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SEMINAR
                 ON

MARKET LED AGRICULTURE:-
  INSTITUTIONS, ISSUES & POLICIES

       SPEAKER – AMOL JAMALE
        REG. NO. - J4-000905-2011
                  JAU.
CONTENT

1     INTRODUCTION

2   EVOLUTION CONCEPT

3      DIMENTIONS

4      INSTITUTIONS

5         ISSUES

6        POLICIES

7      CASE STUDIES

8      CONCLUSION
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 AGRICULTURE


Conversion 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)
DIMENSIONS OF M. L. A.



           A



E                        B

        DIMENSIONS



    D                C
INDIAN AGRICULTURAL WEB SITES

      www.agri.mah.nic.in

      www.agrinto.com

      www.ciks.org/agri.html

      www.khetiwadi.com

      www.kisan.net

      www.krishiworld.com

      www.nabard.org

      www.nic.in/agrico

      www.pravara.com

      www.ycmou.com/agri
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 MLA




STATE 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                   Ample


Cost of reform           High                   Low

                  Farm development        Farm development
 Programme
                   plans after land      plans before pace of
  sequence
                    redistribution          redistribution
                 Protracted, uncertain    Quick, certain, and
Development      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 & DEVELOPMENT


GOVT. 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 supply
Source : Dorward, (2004)
NATIONAL AGRICULTURAL POLICY

Focus 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     92,051

Source : Ajjan et al, (2008)
PRECISION FARMING SUCCESS
                    STORIES




Snake guard’s height, 10 feet          Brinjal: 500MT/ha, all India record




                                                                     Carrot

Sugar 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 FARMING


Forward 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          27.63

Source : Senthilnathan, (2008)
ADVANTAGES OF CONTRACT FARMING
       WASTAGE ACROSS SUPPLY CHAIN


To 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   Employment
systems      (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 +
  Goat

Source : Natarajan and Sudhalakshmi, (2008)
AGRICULTURE SUPPLY CHAIN



INDIA                                  Trader    Wholesaler   Retailer
                                                                         Consumer
                          Commission
          Consolidator       agent
 Farmer

                                                                High wastage and low
                                                                      margins


                                                                 Consumer
DEVELOPED 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 in
Consumer




                                                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 warehouses


Source : GOI, 2001 ( Draft )
STAGES                            EXAMPALS


4: 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, and
6:Packing              bottles for food packaging or fiber products

                     • Independent wholesalers marketing products for
7: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                   Agriculture

Extensionists’   Messages, Training /         Joint analysis of the issues
interactions
                 Motivating                   Varied choices for adoption
                 Recommendations .            Consultancy


Extensionists’   Limited to delivery mode     Establishment of marketing
role             and feedback to research     and agroproccessing linkages
                 system                       between farmer groups
                                              markets and processors

Maintenance of                                Very important as agriculture
                 Not much importance as the
Records           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
WE WANT SUPPORT

           But not like this…..
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.

                                                                                 44
Source: 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 STUDY

Market-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.
                                                                              46
Source: 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………..
For listening me…….




                48
MARKET LED AGRICULTURE

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MARKET LED AGRICULTURE

  • 1. SEMINAR ON MARKET LED AGRICULTURE:- INSTITUTIONS, ISSUES & POLICIES SPEAKER – AMOL JAMALE REG. NO. - J4-000905-2011 JAU.
  • 2. CONTENT 1 INTRODUCTION 2 EVOLUTION CONCEPT 3 DIMENTIONS 4 INSTITUTIONS 5 ISSUES 6 POLICIES 7 CASE STUDIES 8 CONCLUSION
  • 3. 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)
  • 4. 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.
  • 5. 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.
  • 6. 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
  • 7. 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)
  • 8. NEED FOR MARKET LED AGRICULTURE Conversion 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.
  • 9. 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)
  • 10. DIMENSIONS OF M. L. A. A E B DIMENSIONS D C
  • 11. INDIAN AGRICULTURAL WEB SITES  www.agri.mah.nic.in  www.agrinto.com  www.ciks.org/agri.html  www.khetiwadi.com  www.kisan.net  www.krishiworld.com  www.nabard.org  www.nic.in/agrico  www.pravara.com  www.ycmou.com/agri
  • 12. 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)
  • 13. INSTITUTIONS FOR MLA STATE AGRICULTURAL MANAGEMENT & EXTENSION TRAINING INSTITUTE SAMETI, JHARKHAND A State level Training Institute of Jharkhand
  • 14. 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)
  • 15. 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)
  • 16. ISSUES OF M.L.A. Quality standards. Marketing infrastructure building. Bridging the information gap. Direct marketing. Specialized markets. Involving corporates. Source: GOI, (2007)
  • 17. 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
  • 18. ISSUES STATE-LED MARKET-LED Credit and Low credit supply & Increased credit and investments low investments investments Exit options None Ample Cost of reform High Low Farm development Farm development Programme plans after land plans before pace of sequence redistribution redistribution Protracted, uncertain Quick, certain, and Development and anaemic postland dynamic post-land transfer development transfer development
  • 19. 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)
  • 20. PHASES IN AGRI. POLICY & DEVELOPMENT GOVT. 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 supply Source : Dorward, (2004)
  • 21. NATIONAL AGRICULTURAL POLICY Focus 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)
  • 22. 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)
  • 23. MLA WORKS WITH DIFF. FARMING SYSTEMS  Precision farming.  Contract farming.  Corporate farming.  Cooperative farming.  Integrated farming.
  • 24. 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.
  • 25. 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)
  • 26. 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 92,051 Source : Ajjan et al, (2008)
  • 27. PRECISION FARMING SUCCESS STORIES Snake guard’s height, 10 feet Brinjal: 500MT/ha, all India record Carrot Sugar cane 110 MT / acre (22 MT against 12 MT /ha)
  • 28. Turmeric 3000 kg dry Vs 4500 kg dry. Banana double density. (6000 Plants/ha) Workshop on precision vegetables. Service agency.
  • 29. CONTRACT FARMING Forward 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.
  • 30. 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 27.63 Source : Senthilnathan, (2008)
  • 31. ADVANTAGES OF CONTRACT FARMING WASTAGE ACROSS SUPPLY CHAIN To 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.
  • 32. INTEGRATED FARMING Productivity, Economics and Employment Generation of Wetland Integrated Farming System. Farming Productivity Production Gross Net BCR Per day Employment systems (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 + Goat Source : Natarajan and Sudhalakshmi, (2008)
  • 33. AGRICULTURE SUPPLY CHAIN INDIA Trader Wholesaler Retailer Consumer Commission Consolidator agent Farmer High wastage and low margins Consumer DEVELOPED COUNTRIES Retailer Wholesaler Farmer High investments – Low wastage - better margins
  • 34. 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 in Consumer Wastage by Consumer the value (e.g. overeating, food wastage) chain Field Source :MOFPI (2008-2009) Fork
  • 35. 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 warehouses Source : GOI, 2001 ( Draft )
  • 36. STAGES EXAMPALS 4: 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, and 6:Packing bottles for food packaging or fiber products • Independent wholesalers marketing products for 7:Distribution and various processing plants to retailers (chain retail retailing stores sometimes have their own separate warehouse distribution centers)
  • 37. 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)
  • 38. 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)
  • 39. Production-Led Market-Led Aspects Agriculture Agriculture Extensionists’ Messages, Training / Joint analysis of the issues interactions Motivating Varied choices for adoption Recommendations . Consultancy Extensionists’ Limited to delivery mode Establishment of marketing role and feedback to research and agroproccessing linkages system between farmer groups markets and processors Maintenance of Very important as agriculture Not much importance as the Records focus was on production viewed as an enterprise to understand the cost benefit ratio and the profits generated
  • 40. 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)
  • 41. 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)
  • 42. TYPICAL QUESTIONS IN FARMER’S MIND Market Led trying to change it
  • 43. WE WANT SUPPORT But not like this…..
  • 44. 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. 44 Source: Kumar, (2004)
  • 45. 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
  • 46. CASE STUDY Market-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. 46 Source: Charyulu, (2007)
  • 47. 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………..