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A STUDY OF INTERMEDIARIES’ INTERVENTION IN AGRICULTURE
    SUPPLY CHAIN AND ITS EFFECT ON FARMERS’ INCOME

                           A Project Report

                             Submitted to




 G. B. PANT UNIVERSITY OF AGRICULTURE AND TECHNOLOGY
                PANTNAGAR-263145, (U. S. NAGAR)
                          Uttrakhand, India


                             Submitted by


                                Prince
                            I.D. No. 31996


IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE
                  AWARD OF THE DEGREE OF
    Master of Business Administration (Food Retail and Supply Chain)

                               May,2011
CERTIFICATE



  We, the undersigned, members of Project Advisory Committee of Ms. Prince,
  I.D.No. 31996, a candidate for the degree of Master of Business
  Administration (Food Retail and Supply chain), agree that the project report
  entitled “A Study of Intermediaries’ Intervention in Agriculture Supply
  chain and its effect on Farmers’ Income” may be submitted in partial
  fulfillment of the requirements of the degree.




                              Advisory Committee



                               (Ashutosh Singh)

                                    Chairman




(Mukesh Pandey)                                    (Nirdesh Kumar Singh)

 Member                                                   Member




                                                                             i
ACKOWLEDGEMENT
I take this opportunity to express my sincere and deepest gratitude to Govind Ballabh

Pant University of Agriculture & Technology and college of Agribusiness Management

for providing me a chance of learning. This project not only helped me to understand

about the Indian agriculture, but widened this vision in field of management too, by

virtue of being associated with an esteemed and professional institute.

This report is the result of contribution made by numerous people too many to mention

individually, therefore I thank all the respondents who have given their valuable time,

views and authentic information for this project. At the very outset, I would like to

thank my advisor Dr.Ashutosh Singh, Associate professor, department of Human

Resource and personal management for providing me all types of support, constant

encouragement and his relentless efforts to motivate me to achieve my goal. His close

supervision and precious input have made me able to refine this project to this extent. I

consider it my privilege to express my deep sense of gratitude to Dr. Mukesh Pandey,

Associate Professor Department of marketing and Mr. Niredesh Kumar Singh,

Assistant professor, for their continuous guidance, motivation and providing valuable

suggestion and critically analyzed my project work.

I am grateful to Dr B.K.Kumbher Dean post graduate studies for providing me the
                    B.K.Kumbher,

necessary research facilities. Also I would like to express my sincere thanks to

Dr.Devendra Kumar Dean, College of Agribusiness Management, Dr.B.k. Sikka

Former Dean, College of Agribusiness Management, Pantnagar for providing a chance

to undertake this present study.

This acknowledgement would be incomplete if I don’t mention a special regard to my

parents, my sister Preety, my batch mates, administrative staff of my college and all

those who motivated me to perform better than the best.

Last but not the least; I thank The ALMIGHTY, for blessings me with enough patience

endurance and strength in accomplishment of the Endeavor.




Pantnagar                                                                    Prince

                                                                                        ii
EXECUTIVE SUMMARY

       Intermediaries in agri-supply chain are very important component with various pros and
cons. Among the several shortcomings that plague this sector is the high intermediary margin as
a result of numerous intermediaries in the agri-supply chain. These intermediaries add-on their
margins to the produce during its transit from farm gates to the final consumer.

       The proposed study was conducted in Rudrapur, Kashipur, Bazpur, Gadarpur and Jaspur
block of district Udham Singh Nagar. The study was conducted in two phases; the initial phase
was survey, information collection regarding farmers and intermediaries while second phase of
study was to analyse the data of survey.

       This study was conducted to identify the intermediaries in agri-supply chain and to
compare the income of farmers who market through commission agents and through Rice/flour
millers. The study also analyses the impact of intermediaries on cash flow of the farmers. During
the study it was found that four types of intermediaries are involved namely commission agent,
rice/flour millers, wholesaler and retailers. A major portion of farmers sell their produce through
commission agents .It was also revealed that the farmers who sold their produce to rice millers
received higher profit as compare to farmers who sell through commission agents. The various
facilities provided by intermediaries include assured prices, advance credit, information about
agricultural input and transportation facilities. As a result of these activities the income of
farmers increase considerably.
       The study suggests that the farmers should sell their produce directly to the rice/flour
millers as it gives them higher profit. Commission agents are necessary evil in agri-marketing.
But, it is expected that as a result of better extension activities and enforcement of APMC act
the role of commission agent is expected to decrease in future.




                                                                                                 iii
TABLE OF CONTENTS



    S.No                                    Title   Page No.
           Acknowledgement                             i

           Executive summary                           ii

           Table of Contents                           iii
           List of Exhibits                            iv

           List of Tables                              iv

1          Introduction                               1-3
           Background                                  1
1.1        Agriculture Marketing in India              1

1.2        Role of Intermediaries                      2

1.3        Problem Statement                           3

1.4        Objectives                                  3

2          Review of Literature                       4-6

3          Research Methodology                       7-10

3.1        Research Design                             7

3.2        Information required                        7

3.3        Data source                                 7

3.4        Area of Study                               8

3.5        Sampling Plan                               8

3.6        Research Instrument                         9

3.7        Duration of Study                           9

3.8        Data Analysis                               10


                                                               iv
4      Result and discussion                                            11-20

4.1    Classification of farmers                                         11

4.2    Intermediaries in agri-Supply chain                               12

4.3    Different links in supply Chain of Wheat and Rice                 12

4.4    Income of Farmer who sell directly                                14
4.5    No. of farmers who are taking credit                              16
4.6    Factor affecting the selection of Commission agents by Farmers    17
4.7    Income of farmer who sell through Intermediaries                  17
4.8    Comparison of Farmer’s Income                                     18
4.9    Factor affecting the selection of Farmers by Intermediaries       18
4.10   Facilities Provided by Intermediaries to the Farmers              19
4.11   Increase the Income of Farmer                                     22
5      Conclusion                                                        23

6      Suggestions                                                       24

       Reference                                                         vi

       Annexure I                                                        vii

       Annexure II                                                       viii

       Vita




                                                                                v
LIST OF EXHIBITS


S.No   Exhibit No.                     Title of Exhibit              Page No.
1      Exhibit 4.1    Classification of farmers                        10

2      Exhibit 4.2    Intermediaries in Agri-supply chain              11

3      Exhibit 4.3    Different links in agri –supply chain            13
4      Exhibit 4.5    No. of farmers who are taking credit             16
6      Exhibit 4.6    Factor affecting the selection of Commission     17
                      agents by Farmers
5      Exhibit 4.8    Comparison of income of farmer                   18

7      Exhibit 4.9    Factor affecting the selection of Farmers by     18
                      Intermediaries
8      Exhibit 4.10   Facilities Provided by Intermediaries to the     20
                      Farmers
9      Exhibit 4.11   Increase the Income of Farmer                    22




                                                                                vi
LIST OF TABLES



S.No   Table No.                   Title of Table       Page No
 1     Table4.1    Variable Cost of Production            14
 2     Table 4.2   Changes in the cash flow of farmer     21




                                                                  vii
1. INTRODUCTION
Background
The marketing as a term is broader than traditional trading and agricultural marketing as a
concept is still evolving in the Indian agrarian society. The National Commission on
Agriculture defined agricultural marketing as a process which starts with a decision to
produce a saleable farm commodity and it involves all aspects of market structure of system,
both functional and institutional, based on technical and economic considerations and
includes pre and post- harvest operations, assembling, grading, storage, transportation and
distribution.

Agricultural marketing also reflect another dimension from supply of produce from rural to
rural and rural to urban and from rural to industrial. In modern world it became challenging
with the latest technologies and involvement of middlemen, commission agents who keep
their margins and move the produce further. As it is well known more the number of
mediatory more will be the costs as each transaction incurs expenses and invites profits.
Ultimately when it comes to the producer the cost of the produce goes up steep. In the entire
process of marketing the producer gets the lowest price and the ultimate consumer pays the
highest as the involvement of more middlemen.

1.1 Agriculture Marketing in India In the case of agricultural marketing in India it is
not exactly the marketing in the literal sense and we can call it as ‘distributive handling’ and
to go further we may call it as ‘distributive handling’ of agricultural produce as there are
number of intermediaries who are involved in marketing the agricultural produce. Marketing
systems are dynamic; they are competitive and involve continuous change and improvement.
Businesses that have lower costs, are more efficient, and can deliver quality products, are
those that prosper. Those that have high costs, fail to adapt to changes in market demand, and
provide poorer quality, are often forced out of business. Marketing has to be customer-
oriented and has to provide the farmer, transporter, trader, processor, etc. with a profit. This
requires those involved in marketing chains to understand buyer requirements, both in terms
of product and business conditions.

Activities include market information development, marketing extension, training in
marketing and infrastructure development. Improvement of marketing systems necessitates a


                                                                                              1
strong private sector backed up by appropriate policy and legislative frameworks and
effective government support services. Such services can include provision of market
infrastructure, supply of market information, and agricultural extension services able to
advise farmers on marketing. Training in marketing at all levels is also needed.


1.2 Role of Intermediaries The number of middlemen or intermediaries is shrinking
dramatically as the structure of the food and agriculture system changes. Major customers are
requiring their producer-suppliers to perform many of the services previously accomplished
by middlemen. This fact may be detrimental to small- to mid-sized producers in maintaining
their access to important customers. Producers attempting to accomplish all of the assembly
and distribution functions otherwise performed by intermediaries will need to bear that cost
themselves. In some cases, producers may be able to perform those functions profitably but in
many cases the actual costs of assembly and distribution are underestimated by producers,
resulting in losses. Some producers may be in a position to accomplish all of the necessary
assembly and distribution functions themselves or as a group. However, for others not in that
position, eliminating “middlemen” may not be as desirable at first glance as producers might
think, unless they can accomplish all of those functions at a lower cost as those individuals or
firms who performed those assembly and distribution activities on their behalf.

Intermediaries are an important link in the supply chain. One should not forget that even if
there are 3 to 4 intermediaries in the existing supply chain, still the chain is very efficient.
Just ignoring them will lead to no fruitful result. Taking out the middle man from the chain
does not guarantee a higher realization of price for the farmers. The Commission agents play
a very important role by providing finance to the farmer. Though there are arguments that the
intermediaries is exploiting the farmer by charging high interest rate and also that the farmer
is forced to sell the produce to the middle man but he provides finance to farmer when it is
required, procures from the farm level, gives extra credit to meet the house hold needs of the
farmer. The farmer knows that he is not getting the best price from the middleman; He is
fully aware where the mandi is even in the mandi he has to sell to commission agent so why
not sell the produce in the village itself without the hassle of additional transportation cost.




                                                                                                   2
1.3 PROBLEM STATEMENT

The traditional agriculture supply chain model that is operational in India results in
significant reduction in farmers’ income. The farmers have the option to sell his produce in
various agriculture agencies. However selling in mandis in most cases is unprofitable due to
two notable reasons – (1) cost issues involved in transporting produce to mandi, and (2)
structural deficiencies rampant at mandis. On an average, the distance between regulated
markets (mandis) and farm field ranges from 7.7 kilometres to 15 kilometres in India. Indian
agriculture being dominated by small and marginal famers, it may not be economically viable
nor commercially feasible for a small farmer to sell their produce directly to consumers. Here
the agri intermediaries play a crucial role, they add values at several stages of the goods
movement in the value chain because of their specialized role which everyone cannot does
and the biggest role they are playing is the aggregation of goods from large number of small
farmers scattered across a vast area but the negative impact of the agri intermediaries in
downgrading the efficiency of the agricultural marketing in India. It won’t be fallacious to
state that intermediaries also have a role in increasing price of several food commodities. So
the proposed study has been undertaken with the following objectives.


1.4 OBJECTIVES

1. To identify different intermediaries who are involved in supply chain of rice and wheat.
2. To compare the revenue of farmers who market through commission agents and through
   Rice/flour millers.
3. To analyse the impact of intermediaries on Income of the farmers.




                                                                                              3
2. REVIEW OF LITERATURE

Patel (2009) in his study found that agriculture intermediaries in form of commission agents
at mandis (government regulated markets) operate at 4-5 percent margins, intermediaries at
wholesale markets get around 30 percent, and retail vendors make around 20 – 40 percent.
Consequently, the price of commodities that range between Rs 5 – 7 per Kg at farm gate
eventually costs in the range of Rs 15 per kg at the consumer. Among the several
shortcomings that plague this sector is the high intermediary margin that results from the
numerous intermediaries in the agri value chain. These intermediaries add-on their margins to
the produce during its transit from farm gates to the final consumer.

Vasisth and Bhardwaj (2009) observed that Farmers have been at the mercy of traders or
intermediaries while selling their produce, who pay less to farmers and in turn sell it at
exorbitant rates and thus getting huge trading margins as the margin between consumer price
and producers’ price gets added due to several levels of intermediaries prevalent in India
mainly due to the market infrastructure. Many farmers lack instant access to the present
market price.

Michael and Jusman(2008) states that          the rationale for emergency of intermediary
institutions in marketing channel has been the focus of research for marketing scholars
review of the work done in this area reveals two broad approaches of this issue. One group of
scholars focus on the ability of intermediary institutions to reduce the cost of the physical
flow of goods and services from producers to users. Another approach adopted by several
researchers has been focus on the role of marketing intermediary in facilitating transmission
of information within the marketing channel between producers and users.

Thorat (2007) analyzed the state level APMC acts, acc. to that the products of the early
1960’s and 1970’s and enacted with the view that the state alone could protect farmers from
exploitation at the hand of traders to overcome this the APMC act were passed, wherein
wholesale trade was conducted under the presence of the responsible government officials
who are designated. The market mandis were administrated by a marketing committee
comprising of representative of farmers traders and other stockholders.

Mohana Rao(2005) in his study formal credit institutions have largely failed to provide
access to farm credit to small and medium-scale landowners, or zamindars. This paper
examines interlocked transactions between traders and landowners in the wheat markets in

                                                                                           4
UP that facilitate the provision of credit by traders. It is concluded that the case examined
provides an example where traders lend to landowners in a segment of the credit market that
approximates competitive behavior, without surplus extraction by traders. Key conditions
resulting in this favorable outcome are the existence of both competition for market share and
information sharing on borrowers between traders. Whether this outcome is also beneficial
for other rural groups who may borrow from landowners, in particular sharecropping tenants,
is independent of market relations between landowners and traders and is not determined
here.

Verma and Patidar (2004) describe in his study that the producers may either send their
produce to commission agents who arrange the sale in market or they may themselves bring
the produce to the commission agent premises for sale. After purchasing from the agents, the
wholesaler and exporters sort the crop, pack and then dispatch to different distributing or
consuming market. In the process of marketing the producer has to incur various marketing
costs. Agriculture marketing is costly with high commission charges, trader’s profit margins,
wastage and malpractices.

Bieri (2002) states that the welfare consequences of price instability critically depend on the
type of market intermediary. Both a producer marketing board and a pure middleman will
stabilize consumer prices; but the latter, unlike the producer marketing board, will find it
advantageous to "manufacture" price instability for producers.

Deepak et al.(1999) worked against the backdrop of viewing marketing intermediaries in
developing countries as parasites, Necessary information was collected from all major
stakeholders such as farmers, collectors and commission agents, and the relative position of
farmers in terms of their gains was analyzed. Marketing margin and farmers’ share of gross
income are also analyzed ‘with’ and ‘without’ the cost of malicious practices by marketing
intermediaries.




Matsuda (1997) in his study addressed that functional structure of agricultural electronic
marketplaces, together with associated pricing mechanisms. The analysis of transaction costs
suggests that electronic commerce with intermediaries provides more efficient trading
environments than electronic marketplace without intermediaries. This indicates that existing
intermediary institutions will remain important for agricultural transactions even after the

                                                                                             5
adoption of electronic market systems. Compared to other industries or markets, agricultural
markets are characterized as competitive markets and pricing is a key factor for efficient
resource allocations.




                                                                                          6
3. RESEARCH METHODOLOGY
Keeping in view the formulated objectives, the project was carried out with the following
research methodology-

3.1 Research Design

The methodology adopted for the completion of study was descriptive and analylitical
research approach. Descriptive research was used for the identification and role of
intermediaries’ in marketing of agriculture produce while, analytical research approach was
used for analysing the impact of intermediaries on farmers’ income.

3.2 Information Required
For completing the study, information required was about background of Udham Singh
Nagar district, data regarding different blocks and villages of district. Data   related to land
holding of farmers, their cropping pattern, their socio-economic status..


3.3 Data Source

Secondary data as well as primary data were used for the information generation. The
inferences were drawn mainly from primary source.

Secondary Data-Secondary data were collected from internet, journals, book research
articles, different mandis and government booklet issued by district agricultural department.

Primary Data-This data was first hand information for the study. This was collected with
the help of survey method using a self structured questionnaire consisting of both open ended
and close ended questions. The questionnaire was used for conducting the personal interview
of farmers and intermediaries.

3.4 Area of Study

The study was conducted in the Udham Singh Nagar district of Uttrakhand within the district
Udham Singh Nagar different areas like Rudrapur, Gadarpur, Bazpur, Kashipur, Jaspur was
taken.




                                                                                              7
Figure 3.1 Map of district Udham Singh Nagar

3.5 Sampling Plan

3.5.1 Universe

The universe of sampling was comprises of farmers, intermediaries government personnel
who are directly or indirectly related with marketing of agriculture produce of district
Udham Singh Nagar.

3.5.2 Sampling Unit- Farmers and intermediaries were the sampling units for the study.
These were selected from two villages of each block.




                                                                                      8
3.5.3 Sample Size-

S.No       Block                                 Farmer                   Intermediaries
1          Rudrapur                              25                       4
2          Gadarpur                              25                       4
3          Bazpur                                25                       4
4          Kashipur                              25                       4
5          Jaspur                                25                       4
           Total                                 100                      20

3.5.4 Sampling Technique-Convenience and simple random sampling employed for the
selection of farmers and intermediaries. Farmers were selected on the basis of their land
holding. In some places judgemental sampling was also used for selecting intermediaries.

3.6 Research Instrument

Questionnaire containing both open and close ended questions was used as main research
instrument. Questionnaire was structured in such a way that it has contained all the questions
which was helpful in getting the objectives of study fulfilled.

3.7 Data Analysis
Data obtained from the survey of samples was analyzed with the help of graphical
representation, tabulation and classification of data and by using statistical tools like 5 point
scale method, bar diagram, pie charts and other related methods. 5 point scale method is used
for analyzing the factors which are affecting the selection of commission agent by the
farmers.

3.8 Duration of Study

The period of study was from 7th of March to 30th April, 2011.




                                                                                               9
3.9 Limitation of Study
  i.   There may be discrepancies in the actual data and the recorded data due to
       misinterpretations and wrong selection of respondents.
 ii.   Topic is vast but availability of information and timeline was short.
iii.   In some cases there were some contradictory answers given by farmers which were
       create confusion regarding intermediaries’.




                                                                                   10
4. RESULT AND DISCUSSION


In accordance with the objective of the study, the data collected from primary and secondary
sources were analyzed and interpreted.


4.1 Classification of Farmers
It is very important to know that the     categories of    the farmers for understanding the
                                                                                         their
socio-economic status. The farmers are classified into three main categories –Marginal
Farmer, small Farmer and Large Farmer.
It is evident from the Exhibit 4.1 that out of total sample, 17 percent are marginal farmers, 50
percent are small farmers and 33 percent belongs to the category of large farmer.




                            Marginal Farmer
                                 17%

                                                          Large Farmer
                                                              33%




                           Small Farmer
                              50%




Exhibit 4.1 Classification of Farmers
      t




                                                                                             11
4.2 Identification of Different Intermediaries involved in Supply Chain of Rice and
                            ent
Wheat
Farmers producing agricultural produce are scattered in remote villages and t produce has
                                                                            this
to reach to the    consumers for its final use and consumption. There are dif
                                                                          different agencies
and functionaries through which this produce passes and reaches to the consumer. A market
channel or channel of distribution is therefore defined as a path traced in the direct or indirect
transfer of title of a product as it moves from a producer to an ultimate consumer or industrial
                                                  producer
user. There are several channels of distribution which
                          annels                            used by farmers according to their
need. Exhibit- 4.2 shows that 60 percent
                         that,                   farmers   sell their produce to the commission
agents, 35 percent    farmers
                          ers     sell to the rice/ flour millers directly       and on 5 percent
                                                                                     only
farmers sell their produce to others (Wholeselor and Retailers).




                                         other
                                          5%

                                                            Rice/Flour millers
                                                                   35%



              Commission agents
                    60%




 Exhibit 4.2 Proportion of Intermediaries in Distribution of sold produce


4.3 Different links in Supply Chain of W
        erent                          Wheat and Rice
The Exhibit 4.3 illustrates that in Supply chain of wheat and rice in Udham Singh Naga
                                                                                  Nagar
district, there is linkage of four kinds of intermediaries that is Commission agents, Rice
millers/ flour millers, wholesaler and retailers These intermediaries are involved for flow of
                                       retailers.
produce from farmer to ultimate consumer.




                                                                                               12
Farmer




 Commission                                                          Others
   agent




                                   Rice millers
                                  /Flour millers




      Export
                                   Wholesaler




                                     Retailer




                                    Consumer


Exhibit 4.3 Different links in Agri-Supply Chain of Rice and Wheat




                                                                              13
4.3.1 Different Types of Marketing Channel for Rice and Wheat

       1. Producer– Miller- Consumer
       2. Producer– Miller- Retailer– Consumer
       3. Producer- Miller- Wholesaler- Retailer- Consumer
       4. Producer– Commission agents - Miller– Retailer– Consumer
       5. Producer– Govt. procurement– Miller– Retailer– Consumer

These above are the different type of marketing channels for rice and wheat supply chain. In
first channel produce is directly sold to the millers and then it reaches to the ultimate
consumers. In second type of marketing Channel produce is sold to the millers and then it is
further sold to the retailers and finally it reaches to the ultimate consumer. In third type of
marketing channel there is involvement of 3 kinds of intermediaries, produce is sold to the
millers, and then it sold to the wholesaler and again sold to the retailers and finally reaches to
the ultimate consumer. In forth kind of marketing channel there is also involvement of three
kind of intermediaries, in this case produce is first purchased by commission agent then they
sell it to millers, then from millers it sold to the retailers and finally from retailers to the
consumer. In fifth kind of marketing channel produce is first procured by the Government
people then produce is sold to the miller and from milers to retailers and from retailers to the
ultimate consumers.




4.4 Income of Farmer

4.4.1 Cost of Production

Cost of production of paddy and wheat is different. There are different kinds of cost
involved in paddy and wheat production. These costs are two type Fixed cost and variable
cost. Cost of Rice production is high because variable cost is high.

Following items are considered for cost of production
Fixed cost (Land Rate) = Rs 8000/acre
Variable cost = cost of ploughing , seeds, Transplanting, Irrigation, Fertilizer, Pesticide,
                Harvesting and Threshing, Transportation

                                                                                               14
Table 4.1 Variable cost of production
S.No    Parameters                              Cost /acre                    Total
                                                Paddy            Wheat
1       Ploughing                               1500             800          2300
2       Seed                                    400              700          1100
3       Transplanting                           1200                          1200
4       Irrigation                              1500             500          2000
5       Fertilizer                              1200             1200         2400
6       Pesticide                               1000             500          1500
7       Harvesting and Threshing                700              900          1600
8       Transportation                          1000             1000         2000
        Total Cost                              7600             4700         Rs.14100


Interest on variable cost = 10.5 percent/year
                         = Interest on variable cost for 3 month period
                         = [(Variable cost* Rate of interest* Time)/100]
                         = [14100*0.105*3/12]
                         = Rs 370/acre


Total cost = Fixed Cost + Variable cost + Interest on variable cost
          = 8000 + 14100 + 370 = Rs.22470 /acre
Total cost of Production is = Rs. 22470/acre


4.4 .2 Value of Total Produce in Market
Total produce from farmers’ field is 32 quintal/acre Paddy and 22 quintal/acre Wheat. Market
price of the produce is for paddy Rs1000/quintal and for wheat Rs1100/quintals. So the total
value of produce is   [{(32*1000) + (22*1100)}] = 56200.
Total revenue in market is = Rs.56200




                                                                                         15
4.4.3 Income of Farmers Who Sell their Produce without Intermediaries
                         ho
       40 percent of farmers          who directly sell their produce to Rice millers/flour millers.
       So the income of these farmers is-
          Income = (Total Value of produce – Cost of production)
                                        (56200 -22470)
                 Income =          Rs. 3373 / acre
                                       33730




4.5 No. of farmers who are Availing Advance Credit Facility
In India number of marginal farmers is more than large farmers and the chunk of these credit
facilities is used by these marginal farmers. The reasons for using these facilities by marginal
farmers is unavailability of sufficient amount of money used for crop production .Credit
facilities providing to the farmers are very important feature of commission agents Farmers
         s                                                                   agents.
are selling their produce through commission agents because they are taking credit from
                r
them. Exhibit 4.5 shows that only 37 percent farmers take credit from the commission age
                                                                                     agents
while 63 percent farmers use their own money for farming.




                                                                  Availing Credit
                                                                        37%


             Not Availing Credit
                   63%




Exhibit 4.5 No. of farmers who avail credit




                                                                                                 16
4.6 Factors Affecting the Selection of Commission Agents by F
                                                            Farmer
There are many factors responsible for the selection of commission agents by the farmers.
Factors affecting the selection of commission agents were devised on 5 point scale. Exhibit
4.6 shows that the two facto which affect the most in the selection of commission agent
                           ors
were amount of advance credit and rate of interest on credit. The other factors were also
                dvance
important like period of credit and behavior of commission agent.

                                                       5
                        5
                      4.5                                                4
                        4
                      3.5            3
     5 point Scale




                        3
                      2.5                                                                   2
                        2
                      1.5
                        1
                      0.5
                        0
                             Period of Credit     Amount of      Rate of inerest on   Behavior of
                                                Advance Credit         credit       Commission agent

                                                            factors

Exhibit 4.6 Factors affecting the selection of commission agent




4.7 Income of Farmers’ Who S their Produce through Intermediaries
                           Sell
Farmers sell their produce to the commission agents because they have taken advance credit
facility from the commission agents Rate of interest on that advance credit is 2 % per month
                             agents.
or 24 % per year. So the income of farmers who sell their produce through commission
agents is


                     Income = (Total cost of produce – Cost of cultivation- interest on investment Capital
                                (56200 –2247 -5304)
                                          470
                     Income = Rs. 28426 / acre



                                                                                                         17
4.8 Comparison of Farmers’ Income Who Market Their Produce without
Intermediaries and Those Who Market Through Intermediaries


After comparison of both the farmers it has been found that there is a difference of Rs 5304 in
the income of farmers. Exhibit 4.8 shows that farmers who sell their produce directly to the
Rice/flour millers have an income of Rs 33730 while the farmers who sell their produce to
the intermediaries have an income of Rs28426.
            35000
                              33730
            34000
            33000
            32000
            31000
   Income




            30000
            29000                                                  28426
            28000
            27000
            26000
            25000
                              Direct                         With Intermediaries

                                                Farmers

Exhibit no- 4.8 Comparison of farmers’ Income




4.9 Factors affecting for selection of farmers by intermediaries
There are many factors responsible for the selection of farmers by commission agents.
Factors affecting the selection of farmers were devised on 5 point scale. Exhibit 4.9 shows
that the two factors which affect the most in the selection of farmers are trust on farmer and
interest on credit. The other factors were also important like quantity of produce and quality
of produce.




                                                                                            18
5
                      5
                     4.5            4
                      4
                     3.5                               3
     5 Point Scale




                      3
                     2.5                                                                   2
                      2
                     1.5
                      1
                     0.5
                      0
                           Interest on Credit Quality of Produce   Trust on Farmer   Quantity of
                                                                                      Produce

                                                            Factors

Exhibit no-4.9 Factors affecting for selections of farmers by intermediarie
                                                              intermediaries




4.10 Facilities provided by intermediaries to the farmers


Commission agents provide many facilities to the farmers. Commission agents are the need
of farmers for selling the product in the market. They are giving credit to the farmers and pay
                                                           giving
assured prices. Exhibit 4.10 has shown that 20 percent farmers get information about
agriculture input, 20 percent of farmers get information about transportation facilities, 60
percent farmers get advance credit facility as well as other information like market
information and 100 percent of farme get information about assured prices. They give them
                               farmers
information related to the different markets, knowledge regarding their agricultural activities
and information of agri-inputs.
                        inputs.




                                                                                                   19
100
                             90
     percentage of farmers

                             80
                             70
                             60
                             50          100
                             40
                             30                           60
                             20                                                                40
                             10                                             20
                              0
                                   Assured Price   Advance Credit   Agriculture input   Transportation
                                                                                           Facilities

                                                               Faclities


Exhibit -4.10 Facilities provided by intermediaries to the farmers




4.10.1 Impact of Intermediaries on Farmers’ Income
Intermediaries support to the farmers by providing them different facilities. They also give
                                         providing
the information related to high yielding varieties which results in better q
                                                                           quality and quantity
of the crop. These activities are very much helpful in the farmers’ cash flow.
                                            helpful


Table 4.2 shows improvement in the cash flow of the farmer. Earlier the yield of farmers’
field was 30 quintal/acre paddy and 20 quintal/acre wheat. Market price of the produce was
Rs 900/quintal and Rs 1000/qui
                          /quintal for paddy and wheat respectively. Now, after the Support
of intermediaries yield of farmers’ field has improved and market price of the produc has
                                                                               produce
increased. Yield of paddy and wheat is 32quintal/acre and 22 quintal/acre respectively and
market price is Rs 1000/quintal for paddy and Rs 1100/quintal for wheat.
                       /quintal




                                                                                                         20
Table 4.2 Changes in the Income of Farmer


                   Before , Income                                 After ,Income




Yield/Acre             Price/Quintal                 Yield/acre            Price/Quintal


Rice- 30               Rice – 900                     Rice- 32              Rice – 1000
Wheat-20               Wheat – 1000                   Wheat-22             Wheat – 1100


      Revenue B = [{(3o*900) + (20*1000)}]              Revenue A = [{(32*1000)+(22*1100)}]
                   Rs. 47000/acre                                   Rs.56200/acre




Farmers’ Income B = Revenue - Cost of Cultivation   Farmer Income A= Revenue-Cost of Cultivation
                      47000 - 22470                                     56200 – 22470
                    =Rs.24530/acre                                    = Rs.33730/acre




       Percentage Change in the Income of Farmers
           % change = [{ ( Income A-Income B)/Income B}*100]
                      = [{(33730-24530)/24530}*100]
                      =       [(0.3750)*100]
                       =     37%




                                                                                           21
4.11 Increases in the Income of Farmer
Exhibit 4.11 shows that 37 percent improvement in cash flow of farmer. Earlier the income
                                                                     .
of the farmers was Rs.24530 but after the help from rice/flour millers the income of f
                          0                                                          farmers
has increased up to Rs.33730. Improvement in the income of farmer is by Rs 9200
                                                                           9200.This
improvement in the cash flow of farmers helps in the further capital formation of farmer.



                                                                            33730
                        35000

                        30000
                                            24530
     Income of Farmer




                        25000

                        20000

                        15000

                        10000

                         5000

                            0
                                Earlier Situation of Farmer     Current Situation of Farmer

                                                    Farmers' Situation

Exhibit – 4.11 Increase in the Income of Farmers




                                                                                              22
6. CONCLUSION


Agricultural marketing includes the movement of agricultural produce from farmers to
ultimate consumer through intermediaries. Intermediaries are important aspect of agricultural
marketing and affect the price paid by consumers as well as the profit received by farmers.
The present system of agricultural marketing is not well-organized and the farmers have to
depend largely on the intermediaries for the disposal of the farm’s yield. The intermediaries
have no hesitation in taking advantage of the farmer’s dependence upon them. Intermediaries
are necessary evil that cannot be removed but efforts can be made to reduced them in order
to bring about efficiencies in the supply chain.
          The study was conducted in five blocks of district Udham Singh Nagar namely
Rudrapur, Gadarpur, Bazpur, Kashipur and Jaspur. This study identified the various
intermediaries in agri-supply chain.These include commission agent, rice/flour millers,
wholesaler and retailers.    The survey revealed that majority of the farmers were small
farmers. The study identifies two important channels of marketing viz farmers selling their
produce directly to the rice/flour millers and farmers selling their produce to the commission
agents.

During the study it was revealed that the farmers who sell their produce directly to the
rice/flour millers received greater profit as compared to those who sell through commission
agents. It was found that a difference of Rs 5304 existed between the two channels which
means that a farmer who sells his produce to commission agent will receive Rs. 5304 less.
The study also emphasizes on the role of credit in case of commission agents. Majority of the
farmers who sell to the commission agents take loan from them at a higher rate of interest.
Various factors are involved in the selection of commission agents by farmers. These include
period of credit, amount of advance credit, rate of interest on credit and behavior of
commission agent. On the other hand a commission agent also selects a farmers on basis of
certain factors namely interest on credit, quality and quantity of produce and trust on farmer.


The various facilities provided by intermediaries include assured prices; advance credit,
information about agricultural input and transportation facilities. These facilities improve the
income of farmers.


                                                                                              23
6. SUGGESTIONS

1. Most of the farmers depend on agriculture as their main source of income. So, they
     should focus on selection of     marketing channel     like in which mandi or through
     which channel they should sell their produce.
2. The farmers should try to sell their produce directly to the rice/flour millers instead of
     selling to the commission agent for getting higher profit.
3.   Farmers should     avoid    the habit of taking advance credit from the intermediaries
     because they charge a higher rate of interest.
4. The loan providing process of the commercial bank should be simplified, so that the
     farmers could easily approach to banks instead of the commission agents.
5. There should be proper government norms in the mandi for selling of produce. There
     should not be any fraud in the market pricing strategies of produce.
6. There should be the appointment of ombudsman for keeping the farmer updated and
     providing them proper information regarding marketing practices.
7. There should be nonprofit firm to educate the farmer from time to time regarding the
     market situation so that they will be able to understand where they should sell their
     produce.
8. There        should be involvement of cooperatives for         selling of produce to the
     government warehouses. Cooperative employees should be placed for communication
     between farmers and government.




                                                                                          24
25
References


1. T Matsuda,TH Clark System Sciences,(1997) Market Intermediaries and Price Instability:
    Some Welfare Implications.
2. Laurence E. D. Smith and Michael (1999)Facilitating the Provision of Farm Credit: The
    Role of Interlocking Transactions Between Traders and Zamindars in Crop Marketing
    Systems in Sindh.
3. Deepak M. Pokhrel and Gopal B. Thapa (1999)A study based on market price, marketing
    margin and income distribution analyses
4. Verma A.R,(2004) “Price spread marketing Efficiency and Constraints in Marketing of
    wheat”Vol-8,No-2,Page 171-194
5. Thorat Y.S.P(2007) “Issue in agriculture marketing in India”Vol-4,No-3,Page 59-68
6. Vashisth A.K(2009) “Price Dynamics of Agriculture Commodity Future and its impact on
    demand-supply situation of Agriculture commodities”
7. Kothari C.R. Reserch Methodology
8. www.agricultural marketing ,Retrieved on 17/03/2011 at 16.30
9. www.kpmg.ie, Retrieved on 18/03/2011 at 12.30
10. www.google.com, Retrieved on 18/03/2011 at 17.00
11. www.wikipedia.com, retrieved on 19/03/2011 at 16.30
12. www.ficci.com, retrieved on 25/03/2011 at12.00 at 14.00
13. http://www.agriculturemarkrting retrieved on 2/04/2011
14. http://www.agricultural Marketing service - history and Scope.mht retrieved on 12/04/2011
    at 08.15
15. http://www.project matterScience Direct - Agricultural Systems and marketing retrieved
    on 10.00




                                                                                          viii
Annexure I



                                       Questionnaire for farmer

1. Name-
2. Age-
3. Land Holding-
4. Crop currently grown-
5. Village-
6. Educational qualification:

        Illiterate           Primary     Middle school Intermediate   Graduate   Post Graduate
                             School



7. What are the major crops you grow?

        1.Kharif

        2. Rabi

        3.Zaid



8. What is the Yield from Your Field?
        I.    Rice (     )                  II Wheat (       )


9. What is the market price of these produce?
   i.        Rice…………………….
  ii.        Wheat…………………..
 iii.        Other crop………………
10. Three years before what was the yield from your field?
    I.Rice (         )                      II Wheat (   )




                                                                                        ix
11. Where do you market your produce?
       1. Major market……………………                          2. Minor market………………………
12. How you market your produce?
   i.    Directly to consumer          (     )
  ii.    Through intermediaries        (     )
 iii.    Both                          (     )
 iv.     Any other                     (     )


13. If through intermediaries, What is the level of that intermediary?
   i.    Commission agent (       )
  ii.    Rice/flour millers (      )
 iii.    Whole seller       (     )
 iv.     Retailer           (     )
14. At what price produce has been sold to intermediary?
   i.    Rice ………………
  ii.    Wheat………………
 iii.    Other crops………….
15. Costs involved in farming?
   i.    Agri- input………………………
  ii.    Labor…………………………….
 iii.    Transportation……………………
 iv.     Irrigation………………………….
16.Are you availing credit facilities from the intermediaries?
   Yes (     )                               No (   )
If Yes how much amount you are borrowing?
  I.     Less than 5000                    ( )
 II.     5000 to 10,000                    ( )
III.     More than 10,000                  ( )




                                                                                   x
17. Factors involved in the selection of Commission agent?


               Factors                                    Points

Period of Credit

Amount of advance credit

Rate of interest on advance credit

Behavior of commission agent




18. What are the facilities being provided to you?
    1.   Assured price                        (   )
    2.   Advance credit                       (   )
    3.   Transportation facilities            (   )
    4.   Agricultural input                   (   )
    5.   Agricultural extension activities    (   )


19. What is the impact of these activities on your farming with respect to
   i.    Price of the produce
  ii.    Quality and Quantity of produce
 iii.    Transit time
 iv.     Reduction in wastage
20. Annual Income

Less than 50,000     50.000 to 1 lakh        1 Lakh to 2 lakh   2 lakh to 4 Lakh   More than 4 lakh




21. Are you having livestock’s?
    If yes how much the income from livestock’s………………………………………….




                                                                                                  xi
22. Have you ever face any kind of problem? Yes (      )                No (   )
If yes what kind of problems
…………………………………………………………………………………………….
………………………………………………………………………………………………
23. If no what other facilities you expecting from the intermediaries
………………………………………………………………………………………………
………………………………………………………………………………………………




                                                                                   xii
Annexure II

                                     Questionnaire for intermediaries

1. What are the major crops of this area?

          Season                          Crops                             Sowing time
          Kharif                          1
                                          2
                                          3
          Rabi                            1
                                          2
                                          3
          Zaid                            1
                                          2
                                          3


2. What is your level in that supply chain?

         i.   Commission agent ( )
        ii.   Whole seller    ( )
       iii.   Retailer        ( )

3. from where you purchase that produce?

(1) Direct from farmers (        )             (2) Middleman (         )          (3) both ( )

4. if Farmers, Do you having permanent farmers ?           Yes (       )   No (        )

5. How do you decide the price of produce?

Quality basis (        )                       Quantity base (     )

6. Where do you finally sale that produce?

(1) Mandi (        )       (2) Rice mill ( )      (3) Directly to consumer (       )       (4) any other ( )

7. At what price you purchase the produce?

  I.      Rice………….
 II.      Wheat…………
III.      Other crop………..




                                                                                                               xiii
8. At what price you sale the produce?

   i.   Rice……….
  ii.   Wheat…………….
 iii.   Other crop……………

9. Do you having storage facilities?

Yes ( )                  N0 ( )

10. If yes how much amount you store

…………………………………………………………

11. 17. Factors involved in the selection of Farmers?

               Factors                                  Points

Interest on credit

Quantity of produce

Quality of Produce

Trust on Farmer




12. What are the other special services which you are providing to farmers?

    6. Assured price                        (   )
    7. Advance credit                       (   )
    8. Transportation facilities            (   )
    9. Agricultural input                   (   )
    10. Agricultural extension activities   (   )




                                                                              xiv
Vita


Prince Verma, the author of this manuscript was born on 18th December, 1988 in
Gadarpur, Uttrakhand. She has completed her high school and intermediate
examination from uttrakhand board, further she took admission in the prestigious
college of agriculture, a constituent of G.B.P.U.A & T (Uttrakhand) batch 2005
and obtained B.Sc. Agriculture degree in 2009 with first division. Thereafter she
got selected in MBA (Food Retail and Supply Chain) management degree
programme in college of Agribusiness Management of the same university. In the
month of November 2010 during campus placement she got selected by D2k
technologies as management trainee.


Address

Prince Verma
Shiva Colony, Kartarpur Road
Gadarpur (U.S.Nagar)
Uttrakhand
Email address-PrincV2008@gmail.com

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Intermediaries intermention

  • 1. A STUDY OF INTERMEDIARIES’ INTERVENTION IN AGRICULTURE SUPPLY CHAIN AND ITS EFFECT ON FARMERS’ INCOME A Project Report Submitted to G. B. PANT UNIVERSITY OF AGRICULTURE AND TECHNOLOGY PANTNAGAR-263145, (U. S. NAGAR) Uttrakhand, India Submitted by Prince I.D. No. 31996 IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF Master of Business Administration (Food Retail and Supply Chain) May,2011
  • 2. CERTIFICATE We, the undersigned, members of Project Advisory Committee of Ms. Prince, I.D.No. 31996, a candidate for the degree of Master of Business Administration (Food Retail and Supply chain), agree that the project report entitled “A Study of Intermediaries’ Intervention in Agriculture Supply chain and its effect on Farmers’ Income” may be submitted in partial fulfillment of the requirements of the degree. Advisory Committee (Ashutosh Singh) Chairman (Mukesh Pandey) (Nirdesh Kumar Singh) Member Member i
  • 3. ACKOWLEDGEMENT I take this opportunity to express my sincere and deepest gratitude to Govind Ballabh Pant University of Agriculture & Technology and college of Agribusiness Management for providing me a chance of learning. This project not only helped me to understand about the Indian agriculture, but widened this vision in field of management too, by virtue of being associated with an esteemed and professional institute. This report is the result of contribution made by numerous people too many to mention individually, therefore I thank all the respondents who have given their valuable time, views and authentic information for this project. At the very outset, I would like to thank my advisor Dr.Ashutosh Singh, Associate professor, department of Human Resource and personal management for providing me all types of support, constant encouragement and his relentless efforts to motivate me to achieve my goal. His close supervision and precious input have made me able to refine this project to this extent. I consider it my privilege to express my deep sense of gratitude to Dr. Mukesh Pandey, Associate Professor Department of marketing and Mr. Niredesh Kumar Singh, Assistant professor, for their continuous guidance, motivation and providing valuable suggestion and critically analyzed my project work. I am grateful to Dr B.K.Kumbher Dean post graduate studies for providing me the B.K.Kumbher, necessary research facilities. Also I would like to express my sincere thanks to Dr.Devendra Kumar Dean, College of Agribusiness Management, Dr.B.k. Sikka Former Dean, College of Agribusiness Management, Pantnagar for providing a chance to undertake this present study. This acknowledgement would be incomplete if I don’t mention a special regard to my parents, my sister Preety, my batch mates, administrative staff of my college and all those who motivated me to perform better than the best. Last but not the least; I thank The ALMIGHTY, for blessings me with enough patience endurance and strength in accomplishment of the Endeavor. Pantnagar Prince ii
  • 4. EXECUTIVE SUMMARY Intermediaries in agri-supply chain are very important component with various pros and cons. Among the several shortcomings that plague this sector is the high intermediary margin as a result of numerous intermediaries in the agri-supply chain. These intermediaries add-on their margins to the produce during its transit from farm gates to the final consumer. The proposed study was conducted in Rudrapur, Kashipur, Bazpur, Gadarpur and Jaspur block of district Udham Singh Nagar. The study was conducted in two phases; the initial phase was survey, information collection regarding farmers and intermediaries while second phase of study was to analyse the data of survey. This study was conducted to identify the intermediaries in agri-supply chain and to compare the income of farmers who market through commission agents and through Rice/flour millers. The study also analyses the impact of intermediaries on cash flow of the farmers. During the study it was found that four types of intermediaries are involved namely commission agent, rice/flour millers, wholesaler and retailers. A major portion of farmers sell their produce through commission agents .It was also revealed that the farmers who sold their produce to rice millers received higher profit as compare to farmers who sell through commission agents. The various facilities provided by intermediaries include assured prices, advance credit, information about agricultural input and transportation facilities. As a result of these activities the income of farmers increase considerably. The study suggests that the farmers should sell their produce directly to the rice/flour millers as it gives them higher profit. Commission agents are necessary evil in agri-marketing. But, it is expected that as a result of better extension activities and enforcement of APMC act the role of commission agent is expected to decrease in future. iii
  • 5. TABLE OF CONTENTS S.No Title Page No. Acknowledgement i Executive summary ii Table of Contents iii List of Exhibits iv List of Tables iv 1 Introduction 1-3 Background 1 1.1 Agriculture Marketing in India 1 1.2 Role of Intermediaries 2 1.3 Problem Statement 3 1.4 Objectives 3 2 Review of Literature 4-6 3 Research Methodology 7-10 3.1 Research Design 7 3.2 Information required 7 3.3 Data source 7 3.4 Area of Study 8 3.5 Sampling Plan 8 3.6 Research Instrument 9 3.7 Duration of Study 9 3.8 Data Analysis 10 iv
  • 6. 4 Result and discussion 11-20 4.1 Classification of farmers 11 4.2 Intermediaries in agri-Supply chain 12 4.3 Different links in supply Chain of Wheat and Rice 12 4.4 Income of Farmer who sell directly 14 4.5 No. of farmers who are taking credit 16 4.6 Factor affecting the selection of Commission agents by Farmers 17 4.7 Income of farmer who sell through Intermediaries 17 4.8 Comparison of Farmer’s Income 18 4.9 Factor affecting the selection of Farmers by Intermediaries 18 4.10 Facilities Provided by Intermediaries to the Farmers 19 4.11 Increase the Income of Farmer 22 5 Conclusion 23 6 Suggestions 24 Reference vi Annexure I vii Annexure II viii Vita v
  • 7. LIST OF EXHIBITS S.No Exhibit No. Title of Exhibit Page No. 1 Exhibit 4.1 Classification of farmers 10 2 Exhibit 4.2 Intermediaries in Agri-supply chain 11 3 Exhibit 4.3 Different links in agri –supply chain 13 4 Exhibit 4.5 No. of farmers who are taking credit 16 6 Exhibit 4.6 Factor affecting the selection of Commission 17 agents by Farmers 5 Exhibit 4.8 Comparison of income of farmer 18 7 Exhibit 4.9 Factor affecting the selection of Farmers by 18 Intermediaries 8 Exhibit 4.10 Facilities Provided by Intermediaries to the 20 Farmers 9 Exhibit 4.11 Increase the Income of Farmer 22 vi
  • 8. LIST OF TABLES S.No Table No. Title of Table Page No 1 Table4.1 Variable Cost of Production 14 2 Table 4.2 Changes in the cash flow of farmer 21 vii
  • 9. 1. INTRODUCTION Background The marketing as a term is broader than traditional trading and agricultural marketing as a concept is still evolving in the Indian agrarian society. The National Commission on Agriculture defined agricultural marketing as a process which starts with a decision to produce a saleable farm commodity and it involves all aspects of market structure of system, both functional and institutional, based on technical and economic considerations and includes pre and post- harvest operations, assembling, grading, storage, transportation and distribution. Agricultural marketing also reflect another dimension from supply of produce from rural to rural and rural to urban and from rural to industrial. In modern world it became challenging with the latest technologies and involvement of middlemen, commission agents who keep their margins and move the produce further. As it is well known more the number of mediatory more will be the costs as each transaction incurs expenses and invites profits. Ultimately when it comes to the producer the cost of the produce goes up steep. In the entire process of marketing the producer gets the lowest price and the ultimate consumer pays the highest as the involvement of more middlemen. 1.1 Agriculture Marketing in India In the case of agricultural marketing in India it is not exactly the marketing in the literal sense and we can call it as ‘distributive handling’ and to go further we may call it as ‘distributive handling’ of agricultural produce as there are number of intermediaries who are involved in marketing the agricultural produce. Marketing systems are dynamic; they are competitive and involve continuous change and improvement. Businesses that have lower costs, are more efficient, and can deliver quality products, are those that prosper. Those that have high costs, fail to adapt to changes in market demand, and provide poorer quality, are often forced out of business. Marketing has to be customer- oriented and has to provide the farmer, transporter, trader, processor, etc. with a profit. This requires those involved in marketing chains to understand buyer requirements, both in terms of product and business conditions. Activities include market information development, marketing extension, training in marketing and infrastructure development. Improvement of marketing systems necessitates a 1
  • 10. strong private sector backed up by appropriate policy and legislative frameworks and effective government support services. Such services can include provision of market infrastructure, supply of market information, and agricultural extension services able to advise farmers on marketing. Training in marketing at all levels is also needed. 1.2 Role of Intermediaries The number of middlemen or intermediaries is shrinking dramatically as the structure of the food and agriculture system changes. Major customers are requiring their producer-suppliers to perform many of the services previously accomplished by middlemen. This fact may be detrimental to small- to mid-sized producers in maintaining their access to important customers. Producers attempting to accomplish all of the assembly and distribution functions otherwise performed by intermediaries will need to bear that cost themselves. In some cases, producers may be able to perform those functions profitably but in many cases the actual costs of assembly and distribution are underestimated by producers, resulting in losses. Some producers may be in a position to accomplish all of the necessary assembly and distribution functions themselves or as a group. However, for others not in that position, eliminating “middlemen” may not be as desirable at first glance as producers might think, unless they can accomplish all of those functions at a lower cost as those individuals or firms who performed those assembly and distribution activities on their behalf. Intermediaries are an important link in the supply chain. One should not forget that even if there are 3 to 4 intermediaries in the existing supply chain, still the chain is very efficient. Just ignoring them will lead to no fruitful result. Taking out the middle man from the chain does not guarantee a higher realization of price for the farmers. The Commission agents play a very important role by providing finance to the farmer. Though there are arguments that the intermediaries is exploiting the farmer by charging high interest rate and also that the farmer is forced to sell the produce to the middle man but he provides finance to farmer when it is required, procures from the farm level, gives extra credit to meet the house hold needs of the farmer. The farmer knows that he is not getting the best price from the middleman; He is fully aware where the mandi is even in the mandi he has to sell to commission agent so why not sell the produce in the village itself without the hassle of additional transportation cost. 2
  • 11. 1.3 PROBLEM STATEMENT The traditional agriculture supply chain model that is operational in India results in significant reduction in farmers’ income. The farmers have the option to sell his produce in various agriculture agencies. However selling in mandis in most cases is unprofitable due to two notable reasons – (1) cost issues involved in transporting produce to mandi, and (2) structural deficiencies rampant at mandis. On an average, the distance between regulated markets (mandis) and farm field ranges from 7.7 kilometres to 15 kilometres in India. Indian agriculture being dominated by small and marginal famers, it may not be economically viable nor commercially feasible for a small farmer to sell their produce directly to consumers. Here the agri intermediaries play a crucial role, they add values at several stages of the goods movement in the value chain because of their specialized role which everyone cannot does and the biggest role they are playing is the aggregation of goods from large number of small farmers scattered across a vast area but the negative impact of the agri intermediaries in downgrading the efficiency of the agricultural marketing in India. It won’t be fallacious to state that intermediaries also have a role in increasing price of several food commodities. So the proposed study has been undertaken with the following objectives. 1.4 OBJECTIVES 1. To identify different intermediaries who are involved in supply chain of rice and wheat. 2. To compare the revenue of farmers who market through commission agents and through Rice/flour millers. 3. To analyse the impact of intermediaries on Income of the farmers. 3
  • 12. 2. REVIEW OF LITERATURE Patel (2009) in his study found that agriculture intermediaries in form of commission agents at mandis (government regulated markets) operate at 4-5 percent margins, intermediaries at wholesale markets get around 30 percent, and retail vendors make around 20 – 40 percent. Consequently, the price of commodities that range between Rs 5 – 7 per Kg at farm gate eventually costs in the range of Rs 15 per kg at the consumer. Among the several shortcomings that plague this sector is the high intermediary margin that results from the numerous intermediaries in the agri value chain. These intermediaries add-on their margins to the produce during its transit from farm gates to the final consumer. Vasisth and Bhardwaj (2009) observed that Farmers have been at the mercy of traders or intermediaries while selling their produce, who pay less to farmers and in turn sell it at exorbitant rates and thus getting huge trading margins as the margin between consumer price and producers’ price gets added due to several levels of intermediaries prevalent in India mainly due to the market infrastructure. Many farmers lack instant access to the present market price. Michael and Jusman(2008) states that the rationale for emergency of intermediary institutions in marketing channel has been the focus of research for marketing scholars review of the work done in this area reveals two broad approaches of this issue. One group of scholars focus on the ability of intermediary institutions to reduce the cost of the physical flow of goods and services from producers to users. Another approach adopted by several researchers has been focus on the role of marketing intermediary in facilitating transmission of information within the marketing channel between producers and users. Thorat (2007) analyzed the state level APMC acts, acc. to that the products of the early 1960’s and 1970’s and enacted with the view that the state alone could protect farmers from exploitation at the hand of traders to overcome this the APMC act were passed, wherein wholesale trade was conducted under the presence of the responsible government officials who are designated. The market mandis were administrated by a marketing committee comprising of representative of farmers traders and other stockholders. Mohana Rao(2005) in his study formal credit institutions have largely failed to provide access to farm credit to small and medium-scale landowners, or zamindars. This paper examines interlocked transactions between traders and landowners in the wheat markets in 4
  • 13. UP that facilitate the provision of credit by traders. It is concluded that the case examined provides an example where traders lend to landowners in a segment of the credit market that approximates competitive behavior, without surplus extraction by traders. Key conditions resulting in this favorable outcome are the existence of both competition for market share and information sharing on borrowers between traders. Whether this outcome is also beneficial for other rural groups who may borrow from landowners, in particular sharecropping tenants, is independent of market relations between landowners and traders and is not determined here. Verma and Patidar (2004) describe in his study that the producers may either send their produce to commission agents who arrange the sale in market or they may themselves bring the produce to the commission agent premises for sale. After purchasing from the agents, the wholesaler and exporters sort the crop, pack and then dispatch to different distributing or consuming market. In the process of marketing the producer has to incur various marketing costs. Agriculture marketing is costly with high commission charges, trader’s profit margins, wastage and malpractices. Bieri (2002) states that the welfare consequences of price instability critically depend on the type of market intermediary. Both a producer marketing board and a pure middleman will stabilize consumer prices; but the latter, unlike the producer marketing board, will find it advantageous to "manufacture" price instability for producers. Deepak et al.(1999) worked against the backdrop of viewing marketing intermediaries in developing countries as parasites, Necessary information was collected from all major stakeholders such as farmers, collectors and commission agents, and the relative position of farmers in terms of their gains was analyzed. Marketing margin and farmers’ share of gross income are also analyzed ‘with’ and ‘without’ the cost of malicious practices by marketing intermediaries. Matsuda (1997) in his study addressed that functional structure of agricultural electronic marketplaces, together with associated pricing mechanisms. The analysis of transaction costs suggests that electronic commerce with intermediaries provides more efficient trading environments than electronic marketplace without intermediaries. This indicates that existing intermediary institutions will remain important for agricultural transactions even after the 5
  • 14. adoption of electronic market systems. Compared to other industries or markets, agricultural markets are characterized as competitive markets and pricing is a key factor for efficient resource allocations. 6
  • 15. 3. RESEARCH METHODOLOGY Keeping in view the formulated objectives, the project was carried out with the following research methodology- 3.1 Research Design The methodology adopted for the completion of study was descriptive and analylitical research approach. Descriptive research was used for the identification and role of intermediaries’ in marketing of agriculture produce while, analytical research approach was used for analysing the impact of intermediaries on farmers’ income. 3.2 Information Required For completing the study, information required was about background of Udham Singh Nagar district, data regarding different blocks and villages of district. Data related to land holding of farmers, their cropping pattern, their socio-economic status.. 3.3 Data Source Secondary data as well as primary data were used for the information generation. The inferences were drawn mainly from primary source. Secondary Data-Secondary data were collected from internet, journals, book research articles, different mandis and government booklet issued by district agricultural department. Primary Data-This data was first hand information for the study. This was collected with the help of survey method using a self structured questionnaire consisting of both open ended and close ended questions. The questionnaire was used for conducting the personal interview of farmers and intermediaries. 3.4 Area of Study The study was conducted in the Udham Singh Nagar district of Uttrakhand within the district Udham Singh Nagar different areas like Rudrapur, Gadarpur, Bazpur, Kashipur, Jaspur was taken. 7
  • 16. Figure 3.1 Map of district Udham Singh Nagar 3.5 Sampling Plan 3.5.1 Universe The universe of sampling was comprises of farmers, intermediaries government personnel who are directly or indirectly related with marketing of agriculture produce of district Udham Singh Nagar. 3.5.2 Sampling Unit- Farmers and intermediaries were the sampling units for the study. These were selected from two villages of each block. 8
  • 17. 3.5.3 Sample Size- S.No Block Farmer Intermediaries 1 Rudrapur 25 4 2 Gadarpur 25 4 3 Bazpur 25 4 4 Kashipur 25 4 5 Jaspur 25 4 Total 100 20 3.5.4 Sampling Technique-Convenience and simple random sampling employed for the selection of farmers and intermediaries. Farmers were selected on the basis of their land holding. In some places judgemental sampling was also used for selecting intermediaries. 3.6 Research Instrument Questionnaire containing both open and close ended questions was used as main research instrument. Questionnaire was structured in such a way that it has contained all the questions which was helpful in getting the objectives of study fulfilled. 3.7 Data Analysis Data obtained from the survey of samples was analyzed with the help of graphical representation, tabulation and classification of data and by using statistical tools like 5 point scale method, bar diagram, pie charts and other related methods. 5 point scale method is used for analyzing the factors which are affecting the selection of commission agent by the farmers. 3.8 Duration of Study The period of study was from 7th of March to 30th April, 2011. 9
  • 18. 3.9 Limitation of Study i. There may be discrepancies in the actual data and the recorded data due to misinterpretations and wrong selection of respondents. ii. Topic is vast but availability of information and timeline was short. iii. In some cases there were some contradictory answers given by farmers which were create confusion regarding intermediaries’. 10
  • 19. 4. RESULT AND DISCUSSION In accordance with the objective of the study, the data collected from primary and secondary sources were analyzed and interpreted. 4.1 Classification of Farmers It is very important to know that the categories of the farmers for understanding the their socio-economic status. The farmers are classified into three main categories –Marginal Farmer, small Farmer and Large Farmer. It is evident from the Exhibit 4.1 that out of total sample, 17 percent are marginal farmers, 50 percent are small farmers and 33 percent belongs to the category of large farmer. Marginal Farmer 17% Large Farmer 33% Small Farmer 50% Exhibit 4.1 Classification of Farmers t 11
  • 20. 4.2 Identification of Different Intermediaries involved in Supply Chain of Rice and ent Wheat Farmers producing agricultural produce are scattered in remote villages and t produce has this to reach to the consumers for its final use and consumption. There are dif different agencies and functionaries through which this produce passes and reaches to the consumer. A market channel or channel of distribution is therefore defined as a path traced in the direct or indirect transfer of title of a product as it moves from a producer to an ultimate consumer or industrial producer user. There are several channels of distribution which annels used by farmers according to their need. Exhibit- 4.2 shows that 60 percent that, farmers sell their produce to the commission agents, 35 percent farmers ers sell to the rice/ flour millers directly and on 5 percent only farmers sell their produce to others (Wholeselor and Retailers). other 5% Rice/Flour millers 35% Commission agents 60% Exhibit 4.2 Proportion of Intermediaries in Distribution of sold produce 4.3 Different links in Supply Chain of W erent Wheat and Rice The Exhibit 4.3 illustrates that in Supply chain of wheat and rice in Udham Singh Naga Nagar district, there is linkage of four kinds of intermediaries that is Commission agents, Rice millers/ flour millers, wholesaler and retailers These intermediaries are involved for flow of retailers. produce from farmer to ultimate consumer. 12
  • 21. Farmer Commission Others agent Rice millers /Flour millers Export Wholesaler Retailer Consumer Exhibit 4.3 Different links in Agri-Supply Chain of Rice and Wheat 13
  • 22. 4.3.1 Different Types of Marketing Channel for Rice and Wheat 1. Producer– Miller- Consumer 2. Producer– Miller- Retailer– Consumer 3. Producer- Miller- Wholesaler- Retailer- Consumer 4. Producer– Commission agents - Miller– Retailer– Consumer 5. Producer– Govt. procurement– Miller– Retailer– Consumer These above are the different type of marketing channels for rice and wheat supply chain. In first channel produce is directly sold to the millers and then it reaches to the ultimate consumers. In second type of marketing Channel produce is sold to the millers and then it is further sold to the retailers and finally it reaches to the ultimate consumer. In third type of marketing channel there is involvement of 3 kinds of intermediaries, produce is sold to the millers, and then it sold to the wholesaler and again sold to the retailers and finally reaches to the ultimate consumer. In forth kind of marketing channel there is also involvement of three kind of intermediaries, in this case produce is first purchased by commission agent then they sell it to millers, then from millers it sold to the retailers and finally from retailers to the consumer. In fifth kind of marketing channel produce is first procured by the Government people then produce is sold to the miller and from milers to retailers and from retailers to the ultimate consumers. 4.4 Income of Farmer 4.4.1 Cost of Production Cost of production of paddy and wheat is different. There are different kinds of cost involved in paddy and wheat production. These costs are two type Fixed cost and variable cost. Cost of Rice production is high because variable cost is high. Following items are considered for cost of production Fixed cost (Land Rate) = Rs 8000/acre Variable cost = cost of ploughing , seeds, Transplanting, Irrigation, Fertilizer, Pesticide, Harvesting and Threshing, Transportation 14
  • 23. Table 4.1 Variable cost of production S.No Parameters Cost /acre Total Paddy Wheat 1 Ploughing 1500 800 2300 2 Seed 400 700 1100 3 Transplanting 1200 1200 4 Irrigation 1500 500 2000 5 Fertilizer 1200 1200 2400 6 Pesticide 1000 500 1500 7 Harvesting and Threshing 700 900 1600 8 Transportation 1000 1000 2000 Total Cost 7600 4700 Rs.14100 Interest on variable cost = 10.5 percent/year = Interest on variable cost for 3 month period = [(Variable cost* Rate of interest* Time)/100] = [14100*0.105*3/12] = Rs 370/acre Total cost = Fixed Cost + Variable cost + Interest on variable cost = 8000 + 14100 + 370 = Rs.22470 /acre Total cost of Production is = Rs. 22470/acre 4.4 .2 Value of Total Produce in Market Total produce from farmers’ field is 32 quintal/acre Paddy and 22 quintal/acre Wheat. Market price of the produce is for paddy Rs1000/quintal and for wheat Rs1100/quintals. So the total value of produce is [{(32*1000) + (22*1100)}] = 56200. Total revenue in market is = Rs.56200 15
  • 24. 4.4.3 Income of Farmers Who Sell their Produce without Intermediaries ho 40 percent of farmers who directly sell their produce to Rice millers/flour millers. So the income of these farmers is- Income = (Total Value of produce – Cost of production) (56200 -22470) Income = Rs. 3373 / acre 33730 4.5 No. of farmers who are Availing Advance Credit Facility In India number of marginal farmers is more than large farmers and the chunk of these credit facilities is used by these marginal farmers. The reasons for using these facilities by marginal farmers is unavailability of sufficient amount of money used for crop production .Credit facilities providing to the farmers are very important feature of commission agents Farmers s agents. are selling their produce through commission agents because they are taking credit from r them. Exhibit 4.5 shows that only 37 percent farmers take credit from the commission age agents while 63 percent farmers use their own money for farming. Availing Credit 37% Not Availing Credit 63% Exhibit 4.5 No. of farmers who avail credit 16
  • 25. 4.6 Factors Affecting the Selection of Commission Agents by F Farmer There are many factors responsible for the selection of commission agents by the farmers. Factors affecting the selection of commission agents were devised on 5 point scale. Exhibit 4.6 shows that the two facto which affect the most in the selection of commission agent ors were amount of advance credit and rate of interest on credit. The other factors were also dvance important like period of credit and behavior of commission agent. 5 5 4.5 4 4 3.5 3 5 point Scale 3 2.5 2 2 1.5 1 0.5 0 Period of Credit Amount of Rate of inerest on Behavior of Advance Credit credit Commission agent factors Exhibit 4.6 Factors affecting the selection of commission agent 4.7 Income of Farmers’ Who S their Produce through Intermediaries Sell Farmers sell their produce to the commission agents because they have taken advance credit facility from the commission agents Rate of interest on that advance credit is 2 % per month agents. or 24 % per year. So the income of farmers who sell their produce through commission agents is Income = (Total cost of produce – Cost of cultivation- interest on investment Capital (56200 –2247 -5304) 470 Income = Rs. 28426 / acre 17
  • 26. 4.8 Comparison of Farmers’ Income Who Market Their Produce without Intermediaries and Those Who Market Through Intermediaries After comparison of both the farmers it has been found that there is a difference of Rs 5304 in the income of farmers. Exhibit 4.8 shows that farmers who sell their produce directly to the Rice/flour millers have an income of Rs 33730 while the farmers who sell their produce to the intermediaries have an income of Rs28426. 35000 33730 34000 33000 32000 31000 Income 30000 29000 28426 28000 27000 26000 25000 Direct With Intermediaries Farmers Exhibit no- 4.8 Comparison of farmers’ Income 4.9 Factors affecting for selection of farmers by intermediaries There are many factors responsible for the selection of farmers by commission agents. Factors affecting the selection of farmers were devised on 5 point scale. Exhibit 4.9 shows that the two factors which affect the most in the selection of farmers are trust on farmer and interest on credit. The other factors were also important like quantity of produce and quality of produce. 18
  • 27. 5 5 4.5 4 4 3.5 3 5 Point Scale 3 2.5 2 2 1.5 1 0.5 0 Interest on Credit Quality of Produce Trust on Farmer Quantity of Produce Factors Exhibit no-4.9 Factors affecting for selections of farmers by intermediarie intermediaries 4.10 Facilities provided by intermediaries to the farmers Commission agents provide many facilities to the farmers. Commission agents are the need of farmers for selling the product in the market. They are giving credit to the farmers and pay giving assured prices. Exhibit 4.10 has shown that 20 percent farmers get information about agriculture input, 20 percent of farmers get information about transportation facilities, 60 percent farmers get advance credit facility as well as other information like market information and 100 percent of farme get information about assured prices. They give them farmers information related to the different markets, knowledge regarding their agricultural activities and information of agri-inputs. inputs. 19
  • 28. 100 90 percentage of farmers 80 70 60 50 100 40 30 60 20 40 10 20 0 Assured Price Advance Credit Agriculture input Transportation Facilities Faclities Exhibit -4.10 Facilities provided by intermediaries to the farmers 4.10.1 Impact of Intermediaries on Farmers’ Income Intermediaries support to the farmers by providing them different facilities. They also give providing the information related to high yielding varieties which results in better q quality and quantity of the crop. These activities are very much helpful in the farmers’ cash flow. helpful Table 4.2 shows improvement in the cash flow of the farmer. Earlier the yield of farmers’ field was 30 quintal/acre paddy and 20 quintal/acre wheat. Market price of the produce was Rs 900/quintal and Rs 1000/qui /quintal for paddy and wheat respectively. Now, after the Support of intermediaries yield of farmers’ field has improved and market price of the produc has produce increased. Yield of paddy and wheat is 32quintal/acre and 22 quintal/acre respectively and market price is Rs 1000/quintal for paddy and Rs 1100/quintal for wheat. /quintal 20
  • 29. Table 4.2 Changes in the Income of Farmer Before , Income After ,Income Yield/Acre Price/Quintal Yield/acre Price/Quintal Rice- 30 Rice – 900 Rice- 32 Rice – 1000 Wheat-20 Wheat – 1000 Wheat-22 Wheat – 1100 Revenue B = [{(3o*900) + (20*1000)}] Revenue A = [{(32*1000)+(22*1100)}] Rs. 47000/acre Rs.56200/acre Farmers’ Income B = Revenue - Cost of Cultivation Farmer Income A= Revenue-Cost of Cultivation 47000 - 22470 56200 – 22470 =Rs.24530/acre = Rs.33730/acre Percentage Change in the Income of Farmers % change = [{ ( Income A-Income B)/Income B}*100] = [{(33730-24530)/24530}*100] = [(0.3750)*100] = 37% 21
  • 30. 4.11 Increases in the Income of Farmer Exhibit 4.11 shows that 37 percent improvement in cash flow of farmer. Earlier the income . of the farmers was Rs.24530 but after the help from rice/flour millers the income of f 0 farmers has increased up to Rs.33730. Improvement in the income of farmer is by Rs 9200 9200.This improvement in the cash flow of farmers helps in the further capital formation of farmer. 33730 35000 30000 24530 Income of Farmer 25000 20000 15000 10000 5000 0 Earlier Situation of Farmer Current Situation of Farmer Farmers' Situation Exhibit – 4.11 Increase in the Income of Farmers 22
  • 31. 6. CONCLUSION Agricultural marketing includes the movement of agricultural produce from farmers to ultimate consumer through intermediaries. Intermediaries are important aspect of agricultural marketing and affect the price paid by consumers as well as the profit received by farmers. The present system of agricultural marketing is not well-organized and the farmers have to depend largely on the intermediaries for the disposal of the farm’s yield. The intermediaries have no hesitation in taking advantage of the farmer’s dependence upon them. Intermediaries are necessary evil that cannot be removed but efforts can be made to reduced them in order to bring about efficiencies in the supply chain. The study was conducted in five blocks of district Udham Singh Nagar namely Rudrapur, Gadarpur, Bazpur, Kashipur and Jaspur. This study identified the various intermediaries in agri-supply chain.These include commission agent, rice/flour millers, wholesaler and retailers. The survey revealed that majority of the farmers were small farmers. The study identifies two important channels of marketing viz farmers selling their produce directly to the rice/flour millers and farmers selling their produce to the commission agents. During the study it was revealed that the farmers who sell their produce directly to the rice/flour millers received greater profit as compared to those who sell through commission agents. It was found that a difference of Rs 5304 existed between the two channels which means that a farmer who sells his produce to commission agent will receive Rs. 5304 less. The study also emphasizes on the role of credit in case of commission agents. Majority of the farmers who sell to the commission agents take loan from them at a higher rate of interest. Various factors are involved in the selection of commission agents by farmers. These include period of credit, amount of advance credit, rate of interest on credit and behavior of commission agent. On the other hand a commission agent also selects a farmers on basis of certain factors namely interest on credit, quality and quantity of produce and trust on farmer. The various facilities provided by intermediaries include assured prices; advance credit, information about agricultural input and transportation facilities. These facilities improve the income of farmers. 23
  • 32. 6. SUGGESTIONS 1. Most of the farmers depend on agriculture as their main source of income. So, they should focus on selection of marketing channel like in which mandi or through which channel they should sell their produce. 2. The farmers should try to sell their produce directly to the rice/flour millers instead of selling to the commission agent for getting higher profit. 3. Farmers should avoid the habit of taking advance credit from the intermediaries because they charge a higher rate of interest. 4. The loan providing process of the commercial bank should be simplified, so that the farmers could easily approach to banks instead of the commission agents. 5. There should be proper government norms in the mandi for selling of produce. There should not be any fraud in the market pricing strategies of produce. 6. There should be the appointment of ombudsman for keeping the farmer updated and providing them proper information regarding marketing practices. 7. There should be nonprofit firm to educate the farmer from time to time regarding the market situation so that they will be able to understand where they should sell their produce. 8. There should be involvement of cooperatives for selling of produce to the government warehouses. Cooperative employees should be placed for communication between farmers and government. 24
  • 33. 25
  • 34. References 1. T Matsuda,TH Clark System Sciences,(1997) Market Intermediaries and Price Instability: Some Welfare Implications. 2. Laurence E. D. Smith and Michael (1999)Facilitating the Provision of Farm Credit: The Role of Interlocking Transactions Between Traders and Zamindars in Crop Marketing Systems in Sindh. 3. Deepak M. Pokhrel and Gopal B. Thapa (1999)A study based on market price, marketing margin and income distribution analyses 4. Verma A.R,(2004) “Price spread marketing Efficiency and Constraints in Marketing of wheat”Vol-8,No-2,Page 171-194 5. Thorat Y.S.P(2007) “Issue in agriculture marketing in India”Vol-4,No-3,Page 59-68 6. Vashisth A.K(2009) “Price Dynamics of Agriculture Commodity Future and its impact on demand-supply situation of Agriculture commodities” 7. Kothari C.R. Reserch Methodology 8. www.agricultural marketing ,Retrieved on 17/03/2011 at 16.30 9. www.kpmg.ie, Retrieved on 18/03/2011 at 12.30 10. www.google.com, Retrieved on 18/03/2011 at 17.00 11. www.wikipedia.com, retrieved on 19/03/2011 at 16.30 12. www.ficci.com, retrieved on 25/03/2011 at12.00 at 14.00 13. http://www.agriculturemarkrting retrieved on 2/04/2011 14. http://www.agricultural Marketing service - history and Scope.mht retrieved on 12/04/2011 at 08.15 15. http://www.project matterScience Direct - Agricultural Systems and marketing retrieved on 10.00 viii
  • 35. Annexure I Questionnaire for farmer 1. Name- 2. Age- 3. Land Holding- 4. Crop currently grown- 5. Village- 6. Educational qualification: Illiterate Primary Middle school Intermediate Graduate Post Graduate School 7. What are the major crops you grow? 1.Kharif 2. Rabi 3.Zaid 8. What is the Yield from Your Field? I. Rice ( ) II Wheat ( ) 9. What is the market price of these produce? i. Rice……………………. ii. Wheat………………….. iii. Other crop……………… 10. Three years before what was the yield from your field? I.Rice ( ) II Wheat ( ) ix
  • 36. 11. Where do you market your produce? 1. Major market…………………… 2. Minor market……………………… 12. How you market your produce? i. Directly to consumer ( ) ii. Through intermediaries ( ) iii. Both ( ) iv. Any other ( ) 13. If through intermediaries, What is the level of that intermediary? i. Commission agent ( ) ii. Rice/flour millers ( ) iii. Whole seller ( ) iv. Retailer ( ) 14. At what price produce has been sold to intermediary? i. Rice ……………… ii. Wheat……………… iii. Other crops…………. 15. Costs involved in farming? i. Agri- input……………………… ii. Labor……………………………. iii. Transportation…………………… iv. Irrigation…………………………. 16.Are you availing credit facilities from the intermediaries? Yes ( ) No ( ) If Yes how much amount you are borrowing? I. Less than 5000 ( ) II. 5000 to 10,000 ( ) III. More than 10,000 ( ) x
  • 37. 17. Factors involved in the selection of Commission agent? Factors Points Period of Credit Amount of advance credit Rate of interest on advance credit Behavior of commission agent 18. What are the facilities being provided to you? 1. Assured price ( ) 2. Advance credit ( ) 3. Transportation facilities ( ) 4. Agricultural input ( ) 5. Agricultural extension activities ( ) 19. What is the impact of these activities on your farming with respect to i. Price of the produce ii. Quality and Quantity of produce iii. Transit time iv. Reduction in wastage 20. Annual Income Less than 50,000 50.000 to 1 lakh 1 Lakh to 2 lakh 2 lakh to 4 Lakh More than 4 lakh 21. Are you having livestock’s? If yes how much the income from livestock’s…………………………………………. xi
  • 38. 22. Have you ever face any kind of problem? Yes ( ) No ( ) If yes what kind of problems ……………………………………………………………………………………………. ……………………………………………………………………………………………… 23. If no what other facilities you expecting from the intermediaries ……………………………………………………………………………………………… ……………………………………………………………………………………………… xii
  • 39. Annexure II Questionnaire for intermediaries 1. What are the major crops of this area? Season Crops Sowing time Kharif 1 2 3 Rabi 1 2 3 Zaid 1 2 3 2. What is your level in that supply chain? i. Commission agent ( ) ii. Whole seller ( ) iii. Retailer ( ) 3. from where you purchase that produce? (1) Direct from farmers ( ) (2) Middleman ( ) (3) both ( ) 4. if Farmers, Do you having permanent farmers ? Yes ( ) No ( ) 5. How do you decide the price of produce? Quality basis ( ) Quantity base ( ) 6. Where do you finally sale that produce? (1) Mandi ( ) (2) Rice mill ( ) (3) Directly to consumer ( ) (4) any other ( ) 7. At what price you purchase the produce? I. Rice…………. II. Wheat………… III. Other crop……….. xiii
  • 40. 8. At what price you sale the produce? i. Rice………. ii. Wheat……………. iii. Other crop…………… 9. Do you having storage facilities? Yes ( ) N0 ( ) 10. If yes how much amount you store ………………………………………………………… 11. 17. Factors involved in the selection of Farmers? Factors Points Interest on credit Quantity of produce Quality of Produce Trust on Farmer 12. What are the other special services which you are providing to farmers? 6. Assured price ( ) 7. Advance credit ( ) 8. Transportation facilities ( ) 9. Agricultural input ( ) 10. Agricultural extension activities ( ) xiv
  • 41. Vita Prince Verma, the author of this manuscript was born on 18th December, 1988 in Gadarpur, Uttrakhand. She has completed her high school and intermediate examination from uttrakhand board, further she took admission in the prestigious college of agriculture, a constituent of G.B.P.U.A & T (Uttrakhand) batch 2005 and obtained B.Sc. Agriculture degree in 2009 with first division. Thereafter she got selected in MBA (Food Retail and Supply Chain) management degree programme in college of Agribusiness Management of the same university. In the month of November 2010 during campus placement she got selected by D2k technologies as management trainee. Address Prince Verma Shiva Colony, Kartarpur Road Gadarpur (U.S.Nagar) Uttrakhand Email address-PrincV2008@gmail.com