Market led extension

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Market led extension

  1. 1. Agricultural MarketingReforms & Marketing Infrastructure RABI CONFERENCE-2005
  2. 2. 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
  3. 3. PRICE SPREAD100% 18 14 1690% 23 2380% 20 17 1970% Marketing60% 35 36 Margins50% Marketing40% 65 66 65 Cost30% 42 41 Farmers20% Share10% 0% Rice Wheat Groundnut Apple Onion
  4. 4. 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
  5. 5. Domestic Markets Scenarioo Regulated Markets.o 7161 of 7310 Wholesale Markets Covered Under Regulation.o Of 27,294 Rural Markets, 15% Under Regulation
  6. 6. Domestic Markets Scenarioo Regulated Markets Lack Need Based Infrastructure.o Development Confined to Wholesale Markets. Rural Markets Remain Out of Development Ambito Current Mandi System Has Multiple Intermediaries and High Value Losso APMC Regulation Prevents Companies From Directly Sourcing From Farmers
  7. 7. Domestic Markets Scenarioo Fragmented Industry, with no Large Organized Playerso High Wastage between the Farm and the Retailer
  8. 8. Present Scenario in Value Chaino Producer’s Share in Consumer’s Retail Price Mere 40% to 60% depending on the commodityo Only 25% of Produced Food-grains Utilise Scientific Storageo Less Than 2% of Fruits and Vegetables Production Is Processedo Post-harvest Losses estimate 10% of Food Grain and 25% of Fruits and Vegetables Production
  9. 9. 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
  10. 10. 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
  11. 11. Investment Requirement (Rs. in crores) Items Physical X Plan XI Plan Total (Nos)Wholesale markets 3213 2410 4016 6426Modernization of 7293 2260 3766 6026marketsRural Periodic 27294 1024 1706 2730MarketsGrading Centers 5786 400 750 1150Modernizing Labs 100 10 10 20Agribusiness Centres 1500 50 100 150Warehousing (lakhTonne) 518 5965 6200 1216 5
  12. 12. 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
  13. 13. Road Map of Reforms Create enabling Legal and Policy environment  Private / Cooperative Markets  Direct Marketing and  Contract Farming Programs  Grading/Standardisation/Quality
  14. 14. 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
  15. 15. 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
  16. 16. Leaders In Reforms Kerala, Tamil Nadu Madhya Pradesh Andhra Pradesh Punjab Himachal Pradesh Sikkim Manipur Nagaland Andaman & Nicobar
  17. 17. Followers Many States Enabled some components Require all Components
  18. 18. Scheme For Development /Strengthening Of AgriculturalMarketing Infrastructure,Grading And Standardization
  19. 19. Objectives of the Schemeo To Induce Private and Cooperative Sector Investments in Market Infrastructure Development Projectso To Strengthen Existing Agricultural Markets, wholesale and rural periodic, to Enhance Efficiencyo To Promote Grading, Standardization and Quality Certification of Agricultural Produce at Farm/ Market Level
  20. 20. Coverage of the Scheme Agriculture/Horticulture Fisheries Meat & Poultry Minor Forest Produce Dairy Medicinal plants Apiculture
  21. 21. 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
  22. 22. Functional Infrastructure Assembling  Combine harvesters  Cleaning  Assembling yards  Collection centers  Pre-cooling Chambers Grading  Mechanical graders  Color sorters Standardisation
  23. 23. 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
  24. 24. 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
  25. 25. Functional Infrastructure Value addition  Decortication of Groundnut  Waxing of Kinnows  Curing of Honey
  26. 26. Market user common facilitieso Market yardso Platforms for loading/ assembling and auctioning of the produce etco Modern auction Systemso Weighing and Mechanical Equipment
  27. 27. Shortening the Value Chaino Infrastructure for Direct marketing from producers to consumers/ processing units/ bulk buyers etco Infrastructure for supporting Contract farming arrangements between processing/ trading units and farm producerso Infrastructure for E-Trading, market extension and market oriented production planning.
  28. 28. 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
  29. 29. Salient Features of Schemeo 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
  30. 30. Salient Features of SchemePersons 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
  31. 31. Funding ArrangementS.No. Components of Scheme Tenth Plan Provision (Rs. In crores)1. Capital Investment Subsidy on 175.00 Infrastructure Project2. Strengthening of Central Laboratories 10.003. Awareness/Training, Consultancy and 5.00 Evaluation etc. Total - 190.00
  32. 32. • Involve Women through SHGs
  33. 33. 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
  34. 34. Further Details & Assistance www.agmarknet.nic.in reddywr@nic.in 011 23382416
  35. 35. Thank You

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