Liberalising Domestic Agricultural Markets: Gains for India Select Indian Agricultural Markets: A Pr

1
Liberalising Domestic Agricultural Markets Gains
for IndiaSelect Indian Agricultural Markets A
Primary Survey(Work in Progress)

• February 10, 2006

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Outline

• The issues
• The sample
• Some results

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The Issues

• Small quantities to sell urgent cash needs poor
  infrastructure
• Who will bring output to distant markets
  cooperatives? Traders? Who will ensure fair
  trading?
• What marketing channels exist?
• What do the farmers say? What do the traders say?
  What are the marketing issues on the ground?
• And what are the alternatives?

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The Sample
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Sampling Strategy A Spatial View of the Markets
with focus on farmer-market linkage
Farmers in the village
Market in nearby town
Consumers more distant
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Selection of the Sample

• Objective is to get an understanding of the
  working of the markets where farmers sell their
  produce
• To cover major crops grown and sold under a
  variety of agricultural conditions
• The sample covers farmers, traders and market
  officials

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Selection of Sample Crops

• Crops Crops where market interventions prevail
  marketing alternatives exist
• Kharif crops
• Paddy
• Cotton
• Tur
• Groundnut

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Selection of Sample States

• States Important in production of selected
  crops marketing alternatives exist
• Paddy West Bengal, UP, AP, Tami Nadu,
  Maharashtra
• Tur/ Arhar Maharashtra, UP
• Cotton Maharashtra, Gujarat, AP
• Groundnut Gujarat, AP

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Selection of Sample Paddy

• Markets Important in the selected states for
  selected crops contiguous with major markets in
  neighbouring states
• Paddy
• AP Guntur, Nellore
• MT Raigarh, Thane
• UP Pratapgarh, Jaunpur
• WB Burdwan, Birbhum
• Tamil Nadu Thanjavur, Thiruvallur

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Selection of Sample Cotton

• Markets Important in the selected states for
  selected crops contiguous with major markets in
  neighbouring states
• Cotton
• AP Adilabad, Guntur, Kurnool
• MTYeotmal, Jalgaon
• Gujarat Bhavnagar, Amreli

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Selection of Sample Tur

• Markets Important in the selected states for
  selected crops contiguous with major markets in
  neighbouring states
• Tur/ Arhar
• MT Yeotmal, Wardha
• UP Pratapgarh, Jaunpur

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Selection of Sample Total Markets

• Total Markets Across States
• AP 5
• Gujarat 2
• Maharashtra 5
• UP 2
• WB 2
• Tamil Nadu 2

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The Sample of Markets Total Markets

• Three villages per market 3 distance ranges
  (0-10 kms 11-20 gt20 kms from market

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The Sample of Farmers

• Paddy 300
• Tur/ Arhar 100
• Cotton 175
• Groundnut 100
• Total 675

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The Sample Farms Characteristics
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Some Patterns Across Farm Groups, Crops,
StatesPreliminary results Do not quote
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Value of Output per Farm (Thousand Rupees)

• Avg output of the largest size group is about
  double the average size

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Market Dependence of Output Sold by the Farmers

• AP Andhra Pradesh, MTMaharashtra, TN
  Tamilnadu, UPUttar Pradesh, WB West Bengal

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How Big are the Sales? Output in Rs per acre
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Price Realised Rs/ Qtl Paddy
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Price Realised Rs/ Qtl Cotton
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Average Market Distance for Sales (Kms) Paddy
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Average Market Distance for Sales (Kms) Tur
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Average Market Distance for Sales (Kms) Cotton
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Major Marketing Problems( of farmers) Paddy
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Major Marketing Problems( of farmers) Tur
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Major Marketing Problems( of farmers) Groundnut
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Major Marketing Problems( of farmers) Cotton
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Major Reasons for not selling in APMC Tamil Nadu
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Satisfaction with the APMCs Traders Response
(No. of traders)
No information collected in Gujarat
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Traders in APMCs What other alternatives may
work?

• Out of those who felt that other channels offered
  a better deal
• Only 9 out of 20 traders in AP said private
  markets would be better for the farmers

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Traders in APMCs Is there enough competition?

• When asked if there should be more traders in the
  market
• Only in UP the traders were nearly unanimous
  saying no.
• They felt there were not many buyers in the
  market
• In the other cases, about 50 of the traders said
  more traders would be fine.

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Findings

• Small lots to sell
• Differences in patterns of market requirements
  for crops like paddy and Tur vs Cotton and
  Groundnut (larger transactions)
• Smaller farms not able to bear higher marketing
  costs
• Many transactions within village or close to
  village
• Smaller farms growing better quality?

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Findings

• Trader responses vary from commission agents to
  others
• Location of the markets important for traders and
  farmers

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Moving forward

• Alternative channels of marketing for the
  farmers understand reasons for choice
• How much do prices vary under alternative
  channels?
• What are the merits and weaknesses in APMCs?

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Thank You
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Major Reasons for not selling in APMC Uttar
Pradesh