Agricultural Marketing

Dr. Subhasis Sen Faculty Marketing ISB&M Pune

Definition
It refers to the study of all activities, agencies & policies involved in the procurement of farm inputs by the farmers & the movement of agricultural product from the farms to the consumers Agricultural Marketing is a process that starts with a decision to produce a saleable farm commodity. It involves all aspects of the market structure of system, both functional & institutional, based on technical & economical considerations & includes pre- and post-harvest operations, grading, storage, transportation & distribution National Commission of Agriculture

It is the involvement of three important functions, namely (a) assembling, (b) preparation for consumption & (c ) distribution Indian Council of Agricultural Research

Agricultural Versus Manufactured Goods

Sl. Base 1 Perishable Agricultural Manufactured Implications Commodities Goods Yes No Immediate sale or special storage facility Storage facility for distribution for items like food grains Grading Miller/processing agent is an intermediary Transport is essential

Seasonal

Yes

No

3 4

Variations in Natural Quality Processing Needed

By Design Finished

Size

Bulk

Varying quantities

Functions of Agricultural Marketing

Assembling (warehousing) Grading & Standardization (size, variety, quality, colour etc.) Processing e.g. Wheat to Flour, Paddy to Rice Transporting (road, rail, water, air)

Storing (cold storage)

Distributing (increasing the reach through different channels)

Types of Agricultural Markets

Primary Markets (Haats)
Convenient Place Cash Payment

Secondary Markets (Mandis)

Middlemen Market Agents Weighing Men Commission Agents

Types of Agricultural Markets

Terminal Markets located in highly populated cities such as Mumbai, Chennai, Delhi, Kolkata, Bangalore etc. Functions include Assembling of goods Grading Warehousing Distribution for processing Financing & risk bearing Price maintenance Commodity exchange

Marketing System
Objectives To enable farmers to sell products at reasonable prices To make available all products of farm origin to consumers at reasonable price without compromising on the quality of the produce Marketing Agencies
Landlords Village Beoparis Mobile Beoparis Commission Agent Mandi Level Kachcha arthatias Pucca arthatias Dalals

Marketing Channels
Government Channel Producer > Government department > Consumer Co-operative Channel Producer > Co-operatives > Consumer Private Channel Producer > Village merchant > Wholesaler > Commission agent (dalal) > Consumer

Regulated Markets
APMC Act of 1963 & FDI in Multi-Brand Retailing These markets have been established to ensure a reasonable amount of profits to agriculturists for their crops & other agricultural products More than 7,000 such markets are now in India Objectives
To ensure reasonable gain to the farmers by creating an environment in markets conducive to the fair play of supply & demand forces To aim at providing proper method of sale, correct weighing, prompt payment & various marketing-related services To provide democratic set up to control & manage markets

Major Product Categories for Agriculture Marketing

Horticulture Items (Flowers, Spices, Vegetables, Fruits) Food Grains (Wheat, Rice etc.) Oil Seeds (Mustard, Groundnut, Sunflower etc.) Fibre Produce (Cotton, Jute etc.) Beverage Items (Tea, Coffee, Tobacco, Wine) Cash Items (Sugarcane, Natural Rubber) Animal Products (Milk, Fish, Eggs, Poultry etc.)

Rural Entrepreneurship
A Rural Entrepreneur is an individual who usually has a lot of choices while exercising various options to choose from the areas of operations

An Enterprise can be set up in any of the 3 sectors: Primary (Agriculture) Secondary (Industry) Tertiary (Service)

Types of Rural Entrepreneurship

Individual Entrepreneurship (Sole-Proprietorship) Group Entrepreneurship (Partnership, Pvt. Ltd Co., Public Ltd. Co.) Cluster Formation (NGOs, VOs, CBOs, SHGs & even networking of these Groups)

Co-operatives (Association of persons united voluntarily for a common objective)

NGOs
These are initiated, sponsored & constituted mainly by the Govt. as autonomous bodies to fulfill specific development objectives These receive funds mainly from the Govt. & channelize them through VOs These are usually non-political in nature These are formal organizations with rules, regulations & procedures of professional management

NGOs in Rural India

Gramin Bharati Samiti (www.gbsjp.org) Rural Development Foundation (www.rdfindia.org)

Gramin Vikas Vigyan Samiti (www.gravis.org.in)

Nishtha

VOs
These are voluntary agencies initiated by individual for welfare & development VOs are generally managed by persons with motivated leadership & commitment. Their main promoters are honorary with a strong desire to serve the people

SHGs
SHGs are a platform of 10-20 people mainly below the poverty line (BPL) to form a social group not only to mutually help each other but also to achieve common objective Swanjayati Gram Swarozgar Yojana (SGSY)

CBOs
CBO is a group of people from a common living area of habitat who get together for a common cause The overall objective is to enhance the bargaining strength of individuals in the Group e.g. Fishermen Group Cobbler Group Milk Producers

Organic Farming
Farming System which rely on ecologically based practices such as cultural & biological pest management & virtually exclude the use of synthetic chemicals in crop production & prohibit use of antibiotics & hormones in livestock production

Growing Consciousness of Health Hazards Contamination of Farm Produce from the use of chemical fertilizers & pesticides Consumers willing to pay premium price for environmentally responsive safe products

Characteristics of Organic Farming

Organic Agriculture is an environmentally friendly ecological production system that promotes & enhances bio-diversity, biological cycles & biological activities Protection of long term fertility through use of organic materials to maintain organic matter & nutrients in the soil Crop protection without chemical use

Adoption of proper management techniques or cultural practices to control pests

Major Organic Products

Food
Dry Fruits & Nuts Processed Fruits & Vegetables Cocoa Fruits Spices Herbs Oil Crops & Derived Products Toners Dried leguminous plants Meat & Dairy Products Alcoholic Beverages Processed Food Fruit Preparations

Non-Food
Cotton Cut Flowers Pot Plants Oil Seeds

Benefits of Organic Food

Organic Food tastes extremely good Organic fruits & vegetables have been shown in a no. of studies to contain more vitamins, nutrients & cancer-fighting anti-oxidants than non-organic food Organic systems aim to avoid the use of artificial chemicals, pesticides & fertilizers Organic food is produced without GMOs which are prohibited in the Soil Associations Standards for Organic Farming & Production Organic Farming places great emphasis on animal welfare Organic Food is produced without the routine use of antibiotics Organic systems reduces dependence on non-renewable resources Organic production is more sustainable & friendlier to the environment & wildlife Rely on a modern & scientific understanding of ecology & soil science, while also depending on traditional methods of crop rotations to ensure fertility & weed & pest control

References
www.cainc.org (Communicating for Agriculture) www.nabard.org (National Bank for Agriculture & Rural Development) www.krishiworld.com www.agrichem.com www.agritech.com www.cgiar.org www.indiaagronet.com www.fao.org www.agritrade.org