National Perspective on

Development of Agricultural
Marketing Infrastructure &
Opportunities for Private sector
participation

1
 Challenges before Indian Agriculture

Only 25% of Produced Food-grains Utilize

Scientific Storage
Inadequate post harvest infrastructure and
logistics
Fragmented industry, with limited organized
players.
Post-harvest losses estimate 10% of Food
Grain and 25-30% of Fruits and Vegetables
Production.
Quarantine and SPS infrastructure
2
 Present Scenario in Value Chain

COST BUILD UP FOR ONE Kg. OF AVERAGE BASKET OF FRUIT

(Rs per Kg)

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 Aggregation Issues

4
Our food deserves better
handling!

© ARPL
 How
safe
is our
food
6 ??
 Growth factors directing Infrastructure
Increasing health consciousness
– More and more brands getting positioned on health platform -
edible oil, fruit juices, organic foods, demand for processed
food

Increasing number of small-unit families

– Over 50% in urban India
– Over 20% of women in urban middle class are working

Rapid Urbanization
– Top 10% towns have 60% of urban population
– Over 50 towns with more than one million population

Increased media exposure

– 76% of Urban and 33% of Rural reached by TV
– About 60 million cable TV connections

IT and Service Sector Growth

7
 PROJECTIONS OF MARKETED SURPLUS
(Million Tonnes)

COMMODITY Production Marketed Surplus

(2006-07) (2011-12) (2006-07) (2011-12)

Food-grains 205 321 135 166

Oilseeds 26 46 25 37

Sugarcane 232 433 216 402

Fruits & 160 300 141 265

Vegetables
Total 623 1100 517 870

8
 Objectives of Creating Infrastructure
Enhance farmers incomes
Improve access to markets for
small & medium farmers
Employment creation in Rural
areas
Value Addition at rural hinterland
Enabling Improved levels of
processing
Reduce Post-Harvest losses
Reduce Intermediaries
9
 Objectives of Creating Infrastructure

Enable quality & Food

Safety Mechanisms
Preserve quality- enhance
shelf life
Enhance Competitiveness
Facilitate exports

10
 What type of Infrastructure?

Multi Commodity Service

Preserving quality
Enhancing Shelf life
Cover complete value chain
Energy efficient, Integrated
Enable communication - two way
signals from markets farmers

11
 Who should create/ operate?

PRI
Farmers Groups/ SHGs
Public
Private
PPP

12
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25
 Thanks

26
 Marketing Channels

Direct to consumer; = 2-3%

Through wholesalers and retailers; 78 -80%
Through public agencies or 10% cooperatives; and 10%
Through processors -

27
 Rural Primary Market

Estimated to more than 21,000 to a maximum of 47,000,

As per MART study 75% of these held once a week, 20% twice &5% daily.
These market caters to 14 villages & nearly 50% held in large villages
- 67% held in more than 16 KM
- 23% held in 6-15 KM & 10% 1-5KM
Lacks facilities & amenities.
Largely Managed by Panchayat or APMC

28
 Wholesale Markets

Total No. 7557 having 2428 Principal markets & 5129 sub- yards.
About 43% of marketed surplus are traded in these markets.
Average area served by market is 435 Sq Km.
National Commission on Farmers says with a radius of 5 KM and command area of
80 Sq. Km.
However GCA it should be about 15000 ha.

29
 Amenities available

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

30
 Model for Indian Situation
Direct sourcing from the farmers
Value addition activities such as cleaning, grading, packing, primary processing, storage should be nearer to the
farm.
Organizing the farmers into growers’ groups/self help groups Proactively promoting grades and standards through
capacity building and infrastructure creation,
Instead of leaving to the retail companies to evolve sourcing models, Government can proactively prepare the farmer
groups to interact and establish linkage with retailers. The infrastructure for primary handling needs to be created for
a village or group of villages in the form of primary value addition and multi-purpose Service Centres through Public
Private Partnership.
These centers could be managed by Co-operatives, SHGs, farmers’ clubs and producer groups and could be linked
to wholesale markets/retail markets/direct marketing.

31
 Model for Indian Situation
Handling at least 50% of perishables through uninterrupted cool chain from farmer to the consumer. Required cool
chain infrastructure need to be put in place through private sector investment.
There is necessity to continue modernizing existing marketing channels/systems so as to enhance the marketing
efficiency and handling the food.
Introducing professional, managerial practices in running the market and bring efficiency into the system.
Create alternate marketing opportunities to farmers for selling their produce at better prices.
Creating quality consciousness in handling the produce and capacity building for appropriate grading, good
agricultural practices and food safety standards.
Promoting consumer demand for safe and healthy foods, so that the demand will drive, the implementation of food
safety measures. Price incentives will provide the pull for quality and safe food and ultimate traceability.

32
 Financial outlay for Marketing Infrastructure during XI plan

Sl No. Infrastructure Phy No Unit cost (Rs. In lakhs) Total (in Rs. Crores)

1 Development of Whole sale markets

a) Principle Markets 2428 300 7284

b) Sub markets 5129 100 5129

2 Rural Primary Markets 5000 25 1250

5 Primary Value addition Centres and soil health mgt infrastructure 50000 30 15000

6 Livestock Markets 1000 20 200

7 Terminal Markets 35 5000 1750

8 Apni Mandis/Direct Markets 1152 30 346

9 Markets for Spices 50 50 25

10 Storage capacity (Million MTs) 6.67 0.03 2001

11 Cold storage (lakh tons) 45 0.045 15708

12 Specialized Commodity Markets (F&V) 241 2000 4820

13 Flower Markets 5 2500 125

14 Medicinal and Aromatic and Forest Produce Markets 500 100 500

15 Modern abattoirs 35 500 175

16 Retail Market Infrastructure for Poultry 0

and meat 1000 500 5000

17 Centre for Perishable Cargo 15 2000 300

18 Farm Road Infrastructure/Green corridors 100 500 500

19 Quality and Food Safety Infrastructure 500 100 500

20 Specialized Quality and Safety Infrastructure 35 500 175

21 GAP and Certification Infrastructure 100000 1 1000

22 Model Farms for India GAP Certification 1000 1 10

23 Farmers' Organizations support infrastructure 5000 5 250

25 R&D infrastructure for Market led production

Total 62048
33
 Infrastructure

Where?
–Existing Channels
Rural markets
Regulated markets
Farmers markets/Direct markets
Terminal markets
Perishable Cargo Centers
Innovative Channels
34
 How to create

Professional handholding
– Fix location, type, scale
– Mobilise farmers groups
– Locate technology
– Establish linkages
Encourage Retail chains to push
backward integration

35
 How to create

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