Efficient Agricultural Marketing System and Modern Infrastructure Required for Minimizing the losses While Handling the Agri. Produce

1
Efficient Agricultural Marketing System
andModern Infrastructure Required for
Minimizing the losses While Handling the Agri.
Produce

• N.S.Ranawat
• Deputy Director
• National Institute of Agricultural
  Marketing(NIAM)
• JAIPUR

2
Part-I

• Efficient Marketing System

3
Agricultural Scenario Present Status

• All major Climates of world. There are 20
  agro-climatic regions and nearly 46 out of 60
  soil types in the country. Potential to cultivate
  vast range of agricultural produce, a large and
  varied raw material base for food processing.
• Increase in production from 50 million tonnes
  (1951) to 204 million tonnes (2004-05).
• Significant increase in marketed surplus.(110.04
  million tonnes, 2001-02).
• Subsistence to commercial agriculture.
• First in pulses, tea, jute milk and second in
  rice, wheat, fruit vegetables.

4
Agricultural Scenario Present Status

• Indias annual food production stands at 550
  million metric tonnes
• Second highest fruit and vegetable producer in
  the world with a cold storage facility available
  only for 10 per cent of produce
• Second Highest producer of milk
• India has highest cattle population (185/1345
  million (13.8), Largest buffalo population
  98/174 million(56), second highest sheep and
  goat population(183/1839million)(9.95) producing
  about 6million Mt of meat with a Cold storage
  capacity 184,000 tonnes.
• Fifth largest producer of eggs. Projected
  requirement of investments in cold storage
  required to store 20 per cent of surplus of meat
  and poultry products.
• Sixth largest producer of fish with harvesting of
  5.2 million tonnes
• The estimated area under flowers (2005-06) is
  0.126 million hectors with a production of 0.694
  million tonnes loose flowers and 2762 million cut
  flowers.

5
Agricultural Production-2007-08 (Ministry of
Agriculture, GOI)
S.No. Commodity Production (2007-08) Production (2007-08) Estimates
1 Rice 96.43 92.35
2. Wheat 78.40 75.81
3. Course Grain 40.75 33.92
4. Pulses 15.11 14.20
5. Food Grains 230.67 (124 million Ha) 217.28
6. Oil seeds 28.83 24.29
7. Sugar Cane 340.55 355.50
8. Cotton 25.81 22.63
9. Jute Mesta 11.18 11.27
10. Fruits 62.85 58.92
11. Vegetables 116.03 122.25
12. Flower (Loose) Flower ( Cut) 178 778 805 177
13. Spices 39.82 43.07
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Production status change over last fifty year-
(2001-02)
Commidity 1950-51,Mt 2000-2001,Mt
Food grain 50 206 (99-2k)
Oil seeds 5 24.5
Fruits 12 41
Vegeatble 10 72
Potatoes 1.7 25(24.2) (1998)
Onion 1.0 5.5(4.75)
Mushroom 40kt
Livestoc Poultary
Milk 17 78(99-2k)
Meat 0.7(1971-72) 4.6
Eggs 10 bn () (1980-81) 30 bn () (99-2k)
Fish 0.75 5.6 (99-2k)
Marine 2.9
Fresh water 2.7
Honey 0.7 kt (1963-64) 5.5kt
Coconut 4.5 bn () 15bn ()
Spices 3
Sugarcane 57 309.4
Certified seeds 0.75
Lac 40 kt 20 kt
Fibre crop
Cotton 0.7 2.5
Jute 0.67 1.67
Coir 0.13 (1954-55) 0.34
Wool 32 kt (1980-81) 45 kt
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Market Regulation in India An Overview

• It goes without saying that marketing and
  production of agricultural produce are
  inextricably intertwined with each other. In the
  post WTO regime, an effective agricultural
  marketing system is the key driver of the
  agricultural economy of a country.
• An effective marketing system aims at ensuring
  remunerative prices to the producers at cost
  effective marketing costs and smooth supply of
  commodities to consumers at reasonable prices.
• In order to protect the interests of the various
  stakeholders of the agricultural marketing system
  of the country a number of governmental
  interventions have been taken from time to time.
• However, the present agricultural marketing
  system of the country leaves much to be desired.
• Some reform measures by the government have
  already been initiated to address these issues
  and some are in pipeline.

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Agricultural Markets

• Apani Mandi / Farmers market / Raythu Bazars
• Rural Primary Hats/ Periodic Rural Markets
• Market Sub yards
• Primary Market Yards/ Agri. Produce Market
  Committee (APMC)/ Mandi,
• Secondary Market Yards/ Secondary Markets
• Modern Market yards
• Wholesale markets-Perishables
• Terminal Market yards-Perishables
• Future Markets

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CHARACTERISTICS OF TRADITIONAL AGRICULTURAL
MARKETING SYSTEM

• Heavy Village Sales of Agricultural Commodities
• Farmers were hard pressed for money to meet their
  social and other obligations, and are often
  forced to sell their produce right in the
  villages.
• Most of the perishable products need to be
  marketed in the villages because of their low
  keeping quality and the non-availability of
  quick transport means.
• Many farmers disliked city markets mainly because
  of their lack of knowledge about prevailing
  market practices, the possibility of theft or
  robbery in transit and problems faced by them for
  selling their produce in city markets.
• The information on the prices obtaining in the
  nearby primary and secondary wholesale markets
  was not readily available to the farmers.

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CHARACTERISTICS OF TRADITIONAL AGRICULTURAL
MARKETING SYSTEM

• Inadequacy of Institutional Marketing
  Infrastructure and Lack of Producers
  Organizations
• Multiplicity of Market Charges
• Existence of Malpractices
• Lack of Reliable and up-to-date Market
  Information
• Low Marketable surplus of a Large Variety of
  Products
• Absence of grading and Standardization of Produce
• Absence of Quick Transport Means
• Strong Associations of Traders and Market
  Functionaries
• Post-Harvest Immediate Sales by Farmers
• A majority of the cultivators tend to sell their
  produce immediately after the harvest at the low
  prices prevailing at that time.
• Because of substantial supplies, Indian markets
  are glutted in the post-harvest season.
• Traders often take advantage of this situation.
  About 60 to 80 percent of the food grains are
  still marketed in the first quarter of the
  harvest season

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• Farmers have to travel for markets beyond 5 Kms
  for sale of their agricultural produce.
• Fledgling Rural Primary Markets.
• Absence of common trade language and multiple
  Food Laws.
• Variation in market fees and other market
  charges.
• Controls under Essential Commodities Act, 1955.
• Poor Pledge Financing and Marketing Credit.
  Farmers dependent on money lenders for their
  credit need.

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CHARACTERISTICS OF TRADITIONAL AGRICULTURAL
MARKETING SYSTEM

• Long and multiple marketing channels.
• Farmers share in consumers Rupee
• - Fruit and vegetables 32 to 68
• - Paddy 56 to 89
• - Wheat 72 to 88
• - Coarse grains 72 to 86
• - Pulses 79 to 86
• Hidden marketing cost and margins are also common
  Rs. 15/- for 20 Kg. box of apple and Rs. 12/-
  for 50 cabbage bag from Shimla to Delhi by road
  a study reveals.
• Contd..

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• Regulation of Agricultural Marketing -
• The features like high marketing cost,
  unauthorized deductions, false payment and
  prevalence of various malpractices prompted to
  regulate agricultural marketing by the state.
• Establishment of regulated markets has been able
  to overcome the problems of traditional marketing
  system to greater extent. However, these
  problems still persists in the case of village
  sales.
• Definition of Regulated Market-
• Regulated market is one which aims at the
  elimination of the unhealthy and unscrupulous
  practices, reducing marketing charges, and
  providing facilities to the producer seller in
  the market.
• Any legislative measures design to regulate
  marketing of agriculture produce may be termed as
  one which aims at the establishment of regulated
  markets.
• Establishment of regulated markets is not
  intended at creating alternate marketing system.
  The basic objective is to improve the efficiency
  in the marketing system.

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Basic Amenities available at APMCs

• Auction platforms only in 2/3rds markets
• Drying platforms in 1/4th markets
• Traders modules in 63
• Cold storage only in 9
• Grading facilities in 1/3rd markets
• Internal roads in 80
• Farmers amenities in 50 of markets

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• Objectives of Regulated Market
• To prevent the exploitation of farmers by
  overcoming the handicaps in the marketing of
  their products.
• To make the marketing system most effective and
  efficient so that, farmers may get better prices
  for their produce and the goods are made
  available to consumers at reasonable prices.
• To provide incentive prices to farmers for
  inducing them to increase the production both in
  terms of quantity and quality.
• To promote an orderly marketing of agricultural
  produce by improving the infrastructural
  facilities.

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AGMAKRNET http//agmarknet.nic.in

• Crops Directorates (8) Wheat, Jute, Cotton,
  Rice, Sugarcane, Millets, Pulses, Tobacco
• Technology Mission on Horticulture
• Coconut Development Board

• Automatic Data Downloading
• Data validation
• Database updation
• Trend Analysis
• Monitoring Reports
• Commodity profiles for production planning
• Data Warehouse Data Mining
• GIS based National Atlas

DMI Hqs.

Public Access
Local News papers
CDB
Markets
Mobile Operators
CDB Network
DMI State Offices(27)
Notice Board / Electronic Board
IFFCO Network
State Mkts./ Directorates (50)
Regional Office
Call Centres
IFFCO
Agri-clinics
Regional Office
Farmers
Mobile users
IFFCO Network
Regional Office
farmers
Regional Portals (8 already approved)
Farming Community
Area Office
Area Office
Farmers
Kiosk
Area Office
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Agri-Markets in India as on 31.03.2007

• 6261 Wholesale Markets in India (majority are
  regulated markets)
• 20870 Rural Primary Markets (about 15 are
  regulated markets
• Total 27131
• 2459 Principal Regulated Markets
• 5006 Regulated Markets Sub-yards
• Total 7465
• (Only 286 regulated markets in 1950)

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19
Part-II

• Modern Infrastructure Requirements
• Minimization of PHM Losses

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Post-harvest procedures
Harvesting
Selection, cleaning and disinfection
Reception
Pre-cooling
Other treatments
Grading
Drying
Transport
Storage
Packing and packaging
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Post Harvest Management

• Farm Level-
• Harvesting
• Harvest maturity Indices
• Harvesting Methods- Manual/ Mechanized
• Harvesting tools/ kit
• Collection- sorting/grading at farm
• Harvesting Containers/Packing material
• Farm level Storage

• Other important factors
• Waxing, Drying
• Grading and sorting
• Packaging CFB
• Pre-cooling
• Ripening / De-greening treatments
• Cold storage at low temperature
• Reefer transport

• Market level
• Mode of Transportation
• Road conditions
• Cleaning and grading at mandi
• Weighment -Digital/ Pan balance
• Storage at mandi
• Packaging material/Bagging etc

• Quality factors
• GAP certification, GHP, GMP HACCP
• Vapour heat treatment
• Pesticide residue level
• Irradiation
• Packaging specifications
• Product Standardization
• Food safety at Farm, APMC, Storage, Distribution
  / transportation and at retail mkting

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Agricultural Produce

• Agri Produce can be classified in a broad way in
  two categories
• Non-perishables /Durables- Cereals, Millets,
  Pulses, Oilseeds, and seed spices etc. They are
  subjected to some unit operations before
  marketing, some of them are as following i.e.
  Cleaned, Grading, Sorting, De-hulling,
  Decorticating, De-husking, Polishing, Bagging and
  ware-Housing.
• Perishable / Non-Durables- Fruits, vegetables,
  flowers, herbs, spices, Eggs, Poultry
  products, Meat and fish etc. They are also
  subjected to some unit operations before
  marketing, some of them are as following i.e.
  Curing, Washing, Grading, Sorting, Waxing,
  Drying, Pre-cooling and packing /Bagging and
  storage in Cold storage

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Present level of production of different types of
food commodity and their estimates of
post-harvest losses
S.No. Type of food Commodity Present level of production Present level of production Present level of production Post-harvest losses Post-harvest losses Post-harvest losses
S.No. Type of food Commodity Quantity (Mt) Average Price (Rs./t) Value (Rs. In Crore) Quantity (Mt) Monetary value (Rs.in Crore)
1 Durables (cereals pules, oilseeds, etc.) 230 10,000 230,000 10 23.0 23,000
2 Semi-perishables (Potato, tapioca etc) 40 3,000 12,000 15 6.0 1,800
3 Perishables (fruits, vetetables. Milk, meat, fish,eggs etc.) 210 15,000 315,00 20 42.0 63,000
Total/Average 480 11,604 557,000 14.8 71.0 87,800
On Conservative Scale (Ref Agro-processing
Industries in India-Growth, Status and prospects-
Kachru, R.P)
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• Different hurdles for direct marketing including
  infrastructure
• Traditional marketing-Long marketing channel, low
  share in consumers rupee, high costs and
  margins, irrational marketing fees etc.
• Infrastructural Bottlenecks- Rs. 11172 crore
  investment requirement
• low per capita infrastructure limits the access
  of small and marginal farmers to the market
• Small marginal farmers 80
• Need for reforms for congenial policy for private
  investment in infrastructure

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Marketing infrastructure

• A.O. Hirschman- four characteristics of
  infrastructure
• i) the services facilitate economic activity
• ii) the services are public goods because of
  economic externalities
• iii) the services cannot be imported
• iv)investments tend to be indivisible or lumpy
• In this context, marketing infrastructure
  consists of a combination of national assets,
  sustaining the addition of place, time and form
  utilities

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Marketing infrastructure

• Can be classified as physical facilities and
  institutional facilities
• physical facilities--roads, railways,transport,
  postal,telecommunication facilities,
  electrification,storage structure,market yard and
  processing facilities etc
• institutional infrastructurecooperatives,banking
  institutions, extension agencies, marketing
  Organisations and marketing intelligence network

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Infrastructure Development
Exporti
Cooling
Vapur Heat Treatment plant at Vashi

Pack house
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Post Harvest Infrastructural requirements
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Marketing infrastructure-Gaps

• The expert committee, Government of India(June
  2001) made an assessment of investment
  requirement of Rs.268742 crore for investment in
  agricultural marketing.Bulk of the funds to be
  mobilized through pvt.sector.
• For a complete supply chain of perishable
  horticulture produce, from farm to market-
• small pre-cooling units or zero-energy cool
  chambers at production areas to remove field heat
  of the produce
• collection centers near to the farms
• Medium to small cold storages(multi-product
  multi-chamber) as transit godowns
• Specialized cold storages with facility of built
  in pre-cooling, high humidity and controlled
  atmosphere for storage of produce for a longer
  period
• Other components like ripening chambers close to
  market places and display cabinets at retail
  outlets
• Linkages for conversion of fresh produce into
  other marketable forms

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Marketing infrastructure-Gaps

• The integrated pack houses catering to farms in
  respect of regions around 5000-10,000 hectare for
  washing, sorting, grading , packing, cold storing
  etc.
• E-trading for direct marketing through kiosks in
  the market yard
• Telephones- only 59 of villages covered(2001) ,
  3.5 tele-density against world average of 16,
  target is 15 by 2015. Examine WCL technology.
• Rural connectivity- Only 47.83 of villages
  covered till mid 90s. Av. road length is 4 km. To
  connect each village with main road. Investment
  requirement is Rs 74000 cr.
• Physical facilities in regulated markets-
  auction platforms, shops and godowns etc Rs 6026
  crore during next 10 years

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Marketing infrastructure-Gaps

• Specialised markets - fruits and vegetables, 241
  places in the country 970 crore.
• Farmers markets- Apni Mandis in different
  states. Should be in every district at least.
• Rural periodic market- 27294 RPMs investment
  requirement is Rs. 2146 cr.
• Storage/ warehousing- 52 million tonnes storage
  capacity available , need for creating storages
  for additional 20 million tonnes now stored in
  the form of CAP( Covered and Plinth ), investment
  requirement of Rs.5400 crore
• Cold storages- 135 Million tonnes of fruits and
  vegetables, 30 post harvest losses, during next
  ten years cold storage capacity of 45 million
  tonnes for investment of Rs.27000 cr.

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Marketing Infrastructure-Gaps

• Reefer Vans/ Containers- During next ten years
  3000 units with a capacity of 8 tonnes each
  Investment requirement is Rs.600 crore
• Cleaning,grading and packaging- Grading facility
  available in only1321 markets out of the 7300
  regulated markets. Rs.2000 crore investment
  during the next 10 years.
• Export oriented Agri-zones and Food parks-
  estimated public investment (common
  facilities)-Rs 200 crore and private investment
  is Rs.400 crore on 50 EOAZs.
• Processing and value addition- Now 7 value
  addition and 2 processing Target 355 Va. Addi.
  and 10 processing investment of Rs150000 cr.

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Ideal market Infrastructure Requirements

• Core Facilities Support Infrastructure
• Platforms for Automatic weighing
  Water Supply
• Auction Platforms Power
• Packaging Labeling Equipments
  Veterinary Services
• Drying Yards Sanitary Facilities
• Loading, Unloading Dispatch Facilities
  Posts Telephones
• Grading Facilities Banking
• Standardization Facilities Input supply and
  Necessity Outlets
• Price Display Mechanism POL
• Information Centres
  Repair/Maintenance Service
• Storage/Cold Rooms Office
• Ripening Chambers Computerized
  Systems
• Public Address System Rain
  Proofing
• Extension and Training to Farmers
• Service Infrastructure Maintenance
  Infrastructure
• Rest Rooms Cleaning and Sanitation
• Parking Garbage Collection Disposal
• Sheds for Animals Waste Utilization
• Market Education Vermi-Composting

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Grading
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Grading of Onians
38
waxing fruits
Wax layer restricts the gases interchange.
Air in the internal Cavity
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Waxing and Grading of fruits
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Pallet pre-cooling and transition to CA rooms
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Ripening Chambers
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PACKINGHOUSE OPERATIONS
Schematic of the typical unit operations in a
mechanized packinghouse
Bin dump
presize
Wash / scrub
Receiving, inspection
Initial cooling Cold storage
Cull and byproduct
Automatic Sorting sizing
Wax fungicide
Hand sort
Dry
Special operations
labeling
palletize
Box Fill
Cooling storage
Hand sort
Box Fill
Hand sort
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Cold chain
To protect the product from direct sun
light. Quick transport to the packaging.
Minimize delays before pre-cooling. Uniform
products cooling.
Store the product at optimum temperature
conditions . Practice first in first out
rotation. Ship to market as soon as possible.
Temporal storage
Use refrigerated loading area. Cool truck before
loading. Load pallets towards the center of the
truck. Avoid delays during transport. Monitor
product temperature during transport.
Transport
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High Humidity Air Handlers

• Maintains up to 95 RH in the Cold Store.
• Advantage is to increase shelf life of the fresh
  harvested produce.
• Because 1 hour lost in pre-cooling may result in
  8 to 24 hour loss in shelf life

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Cooling
Objective to remove the field heat. Movement
of the caloric energy from the product to the
cooling substance.
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Pre-Cooling Chamber
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Refrigerated storage
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Packaging of Horticultural Crops
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Packaging Basics..from the viewpoint of the
product
Help to maintain quality
Reduce water loss
Protect product from injury
Convenience
Traceability
Ease of transportation
point of sale packaging
Marketing product
Provides consumer information - labeling
55
Packaging Basics..from the viewpoint of the
package
Must be strong enough for the job
Moisture resistant
Facilitate special treatments
Low Cost (costs to buy and dispose OR
REUSEABLE )
Compatible with packing line machinery /
automation
Compatible with unitized handling operations
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Package Diversity
gt 500 different packaging formats used for
horticultural produce
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Vibrations-Road Transportation
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