Linking Markets and Farmers Collectively
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The 3rd International Conference on Linking Markets and Farmers focused on collective markets and the product pyramid. Small farmers lack economies of scale, access to finance, local value addition, and access to remunerative markets. The MART philosophy takes a market-led approach to empower small farmers through collectives to access mainstream markets. MART has expanded from 2 districts to 6 districts in Orissa, covering 148 villages and 1500 SHG members, with annual turnover increasing from 0.5 million to 5 million. MART's approach maps marketable surpluses, builds SHG/CIG capacity, develops market infrastructure, and links farmers to markets through negotiation and profit sharing. This results in increased prices, understanding of
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Linking Markets and Farmers Collectively
- 1. 3rd International Conference on Linking Markets and Farmers Linking Markets Collective Market
- 2. The Product Pyramid Finished Branded, packaged, standardized , high competition, require high skill Semi Finished Unbranded, high competition, more margin, require high skill to produce, Involves function like processing, packing etc. Minimum Value Addition Low skill, high volume, huge market; Raw Produce Involves trading function only, Accrual of 10 to 15 % incremental Raw Produce margin within immediate value chain Product Pyramid in a village
- 3. Issues identified Lack of economies of scale at the village level Lack of economies of scale at the village level Lack of access to finance Lack of access to finance No local level value addition No local level value addition Lack of access to remunerative markets Lack of access to remunerative markets Exploitation at the hands of intermediaries Exploitation at the hands of intermediaries
- 4. MART Philosophy A market led approach to livelihood promotion A market led approach to livelihood promotion • Empower the small farmer through CBOs to negotiate the market through collectivization for economies of scale • Linking farmer to Mainstream market • Focus on public-private-community-partnership • Facilitate and build capacity - not get involved in buying and selling • Intervention should demonstrate scalability • Maximum return to the farmer with minimum additional investment
- 5. Coverage Initiative in most backward Districts of Orissa Initiative in most backward Districts of Orissa Started with Expanded to Coverage (districts) 2 6 Coverage (districts) Balangir, + Kalahandi, Koraput, Nuapada Gajpati, Kandhamal No of Villages 20 148 No of SHG members 200 1500 Turn over (INR) 0.5 Million 5 Million Products Miner Millet, Vegetables, Nizer, Cow Cotton, Onion, pea, cashew, tamarind, mahua, char
- 7. Approach Mapping produce having marketable surplus Mapping produce having marketable surplus SHG/CIG SHG/CIG Market Market Market Market Orientation Orientation Infrastructure Infrastructure Linkage Linkage •• Concept Sharing Concept Sharing •• Drying Drying •• Market Market •• Capacity build platform platform search search Capacity build •• Systems in place •• Weighing Weighing •• Negotiate Negotiate Systems in place •• Logistics Logistics with trader with trader •• Business plan Business plan •• Quality check Quality check •• Linkage Linkage •• Financial linkage Financial linkage •• Share Profit Share Profit •• Procurement Procurement Planning for the next produce Planning for the next produce
- 8. Incremental Price Realization MIS Distant Market Distant Market 5% 5% MIS Local Market Local Market 5% 5% Processing Processing Local Value Add Local Value Add 5 -10% 5 -10% Drying, Grading, Drying, Grading, Weighing, Packaging Weighing, Packaging Producer Co Producer Co Collectivization Collectivization 10 ––15 % incr. price 10 15 % incr. price Bargain Bargain Raw Produce Raw Produce
- 9. Overall benefits Control over the raw produce Control over the raw produce High value for the produce - -(drying, less waste, weighing, grading, packaging) High value for the produce (drying, less waste, weighing, grading, packaging) Increased understanding on market by poor Increased understanding on market by poor Greater understanding of supply chain Greater understanding of supply chain Effective utilization of loan Effective utilization of loan Importance of marketing infrastructure Importance of marketing infrastructure Competitiveness among market channel players Competitiveness among market channel players Replicated in other blocks and projects Replicated in other blocks and projects
- 10. Thank You!