INTRODUCTION Market led agriculture is the market ward orientation of agriculture through extension includes agriculture & economics is the perfect blend for reaching at the door steps of farming community with the help of appropriate technology. During last 50 years emphasis was given on PRODUCTION-LED EXTENSION (PLE). India become self reliant on food production. But the farmers at individual level are not realizing remunerative prices for their produce. They prone to sell their produce “AS IS WHERE”. Farmers need to transform themselves from producers to producers cum sellers.Source: Sheela et al, (2008)
EVOLUTION OF CONCEPT OF M. L. A.Legitimized -led agriculture : Focussed mainly on rural development Some of the attempts include, Sevagram attempt – Mahatma Gandhiji – 1920. Shriniketan - Rabindranath Tagore – 1921. Marthandam project - Spencer Hatch – 1921. Gurgaon attempt – F. L. Bryne – 1927. Etawah pilot project - Albert Mayor – 1946.
CONT…State -led agriculture :Central and State governments took responsibility. Grow more food campaign -1947. Intensive Agriculture Development Programme -1965. Intensive Agriculture Area Programme -1965. High Yielding Varieties Programme -1967. Drought Prone Area Programme - 1971. Agriculture Technology Management Agency - 2000.
CONT…Market-led agriculture : Started in kerala in the year 1993, as an experiment by combining SHGs and market oriented production. The GOI in collaboration with MANAGE Hyderabad as successfully pilot tested MLA with ATMA in 7 states and 28 districts. Some of the developments are, AEZ, FIGS, Collective marketing, AGMARKNET, Rythu Bazaars (Rythara Santhe), RKVY 6
OBJECTIVES OF M. L. A. To conversion of Agriculture sector into profit oriented business. To strengthening R-E-F linkages – between various departments at various levels To strengthening market linkages to farmers – IT application in Agricultural marketing. To wider use of electronic mass media for Agricultural Extension.Source : GOI, (2007)
NEED FOR MARKET LED AGRICULTUREConversion of P-L-A into M-L-A.Expansion of Market - more of agribusiness and trade.Changing consumers preference-move towards HVCs.Revolution in Information Communication Technology (ICT).New trade opportunities within and outside the country.Introduction of export oriented product.Modernization of wholesale markets with new Agricultural policy.
ROLE OF EXTENSION PERSONS IN LIGHT OF MLA Doing SWOT analysis. Organization of Farmer Interest Groups (FIGs). Enhancing the communication skills of farmers. Establishing market linkages between farmers, markets and processors. Helping in production and marketing plan. Educating farmers about direct marketing. Capacity building of FIGs.Source: Reddy and Jaya, (2002)
REASONS FOR NON USAGE OF INTERNET Among rural users in India 90% 84% 80% 70% 60% 50% 38% 40% 31% 31% 28% 28% 25% 30% 22% 20% 10% 10% 0%Source : Internet and Mobile Association of India (IAMAI)
INSTITUTIONS FOR MLASTATE AGRICULTURAL MANAGEMENT & EXTENSION TRAINING INSTITUTE SAMETI, JHARKHAND A State level Training Institute of Jharkhand
CONT…ICAR (Indian Council of Agriculture Research).NARSs (National Agriculture Research Systems ).KVK (Krishi Vigyan Kendra).NHB (National Horticulture Board)SAMB (State Agriculture Marketing Boards ).APEDA (Agri. & Processed food product Export Development Authority)
Objectives. To strengthen Research – Extension – Farmer linkages To increase the quality and type of technologies being disseminated. To develop new partnerships with the private institutions including NGOs.Salient Features. Creating Farmer Advisory Committee to improve feed back. Using NGOs to organize farmers. Increased use of Information Technology (AGMARKNET, WWW)
ISSUES OF M.L.A. Quality standards. Marketing infrastructure building. Bridging the information gap. Direct marketing. Specialized markets. Involving corporates.Source: GOI, (2007)
DIFF. BETWEEN ISSUES OF S.L.A. & M.L.A. based on the pro-market explanations ISSUES STATE-LED MARKET-LED Supply-driven; Demand-driven; self- Beneficiaries beneficiaries state selected selected Protracted; politically Quick; politically &Pace and nature & legally contentious legally noncontentious Land prices Higher Lower Privatized– Statist-centralized;Implementation decentralized; transparency = low method transparency = high degree degree
ISSUES STATE-LED MARKET-LED Credit and Low credit supply & Increased credit and investments low investments investments Exit options None AmpleCost of reform High Low Farm development Farm development Programme plans after land plans before pace of sequence redistribution redistribution Protracted, uncertain Quick, certain, andDevelopment and anaemic postland dynamic post-land transfer development transfer development
POLICIES INITIATIVES The National Agriculture Policy had highlighted the need for increase in the private sector participation in farming by leasing private land for agri-business & contract farming to private companies. The government proposed to set up 20 Agri-Export zones in different state that would integrate the complete process from production to export stage & contract farming is being encouraged to rope in local farmers to join these export zones as members to pool in their produce.Source : Ramasamy et al, (2008)
PHASES IN AGRI. POLICY & DEVELOPMENTGOVT. ACTION STATUS OF AGRI. Extensive, low Phase 1. Roads/ Irrigation Systems/ productivity agriculture Establishing Research/ Extension/ the basics (Land Reforms) Profitable intensive technology. Wider uptake inhibited by lack of Phase 2. Reliable local seasonal inputs, finance & output Kick starting finance, input & output markets markets markets Effective farmer input demand & surplus prod. Phase 3. Withdrawal Effective private sector Larger volumes of (non-agri.) markets finance & input demand & produce supplySource : Dorward, (2004)
NATIONAL AGRICULTURAL POLICYFocus areas of policy document. Sustainable Agriculture. Food and Nutritional Security. Generation and Transfer of Technology. Input Management. Incentives for Agriculture. Investments in Agriculture. Institutional Structure. Risk Management. Management Reforms. Follow up Actions. Cooperative Sector Reforms.Source: GOI, (2000)
FUTURE POLICY DIRECTIONS Completion of market reforms. (Min. of agriculture & state govt.) Promotion of supply chain infrastructure. (Various ministries) Promotion of grading, standardization and quality certification of farm produce. (Min. of agriculture) Expansion of food processing facilities. (Min of FPI) Ensure farmer’s linkage with future market with price discovery and price risk management. (Min. of CA. F. & PD)
MLA WORKS WITH DIFF. FARMING SYSTEMS Precision farming. Contract farming. Corporate farming. Cooperative farming. Integrated farming.
PRECISION FARMING An application of technologies and principles to manage spatial and temporal viability associated with all aspects of agriculture production. (Pierce and nowak, 1999)Objectives. To prepare the farmers for market led Horticulture/ Agriculture. To empower the Farmers and Farmers’ Forum. To promote Hi tech Agri. /Horticulture inbuilt with precision farming elements. To be the model hi tech production system to maximize the productivity.
MEASURABLE OUT PUTS OF P.F. Enhancing the Productivity of crops by 50-60%. 95 percent marketable produce . Water economy 30 to 40 %. Electricity economy 50 %. Less labor dependence. 25% more weight per unit volume for the produce. Empowerment of farmers ( Technical, Economical and social empowerment).Source : Ajjan et al, (2008)
PROFITABILITY OF P.F.No Crop Particulars Cost of Gross Marketing Net % cultivation income cost (Rs) return increase (Rs./ha) (Rs./ha) (Rs) in net return 1 Cucumber Project farmers 51,579 1,20,000 12,000 56,421 221 Other farmers 49,960 75,000 7,500 17,540 2 Cabbage Project farmers 64,545 1,57,500 - 92,955 136 Other farmers 73,275 1,12,500 - 39,225 3 Chilli Project farmers 1,75,500 2,10,000 29,000 92,500 111 Other farmers 1,06,250 1,50,000 22,000 43,750 4 Potato Project farmers 84,100 2,10,000 5000 1,25,000 66 Other farmers 67,000 1,43,000 5000 76,000 5 Tomato Project farmers 2,58,280 95,971 13,068 1,49,241 62 Other farmers 2,00,304 96,430 11,824 92,051Source : Ajjan et al, (2008)
PRECISION FARMING SUCCESS STORIESSnake guard’s height, 10 feet Brinjal: 500MT/ha, all India record CarrotSugar cane 110 MT / acre (22 MT against 12 MT /ha)
Turmeric 3000 kg dry Vs 4500 kg dry. Banana double density. (6000 Plants/ha)Workshop on precision vegetables. Service agency.
CONTRACT FARMINGForward trade agreement between the producer and sponsor (buyer)who may be processer or supplier / exporter.Major States Maharashtra, A.P., Karnataka, Punjab, Orissa, Tamil Nadu, Madhya Pradesh etc.Major Crops Cotton, Soybean, Potato, Sugarcane, Basmati Rice, Chilli, Spices, Medical Plants, Fruits and Vegetables, Flowers, Poultry etc.Major Sponsoring Agencies Mahindra Shubhlabh, PepsiCo, United Breweries, Dabur, Cadbury, Godrej, Himalaya Health Care, ITC Agro-Tech etc.
COMPARATIVE STUDY OF COST & RETURN OF COTTEN in CF & NCF (Rs per acre) No Particulars CF NCF % Diff. to CF over NCF 1 Preparatory cultivation. 1430 1290 10.58 2 Seeds & sowing. 196 374 -47.59 3 Manures. 1702 1490 14.23 4 Fertilizers. 2013 1499 34.32 5 Inter culture operations. 2325 2150 8.14 6 Plant protection. 4873 5595 -12.91 7 Picking cost. 1930 1755 9.97 8 Post harvest operations. 0 1800 -100 9 Total cost. 14469 15954 -9.31 10 Gross return. 32020 29705 7.79 11 Net return. 17551 13751 27.63Source : Senthilnathan, (2008)
ADVANTAGES OF CONTRACT FARMING WASTAGE ACROSS SUPPLY CHAINTo the Farmers… Assured market price. Financial support in kind. Assured quality of seed and pesticides. Better price for producer. Elimination of middlemen. Remunerative returns and timely payment.To the Buyers… Assured required supply. Assured required quality. Protection from fluctuation in market price. Buyer can plan on long term basis.
INTEGRATED FARMING Productivity, Economics and Employment Generation of Wetland Integrated Farming System.Farming Productivity Production Gross Net BCR Per day Employmentsystems (kg/ha) cost (Rs/ha) return return return generation (Rs) (Rs) (Rs) (man days/ ha/yr)Cropping 12995 27822 64975 37153 2.43 178 369 alone Crop + 29609 48303 146035 97731 3.02 400 515 Fish + Poultry Crop + 29173 47090 145868 98778 3.06 400 515 Fish + Pigeon Crop + 37679 55549 186667 131118 3.36 511 576 Fish + GoatSource : Natarajan and Sudhalakshmi, (2008)
AGRICULTURE SUPPLY CHAININDIA Trader Wholesaler Retailer Consumer Commission Consolidator agent Farmer High wastage and low margins ConsumerDEVELOPED COUNTRIES Retailer Wholesaler Farmer High investments – Low wastage - better margins
WASTAGE ACROSS SUPPLY CHAIN Producer Field Losses Developing (e.g. Pest, Diseases, Rodents etc) Countries – Pre-Processing Relatively (e.g. inefficient harvesting, drying, milling) high losses in the initial Transport parts of the (e.g. spillage, leakage) value chain Storage (e.g. technical deficiencies) Rich Processing & Packaging Countries (e.g. excessive peeling, washing) – High losses at a Marketing later (e.g. spoilage, rotting in stores) stage inConsumer Wastage by Consumer the value (e.g. overeating, food wastage) chain Field Source :MOFPI (2008-2009) Fork
STAGES IN A COMMODITY MARKETING SYSTEM STAGES EXAMPALS • Commodity buyers specializing in specific 1:Assembly agricultural products, such commodities as grain, cattle, beef, oil palm, cotton, poultry and eggs, milk • Independent truckers, trucking 2: Transportation companies, railroads, airlines etc. • Grain elevators, public refrigerated 3: Storage warehouses, controlled atmosphere warehouses, heated warehouses, freezer warehousesSource : GOI, 2001 ( Draft )
STAGES EXAMPALS4: Grading and • Commodity merchants or government grading Classification officials • Food and fiber processing plants such as flour mills,5:Processing oil mills, rice mills, cotton mills, wool mills, and fruit and vegetable canning or freezing plants • Makers of tin cans, cardboard boxes, firm bags, and6:Packing bottles for food packaging or fiber products • Independent wholesalers marketing products for7:Distribution and various processing plants to retailers (chain retail retailing stores sometimes have their own separate warehouse distribution centers)
STAGES IN PROMOTING MARKETING LED Review stage. Implementation. Decision making & agreeing. The marketing system. Determining what market wants. Audit of local resources.Source: Sheela et al, (2008)
PARADIGM SHIFT FROM P L A TO M L A Aspects Production-Led Market-Led Agriculture Agriculture• Purpose or • Transfer of production • Enabling farmers to get objective. technologies. optimum returns out of the enterprise.Expected end Delivery of messages. High returns. results. Adoption of package of practices by most of the farmers.Focus. Production / yields Whole process as an ”Seed to seed” enterprise /High Returns ”Rupee to Rupee”Source: Reddy and Jaya, (2002)
Production-Led Market-Led Aspects Agriculture AgricultureExtensionists’ Messages, Training / Joint analysis of the issuesinteractions Motivating Varied choices for adoption Recommendations . ConsultancyExtensionists’ Limited to delivery mode Establishment of marketingrole and feedback to research and agroproccessing linkages system between farmer groups markets and processorsMaintenance of Very important as agriculture Not much importance as theRecords focus was on production viewed as an enterprise to understand the cost benefit ratio and the profits generated
CHALLENGES TO MARKET LED EXTENTION Gigantic size of extension system. Information technology. Market intelligence. Extension cadre development. Reorganization of extension system.Source: Reddy and Jaya, (2002)
CHALLENGES IN RURAL MARKETING SYSTEM Availability. Affordability. Acceptability. Understanding the rural consumer. Physical distribution. Communication barriers. Unauthentic arrival of products.Source: Balaji et al, (2008)
TYPICAL QUESTIONS IN FARMER’S MIND Market Led trying to change it
CASE STUDY Market-led Extension, an Experience with Rubber board in India The companies were importing rubber from other countries due to high quality and low price. Local producers were in trouble . Factories was operating at low capacity utilization Capacity was 40 tonnes/day Were operating at 10 tonnes/day. To tackle this situation,,,,,,,,,,,,,, Established Rubber Producer Societies (RPS). Linking gross root level organization like SHGs to processing factories. Trained the producers on producing high quality rubber. Created infrastructure facility. 44Source: Kumar, (2004)
Result....................Result.................... Productivity increased up to 40% . 70% of rubber is processing now . 20-30% increase in farmer income. Farmers realizing 90% of terminal market price. 45
CASE STUDYMarket-led partnership - FIGs and Chitoor Poultry Association. Groundnut is the main crop in Chitoor. ATMA made diversification of the farmers into maize cultivation. Poultry association and FIGs were linked with buyback arrangements. ATMA conducted 22 awareness camps and 6 exposure visits to A.P. Poultry association provided 2 MT of poultry manure to networked farmers free of cost.Result................ Crop diversification. Area expanded to 1150 hectares from 60 hectares. The average income from maize was raised to 20000 rupees. 46Source: Charyulu, (2007)
CONCLUSION The focus of the market led functionaries need to be extended beyond production. Farmers should be sensitized on various aspects on quality, consumer’s preference, market intelligence, processing and value addition and other marketing information. With globalization of the market, farmers need to transform themselves from producers-sellers in the domestic market to producers cum sellers in a wider market sense to best realize the high returns for the produce, minimize the production costs, and improve the product value and marketability.And at last………..