Source CIRCA 1998 survey Source CIRCA 1998 survey ReportReport

Products Rural India Urban India

Nail polish Rs 270 million Rs 81 million

Lip stick Rs 250 million Rs 131 million

Demand for Face cream 1099 tonnes 426 tonnes

Shampoo 2257 tonnes 718 tonnes

Mosquito repellent Rs173million Rs 79 million

Some Myths about rural marketsSome Myths about rural markets

Myth 1-Rural Market is a Myth 1-Rural Market is a homogeneous mass-homogeneous mass-

In reality it is a heterogeneous market. In reality it is a heterogeneous market. various tiers present depending on the various tiers present depending on the incomes like big land lords, traders, small incomes like big land lords, traders, small farmers, marginal farmers, labours, farmers, marginal farmers, labours, artisans, state wise variations in rural artisans, state wise variations in rural demographics are present viz literacy demographics are present viz literacy (kerala 90%,Bihar 44%) & population (kerala 90%,Bihar 44%) & population below poverty line is (orissa 48% Punjab below poverty line is (orissa 48% Punjab 6%)6%)

Myth 2-Disposable income is lowMyth 2-Disposable income is low

In reality nearly 50% of very Rich plus well off In reality nearly 50% of very Rich plus well off households in rural India.households in rural India.

(million)(million) (million)(million) (million)(million)

Demographic classification Urban Rural Total

Very Rich greater than10Lakh P/A 4.84 1.32 6.16

Well off greater than 5Lakh P/A 29.45 27.36 56.81

Total 34.29 28.68 62.97

% of total 54% 46% 100%

Myth 3-Individuals decide about Myth 3-Individuals decide about purchasespurchases

In reality decision making process is In reality decision making process is collective purchase process-collective purchase process-influencer, decider, buyer, one who influencer, decider, buyer, one who pays all may be different. so pays all may be different. so marketers may must address brand marketers may must address brand message at all levels.message at all levels.

What makes Rural Markets What makes Rural Markets attractive ?attractive ?

Urban Markets are becoming increasingly complex, competitive & Urban Markets are becoming increasingly complex, competitive & saturatedsaturated

A huge untapped Market.-6 lakhs villages with 700mn people.A huge untapped Market.-6 lakhs villages with 700mn people.

The rise in disposable income of the rural familiesThe rise in disposable income of the rural families

Impact of Electronic Media satellite channelsImpact of Electronic Media satellite channels

Increase in literacy level as a result increase in white collar jobs in Increase in literacy level as a result increase in white collar jobs in nearby towns & cities means more disposable income. (Airtel ad - nearby towns & cities means more disposable income. (Airtel ad - “Baba, ghabrana mat. Is bheed mein, main khounga nahin“Baba, ghabrana mat. Is bheed mein, main khounga nahin ))

Revolution in the Information Technology- sanchar dhabasRevolution in the Information Technology- sanchar dhabas

Women empowerment-Project shakthi by HULWomen empowerment-Project shakthi by HUL

Some impressive facts about the Some impressive facts about the rural Indiarural India

There are 42,000 rural super markets (haats) in India There are 42,000 rural super markets (haats) in India that exceed the total number of retail chain stores in that exceed the total number of retail chain stores in the united states(35,000)the united states(35,000)

In the year 2001-2002 the LIC sold 55% of its policies In the year 2001-2002 the LIC sold 55% of its policies in rural India.in rural India.

Of the 20 lakhs BSNL mobile connections 50% are in Of the 20 lakhs BSNL mobile connections 50% are in small towns & villages.small towns & villages.

The billing per cell phone in small towns in Andhra The billing per cell phone in small towns in Andhra Pradesh is higher than the billing in the state Pradesh is higher than the billing in the state capital.capital.

CONT_ _ _ _CONT_ _ _ _

Some impressive facts about the Some impressive facts about the rural Indiarural India

Of the 2 crore who have signed up for Of the 2 crore who have signed up for rediffmail,60% are from small towns.of the rediffmail,60% are from small towns.of the one lakhs who have transacted on the rediff one lakhs who have transacted on the rediff shopping site 50% are from small towns.shopping site 50% are from small towns.

Internet access in semi urban & rural areas Internet access in semi urban & rural areas has increased through the sanchar dhabas has increased through the sanchar dhabas of BSNL operating in 3617 out of 6,332 of BSNL operating in 3617 out of 6,332 blocks in the country.blocks in the country.

The 41 million kisan credit cards issued in The 41 million kisan credit cards issued in rural India exceed the 40 million credit plus rural India exceed the 40 million credit plus debit cards issued in urban India. debit cards issued in urban India.

Classification of Indian EconomyClassification of Indian Economy

Indian Economy

Rural Sector Urban Sector

Agricultural SectorNon Agricultural

Sector

Indian Economy

Rural Sector Urban Sector

Agricultural SectorNon Agricultural

Sector

1.Crop Cultivation 1.Industry-Cottage & village industry2.Animal Husbandry (khadi, Handloom, Crafts)3.Dairying 2.Business-Small shops, petty traders4.Fisheries 3.Services-communication,Banking,5.Poultry Insurance, Education, Tailoring etc6.Floriculture7.Horticulture

Evolution of Rural MarketingEvolution of Rural Marketing Phase-1(Before the 1960s)Phase-1(Before the 1960s)

Agricultural produces like food grains & Agricultural produces like food grains & industrial inputs like cotton & sugar cane industrial inputs like cotton & sugar cane were the primary products which were were the primary products which were marketed marketed

During this period, Scope for farm During this period, Scope for farm mechanization equipment (Tractors, pump mechanization equipment (Tractors, pump sets) & agricultural inputs like fertilizers, sets) & agricultural inputs like fertilizers, seeds & pesticides were very limited. seeds & pesticides were very limited.

As the rural economy was in primitive As the rural economy was in primitive stage, Marketing of products made by stage, Marketing of products made by skilled workers in rural areas was an skilled workers in rural areas was an important activity.important activity.

Phase-II (1960s-1990)Phase-II (1960s-1990) The green revolution changed the face of The green revolution changed the face of

rural india by using scientific farming rural india by using scientific farming practices with the advent of agricultural practices with the advent of agricultural inputs & implements.inputs & implements.

During this period apart from conventional During this period apart from conventional agricultural marketing a new area of agricultural marketing a new area of marketing of agricultutural inputs emerged. marketing of agricultutural inputs emerged. This period saw the emergence of This period saw the emergence of companies such as M&M, Escorts, Eicher & companies such as M&M, Escorts, Eicher & others.others.

During this period the marketing of rural During this period the marketing of rural products received considerable attention products received considerable attention through agencies like Khadi & Village through agencies like Khadi & Village industry commission, Bunkar socities & industry commission, Bunkar socities & handicrafts emporiumhandicrafts emporium..

Phase-III (After-1990s)Phase-III (After-1990s)

As a result of India’s industrial sector As a result of India’s industrial sector gained strength & maturity signifying the gained strength & maturity signifying the transition of agricultural society into an transition of agricultural society into an industrial one. industrial one.

The increased efforts of central & state The increased efforts of central & state government for rural development & rural government for rural development & rural reforms witnessed socio economic reforms witnessed socio economic progress.progress.

All these factors resulted in the growth of All these factors resulted in the growth of rural markets for house hold consumables rural markets for house hold consumables & durables& durables..

Government Policies for rural Government Policies for rural reformsreforms

Pradhan Mantri gramodaya yojana -Pradhan Mantri gramodaya yojana -announced in 2002 fund of 5000 crores announced in 2002 fund of 5000 crores sanctioned out of which 50% for roads & sanctioned out of which 50% for roads & rest for house, water, sanitation.rest for house, water, sanitation.

Pradhan Mantri gram sadak yojanaPradhan Mantri gram sadak yojana Pradhan mantri Rojagar yojana.-To provide Pradhan mantri Rojagar yojana.-To provide

skill based training & credit.skill based training & credit. National housing & habitat policy-aimed at National housing & habitat policy-aimed at

providing for all.providing for all. Swarna jayanti gram swarojagar-on going Swarna jayanti gram swarojagar-on going

programmes for the self employment of programmes for the self employment of poor.poor.

Defining Rural IndiaDefining Rural India According to NABARD(National Bank for According to NABARD(National Bank for

Agricultural and Rural Development) all Agricultural and Rural Development) all locations irrespective of villages or town locations irrespective of villages or town upto a population of ten thousand will be upto a population of ten thousand will be considered as rural.considered as rural.

According to planning commission towns According to planning commission towns with population up to 15,000 are considered with population up to 15,000 are considered as rural. as rural.

In terms of marketing rural India can be In terms of marketing rural India can be defined as- defined as-

For FMCG industry rural India can be For FMCG industry rural India can be defined as all locations having population defined as all locations having population up to 20,000 irrespective of their status as up to 20,000 irrespective of their status as villages or towns.villages or towns.

For consumer durables the rural market can For consumer durables the rural market can be defined as all locations having be defined as all locations having population up to 50,000population up to 50,000..

Definition of Rural MarketingDefinition of Rural Marketing According to the national commission on agriculture “rural According to the national commission on agriculture “rural

marketing is a process which starts with a decision to marketing is a process which starts with a decision to produce a saleable farm commodity & it involves all the produce a saleable farm commodity & it involves all the aspects of market structure & includes pre & harvest aspects of market structure & includes pre & harvest operations, assembling, grading, storage, transportation & operations, assembling, grading, storage, transportation & distribution.”distribution.”

As per Thompson “The study of rural marketing comprises As per Thompson “The study of rural marketing comprises of all the operations & the agencies conducting them of all the operations & the agencies conducting them involved in the movement of farm produced food, raw involved in the movement of farm produced food, raw materials such as textiles, from the farms to the final materials such as textiles, from the farms to the final consumers & the effects of such operations on producers, consumers & the effects of such operations on producers, Middlemen & consumers.”Middlemen & consumers.”

The above two definitions concentrates on goods from The above two definitions concentrates on goods from rural to urban.rural to urban.

Rural Marketing is a two-way marketing process. Its Rural Marketing is a two-way marketing process. Its content now encompasses inflow of products into rural content now encompasses inflow of products into rural areas for production or consumption purposes & also areas for production or consumption purposes & also outflow of products to urban areasoutflow of products to urban areas..

To Rural To urban

From Urban 1.Consumable & durable agricultural inputs.

2.Consumables like soaps, detergents, cosmetics, beverages etc

3.Consumer durables like Mopeds, television sets, Electrical goods & more.

Agricultural inputs like fertilizers, pesticides, seeds, Tractors, Power tillers etc.

From Rural Rural artisans services & products (bamboo baskets, ropes, small agricultural tools & aluminum utensils. Rural artisans like blacksmiths, carpenters & cobblers cater to the professional & household needs of the rural people.

1.Agricultural & allied production

(Food grains, oil seeds, cotton ,sugarcane & others are consumed by urbanites after due processing.

2.Rural artisans & rural industry products.

Handloom textiles, cottage industry products like agarbathi, safety matches & others.

Components of Rural MarketComponents of Rural Market

Market DifferenceMarket Difference 1.Diverse in Nature.1.Diverse in Nature.Environmental DifferenceEnvironmental Difference 1.Small settlements1.Small settlements 2.Low infrastructural level 2.Low infrastructural level 3.Low density of population3.Low density of population 4.Poor connectivity between villages4.Poor connectivity between villagesPeculiar social relationsPeculiar social relations 1.Individuals are better known & identified.1.Individuals are better known & identified. 2.Social norms influences the individual 2.Social norms influences the individual

more.more. 3.Caste influence is direct & strong.3.Caste influence is direct & strong.

Classification of Rural Markets -1Classification of Rural Markets -1 Rural market can be classified as below.Rural market can be classified as below.

1.1.Consumer market - Consumer market - consist of individuals consist of individuals & households.& households.

Products:Products:

Consumables-Food products, toiletries, Consumables-Food products, toiletries, cosmetics, textiles, garments & footwear.cosmetics, textiles, garments & footwear.

Durables-Watches, Bicycles, television Durables-Watches, Bicycles, television sets, radios, home appliance, two wheeler sets, radios, home appliance, two wheeler etc.etc.

Classification of Rural Markets-2Classification of Rural Markets-2

2.2.Institutional Market-Institutional Market-

Consist of Agricultural & allied activities, food Consist of Agricultural & allied activities, food processing, poultry farming, fishery, animal processing, poultry farming, fishery, animal husbandry, cottage industries, health centers, husbandry, cottage industries, health centers, schools, co operatives, NGOs etc.schools, co operatives, NGOs etc.

Products-Products-

ConsumablesConsumables: Agri inputs (seeds, fertilizers, : Agri inputs (seeds, fertilizers, pesticides) animal feed, fishnets, fuel (Diesel/Petrol) pesticides) animal feed, fishnets, fuel (Diesel/Petrol) Engine oil, etc.Engine oil, etc.

Durables: Agri implements (Tractors, Pump sets & Durables: Agri implements (Tractors, Pump sets & others)others)

..

Classification of Rural Markets-3Classification of Rural Markets-3

3.Service Market- 3.Service Market- consist of consist of individuals, household, individuals, household, production firms.production firms.

Services- Banking, Insurance, Services- Banking, Insurance, Credit, health care, tution, IT & Credit, health care, tution, IT & communication, Power, etccommunication, Power, etc

MODULE 2MODULE 2

RURAL MARKET RURAL MARKET ENVIRONMENTENVIRONMENT

Rural Market EnvironmentRural Market Environment

The potential for marketing of goods & services The potential for marketing of goods & services in rural areas depends heavily on agriculture, in rural areas depends heavily on agriculture, since it is the main occupation here. since it is the main occupation here.

Indian farmers have been receptive to new Indian farmers have been receptive to new technology, which has helped in improving their technology, which has helped in improving their standard of living. standard of living.

Except those organizations manufacturing Except those organizations manufacturing agricultural inputs the rural market has remained agricultural inputs the rural market has remained a ‘dark area' for many companies manufacturing a ‘dark area' for many companies manufacturing consumables & consumer durables. consumables & consumer durables.

only a few major ones like HUL, Lipton & Brooke only a few major ones like HUL, Lipton & Brooke bond & P & G have been aware of the potential bond & P & G have been aware of the potential that existed in the rural market & have been that existed in the rural market & have been operating here for a long time.operating here for a long time.

Rural Market EnvironmentRural Market Environment

To successfully exploit the potential offered by To successfully exploit the potential offered by the rural market there is a need to understand the rural market there is a need to understand the market not just in terms of households & the market not just in terms of households & population ,but in terms of their occupation population ,but in terms of their occupation pattern, income generation, marketing pattern, income generation, marketing arrangements for agricultural produce, the arrangements for agricultural produce, the process of rural & cottage industrialization, process of rural & cottage industrialization, communication facilities, infrastructure communication facilities, infrastructure development, rural buyer behaviour, attitude & development, rural buyer behaviour, attitude & belief of rural people & their changing values & belief of rural people & their changing values & aspirations.aspirations.

Factors or contents of Rural Marketing Factors or contents of Rural Marketing EnvironmentEnvironment

Population, Occupation pattern, income Population, Occupation pattern, income generation.generation.

Location of rural population, expenditure pattern.Location of rural population, expenditure pattern. Literacy level, land distribution, land use pattern.Literacy level, land distribution, land use pattern. Irrigation, development programs, infrastructure Irrigation, development programs, infrastructure

facilities.facilities. Rural credit institutions, rural retail outlets, print Rural credit institutions, rural retail outlets, print

media in rural areas, rural area requirement.media in rural areas, rural area requirement. Problems in rural marketing, rural demand, rural Problems in rural marketing, rural demand, rural

market index.market index.

POPULATIONPOPULATION - About 70 percent of Indians - About 70 percent of Indians reside in rural areas. As per the 2001 census reside in rural areas. As per the 2001 census data, India has a total population of 1027 million data, India has a total population of 1027 million of which rural population is large & is 742 million. of which rural population is large & is 742 million. It should be noted that a large population will It should be noted that a large population will require a wide variety of consumable & durable require a wide variety of consumable & durable goods & services but at the same time these goods & services but at the same time these needs of the rural areas do not automatically needs of the rural areas do not automatically guarantee a market, unless backed by rising guarantee a market, unless backed by rising disposable income & the resultant purchasing disposable income & the resultant purchasing power.power.

Population in India-proportion of Population in India-proportion of rural VS urbanrural VS urban

Year Rural population in million

Proportion to total population (%)

Urban populati

on in million

Proportion to total

population (%)

Total populati

on in million

1951 295.0 82.6 62.0 17.4 357.0

1961 360.0 82.0 79.0 18.0 439.0

1971 439.0 80.1 109.0 19.9 548.0

1981 508.0 76.0 160.0 24.0 668.0

1991 621.0 74.3 215.0 25.7 836.0

2001 742.0 72.2 285.0 27.8 1027.0

Occupation Pattern Occupation Pattern The main occupation for a vast majority of The main occupation for a vast majority of

rural population is agriculture & allied activities. rural population is agriculture & allied activities. About half of the rural population own or lease About half of the rural population own or lease land & cultivate it for their livelihood. land & cultivate it for their livelihood.

Another 27 percent are dependent on these Another 27 percent are dependent on these cultivators for jobs as agriculture laborers. cultivators for jobs as agriculture laborers.

Others include petty shop owners, Merchants, Others include petty shop owners, Merchants, teachers, health workers & village-level teachers, health workers & village-level officials. So disposable income in the hands of officials. So disposable income in the hands of rural people is very much dependent on the rural people is very much dependent on the status of agriculture & other allied activities.status of agriculture & other allied activities.

Table indicating Occupation PatternTable indicating Occupation Pattern

Sl No Occupation Proportion to total rural population(%)

1 Agriculture 50

2 Agricultural Labour 27

3 Business 10

4 Non agricultural Labour 9

5 Salary Earners 2

6 Not gainfully employed 2

Total Rural population 100

Income generationIncome generation

The occupation pattern dictates the The occupation pattern dictates the pattern of income generation. Major pattern of income generation. Major occupation being agriculture a large occupation being agriculture a large portion of income generated in rural areas portion of income generated in rural areas is from agriculture & agriculture related is from agriculture & agriculture related activities.activities.

The prosperity of rural areas & The prosperity of rural areas & development of rural market to a large development of rural market to a large extent depends upon the progress of extent depends upon the progress of agriculture & related activities.agriculture & related activities.

Table Indicating Income Table Indicating Income Generation in Rural AreasGeneration in Rural Areas

Sl No Occupation Proportion to total rural population(%)

1 Agriculture 59

2 Agricultural wages 16

3 Business & Crafts 9

4 Non agricultural Wages 7

5 Salaries 3

6 Others 6

Total Rural Total Rural populationpopulation

100100

Expenditure Pattern -1Expenditure Pattern -1 The National Sample Survey organization The National Sample Survey organization

conducts consumer expenditure surveys in the conducts consumer expenditure surveys in the country. Usually expenditure data are country. Usually expenditure data are presented expenditure group wise for different presented expenditure group wise for different items under two major headings food items & items under two major headings food items & non food items. non food items.

Out of every rupee spent in 2004-05 by the Out of every rupee spent in 2004-05 by the average rural Indian on consumption, 55 paise average rural Indian on consumption, 55 paise was spent on food. Of this, 18 paise was spent was spent on food. Of this, 18 paise was spent on cereals and cereal substitutes, 8 paise on on cereals and cereal substitutes, 8 paise on milk and milk products, 6 paise on vegetables, milk and milk products, 6 paise on vegetables, 5 paise on edible oil, 5 paise on sugar, salt and 5 paise on edible oil, 5 paise on sugar, salt and spices, and 5 paise on beverages, spices, and 5 paise on beverages, refreshments and processed food.refreshments and processed food.

Expenditure Pattern -2Expenditure Pattern -2 Out of every rupee spent in 2004-05 by the Out of every rupee spent in 2004-05 by the

average urban Indian on consumption, 43 paise average urban Indian on consumption, 43 paise was spent on food. Of this, 10 paise was spent on was spent on food. Of this, 10 paise was spent on cereals and cereal substitutes, 8 paise on milk cereals and cereal substitutes, 8 paise on milk and milk products, 6 paise on beverages, and milk products, 6 paise on beverages, refreshments and processed food, and 4 paise on refreshments and processed food, and 4 paise on vegetables.vegetables.

The share of clothing in total consumer The share of clothing in total consumer expenditure has fallen from 7-8% to 4.5% in rural expenditure has fallen from 7-8% to 4.5% in rural India & from 5-7% to 4% in urban India.India & from 5-7% to 4% in urban India.

From the above data it is clear that people in From the above data it is clear that people in rural India spend more on food item rather than rural India spend more on food item rather than on beverages, refreshments and processed food.on beverages, refreshments and processed food.

Literacy LevelLiteracy Level Since independence a number of steps have Since independence a number of steps have

been taken to increase the rate of of been taken to increase the rate of of literacy in rural India.literacy in rural India.

The high literacy rate implies that The high literacy rate implies that communication should not prove a hurdle communication should not prove a hurdle with the rural population, provided with the rural population, provided appropriate means are chosen. Today appropriate means are chosen. Today television has proved to be an effective television has proved to be an effective mass medium for communication with the mass medium for communication with the rural masses. The television network in the rural masses. The television network in the country today covers nearly 100 percent of country today covers nearly 100 percent of the population offering a grater reach when the population offering a grater reach when compared to any other mass medium.compared to any other mass medium.

Table indicating Literacy LevelTable indicating Literacy Level

Sl No Sex

Literacy Levels in Percentage

1971 1981 1991 2001

    Rural Urban Rural urban Rural UrbanRural urban

1 Male 34 61 41 66 58 81 71 87

2 Female 13 42 18 48 31 64 47 73

  Total 24 52 30 57 45 73 59 80

Land DistributionLand Distribution The basic resource in agriculture is land. The The basic resource in agriculture is land. The

land distribution is a main factor in deciding the land distribution is a main factor in deciding the distribution of rural income. Since the land distribution of rural income. Since the land distribution is uneven the income distribution is distribution is uneven the income distribution is also uneven which means the rural areas consist also uneven which means the rural areas consist mainly of a large number of small consumers or mainly of a large number of small consumers or families in lower income groups compared to the families in lower income groups compared to the number of families with higher income.number of families with higher income.

From the marketing point of view it is important From the marketing point of view it is important for marketing of seeds, fertilizers & pesticides as for marketing of seeds, fertilizers & pesticides as the demand is there irrespective of the size of the demand is there irrespective of the size of holding & size of income. But durable inputs like holding & size of income. But durable inputs like tractors or major agricultural machinery may be tractors or major agricultural machinery may be in demand only with large sized or higher income in demand only with large sized or higher income groups.groups.

Table indicating Land Table indicating Land DistributionDistribution

Sl No Size in hectares Percentage Proportion of

holdings

Percentage Proportion of area cultivated

Average Holding size (in hectares)

1 Marginal (Up to 1 Hectare)

56.5 12.2 0.39

2 Small (1 to 2) 18.0 14.1 1.43

3 SemiMedium(2to4 ) 14.0 21.2 2.76

4 Medium 4 to 10 9.1 29.7 5.97

5 Large (Above 10) 2.4 22.8 17.24

Total 100.0 100.0 1.82

(source: Department of Agriculture, GOI, Annual report1994-1995)

Land use patternLand use pattern

Nearly 70% of the area under cultivation is Nearly 70% of the area under cultivation is occupied by food crops only 30% under occupied by food crops only 30% under non food crops.non food crops.

The preference for food crops is due to the The preference for food crops is due to the fact that farmers prefer to have their food fact that farmers prefer to have their food secured & so retain sufficient quantities of secured & so retain sufficient quantities of the production for their own consumption the production for their own consumption & only the balance will be sold in the & only the balance will be sold in the market. This has an implication in market. This has an implication in generation of disposable income.generation of disposable income.

IrrigationIrrigation

Irrigation plays a major role in increasing Irrigation plays a major role in increasing the potential of rural market. As of 1999-the potential of rural market. As of 1999-2000 the country’s created irrigation 2000 the country’s created irrigation potential is estimated to have gone up to potential is estimated to have gone up to 94.7 million hectares which is about 50% 94.7 million hectares which is about 50% of area under cultivation. of area under cultivation.

Wherever irrigation facilities are available Wherever irrigation facilities are available the rate of technology adoption is also the rate of technology adoption is also higher resulting in increased productivity higher resulting in increased productivity & thereby increased incomes to the rural & thereby increased incomes to the rural people. people.

Development Programmes-1Development Programmes-1 The five year plans have witnessed The five year plans have witnessed

massive investments by the central & massive investments by the central & state governments in rural areas in a state governments in rural areas in a number of development programmes.number of development programmes.

Intensive Agricultural district programme Intensive Agricultural district programme (IADP-popularly known as package (IADP-popularly known as package programme)programme)

Intensive Agricultural area programme Intensive Agricultural area programme (IAAP)(IAAP)

High-yielding varieties programme (HYVP-High-yielding varieties programme (HYVP-green revolution)green revolution)

Development Programmes-2Development Programmes-2

Drought Prone areas programme (DPAP)Drought Prone areas programme (DPAP) Small farmers development agency (SFDA)Small farmers development agency (SFDA) Marginal farmers & agricultural Laborers Marginal farmers & agricultural Laborers

development programme (MFAL)development programme (MFAL) Integrated tribal development programme Integrated tribal development programme

(ITDP)(ITDP) Hill area development programmeHill area development programme Operation flood (White Revolution)Operation flood (White Revolution)

Development Programmes-3Development Programmes-3

Sericulture developmentSericulture development Fisheries development Fisheries development (Blue revolution)(Blue revolution) (For more details refer- (For more details refer-

http://www.fao.org/NEWS/1998/980802-http://www.fao.org/NEWS/1998/980802-e.htm)e.htm)

Integrated rural development programme Integrated rural development programme (IRDP)(IRDP)

Sampoorna grameen rozgar yojana (SGRY)Sampoorna grameen rozgar yojana (SGRY) Desert development programmeDesert development programme Integrated waste land development Integrated waste land development

programme & several others.programme & several others.

Why Green RevolutionWhy Green Revolution

The term "Green Revolution" is a general The term "Green Revolution" is a general one that is applied to successful one that is applied to successful agricultural experiments in many agricultural experiments in many developing countries. It is NOT specific to developing countries. It is NOT specific to India. But it was most successful in India. India. But it was most successful in India. Aimed at improving food grain production Aimed at improving food grain production in the country & hence achieving food in the country & hence achieving food self sufficiency. self sufficiency.

What was the Green Revolution What was the Green Revolution in India?in India?

There were three basic elements in the There were three basic elements in the method of the Green Revolution:method of the Green Revolution:

(1) Continued expansion of farming areas.(1) Continued expansion of farming areas.

(2) Double-cropping existing farmland.(2) Double-cropping existing farmland.

(3) Using seeds with improved genetics.(3) Using seeds with improved genetics.

Continued expansion of farming Continued expansion of farming areasareas

As mentioned above, the area of land As mentioned above, the area of land under cultivation was being increased under cultivation was being increased right from 1947. But this was not enough right from 1947. But this was not enough in meeting with rising demand. in meeting with rising demand.

Other methods were required. Yet, the Other methods were required. Yet, the expansion of cultivable land also had to expansion of cultivable land also had to continue. So, the Green Revolution continue. So, the Green Revolution continued with this quantitative expansion continued with this quantitative expansion of farmlands. However, this is NOT the of farmlands. However, this is NOT the most striking feature of the Revolution.most striking feature of the Revolution.

Double-cropping existing Double-cropping existing farmlandfarmland

Double-cropping was a primary feature of the Double-cropping was a primary feature of the Green Revolution. Instead of one crop season per Green Revolution. Instead of one crop season per year, the decision was made to have two crop year, the decision was made to have two crop seasons per year. The one-season-per-year seasons per year. The one-season-per-year practice was based on the fact that there is only practice was based on the fact that there is only natural monsoon per year. This was correct. So, natural monsoon per year. This was correct. So, there had to be two "monsoons" per year. One there had to be two "monsoons" per year. One would be the natural monsoon and the other an would be the natural monsoon and the other an artificial 'monsoon.' artificial 'monsoon.'

The artificial monsoon came in the form of huge The artificial monsoon came in the form of huge irrigation facilities. Dams were built to arrest irrigation facilities. Dams were built to arrest large volumes of natural monsoon water which large volumes of natural monsoon water which were earlier being wasted. Simple irrigation were earlier being wasted. Simple irrigation techniques were also adopted. techniques were also adopted.

Using seeds with superior Using seeds with superior geneticsgenetics

This was the scientific aspect of the Green This was the scientific aspect of the Green Revolution. The Revolution. The Indian Council for Agricultural Research developed new quality of high yield value (HYV) developed new quality of high yield value (HYV) seeds.seeds.

The most noteworthy HYV seed was the K68 The most noteworthy HYV seed was the K68 variety for wheat. The credit for developing this variety for wheat. The credit for developing this high yield value seed goes to Dr. M.P. Singh high yield value seed goes to Dr. M.P. Singh who is also regarded as the hero of India's who is also regarded as the hero of India's Green revolution. Green revolution.

Infrastructure facilities-1Infrastructure facilities-1

1. Rural Electrification-1. Rural Electrification-

The central government created an organization The central government created an organization called Rural electrification corporation (REC) with called Rural electrification corporation (REC) with the sole idea of financing rural electrification the sole idea of financing rural electrification projects. as a result electricity connection is now projects. as a result electricity connection is now available in 88% of the villages in India.available in 88% of the villages in India.

Due to subsidized rate of providing electricity for Due to subsidized rate of providing electricity for agriculture purpose marketers of electric motors agriculture purpose marketers of electric motors & pump sets & also other electrically operated & pump sets & also other electrically operated agricultural machinery like threshers & agricultural machinery like threshers & winnowers can concentrate in rural areas.winnowers can concentrate in rural areas.

Under kutir jyothi programme 43.6 lakh light Under kutir jyothi programme 43.6 lakh light connections have been released to the rural poor connections have been released to the rural poor people.people.

REC acccords high priority to the development of REC acccords high priority to the development of Dalit bastis, tribal villages & backward areas.Dalit bastis, tribal villages & backward areas.

Infrastructure facilities-2Infrastructure facilities-2 2. Rural Communication2. Rural Communication

a. Road Networka. Road Network The Road network of over three million The Road network of over three million

kilometers in India is the largest the world. The kilometers in India is the largest the world. The quadrilateral project consisting of north, south, quadrilateral project consisting of north, south, East & West corridors is making progress which East & West corridors is making progress which provides better access to rural areas as well as provides better access to rural areas as well as urban areas.urban areas.

b.Rail Network-b.Rail Network- Railway network should be made more accessible Railway network should be made more accessible

to rural people which is not happening in the to rural people which is not happening in the present scenario.present scenario.

Infrastructure facilities-3Infrastructure facilities-3

3.Television & Radio3.Television & Radio

Doordarshan has a reach over 87% of the Doordarshan has a reach over 87% of the population plays a important medium of population plays a important medium of communication in rural area. some programmes communication in rural area. some programmes are telecasted specially for agriculture purpose & are telecasted specially for agriculture purpose & welfare programmes which our rural people can welfare programmes which our rural people can use the information. Even satellite channels are use the information. Even satellite channels are making in roads to rural areas.making in roads to rural areas.

From six radio stations at the time of From six radio stations at the time of independence All India Radio today has 208 radio independence All India Radio today has 208 radio stations & provide a coverage to rural & urban stations & provide a coverage to rural & urban population population

Infrastructure facilities-4Infrastructure facilities-4 4.Postal System-4.Postal System-

The department of post comes under the ministry The department of post comes under the ministry of communications & information technology. of communications & information technology. India has 1,55,279 post office & which serves on India has 1,55,279 post office & which serves on an average of 6,614 persons.an average of 6,614 persons.

5.Telecom & Mobile services-5.Telecom & Mobile services- 1.Village public telephone1.Village public telephone2.Mobile postman scheme -2.Mobile postman scheme -DAAKIYA AAYA! DAAKIYA AAYA!

MOBILE LAAYA! (MOBILE POSTMAN SCHEME) MOBILE LAAYA! (MOBILE POSTMAN SCHEME) 24.12.200224.12.2002

The scheme is designed to provide The scheme is designed to provide availability of a phone at the availability of a phone at the doorstep of every rural household.doorstep of every rural household.Under the scheme, mobile phone will Under the scheme, mobile phone will be provided to a Postman(Gramin be provided to a Postman(Gramin Sanchar Sevak). When the postman Sanchar Sevak). When the postman goes to a house to deliver a letter, he goes to a house to deliver a letter, he will carry the phone with him. Since a will carry the phone with him. Since a postman reaches practically every postman reaches practically every house, the scheme will enable the house, the scheme will enable the phone service to be made available phone service to be made available practically to all citizens in his area.practically to all citizens in his area.

Rural sources of creditRural sources of credit

Credit providers in Rural India can be Credit providers in Rural India can be classified into two groups.classified into two groups.

1.organised.1.organised.

2.Un organized.2.Un organized.

Forms of Rural CreditForms of Rural Credit

1.Unorganized Finance Private Money Lenders

2.Organised credit Providers Banking-Nationalised Banks, Grameen Banks, Co-operatve societies, Co-operative banks, Non Banking institutions, Peerless, Sahara & others

3.Innovative Credit Systems Micro finance (SHGs), Chit funds.

Unorganized Finance.Unorganized Finance. In the past private money lenders have provided the much In the past private money lenders have provided the much

needed credit in rural areas against gold, jewellery, land & needed credit in rural areas against gold, jewellery, land & house as collateral security. Access to finance was informal house as collateral security. Access to finance was informal & easy as it did not require any paper work (as in the case & easy as it did not require any paper work (as in the case of bank). Money lenders are of four categories.of bank). Money lenders are of four categories.

Rich farmers who lend to fellow villagers & farmers.Rich farmers who lend to fellow villagers & farmers.

Village shopkeepers.Village shopkeepers.

Professional money lenders who belong to a particular Professional money lenders who belong to a particular community.community.

Commission agents, (Artiyas in mandis).-The agricultural Commission agents, (Artiyas in mandis).-The agricultural marketing system (mandi) set up by the government marketing system (mandi) set up by the government includes commission agents who help build the interface includes commission agents who help build the interface between farmers & buyers. Over the years these artiyas between farmers & buyers. Over the years these artiyas have become private financers of farmers for the have become private financers of farmers for the productive & consumption needs there by ensuring that productive & consumption needs there by ensuring that farmers sell their produce only through them.farmers sell their produce only through them.

Organized SectorOrganized Sector

Rural finance in the organized sector has Rural finance in the organized sector has been spearheaded by cooperatives, been spearheaded by cooperatives, commercial banks & RRBs commercial banks & RRBs

under government programmes these under government programmes these organizations provide timely, cheap & organizations provide timely, cheap & adequate credit to benefit small & adequate credit to benefit small & marginal farmers & the weaker sections marginal farmers & the weaker sections of society.of society.

Primary Agricultural cooperative Primary Agricultural cooperative societies (PACS)societies (PACS)

PACS were set up under the cooperative credit societies PACS were set up under the cooperative credit societies act,1904 .A society can be formed with 10 or more act,1904 .A society can be formed with 10 or more persons, who raise capital for the purpose of giving persons, who raise capital for the purpose of giving loans & supporting the essential activities of the loans & supporting the essential activities of the members. PACS have a mandate to supply agricultural members. PACS have a mandate to supply agricultural inputs & services to members at remunerative prices & inputs & services to members at remunerative prices & also assist in arranging for improved irrigation on land.also assist in arranging for improved irrigation on land.

The Nationalization of banks resulted in many new The Nationalization of banks resulted in many new branches being opened in rural India under directives branches being opened in rural India under directives from the government of India. This was a process aimed from the government of India. This was a process aimed at extending the formal credit for agricultural & allied at extending the formal credit for agricultural & allied activities in rural areas. Out of 66,500 branches of activities in rural areas. Out of 66,500 branches of nationalized commercial banks as many as 32,300 i.e nationalized commercial banks as many as 32,300 i.e 48% are in rural India.48% are in rural India.

The RRBs emerged on the rural credit scene in 1975,to The RRBs emerged on the rural credit scene in 1975,to meet the the credit needs ofmeet the the credit needs of

Primary Agricultural cooperative Primary Agricultural cooperative societies (PACS)societies (PACS)

small & marginal farmers & the weaker sections of small & marginal farmers & the weaker sections of society.society.

Non Banking financial Institutions.-like Peerless & Non Banking financial Institutions.-like Peerless & Sahara have tapped the rural & small town markets for Sahara have tapped the rural & small town markets for deposits. They appoint rural youth from the same deposits. They appoint rural youth from the same locality as agents. These agents approach families locality as agents. These agents approach families individually, suggest a suitable scheme, help in filling individually, suggest a suitable scheme, help in filling out documents & deliver receipts.out documents & deliver receipts.

These institutions initiated the system of daily & weekly These institutions initiated the system of daily & weekly savings under which the agents collect small amounts savings under which the agents collect small amounts from the daily or weekly earnings of daily wage earners from the daily or weekly earnings of daily wage earners or petty traders. These door to door services could bring or petty traders. These door to door services could bring these house holds into the formal savings instrumentsthese house holds into the formal savings instruments..

Innovative Credit Delivery Innovative Credit Delivery Systems.Systems.

Kisan Credit CardKisan Credit Card

The Kisan credit card scheme, introduced by the The Kisan credit card scheme, introduced by the government in 1998-99 is a revolving cash credit government in 1998-99 is a revolving cash credit facility with unlimited withdrawals & repayments facility with unlimited withdrawals & repayments with the credit limit based on operational land with the credit limit based on operational land holding, cropping pattern & scale of finance. The holding, cropping pattern & scale of finance. The average limit is Rs50,000/-.average limit is Rs50,000/-.

KCC is issued by the rural branches of 27 KCC is issued by the rural branches of 27 commercial banks,334 cooperative banks & 196 commercial banks,334 cooperative banks & 196 RRBs.RRBs.

KCC provides financial security to farmers as it KCC provides financial security to farmers as it compulsorily provides crop insurance.compulsorily provides crop insurance.

Kisan Credit CardKisan Credit Card

KCC provides accident cover of Rs50,000/- to the KCC provides accident cover of Rs50,000/- to the holder on a payment of Rs16/-as annual premium.holder on a payment of Rs16/-as annual premium.

Unlike the plastic credit card in urban, KCC can Unlike the plastic credit card in urban, KCC can be used for purchase of agricultural inputs as be used for purchase of agricultural inputs as well as non agricultural products.well as non agricultural products.

The average credit limit of Rs50,000/- that a The average credit limit of Rs50,000/- that a farmer enjoys, up to to Rs10,000/- can be used farmer enjoys, up to to Rs10,000/- can be used for the purchase of Durable products (CTV, Mixer, for the purchase of Durable products (CTV, Mixer, Grinder, Music system etc)Grinder, Music system etc)

Micro Finance-Self Helping Micro Finance-Self Helping Groups (SHG)Groups (SHG)

A group with 15-20 individuals come together to form a A group with 15-20 individuals come together to form a group.group.

Members of the group agree to save a few rupees every Members of the group agree to save a few rupees every week & deposit the money in a savings bank account week & deposit the money in a savings bank account opened in the name of the group.opened in the name of the group.

Any member can approach the group for a productive loan Any member can approach the group for a productive loan with a minimum rate of interest.with a minimum rate of interest.

Under the NABARD scheme a mature & a regular group can Under the NABARD scheme a mature & a regular group can get a matching loan from their own bank at a low rate of get a matching loan from their own bank at a low rate of interest. On timely return of the loan the group can avail interest. On timely return of the loan the group can avail up to four times their own savings as loans, to increase up to four times their own savings as loans, to increase their kitty to meet the increasing money need of their their kitty to meet the increasing money need of their members looking to start economic activities of their own.members looking to start economic activities of their own.

Chit FundsChit Funds

People become members of registered or People become members of registered or unregistered chit fund groups & pay a unregistered chit fund groups & pay a certain sum of money every month or certain sum of money every month or week as required under the fund week as required under the fund management rules.management rules.

Each month a member can take money Each month a member can take money from the accumulated fund through an from the accumulated fund through an auction.auction.

The advantage to the borrower in The advantage to the borrower in associating with such system is that associating with such system is that limited formalities.limited formalities.

Rural Credit InstitutionRural Credit Institution Nationalized BanksNationalized Banks Private commercial Banks.Private commercial Banks. NABARDNABARD Co-operativesCo-operatives Regional rural BanksRegional rural Banks District central Co-operative banksDistrict central Co-operative banks Farmers Service societyFarmers Service society Agricultural Credit societiesAgricultural Credit societies TradersTraders Land lordsLand lords Commission Agents & FriendsCommission Agents & Friends

Press/Print Media in rural Areas.Press/Print Media in rural Areas.

News papers, Magazines & other News papers, Magazines & other publications enjoy high level readership in publications enjoy high level readership in urban areas. The limited role of news urban areas. The limited role of news papers in rural areas may be due to the papers in rural areas may be due to the below reason.below reason.

Newspapers do not reach the rural areas Newspapers do not reach the rural areas due to poor infrastructural facilities.due to poor infrastructural facilities.

Capacity to subscribe to news papers & Capacity to subscribe to news papers & magazines is low among rural people.magazines is low among rural people.

Literacy levels are low.Literacy levels are low.

Press/Print Media in rural Areas.Press/Print Media in rural Areas.

The limited copies of the news paper subscribed The limited copies of the news paper subscribed by panchayat or library cannot be shared by all by panchayat or library cannot be shared by all the interested readers.the interested readers.

Both central & state governments are Both central & state governments are undertaking development programmes. News undertaking development programmes. News papers carry such useful information besides the papers carry such useful information besides the publicity ads of government.publicity ads of government.

News papers have regional supplements covering News papers have regional supplements covering region specific news interesting to the readers.region specific news interesting to the readers.

News papers now a days have a variety of pages News papers now a days have a variety of pages catering to the needs of different reader catering to the needs of different reader segments-Children, youth, women & adults segments-Children, youth, women & adults covering topics on development, sports, cinema, covering topics on development, sports, cinema, health, personality development, employment & health, personality development, employment & educationeducation

Rural Areas Requirement-1Rural Areas Requirement-1 The rural requirements vary from state to state & The rural requirements vary from state to state &

the priorities also change. The rural the priorities also change. The rural requirements are listed below.requirements are listed below.

Improved seeds & fertilizersImproved seeds & fertilizers Increased means & methods of irrigationIncreased means & methods of irrigation Multipurpose farmingMultipurpose farming Use of modern farming equipments & methods.Use of modern farming equipments & methods. Warehousing & preservation of agricultural Warehousing & preservation of agricultural

produce.produce. Marketing development & remunerative prices Marketing development & remunerative prices

for the produce.for the produce. Improvements in pest control & preservation of Improvements in pest control & preservation of

crops.crops. R & D work & benchmarking with the best R & D work & benchmarking with the best

agricultural practices, yields in the worldagricultural practices, yields in the world

Rural Areas Requirement-2Rural Areas Requirement-2 Training of farmersTraining of farmers Increased investments & credit facilities.Increased investments & credit facilities. Animal health & veterinary facilities.Animal health & veterinary facilities. Literacy of farmers & familiesLiteracy of farmers & families Develop village agro based industries/cottage & village Develop village agro based industries/cottage & village

industries.industries. Population control.Population control. Crop insuranceCrop insurance Health of farmersHealth of farmers Environment friendly agriculture methods.Environment friendly agriculture methods. Water availability managementWater availability management Remunerative price for milk & milk products & Remunerative price for milk & milk products & Provision for subsidiary occupations & incomes.Provision for subsidiary occupations & incomes.

Problems in the Booming Rural Problems in the Booming Rural MarketingMarketing

Although the rural market does offer a Although the rural market does offer a vast untapped potential, it should also be vast untapped potential, it should also be recognized that it is not that easy to recognized that it is not that easy to operate in rural market because of operate in rural market because of several problems. Rural marketing is thus several problems. Rural marketing is thus a time consuming affair and requires a time consuming affair and requires considerable investments in terms of considerable investments in terms of evolving appropriate strategies with a evolving appropriate strategies with a view to tackle the problems.view to tackle the problems.

1.Underdeveloped People and 1.Underdeveloped People and Underdeveloped MarketsUnderdeveloped Markets::

The number of people below poverty line The number of people below poverty line has not decreased in any appreciable has not decreased in any appreciable manner. Thus underdeveloped people manner. Thus underdeveloped people and consequently underdeveloped and consequently underdeveloped market by and large characterize the market by and large characterize the rural markets. rural markets.

Vast majorities of the rural people are Vast majorities of the rural people are tradition bound, fatalistic and believe in tradition bound, fatalistic and believe in old customs, traditions, habits, taboos old customs, traditions, habits, taboos and practices. and practices.

2.Lack of Proper Physical 2.Lack of Proper Physical Communication FacilitiesCommunication Facilities

Nearly fifty percent of the villages Nearly fifty percent of the villages in the country do not have all in the country do not have all weather roads. Physical weather roads. Physical communication of these villages is communication of these villages is highly expensive. Even today most highly expensive. Even today most villages in the eastern parts of the villages in the eastern parts of the country are inaccessible during the country are inaccessible during the monsoon. monsoon.

3.Media for Rural 3.Media for Rural CommunicationCommunication

Among the mass media at some point of Among the mass media at some point of time in the late 50's and 60's radio was time in the late 50's and 60's radio was considered to be a potential medium for considered to be a potential medium for communication to the rural people. communication to the rural people. Another mass media is television and Another mass media is television and cinemas. Statistics indicate that the rural cinemas. Statistics indicate that the rural areas account for hardly 2000 to 3500 areas account for hardly 2000 to 3500 mobile theatres, which is far less when mobile theatres, which is far less when compared to the number of villages. compared to the number of villages.

4.Many Languages and Dialects4.Many Languages and Dialects

The number of languages and The number of languages and dialects vary widely from state to dialects vary widely from state to state, region to region and probably state, region to region and probably from district to district. The from district to district. The messages have to be delivered in the messages have to be delivered in the local languages and dialects. Even local languages and dialects. Even though the number of recognized though the number of recognized languages are only 16, the dialects languages are only 16, the dialects are estimated to be around 850. are estimated to be around 850.

5. 5. Dispersed MarketDispersed Market::

Rural areas are scattered and it is Rural areas are scattered and it is next to impossible to ensure the next to impossible to ensure the availability of a brand all over the availability of a brand all over the country. Seven Indian states account country. Seven Indian states account for 76% of the country's rural retail for 76% of the country's rural retail outlets, the total number of which is outlets, the total number of which is placed at around 3.7 million. placed at around 3.7 million. Advertising in such a highly Advertising in such a highly heterogeneous market, which is heterogeneous market, which is widely spread, is very expensive. widely spread, is very expensive.

6. 6. Low Per Capita IncomeLow Per Capita Income

Even though about 33-35% of gross Even though about 33-35% of gross domestic product is generated in the domestic product is generated in the rural areas it is shared by 74% of the rural areas it is shared by 74% of the population. Hence the per capita population. Hence the per capita incomes are low compared to the incomes are low compared to the urban areas. urban areas.

7. 7. Low Levels of LiteracyLow Levels of Literacy::

The literacy rate is low in rural areas The literacy rate is low in rural areas as compared to urban areas. This as compared to urban areas. This again leads to problem of again leads to problem of communication for promotion communication for promotion purposes. Print medium becomes purposes. Print medium becomes ineffective and to an extent ineffective and to an extent irrelevant in rural areas since its irrelevant in rural areas since its reach is poor and so is the level of reach is poor and so is the level of literacy literacy

For any branded product there are a For any branded product there are a multitude of 'local variants', which multitude of 'local variants', which are cheaper, and, therefore, more are cheaper, and, therefore, more desirable to villagers. (For ex-Edible desirable to villagers. (For ex-Edible oil)oil)

8.Prevalence of spurious brands and 8.Prevalence of spurious brands and seasonal demand:seasonal demand:

9.Different way of thinking9.Different way of thinking

There is a vast difference in the lifestyles There is a vast difference in the lifestyles of the people. The kind of choices of of the people. The kind of choices of brands that an urban customer enjoys is brands that an urban customer enjoys is different from the choices available to the different from the choices available to the rural customer. The rural customer usually rural customer. The rural customer usually has 2 or 3 brands to choose from whereas has 2 or 3 brands to choose from whereas the urban one has multiple choices. The the urban one has multiple choices. The difference is also in the way of thinking. difference is also in the way of thinking. The rural customer has a fairly simple The rural customer has a fairly simple thinking as compared to the urban thinking as compared to the urban counterpart. counterpart.

Rural Retail Outlets.Rural Retail Outlets. Retailing can be defined as the end process of supply chain Retailing can be defined as the end process of supply chain

management where there is a direct interaction with the management where there is a direct interaction with the end user or the customerend user or the customer

Much transformation has taken place in the rural retailing Much transformation has taken place in the rural retailing format.format.

1.Traditional Format-1.Traditional Format- HaatsHaats MelasMelas Local shopsLocal shops

2.Government supported format2.Government supported format Fair price shopsFair price shops Co-operative societiesCo-operative societies

3.Modern Format3.Modern Format Rural Malls.Rural Malls.

Haats- Haats- (Periodic Markets)(Periodic Markets) are held on a particular day every week. are held on a particular day every week.

Haats plays an important role in the rural Haats plays an important role in the rural economy as well as in the social life of economy as well as in the social life of villagers.villagers.

A first point contact for villages with the A first point contact for villages with the Market.Market.

A means of distributing local productA means of distributing local product An opportunity for buying daily necessities An opportunity for buying daily necessities

as well as farm supplies & equipments.as well as farm supplies & equipments. A place for political, social & cultural A place for political, social & cultural

contact contact

Table Indicating Average sale at a Table Indicating Average sale at a HaatHaat

Total Number of Haats 47,000(MART estimates,1995)

Average number of Visitors 4,580

Average number of villages catered by a haat

14

Number of stalls 314

Average sale at a Haat Rs2.23 lakhs

MelasMelas

are held once or are held once or twice a year for twice a year for longer duration & longer duration & are normally timed are normally timed to coincide with to coincide with religiously religiously festivals.festivals.

Number of Melas Held annually

25,000

Average number of visitors

7.6 lakhs

Average number of outlets

854

Average sales Rs243 lakhs

Source-Mart study

Local ShopsLocal Shops

As per the 2001 census out of the As per the 2001 census out of the 1.33 crore shops in India,55 lakhs are 1.33 crore shops in India,55 lakhs are in rural areas. The type of outlets in rural areas. The type of outlets found in villages are kirana store, found in villages are kirana store, paan shops, Flour mills, tailor, paan shops, Flour mills, tailor, barber, Medical shops etc.barber, Medical shops etc.

Government supported format.Government supported format.

1.Fair Price shops-1.Fair Price shops-Public distribution Public distribution system is the distribution of essential system is the distribution of essential commodities to a large number of people commodities to a large number of people through network of fair price shops. through network of fair price shops. Commodities distributed are wheat, rice, Commodities distributed are wheat, rice, sugar, edible oil & kerosene.sugar, edible oil & kerosene.

Of the total number of FPS 80% are in Of the total number of FPS 80% are in rural areas.rural areas.

Government supported formatGovernment supported format 2. Co-operative societies- 2. Co-operative societies- co-operatives co-operatives

occupy an important place in India’s rural occupy an important place in India’s rural economy in terms of their coverage of economy in terms of their coverage of population & their share in the total population & their share in the total supply of agricultural inputs, including supply of agricultural inputs, including credit. credit.

Co-operatives account for 34% of the total Co-operatives account for 34% of the total quantity of fertilizers distributed in the quantity of fertilizers distributed in the country. warna bazaar & farmers services country. warna bazaar & farmers services co-operative societies (FSCS) function like co-operative societies (FSCS) function like mini supermarkets for rural consumers, mini supermarkets for rural consumers, where consumables, house hold durables where consumables, house hold durables & agricultural products are sold at & agricultural products are sold at economical & reasonable price.economical & reasonable price.

Warna BazarWarna Bazar A milk & sugar cooperative society in A milk & sugar cooperative society in

the kolhapur district of Maharashtra the kolhapur district of Maharashtra opened the first departmental store opened the first departmental store in 1978.Today it has 41 retail stores in 1978.Today it has 41 retail stores in the rural areas of sangli & kolhapur in the rural areas of sangli & kolhapur districts. This has become a one stop districts. This has become a one stop shop for rural consumers looking to shop for rural consumers looking to purchase all kinds of items of rural purchase all kinds of items of rural need, ranging from FMCG, durables, need, ranging from FMCG, durables, auto components & agricultural auto components & agricultural products.products.

Rural mallsRural malls Days are gone when the kirana shop owner sat in Days are gone when the kirana shop owner sat in

full control of the products stocked in shelves full control of the products stocked in shelves behind him. Rural people can now have the behind him. Rural people can now have the shopping experience as their urban counterparts in shopping experience as their urban counterparts in some of the rural organized retail outlets listed some of the rural organized retail outlets listed below. below.

1.Aadhar from Godrej.1.Aadhar from Godrej.

2.Hariyali kisaan Bazar-DCM Shriram Consolidated 2.Hariyali kisaan Bazar-DCM Shriram Consolidated LtdLtd

4.Choupal Sagar from ITC.4.Choupal Sagar from ITC. http://www.businessworldindia.com/sep2004/indepth02.as

p

5.Triveni Kushali Bazar-Triveni Engineers & 5.Triveni Kushali Bazar-Triveni Engineers & industries Ltd.industries Ltd.

6.Kisan Seva Kendra-Dabur6.Kisan Seva Kendra-Dabur

ITC-CHOUPAL SAGAR(Rural ITC-CHOUPAL SAGAR(Rural Mall) in Rafiq Ganj-Madhya Mall) in Rafiq Ganj-Madhya

pradeshpradesh

ITC-CHOUPAL SAGAR(Rural ITC-CHOUPAL SAGAR(Rural Mall) in Rafiq Ganj-Madhya Mall) in Rafiq Ganj-Madhya

pradeshpradesh

ITC-CHOUPAL SAGARITC-CHOUPAL SAGAR E-Chaupal is the backbone of Choupal sagar).E-Chaupal is the backbone of Choupal sagar).

ITC choupal sagar was the first rural mall in India, with an ITC choupal sagar was the first rural mall in India, with an 7,000 square feet. it stocks almost everything from tooth 7,000 square feet. it stocks almost everything from tooth paste to fertilizer. Most of the brands that choupal sagar paste to fertilizer. Most of the brands that choupal sagar sells are national brands such as Marico, eveready & sells are national brands such as Marico, eveready & others. the mall is located near the stock points of ITC’s e-others. the mall is located near the stock points of ITC’s e-choupals.To offset the huge investments made in the choupals.To offset the huge investments made in the distribution net work ITC has partenered with other distribution net work ITC has partenered with other companies interested in serving the Rural market.companies interested in serving the Rural market.

Philips got a call from ITC, which was looking for other Philips got a call from ITC, which was looking for other companies to ride on its chain. Today, Philips' dealers in companies to ride on its chain. Today, Philips' dealers in the 20,000-population villages supply to ITC, which sends a the 20,000-population villages supply to ITC, which sends a van to all its sanchalaks once every 15 days, dropping off van to all its sanchalaks once every 15 days, dropping off their orders. Now, Philips' coverage is up to 50-60 per cent their orders. Now, Philips' coverage is up to 50-60 per cent in these areas - up from 20 per cent two years ago. On in these areas - up from 20 per cent two years ago. On their part, the sanchalaks either sell the goods directly, or, their part, the sanchalaks either sell the goods directly, or, more often, sell them to the village's shopkeepersmore often, sell them to the village's shopkeepers

Hariyali Kisaan Bazaar fromHariyali Kisaan Bazaar from DCM DCM Shriram Consolidated LtdShriram Consolidated Ltd

Hariyali Kisaan BazaarHariyali Kisaan Bazaar The "Hariyali Kisaan Bazaar" chain, seeks to The "Hariyali Kisaan Bazaar" chain, seeks to

empower the farmer by setting up centres, empower the farmer by setting up centres, which provide all encompassing solutions to the which provide all encompassing solutions to the farmers under one roof. farmers under one roof.

Each "Hariyali Kisaan Bazaar" centre operates Each "Hariyali Kisaan Bazaar" centre operates in a catchment of about 20 kms. A typical in a catchment of about 20 kms. A typical centre caters to agricultural land of about centre caters to agricultural land of about 50000-70000 acres and impacts the life of 50000-70000 acres and impacts the life of approx. 15000 farmers. approx. 15000 farmers.

Each centre is engaged in: Each centre is engaged in: Bridging the last mile: Provides handholding to Bridging the last mile: Provides handholding to

improve the quality of agriculture in the area. improve the quality of agriculture in the area. Provides 24X7 support through a team of Provides 24X7 support through a team of qualified agronomists based at the centre. qualified agronomists based at the centre.

Hariyali Kisaan BazaarHariyali Kisaan Bazaar Quality Agri-Inputs: Provides a complete range of Quality Agri-Inputs: Provides a complete range of

good quality, multi-brand agri inputs like good quality, multi-brand agri inputs like fertilizers, seeds, pesticides, farm implements & fertilizers, seeds, pesticides, farm implements & tools, veterinary products, animal feed, irrigation tools, veterinary products, animal feed, irrigation items and other key inputs like diesel, petrol at items and other key inputs like diesel, petrol at fair prices. fair prices.

Financial Services: Provides access to modern Financial Services: Provides access to modern retail banking & farm credit through simplified retail banking & farm credit through simplified and transparent processes as also other financial and transparent processes as also other financial services like insurance etc. services like insurance etc.

Farm Output Services: Farm produce buyback Farm Output Services: Farm produce buyback opportunities, access to new markets & output opportunities, access to new markets & output related services. related services.

Other Products and Services:Fuels, FMCG, Other Products and Services:Fuels, FMCG, Consumer Goods and Durables,Apparels etc.Consumer Goods and Durables,Apparels etc.

Fortis HealthWorldFortis HealthWorld

Organised retail outlets not only help in Organised retail outlets not only help in giving necessary information, buy back of giving necessary information, buy back of agriculture produce, selling of agriculture agriculture produce, selling of agriculture & consumer goods but they have become & consumer goods but they have become the easy source in accessing the rural the easy source in accessing the rural people. As a result petroleum company people. As a result petroleum company HPCL & healthcare provider Fortis they HPCL & healthcare provider Fortis they are tieing with rural retail outlets to offer are tieing with rural retail outlets to offer their services to rural people. their services to rural people.

Fortis Health World tie up with Hariyali Fortis Health World tie up with Hariyali Kisaan Bazaar, a unit of DCM Shriram Kisaan Bazaar, a unit of DCM Shriram Consolidated Ltd.to open health care Consolidated Ltd.to open health care facility in mandi(Ahmedgarh) facility in mandi(Ahmedgarh)

Fortis Health WorldFortis Health World Fortis Health World will have the following key Fortis Health World will have the following key

features at the stores:features at the stores:

OPD facility (Doctor’s Consultation)OPD facility (Doctor’s Consultation)

TelemedicineTelemedicine

Routine Pathology tests Collection centre (SRL Routine Pathology tests Collection centre (SRL Ranbaxy).Ranbaxy).

Prescription, OTC, Alternate medicines (Ayurveda Prescription, OTC, Alternate medicines (Ayurveda & Homeopathy) and also veternary medicines.& Homeopathy) and also veternary medicines.

Wide range of fast moving health good and Wide range of fast moving health good and support systems.support systems.

Godrej AadhaarGodrej Aadhaar “ “Khushiyon Ka, Khushhali Ka”Khushiyon Ka, Khushhali Ka”

Godrej - AadhaarGodrej - Aadhaar GODREJ Aadhaar, the rural retail initiative GODREJ Aadhaar, the rural retail initiative

of Godrej Agrovet Ltd, has chain of 18 of Godrej Agrovet Ltd, has chain of 18 stores providing a host of services to stores providing a host of services to farmers and their families.farmers and their families.

Positioned as `Positioned as `Godrej Aadhaar - Godrej Aadhaar - Khushiyon Ka, Khushhali Ka'Khushiyon Ka, Khushhali Ka',, The The company is in the process of talking company is in the process of talking among others to Apollo Hospitals to set among others to Apollo Hospitals to set up pharmacy/polyclinics at the large up pharmacy/polyclinics at the large format stores. format stores.

Godrej - AadhaarGodrej - Aadhaar The company launched the first couple of these The company launched the first couple of these

new large format retail stores at Mancher and new large format retail stores at Mancher and Alephata in the Pune district of Maharashtra . Alephata in the Pune district of Maharashtra . The new format stores sprawl over an area of The new format stores sprawl over an area of around 10,000 sq.ft. at Mancher and 3000 sq. ft. around 10,000 sq.ft. at Mancher and 3000 sq. ft. at Alephata on the Pune-Nashik Highway. These at Alephata on the Pune-Nashik Highway. These stores not only offer complete agricultural stores not only offer complete agricultural solutions and products for the farmers but also a solutions and products for the farmers but also a wide range of commodities for rural households. wide range of commodities for rural households.

Godrej Aadhaar, with an objective to improve Godrej Aadhaar, with an objective to improve productivity, higher returns and improved cost productivity, higher returns and improved cost benefit ratio, at present offers crop advisory benefit ratio, at present offers crop advisory services, soil and water testing services; buy services, soil and water testing services; buy back of output, crop finance, supply of agri-back of output, crop finance, supply of agri-inputs and animal feeds, transfer of information inputs and animal feeds, transfer of information (weather, price, and demand supply), door (weather, price, and demand supply), door delivery of products among other things.delivery of products among other things.

Working Model of E- ChoupalWorking Model of E- Choupal

Working Model of E- Choupal - 1Working Model of E- Choupal - 1 Each e-Choupal (equipped with a PC with Internet Each e-Choupal (equipped with a PC with Internet

connectivity, printer and UPS) typically housed in the connectivity, printer and UPS) typically housed in the farmer's house, is linked to the Internet via phone lines or, farmer's house, is linked to the Internet via phone lines or, increasingly, by a VSAT connection. increasingly, by a VSAT connection.

Using the system costs farmers nothing, but the host Using the system costs farmers nothing, but the host farmer, called a sanchalak, incurs some operating costs farmer, called a sanchalak, incurs some operating costs (The IT part of each e-Choupal costs about Rs 1.3 lakh, (The IT part of each e-Choupal costs about Rs 1.3 lakh, each e-Choupal is estimated to pay back for itself in 4.5 each e-Choupal is estimated to pay back for itself in 4.5 years) and is obligated by a public oath to serve the entire years) and is obligated by a public oath to serve the entire community; community;

The sanchalak benefits from increased prestige and a The sanchalak benefits from increased prestige and a commission paid him for all e-Choupal transactions. commission paid him for all e-Choupal transactions.

The farmers can use the computer to access daily closing The farmers can use the computer to access daily closing prices on local mandis, as well as to track global price prices on local mandis, as well as to track global price trends or find information about new farming techniques-trends or find information about new farming techniques-either directly or, because many farmers are illiterate, via either directly or, because many farmers are illiterate, via the sanchalak.the sanchalak.

Working Model of E- Choupal -2Working Model of E- Choupal -2 They also use the e-Choupal to order seed, fertilizer, and They also use the e-Choupal to order seed, fertilizer, and

other products such as consumer goods from ITC or its other products such as consumer goods from ITC or its partners, at prices lower than those available from village partners, at prices lower than those available from village traders;traders;

the sanchalak typically aggregates the village demand for the sanchalak typically aggregates the village demand for these products and transmits the order to an ITC these products and transmits the order to an ITC representative. representative.

At harvest time, ITC offers to buy the crop directly from At harvest time, ITC offers to buy the crop directly from any farmer at the previous day's closing price; the farmer any farmer at the previous day's closing price; the farmer then transports his crop to an ITC processing center, then transports his crop to an ITC processing center, where the crop is weighed electronically and assessed for where the crop is weighed electronically and assessed for quality. quality.

The farmer is then paid for the crop and a transport fee. The farmer is then paid for the crop and a transport fee. "Bonus points," which are exchangeable for products that "Bonus points," which are exchangeable for products that ITC sells, are given for crops with quality above the norm. ITC sells, are given for crops with quality above the norm. In this way, the e-Choupal system bypasses the In this way, the e-Choupal system bypasses the government-mandated trading mandis.government-mandated trading mandis.

Rural Demand & Rural Market Rural Demand & Rural Market IndexIndex

The predominant occupation in rural areas is The predominant occupation in rural areas is agriculture & agriculture related activities.agriculture & agriculture related activities.

since agriculture is a seasonal occupation as a since agriculture is a seasonal occupation as a result income generation & the demand pattern result income generation & the demand pattern is also seasonal.is also seasonal.

In addition rural population is scattered as In addition rural population is scattered as opposed to the concentrated nature of urban opposed to the concentrated nature of urban population. like wise there are number of population. like wise there are number of distinguishing features between rural & urban distinguishing features between rural & urban areas which are reflected in the demand pattern.areas which are reflected in the demand pattern.

The below table shows the different features The below table shows the different features between rural & urban demand.between rural & urban demand.

Demand: Rural VS urbanDemand: Rural VS urbanSl

No

Features Rural Urban

1 Demand pattern Seasonal Uniform

2 Spread Widely spread concentrated

3 Literacy Level Low High

4 Sources of supply Inadequate adequate

5 Physical Communication facilities Poor Very good

6 Sources of information Word of mouth Any media

7 Timeliness of supply Untimely timely

8 After sales service availability Inadequate Adequate

9 Per capita income Low high

10 Product as status symbol Mostly No Mostly yes

Hierarchy of markets for Rural Hierarchy of markets for Rural consumersconsumers

te

State Capital/Metros

Affiliate Primary

Secondary whole sale markets

Primary wholesale assembling Markets

Shandies,Haats,jathras & Melas(Cloth,Cosmetics, Soaps, Services, Kitchen

equipments, Agricultural tools, Bamboo baskets etc

Village Shops(matchboxes, Cigarettes, Tea, kerosene, Salt,

Edible oils etc

Hierarchy of markets for Rural Hierarchy of markets for Rural consumersconsumers

Rural consumers has a clear identification of market Rural consumers has a clear identification of market places for different requirements. The first point of places for different requirements. The first point of contact is the village shop which stocks very essential contact is the village shop which stocks very essential manufactured goods like tea, salt, edible oils etc. manufactured goods like tea, salt, edible oils etc. These products are consumed very frequently & in These products are consumed very frequently & in small quantities so rural consumers always small quantities so rural consumers always approaches village shop.approaches village shop.

The next level of market in the hierarchy is The next level of market in the hierarchy is shandies/Hatts & jathras/Melas.shandies/Hatts & jathras/Melas.

The next market place in the hierarchy is the primary The next market place in the hierarchy is the primary wholesale assembling markets/Secondary Wholesale wholesale assembling markets/Secondary Wholesale assembling markets/terminal markets depending assembling markets/terminal markets depending upon the place of their location. these are also upon the place of their location. these are also popularly called as Mandi. In these places a well popularly called as Mandi. In these places a well established market for selling & buying agricultural established market for selling & buying agricultural produce with a number of market functionaries.produce with a number of market functionaries.

Hierarchy of markets for Rural Hierarchy of markets for Rural consumersconsumers

Rural consumers might purchase consumable items at the Rural consumers might purchase consumable items at the village shop or in shandies,village shop or in shandies,

They prefer to purchase consumer durable items from the They prefer to purchase consumer durable items from the towns or district head quarters where the agricultural towns or district head quarters where the agricultural produce markets are located. The behaviour is due to the produce markets are located. The behaviour is due to the fact that firstly the rural consumers have a choice of fact that firstly the rural consumers have a choice of visiting several shops to know about the quality & price to visiting several shops to know about the quality & price to decide on a brand. One more important reason is that after decide on a brand. One more important reason is that after selling the agricultural produce they have ready cash to selling the agricultural produce they have ready cash to purchase durable goods.purchase durable goods.

This implies that the places where agricultural produce This implies that the places where agricultural produce trading is done is the potential place up to which the trading is done is the potential place up to which the distribution network should extend in the case of durable distribution network should extend in the case of durable goods where as for consumables the network can go right goods where as for consumables the network can go right up to village level.up to village level.

A rural consumer may also make an occasional visit to A rural consumer may also make an occasional visit to state head quarters or big cities for any legal matter.state head quarters or big cities for any legal matter.

Thompson Rural market indexThompson Rural market index A successful attempt in the direction of A successful attempt in the direction of

assessing the potential of rural markets has assessing the potential of rural markets has been made by Hindustan Thompson been made by Hindustan Thompson associates limited.associates limited.

First attempt in the year 1972.Data was First attempt in the year 1972.Data was collected from the 334 districts.collected from the 334 districts.

Eleven factors were identified & assigned Eleven factors were identified & assigned weight age to assess potential.weight age to assess potential.

Second attempt was made in the year Second attempt was made in the year 1986.Data was collected from the 383 1986.Data was collected from the 383 districts.districts.

Twenty six factors were considered for Twenty six factors were considered for constructing the Rural market Index.constructing the Rural market Index.

Indicators considered for rural Indicators considered for rural Market indexMarket index

1.area of the district in the SQ.KM1.area of the district in the SQ.KM DemographicsDemographics 2.population:Rural No2.population:Rural No 3.Males:No3.Males:No 4.females:NO4.females:NO 5.Density per SQ.KM5.Density per SQ.KM 6.Percentage distribution of population by population 6.Percentage distribution of population by population

stratastrata 7.No of villages7.No of villages 8.percentage distribution of villages by population 8.percentage distribution of villages by population

strata.strata. 9.Literate:rural no9.Literate:rural no 10.percent of literacy10.percent of literacy 11.Literate:Males11.Literate:Males 12.Literate:Females.12.Literate:Females. Occupation patternOccupation pattern 13.Cultivators:No13.Cultivators:No

Indicators considered for rural Indicators considered for rural Market indexMarket index

14.Agricultural Laborers14.Agricultural Laborers 15.Non Agricultural Laborers.15.Non Agricultural Laborers. Agriculture related dataAgriculture related data 16.Gross cropped area in hectares16.Gross cropped area in hectares 17.gross irrigated area in hectares.17.gross irrigated area in hectares. 18.Area under non food crops in hectares18.Area under non food crops in hectares 19.Average size of operational holdings in hectares.19.Average size of operational holdings in hectares. 19.Average size of operational holdings in hectares.19.Average size of operational holdings in hectares. Agricultural inputs data.Agricultural inputs data. 20.Pump sets & tube wells: No20.Pump sets & tube wells: No 21.Fertilizer consumption in metric tones21.Fertilizer consumption in metric tones 22.No of tractors.22.No of tractors. Rural Electrification data.Rural Electrification data. 23.Percentage of villages electrified.23.Percentage of villages electrified. Commercial banks data.Commercial banks data. 24.No of rural branches.24.No of rural branches. 25.Deposit in Rs.lakhs25.Deposit in Rs.lakhs 26.Advances in Rs.Lakhs26.Advances in Rs.Lakhs

Since the major occupation in rural Since the major occupation in rural areas is agriculture they also areas is agriculture they also collected the value of agricultural collected the value of agricultural output for each district from the CMIE output for each district from the CMIE which was the overall indicator of which was the overall indicator of rural market potential. A statistical rural market potential. A statistical correlation analysis was conducted correlation analysis was conducted with 10 selected variables related to with 10 selected variables related to agriculture with the value of agriculture with the value of agricultural production.agricultural production.

Ten selected variablesTen selected variables 1.Agricultural laborers1.Agricultural laborers 2.Gross cropped area.2.Gross cropped area. 3.Gross irrigated area.3.Gross irrigated area. 4.area under non food crops.4.area under non food crops. 5.Pump sets5.Pump sets 6.fertiliser consumption6.fertiliser consumption 7.Tractors.7.Tractors. 8.Rural credit8.Rural credit 9.rural deposits.9.rural deposits. 10.Villages electrified.10.Villages electrified. It was found that these ten variables had a very It was found that these ten variables had a very

high correlation with the value of agricultural high correlation with the value of agricultural output ranging from 0.52 to 0.79.output ranging from 0.52 to 0.79.

Based on the index numbers districts have been Based on the index numbers districts have been classified as A,B,C,D & E class markets.classified as A,B,C,D & E class markets.

Class of Market Index range No of districts % of Market

A 60.00 to 100.00 22 17.8

B 40.00 to 59.99 39 20.5

C 30.00 to 39.99 54 20.4

D 20.00 to 29.99 86 23.0

E Below 20.00 154 18.3

Total 355 100.00

Module-3, Marketing of Module-3, Marketing of Agricultural InputsAgricultural Inputs

In traditional farming there was no need for any In traditional farming there was no need for any externally produced inputs the entire requirement externally produced inputs the entire requirement was produced on the farm or in the village itself.was produced on the farm or in the village itself.

With the advent of new technology in agriculture With the advent of new technology in agriculture leading to commercialization procurement of leading to commercialization procurement of agricultural inputs required for production has agricultural inputs required for production has received a greater importance.received a greater importance.

A number of corporate bodies are engaged in A number of corporate bodies are engaged in manufacturing & marketing agro inputs like manufacturing & marketing agro inputs like fertilizers, pesticides/insecticides, seeds, oil, fertilizers, pesticides/insecticides, seeds, oil, engines, electric motors & pump sets, tractors & engines, electric motors & pump sets, tractors & other related equipments.other related equipments.

Agricultural inputsAgricultural inputs can be classified into two categories.can be classified into two categories.

1.Consumable inputs.1.Consumable inputs.

2.Durable inputs.2.Durable inputs.

The Various inputs which come under consumable inputs areThe Various inputs which come under consumable inputs are Plant food (manures & fertilizers)Plant food (manures & fertilizers) Agro chemicals for plant protection (pest & diseases)Agro chemicals for plant protection (pest & diseases) Seeds (high yielding, hybrid & improved varieties.)Seeds (high yielding, hybrid & improved varieties.) For power generation (Diesel, oils, petrol & electricity.For power generation (Diesel, oils, petrol & electricity. Feed (Cattle, poultry)Feed (Cattle, poultry) Veterinary medicines (prophylactic & curative)Veterinary medicines (prophylactic & curative) Simple hand held farm tools ( pavadas, sickles, hand hoes, Simple hand held farm tools ( pavadas, sickles, hand hoes,

crowbars)crowbars) Packing materials (gunnies, rope, twine)Packing materials (gunnies, rope, twine) Others (Bamboo articles like baskets etc.)Others (Bamboo articles like baskets etc.)

Durable inputsDurable inputs The Various inputs which come under The Various inputs which come under

Durable inputs areDurable inputs are Farm implements (tractors, Farm implements (tractors,

harvesters, threshers, power tillers)harvesters, threshers, power tillers) Irrigation equipments (motors, Pump Irrigation equipments (motors, Pump

sets, sprinklers, drip irrigation sets, sprinklers, drip irrigation systems.systems.

Construction materials (cement, Construction materials (cement, bricks, sheets for roofing.bricks, sheets for roofing.

Transportation equipments (bullock Transportation equipments (bullock carts, tractors, trailers, mini trucks)carts, tractors, trailers, mini trucks)

Farm animals (Bullocks, cows, Farm animals (Bullocks, cows, poultry, goats, sheep)poultry, goats, sheep)

Others (Tyres, tubes, spare parts)Others (Tyres, tubes, spare parts)

The marketing mix, marketing The marketing mix, marketing organization & marketing strategies organization & marketing strategies are decided based on three are decided based on three important factors in the case of agro important factors in the case of agro inputs.inputs.

Product characteristicsProduct characteristics User characteristicsUser characteristics Use characteristics.Use characteristics.

product characteristicsproduct characteristics

Consumable inputs or capital input.Consumable inputs or capital input. High value or low value.High value or low value. High volume or low volume.High volume or low volume. High cost or low costHigh cost or low cost Manufactured or locally produced.Manufactured or locally produced. High shelf life or low shelf life.High shelf life or low shelf life.

User characteristicsUser characteristics

Planters & farmers.Planters & farmers. DealersDealers Blenders.Blenders.

Use characteristicsUse characteristics

Irrigated farms or dry or rain fed Irrigated farms or dry or rain fed farms.farms.

Cash crop farms or food crops farms.Cash crop farms or food crops farms. Progressive farmers or traditional Progressive farmers or traditional

farmers.farmers.

Marketing of fertilizersMarketing of fertilizers

Fertilizer consumption depends upon Fertilizer consumption depends upon several factors like:several factors like:

Profitability of farmingProfitability of farming Availability of irrigation facilitiesAvailability of irrigation facilities Introduction of new technologyIntroduction of new technology Introduction of genetically modified seeds.Introduction of genetically modified seeds. Availability of fertilizers & Availability of fertilizers & Prices of fertilizers.Prices of fertilizers.

Under the essential commodities act (ECA)& Under the essential commodities act (ECA)& the fertilizer control order (FCO) the the fertilizer control order (FCO) the government is empowered to allocate the government is empowered to allocate the quantities & territories to the manufacture.quantities & territories to the manufacture.

The FCO empowers the concerned state The FCO empowers the concerned state governments agricultural departments to governments agricultural departments to test the quality of fertilizers. For example test the quality of fertilizers. For example ammonium sulphate should contain 26.6% of ammonium sulphate should contain 26.6% of nitrogen & urea 46% of nitrogen. This has to nitrogen & urea 46% of nitrogen. This has to be clearly specified on the fertilizer bag be clearly specified on the fertilizer bag itself.itself.

Marketing Mix of FertiliserMarketing Mix of Fertiliser

Product Product Fertilizers are classified into three Fertilizers are classified into three

different groups depending upon the different groups depending upon the nutrients they supply to the crop.nutrients they supply to the crop.

Nitrogenous),Nitrogenous), Phosphatic (P) Phosphatic (P) Potassic (K).Potassic (K).

ProductProduct Fertilizers which supply only a single Fertilizers which supply only a single

nutrient like N,P or K are called straight nutrient like N,P or K are called straight fertilizers. Examples of such straight fertilizers. Examples of such straight fertilizers are ammonium sulphate, urea, fertilizers are ammonium sulphate, urea, Calcium ammonium nitrate which supply Calcium ammonium nitrate which supply only the nutrient of nitrogen.only the nutrient of nitrogen.

Fertilizers which contain more than one Fertilizers which contain more than one nutrient are called compound & complex nutrient are called compound & complex fertilizers.fertilizers.

In addition there are fertilizers mixtures In addition there are fertilizers mixtures popularly known as NPK fertilizers which popularly known as NPK fertilizers which supply all the three nutrients in supply all the three nutrients in proportions required by different crops & proportions required by different crops & different regions.different regions.

ProductProduct Marketing of fertilizers is tightly controlled by Marketing of fertilizers is tightly controlled by

government regulations.government regulations. Fertilizers are governed by both essential Fertilizers are governed by both essential

commodities act (ECA) & fertilizer control order commodities act (ECA) & fertilizer control order (FCO) under these acts fertilizers have to be (FCO) under these acts fertilizers have to be marketed only by generic name & not by any marketed only by generic name & not by any trade or brand name.trade or brand name.

The companies normally add their company name The companies normally add their company name to the generic name like mangala urea to the generic name like mangala urea (Mangalore chemicals & fertilizers ltd.) SPIC urea (Mangalore chemicals & fertilizers ltd.) SPIC urea (Southern petrochemicals industries corporation (Southern petrochemicals industries corporation ltd)ltd)

In addition they also use a symbol or logo so that In addition they also use a symbol or logo so that rural consumer can recognize the brand. rural consumer can recognize the brand. Mangalore chemicals & fertilizers ltd is identified Mangalore chemicals & fertilizers ltd is identified by a Poorna kumba icon.by a Poorna kumba icon.

In addition some companies manufacture In addition some companies manufacture fertilizers coated with neem, which release the fertilizers coated with neem, which release the nutrients slowly for long lasting action.nutrients slowly for long lasting action.

ProductProduct

PricePrice Fertilizer have to be sold at a uniform Fertilizer have to be sold at a uniform

price throughout the country & the price throughout the country & the government notifies the selling prices for government notifies the selling prices for different fertilizers.different fertilizers.

Since the government fixes the price of Since the government fixes the price of fertilizers a fixed return on investment is fertilizers a fixed return on investment is guaranteed for the manufactures, who are guaranteed for the manufactures, who are given subsidy depending on their cost of given subsidy depending on their cost of production.production.

The government policy prescribes the The government policy prescribes the distribution margins payable to the distribution margins payable to the channel members with respect to each channel members with respect to each variety of fertilizer. variety of fertilizer.

PricePrice Subsidy on fertilizer is common in most of Subsidy on fertilizer is common in most of

the developing countries, though the rate the developing countries, though the rate of subsidy varies across countries & types of subsidy varies across countries & types of fertilizer. of fertilizer.

Since july 1991 there have been Since july 1991 there have been considerable changes in the fertilizer considerable changes in the fertilizer pricing policy. NPK fertilizers were pricing policy. NPK fertilizers were decontrolled. owing to the decontrol of decontrolled. owing to the decontrol of phosphatic & pottasic fertilizers their phosphatic & pottasic fertilizers their prices shot up & the government had to prices shot up & the government had to announce ad hoc subsidy to reduce the announce ad hoc subsidy to reduce the burden on farmers.burden on farmers.

DistributionDistribution

The most common distribution channel for The most common distribution channel for fertilizer is from the supplier to the whole fertilizer is from the supplier to the whole saler & on to the retailer. How ever a saler & on to the retailer. How ever a manufacture can also supply to a retailer manufacture can also supply to a retailer directly & can also do retail business directly & can also do retail business directly.directly.

some companies sell directly to farmers some companies sell directly to farmers through their company sales depots or through their company sales depots or service centers.service centers.

Generally co-operative network operates Generally co-operative network operates through a 3-tier system.through a 3-tier system.

DistributionDistribution However in some states the system work on However in some states the system work on

two tier basis.two tier basis. In a number of states the apex co-operative In a number of states the apex co-operative

marketing federation functions as a marketing federation functions as a wholesaler. the village level primary wholesaler. the village level primary agricultural co-operative societies are the agricultural co-operative societies are the ultimate units in the cooperative structure.ultimate units in the cooperative structure.

These societies act as the retail sales points These societies act as the retail sales points for fertilizer. The village level societies for fertilizer. The village level societies generally receive fertilizer either directly generally receive fertilizer either directly from the cooperative wholesaler i.e apex from the cooperative wholesaler i.e apex marketing federation or from district marketing federation or from district primary marketing societies primary marketing societies

PromotionPromotion

In the case of fertilizerIn the case of fertilizer the manufacturesthe manufactures are free to use their own promotional are free to use their own promotional measures & create a brand image.measures & create a brand image.

since fertilizer are critical input for better since fertilizer are critical input for better yields, thus promoting fertilizers must aim yields, thus promoting fertilizers must aim first to highlight the usage conditions for first to highlight the usage conditions for better yield & then create brand better yield & then create brand awareness in the minds of farmers awareness in the minds of farmers

PromotionPromotion The following promotional measures are used by the The following promotional measures are used by the

manufactures & marketers for promoting fertilizer.manufactures & marketers for promoting fertilizer.

1.Inter personal & group contacts1.Inter personal & group contacts -arranging farmers -arranging farmers meetings & arranging for field visits of progressive meetings & arranging for field visits of progressive farmers fields, help the farmers to learn more about farmers fields, help the farmers to learn more about the product.the product.

2.fertiliser festivals or kisan melas2.fertiliser festivals or kisan melas - organising - organising fertilizers festivals or exhibitions or kisan melas with fertilizers festivals or exhibitions or kisan melas with the help of agricultural universities/research the help of agricultural universities/research institutes help the farmers to know more about the institutes help the farmers to know more about the new developments in the products & usage new developments in the products & usage techniques in the field of agriculture. in these kisan techniques in the field of agriculture. in these kisan melas the companies can make sample distribution or melas the companies can make sample distribution or minikit distribution to the small & medium farmers.minikit distribution to the small & medium farmers.

3.Television3.Television -has been extensively used by fertilizer -has been extensively used by fertilizer manufactures as it has both audio & visual effects.manufactures as it has both audio & visual effects.

PromotionPromotion 4.News papers & journals4.News papers & journals - Advertising in news papers by showing - Advertising in news papers by showing

pictures of healthy seedlings & crops give results. Where the pictures of healthy seedlings & crops give results. Where the manufacture can also mention the names & addresses of manufacture can also mention the names & addresses of distributors or dealers.distributors or dealers.

5.Special promotional measures5.Special promotional measures -many fertilizer manufactures are -many fertilizer manufactures are using special promotion measures by establishing kisan sewa using special promotion measures by establishing kisan sewa kendras where they provide services to the farmers such as free kendras where they provide services to the farmers such as free soil testing services, either through mobile soil testing soil testing services, either through mobile soil testing laboratories providing guidance about the latest developments.laboratories providing guidance about the latest developments.

6.village adoption programmes6.village adoption programmes -The latest promotion measure is -The latest promotion measure is village adoption programme used by the companies for corporate village adoption programme used by the companies for corporate image building, where the manufactures adopt villages with an image building, where the manufactures adopt villages with an aim to promote an all round development by providing free aim to promote an all round development by providing free seedlings, advice on crop cultivation, providing health care, seedlings, advice on crop cultivation, providing health care, family welfare 7 similar development activities.family welfare 7 similar development activities.

7.Wall paintings & hoardings7.Wall paintings & hoardings -wall paintings & hoardings are also -wall paintings & hoardings are also cost effective & economical way for promoting fertilizers. even cost effective & economical way for promoting fertilizers. even posters at the sale points are also useful for promoting fertilizers.posters at the sale points are also useful for promoting fertilizers.

Bio FertilisersBio Fertilisers Bio-fertiliser is a supplement to chemical Bio-fertiliser is a supplement to chemical

fertilisers. fertilisers.

Bio fertilizers are bacterial cultures mixed Bio fertilizers are bacterial cultures mixed with appropriate static (motion less) with appropriate static (motion less) material which is referred to as a carrier.material which is referred to as a carrier.

Certain type of bacteria, algae & fungi are Certain type of bacteria, algae & fungi are known to have capabilities of fixing known to have capabilities of fixing atmospheric nitrogen for use by the crop. atmospheric nitrogen for use by the crop. these are renewable source of energy & are these are renewable source of energy & are considered environmentally safe source of considered environmentally safe source of nutrientsnutrients..

Swot Analysis of fertilizer Swot Analysis of fertilizer market.market.

StrengthsStrengths

The demand for fertilizer is growing with the extension of The demand for fertilizer is growing with the extension of irrigation facilities & new seeds which is the strength of irrigation facilities & new seeds which is the strength of the market.the market.

In addition growing population means more food is In addition growing population means more food is required, which can be produced with combined synergy required, which can be produced with combined synergy effect of fertilizers & irrigation.effect of fertilizers & irrigation.

Weakness-Weakness-

Historically the industry is accustomed to a controlled Historically the industry is accustomed to a controlled market & huge subsidies which have introduced a sense of market & huge subsidies which have introduced a sense of of satisfaction. to the manufactures.of satisfaction. to the manufactures.

The decontrol & abolition of subsidies could expose such The decontrol & abolition of subsidies could expose such weaknesses that have to be overcome by the weaknesses that have to be overcome by the manufacturers. The commodity is characterized by high manufacturers. The commodity is characterized by high value & high volume which restricts the area of operation. value & high volume which restricts the area of operation.

SWOT Analysis of fertilizer SWOT Analysis of fertilizer market.market.

OpportunitiesOpportunities- - In a situation where the country's In a situation where the country's population continues to grow alarmingly & where land population continues to grow alarmingly & where land under cultivation is more or less static,under cultivation is more or less static,

There is an urgent need to boost farm productivity by There is an urgent need to boost farm productivity by irrigation, fertilizer application & breeding seeds irrigation, fertilizer application & breeding seeds responsive to fertilizer application.responsive to fertilizer application.

The districts deprived of fertilizer offer scope for The districts deprived of fertilizer offer scope for expansion of irrigation facilities. The ICAR is carrying expansion of irrigation facilities. The ICAR is carrying out research on dry & land farming techniques, which out research on dry & land farming techniques, which may offer scope for fertilizer consumption in semi-arid may offer scope for fertilizer consumption in semi-arid districts.districts.

Threats Threats – – Two types of threats are visualized, namely Two types of threats are visualized, namely the growing popularity of organic farming & the the growing popularity of organic farming & the evolution of bio-fertilizers.evolution of bio-fertilizers.

Strategies for fertilizer Strategies for fertilizer marketing-marketing-

In order to remain in business viably In order to remain in business viably the fertilizer companies need to the fertilizer companies need to restructure their business in terms of restructure their business in terms of spreading the risk.spreading the risk.

The companies in fertilizer marketing The companies in fertilizer marketing can think of cutting transportation can think of cutting transportation cost cost

Strategies for fertilizer Strategies for fertilizer marketingmarketing

The problem of storage & distribution The problem of storage & distribution can also be tackled by undertaking can also be tackled by undertaking bulk vending of the product wherein bulk vending of the product wherein farmers can get the bags filled & farmers can get the bags filled & take home with the product,from take home with the product,from neighbourhood vending stations.This neighbourhood vending stations.This will give the buyer a confidence will give the buyer a confidence about the quality & weight of the about the quality & weight of the materials since filling will be done in materials since filling will be done in his presence.his presence.

Strategies for fertilizer Strategies for fertilizer marketingmarketing

A mobile unit mounted on a truck A mobile unit mounted on a truck can be operated by the dealers to can be operated by the dealers to reach the product to far off rural reach the product to far off rural markets.o hooking of bags can be markets.o hooking of bags can be prevented prevented

The losses due to hooking of bags The losses due to hooking of bags can be reduced by providing a loop can be reduced by providing a loop on both sides of the bag.on both sides of the bag.

USPUSP Shriram ureaShriram urea In quality SHRIRAM UREA is beyond In quality SHRIRAM UREA is beyond

comparisioncomparision Parry’sParry’s A tradition of quality & service.A tradition of quality & service. KRIBHCO-Krishak Bharati Co-KRIBHCO-Krishak Bharati Co-

operative Ltd.operative Ltd. Set up to modernize agriculture & Set up to modernize agriculture &

strengthen co-operatives worlds strengthen co-operatives worlds largest plant.largest plant.

USPUSP

IFFCO-Indian Farmers Fertiliser IFFCO-Indian Farmers Fertiliser Co-operative ltd.Co-operative ltd.

A multi dimension approach towards A multi dimension approach towards rural developmentrural development

NFL-National Fertiliser Ltd.NFL-National Fertiliser Ltd. Progress through innovationProgress through innovation PPL-Pradeep Phosphates Ltd.PPL-Pradeep Phosphates Ltd.

USPUSP

Grow more, use PPLDAP.A wise Grow more, use PPLDAP.A wise farmers first choice.farmers first choice.

MCF-Mangalore Chemicals & MCF-Mangalore Chemicals & fertiliserfertiliser

At MCF farmer is the king.At MCF farmer is the king. SPIC-Sourthen Petro Chemicals SPIC-Sourthen Petro Chemicals

Industries Corporation.Industries Corporation. Good earth,good yieldGood earth,good yield

USPUSP

RCFL-Rashtriya Chemicals & RCFL-Rashtriya Chemicals & Fertilisers ltd.Fertilisers ltd.

Suphala & ujjwala for you to double Suphala & ujjwala for you to double your yieldyour yield..

GSFC-Gujarat State Fertiliser & GSFC-Gujarat State Fertiliser & chemicals Ltd.chemicals Ltd.

The happy smile-FarmerThe happy smile-Farmer

  

AGRO CHEMICALSAGRO CHEMICALS The chemicals used for control of pests, The chemicals used for control of pests,

plant diseases, rodents, viruses etc are plant diseases, rodents, viruses etc are broadly termed as agricultural chemicals.broadly termed as agricultural chemicals.

The agro chemical market can be The agro chemical market can be classified as follows.classified as follows.

Insecticides Insecticides Pesticide- manocrotophous used for Pesticide- manocrotophous used for

killing mites in coconut trees.killing mites in coconut trees. FungicidesFungicides RodenticidesRodenticides Herbicides & FumigantsHerbicides & Fumigants

AGRO CHEMICALSAGRO CHEMICALS

The manufactures of agrochemicals The manufactures of agrochemicals can be classified as can be classified as

Manufactures of technical grade Manufactures of technical grade materialmaterial

FormulatorsFormulators

AGRO CHEMICALSAGRO CHEMICALS

All manufactures & formulators have All manufactures & formulators have to register themselves with the to register themselves with the central insecticides board under central insecticides board under insecticides act 1968.insecticides act 1968.

No banned agro chemicals can be No banned agro chemicals can be manufactured or sold. Apart from manufactured or sold. Apart from such restrictions formulators are free such restrictions formulators are free to adopt any trade or brand name for to adopt any trade or brand name for the products they manufacture.the products they manufacture.

AGRO CHEMICALSAGRO CHEMICALS

The market for agro chemicals The market for agro chemicals depends heavily on the region & the depends heavily on the region & the crops grown therein.crops grown therein.

since there are no significant since there are no significant government controls the elements of government controls the elements of marketing mix are very much under marketing mix are very much under the control of the manufactures of the control of the manufactures of agro chemicals.agro chemicals.

ProductProduct

The formulators are free to The formulators are free to manufacture & market any manufacture & market any combination or concentration of combination or concentration of insecticide or pesticide from the insecticide or pesticide from the basic chemicals.basic chemicals.

They are also free to give any trade They are also free to give any trade or brand name to their products. or brand name to their products.

ProductProduct

These products need an applicator the These products need an applicator the insecticides or pesticides in powder insecticides or pesticides in powder form require dusters for application, form require dusters for application, while those in liquid form require while those in liquid form require sprayers. sprayers.

Most co-operative society at village Most co-operative society at village level & the departments of agriculture level & the departments of agriculture of various state government keep this of various state government keep this applicators for custom hiring to farmersapplicators for custom hiring to farmers

ProductProduct

The big co-operative sector fertilizer The big co-operative sector fertilizer manufacture IIFCO stocks these manufacture IIFCO stocks these applicators in its agro kendras for applicators in its agro kendras for free use as a measure of service.free use as a measure of service.

PricePrice The government does not control the The government does not control the

prices of agro Chemicals. manufactures prices of agro Chemicals. manufactures are free to fix their own prices.are free to fix their own prices.

There are national players like Rallis, There are national players like Rallis, Ciba, Bayer etc . At times of serious pest Ciba, Bayer etc . At times of serious pest or disease attack the government or disease attack the government purchases agro chemicals & distributes purchases agro chemicals & distributes them at subsidized prices to farmers.them at subsidized prices to farmers.

DistributionDistribution

Distribution of agro chemicals is Distribution of agro chemicals is similar to that of fertilizers.similar to that of fertilizers.

Distribution is the most important Distribution is the most important activity in the marketing of Agro activity in the marketing of Agro chemicals.chemicals.

Appropriate chemicals have to be Appropriate chemicals have to be made available quickly at the time of made available quickly at the time of disease. Most of the chemical have a disease. Most of the chemical have a definite shelf life. definite shelf life.

DistributionDistribution

The manufactures should be able to The manufactures should be able to forecast the disease & move the forecast the disease & move the required chemicals rapidly to places required chemicals rapidly to places where the pest attack is noticed.where the pest attack is noticed.

It is easy for local formulators to It is easy for local formulators to supply the products in time as the supply the products in time as the time available is very short & the time available is very short & the shelf life is also less.shelf life is also less.

DistributionDistribution

since most of the chemicals are since most of the chemicals are poisonous in nature packaging poisonous in nature packaging requirements along with instructions requirements along with instructions how to use the products in the field how to use the products in the field are of utmost importance.are of utmost importance.

PromotionPromotion

The promotion measures used to The promotion measures used to promote agrochemical products are promote agrochemical products are usually same as used by fertilizer usually same as used by fertilizer manufactures/marketers.manufactures/marketers.

The media generally used are The media generally used are television, news papers, radio, wall television, news papers, radio, wall paintings, Hoardings & cinema slides.paintings, Hoardings & cinema slides.

PromotionPromotion The major objective in promoting agro The major objective in promoting agro

chemical products is to educate the farmers chemical products is to educate the farmers in using the product effectively & efficiently.in using the product effectively & efficiently.

Apart from advertisements in mass media Apart from advertisements in mass media some of the effective promotional strategies some of the effective promotional strategies are beloware below

Field demonstrations.Field demonstrations. Conducting farmers meetingsConducting farmers meetings Gifting applicators & dustersGifting applicators & dusters Kisan melas & Credit facilitiesKisan melas & Credit facilities

  

  

SWOT ANALYSIS OF AGRO-CHEMICALS SWOT ANALYSIS OF AGRO-CHEMICALS MARKET.MARKET...

StrengthsStrengths frequently using the same formulation frequently using the same formulation

results in developing a resistance results in developing a resistance tendency by the organism.tendency by the organism.

More dosage should be used in order to More dosage should be used in order to control the pest & new formulations have control the pest & new formulations have to be developed to be developed

Irrigation, new varieties of seeds & Irrigation, new varieties of seeds & growth in population are all factors growth in population are all factors favoring the growth of agro chemicalsfavoring the growth of agro chemicals

StrengthsStrengths

Irrigation, new varieties of seeds & Irrigation, new varieties of seeds & growth in population are all factors growth in population are all factors favoring the growth of agro favoring the growth of agro chemicals.chemicals.

WeaknessWeakness

when applied in more quantity it is when applied in more quantity it is injurious to human health.injurious to human health.

DDT was banned in the country as it DDT was banned in the country as it was taking a call on the human was taking a call on the human health.health.

OpportunityOpportunity

Focus on R & D will pay dividend in Focus on R & D will pay dividend in the form of patentsthe form of patents

ThreatsThreats

As agro chemicals will effect more on As agro chemicals will effect more on human health when used more in human health when used more in quantity an alternative chemical of quantity an alternative chemical of biological origin(Bio Pesticide) is in biological origin(Bio Pesticide) is in demand.demand.

so manufactures have to make new so manufactures have to make new inventions in their formulations which inventions in their formulations which will not effect human life.will not effect human life.

Bio-PesticideBio-Pesticide

are the chemicals of biological origin are the chemicals of biological origin which is environment friendly. Neem which is environment friendly. Neem is the base for manufacturing bio is the base for manufacturing bio pesticide as it has properties of pesticide as it has properties of killing pest & insecticide & which is killing pest & insecticide & which is not harmful to human life.not harmful to human life.

Ex for Neem based bio pesticide is Ex for Neem based bio pesticide is Azadiractin.Azadiractin.

SEEDSSEEDS

Seed is the most important input Seed is the most important input component for productive agriculture. component for productive agriculture. The Indian seed industry is currently The Indian seed industry is currently valued at Rs 2500 crores.valued at Rs 2500 crores.

The ROI depends significantly on the The ROI depends significantly on the quality of seed that is used in the quality of seed that is used in the production of crops.production of crops.

Indian seed programme largely adheres Indian seed programme largely adheres to the limited generation system for seed to the limited generation system for seed multiplication. multiplication.

SEEDSSEEDS

The system recognizes three The system recognizes three generations namely breeder, generations namely breeder, foundation & certified seeds.foundation & certified seeds.

Breeder seed is the primary stage of Breeder seed is the primary stage of the seed production cycle. The the seed production cycle. The production of breeder seed is production of breeder seed is organized by the Indian council of organized by the Indian council of Agricultural research.Agricultural research.

SEEDSSEEDS

Foundation seed is the one born out Foundation seed is the one born out of breeder seed & its is the of breeder seed & its is the secondary stage of seed production secondary stage of seed production cycle.cycle.

Certified seed is the one born out of Certified seed is the one born out of foundation seed & distributed to foundation seed & distributed to farmers in all the regions.farmers in all the regions.

Structure of Seed IndustryStructure of Seed Industry

The Indian seed industry used to be The Indian seed industry used to be dominated by public sector seed dominated by public sector seed companies. how ever following the companies. how ever following the easing of government regulations the easing of government regulations the private sector seed companies have private sector seed companies have started playing a major role in seed started playing a major role in seed development & marketing.development & marketing.

Structure of Seed IndustryStructure of Seed Industry

The government decision to embrace The government decision to embrace biotechnology as a means of biotechnology as a means of achieving food security has attracted achieving food security has attracted several leading bio technology several leading bio technology focused multinational seed focused multinational seed companies to India.companies to India.

BiotechnologyBiotechnology Uses the methods and techniques Uses the methods and techniques

that involve the use of living that involve the use of living organisms Cells, bacteria, yeast, and organisms Cells, bacteria, yeast, and others. others.

They are used in a number of fields They are used in a number of fields like food processing, agriculture, like food processing, agriculture, pharmaceutics, and medicine, among pharmaceutics, and medicine, among others. others.

In Agriculture Biotechnology is used In Agriculture Biotechnology is used to develop insect resistant products.to develop insect resistant products.

Public Sector Seed companies- Public Sector Seed companies- National seed corporation was National seed corporation was

established in the year 1963 in order established in the year 1963 in order to promote seed industry right from to promote seed industry right from production, processing, production, processing, storage,Marketing,& establishing a storage,Marketing,& establishing a system of quality control.system of quality control.

The state seed corporations were The state seed corporations were established with the support from the established with the support from the world bank, it covers 13 states for world bank, it covers 13 states for production & handling of seed in production & handling of seed in their respective states.their respective states.

NATIONAL SEEDS CORPORATION: ( NATIONAL SEEDS CORPORATION: ( NSC):NSC):

   The National Seeds Corporation The National Seeds Corporation (NSC0 was initiated in 1961 under (NSC0 was initiated in 1961 under the Indian Council of Agricultural the Indian Council of Agricultural Research. Research.

Later, on 7Later, on 7thth March,1963, it was March,1963, it was registered as a limited company in registered as a limited company in the public sector. the public sector.

NATIONAL SEEDS CORPORATION: ( NATIONAL SEEDS CORPORATION: ( NSC):NSC):

   The NSC was established to serve The NSC was established to serve

two main objectives: two main objectives: first, to promote the development of first, to promote the development of

a seed industry in India and a seed industry in India and second to produce and supply the second to produce and supply the

foundation seeds of various cropsfoundation seeds of various crops Production and supply of foundation Production and supply of foundation

seed.seed.

The NSC performs following functionsThe NSC performs following functions To maintain improved seed stocks of To maintain improved seed stocks of

improved varietiesimproved varieties Interstate marketing of all classes of Interstate marketing of all classes of

seed.seed. Export and import of seed.Export and import of seed. Production of certified seed where Production of certified seed where

required.required.

The NSC performs following functionsThe NSC performs following functions Providing technical assistance to Providing technical assistance to

seeds corporations and private seeds corporations and private agencies.agencies.

Co-ordinating certified seed Co-ordinating certified seed production of several State Seeds production of several State Seeds Corporations.Corporations.

Conducting surveys of seed demand.Conducting surveys of seed demand. Planning the production of breeder Planning the production of breeder

seed in consultation with ICAR.seed in consultation with ICAR.

The NSC performs following functionsThe NSC performs following functions

Coordinating market research and Coordinating market research and sales promotion efforts.sales promotion efforts.

Providing training facilities for the Providing training facilities for the staff participating in seed industry staff participating in seed industry development.development.

Providing certification services to Providing certification services to states lacking established and states lacking established and independent seed certification independent seed certification agencies.agencies.

Private seed companiesPrivate seed companies Easing of government regulations in Easing of government regulations in

the late 1980 opened enormous the late 1980 opened enormous development within the seed development within the seed industry by attracting several forgien industry by attracting several forgien seed companies to india.seed companies to india.

Most of the large multinational seed Most of the large multinational seed companies now have their presence companies now have their presence in india either as a joint venture or in india either as a joint venture or with 100% equity.with 100% equity.

Monsanto, bayer & others.Monsanto, bayer & others.

Marketing of Seed industryMarketing of Seed industry Marketing of seeds is more complicated & Marketing of seeds is more complicated &

specialized process as compared to specialized process as compared to marketing of other agricultural inputs.marketing of other agricultural inputs.

As seed quality deteriorates faster As seed quality deteriorates faster production of good quality of seed is of no production of good quality of seed is of no value if it does not reach the farmer in value if it does not reach the farmer in time.time.

the non availability of improved seeds of the non availability of improved seeds of high quality deprives the farmers of the high quality deprives the farmers of the advantages of modern technology. advantages of modern technology.

Meaning of HybridMeaning of Hybrid

Seed or plants produced as the result Seed or plants produced as the result of controlled pollination as opposed of controlled pollination as opposed to seed produced as the result of to seed produced as the result of natural pollinationnatural pollination

ProductProduct

Seeds are perishable product by nature. Seeds are perishable product by nature. Its demand is seasonal & derived. The Its demand is seasonal & derived. The demand for seeds depends on the demand for seeds depends on the following various factors.following various factors.

.climate.climate 2.Prices of the crop under consideration.2.Prices of the crop under consideration. 3.prices of other crops.3.prices of other crops. 4.Information about the market4.Information about the market

ProductProduct

Because of the this nature of the Because of the this nature of the product a proper care & co-product a proper care & co-ordination is required at various ordination is required at various stages of marketing process like stages of marketing process like production of seeds, Pricing, production of seeds, Pricing, distribution & promotion of the distribution & promotion of the product.product.

PricingPricing The prices of ordinary quality of seeds The prices of ordinary quality of seeds

transacted between farmers usually from transacted between farmers usually from large farmers to small farmers or from large farmers to small farmers or from traders to the farmers are derived from traders to the farmers are derived from the prevailing grain prices.the prevailing grain prices.

Prices of such seeds therefore tend to be Prices of such seeds therefore tend to be only marginally higher than the grain only marginally higher than the grain prices. however the prices of improved prices. however the prices of improved varieties of seeds & seeds of high yielding varieties of seeds & seeds of high yielding varieties tend to rule much higher than varieties tend to rule much higher than the grain prices.the grain prices.

PricingPricing In the public sector the National Seed In the public sector the National Seed

corporation usually is the retail price setter.corporation usually is the retail price setter. There is government intervention in pricing of There is government intervention in pricing of

seeds produced by public sector corporations seeds produced by public sector corporations with the degree of intervention varying from with the degree of intervention varying from state to state.state to state.

The government on a cost plus basis The government on a cost plus basis determines the prices of seeds marketed by determines the prices of seeds marketed by national seed corporation.national seed corporation.

Even dealers commission is considered in Even dealers commission is considered in arriving at the prices of seeds.arriving at the prices of seeds.

Distribution systemDistribution system

The public sector companies as well The public sector companies as well as private sector firms, distribute as private sector firms, distribute seeds through a network of seeds through a network of distributors & dealersdistributors & dealers

Distribution systemDistribution system

The above mentioned distribution The above mentioned distribution channels are used for selling all kinds of channels are used for selling all kinds of seeds including food grains, oil seeds, seeds including food grains, oil seeds, spices & vegetables. The companies spices & vegetables. The companies appoint distributor for a region that may appoint distributor for a region that may consist of one or more statesconsist of one or more states

These distributors appoint dealers at These distributors appoint dealers at district level. They are appointed on non district level. They are appointed on non exclusive basis.exclusive basis.

Distribution systemDistribution system

The National seed corporation & the The National seed corporation & the state seeds corporations have their state seeds corporations have their own sale points for seed marketing. In own sale points for seed marketing. In some states department of agriculture some states department of agriculture also sell seeds through their field staff.also sell seeds through their field staff.

The agro industries corporations of the The agro industries corporations of the states encourage private states encourage private entrepreneurs to establish agro entrepreneurs to establish agro service centers in rural areas.service centers in rural areas.

PromotionPromotion Building trust with the farmers by means Building trust with the farmers by means

of advertisement/promotion is not of advertisement/promotion is not enough. It is more about involving the enough. It is more about involving the farmers, providing quality seeds in farmers, providing quality seeds in sample & encouraging them by showing sample & encouraging them by showing the results of the product that leads to the results of the product that leads to build loyalty for the product.build loyalty for the product.

Wall paintings, hoardings, krishi melas, Wall paintings, hoardings, krishi melas, exhibition ,radio, Television & video exhibition ,radio, Television & video shows are the most commonly used shows are the most commonly used promotional tools. The effective way can promotional tools. The effective way can be supplying free samples to the farmers.be supplying free samples to the farmers.

Special promotion measures-Special promotion measures-

Due to high competition most of the Due to high competition most of the private companies & MNC are using private companies & MNC are using creative promotional tools to reach creative promotional tools to reach the cultivators or farmers.the cultivators or farmers.

ITC Zeneca chooses a few farmers ITC Zeneca chooses a few farmers before the growing season & gives before the growing season & gives the company seeds to plant along the company seeds to plant along side local varieties. side local varieties.

Special promotion measures-Special promotion measures-

At the time of harvest hundreds of At the time of harvest hundreds of farmers from the nearby areas are farmers from the nearby areas are invited to a field day where the invited to a field day where the grower narrates his experience of grower narrates his experience of growing the particular seed & the growing the particular seed & the results of it to other farmers.results of it to other farmers.

Cattle,poultry & aqua feeds.Cattle,poultry & aqua feeds.

This is another area where a number This is another area where a number of multinationals & Indian companies of multinationals & Indian companies are very active like HUL & godrej are very active like HUL & godrej agrovet.agrovet.

The milk production in the country The milk production in the country got a big boost with the got a big boost with the implementation of operation flood implementation of operation flood programmes.programmes.

Some big names in the Indian poultry Some big names in the Indian poultry business are venkateshwara business are venkateshwara hatcheries,Deejay hatcheries & hatcheries,Deejay hatcheries & others.It is better for the farmers others.It is better for the farmers who have taken up poultry business who have taken up poultry business to buy the feed from organized to buy the feed from organized manufactures since it takes care of manufactures since it takes care of balanced nutrition.balanced nutrition.

Cattle, poultry & aqua feeds.Cattle, poultry & aqua feeds.

Cattle, poultry & aqua feeds.Cattle, poultry & aqua feeds.

Shrimp farming is on the fast track Shrimp farming is on the fast track due to the export opportunities. due to the export opportunities. Many coastal areas of AP, TN, Many coastal areas of AP, TN, Pondicherry,orissa are into shrimp Pondicherry,orissa are into shrimp farming. farming.