Agricultural Marketing Reforms

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Agricultural Marketing Reforms Marketing
Infrastructure
RABI CONFERENCE-2005
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As a Farmer

• I must thank all of you for your efforts and
  concerns
• But what use if I can not be facilitated to sell
  my produce at
• Remunerative Price / Quality linked returns
• Choose my buyer
• Place and time convenient to me
• Escape the fleecing of multiple intermediaries

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Increasing Farmers Income

• 90 of effort is Production oriented
• Only 10 on Marketing/Post harvest phases
• Single intervention that can enhance income by
  20-30
• Private Sector Investment

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Domestic Markets Scenario

• Regulated Markets.
• 7161 of 7310 Wholesale Markets Covered Under
  Regulation.
• Of 27,294 Rural Markets, 15 Under Regulation
  

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Domestic Markets Scenario

• Regulated Markets Lack Need Based Infrastructure.
  
• Development Confined to Wholesale Markets.
  Rural Markets Remain Out of Development Ambit
• Current Mandi System Has Multiple Intermediaries
  and High Value Loss
• APMC Regulation Prevents Companies From Directly
  Sourcing From Farmers

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Domestic Markets Scenario

• Fragmented Industry, with no Large Organized
  Players
• High Wastage between the Farm and the Retailer

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Present Scenario in Value Chain

• Producers Share in Consumers Retail Price
  Mere 40 to 60 depending on the commodity
• Only 25 of Produced Food-grains Utilise
  Scientific Storage
• Less Than 2 of Fruits and Vegetables Production
  Is Processed
• Post-harvest Losses estimate 10 of Food Grain
  and 25 of Fruits and Vegetables Production

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Problems

• Competitiveness is lost
• Quality assurance is a ?
• Loss of Value
• Export is a problem
• No Grading/Standardization
• Consumer Dissatisfaction
• No Market Intelligence
• No Price Discovery

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Paradigm Shift

• Present Agriculture is Production Driven
• Transition to Agri-Business
• Market Driven
• What Consumer Wants ?
• Cutting the value Chain
• Knowledge led growth
• Private Investment

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Investment Requirement (Rs. in crores)
Items Physical (Nos) X Plan XI Plan Total
Wholesale markets 3213 2410 4016 6426
Modernization of markets 7293 2260 3766 6026
Rural Periodic Markets 27294 1024 1706 2730
Grading Centers 5786 400 750 1150
Modernizing Labs 100 10 10 20
Agribusiness Centres 1500 50 100 150
Warehousing (lakhTonne) 518 5965 6200 12165
Total 12119 16548 28667
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Source of Investment

• Public Investment ??
• Significant role of Private Sector
• How do we get them into the sector
• Create enabling Policy and Legal framework
• This requires Reforms

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Road Map of Reforms

• Create enabling Legal and Policy environment
• Private / Cooperative Markets
• Direct Marketing and
• Contract Farming Programs
• Grading/Standardisation/Quality

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Road Map of Reforms

• Establish Effective Linkages Between Farm
  Production And Retail Chains
• PublicPrivate-Partnership to Promote
  Professionalism in Existing Markets
• Stepping-Up of Pledge Financing and Marketing
  Credit

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Road Map of Reforms

• Introduction of Negotiable Warehouse Receipt
  System In Storage Projects
• Link Commodity Exchange with Market Yards for
  Price and Risk Management
• Information Technology to Promote Trade/ Market
  Led Extension Services
• Facilitate Investments

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Leaders In Reforms

• Kerala,
• Tamil Nadu
• Madhya Pradesh
• Andhra Pradesh
• Punjab
• Himachal Pradesh
• Sikkim
• Manipur
• Nagaland
• Andaman Nicobar

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Followers

• Many States
• Enabled some components
• Require all Components

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Scheme For Development / Strengthening Of
Agricultural Marketing Infrastructure, Grading
And Standardization
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Objectives of the Scheme

• To Induce Private and Cooperative Sector
  Investments in Market Infrastructure Development
  Projects
• To Strengthen Existing Agricultural Markets,
  wholesale and rural periodic, to Enhance
  Efficiency
• To Promote Grading, Standardization and Quality
  Certification of Agricultural Produce at Farm/
  Market Level

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Coverage of the Scheme

• Agriculture/Horticulture
• Fisheries
• Meat Poultry
• Minor Forest Produce
• Dairy
• Medicinal plants
• Apiculture

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Components of the Scheme

• Functional Infrastructure
• Market user common facilities
• Shortening the Value Chain
• Direct Marketing
• Contract Farming
• E-Trading Infrastructure
• Market extension and market oriented production
  planning
• Input Supply

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Functional Infrastructure

• Assembling
• Combine harvesters
• Cleaning
• Assembling yards
• Collection centers
• Pre-cooling Chambers
• Grading
• Mechanical graders
• Color sorters
• Standardisation

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Functional Infrastructure

• Quality Certification
• Establishing a Quality Lab
• Accredited Certified agency Infrastructure
• On-Farm Quality Testing Infrastructure (
  Sugarcane Quality Testing for timely harvesting
  and Maximum Sucrose Content)
• Grapes Certification

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Functional Infrastructure

• Labeling
• Bar coding
• Packaging
• Pack houses
• Packing material manufacturing as part of the
  integrated project
• Retailing wholesaling
• Food world
• Nilgiris
• Namdharis in Delhi

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Functional Infrastructure

• Value addition
• Decortication of Groundnut
• Waxing of Kinnows
• Curing of Honey

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Market user common facilities

• Market yards
• Platforms for loading/ assembling and auctioning
  of the produce etc
• Modern auction Systems
• Weighing and Mechanical Equipment

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Shortening the Value Chain

• Infrastructure for Direct marketing from
  producers to consumers/ processing units/ bulk
  buyers etc
• Infrastructure for supporting Contract farming
  arrangements between processing/ trading units
  and farm producers
• Infrastructure for E-Trading, market extension
  and market oriented production planning.

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Scope of Infrastructure Projects

• Infrastructure for supply of production inputs
  and need based services to farmers
• AI infrastructure
• Fertilizer storage units
• Feed storage units
• Marketing Intelligence
• Mobile infrastructure for post-harvest operations
• Market extension and market oriented production
  planning

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Salient Features of Scheme

• Credit Linked Back-ended Subsidy on Capital
  Investment for
• Setting up of General or Commodity Specific
  Infrastructure for Marketing of Agricultural
  Commodities and
• Strengthening and Modernization of Existing
  Agricultural Markets, Wholesale, Rural Periodic
  or in Tribal Areas

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Salient Features of Scheme

• Persons Eligible
• Individuals, Farmers, Consumers, NGOs, APMC,
  Corporations, Cooperatives and Marketing Boards
  in the Entire Country.
• State Projects Assisted by NABARD/NCDC for
  Modernization of Existing Markets Subject to
  States allowing
• Competitive Markets in Private Sector
• Direct Marketing and Contract Farming
• Rationalize levy of Market Fee

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Funding Arrangement

• S.No. Components of Scheme Tenth Plan
  Provision
• (Rs. In crores)
• Capital Investment Subsidy on 175.00
• Infrastructure Project
• Strengthening of Central Laboratories 10.00
• Awareness/Training, Consultancy and 5.00
• Evaluation etc.
• Total - 190.00

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• Involve Women through SHGs

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Expectations from Participants

• Treat marketing as an integral and critical link
• Awareness creation Publicity
• Identify viable projects
• Capacity Building of all players
• NIAM, NABCONS can assist in Capacity building,
  Project Preparation
• Assistance of Trained Project preparation Experts

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Further Details Assistance

• www.agmarknet.nic.in
• reddywr_at_nic.in
• 011 23382416

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Thank You