 13 20265 7839 33 15115

Market fee 823 18 589.3 329 19 291 569 37 519

Loading 3091 16 2874.8 1446 15 2133 2295 31 2637

Packing 1888 4 2181.9 900 2 849 1558 6 1806

Product loss 5144 19 10685.3 675 11 711 3505 30 8709

Others 136 7 106.9 127 12 220 130 19 183

Total Marketing cost 20794 25 34237.7 13403 25 28487 17098 50 31394


Table 5.5: Expenditure incurred for shop (Percent)

District Trivandrum Idukki Total


Rent 11.7976 25 24.19616 20.3648 25 25.51446 16.0812 50 24.98655

Electricity 0.862 25 2.05556 5.1388 25 13.41146 3.0004 50 9.73827

Labour 6.5596 25 16.6385 6.8508 25 20.89278 6.7052 50 18.69269

Credit 0.1792 25 0.896 6.4344 25 18.3481 3.3068 50 13.2388

Transport 32.0216 25 28.40306 19.092 25 23.22713 25.5568 50 26.49578

Market 12.7468 25 24.01418 17.1696 25 27.66615 14.9582 50 25.73603

Profession 0 25 0 2.1408 25 7.22866 1.0704 50 5.17327

Loading 12.3804 25 17.00234 10.1776 25 13.39856 11.279 50 15.19068

Packing 4.4256 25 13.27521 0.482 25 2.19188 2.4538 50 9.62485

Production 18.7748 25 22.76781 10.546 25 21.59131 14.6604 50 22.34963

Others 0.3716 25 0.86074 2.316 25 5.28196 1.3438 50 3.87198


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Difference in the sales value and purchase value of selected agriculture commodities

Per month difference in the sales value and purchase value of each agriculture commodity is givenin the table. On an average, a seller receives Rs.29560 per market as the difference between purchaseprice and sale price with Rs.29082 in Trivandrum and Rs30018 in Idukki. Within vegetables, thedifference between sales value and purchase value is highest in the case of bitter guard, chilly andcucumber in Trivandrum and cowpea and bitter guard in Idukki. Regarding tapioca, a seller in Idukkiget a surplus value of Rs.4480 followed by coconut (Rs5892) and ginger (Rs.4269) whereas thecorresponding values in Trivandrum are Rs.7476, Rs.5925 and Rs.3208. The figures are summarizedand analysed in the next table in terms of total revenue, cost and difference between cost and revenuealong with marketing cost and marketing margin.

Table 5.6: Mean difference in the purchase value and sales value of selected agriculturecommodities sales in a month

District Trivandrum Idukki Total


Tapioca 7475.636 11 6186.721 44480 10 87542.05 25096.76 21 61857.86

Banana 7368.75 8 9198.328 3720 5 2398.333 5965.385 13 7395.026

Coconut 5925.833 12 7889.075 5892.308 13 7644.874 5908.4 25 7599.202

Ginger 3208.571 14 4629.476 4269.333 15 5598.29 3757.241 29 5090.385

Cowpea 3905.882 17 7901.758 16248 5 27903.75 6710.909 22 14963.48

Spinach 4593 10 3311.955 200 1 . 4193.636 11 3409.772

Cucumber 6812.727 11 8899.625 1195 8 1844.893 4447.368 19 7310.669

Gourd 5380.909 11 5990.902 1291.429 7 1620.776 3790.556 18 5123.254

Bitter guard 16866.67 3 26962.44 5320 9 12113.22 8206.667 12 16314.44

Chilly 11053.85 13 23024.32 1500 1 . 10371.43 14 22267.93

Sales-Purchase 29082.17 24 42972.44 30018.4 25 61477.74 29559.84 49 52676.6


Cost, Revenue and Marketing Margin

Since marketing cost cannot be separated for each agriculture output, marketing margin can onlybe estimated for the total products. Table 9 shows that the difference between sales revenue andpurchase cost is Rs.29092 for Trivandrum, Rs.30018 for Idukki and Rs.29560 for both the markets asan average. When the marketing cost is subtracted from this difference, market margin is obtained.The market margin as an average is Rs.7630 for Trivandrum and Rs.16615for Idukki. It is to be notedthat only the crops selected in the study are considered here and the sellers sell other agriculturalproducts also including tomato, potato, ladies’ finger, onion, pumpkin etc. which are common items inKerala food dishes and hence marketing margin may be higher than what is reported.

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Table 5.7: District wise total revenue, cost, marketing cost and market margin in a month

Districts Total revenue Total cost Difference Marketing Market

cost margin

Trivandrum Mean 189395 162954.3 29082.17 20793.76 7630.333

N 25 24 24 25 24

SD 311469.6 279292.7 42972.44 34237.68 43195.33

Idukki Mean 113977.6 83959.2 30018.4 13403.2 16615.2

N 25 25 25 25 25

SD 176701.4 116262.1 61477.74 28487.08 43046.94

Total Mean 151686.3 122650.7 29559.84 17098.48 12214.45

N 50 49 49 50 49

SD 253497.1 213839.7 52676.6 31393.6 42908.74


Payment Schedule

Table 5.8 shows the payment schedule of the traders. Fifty two percent have to pay on buying,

six per cent even before buying and for 18 per cent the payment schedule is pay after sale.

Daily payment schedule is available for 6 per cent and weekly and monthly for 14 per cent and

2 per cent.

Table 5.8: Payment Schedule

Number Percent

Monthly 1 2

Weekly 7 14

Daily 3 6

Pay after sale 9 18

On buying 26 52

Before buying 3 6

Others 1 2

Total 50 100


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Details of purchasing, storage and physical treatment

Price and proximity are the two factors that determine from where purchase should be madefor resale. Majority do not have information on market price before entering into purchase, those whoget information get it form colleagues in the market. Physical treatment is made by many beforeresale, physical treatment includes sorting, grading, packaging and cutting manually.

Table 5.9: Details of purchasing, storage and physical treatment

Number Percent Number Percent

Factors that determine the choice of purchase If yes, source of information (N=11)

Price 15 30 Cooperative 0 0

Proximity 25 50 Commission Agent 2 18.2

Other 3 6 Colleagues in The Market 6 54.5

Availability 7 14 Traders 1 9.1

Total 50 100 Others 2 18.2

Price setting Own Storage facility

Myself 2 4 Yes 1 2

The Seller 34 68 No 49 98

Negotiation 4 8 Total 50 100

Other 10 20 Physical treatment to maintain quality

Total 50 100 Yes 32 64

Awareness of market price before auctioning No 18 36

Yes 11 22 Total 50 100

No 39 78 Type of physical treatment

Total 50 100 Sorting 19 59.4

Grading 17 53.1

Packaging 6 18.8

Cutting 21 65.6

Divisioning 11 34.4


Regarding sales in the market, the seller himself sets the price and awareness regarding themarket price is available for majority of sellers and the source of market price is mainly colleagues.Around half of the sellers consider information on prices as effective and timely whereas the other halfdo not have any opinion regarding this.

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Details of trading licenses

Sixty-four per cent of the sellers have trading license and as an average an amount of Rs.1131was paid per year for trading license renewal in Trivandrum and Rs.3098 in Idukki. Some sort ofrestrictions is kept for entry for new sellers in Kazhakkoottam market.

Table 5.10: Details of selling price and informationNumber Percent

Setting of selling priceMyself 46 92.0The Buyer 1 2.0Negotiations 1 2.0Other 2 4.0Total 50 100.0Awareness of market price before sellingYes 46 92.0No 4 8.0Total 50 100.0Source of market priceColleagues 35 76.1Trader 5 10.9Dealers 4 8.7Newspaper 1 2.2Market Officials 1 2.2Total 46 100.0Effectiveness of informationEffective 27 54.0Undecided 23 46.0Total 50 100.0Timeliness of informationTimely 28 56.0Undecided 22 44.0Total 50 100.0


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Table 5.11: Details of trading licenseNumber Percent

Trading licenseYes 32 64No 18 36Total 50 100Entry restrictionsYes 3 6No 47 94Total 50 100Payment for trading license

PaymentTrivandrumMean 1131.2N 25Std. Deviation 3025.971IdukkiMean 3098N 25Std. Deviation 6145.467TotalMean 2114.6N 50Std. Deviation 4895.88


Section B

Section B examines the infrastructure facilities available in market as reported by the samplealong with satisfaction levels.

5.3.2. Infrastructure Facilities Available in the Market: Selling Platform

Details of Selling Platform as opined by the sellers is provided in table 5.12. Selling platforms isavailable for 66 per cent and crop specific selling platform is available only according to five persons(10 per cent). Selling platform is available in Kazhakuttam, Palayam, Elappara, Pothencode andNanniyode. However, in Elappara, the platform is not used because of the very bad condition. Paymentdisplay is available in VFPCK stall in Nanniyodeand Pothencode has auction hall. Weighing machineis available for 78 per cent of the sellers. Selling platform is provided by different agencies includingCorporation, Municipality, Panchayat and VFPCK based on the locality. Fifty per cent of the sellersreported the condition of the Selling Platform as below average.

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Table 5.12: Details of Auction Hall – views of sellers

Selling Crop Specific Price Display Payment Display Weighing Notice Board

Auction MachinePlatform

Facility Yes 33(66) 5(10) 0 1(2) 39(78) 0No 17(34) 45(90) 50(100) 49(98) 11(22) 50(100)

Satisfaction Very Bad 20(40) 0 0 0 0 0Bad 5(10) 0 0 0 0 0Average 3(6) 0 0 0 0 0Good 3(6) 3(6) 0 0 5(10) 0

Very Good 2(4) 2(4) 0 1(2) 34(68) 0

Note: Per cent in parentheses. Source: Primary data

Infrastructure for Performing Physical Functions of the Market

The first category of infrastructure needed for performing physical function of market istransportation. Table shows the transport related infrastructure facilities in the market and satisfactionregarding the same. Loading facility is available in all markets. Ninety per cent have road facility andeight two per cent have facilities for transporting from purchase point to market. All sellers havefacilities for passenger transport. Trucks/insulated AC vans etc. is not available in any of the markets.Parking facility is available in Kazhakkootam, Palayam and Nanniyode. Kazhakkootam providesparking facility only for two wheelers and the sellers raised complaints regarding the parking of loadingvehicles in front of the market as this affect their sales because of the inconvenience caused to thesellers. In Palayam, parking fee is charged, whereas for Kazhakkootam and Nanniyode parking isfree. Nanniyode market do not have an official parking space, but free space is available for parking.Majority have average level of satisfaction with the loading facility with specific difference betweenmarkets. and same is the case with road facilities.

Table 5.13: Infrastructure for physical movement of goods (Transportation) - views of sellers

Loading Trans: Road Transfrom Passenger Check Parking Trucks/ MainteInside Field Post Insulated nance

Van (AC) of Vehicle

Facility Yes 50(100) 0 45(90) 41(82) 50(100) 0 15(30) 0 5(10)No 0 50(100) 5(10) 9(18) 0 50(100) 35(70) 50(100) 45(90)

Satisfaction Very Bad 1(2) 0 2(4) 2(4) 0 0 0 0 0Bad 7(14) 0 14(28) 2(4) 0 0 1(2) 0 0Average 28(56) 0 3(6) 17(34) 0 0 2(4) 0 0Good 13(26) 0 8(16) 19(38) 22(44) 0 11(22) 0 1(2)Very Good 1(2) 0 18(36) 1(2) 28(56) 0 1(2) 0 4(8)


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Infrastructure for storage functions

Infrastructure facilities for storage is analysed in table 5.14. Cold storage, dry storage, mobilestorage units, ware house or drying yards is available in none of the markets. Banana is frequently soldin all the markets but only in Nanniyode market a ripening chamber is available. A Panchayat stallselling vegetables is inside the market, which has got a ripening chamber for banana. Regarding godown,public sector godown is available in none of the markets. However, two big wholesale sellers inNedumangad market has their own godown. It is a big store room for storing vegetables coming fromother states. Sellers from Kazhakkootam, Palayam, Nanniyode, Kattappana, and Pothencode opinethat washing facility is available within the market. Opinion regarding the washing facility is very badfor Pothencode, Palayam and Katappana markets, whereas it is very good for traders fromKazhakkootam.

Table 5.14: Infrastructure for storage facilities – views of sellers

FacilityCold Ripening Dry Godowns Mobile Ware Drying Washing Assaying

storage chambers storage storage units houses yards facilityYes 0 1(2) 0 2(4) 0 0 0 30(60) 0No 50(100) 49(98) 50(100) 48(96) 50(100) 50(100) 50(100) 20(40) 50(100)SatisfactionVery Bad 0 0 0 0 0 0 0 15(30) 0Bad 0 0 0 0 0 0 0 5(10) 0Average 0 0 0 0 0 0 0 5(10) 0Good 0 1(2) 0 1(2) 0 0 0 0

Very Good 0 0 0 1(2) 0 0 0 5(10) 0


Infrastructure for Value Addition

Facilities for value addition including machinery, in house product testing laboratory etc. is notavailable in any of the markets. Only in Nedumkandam market, one seller owns a food irradiationunit. He sells cardamom powder, turmeric powder and some ayurvedic items. The items are soldunder his brand name. Other facilities for value addition are not reported from any market.

Infrastructure for Standardisation

Standardisation facilities are low in RPM markets. Infrastructure for uniform standards is notavailable. When sellers travel to destination including other states or when dealers bring loads to themarkets, collective loads are happening. Quality testing labs, and Quality certification infrastructureetc. is not available. Regarding surveillance camera, camera is installed by the Panchayath in Nanniyodemarket, sellers feel it as very helpful for preventing theft at night. In Palayam also one seller reportedthat he has installed camera and CCTV for his shop. The satisfaction with the available infrastructurefacilities is high for the sellers.

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Table 5.15: Infrastructure for standardization – views of farmers

Uniform Display Economic loads Quality Quality Weighing Surveillance

standards of samples (collective testing labs certification machines

loads) camera

Facility

Yes 15(30) 34(68) 25(50) 0 0 37(74) 6(12)

No 35(70) 16(32) 25(50) 50(100) 50(100) 13(26) 44(88)

Govt 0 0 0 0 0 0 5(10)

Satisfaction

Very Bad 0 0 0 0 0 0 0

Bad 0 0 0 0 0 0 0

Average 0 0 0 0 0 0 0

Good 0 4(8) 3(6) 0 0 3(6) 5(10)

Very Good 15(30) 30(60) 22(44) 0 0 34(68) 1(2)


For grading and packing the only available equipment is electronic weighing. Scientific labs,grading apparatus, dispatching facility etc. is not available. Machinery available for packing is onlyseen in the case of the seller from Nedumkandum, the machinery being his private machinery.

Table 5.16: Infrastructure for Grading and Packing – views of sellers

Scientific Grading Electronic Machines Labeling Dispatchinglabs apparatus weighing for packing facility facility

Facility Yes 0 0 22(44) 1(2) 0 0

No 50(100) 50(100) 28(56) 49(98) 50(100) 50(100)

Satisfaction Very bad 0 0 0 0 0 0

Bad 0 0 0 0 0 0

Average 0 0 0 0 0 0

Good 0 0 4(8) 1(2) 0 0

Very good 0 0 18(36) 0 0 0


Market Financing

Market financing facility is also rare in the RPMs. Credit facility to sellers is available inKazhakootam and Nanniyode markets. These sellers can avail this facility from whole sale traders,they pay cash after the sale. Bank/ATM facility is only found in one market, i.e., in Nanniyode market,a Co-operative society is operating in this market.

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Credit facility Credit Bank/ATM Loan Incentives Credit Shares

to buyers facility to facility sharing

sellers

Facility Yes 0 2(4) 5(10) 0 0 0 0

No 50(100) 48(96) 45(90) 50(100) 50(100) 50(100) 50(100)

Satisfaction Very Bad 0 0 0 0 0 0 0

Bad 0 0 2(4) 0 0 0 0

Average 0 0 1(2) 0 0 0 0

Good 0 1(2) 2(4) 0 0 0 0

Very Good 0 1(2) 0 0 0 0 0


Table 5.17: Infrastructure for market financing (views of sellers)

Market Information

Infrastructure regarding provision of market information is also weak in the markets. Palayammarket has got an office for managing market data. From Nanniyode, the VFPCK stall is having datamanagement systems. Along with that the Panchayat stall also maintains a data management system.Palayam market also has an information counter. Hence in general the infrastructure for marketinformation is generally low in RPMs.

Table 5.18: Infrastructure for market information – views of sellers

Computer Data Information Market Counter Notice Advertis Market

Data Manage Dissemination surveys board ement education

ment

Facility Yes 2(4) 3(6) 1(2) 0 5(10) 0 0 0

No 48(96) 47(94) 49(98) 50(100) 45(90) 50(100) 50(100) 50(100)

Satisfaction Very Bad 0 0 0 0 0 0 0 0

Bad 0 0 0 0 0 0 0 0

Average 0 0 0 0 5(10) 0 0 0

Good 1(2) 2(4) 1(2) 0 0 0 0 0

Very Good 1(2) 1(2) 0 0 0 0 0 0


Market Integration

Market integration facility is available according to 15 sellers. Horizontal integration is happeningin almost all markets because traders are connected with traders outside Kerala and within the districts.Vertical integration is happening in some markets, particularly in Pothencode and Palayam because

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small traders purchase from these markets and sell in other places. In VFPCK stall in Nanniyode,horizontal integration is happening because of integration with Horticorp. Outwardly, forwardintegration is happening only in the case of one person in Nedumkandam market, because he has agro-business.

Table 5.19: Infrastructure for market integration – views of sellers

Market Risk Vertical Horizontal Trader Digitali ICT Forwardintelligence bearing integration integration linkage sation integration

Facility Yes 15(30) 3(6) 12(24) 6(12) 35(70) 1(2) 1(2) 1(2)

No 35(70) 47(94) 38(76) 44(88) 15(30) 49(98) 49(98) 49(98)

Panchayat 0 0 1(2) 0 0 0 0 0

Satisfaction Very Bad 0 0 0 0 0 0 0 0

Bad 0 0 0 0 0 0 0 0

Average 0 0 0 0 2(4) 0 0 0

Good 12(24) 2(4) 12(24) 6(12) 23(46) 1(2) 1(2) 0

Very Good 3(6) 1(2) 0 0 10(20) 0 0 1(2)

5.3.3. NIAM Classification of Infrastructure Facilities

Core and Service facility

Out of the thirteen core facilities, Auction Platform is available in two markets (VFPCK andPothencode), loading facility in all markets and information centre in one market. Ripening chamberis found only in the Panchayat stall in Nanniyode. All other facilities including storage/cold rooms/grading facilities etc.were not available. Out of the twelve support facilities, water supply is availableaccording to fifty per cent of the traders, power supply according to thirty traders, sanitary facilities insix markets, banking in only one market, input supply and necessary outlet in two and repair andmaintenance service office in one market. Water Supply and Sanitary facilities are not available inNedumangad, Pamabanar, Elappara and Thookkupalam. Rain proofing is reported by only 66 per centof the sellers. The facilities, particularly water supply, sanitary facilities in Kazhakuttamare ratedsatisfactory by the sellers whereas in other markets it is rated less than satisfactory. In Elappara thereis a service workshop inside the market. Input supply and necessary outlets are found in Nedumkandamand Nanniyode. Regarding rain proofing, footpath sellers inside the market have no rain proofing.Sellers in Thookkupalam market have no rain proofing because all sellers are being shifted to nearbyplace since the market is being rebuild.

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Table 5.20: Core facility

Facilities Facility Satisfaction

Yes No Very Bad Bad Average Good Very Good

Platforms for Automatic weighing 0 50(100) 0 0 0 0 0

Auction Platforms 10(20) 40(80) 1(2) 3(6) 1(2) 3(6) 2(4)

Packaging & Labeling Equipments 1(2) 49(98) 0 0 0 1(2) 0

Drying Yards 0 50(100) 0 0 0 0 0

Loading, Unloading & 50(100) 0 1(2) 7(14) 28(56) 13(26) 1(2)

Dispatch facilities 0 50(100) 0 0 0 0 0

Grading facilities 0 50(100) 0 0 0 0 0

Standardization facilities 15(30) 35(70) 0 0 0 0 15(30)

Price Display Mechanism 0 50(100) 0 0 0 0 0

Information Centers 5(10) 45(90) 0 0 5(10) 0 0

Storage / Cold Rooms 0 50(100) 0 0 0 0 0

Ripening Chambers Public

Address System 1(2) 49(98) 0 0 1(2) 0

Extension and Training to Fanners 1(2) 49(98) 0 0 0 1(2) 0


Table 5.21: Support facility

Facility Facility Satisfaction

Yes No Very Bad Bad Average Good Very Good

Water Supply 25(50) 25(50) 4(8) 1(2) 1(2) 4(8) 5(10)

Power 30(60) 20(40) 3(6) 3(6) 2(4) 5(10) 17(34)

Veterinary Services 0 50(100) 0 0 0 0 0

Sanitary Facilities 30(60) 20(40) 15(30) 5(10) 5(10) 0 5(10)

Posts 0 50(100) 0 0 0 0 0

Telephones 0 50(100) 0 0 0 0 0

Banking 5(10) 45(90) 0 2(4) 1(2) 2(4) 0

Input supply &Necessity OutletsPOL 10(20) 40(80) 0 0 5(10) 5(10) 0

Repair I MaintenanceService Office 5(10) 45(90) 0 0 0 2(4) 3(6)

Computerized systems 1(2) 49(98) 0 0 0 0 1(2)

Rain Proofing 33(66) 17(34) 3(6) 2(4) 5(10) 11(22) 12(24)


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Table 5.22: Services Infrastructure

Facility Available

Total Not Very Bad Bad Average Good Very Good

(Available) Available

Rest rooms 17(34) 33(66) 0 3(6) 6(12) 8(16) 0

Sheds for animals 0 50(100) 0 0 0 0 0

Market education 1(2) 49(98) 0 0 0 1(2) 0

Soil testing facilities 1(2) 49(98) 0 0 0 1(2) 0

Drainage 30(60) 20(40) 10(20) 10(20) 5(10) 5(10)

Covered drainage 10(20) 40(80) 0 5(10) 0 0 5(10)

Sitting facility 13(26) 37(74) 0 0 3(6) 9(18) 1(2)

Compound wall 30(60) 20(40) 5(10) 5(10) 2(4) 13(26) 5(10)

Toilets 30(60) 20(40) 15(30) 5(10) 5(10) 0 5(10)

Parking space 15(30) 35(70) 0 1(2) 2(4) 11(22) 1(2)

Fire fighting 0 50(100) 0 0 0 0 0

Security 10(20) 40(80) 1(2) 0 0 7(14) 2(4)


Table 5.23: Maintenance Facility/Green initiatives

FacilityMaintenance If yes rating of availability

Facility/Green initiatives Yes No Very Bad Bad Average Good Very Good

Cleaning facility 30(60) 20(40) 2(4) 1(2) 7(14) 20(40) 0

Garbage collection 30(60) 20(40) 3(6) 1(2) 4(8) 22(44) 0

Garbage disposal 15(30) 35(70) 0 10(20) 1(2) 4(8) 0

Waste utilization

A.Vermin composting 0 50(100) 0 0 0 0 0

B. Biogas plant 0 50(100) 0 0 0 0 0

C. Bio gas power 0 50(100) 0 0 0 0 0

Revolving fund

for maintenance 0 50(100) 0 0 0 0 0

Solar/wind energy 0 50(100) 0 0 0 0 0


Service facility

Regarding service infrastructure, 34 per cent of sellers report that rest rooms are available, but theprovision for rest room is within their own shops, market doesn’t provide any rest room. Marketeducation is provided by VFPCK stall in Nanniyode. Drainage facility is available in Kazhakkootam,

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Pothencode and Nedumkandam market and covered drainage is available in Kazhakuttam andKattappana. Compound wall around markets and availably of toilets is reported by 60 per cent ofsellers. Parking space is also reported by 30 per cent of the sellers. Regarding security, a security isappointed by the sellers with a monthly salary on share basis in Elappara and Pambabnar. Nanniyodmarket has a CCTV camera.

Maintenance Facility

Cleaning facility and garbage collection is reported by 60 per cent of the sellers, whereas availabilityof infrastructural facility for garbage disposal is reported only by thirty per cent. A fee of Rs.50/- isgiven for waste collection in Palayam. In Kattappana, waste collection is done by the MuncipalCorporation. Regarding waste utilization, none of the infrastructure facilities are available inside themarket. In Kattappana market the waste generated by the market is collected by the Muncipality.

Own infrastructure

It is interesting to note that some sellers are having own infrastructure. Storage facility is available forone, godown for four and drying yard for one. Washing facility is available for 28 per cent, weighingmachine for 74 per cent

Table 5.24: Own Infrastructure

Iteams Yes Percent No Percent

Storage 1 2.0 49 98.0

Godown 4 8.0 46 92.0

Ripening chamber 1 2.0 49 98.0

Drying yards 1 2.0 49 98.0

Washing facility 14 28.0 36 72.0

Weighing machine 37 74.0 13 26.0

Value addition 1 2 49 98

Transportation 8 16.0 42 84.0

Branding 3 6.0 47 94.0

Packaging 1 2.0 49 98.0

Grading 0 0 0 0

Electric equipments 1 2.0 49 98.0

Other infrastructure 4 8.0 46 92.0


5.4. Overall Satisfaction of Sellers

Sellers have high rating regarding the location and accessibility of RPMs. However regarding thephysical conditions and operational conditions majority have low opinion, particularly in the case ofPothencode, Palayam, Thookkupalam, Elappara markets.

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Table 5.25: Overall satisfaction of seller

Number Very Low Low Moderate High Very High Total

Location 4(8) 0 4(8) 32(64) 10(20) 50(100)

Accessibility 2(4) 4(8) 4(8) 31(62) 9(18) 50(100)

Physical Conditions 7(14) 16(32) 13(26) 11(22) 3(6) 50(100)

Operational Conditions 3(6) 17(34) 13(26) 13(26) 4(8) 50(100)


5.5. Factors contributing to market inefficiencies

Farmers have reported the reasons for the inefficiencies in the market. The major solutions as given bythem are also given in the table 5.26.

Majority recommended for government intervention in price setting, facility for credit, subsidyand interest free loans, facility for government provision of store rooms, incentives, free provision ofentry into market stalls for sales, parking facility, provision of water supply and toilet facilities.

Table 5.26: Problems Identified for Market InefficienciesProblems Causes

Yes No High price No: Solutions

/cess/rent/ FacilityMarket fee

Price setting 3(6) 47(94) 3(6) 0 Availability,Ensure base price,

Govt intervention

Credit 38(76) 12(24) 0 38(76) Facilitate credit,Govt

assistance,Govt

subsidy,Interest free loans,

Scaling/weighing 1(2) 49(980) 0 1(2) Facility for scaling

Storage problem 16(32) 34(68) 0 16(32) Facility for cold storageRoomin market, govt Provision

Perishability 25(50) 25(50) 0 25(50) Government assistance,Storagefacility

High marketing costs 31(62) 19(38) 31(62) 0 Free provision, Incentives,Reduce market fee,Subsidize

Lack of space 25(50) 25(50) Conflict between sellers for Facilitate auction hall,Covered

space, limited space, no selling room,Expansion

platform, no trading hall of hall,Market development

Four wheeler parking facility, stop

Other causes Block of vehicles, outside trading, completion of rain

incomplete rain proof, proof, covered room, electric light,

insufficient light, strong door, open to all traders,

no toilet facility provision of water supply,Toilet facility


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To summairse, the Wholesale Assembly Markets/Rural Periodical Markets work differently from thatof WAMs/RPMs in other states. In other states WAM/RPMs have a function to mobilise the surplusproducts from farmers to the second round of supply chain, and thus becomes the most importantplace where the farmer comes in direct contact with the consumer/wholesale/retailer. In Kerala thesemarkets are filled with sellers, who buy produce from traders in the neighbouring states and sell inthese markets. The WPM/RPMs show difference in the presence of facilities and operations. Palayam,Kattappana and Kazhakkuttam markets are relatively better in their performace and availability ofinfrastructure facilties, but the situation in Nanniyode, Elappara and Pothencode are worse. Basicinfrastructure facilities such as trading halls, drainage, weighing machines, waste managementfaciltiesetc are not available in the markets. Some markets do not even have basic facilities such astoilet and drinking water. Storage facilties, grading facilites, quality testing mechanism etc is notavailable in any one of the markets. Hence the WAMs/RPMs in Kerala require immediate attentionaimed at revamping.

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CHAPTER 6Agriculture Marketing Infrastructure in Kerala: An Analysis of

Vegetable and Fruit Promotion Council Keralam (VFPCK)

Vegetable and Fruit Promotion Council, Keralam (VFPCK) was established in the state tobring many fold improvements in the field of production and marketing of fruits and vegetablesemploying the farmer participatory approach through Self Help Groups. The present chapter looksinto the structure, conduct and performance of VFPCK markets with particular focus on the infrastructurefacilities provided by VFPCK and the stakeholder view regarding the same is also examined. For thispurpose, from Trivandrum, three VFPCKs are selected randomly, the selected ones being Vembayam,Maranalloor and Kovilnada. Similarly, from Idukki the selected VFPCKs are Thankamani, Santhigramand Parathode. Five farmers and five traders from each of these markets is randomly selected and datais collected using detailed interview schedule. Along with this indepth interviews were conductedwith the officials in the market. The chapter is divided into two sections. Section I looks into thestructure, conduct and performance of VFPCK markets. Section II analyses the primary data collectedfrom farmers and traders operating in VFPCK. Socio-economic details of the farmers, cultivationspecifics and operations in the market, socio economic details of the traders and trading details andopinion of the farmers and traders regarding the infrastructure facilities in the VFPCK markets alongwith reasons for inefficiencies is provided.

Section I6.1. Structure and Conduct of VFPCK markets

Vegetable cultivation in Kerala experience many issues including cheap import fromneighbouring states, small holding, high input cost and difficulties in marketing. In order to deal withthese problems, VFPCK introduced Farmer’s markets in different districts. The markets were set upped

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with the principle of ”Self Help, Participation and Prosperity” and these markets has emerged as a newhope to farmers that can improve their livelihood. Infrastructure facilities at the selected farmer marketsand structure of functioning of the selected markets is narrated below.

6.1.1. Infrastructure:

Infrastructure in the three different markets are narrated below.

Table 6.1: Basic infrastructure facilities

Basic Facilities Idukki Trivandrum

SKS SKS SKS SKSV SKS SKSErattayar Thankamani Parathode embayam Maranallor Kovilnada

Auction Hall 1 1 1 1 1 1

Market yard 1 1 1 1 1 1

Cold Storage 0 0 0 0 0 0

Ripening Chamber 0 0 0 0 1 1

Weighing machine 2 2 3 2 2 2

Processing unit 0 0 0 0 0 1

Godown 0 0 0 0 1 0

Office Building 1 1 1 1 1 1

Toilet complex/rest room 1 1 1 1 1 1

Drinking water 1 1 1 0 0 0

Fan/lights 5 12 4 5 6 5

Computers (documention) 1 1 1 1 1 2

Waste Management Plant 0 0 1 0 0 1

Crop specific area 0 0 0 0 0 0

Parking area 1 1 1 1 1 1

Outlet 0 0 1 0 0 0

Weather station 1 1 1 1 1 1


All the six markets have the essential infrastructure and they are working efficiently. Withfinancial support from VFPCK, the auction hall, market yard, office building, furniture is ensured inall the six markets. However, service facilities (toilet and drinking water) are ensured to the staffs butfarmers and traders does not have separate facilities. In Thankamani market, a fertiliser depot is alsoworking in the market. In all the markets, primarily vegetables- yam, spinach, bitter gourd, tomato,ladies’ finger, cucumber, chilly, cow pee, jack fruit and banana are auctioned.

SKS Parathode, in Konnathady Panchayat is the first established VFPCK market in Idukki andstarted functioning during 2005. Sunday and Wednesday are the auction days and for selling cow peaand bitter gourd, it functions on Friday also with limited farmers and traders and the auction time is

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from 9a.m to 1pm. It is situated in 20 cents of land and 45 SHGs are attached to the market. SKS,Erattayar is situated in 27 cents and the auction take place during Tuesday and Friday and auction timeis from 2.pm to 4.p.m. There are 16 self-help groups in which around one hundred and fifty farmers areactively participates and 12 traders attached to the market. Both farmers and traders have to register inthe market in order to trade in the market and whether to provide membership for a farmer is a collectivedecision of general body meeting. In the SKS, Thankamai, 350 farmers organised in 25 SHG is attachedto the market and around 16 traders from within the district and other districts are participating inauction. The market is situated in 36 cent area and have essential infrastructure including electricityand drinking water. The auction days are Sunday and Wednesday and auction happens from 1pm. To 3p.m. SKS Kovilnada has food processing unit and cut vegetables are sold. Both SKS Kovilnada andMaranallor have ripening chambers which is mainly used for ripening bananas. In all markets weatherstation is functioning and it is beneficial in forecasting and planning. All the markets provide facilitiesfor farmers to directly sell their produce and thus ensure, essential infrastructure.

6.1.2. Administrative Structure

The administrative structure and functional division of the market is laudable. There is a Deputymanager and two staff (secretary and assistant secretary) for every market who monitors the functionof the market. Deputy manager managers all activities of the market starting from formation of SHGs,training programs, input supply to the farmers and the office staff do the documentation and accountkeeping works. Deputy manager is paid with a salary of Rs. 40000/- and the other staff with a basic payof 15000. The functioning of the market is organised in such a way that the conduction of activities isdone with the participation of farmers. Each farmer in the market is a share holder and the generalbody meeting is conducted to discuss on important activities and to decide up on common issues.Through election a president, vice president and a treasurer are elected for two-year term and theyfacilitate the activities and receive an honorarium. And there are three different groups of farmers tolook up on important issues related to production, credit, and marketing possibilities and issues. Thefarmers in the production group decide up on matters related to production decision, demand forecastingand input supply chain and the credit group collects information on new schemes and credit facilitiesavailable to farmers. The marketing group is in charge of conducting the auction at the market and tohandle the relations with traders. Thus, the market is working with active planning and participationfrom the part of farmers, with support of government staff.

6.1.3. Structure of market

On an average each market has more than hundred farmers and around15 traders and there areentry restrictions to the market. In order to get membership in the market rules are stipulated. Forinstance, in some markets first the farmer has to be a member of the SHG. It is stipulated that thefarmer should have sold vegetables amounting 5000kg (or more than Rs. 15000 in Thankamani market)in the market and an application has to be submitted to the President. A SHG must have at least 10members for becoming a share holder in the market. The application is discussed in executive committeeand a decision is taken regarding membership. To become a member a farmer has to pay Rs. 500/-

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which considered as a share in the market and is refundable. In addition to that the farmers have to payto the market 5 % of quantity sold in the market towards meeting the day to day expenditures inmarket. This is used for paying electricity and water bill, rent (Rs. 1000 to VFPCK) and to payhonorarium to President and Treasurer. Of this, the amount remaining after meeting the expenses ispaid to farmers as bonus which amount to 2% of the amount paid. In SKS Parathode, entry for tradersis free, but in the other two markets traders has to pay an entry fee of Rs. 100 and has to register withthe market. The price is determined by taking the highest price in near by VFPCK markets in Parathodeand in the other two markets average price in the 17 VFPCK markets is taken as price. Farmers whoare not shareholders of the market can sell their products by paying a registration fee of Rs. 250.

6.1.4. Conduct

In all markets auctioning is the major form of marketing activity. Farmers brings their producein the market and sell it through auctioning. The base price is taken by finding the average price inother VFPCK markets. The money is paid to the farmers in the next auction day by the market officials.During the auction, a receipt is given to farmers. However, in Parathode, auction is not taking placeinstead the highest price in other VFPCK markets is determined as price and the products are sold totraders at that price. And it is said that farmers receive a margin up to 5-10 rupees, comparing to themarket price.

There are no loading workers in the market, farmers are assigned with the duty and they dividethe work among themselves and receive an honorarium for the same. During the time of bumper crops,with initiative of market, produce is traded to wholesalers in other districts and sold at a reduced price.For traders Credit facility is arranged. Post-dated cheque with one-week time is allowed for purchaseof produce. In SKS Thanakamani, 50 paise per kg is given as an incentive, for farmers selling above100 kg. Also, insurance subsidy is also given to farmers. The total turnover during last year for themarket was Rs.17984760/-

The market also provides farmers with input supply. Organic fertiliser such as fish amino acidand seeds are being distributed to farmers. Vermin compost is maintained in the market and it is alsoused as a fertiliser by the farmers. Farmers are also given training for initiating organic farming activities.Thus, the markets help in reducing the cost of production through provision of input on the one handand ensures better income for farmers by establishing essential marketing infrastructure.

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Section II

Section A

6.2. VFPCK Market – Analysis of Farmer Details

The average age of a farmer registered in VFPCKs in Trivandrum is 54.93 and that in IdukkiVFPCKs is 54.53. The sample consists of only one female farmer and she is from Idukki VFPCK. For100 per cent of registered farmers in Trivandrum, their main occupation is agriculture, and in Idukki,out of the 15 farmers selected one was a government employee, and for all others their main occupationis agriculture. Educational background of the farmers reveals that majority belong to SSLC or belowlevel of educational qualification. Detailed tables are provided in Appendix 5.

Land size distribution of farmers reveal that 47 per cent have small land holdings, 40 per centhave medium size land holdings and 13 per cent have large size holdings in Trivandrum VFPCKswhereas the corresponding value in Idukki is 40 per cent, 47 per cent and 13 per cent. Twenty sevenfarmers have availed loans and the mean amount of loan for small, medium and large farmers areRs.2,77,200, Rs.2,10,946 and Rs.7,81,125 respectively, the average liability for the total sample beingRs.3,19,955. On an average a farmer in Trivandrum has been selling in the VFPCK since last 15 yearsand 13 years in Idukki market.

Year wise quantity and value of crops cultivated, amount used for own consumption and averagequantity and value of sales in VFPCK along with RPM and other markets for each crop is given inAppendix 5. Separate average value for small, medium and large farm size holders is given for bothTrivandrum VFPCK and Idukki VFPCK. Annual sales on an average per farmer is 15530 kilos fortapioca (Rs.2,56,094), 12315 kilos for banana (Rs.4,84,432), 570 kilos for coconut (Rs.19,950), 470kilos for ginger (Rs.44,757), 1325 kilos for cowpea (Rs.51,637), 3138 kilos of spinach (77,615), 15715kilos of cucumber (Rs.23,197), 811 kilos of snake guard (Rs.10.420) and 5320 kilos of bitter guard(Rs.1,54,211). Altogether 13, 28, 1, 13,20,6,6,3,14 farmers bring tapioca, banana, coconut, ginger,cowpea, spinach, cucumber, snake guard and bitter guard respectively to the VFPCK.

The value of all the crops sold in WM is aggregated and land size wise distribution of value ofsales in each market is given in table. Out of the twenty-eight who bring their crops to the VFPCK,one also sells in WAM, six sells in RPM and four sells in other markets. Value of output worthRs.7,41,694.7 is provided by each farmer per year, of which Rs.6,64,700 is generated by sales in theVFPCK.

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Table 6.2: Value of agricultural produce sold by farmers in VFPCK

District Farm size Own Consumption VFPCK WAM RPM Others Total valueTrivandrum Small µ 4643.571 286020 407115 406991.4

N 7 7 2 7SD 3243.173 193284.3 484488.4 334012

Medium µ 6309.167 742023.5 748333.3N 6 6 6SD 3023.211 403508.6 404286.5

Large µ 13112.5 3737388 3750500N 2 2 2SD 13198.15 2558075 2544877

Total µ 6439 928603.7 407115 989329.3N 15 15 2 15SD 5309.94 1374768 484488.4 1361025

Idukki Small µ 3943.333 76457.25 1078800 315175N 6 4 1 6SD 2400.728 91419.04 . 397889.5

Medium µ 9497.857 325745 13600 230200 71425 423364.3N 7 7 1 2 2 7SD 5719.152 334541.7 . 298116.2 99949.54 317144.4

Large µ 7490 796255 431460 258675 1278150N 2 2 1 2 2SD 494.9748 67804.47 . 283090.2 90297.54

Total µ 7008.333 321427.2 13600 492665 165050 494060N 15 13 1 4 4 15SD 4822.034 340621.1 . 437397.3 204281.3 451963.6

Total Small µ 4320.385 209815.4 631010 364614.6N 13 11 3 13SD 2791.515 190003.4 517447 352160.1

Medium µ 8026.154 517873.5 13600 230200 71425 573350N 13 13 1 2 2 13SD 4785.402 412861.7 . 298116.2 99949.54 383178.2

Large µ 10301.25 2266821 431460 258675 2514325N 4 4 1 2 4SD 8287.513 2250823 . 283090.2 2049152

Total µ 6723.667 646700.4 13600 464148.3 165050 741694.7N 30 28 1 6 4 30

SD 4992.048 1061438 . 404582.9 204281.3 1027768


Details regarding agricultural marketing activity is given in Table 6.3. Nearly seventy-sevenper cent of the total farmers engage alone in agricultural activity, with 93 per cent of farmers inTrivandrum engaging alone in agricultural activity and the corresponding per cent for Idukki being60.40.

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Table 6.3: Agriculture marketing activities

Districts Trivandrum Idukki Total

N % N % N %

Trade activity

Alone 14 93.3 9 60 23 76.7

With a partner 1 6.7 0 0 1 3.3

Others 0 0.0 6 40 6 20.0

Total 15 100.0 15 100 30 100.0

Do you sell agriculture produce around the year?

Yes 15 100.0 13 86.7 28 93.3

No 0 0.0 2 13.3 2 6.7

Total 15 100.0 15 100.0 30 100.0

If no at what period of the year do you sell/buy?

During bumper crop 0 0 2


Yes 10 66.7 11 73.3 21 70.0

No 5 33.3 4 26.7 9 30.0

Total 15 100.0 15 100.0 30 100.0

If yes above why?

Bulk quantity 2 20.0 1 9.1 3 14.3

Bulk quantity and low price 1 10.0 3 27.3 4 19.0

Low price 6 60.0 7 63.6 13 61.9

Season time 1 10.0 0 0.0 1 4.8

Total 10 100.0 11 100.0 21 100.0

How long have you been selling in the market?

Mean N Std. Deviation

Trivandrum 15.3333 15 6.92477

Idukki 13.4667 15 2.35635

Total 14.4 30 5.17021


All the VFPCK farmers in Trivandrum sell products around the year, whereas in Idukki two farmersreported that they sell only when there is bumper crop. Seventy per cent above reported that they faceissues in finding buyers near the locality, the major reason being low price.

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The sales details of different commodities from tapioca to bitter guard including gross weight,net weight, floor price, auction rate, auction amount, market fee, trader and farmer amount is providedin tables. Generally, the auction rate and base price is same for all the selected crops in the VFPCKmarkets is both districts. This is because base price is fixed by the authorities after consultation withVFPCKs in the districts. The authorities take care that the auction rate does not fall below the baseprice. Auction rate is decided by negotiation and not by auction in the true sense. In Trivandrum, salestake place at the base price, there is no negotiation or auction. In Idukki, in Santhigram auction istaking place and auction is done only when all traders assemble and hence there is difference in baseprice and auction price. The difference is highest in banana, ginger, cowpea and bitterguard.

The farmers are given an amount after subtracting the market fee from the auction amount. Themarket fee charged from the farmers is 5 per cent of the total trade amount. Out of this two per cent isreimbursed to the farmers as incentive during festival season.

Table 6.4: Sale of Tapioca, Banana, Coconut, Ginger and Cowpea

Gross Net Floor Auction Auction Market Trader Farmerweight weight price Rate amount Market Amount amount

Tapioca

Trivandrum µ 2868.0 2731.9 21.1 21.0 59143.3 2956.9 59143.2 56186.4

N 9 9 9 8 9 9 9 9

SD 3036.7 2975.0 6.4 6.8 70220.4 3511.0 70220.4 66709.4

Total µ 2868 2731.8 21.1111 21 59143.33 2956.88 59143.22 56186.44

N 9 9 9 8 9 9 9 9

SD 3036.7 2975.0 6.4 6.8 70220.4 3511.0 70220.4 66709.4

Banana

Trivandrum µ 2434 2129 48 48 95722 4786 95722 90936

N 15 15 15 15 15 15 15 15

SD 2912 2668 10 10 108435 5422 108435 103014

Idukki µ 1810 1558 21 29 42204 1955 42208 40389

N 14 14 14 14 14 13 14 14

SD 2105 1834 5 4 42483 2127 42488 40674

Total µ 2133.1 1853.3 34.6 38.8 69885.7 3471.5 69887.7 66533.9

N 29 29 29 29 29 28 29 29

SD 2529.7 2281.5 15.6 11.8 86358.5 4395.4 86358.7 82065.7

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Coconut

Idukki µ 47 47 35 35 1645 82 1645 1563

N 1 1 1 1 1 1 1 1

SD . . . . . . . .

Total µ 47 47 35 35 1645 82 1645 1563

N 1 1 1 1 1 1 1 1

SD . . . . . . . .

Ginger

Trivandrum µ 329 329 125 125 42650 2132.33 42650 40517.67

N 3 3 3 3 3 3 3 3

SD 142.6 142.6 43.3 43.3 25827.9 1291.1 25827.9 24536.8

Idukki µ 111.4 243.8 73.8 74.3 16239.3 811.72 16239.3 15427.6

N 10 10 10 10 10 10 10 10

SD 60.6 432.2 24.3 23.9 23638.7 1181.9 23638.7 22456.8

Total µ 161.6 263.5 85.6 86.0 22334.1 1116.5 22334.1 21217.6

N 13 13 13 13 13 13 13 13

SD 123.5 380.6 35.5 35.1 25776.2 1288.7 25776.2 24487.4

Cowpea

Trivandrum µ 149.6 149.6 55.6 55.6 8424.4 421.8 8424.4 8002.7

N 9 9 9 9 9 9 9 9

SD 119.3 119.3 8.8 8.8 7241.8 361.4 7241.8 6880.4

Idukki µ 318.1 315.9 32.7 39.8 11993.8 599.5 11993.8 11394.3

N 12 12 12 12 12 12 12 12

SD 331.6 329.3 5.5 8.7 12312.3 615.7 12312.3 11696.5

Total µ 245.9 244.6 42.5 46.6 10464.1 523.3 10464.1 9940.7

N 21 21 21 21 21 21 21 21

SD 271.1 269.2 13.5 11.7 10374.4 518.5 10374.4 9855.9


Table 6.5: Sale of Spinach, Cucumber, Snake gourd, bitter gourd, and chilly

Gross Net Floor Auction Auction Market Trader Farmerweight weight price Rate amount Market Amount amount

Tapioca

TVM µ 392.5 392.5 24.2 24.2 9698.3 484.7 9698.3 9213.7

N 6 6 6 6 6 6 6 5

SD 729.1 729.1 8.6 8.6 18242.3 911.9 17292.2 1795.8

Total µ 392.5 392.5 24.2 24.2 9698.3 484.7 9698.3 9213.7

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N 6 6 6 6 6 6 6 5

SD 729.1 729.1 8.6 8.6 18242.3 911.9 17292.2 1795.8

Cucumber

TVM µ 270.3 270.3 15.8 15.8 3999.2 199.5 3999.2 3799.7

N 6 6 6 6 6 6 6 6

SD 255.2 255.2 7.4 7.4 3683.4 184.1 3683.4 3499.3

Total µ 270.3 270.3 15.8 15.8 3999.2 199.5 3999.2 3799.7

N 6 6 6 6 6 6 6 6

SD 255.2 255.2 7.4 7.4 3683.4 184.1 3683.4 3499.3

Snake gourdTVM µ 261.5 261.5 18.5 18.5 3352.5 167.5 3352.5 3185

N 2 2 2 2 2 2 2 2

SD 323.1 323.1 9.2 9.2 3574.4 178.9 3574.4 3395.5

Idukki µ 68 68 10 10 680 34 680 646

N 1 1 1 1 1 1 1 1

SD . . . . . . . .

Total µ 197.0 197.0 15.7 15.7 2461.7 123.0 2461.7 2338.7

N 3 3 3 3 3 3 3 3

SD 254.3 254.3 8.1 8.1 2961.3 148.1 2961.3 2813.1

Bitter gourd

TVM µ 111.7 111.7 56.7 56.7 6200.0 310.0 6200.0 5890.0

N 3 3 3 3 3 3 3 3

SD 67.1 67.1 2.9 2.9 3593.0 179.7 3593.0 3413.4

Idukki µ 740.2 740.2 17.5 34.6 21509.8 1075.1 21509.8 19553.3

N 11 11 11 11 11 11 11 11

SD 1208.6 1208.6 3.8 8.4 34760.9 1738.2 34760.9 33433.2

Total µ 605.5 605.5 25.9 39.4 18229.1 911.1 18229.1 16625.5

N 14 14 14 14 14 14 14 14

SD 1093.6 1093.6 17.0 12.0 31208.3 1560.5 31208.3 29924.4


Table 6.6: Details of Auction amount, Market fee, Trader Amount and Farmer amount

Districts Auction Market fee Trader Amount Farmer amountamount

Trivandrum Mean 151975.4 7598.2 151975.4 144377.2N 15 15 15 15Std. Deviation 129438 6472.179 129438 122965.8

Idukki Mean 75740.33 3762 75940.67 71898.47N 15 14 15 15Std. Deviation 61863.16 3208.615 61733.33 59493.33

Total Mean 113857.9 5746.241 113958 108137.8N 30 29 30 30Std. Deviation 106952.4 5434.192 106879.3 101817.9


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On an average, the auction amount in Trivandrum for the selected farmers is Rs.151875 permonth, with an average expense on market fee of Rs 7598. Hence the farmers in Trivandrum on anaverage is getting an amount of Rs.1,44,372 whereas farmers in Idukki get an amount of Rs.71,898after paying an average amount of Rs 3,762 as marketing fee and the traders get an amount of Rs.75,940.The auction amount for all the VFPCK in all the sample markets under consideration is Rs.1,13,857and the marketing fee being Rs.5746.

6.2.1. Reasons for sale in VFPCK

As regards the major reasons for selling in the VFPCK markets, factors such as governmentregulated market which ensures surety in revenue, better price, regular consumer, better infrastructure,availability of incentives, possibilities to sell any quantity, availability of transportation facility, nearnessof markets etc. are the reasons for farmersboth in Trivandrum and Idukki.

Table 6.7: Reasons for selling in this market

Very bad Bad Average Good Very good Very bad Bad Average Good Very good

Price better Incentives/subsidyTrivandrum (N) 0 0 6 8 1 0 2 1 10 2% 0.0 0.0 40.0 53.3 6.7 0.0 13.3 6.7 66.7 13.3Idukki(N) 0 1 0 3 11 1 0 3 5 6% 0.0 6.7 0.0 20.0 73.3 6.7 0.0 20.0 33.3 40.0Regular consumerothersTrivandrum(N) 0 0 3 11 1 0 1 3 10 1% 0.0 0.0 20.0 73.3 6.7 0.0 6.7 20.0 66.7 6.7Idukki(N) 0 0 2 11 2 0 7 7 1% 0.0 0.0 13.3 73.3 13.3 0.0 0.0 46.7 46.7 6.7Better infrastructure Any quantity can sellTrivandrum(N) 0 0 0 10 5 0 0 0 7 8% 0.0 0.0 0.0 66.7 33.3 0.0 0.0 0.0 46.7 53.3Idukki(N) 0 0 2 6 7 0 1 1 8 5% 0.0 0.0 13.3 40.0 46.7 0.0 6.7 6.7 53.3 33.3Storage Govt mktTrivandrum(N) 0 6 6 3 0 0 0 0 1 14% 0.0 40.0 40.0 20.0 0.0 0.0 0.0 0.0 6.7 93.3Idukki 3 10 0 2 0 1 0 1 8 5% 20.0 66.7 0.0 13.3 0.0 6.7 0.0 6.7 53.3 33.3Auction platform Nearest MarketTrivandrum(N) 0 0 1 11 3 0 0 0 4 11% 0.0 0.0 6.7 73.3 20.0 0.0 0.0 0.0 26.7 73.3Idukki(N) 1 1 3 7 3 0 0 0 1 14% 6.7 6.7 20.0 46.7 20.0 0.0 0.0 0.0 6.7 93.3Transportation facilityTrivandrum(N) 0 0 6 8 1% 0.0 0.0 40.0 53.3 6.7Idukki(N) 0 1 2 10 2

% 0.0 6.7 13.3 66.7 13.3


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The major forms of source of information are VFPCK office for the farmers in Trivandrum, VFPCKoffice and farmers cooperatives in Idukki. 53 per cent of farmers in Trivandrum and 60 per cent inIdukki reported pending payments. The average number of pending days varies between Trivandrumand Idukki, with 23.5 days for Trivandrum and 11 days for Idukki. Regarding the question of who setsthe price, 93 per cent opine that price is set within the VFPCK

Table 6.8: Source of information, payment schedule and pending paymentsSource of information on market (N) Percent

Trivandrum Idukki Total Trivandrum Idukki TotalFarmers 0 1 1 0.0 6.7 3.3Agriculture office 14 6 20 93.3 40.0 66.7Media/newspaper 0 2 2 0.0 13.3 6.7Farmer cooperatives 1 6 7 6.7 40.0 23.3Total 15 15 30 100.0 100.0 100.0Payment schedule for sold goodsDaily 10 1 11 66.7 6.7 36.7Receives amount from traders 4 8 12 26.7 53.3 40.0Next market day 1 6 7 6.7 40.0 23.3Total 15 15 30 100.0 100.0 100.0Pending Payments

Trivandrum Idukki TotalYes 8 9 17 53.3 60.0 56.7No 7 6 13 46.7 40.0 43.3Total 15 15 30 100.0 100.0 100.0Average Number of pending daysTvm 23.5 9 31.4Idukki 11.1 9 7.5


As regards the opinion regarding determination of price, majority opine that price is determined byVFPCK. Around 50 per cent are satisfied with the price determination. Those who are not satisfiedconsider inadequate price as the major reason. All are aware of the market price. Around 50 per centconsider that there exists compulsion to sell at a fixed price.

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Table 6.9: Price determination, satisfied with price determination, and price information

Price Determination

Trivandrum % Idukki % Total %

Mkt Officials (Price Forecast) 0 0 1 6.7 1 3.3

Mkt Officials (Price of other mkts) 15 100 14 93.3 29 96.7

Total 15 100 15 100.0 30 100.0

Satisfied With Price Determination 0.0

Yes 10 66.7 9 60.0 19 63.3

No 5 33.3 6 40.0 11 36.7

Total 15 100.0 15 100.0 30 100.0

Compulsion To Sell At Fixed Price

Yes 10 66.7 6 40.0 16 53.3

No 5 33.3 9 60.0 14 46.7

Total 15 100.0 15 100.0 30 100.0

Knowledge About The Market Price

Yes 0 0.0 11 73.3 11 36.7

No 15 100.0 4 26.7 19 63.3

Total 15 100.0 15 100.0 30 100.0


Only 40 per cent in Trivandrum consider the quality of information they receive as effective,whereas in Idukki 64.7 per cent consider it as effective. Majority opine that price fluctuations do notoccur on the same day. All the farmers in Trivandrum opine that they are able to sell the whole producethat they bring to the market. However, 53 per cent of the farmers in Idukki opine that they are not ableto sell the whole produce in the market itself. Majority report the information received as timely. Nospecific quota is fixed by the VFPCK normally regarding the amount that the farmers bring to themarket.

Table 6.10: Reselling, effectiveness and timeliness of the information


Qualify effectiveness of the information

Highly effective 2 13.3 3 20.0 5 16.7

Effective 6 40.0 11 73.3 17 56.7

Undecided 7 46.7 1 6.7 8 26.7

Total 15 100.0 15 100.0 30 100.0

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Qualify timeliness of the information

Very timely 2 13.3 3 20.0 5 16.7

Timely 6 40.0 11 73.3 17 56.7

Undecided 7 46.7 1 6.7 8 26.7

Total 15 100.0 15 100.0 30 100.0


6.2.2. Marketing cost

Details of transport cost and market charges incurred per month is given in the table.

Table 6.11: Details of cost incurred for marketing

Trivandrum Idukki Total

Mean N SD Mean N SD Mean N SDTransport costPer day 341 15 376.0 129 15 109.4 235 30 292.7

Per month 2588 15 1350.6 918 15 878.5 1753 30 1405.4

Market ChargesPer day 1096 14 1072.5 496 14 364.2 796 28 843.3

Per month 8035 14 6483.5 3773 14 3202.6 5904 28 5466.7

Per month 9890 13 7531.1 4429 15 3370.0 6965 28 6228.1


In Trivandrum, the monthly transport cost is Rs.2588, whereas in Idukki it is 878 Rs, averaging toRs.1753 for the total sample. Market charges of Rs.8034 in Trivandrum and Rs.3733 in Idukki is paidby the farmers, the market charge being 5 per cent of the total value of produce. Out of this marketcharge, around two per cent is reimbursed to the farmers during festive seasons as bonus.

Section B

6.3. VFPCK Markets – Analysis of Trader Details

Information regarding the structure-conduct and performance of VFPCK and views regardingthe available infrastructure and analysis of infrastructure requirement can become complete, only if itis assessed from the part of the traders also. As such five traders each form the six VFPCKs is selected,the total sample of traders becoming thirty. The general information, details of trade activity etc. isgiven below. Details are given in Appendix 6.

Of the total samples, 90 per cent are male, regarding their educational qualifications, 78 percent have SSLC or below educational qualification, 20 per cent higher secondary and 3 per cent degree.The modus operandi of engaging in trade activity is alone for 93 per cent and 86 per cent of traders inTrivandrum and Idukki. Out of the sample traders selected seventeen are whole sale traders, with twofrom Trivandrum and 15 from Idukki. The retailers in the sample traders belong to Trivandrum. Ninety-

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three per cent participate in trade activities year around. Out of the total twenty-five traders, five haveavailed loan for mobilization of startup capital and 25 has used their own savings for startup capital.The average amount of startup capital is Rs.7,15,00 for the total sample, with an average amount ofRs.20,333 for Trivandrum and Rs.1,22,66 for Idukki.

The purchase value of the different agricultural commodities by the traders in the VFPCKmarkets, district wise and in aggregate along with sales value and the difference between purchasevalue and sales value is given in the table 6.12.

Table 6.12: Purchase and Sales details of traders in VFPCKTrivandrum Idukki Total


Tapioca Buy value 22915 5 15171.6 22915 5 15171.6

Sell value 31560 5 21951.5 31560 5 21951.5

Diff 8645 5 7436.3 8645 5 7436.3

Banana Buy value 54923 13 40815.0 221827 11 312544.6 131421 24 224849.0

Sell value 63308 13 45373.5 248494 11 337570.3 148185 24 243933.1

Diff 8385 13 6756.8 26667 11 28630.6 16764 24 21605.6

Coconut Buy value 23200 2 21496.1 23200 2 21496.1

Sell value 27560 2 24833.6 27560 2 24833.6

Diff 4360 2 3337.5 4360 2 3337.5

Ginger Buy value 5040 1 . 23490 10 18510.1 21813 11 18420.3

Sell value 6480 1 . 25450 10 19789.1 23725 11 19625.5

Diff 1440 1 . 1960 10 1409.6 1913 11 1346.4

Cowpea Buy value 22874 7 24951.6 90970 10 115659.3 62931 17 94612.0

Sell value 25500 7 27508.0 100826 10 127894.8 69809 17 104617.6

Diff 2626 7 3200.3 9856 10 12635.2 6879 17 10348.8

Spinach Buy value 15807 6 13308.9 15807 6 13308.9

Sell value 19260 6 15658.2 19260 6 15658.2

Diff 3453 6 2437.8 3453 6 2437.8

Cucumber Buy value 19894 7 31287.1 19894 7 31287.1

Sell value 27111 7 41491.7 27111 7 41491.7

Diff 7217 7 10314.1 7217 7 10314.1

snake gourd Buy value 5025 4 1916.5 5025 4 1916.5

Sell value 8085 4 4106.2 8085 4 4106.2

Diff 3060 4 2372.8 3060 4 2372.8

Bitter guard Buy value 9222 5 7426.1 66256 10 48773.4 47245 15 48161.3

Sell value 10800 5 8611.6 76512 10 57363.3 54608 15 56255.2

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Diff 1578 5 1190.1 10256 10 9638.7 7363 15 8835.1

Chilly Buy value 5400 1 . 3500 3 2095.2 3975 4 1956.8

Sell value 6480 1 . 4093 3 2298.7 4690 4 2224.1

Diff 1080 1 . 593 3 300.2 715 4 345.4

Overall Buy value 89723 15 72252.2 283851 15 346152.3 186787 30 264785.3

Sell value 107937 15 87764.3 318240 15 377252.8 213088 30 289590.3

Diff 18214 15 17422.9 34389 15 35295.8 26302 30 28559.1


Banana, ginger, cowpea, bitterguard and chilly is purchased in both Trivandrum and Idukkimarkets. The major agricultural produce that is being traded in both areas are banana, followed bycowpea and bitterguard. The mean buy value and sales value for tapioca is Rs.2,2915 and Rs.31,560,for banana it is Rs.1,31,420 and Rs.1,48,184 for coconut Rs.23,200 and Rs.27,560, for ginger Rs.21,812and Rs.23,725, for cowpea Rs.62,930 and Rs.69,809, for spinach Rs.15,806 and Rs.19,260, forcucumber Rs.19,894 and Rs.27111, forsnakeguardRs.5,025 and Rs.8,085, for bitterguard Rs.47,244and Rs.54,608, and for chillyRs.3,975 and Rs.4,690. The highest mean difference between sale valueand buy value happens in the case of banana followed by tapioca, bitterguard and cucumber. InTrivandrum all the agricultural produce under consideration of the study is traded in selected VFPCK,whereas in Idukki, the selected traders do not buy tapioca, spinach, cucumber and snake guard fromthe VFPCK.

6.3.1. Marketing Cost

The different types of marketing cost incurred by the traders are transportation, packaging, produceloss, loading/off loading and others. The monthly mean marketing cost incurred in Trivandrum VFPCKis Rs.7,428 and Idukki VFPCK is Rs.24,168, the average being Rs.15778. Transportation cost formsa major component of marketing cost, the mean transport cost being Rs.4,724 in Trivandrum and21,853 in Idukki. In Idukki, the traders are really dealers who supply these agricultural products towhole sale markets in Trivandrum and other states and also retail shops in other districts of Kerala.Hence the transportation cost incurred by traders in Idukki is much higher than that incurred by tradersin Trivandrum who supply agricultural produce in and around shops in Trivandrum. When marketingcost is subtracted from the difference between sales value and purchase value, the marketing margin ofthe traders is worked out. The marketing margin for an average trader is Rs.10,503 per trader withRs.10,785 for Trivandrum traders and Rs.10,220 in Idukki. The marketing margin, if separated forcrops gives an idea that for crops like ginger and chilly the marketing margin is high since bulk purchaseis done and sales of small quantity is possible in the case of these crops.

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Table 6.13: Marketing cost incurred

Transport Packaging Produce loss Others Total

Trivandrum Mean 4724.667 385.7143 1828.929 1800 7428.333

N 15 7 14 2 15

SD 6574.749 514.5502 2240.833 2404.163 8444.17

Idukki Mean 21853.33 5792.667 24168.4

N 15 6 15

SD 22282.4 6668.839 23302.88

Total Mean 13289 385.7143 3018.05 1800 15798.37

N 30 7 20 2 30

SD 18342.24 514.5502 4314.184 2404.163 19210.56


Table 6.14: Overall marketing margin during last month

Buy value Sell value Difference Market cost Market margin

Trivandrum Mean 89723.07 107937.3 18214.27 7428.333 10785.93

N 15 15 15 15 15

Std. Deviation 72252.24 87764.32 17422.89 8444.17 15338.59

Idukki Mean 283850.7 318239.5 34388.8 24168.4 10220.4

N 15 15 15 15 15

Std. Deviation 346152.3 377252.8 35295.76 23302.88 37110.21

Total Mean 186786.9 213088.4 26301.53 15798.37 10503.17

N 30 30 30 30 30

Std. Deviation 264785.3 289590.3 28559.07 19210.56 27901.65


As to the question of factors determining the choice of purchase from VFPCK, majority oftraders both in Trivandrum and Idukki purchase from VFPCK because the agricultural produce isorganic. The other measures are proximity, availability, good dealings and price, both in Trivandrumand Idukki. Regarding setting the price, the major methods of setting as reported by traders in Idukkiare negotiation and auction, whereas in Trivandrum the price setting mechanism includes market officialsand auction. Around 77 per cent opine that they are not aware of the market price before they bring theproduct to the market.

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Table 6.15: Determining factors of choice of VFPCK and Setting of market prices

Trivandrum Idukki Total Trivandrum Idukki Total

Determines the choice Setting the price

Price 1 1 2 Negotiation 0 10 10

% within choice 50 50 100 % within price 0 100 100

Proximity 1 4 5 Market officials 15 0 15


Fair scaling 1 1 2 Auction 0 5 5


Availability 2 2 4 Total 15 15 30


Organic 10 5 15 Know about the market price

% within choice 66.7 33.3 100 Yes 1 6 7

Good dealings 0 2 2 % within knowledge 14.3 85.7 100

% within choice 0 100 100 No 14 9 23

Total 15 15 30 % within knowledge 60.9 39.1 100

% within choice 50 50 100 Total 15 15 30

% within knowledge 50 50 100


Around 77 per cent of the traders report that they take one to five days to resell the quantity, withoutmuch difference between Trivandrum and Idukki, and 33 per cent of the traders in Trivandrum reportthat they take one week to resell the product. Only six per cent are able to resell the product immediately.This has implication for infrastructure since storage facilities and godown facilities are needed as thetime for resale increases. Physical treatment of the agricultural produce is done by 30 per cent of thetraders.

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Table 6.16: storage facility and physical treatment

Trivandrum Idukki Total Trivandrum Idukki Total

Time to resell Physical treatment

Immediately 0 2 2 Yes 4 5 9

% within time to resell 0.00 100.00 100.00 % within physical treatment 44.40 55.60 100.00

% within VFPCK 0.00 13.30 6.70 % within VFPCK 26.70 33.30 30.00

1 to 5 days 10 13 23 No 11 10 21



Week 5 0 5 Total 15 15 30




Only five traders in Idukki opine that information from VFPCK is ineffective. This is only with regardto the information on price. Thirty-six per cent consider the information as effective, with 33 per centfrom Trivandrum and 40 per cent in Idukki. Regarding timeliness, 80 per cent in Trivandrum considerit as very timely in Trivandrum and 6.7 per cent consider it as effective. In Idukki, around half do nothave any opinion about the timeliness of information and 47 per cent consider the information as nottimely.

Table 6.17: Effectiveness and Timeliness of the information


Effectiveness

Highly effective 1 6.7 1 6.7 2 6.7

Effective 4 26.7 5 33.3 9 30.0

Undecided 10 66.7 4 26.7 14 46.7

Not effective 0 0.0 5 33.3 5 16.7

Total 15 100.0 15 100.0 30 100.0

Timeliness 0.0 0.0 0.0

Very timely 12 80.0 0 0.0 12 40.0

Timely 1 6.7 0 0.0 1 3.3

Undecided 2 13.3 8 53.3 10 33.3

Not timely 0 0.0 5 33.3 5 16.7

Total 15 100.0 15 100.0 30 100.0


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6.2.2. Reason for purchase from VFPCK

As regards the reasons for purchase from VFPCK, the major reasons cited by traders are better price,organic products, availability of auction platform, nearest market and regular consumers.

Table 6.18: Reason for purchase from VFPCK

TVM Idukki Total TVM Idukki Total

N % N % N % N % N % N %

Price better Auction platform

V bad 1 6.7 1 6.7 2 6.7 Bad 1 6.7 0 0.0 1 3.3

Bad 3 20.0 2 13.3 5 16.7 Average 3 20.0 0 0.0 3 10.0

Average 7 46.7 4 26.7 11 36.7 Good 7 46.7 9 60.0 16 53.3

Good 4 26.7 7 46.7 11 36.7 V good 4 26.7 6 40.0 10 33.3

V good 0 0.0 1 6.7 1 3.3 Total 15 100.0 15 100.0 30 100.0

Total 15 100.0 15 100.0 30 100.0 Organicitems

Storage V bad 5 33.3 5 33.3 10 33.3

V bad 1 6.7 13 86.7 14 46.7 Bad 7 46.7 1 6.7 8 26.7

Bad 12 80.0 1 6.7 13 43.3 Average 3 20.0 8 53.3 11 36.7

Average 2 13.3 1 6.7 3 10.0 V good 0 0.0 1 6.7 1 3.3

Total 15 100.0 15 100.0 30 100.0 Total 15 100.0 15 100.0 30 100.0

Regular consumer Transportation facility

Average 1 6.7 1 6.7 2 6.7 V bad 0 0.0 1 6.7 1 3.3

Good 0 0.0 1 6.7 1 3.3 Bad 1 6.7 1 6.7 2 6.7

V good 14 93.3 13 86.7 27 90.0 Average 4 26.7 9 60.0 13 43.3

Total 15 100.0 15 100.0 30 100.0 Good 6 40.0 4 26.7 10 33.3

Incentives/subsidy

V good 4 26.7 0 0.0 4 13.3

Very bad 7 46.7 13 86.7 20 66.7 Total 15 100.0 15 100.0 30 100.0

Bad 7 46.7 1 6.7 8 26.7 Nearest market

Average 1 6.7 1 6.7 2 6.7 Average 4 26.7 5 33.3 9 30.0

Total 15 100.0 15 100.0 30 100.0 Good 9 60.0 10 66.7 19 63.3

Vgood 2 13.3 0 0.0 2 6.7

Total 15 100.0 15 100.0 30 100.0


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Section C

6.4. Performance of VFPCK -Analysis of Available Market Infrastructure - views of farmersand traders

The major infrastructural facilities that are to be provided by a market include infrastructurefor a) buying, selling and demand forecasting b) physical movement of goods c) facilitation function.This section analyses the availably of these infrastructure facilities according to the views of farmersand traders along with the satisfaction level of farmers and traders.

6.4.1 Infrastructure for buying, selling and demand creation.

Auction Hall is the major infrastructure for buying and selling of agricultural commodities.Details of Auction Hall in VFPCKs is provided in the table below.

Table 6.19: Auction hall

Satisfaction

Yes % Very bad % Bad % Average % Good % Very good %

Auction platform

Trivandrum 15 50.0 0 0.0 0 0.0 0 0.0 9 60.0 6 40.0

Idukki 13 43.3 0 0.0 0 0.0 0 0.0 8 61.5 5 38.5

Crop specific auction platform

Trivandrum 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0

Idukki 9 30.0 0 0.0 0 0.0 1 11.1 8 88.9 0 0.0

Price display

Trivandrum 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0

Idukki 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0

Payment display

Trivandrum 2 6.7 0 0.0 1 50.0 0 0.0 1 50.0 0 0.0

Idukki 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0

Weighing machine

Trivandrum 14 46.7 0 0.0 0 0.0 0 0.0 3 21.4 11 78.6

Idukki 15 50.0 0 0.0 0 0.0 0 0.0 6 40.0 9 60.0

Notice board

Trivandrum 14 46.7 0 0.0 0 0.0 3 21.4 10 71.4 1 7.1

Idukki 14 46.7 0 0.0 1 20.0 0 0.0 4 80.0 0 0.0


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Auction Platform is available in all markets in Trivandrum and Idukki with a good amount of satisfactionregarding Auction Platform reported by traders and farmers. The available space in the auction platformis allotted to different crops in two markets in Idukki, Parathode and Santhigram. Farmers are satisfiedwith the crop specific auction platform. Price display is not available in any of the market in Trivandrum,however in Idukki it is available according to six farmers in the market. Weighing machine is availablein all markets and notice board in all markets in Trivandrum and all market in Idukki. 23 farmers outof the 25 opine that VFPCK market helps in demand forecasting and 20 view that market helps inproduction decision. 63 per cent view that market provides insurance provision to the farmers. Insuranceis available for banana, and the premium amount is Rs.3 per banana plant and the insured amount,Rs.100 per VFPCK. The marketing channel that is in operation is producer – wholesaler – retailer –consumer in both VFPCKs.

Table 6.20: Efficacy of market in demand forecasting

Trivandrum Idukki Total %

Demand forecasting 11 12 23 76.7

% 47.8 52.2 100.0

Market helps in production decisions 8 12 20 66.7

% 40.0 60.0 100.0

Insurance provision 11 8 19 63.3

57.9 42.1 100.0

Marketing channel

Producer-wholesaler-consumer 1 (6.6%) 1 (6.6%) 2 6.7

Producer-wholesaler-retailer-consumer 14(93.4) 14(93.4) 28 93.3

Total 15 15 30 100.0


6.4.2. Infrastructure for the Physical Movement of Goods

Of the different facilities required for physical movement of goods, loading unloading facility,road facility inside market is available in all markets. In Maranalloor VFPCK, transportation facilityis available from field to market. In Parathode, trader’s vehicle goes and collect farmer’s product whenrequired. Due to limited space in all the VFPCK, they have a constraint for parking, but traders andfarmers park their vehicle inside the market for loading and unloading. Passenger transport facility iseasy in Santhigram and Parathode in Idukki and Maranalloor in Trivandrum, because these are locatedmore or less near busstop. Farmers complain that in the other markets, the markets are far away frommain road and public transport facilities. Refrigerated trucks and other storage facilities, particularlycold, dry, mobile units, ware houses, drying yards, assaying units etc. are not available. Godownfacility is available in Maranalloor and ripening chambers is available in Maranallorr and Kovilnadu.

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Table 6.21: Transportation, storage, value addition, standardization and grading – views offarmers (in percent)

Facility Satisfaction Satisfaction

Yes 1 2 3 4 5 Yes 1 2 3 4 5

Transportation Value Addition

Loading/ TVM 0.0 0.0 0.0 0.0 0.0 0.0 Foodirra 33.3 0.0 0.0 0.0 100.0 0.0

Unloading Idukki 93.3 0.0 0.0 0.0 92.9 7.1 diation unit 0.0 0.0 0.0 0.0 0.0 0.0

Transportation TVM 6.7 0.0 0.0 0.0 0.0 100.0 Inhouse 6.7 0.0 0.0 0.0 100.0 0.0

inside market Idukki 40.0 0.0 0.0 0.0 83.3 16.7 testing lab 0.0 0.0 0.0 0.0 0.0 0.0

Road facility TVM 100.0 13.3 0.0 13.3 33.3 40.0 Machinery 33.3 0.0 0.0 0.0 100.0 0.0

inside market Idukki 100.0 6.7 13.3 0.0 46.7 33.3 0.0 0.0 0.0 0.0 0.0 0.0

Transportation TVM 33.3 0.0 0.0 0.0 60.0 40.0 Skilled 33.3 0.0 0.0 0.0 80.0 20.0

from field to Idukki 13.3 50.0 0.0 0.0 50.0 0.0 labors 0.0 0.0 0.0 0.0 0.0 0.0

market

Passenger TVM 0.0 0.0 0.0 0.0 0.0 0.0 Branding or 6.7 0.0 0.0 0.0 100.0 0.0

transport Idukki 53.3 0.0 12.5 12.5 75.0 0.0 patenting 6.7 0.0 0.0 0.0 100.0 0.0

Check post TVM 0.0 0.0 0.0 0.0 0.0 0.0 Standardisation

Idukki 6.7 0.0 0.0 0.0 100.0 0.0 Uniform 0.0 0.0 0.0 0.0 0.0 0.0

Parking TVM 93.3 0.0 7.1 21.4 57.1 14.3 standards 0.0 0.0 0.0 0.0 0.0 0.0

facility Idukki 86.7 0.0 15.4 23.1 53.8 7.7 Display of 0.0 0.0 0.0 0.0 0.0 0.0

Refrid: trucks TVM 6.7 0.0 0.0 0.0 0.0 100.0 samples 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Economic 13.3 0.0 0.0 0.0 0.0 100.0

Vehicle TVM 0.0 0.0 0.0 0.0 0.0 0.0 loads 6.7 0.0 0.0 0.0 0.0 100.0

maintain Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Quality 0.0 0.0 0.0 0.0 0.0 0.0

Storage testing labs 0.0 0.0 0.0 0.0 0.0 0.0

Cold storage TVM 0.0 0.0 0.0 0.0 0.0 0.0 Quality 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 6.7 0.0 0.0 0.0 100.0 0.0 certification 0.0 0.0 0.0 0.0 0.0 0.0

Ripening TVM 86.7 0.0 0.0 0.0 69.2 30.8 Weighing 100.0 0.0 0.0 0.0 26.7 73.3

chambers Idukki 6.7 0.0 0.0 0.0 0.0 100.0 machines 93.3 0.0 0.0 0.0 28.6 71.4

Dry storage TVM 0.0 0.0 0.0 0.0 0.0 0.0 Surveillance 60.0 0.0 0.0 0.0 55.6 44.4

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 camera 6.7 0.0 0.0 0.0 100.0 0.0

Godowns TVM 26.7 0.0 0.0 0.0 50.0 50.0 Grading and packing

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Scientific 0.0 0.0 0.0 0.0 0.0 0.0

Mobile TVM 0.0 0.0 0.0 0.0 0.0 0.0 labs 0.0 0.0 0.0 0.0 0.0 0.0

storage units Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Grading 0.0 0.0 0.0 0.0 0.0 0.0

Ware houses TVM 6.7 0.0 0.0 0.0 100.0 0.0 apparatus 6.7 0.0 0.0 0.0 100.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Electronic 100.0 0.0 0.0 0.0 33.3 66.7

Drying yards TVM 0.0 0.0 0.0 0.0 0.0 0.0 weighing 13.3 0.0 0.0 0.0 50.0 50.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Machines for 33.3 0.0 0.0 0.0 100.0 0.0

Washing TVM 86.7 0.0 0.0 7.7 46.2 46.2 packing 6.7 0.0 0.0 0.0 0.0 100.0

facility Idukki 26.7 0.0 25.0 50.0 25.0 0.0 Labelling 13.3 0.0 0.0 0.0 100.0 0.0

Assaying TVM 0.0 0.0 0.0 0.0 0.0 0.0 facility 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Dispatching 93.3 0.0 0.0 0.0 71.4 28.6

facility 0.0 0.0 0.0 0.0 0.0 0.0

Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good

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Facility Satisfaction SatisfactionYes 1 2 3 4 5 Yes 1 2 3 4 5

Transportation Value AdditionLoading/ TVM 0.0 0.0 0.0 0.0 0.0 0.0 Food 33.3 0.0 0.0 0.0 80.0 20.0Unloading Idukki 100.0 0.0 0.0 6.7 20.0 73.3 irradiation unit 0.0 0.0 0.0 0.0 0.0 0.0Transportation TVM 0.0 0.0 0.0 0.0 0.0 0.0 Inhouse testing 0.0 0.0 0.0 0.0 0.0 0.0inside mkt Idukki 0.0 0.0 0.0 0.0 0.0 0.0 laboratory 0.0 0.0 0.0 0.0 0.0 0.0Road facility TVM 100.0 0.0 6.7 13.3 73.3 6.7 Machinery 33.3 0.0 0.0 0.0 100.0 0.0

Idukki 100.0 0.0 0.0 0.0 66.7 33.3 0.0 0.0 0.0 0.0 0.0 0.0Transportation TVM 86.7 0.0 0.0 0.0 61.5 38.5 Skilled labors 53.3 0.0 0.0 0.0 62.5 37.5from field Idukki 6.7 0.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0Passenger TVM 6.7 0.0 0.0 0.0 0.0 100.0 Branding or 33.3 0.0 0.0 0.0 100.0 0.0transport Idukki 93.3 0.0 14.3 42.9 28.6 0.0 patenting 0.0 0.0 0.0 0.0 0.0 0.0Check post TVM 0.0 0.0 0.0 0.0 0.0 0.0 Standardisation

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Uniform 93.3 0.0 0.0 0.0 78.6 21.4Parking TVM 100.0 0.0 0.0 13.3 73.3 13.3 standards 6.7 0.0 0.0 0.0 0.0 100.0facility Idukki 93.3 0.0 0.0 7.1 85.7 0.0 Display of 0.0 0.0 0.0 0.0 0.0 0.0Refrigerated TVM 0.0 0.0 0.0 0.0 0.0 0.0 samples 53.3 0.0 0.0 0.0 75.0 25.0trucks Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Economic 20.0 0.0 0.0 0.0 33.3 66.7Vehicle TVM 0.0 0.0 0.0 0.0 0.0 0.0 loads 0.0 0.0 0.0 0.0 0.0 0.0maintain Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Quality testing 0.0 0.0 0.0 0.0 0.0 0.0Storage labs 0.0 0.0 0.0 0.0 0.0 0.0Cold storage TVM 0.0 0.0 0.0 0.0 0.0 0.0 Quality 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 certification 0.0 0.0 0.0 0.0 0.0 0.0Ripening TVM 93.3 0.0 0.0 0.0 42.9 57.1 Weighing 86.7 0.0 0.0 0.0 46.2 53.8chambers Idukki 33.3 0.0 0.0 60.0 40.0 0.0 machines 20.0 0.0 0.0 0.0 66.7 33.3Dry storage TVM 0.0 0.0 0.0 0.0 0.0 0.0 Surveillance 60.0 0.0 0.0 0.0 44.4 55.6

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 camera 60.0 0.0 0.0 0.0 11.1 88.9Godowns TVM 26.7 0.0 0.0 0.0 75.0 25.0 Grading and packing

Idukki 6.7 0.0 0.0 0.0 100.0 0.0 Scientific labs 13.3 0.0 0.0 0.0 50.0 50.0Mobile units TVM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Grading 0.0 0.0 0.0 0.0 0.0 0.0Ware houses TVM 6.7 0.0 0.0 0.0 100.0 0.0 apparatus 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Electronic 86.7 0.0 0.0 0.0 46.2 53.8Drying yards TVM 0.0 0.0 0.0 0.0 0.0 0.0 weighing 20.0 0.0 0.0 0.0 66.7 33.3

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Machines 40.0 0.0 0.0 0.0 100.0 0.0Washing TVM 93.3 0.0 0.0 21.4 50.0 21.4 for packing 13.3 0.0 0.0 0.0 100.0 0.0

Idukki 26.7 0.0 0.0 25.0 75.0 0.0 Labelling 33.3 0.0 0.0 0.0 100.0 0.0Assaying TVM 0.0 0.0 0.0 0.0 0.0 0.0 facility 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Dispatching 80.0 0.0 0.0 0.0 91.7 8.3facility 0.0 0.0 0.0 0.0 0.0 0.0


Table 6.22: Transportation, storage, value addition and standardization -views oftraders (in percent)

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Regarding infrastructure for value addition, food irradiation units, skilled labour and brandingfacility is available only in Kovilnada, since Kovilnada VFPCK has a cut vegetable unit. Standardisationinfrastructure including uniform standards, display of samples, economic loads, quality testing labs,certification etc. is not available in any markets. Surveillance camera is available in Kovilnada andMaranalloor and despatching facility is available in more or less all markets on demand from traders.As far as traders are concerned, in Idukki loading/unloading facility is helped by the market, whereasin Trivandrum, traders have to do that on their own. In all other infrastructure facilities for the physicalmovement of goods, traders have the same opinion as farmers. Regarding satisfaction level of theavailable infrastructure, they are more or less satisfied with the working of the available ones.

6.4.3. Infrastructure for Facilitation

Regarding facilitation infrastructure, credit facility to buyers is available in all markets in Trivandrumand Idukki. Credit sharing facility is not available, however farmers own shares of their representativemarkets.

Table 6.23: Market financing, market information and market integration -views of farmers (in percent)

Facility Satisfaction SatisfactionYes 1 2 3 4 5 Yes 1 2 3 4 5

Market financing Market InformationCredit facility TVM 73.3 0.0 0.0 0.0 72.7 27.3 Notice board/ 60.0 0.0 0.0 33.3 66.7 0.0to buyers Idukki 33.3 0.0 0.0 0.0 100.0 0.0 price display 46.7 0.0 57.1 0.0 0.0 42.9Credit facility TVM 26.7 0.0 0.0 0.0 50.0 50.0 Advertisement 0.0 0.0 0.0 0.0 0.0 0.0to sellers Idukki 0.0 0.0 0.0 0.0 0.0 0.0 6.7 0.0 0.0 0.0 0.0 100.0Bank/ATM TVM 0.0 0.0 0.0 0.0 0.0 0.0 Market 93.3 0.0 0.0 7.1 64.3 28.6

Idukki 6.7 0.0 0.0 0.0 100.0 0.0 education 60.0 0.0 0.0 0.0 44.4 55.6Loan facility TVM 53.3 0.0 0.0 0.0 50.0 50.0 Market Integration

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Market 93.3 0.0 0.0 0.0 64.3 35.7Incentives TVM 93.3 0.0 0.0 0.0 50.0 50.0 intelligence 86.7 0.0 0.0 7.7 38.5 53.8

Idukki 86.7 0.0 0.0 0.0 30.8 69.2 Risk bearing 100.0 0.0 0.0 0.0 80.0 20.0Credit sharing TVM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 6.7 0.0 0.0 0.0 0.0 100.0 Vertical 100.0 0.0 0.0 0.0 80.0 20.0Shares TVM 60.0 0.0 0.0 0.0 11.1 88.9 integration 93.3 0.0 0.0 0.0 50.0 50.0

Idukki 93.3 0.0 0.0 0.0 64.3 35.7 Horizontal 100.0 0.0 0.0 0.0 86.7 13.3Market Information integration 86.7 0.0 0.0 0.0 76.9 23.1Computerized TVM 100.0 0.0 0.0 0.0 60.0 40.0 Trader linkage 100.0 6.7 0.0 0.0 86.7 6.7data Idukki 93.3 0.0 0.0 0.0 78.6 21.4 66.7 0.0 10.0 90.0 0.0 0.0Record TVM 100.0 0.0 0.0 0.0 40.0 60.0 Digitization 6.7 0.0 0.0 0.0 100.0 0.0keeping Idukki 86.7 0.0 0.0 0.0 76.9 23.1 0.0 0.0 0.0 0.0 0.0 0.0Information TVM 93.3 0.0 0.0 0.0 64.3 35.7 ICT tools 0.0 0.0 0.0 0.0 0.0 0.0Dissemi: Idukki 86.7 0.0 0.0 0.0 30.8 69.2 0.0 0.0 0.0 0.0 0.0 0.0Market TVM 0.0 0.0 0.0 0.0 0.0 0.0 Forward 60.0 0.0 0.0 0.0 100.0 0.0surveys Idukki 0.0 0.0 0.0 0.0 0.0 0.0 integration 26.7 0.0 0.0 0.0 100.0 0.0Information TVM 66.7 0.0 0.0 0.0 80.0 20.0counter Idukki 93.3 0.0 0.0 0.0 50.0 50.0


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With regard to market information, computerized data, data management, information dissemination,information counter etc. is available in all markets with a relatively high degree of satisfaction. Marketinformation infrastructure facilities including market information and market education is also availablein most VFPCKs.

Table 6.24: Market financing, information and integration views of traders (in percent)


Yes 1 2 3 4 5 Yes 1 2 3 4 5

Market financing Market InformationCredit-buyers TVM 86.7 0.0 0.0 0.0 38.5 61.5 Information 60.0 0.0 0.0 0.0 77.8 22.2

Idukki 73.3 0.0 0.0 9.1 9.1 81.8 counter 80.0 0.0 0.0 0.0 83.3 16.7Credit-sellers TVM 0.0 0.0 0.0 0.0 0.0 0.0 Notice board 60.0 0.0 11.1 22.2 66.7 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 86.7 0.0 7.7 15.4 76.9 0.0Bank/ATM TVM 6.7 0.0 0.0 0.0 100.0 0.0 Advertisement 6.7 0.0 0.0 0.0 100.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 13.3 0.0 0.0 50.0 50.0 0.0Loan TVM 0.0 0.0 0.0 0.0 0.0 0.0 Market 0.0 0.0 0.0 0.0 0.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 education 20.0 0.0 0.0 33.3 66.7 0.0Incentives TVM 0.0 0.0 0.0 0.0 0.0 0.0 Market Integration

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Market 86.7 0.0 0.0 0.0 76.9 23.1Credit sharing TVM 0.0 0.0 0.0 0.0 0.0 0.0 intelligence 20.0 0.0 0.0 0.0 100.0 0.0

Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Risk bearing 100.0 0.0 0.0 0.0 80.0 20.0Shares TVM 0.0 0.0 0.0 0.0 0.0 0.0 6.7 0.0 0.0 0.0 100.0 0.0

Idukki 33.3 0.0 0.0 0.0 60.0 40.0 Vertical 100.0 0.0 0.0 0.0 80.0 20.0Market Information integration 46.7 0.0 0.0 0.0 85.7 14.3Computerized TVM 93.3 0.0 0.0 0.0 42.9 57.1 Horizontal 100.0 0.0 0.0 0.0 80.0 20.0data Idukki 93.3 0.0 0.0 7.1 78.6 14.3 integration 66.7 0.0 0.0 10.0 80.0 10.0Data TVM 100.0 0.0 0.0 0.0 46.7 53.3 Trader linkage 100.0 0.0 0.0 0.0 93.3 6.7management Idukki 100.0 0.0 0.0 6.7 86.7 6.7 86.7 0.0 0.0 7.7 92.3 0.0Information TVM 100.0 0.0 0.0 0.0 46.7 53.3 Digitization 26.7 0.0 0.0 0.0 100.0 0.0Dissemination Idukki 100.0 0.0 0.0 6.7 93.3 0.0 6.7 0.0 0.0 100.0 0.0 0.0Market TVM 13.3 0.0 0.0 0.0 50.0 50.0 ICT tools 6.7 0.0 0.0 0.0 100.0 0.0surveys Idukki 13.3 0.0 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Forward 33.3 0.0 0.0 0.0 100.0 0.0integration 0.0 0.0 0.0 0.0 0.0 0.0


Risk bearing is undertaken by all markets, according to the farmers, since futurepayment is guaranteedby the market. Regarding horizontal integration, VFPCKs are integrated to other VFPCKs for pricedetermination. If there is excess supply of agricultural products, it is sold in ‘Sasya’ governmentoutlet, hence there is horizontal integration in quantity of sales only. Regarding vertical integration,the VFPCK is integrated with traders and government institution and commission agents. If there isexcess produce, commission agents collect this and five to ten per cent commission is charged. InParathode, if there is excess supply of agricultural produce, the market officials hire a vehicle and

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transport it to the nearby shops and the received amount is divided among the farmers. Any loss iscompensated though the risk fund for those farmers who have made their contribution to the risk fund.


Under the core facility classification of NIAM, platforms for automatic weighing is not available inany of the markets. Auction Platforms, Loading/Unloading facilities, information counters, extensionand training facilities, water and electricity supply, sanitary facility, computerized systems, facility forrain proofing etc. is available in all VFPCKs.


Yes 1 2 3 4 5 Yes 1 2 3 4 5

Core facility Support facility

Platforms for TVM 0 0 0 0 0 0 Water Supply 15 0 1 0 8 6

Auto weighing Idukki 0 0 0 0 0 0 14 0 1 1 12 0

Auction TVM 15 0 0 0 8 7 Power 15 0 0 0 6 9

Platforms Idukki 14 0 0 1 13 0 15 0 0 0 1 14

Pack/Labeling TVM 4 0 0 0 4 0 Sanitary 13 1 2 2 1 7

Idukki 0 0 0 0 0 0 Facilities 13 0 0 5 8 0

Drying Yards TVM 0 0 0 0 0 0 Posts 0 0 0 0 0 0

Idukki 1 0 0 0 0 1 0 0 0 0 0 0

Loading/ TVM 13 0 0 0 0 0 Telephones 0 0 0 0 0 0

Unloading Idukki 13 0 0 0 0 13 0 0 0 0 0 0

Dispatch TVM 1 0 0 0 1 0 Banking 0 0 0 0 0 0

facilities Idukki 13 0 0 0 0 1 0 0 0 0 0 0

Grading TVM 11 0 1 0 8 2 Input supply & 11 0 1 4 5 1

facilities Idukki 5 0 0 0 4 1 Necessity Outlets 15 0 1 4 10 0

Standardi TVM 0 0 0 0 9 4 Repair/Mainte 0 0 0 0 0 0

sation Idukki 2 0 0 0 2 0 nance Servic 0 0 0 0 0 0

Office

Price Display TVM 0 0 0 0 0 0 Computerized 11 0 1 0 0 0

Mechanism Idukki 0 0 0 0 0 0 systems 8 0 1 0 7 0

Information TVM 13 0 0 0 2 1 Rain Proofing 13 1 0 0 3 9

Centres Idukki 13 0 0 0 9 4 14 0 1 1 11 1

Cold Rooms TVM 0 0 0 0 0 0

Idukki 0 0 0 0 0 0

Ripening TVM 8 1 0 0 4 3

Chambers Idukki 0 0 0 0 0 0

Extension and TVM 11 0 0 0 7 4

Training Idukki 9 0 0 0 3 9


Table 6.25: Core facility and support facility -views of farmers

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Manual grading facility is available for banana and cow pea in all markets. Organic input supplyprovision is also available in all markets. In Maranalloor, chemical fertilisers is also provided alongwith organic. Subsidized inputs are provided in all markets, in Marnalloor in addition to the subsidizedinputs, inputs are also supplied on a retail basis at a subsidy rate. Traders also have the same viewregarding the availability of core facilities in the VFPCK markets.

Table 6.26: Core facility and support facility-views of traders


Yes 1 2 3 4 5 Yes 1 2 3 4 5

Core facility Support facility

Platforms- TVM 0 0 0 0 0 0 Water Supply 15 0 1 0 10 4

auto weighing Idukki 0 0 0 0 0 0 13 0 0 1 10 2Auction TVM 15 0 0 1 7 7 Power 13 0 0 0 5 8Platforms Idukki 14 0 0 0 10 4 13 0 0 0 1 12Pack/ Label TVM 5 0 0 0 5 0 Veterinary 2 0 0 1 0 1ing Equip: Idukki 0 0 0 0 0 0 Services 2 0 0 0 1 1Drying Yards TVM 0 0 0 0 0 0 Sanitary 13 0 0 7 3 3

Idukki 2 0 0 0 2 0 13 0 1 3 8 1Loading/ TVM 1 0 0 0 1 0 Posts 0 0 0 0 0 0Unloading Idukki 9 0 0 0 3 6 1 0 0 0 1 0Dispatch TVM 13 0 0 0 11 2 Telephones 1 0 0 1 0 0

Idukki 2 0 0 0 2 0 0 0 0 0 0 0Grading TVM 15 0 0 0 9 6 Banking 1 0 0 0 1 0

Idukki 9 0 0 0 9 0 1 0 0 0 1 0Standardis TVM 13 0 0 0 7 6 Input supply 11 0 2 5 3 1ation Idukki 3 0 0 0 1 2 14 0 0 6 8 0Price Display TVM 1 0 0 1 0 0 Repair- Office 2 0 0 1 1 0Mechanism Idukki 1 0 0 0 0 1 0 0 0 0 0 0Information TVM 10 0 0 0 7 3 Computerized 1 0 0 0 1 0Centres Idukki 9 0 0 1 7 1 systems 0 0 0 0 0 0Cold Rooms TVM 1 0 0 0 1 0 Rain Proofing 13 0 0 0 7 6

Idukki 0 0 0 0 0 0 15 0 0 0 14 1Ripening TVM 12 0 0 0 8 4Chambers Idukki 2 0 0 1 1 0Extension/ TVM 5 0 0 0 4 1

Training Idukki 5 0 0 1 3 1


Regarding infrastructure facility for services, rest room is available only in Vembayam VFPCK inTrivandrum, it is available as a room for conference in the upstairs of the VFPCK building office.

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Market education is provided to all farmers, as training around four times a year. Drainage facility,firefighting, security etc. is not available in the markets. Proper sitting facility is not available, two orthree chairs are the only available ones. Toilet facility is inside the office; hence the farmers and tradersfind it difficult to use it.


Yes 1 2 3 4 5 Yes 1 2 3 4 5

Service infrastructure for farmersService infrastructure for farmers

Frequency Districts Yes 1 2 3 4 5 Yes 1 2 3 4 5

Rest rooms TVM 6 0 1 0 4 1 6 1 0 0 5 0

Idukki 0 0 0 0 0 0 0 0 0 0 0 0

Sheds for TVM 1 1 0 0 0 0 0 0 0 0 0 0

animals Idukki 1 1 0 0 0 0 0 0 0 0 0 0

Market TVM 14 1 0 0 9 4 0 0 0 0 0 0

education Idukki 12 0 0 0 3 9 0 0 0 0 0 0

Soil testing TVM 8 0 0 0 7 1 8 0 0 3 5 0

facilities Idukki 8 0 0 0 7 1 0 0 0 0 0 0

Drainage TVM 2 0 0 0 2 0 2 1 0 0 1 0

Idukki 2 1 0 0 1 0 0 0 0 0 0 0

Covered TVM 1 0 0 0 1 0 0 0 0 0 0 0

drainage Idukki 1 0 0 0 1 0 1 0 0 0 1 0

Sitting TVM 11 0 1 4 6 0 8 0 1 5 2 0

facility Idukki 9 0 1 3 5 0 5 0 0 2 1 2

Compound TVM 12 0 1 4 7 0 13 0 0 0 5 8

wall Idukki 13 0 0 12 1 0 15 0 0 1 13 1

Toilets TVM 13 0 4 3 2 4 15 0 2 5 1 7

Idukki 14 1 2 0 10 1 15 0 1 3 11 0

Parking TVM 14 0 1 4 8 1 15 1 0 4 9 1

space Idukki 14 0 0 0 12 2 14 0 0 0 14 0

Fire fighting TVM 1 1 0 0 0 0 4 2 0 1 1 0

Idukki 1 0 0 0 1 0 2 0 0 0 2 0

Security TVM 0 0 0 0 0 0 0 0 0 0 0 0

Idukki 0 0 0 0 0 0 0 0 0 0 0 0


Table 6.27: Availability of Service infrastructure for farmers and traders

Cleaning and garbage collection is done by farmers or the staff entrusted for the same by the market.However, no facility is available for garbage disposal. For waste utilization, only Parathode andKovilnada have a vermi-compost unit. Other waste utilization methods of biogas plant or bio gaspower is not available in any of the VFPCKs. Revolving fund is also not available in any of theVFPCKs.Traders also have the same opinion regarding the availability and satisfaction of the facilities.

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Table 6.28: Maintenance facility (frequency) for farmers and traders

Facilities Districts Maintenance facilities for farmers Maintenance facilities for traders

Total 1 2 3 4 5 Total 1 2 3 4 5

Cleaning TVM 7 0 0 3 3 1 14 0 0 5 9 0

facility Idukki 15 0 0 0 3 12 15 0 0 0 6 9

Garbage TVM 4 0 0 1 3 0 5 0 0 5 0 0

collection Idukki 12 0 0 0 0 12 15 0 0 0 7 8

Garbage TVM 0 0 0 0 0 0 0 0 0 0 0 0

disposal Idukki 1 0 0 0 0 1 3 0 0 0 2 1

Waste utilization

A.Vermin TVM 4 0 0 3 1 0 5 0 0 4 1 0

composting Idukki 5 2 3 0 0 0 4 0 2 0 2 0

B. Biogas TVM 0 0 0 0 0 0 0 0 0 0 0 0

plant Idukki 0 0 0 0 0 0 0 0 0 0 0 0

C. Bio gas TVM 0 0 0 0 0 0 0 0 0 0 0 0

power Idukki 0 0 0 0 0 0 0 0 0 0 0 0

Revolving TVM 0 0 0 0 0 0 0 0 0 0 0 0

fund Idukki 1 0 0 0 1 0 1 0 1 0 0 0

Solar/wind TVM 0 0 0 0 0 0 0 0 0 0 0 0

energy Idukki 0 0 0 0 0 0 0 0 0 0 0 0


6.4.5. Own infrastructure

The own infrastructure facility available for traders in VFPCK is provided in the table below. Farmersgenerally do not have any of the infrastructure facility, except for washing and weighing. Two tradershave facility for storage, godown and grading. Weighing machine is privately owned by the traders.

Facilties Districts Number PercentStorage TVM 2 13.3

Idukki 0 0.0Godown TVM 2 13.3

Idukki 1 6.7Washing TVM 11 73.3

Idukki 2 13.3Weighing machine TVM 13 86.7

Idukki 4 26.7Value addition TVM 0 0.0

Idukki 1 6.7Transportation TVM 5 33.3

Idukki 14 93.3Packaging TVM 5 33.3

Idukki 2 13.3Grading TVM 3 20.0

Idukki 12 80.0


Table 6.29: Own infrastructure for traders

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6.4.6. Problems identified for market inefficiencies and suggested solutions

The major problems identified by farmers and traders, the reasons for the problems and thesuggestions given by the farmers and traders to solve the same is given in the tables below.

Problems & solutions identified from farmersProblems Yes Percent Causes SolutionsPrice setting TVM 5 33.3 Low price, no price stability Price stability

Idukki 9 60 Low price Base price, fix support priceCredit TVM 8 53.3 Not available, insufficient Provision of credit facility in

facility, marketIdukki 15 100 Not available Provision of credit facility in market

Scaling/ weighing TVM 1 6.7 Partiality in weighing Should not be allowedTVM 3 20 No store room Store room

Storage problem Idukki 7 46.7 No facility, no godown Facilitate godownInformation flow TVM 1 6.7 No price display Provide price displayPerishability TVM 7 46.7 No cold storage facility Provide cold storage

Idukki 7 46.7 no vehicle Provide vehicleHigh marketing costs TVM 2 13.3 High transportation cost To be met by the market

Idukki 2 13.3 High commission Reduce itTVM 3 20 Complex insurance, problem Simplification of insurance

in rainy seasonLack of other facility Idukki 2 13.3 Jackfruit to be included,

establishment of ,non Facilitaterevolving fund

Problems & solutions identified from tradersPrice setting TVM 5 33.3 High price, no facility Price stability, reduce price, provide

incentivesIdukki 9 60 High price, no incentive Study local market, reduce price, open

market facilityCredit TVM 6 40 No facility Credit facility

Idukki 2 13.3 No facility Credit facility with free interest,vehicle loan

Information flow Idukki 1 6.7 Delay Price fixationPerishability TVM 1 6.7 Hartal, natural calamities Economic assistanceLack of other facility TVM 2 13.3 No bonus, no incentives Provide incentives

Idukki 1 6.7 No bonus, no incentives Provide incentives


Table 6.30: Problems & solution identified from farmers and traders

The major problems identified are issues in price setting, unavailability of credit facilities, perishabilityof the products etc. The other major reasons as given by farmers for market inefficiencies is the invasionof agricultural products from neighboring states, the less provision for exports, lack of awarenessabout government schemes, less concessions, difficulty in getting access to financial institutions, highrate of interest, not getting favorable price for organic products etc.

To summarise, VFPCK Farmer’s market was an initiative towards establishing markets wherefarmers have an active role in the conduction of market, and infrastructure is established with the

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financial support of government, and managerial functions is coordinated by both farmers andgovernment officials. Small and marginal farmers usually find difficulty in finding buyers from thelocality and the new initiative created a platform for farmers and traders to meet and do businesseffectively.

The primary data reveals that both farmers and traders are satisfied with conduction of market,especially relating to dissemination of market information, price fixation and timeliness of marketingactivities. Particularly, farmers find that the market is helpful in demand forecasting and provision forinput supply as an added advantage. To traders, availability of fresh and organic produce is the mostimportant factor that attracts them to farmer markets, since in most of the other markets, vegetables areusually coming from neighboring states and they are of low quality. Along with this, good recordkeeping, in which all data relating to sale and purchase of agriculture produce are digitized increasetransparency and precision in dealings. Both opine that since the VFPCK market is a governmentregulated one, they have more confidence operating in VFPCK market. However, farmer’s surveyshows that payment is delayed and many of them have huge dues to be received.

Considering the marketing infrastructure, all the markets have essential infrastructure such asauction hall, market yards and weighing machines, but none of them have facilities for cold storage orvalue addition. Only one of the markets has a processing center, where cut vegetables are sold, in othermarkets there are no facilities to deal with the problem of bumper crop. And this is a major issue, attimes farmers have to sell their produce at very low price. This quintessentially shows the need formore infrastructure including cold storage, ripening chambers and facilities for value addition, packing,grading and standardization. Similarly, there is a dearth of service facilities such a rest room, toilets,waste management facilities, surveillance cameras and fire fighting facilities.

There is crop specific and district specific difference relating to marketing margins.Transportation cost forms a major share of marketing margin, but still, transportation facilities are amajor component that get neglected when it comes to marketing infrastructure. Given the perishabilityof goods and the large geographical area covered by the dealers, it is very important to arrange wellequipped, weather sensitive transportation facilities, which can be very helpful for the traders.

Establishing retail outlets can increase the acceptance of farmers’ markets in the locality andthis can earn more profits to farmers. Also establishing crop specific infrastructure facilities, based onthe agroclimatic zones can promote farmers to do agriculture more scientifically and profitably.

In short, it is important to convert the farmers markets from mere auction centres, to centers forstorage and value addition, by which the current problems faced by both farmers and traders can becurtailed. This essentially involve developing essential capacity, both physical and human, that makesfarmers capable of handling the complex process of agriculture marketing from input supply to marketingof agriculture produce, by eliminating the intermediaries.

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CHAPTER 7

Crop Specific Infrastructure - SpicesIndia is the largest producer, consumer and exporter of spices in the world and produces more

than 65 spices in different varieties out of the 109 Spices listed by ISO. India has a significant share of48% in quantity and 43% in value of the world trade in spices and nowadays major importers such asUSA and Europe are demanding more quality compliance in recent years that necessities refining theprocess of production, storage, standardisation and export facilitation infrastructure. Spices Parks hasbeen set up by the Spice Board to cope with the new challenges emerging in spice trade.

Spices Parks can be defined as an industrial park for processing and value addition of Spicesand Spice products which offers the processing facilities at par with the international standards. Eightregional crop specific Spices Parks has been established in various parts of the country with an aim tohave an integrated operation for cultivation, post harvesting, processing for value addition, packaging,storage and exports of spices and spice products by meeting the quality specifications of the consumingcountries. The basic objective is to provide common infrastructure facilities for both post-harvest andprocessing operations of spices and spice products, which also aims at backward integration by providingrural employment. In addition to common infrastructure, Spices Parks are having facilities for valueaddition and carries educative services. The aim is to ensure a better pricing for the produce by shorteningthe channels in the supply chain system currently followed locally.

For detailed analysis Spices Park, Puttady is selected. Insights from the observation and in-depth interview with all stakeholders is narrated below:

7.1. Spices Park, Puttady

Spices Park, Puttady is established with an aim to facilitate trade of spices especially of blackpepper and cardamom by Spice Board, India with a total outlay of Rs. 28 crores and it started functioningduring February 2011. The Spices Park has facilities for auctioning of spices and has infrastructure fortransportation, storage, value addition, grading and packing for both pepper and cardamom. Alongwith this, it provides infrastructure for facilitation function by providing banking and credit facilities.

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7.2. Infrastructure Facilities

Infrastructure for the function of transfer of ownership:

The SpicesPark has essential facilities for trade where auction companies and traders can meetand negotiate on prices and quantity of trade.

Auction Centre: Board has established a full-fledged Electronic Auction centre for cardamom in thefirst floor of the Administrative building. The Hall is of 600 square meter areas and the E-Auctionsystem has a higher end server with 60 bidder terminals, which can be extended to 100 bidder terminals.The updates of auction are available online which helps the farmer to keep in touch with the demandand price of different grades of cardamom and ensure fair prices from auction centres. This also helpsin knowing the general market behaviour and planning the production cycle accordingly. Both theauction companies and traders are registered with Spice Board, by fullfilling conditions of financialcredibility and taking trader/auctioneer license from the Board.

Infrastructure for Physical Functions:

Transportation: The SpicesPark is situated near from town and has good road connectivity to the statehigh way. There are roads inside Spices Park which makes movement of goods easier inside the campus.For transportation of materials from building to building inside the Park, Board has installed a GODREJDiesel Forklift Truck model GX 200 D of 2T capacity at 500 mm load center, fitted with Diesel Engineof 56HP @ 2300 rpm, with Automatic Torque. And for transportation of materials within the Godown,Board has installed 5 pallet trucks of Capacity 2.5 T.

Storage:

Five numbers of Warehouses are built in the Spices Park for storing of both the raw materialsand finished products of Cardamom & Pepper and it include: i) One raw material Gowdown each forCardamom and Black pepper having area of 804 and 600 sq. meters respectively ii) One finishedproduct Gowdown each for Cardamom & Black pepper and both having an area of area 600. Sq.Meters each are established iii) One puff Gowdown for Cardamom which is of area 583 sq. for keepingthe product with out defects in the long run. Farmers, auction companies and traders use the godownfor keeping both cardamom and pepper so as to make profit out of price fluctuations.

Infrastructure for Processing: (Grading and Standardisation and Packing)

Spices Park has ensured crop specific processing facility for both cardamom and pepper. Boardhas installed a Cardamom Processing plant of capacity 2 Tons per hour. The facilities include pre-cleaning, grading, sorting, weighing and packing of dried whole Cardamom. The processing line includesfacility for grading of Cardamom based on its size and further sorted out based on colour with the helpof colour sensors. The packing facility included in the processing line provide both bulk and consumerpack of 25 gm, 50gm & 100 gm.

Also, Board has established a processing plant of Black Pepper and the capacity of the plant forpre cleaning facilities is 24 Tons per day. The dried Black Pepper is cleaned through aspiration, gravity

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separation, magnetic separation and vaccum de-stoner mechanisms. The cleaned Black Pepper can begraded based on its size. The processing facility of the plant includes cracking and grinding of BlackPepper with a capacity of 500 kg per Hour. Apart from these facilities, separate packaging facilities forwhole pepper, ground pepper and cracked pepper were also established. The packing facility includedin the processing line provide both bulk and consumer pack of 25 gm, 50gm & 100 gm.

In addition, Board has established a sterilization facility with a capacity of 250 Kg per hour inbatch process and a drying yard with an area of 3000 sq. met.

Value Addition

A full-fledged white pepper production unit is established in the Spices Park with a productioncapacity of 1 Ton per day. The technology for the production of White Pepper is developed by theNational Institute for Interdisciplinary Science and Technology.

Infrastructure for facilitation function:

The Spices Park gives facilitation function in which facilities are provided for market informationand financing.

Banking Services: The Spices Park has a bank in its compound and ATM inside campus. Credit facilityis also arranged. Also, a business centre is opened inside the campus to facilitate trade and it provideswith market information. An office cum sales counter of M/s FSTL is functioning in the Spices Park inthe two storied Building of area 500 square meters.

Services/ Maintenance Infrastructure:

Spices Parkhas common infrastructure facilities developed such as internal road, drainage,power station, common generator for power backup, rain water harvesting, weighing bridge etc. Boardhas set up a two storied administrative building of area 1200 square meter. The ground floor of theblock is of 620 square meters. The administrative Office and the Zonal Office of the Board is functioningin the block. Besides, there are 12 rooms available for functioning as the offices of registered Auctioneers& Dealers of Cardamom and for other stake holders. A restaurant of 460 square meters with all amenitiesand a Guest House, which is a 3 storied building of area 577 sq. meters with six bed rooms, dining halland kitchen facilities is also established in the campus. A power station with 630 KVA transformer and250 KVA D.G. is setup to ensure uninterrupted power supply. The Spices Park has initiated efforts likegreen energy and as a part of it, all the street lights established in the park is under the Solar Powersystem and waste management plant is also functioning. A firefighting system is also established at theSpices Park, Puttady for ensuring safety. General facilities available includefully computerized PitType Weighbridge of 50 T capacity and plastic pallets for stacking of cardamom/pepper bags in godowns.

Following is a narration of how the institutional environment and infrastructure effects thestructure, conduct and performance of the market.

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7.3. Institutional Environment

Spices Park is governed by Spice Board of India and for conducting day to day functions, fivedepartments are being formed - development department, marketing department, finance department,research department and administrative department. All the departments are working under an AssistantDirector and follows a strictly hierarchical structure of administration. Spices Park’s marketing sectionis monitoring the players during auction and take necessary steps to curb uncompetitive practices.Auction company has to submit trade transaction details to Spices Park and this is verified by theauthorities, since tax has to be paid not based on the average auction price, but price quoted for eachlot and the volume of trade transaction.

7.4. Structure of the market:

Structure of the market is analysed by looking into variables relating to market forces, andcategories related to the enabling environment. There are twelve auction companies in the market whoare registered with Spice Board. These auction companies collect produce from the farmers. Majorcompanies include MAS Enterprises Ltd., Header Systems Ltd, Cardamom Planters Marketing Co-operative Society, Greenhouse Cardamom Co. Ltd., South Indian Green Cardamom Co. Ltd.,Sugandagiri Spice Promoters and Traders Pvt. Ltd., Idukki District Traditional Cardamom ProducersCompany and The Kerala Cardamom Producers Company Ltd. Around 400 traders take part in theauction in which trading/ exporting companies including Allus Cardamom Point, SRM Traders,Kingfisher Spices, Vignesha Spices, P.J Thomas and Co. RAM exports, Sanjay Traders and individualfarmers participate. Major auction companies have their own pooling centres and own infrastructurefor storage, grading and packing. Since for registration, procedure is complicated and demand largeamount as security deposit, only large companies with financial credibility can register as auctioncompanies. So there are entry restrictions to the market and price discovery is not always independentof the major players, instead major auction companies create artificial price hike in the market and thishas led to monopoly features in the market, with the same company acting as buyer and seller andtaking away the commission from auction and farmers being provided with false demand and priceforecast. For instance, a single auction company and trader have around sixty percent of trade share.For farmers, cheap substitutes from foreign countries, especially Guatimalaaffects their profitability.And artificial hike in the price may drive away the genuine consumers leading to a steep fall in theprice of cardamom. Additionally, there are apprehensions relating to the quality of product, especiallythe high pesticide residue which may seriously effect trade in the market in the long run. Goodinfrastructure has attracted major players in spice trade to the Spices Park, and they are providedfacilities from storage, grading, packing to credit facilities. The market is working efficiently withtrade in alternative days. However, there are issues related to equity and fairness which is related to theconduct and performance of the market.

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7.5. Conduct of the market:

e-Auction has replaced the traditional outcry auctions of Cardamom in Kerala. In the newsystem, licensed dealers are provided with a user id and password. The dealers have to log into thesystem to participate in the auction. A bid is made with key depressions using a normal computerkeyboard and identity of bidders is protected during the auction process. Highest bidder’s name isdisplayed only on the Auction Master’s terminal. There is a main display board showing lot number,quantity, number of bags, current highest bid etc of each lot kept in the auction. The e-Auction systemstarted in 2007, has brought transparency in the auction process and is running successfully.

Auction is conducted at the centre in alternative days so as to organise the trade activities in parwith the other auction centre at Bodinayak, the major trading centreestablished before the setting up ofSpices Park, Puttady. There was a monopoly of Tamil Nadu based traders and farmers in cardamomtrade. However, region wise monopoly has changed after the functioning of the centre since tradersfrom North India as well as Kerala are active in auction process and farmers get a chance to sell theirproduce at fair price to pooling centres.

Twelve auction companies are registered in the market and each of them are assigned withparticular days of auctioning. In order to register as an auction company, the company has to provideten crores as bank guarantee. Around sixty-five traders are physically being present during the auctiontime, and others take part from either Mumbai or from Theni, the other auction centres. Since e-auction facility is available, around 400 traders who are registered with Spice Board can participate inthe auction. The traders check the size and quality of cardamom and decide up on price. Any quantityof cardamom, above 1.5 kg can be traded in auction. The cardamom is collected by the auction companiesfrom farmers directly. There are pooling centres managed by the auction companies and farmers sellthe product to auction companies based on the average market price, which is available to farmers onthe online portal. Of the total quantity collected, a sample of 1.5 kg is taken. Of this 50 g is displayedon the Notice Board so that the traders can examine all the lots before entering to the auction hall. A100 gram is given to traders so that he can check the product at the time of procurement from thegodown. Farmer gets the price of 1.35 gram of cardamom. Price of 50g is paid by the auction companyto Growers Development Fund and the rest is met by trader. Traders have to pay the amount fixedduring auction to auction company within one week and the company will disperse the amount withintwo weeks to farmers. The company gets one percent of the total volume of trade as commission.Traders resale it to auctioneers / exporters or retailers. The price at which resale is happening is notknown since the supply chain is very much diverse.

7.6. Monitoring:

Malpractices: Auction companies reduce the price of farmer’s lots and hike the price when the lot oftraders / auction companies comes in. And most of the auction companies have traders and they buytheir own products and thus create a fake price hike in the market. Many of these companies haveconnections with real estate groups and fertiliser industry, this boom in price of cardamom leads to

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increased cultivation and hoarding. Spices Park is closely watching these trends and is trying to takenecessary steps.

Quality issues: European countries have issued guidelines on the quality of products and due to highpesticide residue, the cardamom from Kerala has been rejected. So, Spice Board is taking necessarysteps to curtail use of chemical fertilisers and pesticides.

7.7. Performance of the market:

During recent months, price of cardamom is very high and most of the farmers are not usingthe facilities for storage and standardisation, they are directly selling it to nearby shops or to thepooling centres after drying for which majority of the farmers are having a facility of their own athome.

7.8. Service Facility: Input supply

Along with trading facilities Spices Park is providing support for farmers to ensure good inputsupply. Both farmers and auction companies and export houses are benefitting from the subsidy schemesand credit facility provided by the Board. Individual farmers are getting support- the major schemesinclude Spport for Replanting (rupees 1 lakh as subsidy), Scheme for Rejuvenation (32000/-), Schemefor sucker nursery (Rs. 25000/-) and support for irrigation (Rs. 21175 for sprinkle irrigation and Rs.10000 for pumps). Subsidy for dryer to the farmers is at an amount of 1 lakh (33% of expenditure ondryer) with a view to ensure basic facilities to farmers. The support is given after three inspection atthree levels and the officials visit plantations and thus maintains contact with individual farmers.Farmers applications are processed online and basic details are there in the application managementsystem which makes the monitoring fool proof.

7.9. Issues in conduction of markets: Backward and Forward Linkages

Cardamom cultivation is a booster to real estate, fertiliser industry and labour supply. On thebackward linkage, there are labourers from Tamil Naidu who comes in the morning and work inplantation with a salary of Rs.300. Around 300 jeeps are transporting these labourers form Theni toIdukki. This is also a way to transport the banned fertilisers and pesticides to Kerala. In addition, realestate group is playing an important role in hiking the demand for lease cultivation and auction companieshave a big hand in escalating the malpractices. Spice Board has taken actions to cancel license ofsome of the auction companies, but it is difficult to make the general public realise the malpractices inthe marker.

With regard to pepper, cultivation activities up to harvest is monitored and regulated by Ministryof agriculture, but the post handling comes under Spice Board.

Small farmers are not benefiting from the unit as the minimum amount needed for processingis 500 kg. Also, in order to give produce to pooling centres the farmer should possess at least 25 centsof lands. Mostly, the farmers do not have bulk quantities and they have to pay additional amount foreach activity in addition to transport cost. Some of the farmers sell the produce as raw or depend on

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private facilities that are near to the plantations. To solve this, Spices Park is making efforts to organisefarmers so that they can make use of the infrastructure facilities at the park and indulge in directmarketing. However, the efforts are not completely successful, since there was lack of motivation andevery one preferred to increase their own profit only. Similarly, for getting the exporting licences thereare many bottlenecks and it is important to train farmers to acquire that by forming cooperatives orFPOs.

However, there are some models worth mentioning. For instance, Tribal hamlet in Vallakkadavuis exporting spices to Germany. And there are individuals who benefit from online trading, and thusmake use of facilities at the park, especially the packing facility by which cardamom can be packed inpackets of 50 g to 50 kg.

7.10. Maintenance:

FSTL was maintaining the whole infrastructure in the park till last year. Now due to sometechnical problems, facilities except the auction centreare leased out to BOS Naturals Private Ltd, themajor spice trader in India. They are charging a service fee for grading, storage and packing.

Spice Board monitors the export channel also. To export, traders have to log in to website andhas to enter into price quantity agreement with importers. Then the marketing officials of the SpiceBoard take sample and conducts necessary lab test to check for pesticide residue and phytosanitaryconditions and issues necessary certificates including Certificate of Origin.

7.11. Traders view: Allu Cardamom and MAS Enterprises Ltd.

Interview with traders revealed major infrastructure bottlenecks faced by the traders. Regardingphysical infrastructure majority of them are having facilities for storing, grading, standardisation andpacking. To them the three major problems include pesticide residue, artificial colouring, and immaturecapture of cardamom. Unrestricted pesticide use has destroyed the fertility of soil and has created anexus of auction companies, farmers and pesticide industry. Many of the countries including SaudiArabia and Oman has rejected the consignments sighting the high pesticide residue and the Europeanmarket is not accessible. They are of the opinion that the Spice Board should introduce strict monitoringmeasures/infrastructure to tackle these issues.

7.12. Performance of the Spices Park: Analysis of Primary Data

Primary data is collected from farmers who cultivate spices, particularly cardamom and pepper.Those who have Cardamom Registration both permanent and temporary were selected for the study.The period of data collection was March 2020, when the cardamom prices were very high (i.e., between2500 to 3200 per kg). Hence many of the cardamom growers were directly selling their crop to theretail shops near their home.

The socio demographic characters of the sample show that only one among the fifteen spicegrowers sample was a female, majority had education plus two and below and for eighty per cent theirmain occupation was agriculture. Regarding their cultivation habits, some cultivate crops other than

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pepper and cardamom, tapioca is cultivated by three, bananaby six, ginger by five, cow pea by six,spinach by six, cucumber by two, snakeguard by three and bitterguard by six.

Out of the fifteen sample farmers who were cultivating cardamom, only three are now takingpart in the auction process in Spicepark. They bring their cardamom to the pooling centres of auctioncompanies like Mass, Allooss Cardamom etc. The Auction companies pool the crop and engage in thetrading process at Spices Park. All the other farmers were doing the same process, when price ofcardamom was low. But since the price of cardamom was very high during the data collection time,many farmers were directly selling their product to small shops who acted as collecting points tosupply to wholesale operators in the market. This is because this marketing process gave them immediatecash, whereas operations at Sprice Park required pending days for payments (around three weeks),even though the price received was lesser by around Rs.100 per kilo. Pepper is also sold thoughcollection agents who supply the same to the wholesale traders.

On an average a small farmer gets Rs.2,71,250 per year and a medium scale farmer getsRs.19,34,167. The large-scale farmers in the sample earns around Rs.1,38,12,500. The large farmersare exporters through societies and dealers. This revenue earned is particular to this year becausecardamom prices were very high and yield is received five times per year.

Table 7.1: Area wise distribution of spices

Small Medium Large Total

µ N SD µ N SD µ N SD µ N SD

Pepper Area 56 5 65.51 100 7 79.05 84.28 12 75.13

Own Qty 1.8 5 0.44 2 7 0.5 1.92 12 0.47

Value 966 5 857.71 580 7 151.9 717.85 12 526.69

WHM Qty 161.6 5 144.52 385.62 6 209.95 299.46 11 213.41

Value 200529 5 376672.7 112585 6 64489.25 146409.6 11 227383.4

Others Qty 597 1 . 597 1 .

Value 179100 1 . 179100 1 .

Total Qty 163.4 5 144.19 411.11 7 208.83 322.64 12 220.01

Value 201495 5 377526.6 81955.56 7 66444.47 124648.2 12 223839.8

Carda Area 57.75 4 48.78 177.77 8 132.54 850 3 180.21 191.5 15 224.39

mom

Own Qty 1 4 0 1 8 0 2 3 0 1.07 15 0.26

Value 2225 4 206.15 2400 8 357.07 500 3 140.32 2214.28 15 581.58

WHM Qty 121.75 4 123.24 727.12 8 1327.68 525.33 12 1102.15

Value 269025 4 270344.2 1780738 8 3331818 1276833 12 2763733

Others Qty 4011 3 2138.29 4011 3 2138.29

Value 10027500 3 5345727 10027500 3 5345727

Total Qty 122.75 4 123.24 813.88 8 1268.31 5525 3 832 952.92 15 1681.32

Value 271250 4 270337.3 1934167 8 3222730 13812500 3 1804320 2307500 15 4238213Source: Primary data

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All farmers except one engage in trade individually. Sixty per cent sell agricultural produce around theyear and since cardamom prices are very high currently, they do not face difficulty in finding a buyernear their home.

Table 7.2: Details of trade activityHow do you undertake agricultural trade activity?

Trade activity Number Percent

Alone 14 93.3

With a partner 1 6.7

Total 15 100

Do you sell agricultural produce around the year?

Yes 9 60

No 6 40

Total 15 100


No 15 100


The details of sales during last month is given in the table. It shows that the auction rate in the WM ishigher than the rate at which the farmers sell their product at the collection shops. The price differencebetween local collection shops and auction rate for pepper is Rs.13 for small farmers and Rs.10 formedium farmers. Similarly the difference in the price in Spices Park and the collection points wherethe farmers sell is Rs.320 per kilo for small farmers, Rs.100 per kilo for medium farmers and Rs.300in the case of large farmers.

Table 7.3: Details of selling during last monthSmall Medium Large Total

µ N SD µ N SD µ N SD µ N SD

Pepper

Quantity 61 5 39.37 349 7 304.30 229 12 270.30

Auction rate in WM 300 5 0 300 7 0 300 12 0

Selling price 287 5 13.03 290 7 12.58 288.75 12 12.27

Farmer amount 17507 5 10682.73 101210 7 92317.08 66123.75 12 81621.84

Cardamom

Quantity 51.85 4 59.66 253.56 8 448.41 460 3 312 200.09 15 361.14

Auction rate in Wm 2500 4 0 2500 8 0 2500 3 0 2480 15 77.45

Selling price 2280 4 216.79 2400 8 357.07 2200 3 210.31 2366.66 15 301.58

Farmer amount 118218 4 150208.9 608560.1 8 1124219 1012000 3 2014000 473546.4 15 904693.3


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Table 7.4: Reasons for selling in the marketVery bad % Bad % Average % Good % Very good %

Immediate payment 0 0.0 0 0 4 26.66 1 6.66 10 66.66

Regular consumer 0 0.0 3 20.0 12 80.0 0 0.0 0 0.0

Storage 11 73.3 4 26.7 0 0.0 0 0.0 0 0.0

Auction platform 12 80.0 3 20.0 0 0.0 0 0.0 0 0.0

Transportation facility 0 0.0 0 0.0 1 6.7 11 73.3 3 20.0

Incentives/subsidy 10 66.7 2 13.3 2 13.3 0 0.0 1 6.7

Others 3 20.0 0 0.0 11 73.3 1 6.7 0 0.0

Nearest Market 0 0.0 0 0.0 0 0.0 4 26.7 11 73.3

Any quantity can be sold 0 0.0 0 0.0 0 0.0 6 40.0 9 60.0

Govt market 12 80.0 2 13.3 1 6.7 0 0.0 0 0.0


The major reasons for selling in the nearby shops include immediate payment and nearness of market.But many opined that they may sell the product to the auctioneers, if the price fluctuates or becomeslow.

7.12.1. Infrastructure facilities available for the farmers

Out of the selected fifteen farmers, none of them are using the infrastructure facilities at SpicesPark. On enquiry it is known that the facilities in Spices Park is used by auctioneers and trades. Out ofthe selected fifteen samples, three supply their products to auctioneers and the other twelve supplytheir product to near by collection shops, who further supply it to wholesalers/exporters. Data elicitedfrom these thirteen farmers show that transportation facility is available for them, regarding storage,when price is high, they normally don’t use it and when they need it, they depend on private partieswhich provide storage facility at rent. But specified scientific storage is not available with privateparties and they are not using the facilities at Spices Park because the quantity may be less and theprice is high. Value addition facilities are not available in the local markets, but for pepper it is availableat Spices Park, but nobody is using it. Weighing machines are available in all local shops and thefarmers have to give a sample of 150 gm to the traders for testing the grade. Regarding infrastructurefacilities for facilitation, the local markets do not provide any facility except the presence of Bank/ATM. However, all these facilities are available in the Spices Park. The farmers get a subsidy forreplantation from Krishi Bhavan at the rate of Rs.35 per plant. Krishi Bhavan supply pepper plant,organic manures and seeds to farmers. Krishi Bhavan also provides training facilities to the farmersand some organic inputs and provide finance for rain shelter at a subsidy of Rs.50,000. Farmers are notaware of the availability of godown facilities. State government provide electricity subsidy forcardamom farmers. Farmers get subsidy from spice board for purchasing motor pump for irrigation,they got a subsidy of Rs.18000, the actual cost being 2 lakhs.

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7.12.2. Problems identified by the farmers

The farmers mentioned many problems, the most important ones being storage problem andhigh marketing cost. Even if they want to store the product they do not do so because the storage costat Spices Park is high. The same is the case with State Ware House Corporation. They may keep theproduct at local godowns, but the price and quality of godowns is not as per requirement. Dryingcharges is also high. A drying machine cost Rs.3 lakhs, of which one lakh is given as subsidy. Only oneof the sample farmers own a drying machine. For drying, all others depend on rented facility, the costbeing Rs.12 per kg.

Table 7.5: Problems and solutions identified

Yes % Causes Solutions

Price setting 14 93.3 Low prices Price stability, government action

Credit 13 86.7 No facility Facilitate

Storage problem 10 66.7 High charges, no govt laws, Free service, subsidy, reduce charges

not perishable

High marketing costs 1 6.7 High drying charge Subsidy

Other causes 1 6.7 No subsidy Subsidy for input supply


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CHAPTER 8The Alternative Marketing Structures

Tejaswini Farmer Producers Company Ltd.: A Case Study8.1. Introduction

Collectivization of producers, especially small and marginal farmers, into producer organisationsimprove access to investments, technology, inputs and markets for farmers. Farmer Producer’sorganisations envision to maximize profit for farmers, by shortening the supply chain and eliminatingthe intermediaries in the agriculture marketing, depicts the most important form of alternative marketingstructures. Since 2011, both national government and state governments are promoting creation andfacilitation of FPOs, so that the major bottlenecks in agriculture marketing including fragmented supplychain with inadequate market infrastructure, lack of accurate and timely market information/intelligencesystem, produce loss and price fluctuations can be curtailed.

Small and marginal farmers account for ninety-two per cent of the total operational land holdingsin Kerala and FPOs attain greater importance since cash crops forms a major part of cultivation whichneed better input supply, value addition and marketing infrastructure. Of the 121 FPOs in Kerala, oneFPO that won the award for Best Farmer Producer Organization from NABARD is selected for detailedstudy. Rapid Rural Appraisal is used, in which information relating to infrastructure, organizationalstructure, physical functions and service functions are collected from Board members, farmers, staffand other stakeholders using participatory data collection tools. Focus was given to assess the existinginfrastructure facilities for agriculture marketing and its status and needed facilities for future. Alongwith it, the organizational structure, managerial aspects relating to marketing, volume of transaction ofboth inputs and outputs are analyzed.

Kannur and Kasaragod districts play an important role in agriculture production and marketingin the state and the farms mostly following integrated organic farming techniques traditionally, isrecognised as the future of agriculture sector of Kerala. Coconut and arecanutare the major crops,pepper, coco, coffee, vanilla and cashew are cultivated as intercrops in the farms and most of thepeople are dependent on agriculture for a living. While the other inter crops including cashew, pepper

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and coco finds market, majorly export market for organic crops, value addition and marketing ofcoconut was a major problem for the farmers in the districts. Coconut is cultivated in 85972 ha and67085 ha area in Kannur and Kasaragod respectively, in which the bordering areas of the districtsincluding Cherupuzha, Panathady, West and East Elery are centres of coconut production. It was inthis background some farmers under the initiative of Sri.Sunny George, a KarshakaSree awardeethought of possibilities of making value added products from coconut and marketing it profitably.Organising farmers in to a collective and convincing them about the advantages of Farmer ProducersOrganisation was a difficult task, but it was done effectively by the core team members with an effortof around two years.

8.2. Tejaswini: The Coconut Farmers Producing Company: TCFPCL

TCFPCL, the farmer producer company was registered on 03/06/2013 as an Indian non-governmental company limited. The company brings together 3,78,568 members spread across fifteenpanchayats in the districts of Kannur and Kasaragod who cultivates 91252 acres of land. The companywas set up with an objective to undertake programs for employment generation, growth anddiversification of agriculture and agro-based industries to increase food production, and export ofagriculture products, in primary, and value-added forms. It also envisages promoting organisation ofmarketing chain both for domestic and export marketing and make advantage of forward and backwardlinkage by integrating producers’ associations. The strength of the company is its democratic functioningand organisational structure which is depicted in the organogram.

Figure 8.1: Decentralised structure of TCFPCL: Mobilisation of farmers

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At the bottom level farmers are organised into 272 Producer Societies and they form intoOrganic Producer Cells. These cells are integrated into Producer Federations and there are 15 federations.They include Cherupuzha (33 cells), Udayagiri (23), Alakkode (30), Therthally (14), Chemberi (17),Kudiyanmala (14), Payyavur (14), Naduli (10), Mayoori (11), Palayalal (14), Karivellur (20),Perumbadavu (16), Puligome (12), Sreekandapuram (10), Mallur (34). Thus, a total of 30100 farmersare part of the clusters and they cultivate around 91252 acres of land. Around 40 per cent of thestakeholders are females and there are farmers from SC and ST communities, rightly representing thediverse demography of the state. Each year a general body meeting is conducted and all the farmersparticipate in it and evaluate the functioning and discuss future plans. An annual report is publishedevery year including the verified account statement and transparency is assured in functioning. Thereare shareholders and 15-member director board which makes managerial decisions. It started with anauthorised capital of Rs. 4 Cr and the paid-up share capital is Rs. 1,64,26,250. There are 363 shareholdersof which 209 are individuals and 154 are societies associated with 30280 farmers. Out of this, 8500society members and 363 shareholders are females. Of this, 14500 farmers are marginal farmers and15780 are small farmers. For the farmers, 320 training sessions were conducted in which around 9400members participated. Annual business turnover of the company is 95 lakhs and credit requirement is250 lakhs, of which 181 lakhs is gained from NABARD, 20 lakhs from NABKISAN and 30 lakh fromSBI. A total of Rs. 216 lakhs are availed and the producer members have Kisan Credit Card (KCC)facility. Rs. 25 lakhs are received as promotional assistance from government agencies and DICregistration, input dealership and Mandis registration is completed. The company has business tie upwith INDOCERT for organic value-added products and has developed backward and forward linkages.

Figure 8.2: Administrative Structure of TFPCL

Departments

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The day to day functioning of the company is dealt by four administrative managers, who werethe founders of the company. There are four departments namely; Purchase, Production, Marketingand Financing departments working under the administrative directors and each of these departmentshave managers assigned with particular responsibilities. The office of the company is situated at EastElery, near to the town which makes administrative functions easier. The are five staff working at theoffice and other contract labours working at the company site. TFPCL provides employmentopportunities to the younger generation in the area and thus contribute towards improving livelihoodof the staff as well as farmers.

8.3. Activities and Functioning:

The company is indulged in diversified activities starting from the input supply to value additionand marketing of Agri- products. Since 2013, the company is indulged in developing essentialinfrastructure for storage, value addition, grading and packing and standardisation along with initiatingdirect selling and providing market intelligence for the farmers. These are done with availing fundingfrom agencies including NABARD, CDB and state government. Major projects initiated by the companyand its funding source and status is given in the table.

Table 8.1: Projects by TCFPCL

Title of the project Assistance from Focus Area AmountUtilised

PRODUCE Fund NABARD Producer Organisation development 6.46 LReplanting and CDB (Coconut Cutting and removal of old Rejuvenation

Development Board) senile palms and rejuvenation with newseedlings 24 L

Laying Out Of CDB Scientific cultivation 65 LDemonstration Plot(LoDP) SchemeMission for Integrated The Directorate ofDevelopment of Cashewnut & Cocoa Replanting coca 12 LHorticulture (MIDH) Development (DCCD)Organic Vermin Compost Coocnut Development Vermin compost making 10 LUnit BoardTrainings Coconut Development Neera Technician, FoCT, CPS 20 L

Board leader trainingSource: Primary data

Thejaswini is implementing the central schemes of Government of India and state schemes ofGovernment of Kerala for agriculture development of small and marginal farmers in agribusinessactivities. The major financers for the company include NABARD, Coconut Development Board,Directorate of Coco and Cashew Development. From the funding from NABARD agri-processingcentre is established at Cherupuzha and there are facilities for coconut oil making, soap making and

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manure. The company received PRODUCE fund worth of Rs. 18 million and the administrative costof FPO is met from the fund. Currently, organic manure is produced and distributed at the centre.

The company also procures coconut and agri produces from farmers and processes it at theirplant at Peringome, Kannur. As part of Skill Development Training Programme of Coconut DevelopmentBoard, Company had organized 24 batches of FOCT and 8 batches of Neera Technician trainingprogrammes at their training centers. The company is pioneer in organizing small and marginal farmersas Farmer Producer Societies, Farmers Producers Federations for endowing them with collective powerand economies of scale. It provides a platform for increased accessibility and cheaper availability ofagricultural inputs to small and marginal farmers and in establishing forward and backward linkagesin supply chain management. This initiative has triggered mobilization of farmers for aggregationacross the Kannur and Kasargod districts of Kerala with ultimate aim of sustainable business modeland augmented incomes. Recently the company has entered in to the task of Responsible Tourism(RT) initiatives of department of tourism, Government of Kerala to integrate the products, servicesand the local community for utilizing the opportunities in tourism.

8.4. Asset Details of the company

TFPCL currently has asset worth of around two crore which has been established since itsinception in 2014. TFPCL holds around five acres of land, in which its processing centre at Peringomeis constructed. In addition, TFPCL has a nursery in Cherupuzha town. The centre is well equippedwith post modern machinery for processing, packing and standardising coconut and has a biogas plantattached to it. Along with that TFPCL is involved in direct marketing through its Neera stalls, whichwas the pioneer initiative of the company. Also, the company has good safety mechanisms and wastemanagement system. Asset details of the company is shown in the table below:

Table 8.2: Asset Details of TFPCLItems Value

Land & Development 24,26,925.00

Plot of Land 0.4047 at Peringome 12,64,520.00

Plot of Land 0.9714H at Peringome 29,48,210.00

Plot of Land 0.0184 at Peringome 2,23,340.00

Building & Structures under construction 6,5 92,521.69

Neera Stall 3,600.00

Furniture & Fittings 16,500.00

Equipments& Tools 6,39,859.00

Motor Bike 66,000.00

Motor Pump & Fitting 55,564.00

Tally Software 18,500.00

Electrical Fitting 2,86,458.82

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Plant and Machinery 39,47,500.00

Stitching Machine 6,800.00

Bio Gas Plant 4,71,030.00

Generator 5,84,746.00

Computer and Accessories 35,722.61

Induction Motor 58,983.00

Soap Unit Machineries 4,55,328.00

De Husking Machine 3,50,000.00

Bronze Vessel 6,258.00

Electric Motor 1,68,000.00

Pouch Packing Machine 6,15,500.00

Voltage Stabilizer 32,500.00

Chillar machine 76,800.00

Copra Dryer Chamber 9,99,686.00

Conveyer System 2,23,750.00

Transformer 8,49,600.00

Expeller 2,59,600.00

Fire & Safety Equipment 1,00,081.70

Helical Gear Motors 76,700.00

Mobile Phone 1,500.00

Weighing Machine 8,600.00

Electrical Fittings at Peringome Factory 19,53,048.00

Total 19231210.13


8.5. Revenue and Sales:

The company is successfully running its centre at Perigome and has started to receive revenue. Thecompany is among the major traders of coconut water, coconut oil, honey and manure named Krishimitraand is looking to increase its revenue. During 2018, the company had earned a profit of Rs. 608173/-, but in the year 2019 it dropped. Details are shown in the table below:

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Table 8.3: Revenue and Expenses

Revenue 2019 2018

Revenue from operations 8613260.9 9788555

Other income 354249 2763115

Total revenue 89,67510- 12551670/-

Expenses

Cost of materials consumed 965202 1366470

Purchase of stock in trade 4078920.5 5356709

Changes in inventories of finished goods work 43330 188966

Employee benefit expenses 406102 672200

Finance costs 1502366 912423

Depreciation 168994 194834

Other Expenses 1976618 3251892

Total Expense 9141535/- 11943496/-

Profit -174025.37 608173/-


Table 8.4: Liabilities

Borrowings (Major heads) Amount

Loan from NABAD 11,214,680.00

Borrowings from directors 3805000.00

Trade payables (others) 1185832.00

Stock (raw materials) 4,144.768.11

Stock (finished goods- soap, coconut oil) 26,434.3

Short term loans 1327335.00


Major liabilities of the company include the long-term loan from NABARD worth of amount Rs.11214680/- and other short-term loans worth of Rs.1327335/-.

8.6. Creation /Facilitation of infrastructure

TCFPCL facilitates the three aspects of agriculture marketing; namely

a. Exchange functions

b. Infrastructure for transportation, storage, value addition, grading and standardisation.

c. Sharing market intelligence and financing

d. Service Functions

The objective of the company is socio economic upliftment of farmers through productivityimprovement, cost reduction, collective marketing, processing and product diversification. And for

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that, creation/facilitation infrastructure is the most import aspect and the company successfully fulfilledthese functions by creating a processing centre, marketing chains as well as input output linkages.

TFPCL is involved in many activities from input supply to value addition and marketing. It includes,agriculture nursery, organic manure unit, coconut oil extraction unit, pocking of honey, curry masalapowder making unit and marketing of spices and agriculture inputs. Thus exchange (direct marketingand demand forecasting), input supply, value addition and marketing are performed. Details are givenin the following table:

Table 8.5: Agriculture marketing functions facilitated by TFPCL

Name of Facility/item Capacity /Status Amount investedExchange FunctionEco Spots 10 5LInfrastructureInput SupplyAnimal Feed Pellet Unit 1000 p/day 2 CrCherupuzha Gardens - 15LGrading and StandardisationCherupuzha Fruits and Vegetable Processing cluster 1.5 Cr.Value AdditionCoconut Oil dryer and expeller 22000 nuts /day 2.61 CrCoconut milk and Desiccated coconut powder 50000 nuts /day CrVirgin Coconut Oil 20000 Husks/day 25 LChocolate making Unit 10000 kg/per day Chocolate making UnitService FunctionsEco farm Tourism -Smart Village - 10 CrMarket financing and intelligence - 10L


Regarding exchange functions, the products are directly sold by TFPCL and coconut is collected fromfarmers using farmer cooperatives. This provides an opportunity to farmers to market their produceeasily and helps in receiving better prices. Along with this, facilities for storage, standardisation andvalue addition ensures that coconut is not perished during the harvest season. The ecotourism andsmart village initiatives provides additional income to farmers.

1. Exchange function: Infrastructure for the function of transfer of ownership

Organic Producer Cells and Eco Spots:

The TCFPCL initiated formation of Organic Producer Cells (OPC) by associating around 100 organiccertified growers in the area. Each OPC has to register with the company. The cell has to collectorganic produces from its member farmers as per the demand and the products are sold at the EcoSpots. Thus, the OPC act as a direct link between producer and ultimate customer. In addition, Neera

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and value-added products produced at Thejaswini Processing Centre, Thirumeni are sold at ‘Eco Shops’.The products are sold under the brand name ‘Palm Fresh’.

Input Supply

Organic manure unit: Organic manure is produced at Perigome, Kannur. TFPCL is distributing themanure to member farmers and other organic farmers in the Panchayat. Coconut water and damagedcoconuts are used for generating bio-gas and slurry from the biogas plant is used for making manure.The pith after removing the fibber from coconut husk is also used for making organic manure.Infrastructure facilities at the Organic manure unit is and its cost is given in the table.

Table 8.6: Organic manure unit: Infrastructure

Components Amount

Pith Mini Screener 56100.00

Neem Expeller 370000.00

Conveyer System 77500.00

Lab Equipment 22000.00

Stitching Unit 15500.00

Building Shed No. 1 760000.00

Building Shed No. 2 550000.00

Shed for Bio- Gas Plant 215000.00

Effluent Treatment Plant 510000.00

Electrification 20000.00

Furniture, Weighing Scale and Equipment’s 105000.00

Engagement of marketing consultants and managers 1050000.00

Total 3751100.00


The organic manure unit is constructed by spending around 37 lakh rupees and has all facilities includingneem expeller, conveyer system, lab equipment, effluent treatment plant and bio gas plant. This ensuresefficient functioning and safety of labourers.

Horticulture Nursery Unit:

TFPCL ensures supply of seedlings to farmers by nurturing a nursery – ‘Cherupuzha gardens’ atCherupuzha. The nursery has all modern facilities including polyhouse, shade net house, poly tunnel,sprinkler and mist chamber. In the organic nursery, seedlings of all plants including that of coconut,jackfruit seedlings are nurtured and sold. Infrastructure facilities at the nursery and its cost are givenin detail.

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Table 8.7: Horticulture Nursery UnitComponents Amount

Various Nursery Seedlings 710000

Fencing 162000

Gate 5000

Work Shed 12000

Pipe Line 8000

Office cum Store 25000

Shade net House 135000

Poly Houses 110000

Mist Chamber 7500

Poly Tunnel 38000

Land Preparation 205000

Water Storage Tank 32000

Pump Set 30000

Sprinkler/ (mist drip) 50000

Mother Plant Block 32000

Total 1561500


The nursery unit established with a cost of around fifteen lakhs, helps in supplying seedlings to itsfarmer members at cheap cost and also helps to protect the indigenous varieties of all traditional crops.The company also organises and participates in seed exhibitions and promote farmers to nurture organicvarieties of crops that is suitable to the climate and soil of the region.

1. Infrastructure for Physical Functions

Storage and Value Addition: Integrated Agro Processing Complex:

The integrated Agro Processing complex of Thejaswini CFPC Ltd, which is under construction issituated in four acres at Perngome Panchayat, 60 kms east of Kannur town. The centre under constructionhas developed infrastructure facilities worth of around two crore, and currently the coconut oil extractionunit is functioning.

Table 8.8: Agro-processing Unit – InfrastructureComponents AmountDe- husker 448500.00Copra Dryer 3700200.00Expeller System with all accessories 4778000.00Copra Cutter 630500.00Filter Press 1260000.00Oil Storage Tank 1145000.00Drag Chain 320000.00Pouch Making Machine 726290.00Stabiliser for PPM 39350.00

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Cooler attached to the PPM 76800.00Preliminary and Pre- operative expenses 350000.00Building (4500 sq. ft.) 4100000.00Effluent Treatment Plant 1000000.00Electrification 1550000.00Generator 740000.00Furniture, Weighing scale and office equipment’s 225000.00Electric motor, pump, Tank and others 102500.00Standardisation, e- commerce, etc. 500000.00Bottle filling machine 131000.00Working Capital 2218000.00Total 24041140.00


The company has a dryer cum expeller unit with capacity of 22000 nuts per day. It has machinesincluding De husker, copra dyer, expeller system, copra cutter, oil storage tank, pouch making machineand cooler and thus provide facilities for storage, grading, standardisation and value addition of coconut.The raw material is directly procured from farmers and around 30000 farmer families are beingbenefitted. Coconut oil is also used as a raw material for handmade bath soap.

Handmade bath soap: Handmade bath soap unit has been completed. Thejas Beauty soap isproduced with five varieties of fragrance and the unit has the capacity to produce 5000 pieces per day.Along with this, Thejas Gold Turmeric powder, masala powder, Palm fresh Neera: extracted usingCPCRI technology are produced and sold.

Other activities:

Other activities include making of coir fibre. Under TFPCL, a society named CherupuzhaYCVSS is working to produce high quality coir fibre. And Umbrella Programme for Natural ResourceManagement (UPNRM) is being implemented by taking a loan worth of Rs. 180.88 lakh.

Service Functions:

FoCT(Friends of Coconut Tree): The company trained 604 FoCT people in the districts andthey are working as coconut climbers and 6 batch of Neeratechnicians and four batch of leaders ofCPSs. The company trained 205 society leaders of Kannur and Kasargod and they actively work asleaders for their respective producer societies.

Awards:

National Entrepreneurship Award 2017 from Ministry of Skill Development andEntrepreneurship, Government of India

State Award, 2016 for best farmer producer organisation from NABARD

Best Business Plan Award, ICAR Central Plantation Crops Research Institute 2018

In-depth interview with Director Board members has revealed the current problems faced bythe company, in spite of being a pioneering FPO in Kerala, and major insights are discussed below.

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8.7. Problems

1. Shortage of Working Capital: Due to delay in complete functioning of the processing unitowing to procedural delays there is shortage of working capital.

2. At present the Farmers don’t have enough money to purchase organic manure and plantingmaterials.

3. The supply of organic manure in the Panchayath schemes are now given to the retail manureDepots within the area of the respective Panchayaths. Direct and wholesale supply is notallowed under Panchayath schemes and so, manure from FPO cannot be sold to other farmers.

4. The Transportation of goods from Kannur district to Kasargod and other districts are restrictedand this make problems.

5. The availability of workers, transportation and other facilities in the Production and marketingare affected due to the issue of Covid-19.

6. Increase in loss due to the less utilization of the capacity of the Unit.

8.8. Measures to overcome the problems

1. Increase the share capital by issuing new shares.

2. Business Development Assistance from NABARD and other Government Agencies.

3. Search for more fund with less interest.

4. More effective utilization of the three tire structure (Federations and Societies) of the Companyfor the raw-materials collection and marketing of the products.

5. Increasing the business tie-ups with other FPOs and other reputed organizations in the Country.

6. Increase the production and sales to reduce the cost of production and marketing.

7. Planning to run the unit and office in a more professional way by appointing new experiencedand trained staffs and skilled labours.

TFPCL have formed different departments for the smooth functioning of the Company –

(a) Purchase Department - Purchase of coconut, Seeds and other raw-materials, price fixing,collection, transportation, etc.

(b) Production Department – Production of Coconut oil, organic manure, Soap, Spices, Honey,planting materials, etc., Cost accounting, Stock management, etc.

(c) Marketing Department – Publicity, Sales, Market research, Digital Marketing, etc.

(d) Finance Department – Budget, planning, Accounting, Cost and Stock Statements.

(e) Administration Department headed by the Chairman, Managing Director, CEO and the headof the Directors from each department – For the evaluation and modification of the functioningof each department, Human Resources and Management, Planning, etc.

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8.9. Conclusion

FPOs follow a holistic approach in agriculture marketing initiatives and it can be the best formof alternative marketing. However, procedural delays and market restrictions from the part of governmentis negatively affecting the smoot functioning of FPOs. In spite of starting the construction of processingcentre in 2014, due to difficulties in getting sanction from Panchayat and Electricity Board thefunctioning of the centre was delayed and till now, the entire capacity of the centre has not beenutilised. This has created problems in repayment of loans and loss in the recent years. It is very crucialto provide technical and managerial expertise to farmers so that they can efficiently manage all activitiesof processing centre. Also, the bureaucratic delays from the part of government should be avoided byscraping some of the age-old laws and issuing special allowances to FPOs, as is given to MNCs.

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CHAPTER 9Warehousing – Problems and Prospects

The chapter analyases the objective ofassesing the extent of warehousing infrastructure in thestate, performance of existing warehouse facilities, identification of the gap between the existing andrequired facilities. The findings of the study in this section are mainly determined through the secondarydata sources collected from different state warehouses with direct individual interviews and focusgroup discussions with concerned officials, farmers and traders in respective warehouses.

9.1 Introduction

Warehouses are scientific storage structures especially constructed for the protection of thequantity and quality of stored products. It plays a crucial role in storing, preserving and protectingagriculture and related commodities against insects, pests and rodents. Warehousing is now seen as anintegral part of the supply chain where goods are not only stored for safekeeping, but also where othervalue processes are implemented, thereby minimising wastage and costs. In addition, warehousing hasbecome an essential factor that enables food producers to access credit in the form of pledge financing.

Warehouses are primarily licensed by state governments under state warehousing laws. InIndia there are three public sector agencies which are involved in building large-scale storage andwarehousing capacities. These are the Food Corporation of India (FCI), Central WarehousingCorporation (CWC) and 17 State Warehousing Corporations (SWCs). While the FCI uses its warehousesmainly for storing food grains, the storage capacities with CWC and SWCs are used for the storage offood grains as well as other items.

The main functions of warehousing development in India are scientific storage, financing,price stabilization and market intelligence. In scientific storage the product is protected againstquantitative and qualitative losses by the use of such methods of preservation as are necessary.Warehouses meet the financial needs of people who store the produce by providing value for the goodsstored. Nationalized banks advance credit on the security of the warehouse receipt issued for thestored products to the extent of 75 to 80% of their value. Another important function of warehouses isregulating price levels by regulating the supply of goods in the markets. More goods from the buffer

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are released when supplies are less and less is released when supplies are more in the markets. Bychecking the tendency to making post-harvest sales among the farmers, warehouses help in pricestabilisation of agricultural commodities. Farmers can store their products in warehouses during thepost-harvest season, when prices are low and sell it once they are assured of good returns on theirproducts. Warehouses even inform farmers about the current market prices, thereby preventing distresssales and apprise them about the emergence of favourable market conditions, so that they get the bestvalue for their product. Offering market intelligence in the form of price, supply and demand informationso that market users may develop selling and buying strategies.

The CWC was founded in 1957 to provide logistics support to the agricultural sector. Currently,it operates around 514 warehouses across the country with a storage capacity of 10.27 million tonnes.Other than storage and handling, CWC also offers services such as disinfestations, pest control,fumigation, clearing and forwarding, handling and transportation, procurement and distribution. StateWarehousing Corporations exist in 17 States to provide storage facilities and pest control services forvarious agricultural commodities belonging to farmers of that State. These warehouses work underdifferent Warehousing Acts enacted by the respective State Governments (http://cewacor.nic.in/).

For promoting warehousing facilities government of India implemented two major schemessuch as GraminBhandaran Yojana (GBY) and Private Entrepreneurs Guarantee (PEG), 2008 Scheme.This scheme was implemented by the Department of Agriculture and Cooperation, Ministry ofAgriculture and has since been merged with other existing schemes to be renamed as AgriculturalMarketing Infrastructure (AMI) scheme, which is a sub-scheme of Integrated Scheme for AgriculturalMarketing (ISAM).The objective of the scheme was to promote construction of scientific warehousesin the rural areas of the country. The scheme provides subsidy of 25%. NABARD has sanctionedprojects to several Primary Agricultural Credit Societies for setting up warehouses so as to provide thenearest source of scientific warehousing to the farmers. In 2008, Government of India enacted a schemefor creating additional storage capacity for food grains through the private sector, CWC and SWC.Under this scheme, Food Corporation of India (FCI) gives a guarantee of ten years to private partiesfor assured hiring of warehouses. For expeditious construction of godowns, it was decided that whereverCWC or SWC have their own land within the identified locations the CWC or SWC will constructgodowns on priority for which FCI would give a guarantee of 9 years for storage charges(https://niti.gov.in).

9.2. Central Warehousing Corporation (CWC)

Central Warehousing Corporation (CWC), a Schedule ‘A’-Mini Ratna, Category – 1 CentralPublic Sector Enterprise (CPSE) is a statutory body which was established under ‘The WarehousingCorporations Act, 1962’. Its aim is to provide reliable, cost-effective, value-added, integratedwarehousing and logistics solution in a socially responsible and environment friendly manner. Theauthorisedcapital and total paid up capital of CWC are Rs. 100 crore and Rs. 68.02 crore respectively.During 2018-19, the turnover of CWC was Rs. 1604.62 crore, its Profit Before Tax was Rs. 225.42crore and its Profit After Tax was Rs. 163.61 crore. CWC has paid a total dividend of Rs 49.08 crore

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for the year 2018-19 to its shareholders. As a premier Warehousing Agency, CWC is operating 415warehouses as on 31.12.2019 with a total storage capacity of 101.44 lakh MT including 25 ContainerFreight Stations (CFSs)/ Inland Clearance Depots (ICDs), 3 Air Cargo Complexes (ACCs), 2 InlandCheck Posts (ICPs) at Petrapole and Attari and 3 Temperature Controlled Warehouses. Warehousingactivities of CWC includes food grain warehouses, industrial warehousing, custom bonded warehouses,container freight stations, inland clearance depots and air cargo complexes (http://cewacor.nic.in/).

Apart from storage and handling, CWC also provides services in the area of clearing &forwarding, handling & transportation, disinfestation, fumigation etc. CWC also offers consultancyservices/ training to different agencies for construction of warehousing infrastructure.CWC has 19State Warehousing Corporations (SWCs) as its associates. Central Warehousing Corporation is 50%shareholder in the equity capital of the SWCs. The total investment of CWC in SWCs is Rs. 61.79Crore. As on 31.12.2019, these SWCs were operating 2055 warehouses with a total storage capacity of354.85 lakh MT. Scientific storage and handling services for more than 400 commodities includeAgricultural produce, Industrial raw-materials, finished goods and variety of hygroscopic and perishableitems. Scientific Storage Facilities for more than 200 commodities including hygroscopic and perishableitems through network of 436 warehouses in India with its 3,631 trained personnel; Import and ExportWarehousing facilities at its 30 Container Freight Stations in ports and inland stations; BondedWarehousing facilities; Disinfestation services and Handling, Transportation & Storage of ISOContainers are the major functions of Central Warehousing Corporation(http://cewacor.nic.in/).

9.3. Central Ware houses in Kerala

There are 11 central ware houses around different parts of Kerala. The table 9.1 explains performanceof central warehouses in Kerala.

Table 9.1: Performance of Central Warehouses in Kerala 1st July 2020Capacity Rated FG* Capacity Capacity Total utilised Total vacant

capacity used by FCI used by others capacity capacity +20%

(MT) (MT) (MT) % (MT) % (MT) % (MT) %

Trivandrum 19000 22800 5000 21.9 14000 61.4 19000 83.3 3800 16.7Trichur 32590 39108 0 0.0 32044 81.9 32044 81.9 7064 18.1Kunnamthanam 12600 15120 7960 34.9 4640 30.7 12600 83.3 2520 16.7Kozhikode 12254 14705 0 0.0 12244 83.3 12244 83.3 2461 16.7Kochi 5030 6036 0 0.0 4640 76.9 4640 76.9 1396 23.1Kannur 9590 11508 0 0.0 9625 83.6 9625 83.6 1883 16.4Kanjikode 20000 24000 0 0.0 15245 63.5 15245 63.5 8755 36.5Kakkancherry 10000 12000 0 0.0 10000 83.3 10000 83.3 2000 16.7Kakkanad 21850 26220 0 0.0 13917 53.1 13917 53.1 12303 46.9Ernakulam 14065 16878 0 0.0 9562 56.7 9562 56.7 7316 43.3Edathala 11700 14040 0 0.0 10750 76.6 10750 76.6 3290 23.4Total 168679 202415 12960 6.4 136667 67.5 149627 73.9 52788 26.1

Source:http://cewacor.nic.in/, * FG Over & above (MT)

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The total rated capacity in 11 central warehouses is 202415 MT (rated capacity+20%FG over& above) in which only 6.4 percent is utilized by the FCI. (The minimum available space needed forFCI is stipulated as a storing capacity of 5000 MT). Nearly 68 percent of the storage facilities areutilized by others, and 26 percent is reported as vacant storage space.

9.4. Kerala State Warehousing Corporation

Kerala State Warehousing Corporation (KSWC) came into existence on 20th February 1959and functions under the Warehousing Corporations Act 1962. The Warehousing Corporations Act1962 was passed repealing the Agricultural Produce Development and Warehousing Corporations Act1956. Over the last two decades, the need for warehousing has also been felt in non-agricultural sectorssuch as retail commerce.

Kerala State Warehousing Corporation provides a package of services briefed as below. http://www.kerwacor.com/old/facilities.html

• Provision of space to accept notified commodities from various clients.

• Acts as an enabler for credit through pledge of negotiable warehouse receipts with banks.

• Scientific storage through a chain of 60 number of warehouses scattered all over the state atreasonable rates.

• Helps the depositors to keep their goods indemnified against loss of damage due to fire, andburglary.

• Handling and Wagon clearance, Transport facilities to depositors like major fertilizer companiesetc. on their request on actual plus nominal supervisory charges.

• Container House Stuffing, open yard and godown facility.

• Godown facilities are provided on area reservation basis on attractive terms.

• Acting as a procuring agent of Govt. for Rubber, Copra and other Agricultural commoditiesunder Price Support Scheme.

• Special storage for Hygroscopic commodities like fertilizer, sugar, chemicals etc.

• Acting as a quality control agent for public sector undertaking etc. for purchase of food grainand other agricultural products.

• Disinfestation Extension Service at the door steps of farmers, traders, co-operatives, and Govt.Organization at economical rates.

• Fumigation of stores, record rooms, ship, libraries, containers, including exportablecommodities.

• Spraying against the formation of cob-web and controlling of spiders in offices, Hotels, factoriesetc..

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• Spraying against weed in the premises of godowns, Factories, Hotels etc.

• General disinfestation work in Airport, Railway Coaches etc.

• Spraying of organic pesticide against Eriophid Mite on coconut palms in the state under stateGovt.

• Antitermite treatment for pre and post construction structures.

• Periodical chemical bating to control Mice, Rat, Bandicoots in stores, factories, residentialbuilding.

KSWC has offered its helping hand to the Public Sector organizations in designing and constructingbuildings and godown making use of the technical know-how and personnel available with the CivilEngineering Wing. Container Fright Station functions at Thripunithura with most modern facilitieslike Mechanised handling, Computerised documentation, 42,000 Sq. Ft. covered area, Container ParkingYard, Dormitory facilities for truck operators, Fool Proof Security Arrangement etc.

9.4.1. Operational procedures of the SWHs

All types of agricultural commodities and other commodities notified by the Government fromtime to time are accepted for storage in a Warehouse. The main purpose behind the whole warehousingscheme is to give scientific storage to the agricultural produce and also to arrange easy credit andholding power to the agriculturists to enable them to get a better price for their produces.

A Warehouse Receipt (WR) incorporating the quantity, quality, market value and particulars ofinsurance against fire, theft will be issued to the depositor. The warehouse receipt is negotiable innature and can be pledged in any bank for obtaining advance not exceeding 60 percent. WR financecan play an important role in smoothening income for farmers by providing liquidity at times whencash flows dry out. Warehouse receipt financing has been primarily developed to provide liquidity fordepositors while allowing them to hold on to their goods till they receive a better price; allow farmersto use this system to avoid a distress sale and obtain working capital; improve the transparency andefficiency of goods stored.

KSWC is a statutory Corporation having 50% Share Capital by Central Warehousing Corporationand 50% share capital by the Govt. of Kerala. It has its Corporate Office at Ernakulam with 3 ZonalOffices, 9 Regional Offices and 55 Warehouses scattered all over the state. The total rated capacity ofstate warehouses in Kerala is 198004 MT. The district wise State Ware Houses are shown in table 2.Out of this 75.5 percent is stored in owned and remaining 24.4 percent is stored in rented facilities.

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Table 9.2: Covered capacity (MT) of warehouses in Kerala (01.09.2019)

Sl.no Districts Number of SWHs Owned Hired Total

1 Trivandrum 5 13994 7241 21235

2 Kollam 5 29456 7990 37446

3 Pathanamthitta 2 4740 4163 8903

4 Alappuzha 6 17113 6061 23174

5 Kottayam 5 17624 6112 23736

6 Idukki 3 8002 550 8552

7 Ernakulam 4 20337 3190 23527

8 Thrissur 4 12150 5781 17931

9 Palakkad 4 17539 12930 30469

10 Malappuram 3 16850 1856 18706

11 Kozhikode 2 0 1333 1333

12 Wynad 3 8935 2537 11472

13 Kannur 5 18564 770 19334

14 Kasargod 4 12700 3478 16178

15 Total 55 198004 63992 261996

% 75.5% 24.4% 100%

Source: Official data from Kerala State warehousing corporation,Ernakulam(01.09.2019)

9.5. Results of primary data

For in-depth understanding of the utilisation and requirement of warehouses direct interviewsand focus group discussions were conducted at all warehouses in Trivandrum and Idukki districts.Individual interviews were conducted with the Senior Assistant Managers of selected SWHs and focusgroup discussions were conducted with concerned officials, farmers and traders in respectivewarehouses.

9.5.1 Storage Facilities – Normal and Reservation

Normal warehousing facilities will be realized on the entire item held in a warehouse on aweekly basis (Up to 4 weeks) at bag rate fixed by SWC. The storage charge for normal warehousingbasis is distinct from reservation basis. The rate varies for different commodities under normal facilities,as given below (Table 9.3).

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Table 9.3: Normal storage charges for major commodities (per bag)Commodities Weight/unit 1st week 2nd week 3rd week 4th week

Upto 50kg

Food grains except paddy Standard rate 3 4.6 5.9 6.7

High rate 3.45 5.3 6.8 7.8

Grams/pulses/dhal Standard rate 3.65 5.6 7.3 8.3

High rate 4.05 6.25 8.1 9.2

Basmati/Biriyani rice Standard rate 3 4.6 5.9 6.7

High rate 3.45 5.3 6.8 7.8

Sugar Standard rate 3.65 5.55 7.3 8.3

High rate 4.05 6.25 8.1 9.2

Cardamom Standard rate 29.1 44.95 58.2 66.15

High rate 32.05 49.6 64.15 72.85

Pepper Standard rate 4.95 7.55 9.8 11.15

High rate 5.4 8.35 10.8 12.25

Source: Official data collected from State Warehouse Corporations

In addition to the facility of storage on normal warehousing basis customers will be providedwith storage facility on reservation or area basis, also on metric ton basis (4 weeks and above). Quantityreserved on area basis should be for minimum of 30sq.m and on ton basis it should be for 50MT andabove. In the event of cancellation of reservation, for the left over quantity if any in that reserved area,it will be treated on normal warehousing basis. The minimum period of reservation will be one monthconsisting of two consecutive fortnights. Reservation will be made in terms of complete month interms of tonnage or floor area for storage in the warehouse. The stack height of the commodity shall bethe one fixed by the Corporation in accordance with the storage practices, laid down for each commodity.Extension of reservation will not be granted for less than one month. The reservation charges will bepayable by the depositor for the area/MT reserved at the prescribed rate irrespective of whether thereserved area/MT remains totally or partly unutilized during the period of reservation. When reservationis made by a depositor, one month reservation charges will be recovered in advance. Over & abovereservation will be calculated as opening balance plus deposit less quantity reserved during the month.The charge for reservation facility is based on area and the charges may vary on the basis of certainspecialized storages. The charge fixed by the Corporation for general and specialized storages is givenin below table 9.4.

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Table 9.4: Monthly Reservation charges Rs. Per sq.ft fixed by Corporationfor different storage facilities

Area basis reservation Rs. Cement Rs.

Standard rate 20.2 Standard rate(MT) 105.7

High rate 22.35 High rate(MT) 132.1

Open yard Cardamom

Standard rate 10.75 Standard rate 31.75

High rate 12.15 High rate 35

Fertilizer Office space

Standard rate (MT) 86.5 Standard rate 24.25

High rate(MT) 108.25 High rate 26.75

Source: Official data collected from State Warehouse Corporations

9.5.2 Disinfection Extension Services (DES)

KSWC undertakes Disinfestation Extension Services at the door steps of the Farmers, Traders,Industrialists etc., on short calls as well as on yearly contract basis as per the request of the customers.The services consist of fumigation, general disinfestation, weed control and termite control. KSWChad formulated very effective Anti-coagulant Rat Poisoning Bait in the name of “RODOFOE”. KSWCacts as Nodal Agency to supply “RODOFOE” for the Government Level Rat Control Campaigns inthe state.For 50 gram packet of RODOFOE the corporation will charge Rs. 12.60+18% GST.Thestorage facilities, reservation particulars, utilisation, income, expenditure and profit details ofTrivandrum and Idukki warehouses is shown in Table 9.5 and Table 9.6.

Table 9.5: Storage Capacity, utilisation& Reservation particulars of selected SWHs(June2020)

Trivandrum IdukkiStorage Attin Neduman Neyya Palli Tvm Vandan Katta Thodu

capacity (MT) Gal gad tinkara Chal medu ppana puzha

Owned 3100 4058 2276 2560 2000 4186 2800 1016

Hired 2789 3563 500 0 0 0 0 550

Total 5889 7621 2776 2560 2000 4186 2800 1566

Effective (owned) 4299 5563 2026.48 1869 1460 3056 2044 1143

Utilised 6121.352 7750.359 2776 2506.8 2252.25 4546.853 2802.45 1566

% of utilisation 104 102 100 98 113 109 100 100

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Reservation(mt)

KSCSC 5480.667 1058 2276 1659 1130 0 2036 9396sq.ft

KSCSC-Office(sq.ft) 0 215.2 150 187 15M2 0 1157 650

KSCSC-rented 0 3563 3000 sq.ft 0 0 0 0

Census 0 0 0 674 0 0 0

KSBC 0 18853 sq.ft 0 0 0 0 0

KSBC office 0 3393sq.ft 0 0 0 0 0

CPMC 0 0 0 0 801 0 0

CPMC office 0 0 0 0 445sq.mt 0 0

KCPMC 0 0 0 0 900 0 0

KCPMC office 0 0 0 0 500sq.mt 0 0

KSCCF 0 0 0 0 0 675 mt 0

KSCCF SQ.MT 0 0 0 0 0 20 0

Others (pvt.godown) 100 sq.ft 0 80.7 sq.ft 0 634 2522 mt 0 0

Others (pvt. office) 0 0 0 0 4M2 1401 sq.mt 0 0

Source: Official data collected from selected SWCs in Kerala

The total storage capacity of state warehouses of Trivandrum district is 21235 and Idukki district is8552 MT. The percentage utilization of each warehouse is shown in table 3 where majority of the statewarehouses utilized more than cent percent. It is understood that the demand for warehousing facilitiesis greater than the supply provided. In all state warehouses we found that government agencies reservewarehousing facilities for their own consumption leaving very little space available for private tradersof warehouses. As per the views of officials in state warehouses, at present Pallichal state warehouserequired around 3000sq.ft of area and above 10000 sq.ft of area for Trivandrum (Chalai). In the casesof other three state warehouses the requirement is filled with the hired buildings, but there is additionaldemand for ware housing facility in all the three places. Demand for scientific warehousing is veryhigh in Idukki district because of the necessity of farmers and traders to store spices with a view tohedge against price fluctuations and to use ware house receipts.

Table 9.6: Income, Expenditure and Profit of selected SWCs in Kerala (June2020)Income Expenditure Profit

Area Storage DES Rent NFSA PCW Electy: Total Salary Imprest Handling Rent Total

Trivandrum

Attingal

Amt 540619 30209 54298 0 0 0 625126 103364 13988.5 0 190435 307787.5 317338.5

% 86.5 4.8 8.7 0.0 0.0 0.0 100.0 33.6 4.5 0.0 61.9 100.0

Nedumangad

Amt 760269.1 7000 0 0 0 0 767269.1 84364 21744 3755 215754 325617 441652.1

% 99.1 0.9 0.0 0.0 0.0 0.0 100.0 25.9 6.7 1.2 66.3 100.0

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Neyyatinkara

Amt 220894 7040 1956 1965 0 0 231855 62571 4321 0 27000 93892 137963

% 95.3 3.0 0.8 0.8 0.0 0.0 100.0 66.6 4.6 0.0 28.8 100.0

Pallichal

Amt 226532 22167 0 2450 0 0 251149 84901 22665 6081 0 113647 137502

% 90.2 8.8 0.0 1.0 0.0 0.0 100.0 74.7 19.9 5.4 0.0 100.0

Trivandrum

Amt 296674 208767 30817 0 0 0 536258 157215 64858 118837 23000 363909 172349

% 55.3 38.9 5.7 0.0 0.0 0.0 100.0 43.2 17.8 32.7 6.3 100.0

Idukki

Vandanmedu

Amt 453255 52093 54495 0 0 0 559843 120477 8551 14150 0 143178 416665

% 81.0 9.3 9.7 0.0 0.0 0.0 100.0 84.1 6.0 9.9 0.0 100.0

Kattappana

Amt 258386 0 5215 0 4000 2078 269679 90289 3948 3600 0 97837 171842

% 95.8 0.0 1.9 0.0 1.5 0.8 100.0 92.3 4.0 3.7 0.0 100.0

Thodupuzha

Amt 134573 0 0 0 0 0 134573 26268 1466 4207 34650 66591 67982

% 100.0 0 0 0 0 0 100.0 39.4 2.2 6.3 52.0 100.0

Source: Official data collected from selected SWCs in Kerala

9.5.3. Income, Expenditure and profit of State warehouses

The income and expenditure in state warehouses differ according to its functioning. The sourcesof income of state warehouses are rent from depositors and service charges from DES (DisinfectionExtension Services). Above 80 percent of the income are coming from storage facilities utilized bygovernment and private depositors. The expenditure for warehouse are limited and out of fivewarehouses three warehouses in Trivandrum and one warehouse Idukki are occupied both rented andowned. The expenditure of each warehouses consists of salaries of staff, imprest (expenses formiscellaneous), handling charges and rent for hired spaces. Salaries and rent for hired spaces are themajor expenditure in selected warehouses. The profit across the state warehouses varied from Rs.67982to Rs.441652.

9.6. Results from FGDs and Individual Interviews

The primary users of the selected warehousing facilities are government agencies like KeralaState Civil Supplies Corporation (KSCSC), Kerala Cardamom Processing and Marketing Company(KCPMC), Kerala State Beverages Corporation, Kerala State Co-operative Consumers’ FederationLimited (Consumerfed) etc. From the data given in table 3 it is observed that the major part of the statewarehouses are occupied by the Kerala State Civil Supplies Corporation (KSCSC), which is agovernmental retail agency supplying life’s essential commodities from agricultural commodities tomedicines at subsidized price fixed by state government. It also procures agricultural commoditiesdirectly from farmers at Minimum Support Price and distributed through PDS. The private traders

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who are considered as the main users of selected warehouses stored the commodities vary widely onthe basis of the area requirement such as rice, sugar and spices in Trivandrum district and Cardamom,pepper, and Coffee in Idukki district. When compared to traders the proportion of farmers in usinggovernment warehousing facilities are very low because most of them are small farmers and try to selltheir products in local markets immediately after the harvest for their daily expenses. In Idukki districtsome big farmers are also act as traders whose demand for warehousing facilities is very high whencompared to the supply of warehousing.

Trivandrum

Official’s response towards working of State warehouses: In five state warehouses in Trivandrumdistrict such as Attingal, Nedumangad, Pallichal, Neyyatinkara and Trivandrum main (Chalai), thewarehousing facilities are mainly occupied by government agency KSCSC. The major commoditiesstored by KSCSC in state warehouses are rice, sugar pulses, chilly and coconut oil. The SWCs areallowed to give ware house facility to private traders, only if there is vacant space after providingspace to KSCSC. KSCSC is in need of further space in all major areas since the available space is notenough mainly for keeping NFSA stock, particularly during the Covid period. From the discussionwith the officials it is known that some traders have approached them for keeping agriculturalcommodities, but due to unavailability of space, Ware Houses are unable to provide facilities to them.As per the views of officials in state warehouses, at present Pallichal state warehouse require around3000sq.ft of area and above 10000 sq.ft of area for Trivandrum (Chalai). In the cases of other threestate warehouses also there is additional demand for warehousing facilities.

Trader’s response towards working of state warehouses: We also tried to collect information regardingwarehouse operations through focus group discussions. Earlier traders used to keep their products inSWCs in Trivandrum district. In Trivandrum district the traders were using the warehousing facilitiesfor storing normal rice, biriyani rice, basmati rice, sugar and spices for whole sale purposes. Thesetraders collected commodities from millers or directly from farmers of Tamil Nadu, Andra Pradesh,Karnataka and also from the whole sale dealers of Northern states. Most of the traders used thesewarehousing facilities to store their commodities for three months and above. Some of them mentionedthat due to high loading/unloading charges (not following government rates) they are not interested inthe government warehouses. Similarly, the traders viewed that the pulses is of high value and verysensitive to infestation. Because of the absence of proper scientific warehouses, they are forced tochoose private scientific warehouses of Tamil Nadu which they feel as less expensive and providebetter services. Traders preferred warehouses in those places where loading/unloading charges arevery low. The major problem pointed out by the traders is that the officers often deny facilities becausethe available warehousing space is scarce. In Trivandrum, the traders are unaware about the governmentschemes and benefits of Negotiable Warehouse Receipts (NWRs).

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Idukki

Official’s response towards working of State warehouses: In three state warehouses of Idukki districtsuch as Vandanmedu, Kattapana and Thodupuzha the utilization of warehousing facilities varies widely.Vandanmedu is a biggest cardamom plantation village in India and is one of the world’s largest auctioncentres for cardamom. The users of warehousing facilities are largely a private company KCPMC(Kerala Cardamom Processing and Marketing Company). It is observed that all private traders inVandanmedu, who own their personal warehouses are also forced to store it in state warehouses forpledge finance mainly because of price fluctuations which lead to high demand for warehousing facilities.From the direct interview with the Senior Assistant Manager of SWH Vandanmedu Idukki district it isobserved that a new scientific Cold Storage unit has been established at Vandanmedu with provisionsto separately store spices, vegetables and other sensitive commodities, and an anteroom to maintaintemperature in hot and humid climates. These passage rooms or anteroom are kept in the temperaturerange of + 100C / + 120C to prevent condensation on the product. The cost for constructing the anteroomis approximately Rs. 40 lakhs. Provisions for hydraulic stalker, Diesel generator set, data logger etc.are also included in this. A quality control laboratory for grading and other purposes was also set up tomonitor the quality aspects of the stored agricultural produces. The total construction cost mayapproximately turn out to be Rs.75 to 80 lakhs. It is viewed that the facility is expected to supportdirectly around 150 farmers. The major portion of warehousing facilities in Kattapana and Thodupuzhaare utilized by KSCSC for rice and spices.

Trader’s response towards working of state warehouses: In Idukki district the traders have knowledgein NWRs and they pledge their receipts up to five years. Currently there are no government coldstorage facilities in selected regions (except the space provided by Spices Park, Idukki). The tradersargued that there is no facility for grading of cardamom in state warehouses which is compulsory forfurther marketing processes. Grading of cardamom is completely based on its external features namelyweight, color, pod size, pod surface finishing and blacks & dots. Therefore, the traders viewed thatthey need scientifically full-fledged cold storage facilities with specified space and a quality controllaboratory for grading high valued and sensitive commodities.

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CHAPTER 10Required Infrastructure and Estimated Expenditure

An analysis of agriculture marketing infrastructure in Kerala explicitly shows that, in spite ofthe efforts taken by different government departments and LSGs, agriculture marketing infrastructureis poor, which is reinforced by the incompetent institutional environment. This throws light in to needof proper planning and developing need-based investment at different structures of markets. Thischapter tries to plot the required marketing infrastructure facilities in each type of market and discussesan action plan with regard to the functioning of the markets. The required infrastructure in each marketis understood by collecting the views of farmers, traders and market officials. The analysis of therequired infrastructure in each market is given in the following Section.

10.1. Infrastructure requirements in Wholesale Markets

The infrastructure required in both the whole sale markets – Anayara and Nedumangad asreported by the farmers and traders is specified below. Infrastructure needed for the physical movementof goods as required by the farmers include transportation facilities from field to market, quality testinglabs and certification, godownsetc in both Anayara and Nedumangad markets. Traders requiretransportation facility, cold storage, ware houses, quality certification, machines for packing,infrastructure for labelling and despatching facility etc. Farmers and traders in Nedumangad demandsurveillance camera in the market. Generally, the facilities demanded by farmers and traders inNedumangad is high compared to the farmers in Trivandrum. Farmers and trades require refrigeratedtrucks, ripening chambers, godowns, ware houses, food irradiation units, facilities for branding/patentingetc. Traders and farmers in market also want more labourfor weighing and movement of productsinside the market. Despatching facility is demanded by the traders as despatch to their shop as per theorder through telephone or social media like whatsapp will save their valuable time. Both farmers andtraders require credit facilities, bank/ATM facilities, loan facilities and incentives. Farmers also demandmarket surveys, information dissemination facilities to farmers and traders. Information counter andnotice board/price display is also demanded in Nedumangad. Similar to the physical movementinfrastructure, farmers and traders demand facilitating infrastructure for market integration, in

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Nedumangad as compared to Anayara. In Anayara facilitation infrastructure for market integration isdemanded more by traders.


Infrastructure demanded as per core NIAM classification is packing and labelling equipment,despatch facilities, grading facilities, cold room, price display mechanism, information centres, ripeningchambers etc and these facilities are demanded mainly by farmers and traders in Nedumangad.Regarding support facilities farmers and traders in Nedumangad demand water supply, sanitary facilities,input supply and necessary outlets, repair and maintenance service office and computerised systems.The demand for infrastructure for support facilities is less in Anayara.With regard to service infrastructurealso, the demand for infrastructure is very high in Nedumangad, both for farmers and traders, thedemanded infrastructure being rest rooms, market education, soil testing facility, drainage, covereddrainage, sitting facilities, compound walls and toilets. In Anayara, the facilities demanded is basicallysitting facility for traders and farmers inside the Auction Hall.Both farmers and traders in Anayara andNedumangad demand maintenance facility, particularly infrastructure for waste utilisation. Infrastructurefor vermin composting, biogas plant, bio gas power, revolving fund for maintenance and solar energyis demanded by almost all in both Anayara and Nedumangad markets. Farmers and traders also demandinfrastructure for cleaning facility, garbage collection and garbage disposal.

10.1.2. Infrastructure requirements in WAM/RPM

A clear idea about the required infrastructure at RPMs can be obtained only after consolidatingthe opinion of the sellers in WAMs/RPMs. As such information regarding the required infrastructureis collected from farmers and traders and is summarised below.

Regarding the required infrastructure for physical movement of goods and services, majorityrequires quality testing labs, surveillance camera etc. In Trivandrum, traders wanted labelling facility,however in Idukki they do not want labelling facility as most of the products come from Tamil Nadu.Traders in Trivandrum would also like to get infrastructure for dispatching products as per the telephonecalls from the customers. Those markets which are spacious, would like to have small vehicles tomove goods from one part of the market to the other. Road facility inside the market is needed inNDD, Palayam and Pothencode. Maintenance of vehicle facility inside the market is demanded bymany traders in all markets. Market in Elappara, which is a NABARD funded market is the onlymarket which has this facility. However, this market is not functioning properly (unstructuredinfrastructural facility is the problem.). Parking facility is required by all markets particularly,Pothencode, Kattappana, Nedumkandum, Thookkupalam, Parathode and Elappara. People also demandfor check post in all the markets. Markets are in need of storage facilities. Facilities for cold storage isdemanded by traders as there won’t be distress sale. Similarly, godowns and ware houses are alsodemanded by traders. Weighing machines are demanded by small traders in both markets. Dispatchingfacility is also demanded by traders as per orders from the customers.

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Regarding infrastructure for facilitation function, all sellers in all markets demand credit facility,loan facility and incentives. Notice board, price display information counter, etc is also required bymajority of traders in all RPMs. They also demand facilities for market integration, particularly vertical,horizontal and forward integration. If incentives are given to traders for purchase form WM/VFPCK itwould be beneficial for both the traders and customers. Market surveys for understanding the needs ofcustomers and traders is also requested by the traders. Traders also request for a risk bearing fund to beprovided by the market.

The core facilities in the priority of demand made by RPM traders include Auction Platforms,storage rooms, cold storage rooms, price display mechanisms, ripening chambers, setting up ofinformation centres, etc. Regarding the support facility, the major support infrastructure facility requiredare water supply, sanitary facilities, input supply outlets, banking facility and in Trivandrum, rainproofing facility particularly in NDD, Pothencode, Nanniyode and Thookkuplam. Regarding serviceinfrastructure, they demand rest rooms, and covered drainage facility. A lot of diseases are reported byPothencode sellers due to unhealthy environment. There is an urgent need for constructing drainagefacility in NDD and Thookkupalam. Security services are also required by many markets.

Regarding maintenance facility in markets, since available waste management facility is very poor inmarkets, markets are in dire need of investment in maintenance infrastructure. In many markets sincewaste disposal facility is not available, traders take their after sales waste to their home and have totreat it themselves. If a vermin compost or biogas plant or bio gas power is established in the market,that would be good according to the traders.

10.1.3. Infrastructure requirements in VFPCK markets

All farmers in VFPCK demand transportation facilities for collecting produce from field tomarket. Only Maranalloor and Kovilnada VFPCK have their own vehicle to send their produce totraders. Most of the farmers in Trivandrum and Idukki and some traders in Trivandrum districtdemand provision of transportation facilities. Due to limited space in all the VFPCK, they have aconstraint for parking, but traders and farmers park their vehicle inside the market for loading andunloading. Some farmers and traders also require parking facilities. Refrigerated trucks for sale ofagricultural commodities is demanded mainly by farmers in both the districts, traders prefer refrigerationfacility in their own shops.

Farmers demand cold storage facility in all markets, to keep the excess produce that is not soldon a particular day. This happens during season time when there is bumper crop and unsold producecan be stored and sold on other days if cold storage facility is available. Farmers in Vembayam demandripening chambers and the other two markets in Trivandrum have ripening chambers. Godown facilityis demanded by all farmers and traders, since only Maranalloor VFPCK, has a store room for storingmanure. Most of the markets need a washing and toilet facility outside the office building.

Farmers in two markets in Trivandrum and all markets in Idukki demand a food irradiationunit. Kovilnada has a food irradiation unit as a cut vegetable unit and it is functioning well. Traders

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also opined the need for food irradiation unit. Farmers and traders require in house product laboratory,facility for branding/patenting, quality certification and labs, surveillance camera. Labellinginfrastructure for labeling and dispatching is also required by some farmers.

Majority of traders and farmers require credit facility. Credit facility of around one month timeis given to traders in all markets. Farmers demand credit facility in all markets to carry out agriculturalactivities. Farmers in Trivandrum require an ATM near the VFPCK. Farmers and traders require loanfacility. As of now the farmers can avail agricultural loans from Nationalised Banks through KissanCredit Cards, with around 7 per cent interest rate. For those who repay the loan without default, aninterest waiver of 3 per cent is provided by Central Government and an interest subsidy of 1 to 2 percent is provided by VFPCK. Farmers in all markets demand more loan incentives. The SKS farmersis linked with traders and VFPCK market is linked with other markets for price determination. InParathode, if there is excess supply of agricultural produce, the market officials hire a vehicle andtransport it to the nearby shops and the received amount is divided among the farmers. Risk fund isavailable in all VFPCKs but the farmers demand more amount as risk fund.

Auction platform is required by farmers in Thankamani and Santhigram. These markets havean auction platform, but during season times the existing one is not sufficient. In Kovilnada alsofarmers prefer one more Auction Platform. Rest room and sitting facility is very limited in the market,farmers and traders demand sitting facility in all markets, it would be good if sitting facility is availablewithin the Auction Hall. Toilet facilities are demanded by farmers and traders in all markets exceptMaranalloor and parking space in all markets.

Cleaning facility, infrastructure for garbage collection, garbage disposal is demanded in allmarkets both by farmers and traders. Similarly, vermicomposting is required by all farmers inTrivandrum except Kovilnada and in all markets in Idukki. All waste utilization infrastructure includingbiogas plant and bio gas power is demanded in all markets. Same is the case with revolving fund formaintenance.

10.2. Required Infrastructure facilities

On summarising the analysis, the following are the most important requirements in the concernedmarkets.

Wholesale Markets

- Major renovation of existing infrastructure like buildings and market roads, drainage etc

- E – auction facility to be created

- Construction of training hall and staying facilities including dormitories should be givenimportance

- Facilities for cleaning, sorting grading, packaging and labelling to be introduced

- Quality testing labs to be instituted

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- Green initiatives including solar plant/biogas plant to be introduced

- Most importantly a cold chain management system to collect vegetables from the leading clustersin Idukki and Trivandrum and to transport it to retail outlets to be introduced.

- Competitive working environment to be created

- Measures to be introduced to strengthen farmer participation

- Measures to ensure forward and backward linkage, demand forecasting and input supply

- Provision of training to farmerss.

Wholesale Agriculture Markets/Rural Periodical Markets

- Quality testing labs

- Cleaning, sorting, grading, packaging and labelling facility

- Facility for cold storage

- Weighing machines

- Drainage facility

- Green initiatives including solar plant/biogas plant to be introduced

Vegetable and Fruit Promotion Council Keralam (VFPCK)

- Provision of Cold room

- Green initiatives including solar plant/biogas plant

- Provision of godown/store room

State Warehousing Corporation

- Additional Scientific Ware Housing Capacity to be created

Infrastructure connecting all markets

- Most importantly a cold chain management system needs to be adopted

10.3. Specification and Cost Estimation

Specification and Cost estimation of the major infrastructural facilities is given below. Thespecification and cost estimation has been done in consultation with experts, particularly the agricultureengineers and also after referring to the existing project documents.

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Table 10.1: Specification and Cost Estimation of Needed Infrastructural Facilities in WholeSale Markets (as from the document submitted by Nedumangad Wholesale Market)

Items No Rate Cost Items No Rate Cost

Cleaning PackingPrewashing tanks for 3 50000 150000 Horizontal Packing Machine with 1 1700000 17,00,000cleaning tubers end sealed chain mechanism with

labelling and hole punchingattachments

Steel Perforated Trays/ 6 12000 72000 Box strapping machine for 1 53000 53,000Crates for washing in Cartoon packing-400 Wthese tanksWheel barrows 3 8000 24000 Semi automatic Cartoon Sealing 1 70000 70,000

MachineVegetable Bubble 2 250000 500000 Hand Tabletop Heat Impulse 3 2000 6000washing Machine – 3 Sealing MachineChamberTrays and Crates 50 1500 75000 Sack Sealing/Bag Closer 2 7500 15,000

Stitching MachineHigh Pressure Industrial 1 100000 100000 Vacuum Sealing Machine with 1 70000 70,000Jet Cleaner Nitrogen FlushingScrubber/Dryer Machine 1 200000 200000 Colour Laser Printer 2 40000 40,000for cleaning Auction for Label PrintingPlatforms and StoreRoomsWet and Dry Type 1 25000 25000 Sub Total 19,54,000Industrial VacuumCleanerSub Total 11,46,000 Item No Rate CostSorting, Grading & Stacking Biogas Plant 30 M3 15,00,000Manual sorting &grading 50 1000 50000 Aerobic Compost Units -2 Nos 7,00,000accessories – crates andboxesAssaying equipments LS 200000 200000 Mini Material Collection Units 70,000Vegetable Drier-300 kg 1 300000 300000 Collecting Bins, Boards, wheel

barro, training etc 1,30,000Manual Stacker withelectric motor for lifting 1 200000 200000 Segregating Shed 3,50,0001000 kg manual stacker 2 70000 140000 Total Amount 37,50,0004 wheel electric forklift 1 900000 900000 ItemStacking Trays 50 5000 250000 Solar Power Plant – Own

Grid -50 KV Capacity 350,000Shelving racks in coldchamber for storingvegetables LS 160000 160000 Soft ware, server, computerisation,

digitalisation for e-NAM auction 90,00,000Total 22,00,000

Source: Official documents of Nedumangad Wholesale Market

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Establishment of Cold Chain System (after consultation with State Assistant Agriculture Engineerand referring the document submitted by Directorate of Agriculture to the Government of Keralaunder the Rebuild Kerala Initiative)

Based on a very preliminary assessment, 30 Pack Houses to cater 10 Distribution Centresfurther to cater 150 retail outlets in various locations are proposed under the project. This can bemodified based on the market survey and production status of various vegetable production clusters.Each pack houses should have space allocation for mobile precoolers, two 10 MT reefers, waterharvesting structure with at least 1 lakh litre capacity, Solar assisted UPS system, compost unit, watersource, water tank etc.

Infrastructure: Infrastructure development include construction of twenty PEB cold storage buildingat various suitable markets of 300 Sq. m. floor area each. Garage spaces for reefer vans, reefer trucks,mobile pre-coolers are also required. Water harvesting and storage structures should be constructed.To convert biomass wastes generated from the pack houses into bio-manure, vermi or aerated compostunits should be constructed.

Table 10.2: Specification on different equipments

Sl. Description Specification No. Rate Amount

No (Rs.lakhs) (Rs.lakhs)

1 PEB ReeferGarages 100 sq.m 40 0.094/sqm 376

2 PEB for Pack Houses 200 sq. m 30 0.0124/sqm 744

3 PEB for Distribution Centre

cum Cold Storage 500 sq.m. 10 0.124/sqm 620

4 Compost Unit (Vermi,

Aerobic) Various capacity 40 2.5/unit 100

5 Water Harvesting Structure 100000 litre 40 4.8/unit 192

6 Water source development

&Water storage structures Various capacity 40 12/unit 480

7 Approach Roads Various 40 10/unit 400

Total 2912

Source: proposal submitted by Agriculture Department under the Rebuild Kerala Initiative

Equipment: The equipment and machinery required other than the cleaning, conveying and packingmachinery and refrigeration equipment are biomass shredders to crush the biomass waste generated inthe pack house enabling quick composting of the same, water supply system with a water lifting pump,storage tank and distribution line and a solar power generating system of desired capacity. Dieselgenerator of required capacity suitable for the functioning of cold rooms are also proposed at each coldstore and the pack house. The equipment for minimal processing of vegetablesis also included. Thefinancial outlay of these are shown in the table below.

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Table 10.3: Financial specificationDescription Specification No Rate (Rs.lakh) Amount (Rs.lakh)

Biomass Shredder 1500kg/hr 40 0.65/each 26

Solar & DG Standby Power 200KVA 40 10.50/each 420

Veg. Bubble Washer 1500kg/hour 30 2.5/each 75

Shrink Wrapping Machine 10m/min 40 3.00/each 120

Veg. Cleaning & peeling machine 400kg/hour 10 1.75/each 17.50

Veg. cutter cum slicer 660kg/hour 10 1.00/each 10

Vacuum Packaging Machine Various 10 1.00/each 10

MA packing machine Various 10 3.00/each 30

Tray drier 100kg/batch 10 4.00/each 40

Flindized Bad Drier 60kg/hour 10 6.15/each 61.5

Steel Furniture Various 40 0.50/unit 20

Steel utensils Various 40 0.30/unit 12

Crates, others Various 80 0.20/unit 16

Total 858


Cold Chain Components: As stated earlier, the cold chain comprises components like mobile pre-coolers, stationary precoolers, pack house, reefer trucks, cold storage room, reefer vans and refrigerateddisplay racks for the CA supermarkets.

Table 10.4: Description on cold chain components

Sl.No Description Specification Number Rate Amount

1 Mobile Pre Coolers 1QF -1.00MT 120 14.00/each 1680

2 Farm Pre Coolers 1.00-2.00MT 20 1.05/MT 42

3 Pack Houses 40 MT 30 0.85/MT 1020

4 Reefer Trucks 7.00 MT 10 22.00/each 220

10.00MT 10 28.00/each 280

5 Cold Storage 80 MT 10 0.85/MT 680

6 Distribution Reefer Vans 4.00 MT 20 12.00/each 240

7 CA display racks 150 0.80/each 120

Total 4282.00


The total installed capacity of Cold Storage is 2000 MT. Thus, the total capital cost for the project isRs. 80.52 Crores.

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Thus, the agriculture marketing infrastructure facilities in the state needs thorough modificationto cater to the needs of the stakeholders. All the markets that the study has examined including WholesaleMarket, Rural Periodical Market, Spices Park, VFPCK are not fulfilling the stipulated functions mainlybecause of the inappropriate conduct and performance in terms of infrastructure facilities. There is alarge lacuna in terms of the available and required scientific ware housing facility. All these limitationsneed to be addressed immediately to transform agriculture into a remunerative vocation for the farmersand other stakeholders and also to provide food self sufficiency to the population.

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CHAPTER 11Summary and Conclusions

Inadequacy and inefficiency of marketing infrastructure is pointed out as the major reason forpost-harvest loss in agriculture with its consequent effect on food security. A well structured andmanaged marketing infrastructure is essential at all stages of supply chain if agriculture is to be afeasible vocation. The present study on ‘Agriculture Marketing Infrastructure in Kerala’ examined thestructural and functional dimensions of existing agriculture marketing infrastructure in Kerala with afocus on marketing infrastructure and attempted at synthesising the opinion of multi stakeholders tostrengthen the marketing infrastructure facilities for future development of agriculture with a view toprovide food self sufficiency and security along with sustainable income generation or farmers.Following were the specific objectives of the study.



b. Infrastructure for the function of physical movement such as transportation and storage, functionof changing the form of product, standardization and grading and packaging.

c. Infrastructure for the facilitation function- market financing, and market information/ marketintegration.


3. To assess empirically the institution wise infrastructure requirement for agricultural marketing.

4. To assess the District- wise data of warehousing infrastructure required, available and the gapsbased on primary/ secondary data analysis.

Two Wholesale Markets, Anayara and Nedumangad, ten WAMs/RPMs, six VFPCKs, arepresentative FPO, Spices Park, State Ware Hose were selected for indepth analysis. Rapid Rural

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Appraisal, Focus Group Discussion, interview schedules, observation etc were the tools used for datacollection. Data were collected from twenty farmers and twenty traders form the Wholesale Markets,fifty sellers from ten WAMs/RPMs, thirty farmers and thirty traders from six VFPCKs and fifteenfarmers form Spices Park. Additionally, interviews were conducted with exporters, market officials,marketing officers, administrative officers, dealers, officers and beneficiaries of State Ware Housesand officers and farmers of FPOs. The analytical framework of Structure-Conduct-Performance isused to explain the intricacies of the market. The required infrastructure along with the cost estimationfor selected infrastructure requirement is also provided. It is understood that the marketing facility ineach of the market analysed is far below the bench marks. The major findings in this regard are givenbelow.

Major Findings of the study

The study shows that, in spite of the efforts taken by different government departments andLSGs, agriculture marketing infrastructure needs improvement, which requires constructive changesin the institutional environment.

Wholesale Markets:

Wholesale markets in the state were established to improve efficiency in food production and distributionby encouraging competition through creating conditions for transparent price discovery at relativelylow costs and by enhancing market information to various actors. Against these specified benefitsexpected from Wholesale Markets, analysis of the existing ones in Kerala reveals that the conduct andperformance of the Wholesale Markets are far below the benchmarks. Many functional andadministrative crisis can be found in the market relating to the conduct of market activity. Lack ofaccuracy in payments result in discouragement of farmer’s participation in the markets. As of now,online trading facility is not established in the markets. Competition through creating condition fortransparent price discovery is also low because traders are few and, in several occasion, price is set bynegotiation. During the times of bumper crops, there is distress sales and no mechanism for priceregularity. The infrastructure for storage, grading, packaging, value addition, market integration andfacilitation is very low, hence even after establishment of Wholesale Markets, post-harvest loss remainshigh. The provision for forward and backward linkages and demand forecasting is also absent in themarket. The farmers also faced difficulty because of the perishability of the product and wanted themarket to be opened on all days. Hence to conclude the issues in relation to the structure, conduct andperformance of the Wholesale Markets needs to be addressed for making it meet the true requirementsof farmers, traders and other stakeholders. The major suggestions with regard to Wholesale Marketsinclude –

• Renovation of existing infrastructure facilities like buildings to be done

• Drinking water problems, scientific waste management problem etc should be resolved

• Green energy sources should be established

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• Market Information and Market Intelligence system should be strengthened for linking a greaternumber of agriculture markets

• Cool room, controlled atmospheric storage with supporting reefer trucks, pack houses, ripeningchambers, retail shops etc is to be established.

• Markets are reported to have issues in finding resources to meet day to day activities, especiallyelectricity bills, tax payment etc. Many of the infrastructure facilities such as cold storage is notused citing the feasibility problem. Some measures must be adopted to meet the maintenancecost

• There are limited initiatives towards market integration or building up backward /forward linkagesand demand forecasting. In spite of having all basic facilities in the market, very few traders arecoming, which has a grave impact on the actual volume of produce auctioned/traded. So alongwith ensuring the infrastructure it is important to develop/ stipulate managerial procedures bywhich the market can be run in full capacity and can develop its activities further.

11.2. Wholesale Agriculture Markets/Rural Periodical Markets

To summairse, the Wholesale Assembly Markets/Rural Periodical Markets work differentlyfrom that of WAMs/RPMs in other states. In other states WAM/RPMs have a function to mobilise thesurplus products from farmers to the second round of supply chain, and thus becomes the most importantplace where the farmer comes in direct contact with the consumer/wholesale/retailer. In Kerala thesemarkets are filled with sellers, who buy produce from traders in the neighbouring states and sell inthese markets. The WPM/RPMs show difference in the presence of facilities and operations. Palayam,Kattappana and Kazhakkuttam markets are relatively better in their performace and availability ofinfrastructure facilities, but the situation in Nanniyode, Elappara and Pothencode are worse. Basicinfrastructure facilities such as trading halls, drainage, weighing machines, waste managementfacilitiesetc are not available in the markets. Some markets do not even have basic facilities such astoilet and drinking water. Storage facilities, grading facilities, quality testing mechanism etc is notavailable in any one of the markets. Hence the WAMs/RPMs in Kerala require immediate attentionaimed at revamping. The major measures needed to be adopted in RPMs include:

• Measures for quality control: Infrastructure for quality testing must be installed in all markets

• Ensuring auction platform for regional farmers: Currently farmers in the region are not able touse the infrastructure at the market, since bulk quantities of goods are coming from neighbouringstates.

• The infrastructure in RPMs is pathetic. Auction hall, selling platform, Price display, wastemanagement system, boundary wall, crop specific infrastructure, roofing etc. are essential inall markets.

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• Technical support for LSGs: Most of the RPM s are under reconstruction with an aim to ensureessential infrastructure. But, many of the reconstructed markets are not usable. So that it isessential to have an authority that can provide with technical support in constructing marketsso that the financing will not go waste.

• Refining the legal aspects relating to responsibility of LSGs towards markets: Even though thejurisdiction of markets comes under LSGs, there is no clarity on the role and responsibility ofLSGs. There is not a single department that is wholly responsible for fair conduction of market,instead it is scatted over the health, revenue and Public works department of LSGs. It is importantto have a centralised authority to monitor the functioning of market so that essential infrastructure,quality control, entry and exit can be organised efficiently.

• In many markets there exists entry restrictions, that effect the performance of markets andinfrastructure facilitation. For instance, number of selling platform, physical structure of marketbuilding, etc. affect entry and exit and there by market functioning.

• Infrastructure for demand forecasting is quintessential in all markets. Given the small quantityof transaction of goods in the markets in Kerala, possibilities of clustering, online platforms etcshould be mooted.

11.3. VFPCK

VFPCK Farmer’s market was an initiative towards establishing markets where farmers havean active role in the conduction of market, and infrastructure is established with the financial supportof government, and managerial functions is coordinated by both farmers and government officials.Small and marginal farmers usually find difficulty in finding buyers from the locality and the newinitiative created a platform for farmers and traders to meet and do business effectively. Consideringthe marketing infrastructure at the studies VFPCKs, all the markets have essential infrastructure suchas auction hall, market yards and weighing machines, but none of them have facilities for cold storageor value addition. Only one of the markets has a processing center, where cut vegetables are sold, inother markets there are no facilities to deal with the problem of bumper crop. And this is a major issue,at times farmers have to sell their produce at very low price. This quintessentially shows the need formore infrastructure including cold storage, ripening chambers and facilities for value addition, packing,grading and standardization. Similarly, there is a dearth of service facilities such a rest room, toilets,waste management facilities, surveillance cameras and firefighting facilities. There is crop specificand district specific difference relating to marketing margins with reference to the crops sold throughVFPCKs. Transportation cost forms a major share of marketing margin, but still, transportation facilitiesare a major component that get neglected when it comes to marketing infrastructure. Given theperishability of goods and the large geographical area covered by the dealers, it is very important toarrange well equipped, weather sensitive transportation facilities, which can be very helpful for thetraders. Establishing retail outlets can increase the acceptance of farmers’ markets in the locality and

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this can earn more profits to farmers. Also establishing crop specific infrastructure facilities, based onthe agroclimatic zones can promote farmers to do agriculture more scientifically and profitably. It isimportant to convert the farmers markets from mere auction centres, to centers for storage and valueaddition, by which the current problems faced by both farmers and traders can be curtailed. Thisessentially involve developing essential capacity, both physical and human, that makes farmers capableof handling the complex process of agriculture marketing from input supply to marketing of agricultureproduce, by eliminating the intermediaries. The major suggestions with regard to VFPCKs are providedbelow.

• Infrastructure like cold storage, cool chamber and concrete floors for fruits and vegetablehandling facility should be created

• Vehicles needed in VFPCK to bring agriculture products from field to the market and to distributeit to the retail shops

• Infrastructure for value addition facilities to be provided for those VFPCKs which are ready toinitiate value addition units

• Given the perishability of goods and the large geographical area covered by the dealers, it isvery important to arrange well equipped, weather sensitive transportation facilities, which canbe very helpful for the traders.

• Establishing retail outlets can increase the acceptance of farmers markets in the locality andthis can earn more profits to farmers.

• Also establishing crop specific infrastructure facilities, based on the agroclimatic zones canpromote farmers to do agriculture more scientifically and profitably.

11.4. State Ware Houses

There is shortage of scientific ware housing facility and state itself is the major user of warehousing facility in some of the districts, and in some others private companies storing nonagriculturalcommodities are the users. The cost of storage is high compared to neighboring states, and quality iscomparatively low. The major recommendations for Ware Houses include:

• SWH Corporation should be provided with more warehousing facility

• Scientific ware houses must be constructed particularly in districts where spice production isdominant

11.5. FPOs

Collectivization of producers, especially small and marginal farmers, into producer organisationsimprove access to investments, technology, inputs and markets for farmers. Farmer Producer’sorganisations envision to maximize profit for farmers, by shortening the supply chain and eliminatingthe intermediaries in the agriculture marketing, depicts the most important form of alternative marketingstructures. TCFPCL, the farmer producer company was registered on 03/06/2013 as an Indian non-

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governmental company limited. The company brings together 3,78,568 members spread across fifteenpanchayats in the districts of Kannur and Kasaragod who cultivates 91252 acres of land. The companywas set up with an objective to undertake programs for employment generation, growth anddiversification of agriculture and agro-based industries to increase food production, and export ofagriculture products, in primary, and value-added forms. It also envisages promoting organisation ofmarketing chain both for domestic and export marketing and make advantage of forward and backwardlinkage by integrating producers’ associations. The company is indulged in diversified activities startingfrom the input supply to value addition and marketing of Agri- products. Since 2013, the company isindulged in developing essential infrastructure for storage, value addition, grading and packing andstandardisation along with initiating direct selling and providing market intelligence for the farmers.These are done with availing funding from agencies including NABARD, CDB and state government.In-depth interview with Director Board members has revealed the current problems faced by the company,in spite of being a pioneering FPO in Kerala, and major issues are a) Shortage of Working Capital: Dueto delay in complete functioning of the processing unit owing to procedural delays there is shortage ofworking capital b) At present the farmers don’t have enough money to purchase organic manure andplanting materials c)the supply of organic manure in the Panchayath schemes are now given to theretail manure Depots within the area of the respective Panchayaths. Direct and wholesale supply isnot allowed under Panchayath schemes and so, manure from FPO cannot be sold to other farmers d)the transportation of goods from Kannur district to Kasargod and other districts are restricted and thismake problems e) the availability of workers, transportation and other facilities in the production andmarketing are affected due to the issue of Covid-19 f) increase in loss due to the less utilization of thecapacity of the unit. The major suggestions with regard to FPOs are

• Infrastructure assistance should be provided to FPOs.

• Technical and managerial expertise to be provided to farmers

• Bureacrats delays from the part of government should be avoided by scrapping some of the age-old laws and issuing special allowance to FPOs.

To conclude, the study reiterates the need for strategic intervention in the existing marketscenario to improve investment in agriculture marketing infrastructure and also to bring about positivestructural and functional changes in the marketing institutional environment. This requires systematicschemes reflecting the needs of the stake holders and mobilisation of investment funds from differentsources.

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APPENDICESAppendix 1 Whole sale market

Table 1: Average Years of Age

IFWS N Minimum Maximum Mean Std. Deviation

Anayara 10 38 65 51.8 8.82924

Nedumangad 10 23 69 47.9 13.64999

Table 2: Social and Economic StatusSex-wise distribution IFWS

Number PercentAnayara Male 10 100Nedumangad Male 9 90

Female 1 10Total 10 100

Educational statusAnayara Below SSLC 2 20

SSLC/Equal 4 40High School 2 20Degree 2 20Total 10 100

Nedumangad Below SSLC 2 20SSLC/Equal 4 40High School 3 30Degree 1 10Total 10 100

Occupational StatusAnayara Agriculture 8 80

Retired 1 10Business 1 10Total 10 100

Nedumangad Agriculture 8 80Mechanical engineer 1 10Retired 1 10Total 10 100

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Table 3: Percentage distribution of size of farm

Anayara Nedumangad Total

Small Number 3 7 10

% within Farm size 30.00% 70.00% 100.00%

% within WM 30.00% 70.00% 50.00%

Medium Number 2 2 4

% within Farm size 50.00% 50.00% 100.00%

% within WM 20.00% 20.00% 20.00%

Large Number 5 1 6

% within Farm size 83.30% 16.70% 100.00%

% within WM 50.00% 10.00% 30.00%

Number 10 10 20

% within Farm size 50.00% 50.00% 100.00%

% within WM 100.00% 100.00% 100.00%

Table 4: Farm wise total liability of the farmers in Wholesale markets

Wholesale markets Farm size Mean N Std. Deviation

Anayara Small 191071 1 .

Medium 372256 2 294317.6

Large 504785.4 5 292852.5

Total 432438.8 8 272906.5

Nedumangad Small 178550 5 141625.4

Medium 137000 2 42426.41

Large 761000 1 .

Total 240968.8 8 237114.5

Total Small 180636.8 6 126776.7

Medium 254628 4 218912.7

Large 547487.8 6 282047.9

Total 336703.8 16 266026.5

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Table 5: Farm wise quantity of tapioca cultivated and sold in markets

Farm Size Own consu: WHM Sell WAM sell RPM sell Other mkt:sell Total Per Year

Qty Value Qty Value Qty Value Qty Value Qty Value Qty ValueAnayara

Small µ 20 440 1388.5 13968 1990 5000 1609 22473.33

N 3 3 2 2 1 1 3 3

SD 10 220 270.8219 17488.16 . . 386.5786 15494.13

Medium µ 15 330 15485 340670 15500 341050

N 2 2 2 2 2 2

SD 7.07107 155.5635 20499.03 450978.6 20506.1 451063.4

Large µ 20 1232.8 6380 140360 6220 140800

N 5 5 5 5 5 5

SD 0 1772.755 4037.326 88821.17 4346.493 88821.17

Total µ 19 814.4 7294.111 156786.2 1990 5000 6692.7 145352

N 10 10 9 9 1 1 10 10

SD 5.67646 1267.401 9311.251 207669.8 . . 9007.116 199302

Nedumangad

Small µ 21 522 1497 46941 10 210 500 10500 3000 60000 2940 61605

N 5 5 5 5 1 1 1 1 1 1 5 5

SD 8.94427 365.9508 1981.516 44204.57 . . . . . . 2286.097 46398.71

Medium µ 0 0 0 0 0 0 0 0 0 0 0

N 1 1 1 1 1 1 1 1 1 1 1

SD . . . . . . . . . . .

Large µ 30 630 18000 378000 1970 41370 20000 420000

N 1 1 1 1 1 1 1 1

SD . . . . . . . .

Total µ 19.2857 462.8571 3640.714 87529.29 660 13860 250 5250 1500 30000 4957.143 121337.5

N 7 7 7 7 3 3 2 2 2 2 7 6

SD 11.70063 364.084 6559.053 134218.6 1134.504 23824.59 353.5534 7424.621 2121.32 42426.41 6977.465 152085.8

Total

Small µ 20.625 491.25 1466 37520.14 10 210 500 10500 2495 32500 2440.875 46930.63

N 8 8 7 7 1 1 1 1 2 2 8 8

SD 8.63444 303.571 1622.539 40156.32 . . . . 714.1779 38890.87 1871.803 41339.47

Medium µ 10 220 10323.33 227113.3 0 0 0 0 0 0 10333.33 341050

N 3 3 3 3 1 1 1 1 1 1 3 2

SD 10 220 17030.37 374668.1 . . . . . . 17039.17 451063.4

Large µ 21.6667 1132.333 8316.667 179966.7 1970 41370 8516.667 187333.3

N 6 6 6 6 1 1 6 6

SD 4.08248 1604.584 5961.884 125393.3 . . 6838.25 138936.9

Total µ 19.1176 669.6471 5695.75 126486.3 660 13860 250 5250 1663.333 21666.67 5978.059 136346.6

N 17 17 16 16 3 3 2 2 3 3 17 16

SD 8.33578 992.5017 8182.409 177386.2 1134.504 23824.59 353.5534 7424.621 1526.445 33291.64 8041.557 178008.4

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Table 6: Farm wise quantity of banana cultivated and sold in markets

Farm Size Own consu: WHM Sell WAM sell RPM sell Other mkt:sell Total Per Year

Qty Value Qty Value Qty Value Qty Value Qty Value Qty ValueAnayara

Small µ 28.3333 950 3775 113250 2212.5 87825 4020 135000

N 3 3 2 2 2 2 3 3

SD 2.88675 229.1288 4808.326 144249.8 2938.029 118475.7 3340.12 105126.8

Medium µ 29 765 9053 111270 111 42218 9637.5 133144

N 2 2 2 2 1 1 2 2

SD 1.41421 106.066 10277.09 81585.98 . . 9492.909 51627.28

Large µ 32 798 29174 515220 2000 80000 17606 532180

N 5 5 5 5 1 1 5 5

SD 5.70088 429.8488 27737.49 151011.3 . . 4989.607 150348.8

T otal µ 30.3 837 19058.44 336126.7 2000 80000 1512 72622.67 11936.5 333218.8

N 10 10 9 9 1 1 3 3 10 10

SD 4.44847 318.2609 23412.65 244827.3 . . 2405.849 87815.62 7967.383 238291.9

Nedumangad

Small µ 30.8333 1184.167 4973.167 170735.5 20 960 500 24000 1552 58216 5608 211794.8

N 6 6 6 6 1 1 1 1 2 2 6 6

SD 9.70395 362.1659 7259.679 277025.8 . . . . 1991.213 72554.81 8419.101 309586.8

Medium µ 115 4175 9244 333980 2000 700000 8262 396376 14490 590250

N 2 2 2 2 1 1 1 1 2 2

SD 120.2082 3995.153 10120.11 339439.5 . . . . 5812.418 174160.4

Large µ 30 1140 17640 670320 17330 658540 35000 1330000

N 1 1 1 1 1 1 1 1

SD . . . . . . . .

Total µ 49.4444 1843.889 7329.667 262521.4 6450 453166.7 4381 210188 1552 58216 10847.56 420141

N 9 9 9 9 3 3 2 2 2 2 9 9

SD 56.97831 1955.508 8006.889 301246.6 9474.223 392170.7 5488.563 263309.6 1991.213 72554.81 12056.03 454933.8

Total

Small µ 30 1106.111 4673.625 156364.1 20 960 500 24000 1882.25 73020.5 5078.667 186196.6

N 9 9 8 8 1 1 1 1 4 4 9 9

SD 7.90569 329.8653 6423.04 241862.2 . . . . 2084.322 82010.96 6907.99 253258.3

Medium µ 72 2470 9148.5 222625 2000 700000 8262 396376 111 42218 12063.75 361697

N 4 4 4 4 1 1 1 1 1 1 4 4

SD 85.33854 3033.183 8328.1 239078.2 . . . . . . 7010.617 283985.4

Large µ 31.6667 855 27251.67 541070 9665 369270 20505 665150

N 6 6 6 6 2 2 6 6

SD 5.16398 409.0355 25252.07 149174 10839.95 409089.6 8387.023 352377.5

Total µ 39.3684 1313.947 13194.06 299324 5337.5 359875 4381 210188 1528 66860 11420.68 374392.5

N 19 19 18 18 4 4 2 2 5 5 19 19

SD 39.36046 1420.212 18014.93 268974 8049.3 370601.2 5488.563 263309.6 1971.235 72347.13 9831.11 349805.9

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Table 7: Farm wise quantity of pepper cultivated and sold in markets

Own Consumption WAM sell Total Per Year

Farm Size Pepper Qty Value Qty Value Qty Value

Nedumangad

Large µ 3 900 97 29100 100 30000

N 1 1 1 1 1 1

SD . . . . . .

Total µ 3 900 97 29100 100 30000

N 1 1 1 1 1 1

SD . . . . . .

Total

Large µ 3 900 97 29100 100 30000

N 1 1 1 1 1 1

SD . . . . . .

Total µ 3 900 97 29100 100 30000

N 1 1 1 1 1 1

SD . . . . . .

Table 8: Farm wise quantity of coconut cultivated and sold in markets Coconut Own Consumption WAM sell Other MarketSell Total Per Year Farm Size Qty Value Qty Value Qty Value Qty Value

Anayara

Small µ 164 7280 1772 79740 950 47150

N 2 2 1 1 2 2

SD 90.50967 4214.356 . . 1202.082 60599.05

Medium µ 70 1540 210 4620 280 6160

N 1 1 1 1 1 1

SD . . . . . .

Total µ 132.6667 5366.667 210 4620 1772 79740 726.6667 33486.67

N 3 3 1 1 1 1 3 3

SD 83.91265 4456.785 . . . . 933.8808 48950.82

Nedumangad

Small µ 20 1000 20 1000

N 1 1 1 1

SD . . . .

Total µ 20 1000 20 1000

N 1 1 1 1

SD . . . .

Total

Small µ 116 5186.667 1772 79740 640 31766.67

N 3 3 1 1 3 3

SD 104.919 4693.243 . . 1005.386 50458.53

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Medium µ 70 1540 210 4620 280 6160

N 1 1 1 1 1 1

SD . . . . . .

Total µ 104.5 4275 210 4620 1772 79740 550 25365

N 4 4 1 1 1 1 4 4

SD 88.69987 4243.689 . . . . 840.3967 43142.8

Table 9: Farm wise quantity of ginger cultivated and sold in markets

Ginger Own Consumption WAM sell Other MarketSell Total Per Year Farm Size Qty Value Qty Value Qty Value Qty Value Nedumangad

Medium µ 34 3434 500 50500 534 53934

N 1 1 1 1 1 1

SD . . . . . .

Large µ 617 277765 4800 216000 9583 431235 15000 675000

N 1 1 1 1 1 1 1 1

SD . . . . . . . .

Total µ 325.5 140599.5 2650 133250 9583 431235 7767 364467

N 2 2 2 2 1 1 2 2

SD 412.2433 193981.3 3040.559 117026.2 . . 10229.01 439160 Total Medium µ 34 3434 500 50500 534 53934

N 1 1 1 1 1 1

SD . . . . . .

Large µ 617 277765 4800 216000 9583 431235 15000 675000

N 1 1 1 1 1 1 1 1

SD . . . . . . . .

Total µ 325.5 140599.5 2650 133250 9583 431235 7767 364467

N 2 2 2 2 1 1 2 2

SD 412.2433 193981.3 3040.559 117026.2 . . 10229.01 439160

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Table 10: Farm wise quantity of cowpea cultivated and sold in markets

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Table 11: Farm wise quantity of spinach cultivated and sold in markets

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Table 12: Farm wise quantity of cucumber cultivated and sold in markets

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Table 13: Farm wise quantity of snake gourd cultivated and sold in markets

Table 14: Farm wise quantity of bitter gourd cultivated and sold in markets

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A Collaborative Study on Agriculture Marketing