market-led extension to enhance producer share


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this is my M.Sc seminar topic, department of agricultural extension, UAS, bangalore

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  • Business approach where customers' needs and wants are identified through market research before designing or offering a good or service
  • Financing: In almost any production system there are inevitable lags between investing in thenecessary raw materials (e.g. machinery, seeds, fertilizers, packaging, flavorings, stocks etc.)and receiving payment for the sale of produce. During these lag periods some individual orinstitution must finance the investment. The question of where the funding of the investment is tocome from, at all points between production and consumption, is one that marketing mustaddress.Grading : It is important to have a grading system, which accurately describes products in auniform and meaningful manner. Grades and standards contribute to operational and pricingefficiency by providing buyers and sellers with a system of communicating price and productinformation. By definition, commodities are indistinguishable from one another. However, thereare differences between grades and this has to be communicated to the market. By the samemeasure, buyers require a mechanism to signal which grades they are willing to purchase andat what premium or discount. Prices vary among the grades depending upon the relative supplyof and demand for each grade. Since the value of a commodity is directly by its grade, disputescan and do arise.Standardization: is concerned with the establishment and maintenance of uniform measurementsof produce quality and /or quantity. This function simplifies buying and selling as well as reducingmarketing costs by enabling buyers to specify precisely what they want and suppliers tocommunicate what they are able and willing to supply with respect to both quantity and qualityof product. In the absence of standard weights and measures trade either becomes moreexpensive to conduct or impossible altogetherProcessing: Most agriculture produce is not in a form suitable for direct delivery to the consumerwhen it is first harvested. Rather it needs to be changed in some way before it can be used. Ofcourse, processing is not the only way of adding value to a product. Storing products until suchtime as they are needed adds utility and therefore adds value. Similarly, transporting commoditiesto purchasing points convenient to the consumer adds value. In short, any action, which increasesthe utility of the good or service to prospective buyers, also adds value to that product or service.
  • Information technology should be able to provide answers to questions like what and how muchto produce, when to produce, in what form to sell, at what price to sell, when to sell and whereto sell. This kind of information to the farmers with ‘press a button’ on the computer on acontinuous updated basis. Then and only then, the much talked about IT revolution would bebeneficial to farmers.
  • No organization can sit still and expect things to be the same month after month, year after year.At some point, something will happen to change your assumptions. And almost every decision (especiallya strategic decision) is based on certain assumptions. Over time, these assumptions fall apart and if youfail to adjust with a continuous flow of new intelligence, then you will be forced to react in a way thatmakes it difficult to compete. Therefore, Market Intelligence can help test and validate your assumptions.Competitive intelligence also fills in gaps, covering areas that you failed to consider in your assumptions.And ofcourse, competitive intelligence can yield some basic benefits
  • Mass Media Support to Agricultural ExtensionOver the last few years mass media has seen a phenomenal growth in thecountry both in terms of reach and advance in technology. This medium has not beenexploited to its full potential for the purpose of agricultural extension. A concerted andwell-coordinated effort now needs to be made to use the electronic media in theExtension strategy by strengthening infrastructure facility, capacity building of theprogram producers and to increase quality and quantity of agriculture programs. Someof the major constraints perceived are as follows:Major Constraints􀂃 Inadequate capacity building for program producers of Doordarshan and AllIndia Radio.􀂃 Lack of dedicated TV channel for agriculture.􀂃 Lack of convergence and sharing of resources of mass media and ICT attemptsin agriculture by public, private and NGO sectors.􀂃 Absence of orientation in agriculture for program producers of private TVchannels.36􀂃 Lack of orientation in agriculture for professionals of print, ICT and traditionalmedia.􀂃 Lack of digitization of real time information.􀂃 Lack of expertise in content development for agricultural programs.􀂃 Inadequate broadcasting and telecasting facilities to cover large number farmers􀂃 Limited time available for agricultural programsStrategies􀂃 Capacity building for program producers of Doordarshan and All India Radiohave to be strengthened. Expertise in content development may be developedbased on SREPs.􀂃 Increased frequency of telecast of success stories of farmers􀂃 Capacity building program for professionals of private TV channels and printmedia may be organized􀂃 Community radio stations may be established in villages linking KVKs or othersuch institutions
  • Diversification triggered by the adequate market support. It onlyindicates the strong commercial sense of the farmers in marketing.
  • market-led extension to enhance producer share

    1. 1. Welcome TO SECOND SEMINAR 1
    2. 2. SEMINAR TOPIC 2
    3. 3. INTRODUCTION  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” basis. 3
    4. 4.  Globalization of the market demanded for paradigm shift i.e. from production to market led production.  There are different changes took place at global level which stress the need for opting market-led extension in a large scale  Globalization/Economic liberalization  Changed consumer preference  Revolution in ICT  New trade opportunities within and outside the country  Export opportunities 4
    5. 5. To meet these challenges........  Farmers need to transform themselves from mere producers-sellers in the domestic market to producers cum sellers in a wider market. To achieve this, The questions confronting the farmers are What to produce ? When to produce ? How much to produce? When and where to sell ? At what price to sell? In what form to sell? 5
    6. 6. NEED FOR EXTENSION Conversion of P-L-E into M-L-E Orientation of extension system with knowledge and skills related to the market. Minimization of production cost. Introduction of export oriented product. Modernization of wholesale markets or new markets with new Agricultural policy. 6
    7. 7. Need of market led extension in India  90% of effort is Production oriented  Only 10% on Marketing/Post harvest phases  Single intervention that can enhance income by 20- 30%  Farmer share in consumer price is 25-30% source : Ministry of Agriculture, Government of India, 2001 ( Draft )
    8. 8. OBJECTIVES OF SEMINAR • To understand the concept of Market-Led extension 1 • To understand the objectives of Market-Led extension. 2 • To study the evolution of Market-Led extension 3 • To review the case studies related to Market-Led extension. 4 8
    9. 9. Market-led Extension Kaleel, 2007 Market led Extension 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. Market-led Identification of customer needs and wants before offering a service (Text book )Market-Led Extension-Dimensions and Tools 9
    10. 10. Need of crisis in extension 1. Knowledge input crisis 2. Efficacy crisis 3. Credibility crisis 4. Reorganization crisis 10
    11. 11. Superiority of latter over the former ASPECTS PLE MLE 1. Purpose Transfer of Technology Optimum returns out of the Investment 2. Expected results Adoption of POP High returns to investment 3. Famer viewed Producer Agripreneur 4. Focus Seed to Seed Rupee to Rupee 5. Linkages R-E-F R-E-F extended by market linkages 6. Importance of Not important Important maintaining record 11
    12. 12. Dimensions of market-led extension  Marketing mix  Marketing plan  Market oriented production  Market Intelligence  Use of Technology 12
    15. 15. OBJECTIVES OF MARKET LED EXTENSION.  Conversion of Agriculture sector into profit oriented business  Strengthening R-E-F linkages – between various departments at various levels.  Strengthening market linkages to farmers – IT application in Agricultural marketing.  Wider use of electronic mass media for Agricultural Extension. 15
    16. 16. Conversion of Agriculture sector into profit oriented business  Private trade is 80% marketed surplus  Direct marketing “farmer – consumer “ is negligible  Due to lack of proper handling at farm gate lead to 30 % F&V, 7% grains, 10% spices loss before reaching market  Rs 50,000 crores /year lost due to poor marketing chain source : Ministry of Agriculture, Government of India, 2001 ( Draft ) 16
    18. 18. F u n c t i o n o f MLE for converting Agriculture sector into profit oriented business  Market intelligence  Financing  Facilitating Functions Grading Standardization Processing Storage of farm produce 18
    19. 19. Market intelligence The process of collecting, interpreting, and disseminating information relevant to marketing decisions is known as market intelligence Why we need MI in agriculture  Reduce the level of risk in decision-making  Seller finds out what the customer needs and wants  What products are right for the market  What will be the price 19
    20. 20. Need of IT application in Extension  Over 50% of farmers do not have access to extension information.  44% have some access. 22% has access through media (Radio 13% and TV 9%).  Lack of information hinders transfer of technology.  Only 40% of the Indian farmers are reached by extension service providers. Source: National Sample Survey Organization (NSSO) , 2005/7 20
    21. 21. Sources of marketing information  Notice boards of APMCs  News paper  Magazine  Periodicals  Special bulletins  Post  Radio  Television  Telephone  Telegram  Fax  Email  Website 21
    22. 22. Websites for market information 1. Agrisurf Market 2. NETVET informatio n 3. Agriwatch 4. Commodity India 5. Agfind 6. Agmarknet 7. Hortiindia 8. APEDA 9. NCDEX 10. e- CHOUPAL 11. Commodity Board 22
    23. 23. Required information to extension system and farmers Suitability of land to various crops/enterprises Crops in demand in near future Market prices of crops Availability of inputs Credit facilities Desired qualities of the products by consumers Market price differences Production technologies WTO regulations 23
    24. 24. Role of Electronic mass media in MLE  Capacity building through programs  Telecast of success stories of farmers  Capacity building program for professionals of private TV channels and print media organize  Community radio stations in villages linking KVKs 24
    25. 25. Role of extension personnel in light of MLE 1. Doing SWOT analysis. 2. Organization of Farmer Interest Group(FIG). 3. Enhancing the Capabilities of local established groups. 4. Enhancing the communication skills of farmers. 5. Establishing market linkages between farmers groups, markets and processors. 25
    26. 26. Role of extension personnel in light of MLE 6. Helping in production and marketing plan. 7. Educating farmers to establish agriculture as enterprise 8. Educating farmers about direct marketing 9. Capacity building of FIGs 10. Expose the farmers to acquire complete market intelligence. 26
    28. 28. EVOLUTION OF CONCEPT OF MARKET LED EXTENSION The transition from Legiitimizer-led extension to Market-Led extension is quiet eventful in the country Legitimiser–led extension State-led extension Farmer/Group-Led extension Market-led extension 28
    29. 29. Legitimiser–led extension (before independence) Focussed mainly on rural development Some of the attempts include  Scheme of Rural reconstruction- Daniel Hamilton - 1903  Sevagram attempt – Mahatma Gandhiji - 1920  Shriniketan - Rabindranath Tagore - 1921  Marthandam project - Spencer Hatch - 1921  Etawah pilot project - Albert Mayor - 29
    30. 30. State-led extension (after independence) Central and State governments took responsibility  Grow more food campaign................................... 1947  Community Development Programme.............. 1952  National Extension Service................................... 1953  Intensive Agriculture Development Programme....1965  Intensive Agriculture Area Programme............... 1965  High Yielding Varieties Programme....................... 1967  Drought Prone Area Programme......................... 1971  Broad based extension programme...................... 1991  Agriculture Technology Management Agency..... 2000 30
    31. 31. Farmer /Group-led extension Reasons for emergence of location specific Group-led extension  Disenchantment with government officials dominance  Executive led institutional set up  Unsustainability of public fund  Executive led extension programme Examples.  Cooperative farming  Self Help Group  Mahila Mandal  Farmer Field Schools 31
    32. 32. Market-led extension  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 MLE with ATMA in 7 states and 28 districts Some of the developments are  FIACs  AEZ,  FIGS  Collective marketing  AGMARKNET  Rythu Bazaars (Rythara Santhe)  RKVY 32
    33. 33. 33
    34. 34. Case study I. 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 KRISHNA KUMAR, A.K., 2004, Market-Led Extension-An experience with Rubber Board, Paper Presented in work shop on Market-Led extension, MANAGE, Hyderabad, 1-21 December.2004 34
    35. 35. 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. 35
    36. 36. Result....................  Productivity increased Upto 40%  70% of rubber is processing now  20-30% increase in farmer income  Farmers realizing 90% of terminal market price 36
    37. 37. Case study 2. Market-led extension strategies for promoting vegetable cultivation in Uttarkhand PROBLEM  Low price for produce  Marketing was uncertain STRATEGY  The local government modified the extension strategy.  Provided information regarding marketing.  Trained farmers regarding marketing. SHAILESH KUMAR., AND SHARMA, G., 2007, Market-Led Extension strategies for Promoting Vegetable cultivation in Uttarkhand, Agricultural Extension Review 3(1&2):137-139 37
    38. 38. OUTCOME Area (000 ha), Production(000 mt), Productivity (t/ha) of vegetables 1992- 1993- 1994- 199- 199- 199- 1998- % 93 94 95 96 97 98 99 CHANGE AREA 79.59 84.00 86.50 88.09 88.90 91.03 91.50 60.36 PRODUCTION 687.0 717.6 774.4 790.5 807.8 792.2 840.2 36.12 PRODUCTIVI- -TY 10.82 8.63 8.55 8.95 8.97 9.00 9.19 -15.15 38
    39. 39. Case study 3.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 Karnataka.  Poultry association provided 2 MT of poultry manure to networked farmers free of cost. CHARYULU, A.S., 2007, Private-Public relation in Market-Led extension: Case studies. Academic Publication, National Institute of Agricultural Extension Management, Hyderabad 39
    40. 40. Result................  Crop diversification.  Area expanded to 1150 hectares from 60 hectares.  The average income from maize was raised to 20000 rupees 40
    41. 41. CONCLUSION The focus of the extension 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. This would certainly promote and motivates farming community towards profitable agriculture. 41
    42. 42. The world has changed.. So as We.. Then Why not .. agriculture..?? THANK YOU 42
    43. 43. FIG  A group of small and marginal farmers combined together as a producer group in order to reduce the production cost, better adoption of technology, marketing of the produce Examples  Nasik for Grapes  Nagpur for Mandarins  Kullu for Apple 44
    44. 44. MARKETED SURPLUS Marketed surplus =Marketable Surplus - Household Consumption 45
    45. 45. SWOT of marketing Strengths = Demand of products, High Marketability, Good priced markets Weakness = Low demand products. Less marketability areas, less priced markets. Opportunities = Export opportunities, Appropriate time of selling Threats = imports, Perishability of products Home 46
    46. 46. 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% source : Ministry of Agriculture, Government of India, 2001 ( Draft )
    47. 47.  Efficacy 48