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Agricultural Marketing Reforms
RABI CONFERENCE-2005
As a Farmer
I must thank all of you for your efforts and concerns
But what use if I can not be facilitated to sell my produce at
Remunerative Price / Quality linked returns Choose my buyer Place and time convenient to me Escape the fleecing of multiple
intermediaries
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R i c e W h e a t G r o u n d n u t A p p le O n i o n
P R I C E S P R E A D
M a r k e t i n gM a r g in sM a r k e t i n gC o s tF a r m e r 'sS h a r e
Increasing Farmers Income
90% of effort is Production oriented
Only 10% on Marketing/Post harvest phases
Single intervention that can enhance income by 20-30%
Private Sector Investment
Domestic Markets Scenario
o Regulated Markets.
o 7161 of 7310 Wholesale Markets Covered Under Regulation.
o Of 27,294 Rural Markets, 15% Under Regulation
Domestic Markets Scenario
o Regulated Markets Lack Need Based Infrastructure.
o Development Confined to Wholesale Markets. Rural Markets Remain Out of Development Ambit
o Current Mandi System Has Multiple Intermediaries and High Value Loss
o APMC Regulation Prevents Companies From Directly Sourcing From Farmers
Domestic Markets Scenario
o Fragmented Industry, with no Large Organized Players
o High Wastage between the Farm and the Retailer
Present Scenario in Value Chain
o Producer’s Share in Consumer’s Retail Price Mere 40% to 60% depending on the commodity
o Only 25% of Produced Food-grains Utilise Scientific Storage
o Less Than 2% of Fruits and Vegetables Production Is Processed
o Post-harvest Losses estimate 10% of Food Grain and 25% of Fruits and Vegetables Production
Problems Competitiveness is lost Quality assurance is a ? Loss of Value Export is a problem No Grading/Standardization Consumer Dissatisfaction No Market Intelligence No Price Discovery
Paradigm Shift Present Agriculture is Production
Driven Transition to Agri-Business Market Driven What Consumer Wants ? Cutting the value Chain Knowledge led growth Private Investment
Investment Requirement (Rs. in crores)
Items Physical (Nos)
X Plan
XI Plan
Total
Wholesale markets 3213 2410 4016 6426
Modernization of markets
7293 2260 3766 6026
Rural Periodic Markets
27294 1024 1706 2730
Grading Centers 5786 400 750 1150
Modernizing Labs 100 10 10 20
Agribusiness Centres
1500 50 100 150
Warehousing (lakhTonne)
518 5965 6200 12165
Total 12119
16548 28667
Source of Investment Public Investment ?? Significant role of Private Sector How do we get them into the
sector Create enabling Policy and Legal
framework This requires Reforms
Road Map of Reforms Create enabling Legal and Policy
environment Private / Cooperative Markets
Direct Marketing and
Contract Farming Programs
Grading/Standardisation/Quality
Road Map of Reforms
Establish Effective Linkages Between Farm Production And Retail Chains
Public–Private-Partnership to Promote Professionalism in Existing Markets
Stepping-Up of Pledge Financing and Marketing Credit
Road Map of Reforms
Introduction of Negotiable Warehouse Receipt System In Storage Projects
Link Commodity Exchange with Market Yards for Price and Risk Management
Information Technology to Promote Trade/ Market Led Extension Services
Facilitate Investments
Leaders In Reforms Kerala, Tamil Nadu Madhya Pradesh Andhra Pradesh Punjab Himachal Pradesh Sikkim Manipur Nagaland Andaman & Nicobar
Followers Many States
Enabled some components
Require all Components
Scheme For Development / Strengthening Of Agricultural Marketing Infrastructure, Grading And Standardization
Objectives of the Scheme
o To Induce Private and Cooperative Sector Investments in Market Infrastructure Development Projects
o To Strengthen Existing Agricultural Markets, wholesale and rural periodic, to Enhance Efficiency
o To Promote Grading, Standardization and Quality Certification of Agricultural Produce at Farm/ Market Level
Coverage of the Scheme Agriculture/Horticulture Fisheries Meat & Poultry Minor Forest Produce Dairy Medicinal plants Apiculture
Components of the Scheme Functional Infrastructure Market user common facilities Shortening the Value Chain
Direct Marketing Contract Farming E-Trading Infrastructure
Market extension and market oriented production planning
Input Supply
Functional Infrastructure Assembling
Combine harvesters Cleaning Assembling yards Collection centers Pre-cooling Chambers
Grading Mechanical graders Color sorters
Standardisation
Functional Infrastructure Quality Certification
Establishing a Quality Lab Accredited Certified agency
Infrastructure On-Farm Quality Testing Infrastructure
( Sugarcane Quality Testing for timely harvesting and Maximum Sucrose Content)
Grapes Certification
Functional Infrastructure Labeling
Bar coding Packaging
Pack houses Packing material manufacturing as
part of the integrated project Retailing & wholesaling
Food world Nilgiris Namdharis in Delhi
Functional Infrastructure Value addition
Decortication of Groundnut
Waxing of Kinnows
Curing of Honey
Market user common facilitieso Market yards o Platforms for loading/ assembling
and auctioning of the produce etc
o Modern auction Systems
o Weighing and Mechanical Equipment
Shortening the Value Chain
o Infrastructure for Direct marketing from producers to consumers/ processing units/ bulk buyers etc
o Infrastructure for supporting Contract farming arrangements between processing/ trading units and farm producers
o Infrastructure for E-Trading, market extension and market oriented production planning.
Scope of Infrastructure Projects
Infrastructure for supply of production inputs and need based services to farmers
AI infrastructure Fertilizer storage units Feed storage units Marketing Intelligence
Mobile infrastructure for post-harvest operations
Market extension and market oriented production planning
Salient Features of Scheme
o Credit Linked Back-ended Subsidy on Capital Investment for Setting up of General or Commodity
Specific Infrastructure for Marketing of Agricultural Commodities; and
Strengthening and Modernization of Existing Agricultural Markets, Wholesale, Rural Periodic or in Tribal Areas
Persons Eligibleo Individuals, Farmers, Consumers, NGOs,
APMC, Corporations, Cooperatives and Marketing Boards in the Entire Country.
o State Projects Assisted by NABARD/NCDC for Modernization of Existing Markets Subject to States allowing
Competitive Markets in Private Sector Direct Marketing and Contract Farming Rationalize levy of Market Fee
Salient Features of Scheme
Funding Arrangement
S.No. Components of Scheme Tenth Plan Provision (Rs. In crores)
1. Capital Investment Subsidy on 175.00Infrastructure Project
2. Strengthening of Central Laboratories 10.00
3. Awareness/Training, Consultancy and 5.00Evaluation etc.
Total - 190.00
• Involve Women through SHGs
Expectations from Participants Treat marketing as an integral and
critical link Awareness creation & Publicity Identify viable projects Capacity Building of all players NIAM, NABCONS can assist in Capacity
building, Project Preparation Assistance of Trained Project preparation
Experts
Thank You
