Market led extension

I SEMINAR ON

Presented By:Preety

PGS12RHS390Jr. MHSc.2

With globalization of the market, farmers need to transform themselves from mere producers-sellers in the domestic market to producers cum sellers in a wider market.

Producers

Sellers

Produc-ers

Sellers

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Introduction

Keeping this in view, MANAGE started working on the concept of ‘Market-Led Extension’ and a beginning was made through a three day national workshop on Market-Led Extension at MANAGE during 18th-20th December, 2001.

• Market led means identification of customer needs and wants before offering service.

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• Market led extension is market ward orientation of agriculture through

extension includes agriculture and economics

• The perfect blend for reaching at the door steps of farming community with the help of appropriate technology.

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Why MLE?• Even after 65 years of independence, the

quality, timely and cost effective delivery of adequate inputs remains a dream

• Farmers are not able to sell their surplus produce remuneratively

• Plenty of distress sales among farmers

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Knowledge-skill input crisis

Efficacy crisis

Credibility crisis

Reorganization structure crisis

With the changing scenario of Indian agriculture, with newly added face of marketing, the extension system is likely to undergo series of crises:

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Conversion of P-L-E into M-L-E

Orientation of extension system with knowledge and skills related to the market.

Minimization of production cost.

Introduction of export oriented product.

Modernization of wholesale markets or new markets with new Agricultural policy.

NEED

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Paradigm Shift from Production-led Extension to Market Led Extension

Aspects Production led extension

Market led extension

Purpose/Objective Transfer of production technologies

Enabling farmers to get optimum returns out of the enterprise

Expected end results Delivery of messages, Adoption of package of practices by most of the farmers

High returns

Farmers seen as Progressive farmer/High producer

Farmer as an entrepreneur “Agripreneur”

Focus Production/Yields. “seed to seed”

Whole process as an enterprise/ High returns. “rupee to rupee”.

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Technology Fixed package recommended for an agro climatic zone covering very huge area irrespective of different farming situations

Diverse baskets of package of practices suitable to local situations /farming systems

Extensionists interaction Messages/ Training/ Motivating/ Recommendations

Joint analysis of the issues, varied choices for adoption

Linkages/ Liaisons Research-Extension- Farmer

Research-Extension –Farmer- Market

Extensionists’ role Limited to delivery mode and feedback to research system

Enriched with market intelligence besides the TOT function.

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Contact with farmers Individual Farmer’s intrest group/ Commodity Intrest Groups/ SHGs

Maintenance of records Not much importance as the focus was on production

Very important as agriculture, viewed as an enterprise to understand the cost benefit ratio and the profits generated

Information and technology support

Emphasis on production technologies

Market intelligence including likely price trends, demand position, current prices, market practices, communication network etc. besides production technologies.

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Flow Chart of Agriculture as an Enterprise:-

Rupees (Credit/Investment)

What to produce

Analysis of land holding for

suitability of crops

Decision on how much to produce How to produce

Post harvest technology

Value addition

Storage/ Transport When to sell

Where to sell

At what price to sell

Selling Rupees

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• With the emergence of agriculture as industry, farmers no longer function in isolation and most of the production decisions are governed by marketing firms and consumer preferences.

• Farming sector would be successful only when farmers produce what market wants, rather than what they are good at producing.

• Farmers, agricultural input suppliers and marketing firms need to work in cohesion, so that, enterprises are mutually benefitted. 13

OBJECTIVES

1. •Conversion of Agriculture sector into profit oriented business.

2. •Strengthening R-E-F linkages – between various department at various levels.

3. •Strengthening market linkages to farmers – IT application in Agricultural marketing.

4. •Wider use of electronic mass media for Agricultural Extension.

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Required information to extension system and farmers for MLE

Present agricultural scenario and land use patternSuitability of land holding to various crops/enterprisesCrops in demand in near futureMarket prices of cropsAvailability of inputsUsage of inputsCredit facilities

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Desired qualities of the products by consumersTransport facilitiesMarket network of the local area and the price differences in various marketsNetwork of storage and warehouse facilities availableRegular updating of market intelligenceProduction technologies like improved varieties, organic farming, usage of bio-fertilizers and bio-pesticides, IPM, INM, and right methods of harvesting etc.

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Post-harvest management like processing, grading, standardization of produce, value addition, packaging, storage, certification, etc. with reference to food grains, fruits and vegetables, eggs, poultry, fish, etc.Contract farmingPrivate modern terminal marketsFood retail chainsFood safety and quality standardCertificationWTO regulations

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So how should the

market be for MLE???

Markets

• Markets must be available and profitable• Potential risks include:

rapid price fluctuations;highly competitive markets;limited number of buyers.

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Agri-Markets in India as on 31.03.20076261 Wholesale Markets in India (majority are regulated markets)

20870 Rural Primary Markets (about 15% are regulated markets)

Total – 27131

2459 Principal Regulated Markets

5006 Regulated Market Sub-yards

Total – 7465 (Only 286 regulated markets in 1950)

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Roles of Extension System in Light of Market Led Extension

• SWOT analysis of the market• Organization of Farmers’ Interest Groups (FIGs)• Supporting and enhancing the capacities of locally

established groups under various schemes /programmes

• Enhancing the interactive and communication skills of the farmers

• Establishing marketing and agro-processing linkages between farmers’ groups, markets and private processors.

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• Advice on product planning• Educating the farming community• Direct marketing: farmers need to be informed about

the benefits of direct marketing.• Capacity building of FIGs in terms of improved

production, post harvest operations, storage, transport and marketing.

• Regular usage of internet facility and production of video films of success stories of commodity

specific farmers.

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Market RelatedExtension RelatedProduction Related

Problems in MLE

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Production related•Seasonality of

production: Supply not uniform throughout the year.

•Perish ability of produce: Problem of storage

•Bulkiness of production: Transportation problem

Market related•Non – availability of

MI•Existence of many

middleman•Inferior quality of

produce•Export promotion•Supply chain

management•Retail market

Extension related•Lack of

communication skills.

•Lack of credibility•Insufficient

information related with market and many more

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MLE – ITS CHALLENGESMarket size is large and continuously expanding, but marketing system has not kept pace.Direct marketing “farmer-consumer” is negligible.85% of the 27,294 rural periodic markets, facilities for efficient trade is still almost absent.7200 market yards/sub yards are inadequate, ill equipped and mismanaged.Due to lack of proper handling at farm gate lead to 30% fruits and vegetables, 7% grains, 10% spices loss before reaching market.Rs 50000 crores/year lost due to poor marketing chain.Risk bearingStorage of farm produce and grading

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Different models of MLE in India

Rythu Bazaar in Andhra Pradesh

Apni Mandi in Punjab

Uzhavar Santhai in Tamil Nadu

Shetkari Bazaar in Maharas

htra

Raithara santhe in karnatak

a

Krushak bazaar

in orissa

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Self-help Groups (SHGs) are a unique method to implement developmental schemes at the grass root level by combining self management with access to low cost finances.

SHGs or thrift and credit groups are mostly informal groups whose members pool savings and re-lend within the group on rotational or need basis.

Many of these groups are formed around specific production activity.

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Self Help Groups???

• Brain child of Grameen Bank of Bangladesh• Founded by Prof. Mohammad Yunus in 1975

• The concept of self help groups gained significance especially after 1976 when Prof. Mohd. Yunus of Bangladesh began the experiment with micro credits and self help groups.

• In India NABARD initiated SHGs in 1986-87• In 1991-92, linkage of SHGs to bank

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2 Models of SHGs

•A.P.

Indira Kranthi Pathakam

•Kerala

Kudumbasree

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Research based evidences

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Impact Assessment of Reuters Market Light in Agricultural Information Dissemination in Punjab

Objective:To examine the awareness about utilization of

information by the farmers and extent of satisfaction of the subscribers to the RML scheme

Chahal et al.,2012

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Frequency of Market Information Supply (N=116)

Particulars Number of respondents/Subscribers

Percentage to total

Daily - -

Once in week 11 9.48

Twice in week 10 8.62

Thrice in week 45 38.79

Four times in a week 48 41.39

Five times in a week 2 1.72

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Views of respondent-subscribers on subscription of RML scheme

Particulars No. of

respondents/Subscribers

Percentage to total

Subscription charges not commensurate with the services provided

11 11.11

Services provided not satisfactory 42 42.42

Information not timely 17 17.18

Information not accurate 16 16.16

Information not relevant 11 11.11

Other (ambiguous SMS) 2 2.02

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Advantages of RML Scheme

Particulars Response (no.)

Percentages to total

Could receive higher prices 25 21.55

Spend less time in disposal of produce 14 12.07

Utilized warning about outbreak of disease/insect-pest attack

20 17.24

Availability of inputs 5 4.31

Demand and supply situation of a particular commodity

4 3.45

Weather conditions 63 54.31

Latest market situation of a commodity 59 50.86

Others 8 6.9034

Benefits in terms of price derived based on information from RML Scheme

Particulars Basmati Potato

Farmers (No.)

Quantity(Q)

Price(Rs/Q)

Farmers (No.)

Quantity(Q)

Price(Rs/Q)

Nearby market in the same district

10 962 2266 12 1300 216

Market in other districts of Punjab

- - - 20 11010 350

Distant Markets 8 607 2333 7 1000 700

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• Most of the respondents rated the RML scheme as advantageous as they could get a higher price for their produce, disposed off their produce according to market conditions, got imminent warning on the outbreak of disease, etc.

• It shows that if farmers are provided with the latest information on different crops, it will go a long way in making farming a more remunerative venture.

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Rythu bazaars – A study of the benefits received by farmers

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Dey, 2012

N=250

Increase in Monthly earnings

Response Frequency Percentage

No 8 3.2

Yes 242 96.8

Total 250 100

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Binomial test for significance of association of Rythu bazar and Increase in Income

Category N Obs. Proportion

Test Proportion

Asymptote Sig.(2-Tailed)

Group 1 8 0.03

0.5 .oooaGroup 2 242 0.97

Total 250 1

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Farmers income increment

40

300

400

800

1000

1200

1500

2000

2500

3000

3500

3800

4000

5000

not s

ure

no in

creas

e

1.2 0.4 0.8

16.1

3.7

28.1 26.9

12.8

7.9

0 0.8 0.8 0.4 0 0

percent of respondents

Test for significance for association of Rythu Bazar and farmers’ income increment

Value DF Asymptote sig.(2-sided)

Pearson chi square

250.000a 13 .000

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Benefit on assurance of fixed income


Test Proportion


Group 1

1 224 0.9

0.5 .oooaGroup 2

0 26 0.1

Total - 250 1

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Benefit on account of Immediate Cash Realization


Test Proportion


Group 1

1 224 0.9

0.5 .oooaGroup 2

0 26 0.1

Total - 250 1

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Benefit on account of Receiving Higher Rates


Test Proportion


Group 1

1 229 0.92

0.5 .oooaGroup 2

0 21 0.08

Total - 250 1

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Benefit on account of Location


Test Proportion


Group 1

1 249 1

0.5 .oooaGroup 2

0 1 0

Total - 250 1

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It is evident that the farmers have got benefitted on the account of increase in their earnings, assurance of fixed income, immediate cash realization, higher rates for their vegetables and location of the market yards.

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Case study of citrus fruits: Improving post harvest handling and market linkage in Philippines

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Rapusus2008

Developed local citrus industry through farmers’ cooperative

Post harvest handling and market linkages

Application of Immediate interventions

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Strengthening institutional linkages and support

Major constraints in handling and marketing of citrus fruits

1. Problems in manual handling operations like washing, waxing, sorting and packing.

2. Limited trading capital and inadequate market facilities.

3. Presence of several kinds of middlemen.

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Intervention

Adaptation of sorter/ grader

Use of stackable

plastic crates

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Manual to Mechanical Wooden to plastic

Linkage with institutions

Farmers’ Cooperative

LGU

Markets

PHTRC

DTI

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LGU-Local Government Unit

DTI-Dept. of Trade and Industry

PHTRC-Post Harvest Horticulture Training and Research Centre

The project strengthened the farmers’ cooperative and improved its capacity to provide support services, in an integrated approach, on production, postharvest handling and marketing of citrus produced .

In the area of marketing, the increase in trading capital and the establishment of a packing house equipped with a mechanical sorter, together with the use of plastic crates in citrus handling has increased the volume handled by the cooperative from 20% to 75% of total production of members(14 MT/day).

Gradually the cooperative has pulled the citrus growers away from depending too much on the traders, who usually dictate the price and terms of payment of the citrus

fruits. 52

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The dynamics of Farmers’ Market: A Case Analysis of Uzhavar Sandhai of Tamil Nadu

Kallummal & Srinivasan2007

N=330

Profit Margins of the Farmers

Profit Margin Frequency Percentage

Less than 10% 42 12.7

10%–20% 135 40.9

More than 20% 153 46.4

Total 330 100

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Views of farmers regarding Uzhavar Sandhai

Situation Frequency Percentage

Best 38 11.5

Good 136 41.2

Bad 16 4.8

Worst 5 1.5

Satisfactory 135 40.9

Total 330 100

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Uzhavar Sandhai has created better market for the products of poor, small and margial farmers with fixed prices.

It has enabled the farmers to sell their produce at a competitive price by elimination of middlemen.

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• Indira Kranthi Pathakam, a self help group of Andhra Pradesh conducted marketing interventions during 2001

Objective:To enable the poor farmer producers to obtain the best

price for their agricultural Commodities and NTFPs.To create marketing facility at their door steps.

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Target Group

Farm sector-Poor Farmers

Non Farm Sector-Tribals who

collect NTFPs

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Marketing intervention included:

• Potential survey of Agricultural Commodities and NTFPs• Monthly Action Plan• Micro credit plans• Sourcing of finance• Constitution of Procurement Committee and Advisory

Committee• Training to Committee members and Book Keepers• Supply of required Physical Infrastructure to the VO• Farmers education (on Price, Quality and Markets)• Marketing tie ups with trade, government agencies (MSP

and Direct Marketing)59

Key Commodities under the programme

Paddy

Maize

Red gram

Soya

Neem

Medicinal Plants 60

Achievement of the marketing intervention

2005-06 2006-07 2007-08 2008-09

1.42 1.26

3.1

6.5

Rupees in Billion

61Projection

Direct Benefit for Paddy (For 50 quintals)Particulars @ rate of Rs/Q Total Quantity

(Q)Total Amount(Rs)

Price difference 120 50 6000

Transportation 13 50 650

Bus fare - - 30

Total - 50 6680

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Direct Benefit for Maize (For 128 quintals)

Particulars @ rate of Rs/Q Total Quantity(Q)

Total Amount(Rs)

Overall difference 60 128 7680

Difference in expenditure

20 128 2560

Total difference - 128 10,240

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Direct benefit for chillies (For 50 quintals)

Particulars @ rate of Rs/Q Total Quantity(Q)

Total Amount(Rs)

Price difference 280 50 14000

Transportation 10 50 500

Bus fare - - 14

Cash discount 3 % - - 8070

Adithi dhadwai 2 % - - 5380

Total 559 50 27964

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Benefits to Farmer

Direct

• Remunerative prices• Procurement at door step• No exploitation in

weighment and price• Reduction in costs under

various components (Rs. 50 to Rs.100 per quintal)

• No wage loss• No hassles like in Market

yards

Indirect

• Better terms from trade• More transparency

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A final thought...• The focus of the extension functionaries need to be

extended beyond production. Farmers should be sensitized on various aspects on quality, consumer’s preference, market intelligence, processing and value addition and other marketing information. This will help the farming community to realize high returns for the produce, minimize the production costs, and improve the product value and marketability.

• Market led extension system establishes its position by helping the farmers realize high returns for the

produce and minimize the production costs and improve the product value and marketability

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• Information technology, electronic and print media need to be harnessed to disseminate the

production and market information.

• Indian farmers have moved from subsistence to self sufficiency due to advent of production

technologies. In order to be successful in the liberalized market scenario they have to shift their focus from ‘supply driven’ to ‘market driven’ and produce according to the market needs and earn high returns.

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OpenFor

Discussio

n

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Market led extension

Technology

Transcript of Market led extension