RESEARCH PROPOSAL ON

Overview of chemical fertilizer industry in india and

understanding the related customer preference.

In partial fulfilment of the requirements for Comprehensive Project for the award of the degree of MASTER OF BUSINESS ADMINISTRATION

SUBMITTED TO

SOM-LALIT INSTITUTE OF BUSINESS MANAGEMENT GUJARAT TECHNICAL UNIVERSITY

PROJECT GUID BY: Ms. Reshmi Manon SUBMITTED BY: Hiteshsinh Parmar Pankaj Padhiyar

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Table of Content

No . 1 Introduction 2 3 4 5 Literature Review

Title

Objectives of the study Research Methodology Data construction plan

Data Analysis and Cross Validation Procedure

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PREFACE

Knowledge and human power are synonyms, once said the great philosopher Francis Bacon. However based on the experience within todays global markets, he would probably say, The ability to capture, communicate & leverage knowledge to solve problems is human power. This raises the question how exactly one can best capture, communicate & leverage knowledge, especially within world of system engineering.

The answer probably lies in statement itself by communicating your ideas and devising ways and means to give shape to your plans in to reality, which requires a long-term planning, investment and shrewd thinking. The tryst for knowledge and power led me to two years M.B.A. degree course as part of this long-term investment.

As a part of this M.B.A. degree, students have to undergo a project, which is designed keeping the prerogative and preferences of industry in mind. This particular project allows a student to implement what he has learned within the four walls of classroom. This report that we are submitting intends to highlight our versatility in sustaining the pulls and pressure of day to day professional life and put to perspective the facts that we are capable enough to deliver whenever a challenge is thrown to us.This report is divided in two parts. The first part gives the basic information about the project, the industry and the company. The second part consists of Research Analysis and Conclusion on the basis of particular Research Process. At the end we have provided a short list of the reference books and the sites that provided useful information during the project.

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INTRODUCTION
The fertilizer industry presents one of the most energy intensive sectors within the Indian economy and is therefore of particular interest in the context of both local and global environmental discussions. Increases in productivity through the adoption of more efficient and cleaner technologies in the manufacturing sector will be most effective in merging economic, environmental, and social development objectives. A historical examination of productivity growth in Indias industries embedded into a broader analysis of structural composition and policy changes will help identify potential future development strategies that lead towards a more sustainable development path. Issues of productivity growth and patterns of substitution in the fertilizer sector as well as in other energy intensive industries in India have been discussed from various perspectives. Historical estimates vary from indicating an improvement to a decline in the sectors productivity. The variation depends mainly on the time period considered, the source of data, the type of indices and econometric specifications used for reporting productivity growth. Regarding patterns of substitution most analyses focus on interfuel substitution possibilities in the context of rising energy demand. Not much research has been conducted on patterns of substitution among the primary and secondary input factors: Capital, labor, energy and materials. However, analyzing the use and substitution possibilities of these factors as well as identifying the main drivers of productivity growth among these and other factors is of special importance for understanding technological and overall development of an industry. In this paper we contribute to the discussion on productivity growth and the role of technological change. We introduce the fertilizer industry in more detail taking into account industry specific aspects such as structural composition, production, technologies, energy consumption within processes, sector specific policies etc.

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This following we derive both statistical and econometric estimates of productivity growth for the fertilizer sector over time. For the statistical analysis we develop the Kendrick and Solow indices while for the econometric analysis a translog cost function approach using both cross-state and national time series data is employed. The results are then interpreted within a broader context of structural and policy changes in the sector as well as other sector specific aspects. Future energy use depends on the level of production and the technologies employed. Furthermore, different economic and policy settings affect structures and efficiencies within the sector. The final section therefore examines the ongoing changes in the fertilizer industry structure. It compares best practice technologies to Indian technologies and identify potentials and barriers to the adoption of such efficiency improvements

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LITERATURE REVIEW

The focus on rainfed agriculture, and key challenges Rainfed agriculture remains high on the development agenda in India. Its contribution is vital to help avoid projected food gaps as a result of increasing populations (typically around 2%) and in supporting the livelihoods of the poorest farming families who do not have access to irrigated land. Green revolution gains in agricultural productivity, food security and reduced poverty were widely associated with irrigated areas where the benefits of improved seeds and increased use of inorganic fertilisers could be realised. However, the potential for expansion of irrigated agriculture is decreasing as it is increasingly expensive to bring new land under irrigation (largely because water resources are limited) and there are widespread problems associated with overexploitation of groundwater. Groundwater is the most important source for irrigation. As a consequence rainfed agriculture will continue on over 50% of land in most Indian states (for example, irrigated areas were 21.6 and 38.4% in Karnataka and Andhra Pradesh states respectively in 1993-94), and it will remain the focus of much effort to increase productivity and avoid food gaps. In addition to rising populations and projected food gaps (see for example Bhalla et al., 1999), major concerns associated with the future of rainfed agriculture in semi-arid India include decreasing yield growth and yields, negative nutrient balances, and sustainability. Sustainability concerns reflect both the need to increase returns to land and labour while maintaining soil productivity over the long-term, and concerns about negative impacts of inorganic fertilisers on soil quality and pollution. Further concerns at macro-economic level include the ineffective targeting of the governments vast expenditure on agriculture (Bhalla et al., 1999). Most government expenditure goes to subsidies for farm inputs, particularly fertilisers, credit, water and electricity.

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The policy responses to these challenges include: modernisation of agriculture such as encapsulated new in Andhra and Pradeshs GMOs, 2020 and vision (including irrigation commercialisation, varieties continued

development), watershed development programmes to improve the potential of land and develop water resources (some of these programmes are also becoming more poverty and livelihoods focused and include non-land based activities), and subsidies such as the fertiliser subsidy. Other key reviews that have addressed soil fertility issues from a livelihoods perspective include NRSP project R7458 reviews focused on semi-arid India and global experiences (NRSP, undated; Tanner et al., 2000).

Livelihood systems and strategies Conroy et al. (2001) identified the following key livelihood systems in rural semiarid India: medium/large farmers, primarily dependent on agriculture (mixed but crops usually more important than animals); small/marginal farmers, who are primarily dependent on a combination of agriculture (in some cases land may be leased rather than owned) and wagelabour;

livestock-specialists, for whom animal husbandry is the principal livelihood activity; and landless labourers, who are primarily dependent on wage labour, which may be agricultural or not. Although agriculture continues to be the backbone of the rural economy and rural livelihoods (see Box 1), there is increasing recognition of the role of non-farm (and non-NR) livelihood contributions. Supplementing agricultural income with casual wage labour is increasingly common as the relevant returns from such

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employment compared to agriculture improve. The poorest people are likely to be wage labourers and small/ marginal farmers - especially given recent price shocks - resulting in high levels of indebtedness and high suicide rates. Livelihood strategies can be categorized in different ways. On approach is into intensification and extensification, diversification and migration. Intensification may involve increasing the number of crops and livestock per hectare per year e.g. a second (rabi) crop perhaps through access to irrigation, and/ or increasing the yield of crops and livestock products per hectare . Strategies to improve productivity include soil and water conservation (SWC), the use of high-yielding varieties (HYVs), irrigation, or use of animal feeds (Tanner, 1997). Extensification includes the extension of agricultural areas for example into CPR lands, often wastelands or forest lands. Other farmers have extended their cropping into tank beds. Intensification (see for example Tanner et al., 2000) may be driven by population pressure and declining land area, or by markets reflecting increased demand. In reality, a combination of these forces is often at work. At the household level intensification requires more capital (to buy inputs) or labour to be invested (for example in crop rotations, cut and carry feeding etc). These strategies are also likely to be combined, but the poor are typically expected to intensify through greater use of labor. (Tanner et al., 2000). Key aspects of farming systems Perhaps the most important characteristics of semi-arid farming systems are the objectives or motivations of farming families. These include food security, insurance against risk, and profit maximisation (Conroy et al., 2001). Other studies and field experiences have also shown that household food security is the first concern of farmers when they decide on their cropping pattern. Important risk spreading measures include diversification (Farrington & James, 2000). Gulati & Keeley (1991) showed that with respect to crops grown, farmers are on the whole most responsive to pricing factors.

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Access to land The main land holding and tenure categories include land owners, tenants, share croppers, and encroachment on CPR lands. In both Karnataka and Andhra Pradesh past encroachment of wastelands has subsequently been regularised in some cases and government investment utilised to improve these poor quality lands. The poor have less secure access to land for cropping and are consequently more dependent upon CPRs (for pasture, fodder, timber, and NTFPs) although these are diminishing in quantity and quality. The average landholding in drought prone states is 2.6 ha (Conroy et al., 2001) but increasingly is not equally distributed. Most holdings are less than 2 ha in size and landholdings are often less than 1 ha. The poor have the least productive land and usually no irrigation so have generally not benefited directly from increases in land under irrigation (see box 3). Landholdings are decreasing as a result of an increasing population which provides pressure to intensify or diversify. There is a significant landless population.

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Objectives

To understand current scenario of chemical fertilizer industries.

Measurement of utilization and satisfaction level of the customer toward chemical fertilizer.

To analyse chemical fertilizer industry in context of Indian environment.

To judge and evaluate customers mindset towards chemical fertilizers. To understand the markets positioning of chemical fertilizer in India.

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RESEARCH METHODOLOGY DATA SOURCES 1. Primary data collection through questionnaire 2. Secondary data collection through journals, magazines. TYPE OF RESEARCH RESEARCH APPROACH SAMPLE REGION Descriptive Survey method JUNAGADH AND BHAVNAGAR DIST.OF GUJARAT 100 Convenience Sampling
Farmers

RESEARCH INSTRUMENT Questionnaire

SAMPLE SIZE SAMPLING TECHNIQUE TARGET SAMPLE

DATA COLLECTION PROCEDURE

Personal interview

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Data construction plan

Data collection sources:Data can be collected by two method 1) primary data collection 2) secondary data collection. Both the method has its own advantages and limitation. Primary data collection:We will use questionnaire for the purpose of carry out our research. The scales applied to the questions would be nominal, ordinal; interval and ratio scales and accordingly the statistical tests will be applied to validate the questions so asked. Secondary data collection:The secondary data can be collected from magazine, newspaper, journal, companys website, and different reports of the companies.

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Data Analysis and Cross Validation

1. For the analysis of data require certain process to be followed which Is as follows o o o o o o
2.

Editing Coding Classification Tabulation Using percentages. Preparing of graph

We will use SPSS(Statistical Package for the Social Sciences) software for the purpose of statistical analysis.

3. HO and H1 test H0:Null hypothesis Preference of rural and urban customer is same. H1:Alternate hypothesis Preference of rural and urban customer is not same.

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