Third Meeting of the Committee of State Ministers in charge of Agricultural marketing

6th September, 2010Madhya Pradesh

A presentation by -Smt. P.R.Brahma, Minister of Agriculture, Assam

The Presentation at a glance The Agricultural Marketing scenario of Assam. The products to handle. The systems and authorities in operation. Towards marketing reforms / amendments. Private Players – prospect & limitations. Government initiatives. Issues ahead.

Practices of Agricultural Marketing differ in the surplus & deficit States.

Assam being a deficit State in respect of foodgrains, a large number of the farmers are net buyers of food grains.

85% of the farmers are Small & Marginal farmers with average land holding of 0.62 ha. The State’s average productivity of Rice (major crop) is 1638 Kg. per hectare. Thus on average, 85% of the farmers are able to produce 868 Kg per year against their requirement of 1150 Kg. per year for an average family size of 7.

Scenario of Agricultural Marketing in Assam

Production & Requirement of Foodgrains(lakh MT)

Total requirement * Production in State (2008-09) ShortfallRice –Wheat –Pulses –Other Cereals –Total Foodgrains –

56.0003.8502.6000.8963.34

41.0000.6500.7300.1642.54

15.0003.2001.8700.7320.80

* Requirement includes human consumption, seeds, produce used in processing etc.

Assam is short of almost all kinds of Foodgrains. This shortfall is met by import from other states.

Production (lakh MT) Surplus of AssamFruits 14.95 4.47 lakh MTVegetables 40.52 16.27 lakh MTSpices 2.24 0.94 lakh MT

HORTICULTURE SURPLUS(2008-09)

What comes to the market ?

a. Total arrival of Rice = 9 lakh MT.Rice produced locally + imported Rice through Private Traders.

b. Other major commodities :i. Vegetables – Marketable Surplus – 16.0 lakh MT + imported

Vegetablesii. Fruits – Marketable surplus – 4.5 lakh MT + imported fruitsiii. Spices – Marketable Surplus – 1.0 lakh MT + imported

Spicesiv. Arecanut – 0.57 lakh MTv. Coconut – 15.00 million nuts.vi. Jute – 6.50 lakh bales.vii. Sugarcane – 11.00 lakh MTvii. And other minor fresh and value added produces.

Agricultural marketing in Assam at a glance● Assam State Agricultural Marketing Board (ASAMB) was

set-up as a statutory body in 1976.

● AAPM Act 1972 came into force with effect from 15th June, 1977.

● 25 out of 27 districts covered under AAPM Act 1972.

● Total no. of markets = 1140 (405 Wholesale Markets and 735 Rural Primary Markets)

● No of Market Committees = 24.

● Principal Market Yards set-up = 20 nos.

● Sub Market Yards set-up = 206 nos.

AGMARKNET connectivity maintained

23 Regulated Market Committees.

Organic Market : 1 no. is being established in Guwahati.Godowns established : Rural Godown - 22 nos.

Rural Seed Storage Godown – 21 nos. Other Godowns – 29 nos.

Cold Storages established

: 25 nos. Total capacity : 1.08 lakh MT

Processing Units : 6 nos. (Horticultural produce)

Other Infrastructure

Laws governing Markets

1. AAPM Act 1972.

2. Panchayat Act 1994.

3. Municipal Act 1956

4. Autonomous Councils Laws under Sixth Schedule of Constitution of India.

Authorities Governing Markets

1. APMCs

2. Municipal Councils & Town Committees.

3. Zilla Parishad, Anchalik Parishad & Gaon Panchayats.

4. Autonomous District Councils.

Percentage share of Markets regulated by different Authorities

3% 4%

17%

73%

3%

Regulated MarketTown Committee MarketMunicipality MarketPanchayat MarketNo Committee

The markets are leased out by ULBs / Panchayats to the lesses (highest bidder), usually known as Mahaldars.

The lesses charge “Bazar Khajana” (market toll) from the farmers / traders, many a times, much more than authorised.

The revenue earned by PRIs / ULBs is not ploughed back for development of the infrastructure.

Therefore the concept of market operation by PRIs / ULBs has not helped the farmers much.

Operation of Markets by PRIs / ULBs

Operation of Markets As regards concept of direct farmer-consumer market, the

practice is being followed since time immemorial. The rural haat where the farmers sell their marketable

produce to the consumers is still prevalent and popular in most of the rural areas in the state and many urban areas as well.

The rural haats are held normally weekly, bi-weekly or daily.

Weekly markets in a specific geographical region are held at various locations in a cyclic order covering all the days of the week. Thus the flow of commodities is maintained.

One of the major markets in the circuit is linked with the market of neighbourhood market circuit.

Market Circuit

Periodicity of Markets in Assam

Daily - 19%

Weekly - 42%

Bi-Weekly - 39%

Channel-IProducer-Retailer-Consumer

(Lemon, Tomato, Chillies, Banana)

Channel-IIProducer-Whole Seller-Commission Agent-Retailer-Consumer

(Mango, Mustard, Jute, Arecanut)

Channel-IIIProducer-Trader-Retailer

(Ginger, Okra, Ridge gourd, cabbage)

Channel-IVProducer-Mobile Trader

(Banana, Rice, Pineapple)

Channel-VProducer-Trader-Miller / Processor

(Paddy, Jute, Arecanut)

Market ChannelsApart from Direct Sale, the following channels are also prevalent -

Access to Markets

Farmers have access to market but road conditions are bad.

60% of farmers have unpaved roads to travel to market. Common mode of transport used by farmers is bicycle. Depending upon volume, cycle thela, truck, minivan

wooden cart, etc. are hired for transport. Poor condition roads and high transportation costs are key

constraints in physical access to markets

Distance from markets PercentageUp to 5 Km. 71%5 – 10 Km. 22%10 – 15 Km. 3%15 – 20 Km. 1%Above 20 Km. 2%

Access to Market Information Up-to-date flow of information is important to facilitate flow

of produce so that farmer gets better value for his produce. Only 45% markets are linked with telephone.

64% farmers have no knowledge about what price they should ask for the produce during transaction. The Paddy producers go by prices fixed by millers.

Majority farmers gain first hand information about prices from fellow farmers and traders.

Few educated farmers keep in mind cost of production, transportation, etc. while negotiating in market.

Radio or television is hardly considered as a source of information by farmers

Status of cess realization by Assam State Agricultural Marketing Board during last 5 yearsYear Amount of Cess collected

(Rs. in Crore)

2005-06 : 19.062006-07 : 22.332007-08 : 25.562008-09 : 29.892009-10 : 25.20

The Assam Agricultural Produce Market Act, 1972 has been amended in 2006 to promote market reforms and has permitted Private Market Yards, Farmer-Consumer Markets, Direct Marketing and Contract Farming.

Agricultural Marketing - Reforms

Private Market Yards :

1. Any person or group of persons or body corporate are allowed to establish private market yards U/s 5B.

2. Director may issue registration on application in the manner as may be prescribed.

3. No amount shall be realized by the owner of the market from the seller.

ReformsEstablishment of Alternate Market

1. Any person or group of persons or body corporate other than Market Committees may establish Consumer/Farmer Market and develop infrastructure.

2. Producer of agricultural produce may sale his produce directly to the consumer.

3. Consumer shall not purchase more than such quantity at a time as may be prescribed.

4. Registration – by the Director under this Act in the manner as may be prescribed.

5. No amount shall be realized by the owner of the market from the seller.

ReformsConsumer / Farmer Market

(Direct sale by the producer)

1. Any person or group of persons or body corporate other than Market Committees may purchase specified agricultural produce directly from the producer.

2. Director may issue registration on application in the manner as may be prescribed.

3. No amount shall be realized by the owner of the market from the seller.

ReformsDirect Market

1. Contract Farming sponsor shall register himself with the Deputy Commissioner of the district where the Contract Farming producer resides.

2. Contract Farming sponsor shall also get the Contract Farming agreement recorded with the Deputy Commissioner.

3. Contract Farming agreement in a form as may be prescribed.

4. No title, right, ownership or possession shall be transferred or alienated or will vest in the Contract Farming sponsor or his successor/agent.

5. Dispute settlement authority on Contract Farming lies with the Director.

ReformsContract Farming

The State requires 56 lakh MT of Rice per year against production of 41 lakh MT.

Similarly, in case of Pulses, Oilseeds and Other Cereals the State is short of its requirement.

The additional requirement is met by import from other States through FCI or private traders.

Therefore the turn over & throughput of the foodgrain markets is very low.

The State is surplus in Horticultural Produce but due to various Regulatory Authorities of markets, the private investment in the marketing sector is perhaps not remunerative.

Hence the private players are reluctant to invest in development of infrastructure.

Constraints in Market ReformsPrivate Markets

Average land holding size in Assam is 1.11 hectare (2005-06 Agriculture Census).

Size of land holding being very low, the contract farming is relatively a difficult venture as much larger number of farmers are required for covering small area.

Resultantly, no private player / corporate sector has entered into this area.

However, a very few cases of contract farming at the instance of some entrepreneurs are trying to establish themselves.

In some cases, disputes have already cropped in between the farmers & the agency concerned.

Constraints in Market ReformsContract Farming

Since Private Players are not keen to set-up infrastructure, the responsibility perhaps lies with the Government only.

New Initiatives1. The State has planned to set up one modern Producer-Consumer

Market at Guwahati. 2. A modern Organic Market, first of its kind in the North-East, is in

advanced stage of completion.3. Various initiatives have been taken to strengthen marketing

infrastructure under RKVY and Externally aided Project of AACP.4. Extension through e-channel :

The State Govt. has taken up a project on pilot basis for setting up facilities on the pattern of e-choupal in two districts where a private company is being engaged for dissemination of information electronically on weather conditions, farm management , risk management and pricing of various commodities in different markets. The Company has completed initial survey and interaction with various stakeholders including farmers. The Company has received huge response.

5. The Government is encouraging contract farming amongst producers of Sugarcane, Ginger, Potato and Flowers. A few cases of contract farming on the initiative of certain local young entrepreneurs have already come to the notice.

6. 224 nos. of Auto vans have been provided at subsidised rates for transportation of various products grown in the interior to agricultural markets.

7. 30% transport subsidy along with revolving fund of Rs. 5000.00 is provided to each of 680 Grower Societies.

8. Prices of major agricultural commodities are being telecast through Door Darshan daily.

9. The State is going to set-up cool chain facilities in 11 markets in the current financial year at a cost of Rs. 5.0 crores.

New Initiatives

New Initiatives10. Mega Food Park :

Construction of Mega Food Park at Tihu – about 110 Km. from Guwahati, is in progress with a project cost of Rs. 76.0 crores. The park will have facilities like Cold Chain, Dry Ware House, Common facility Centre, Standard Design Factory for local entrepreneurs etc. Special focus area is Contract Farming of various horticultural products like Assam Lemon, Pineapple, Passion Fruit etc.

11. Agri Export Zone on Ginger : Most of the infrastructure already set-up in collaboration with

APEDA. Three Collection Centres set-up at strategic locations with

facilities for scientific handling of Ginger. Ginger growers are being organized to form Gower Societies for

tie-up with Central Pack House under construction at Guwahati.

Issues ahead Minimise role of middle man to provide better price to both

producers and consumers. Formation of Growers Societies to give them bargaining

power for their produce. Remunerative price to the producers of Organic Products. Improvement of rural roads for better connectivity to the

markets. Presently only 35% of rural roads are metalled. Involvement of private sector in the light of APMC

amendment. Improvement in market intelligence. Infusing modern concepts of marketing amongst stake

holders

T h a n k s