Directorate of Marketing and Inspection

Gaurav Keshari(M.Sc.,B.Ed.; MBA-Agribusiness )

Marketing Officer

Agriculture

Means activities aimed at the use of natural resources

for human welfare

DEFINITION :-

i.e., it includes all the primary activities of production.

But, generally, it is used to mean growing and / or raising crops and livestock.

Dr. R. R. K, Dy. A.M.A., MSTC, Hyderabad

Marketing:-

connotes a series of activities involved in moving the goods from the point of production to the point of consumption.

It includes all activities involved in the creation of time, place, form and possession utility

DEFINITION :-

Dr. R. R. K, Dy. A.M.A., MSTC, Hyderabad

National Commission on Agriculture (XII Report, 1976)

Agricultural Marketing is a process starts with a

decision to produce a saleable farm commodity,

and it involved all the aspects of market structure or system,

both functional and institutional, based on

technical and economic considerations, and

includes pre and post-harvest operations, assembling, grading, storage, transportation and distribution

DEFINITION :-

Dr. R. R. K, Dy. A.M.A., MSTC, Hyderabad

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

Components of Marketing Components of Marketing InfrastructureInfrastructure

• 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

6

Indian Agriculture has made rapid strides since independence

• From food shortages and import

to self-sufficiency and exports.

• From subsistence farming

to intensive and technology led cultivation.

• Today , India is the front ranking

producer of many crops in the world.

• Ushered in through the

green, white, blue and yellow revolutions

Dr. R. R. K, Dy. A.M.A., MSTC, Hyderabad

India has huge supply advantages due to diverse agro-climatic conditions and wide ranging raw material base…

• 52% cultivable land compared to

11% world average

• All 15 major climates in the world exist in

India

• 46 out of 60 soil types exist in

India

• 20 agri-climatic regions

• Largest livestock population

• Largest producer of milk

• Largest producer cereals

• Second-largest fruit and

vegetable producer

• Among the top five producers worldwide of rice, wheat,

groundnuts, tea, coffee, tobacco, spices, sugar and oilseeds.

• Sunshine hours and day length

are ideally suited for round the year

cultivation

Significant Opportunity

India as a global sourcing hub

Food is the largest consumption category in India...

Food Consumption in IndiaSource: BMI, Q1 2009 & CSO

151.7157.7

168.6180.1 184.4

191.4198

210.3

229.7

0

50

100

150

200

250

2005 2006 2007 2008e 2009f 2010f 2011f 2012f 2013f

CAGR: 5.32%

Significant Opportunity

India as a huge Consumer Market

Huge wastage across the supply chain leads to lower level of processing and hence low value addition…

Field Losses (Pest, Diseases, Rodents etc))

Pre-Processing(e.g. inefficient harvesting, drying, milling)

Transport(e.g. spillage, leakage)

Storage(e.g. technical deficiencies)

Processing & Packaging(e.g. excessive peeling, washing)

Marketing(e.g. spoilage, rotting in stores)

Rich Countries – High

losses at a later stage in the food chain

Co

nsu

mer

Pro

du

cer

Field Fork

Wastage by Consumer(e.g. overeating, food wastage)

Developing

Countries –

Relatively high

losses in the initial parts of

the value chain

Britt-Louise Andersson, SIWI

Level of Processing across Segments

Segment India Other Countries

Fruits and Vegetables

2.2%US A (65 %), Philippines (78%)

China (23)%;

Marine 26%

60-70% in developed countries

Poultry 6%

Buffalo Meat

20%

Milk 35%60-75% in developed countries

Inadequacy

of

Agricultural Marketing infrastructure

Faults………………..

Dr. R. R. K, Dy. A.M.A., MSTC, Hyderabad

The First Ever National Agriculture Policy was announced in July 2000 has indicated a nine-fold package of policy initiatives to achieve the objectives

• Development of Sustainable agriculture• Food and Nutritional security• Generation and Transfer of Technology• Improvement of input efficiency• Provision of incentives for agriculture• Promotion of Investments in agriculture

• Strengthening of institutional infrastructure• Better risk management• Introduction of Management Reforms

The expert committee, Government of India (June 2001) made an assessment of investment requirement of Rs.268742 crore for investment in agricultural marketing Infrastructure.

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

Recommendations

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.

Recommendations…….

Strategies & Initiatives: Enhancing Value Addition

Draft National Policy on Food Processing prepared.Draft National Policy on Food Processing prepared.

Draft Processed Food Development Act formulated.Draft Processed Food Development Act formulated.

Package of promotional schemes available for Package of promotional schemes available for Agriculture infrastructure development and Agriculture infrastructure development and quality improvement.quality improvement.

schemes

Post Harvest Infrastructure

• 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

Agrilculutural Marketing Infrastructure, Grading & Standardization Scheme

• Agriculture/Horticulture

• Fisheries

• Meat & Poultry

• Minor Forest Produce

• Dairy

• Medicinal plants

• Apiculture

Coverage of the Scheme

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

Components of the Scheme…

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.

Infrastructure then & now

REDEFINING THE SUPPLY CHAIN