DeskE d i t o r ' sFrom the

Marketing is the buzz word – across products and sectors. Let us specifically take up the case of agricultural produce.

The distinguishing factors influencing the buying preference of the end-users/ customers have been reduced to a specific few. In the case of fruits and vegetables, consumers often view them as commodities – undifferentiated products. So, interestingly, brand loyalty is no longer linked to only quality, taste and colour. Therefore, the differentiating factors for the producers are to compete on the volume and price points in the current “low prices and profits” scenario.

In this price-conscious market, clearly, smart marketing is the key to success, by creating consumer demand for specific varieties and production methods that are recognised through a brand. This creates a differentiation–and with this differentiation–the opportunity to secure a stable demand vis-à-vis prices.

In the Indian context the bulk of the fresh produce is often seen to have been sold without a marketing and communication strategy in place, with no enabling tools to help consumers differentiate their purchases.

The identification of the Unique Selling Proposition (USP) is the basic step, before competing. Then the marketing ground work involving segmentation, positioning, targeting, outreach, etc. A well defined communication strategy, with the right messages, using the appropriate mix of channels to reach out to the users, will be the penultimate step. The final aspect entails product development which involves innovation and differentiation – defining what the competitors do not currently offer.

While marketing alone will not be sufficient, producer companies which have a well-integrated marketing strategy will be better placed than their competitors, to access new markets and stabilise their revenue base. Producer companies that do not have the resources to create and maintain a marketing department and which are yet to incorporate marketing techniques into their sales strategy, could begin by studying different models which are in vogue; seek the advice of a marketing expert and work towards allocating human and financial resources in this direction.

This issue features the interesting Rythu Bazaar marketing model of Hyderabad, Andhra Pradesh. We also bring a few marketing models from other parts of the country, that have emerged to cater to local market dynamics.

Vegetable InItIatIVe for Urban ClUsters

Monthly NewsletterVolume 11 January 2014

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Marketing Models – the Revenue Earners

Marketing is an integral and essential part of the agri value chain which generates revenues for primary producers. Over time, the farmer/growers' interests have been marginalised by the entry of traders and middlemen, who have almost monopolised the selling and trading of agri produce. The VIUC initiative aims to bring in positive changes to this modus operandi, by helping the primary producers to sell their produce directly to end users, thus minimising the involvement of traders and middlemen in the process.

Some of the prevalent marketing models were already in existence, while others have evolved over a period of time. The VIUC initiative has helped these marketing models gain a foothold, formalise and actualise C2C (cultivator to consumer) outreach.

Most of the successful operational marketing models have been created and operated by the respective state governments. Some of these models are described below. In each of these models, the implementing agency of the respective state government ensures the collection of produce from primary producers along with their post-harvest management, distribution logistics to various points of sales, management of facilities and retail selling prices for consumers.

ANDHRA PRADESH

In Andhra Pradesh, the government instituted the concept of Rythu Bazaar in urban areas where farmers are able to sell their produce directly to end-consumers. It also acts as a one-stop-shop for all household food products like oils, rice, ect., wherein the PDS and government sell these products at reasonable prices. The farmers are issued photo identity cards, so that traders are not able to set up shops in these bazaars. Prices of products are mentioned on the notice board and all farmers sell their produce at the specified rate. These Rythu Bazaars are active in urban areas and are able to attract both farmers and end consumers on to one platform. (For more details,

please do read the feature article of this Issue). The various line departments and agencies could work together to make this model more robust and sustainable.

GOA

In Goa, the State Horticulture Corporation Ltd. procures the vegetables from the Farmer Interest Groups (FIGs) on a fixed rate basis. These rates are valid for 15 days and payments are remitted to these FIGs after 15 days. The vegetables are collected at the Corporation’s collection centres. From here these vegetables are distributed to about 600 retail kiosks owned by the Corporation across the state. The consumers purchase vegetables from these kiosks. The prices of vegetables are mentioned on a notice board at each kiosk and maintained such that they do not fluctuate often. The fixing of prices is a key differentiating factor that is influencing trade in this model.

KERALA

In Kerala, the VFPCK (Vegetable and Fruits Promotion Council Keralam), a section 25 company promoted by the Government of Kerala and DFID, own and operate cluster mini mandis. Farmers bring their produce to these mandis, where they are auctioned by farmers directly to buyers/retailers. The auction takes place twice a week. Each of these mandis is equipped with weighing scales, software to keep track of quantities sold along with buyer and seller database. VFPCK retains 5% from each transaction as their administrative cost for operating these mandis. While this is a state-owned and marketed model, some of its positive aspects could be incorporated in milieus elsewhere.

programme. They have implemented an output selling model which entails retail sale of fresh produce in Pune’s housing societies. This is done directly by FIGs. Every day about 30 trucks of 1MT each, ply from the hinterland to the housing societies in Pune. These trucks contain assorted vegetables and they remain parked at the housing societies throughout the day. It was observed that the selling prices of these vegetables were about 25-30% lower than normal retail selling prices. In the end, the farmers and consumers mutually benefit from this arrangement – farmers get higher realisation on spot cash basis, consumers get fresh vegetables at reasonable prices.

The success of the C2C marketing model depends on the buy-in of the primary producers, FIGs and FPOs. This will also require active participation of the government as these producer groups need handholding and initial support to make it sustainable. A government-driven model also ensures participation from primary producers and other stakeholders along with fair-play in business transactions.

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TAMIL NADU

The Tamil Nadu Government has instituted the concept of farmer mandis where the farmer would be able to sell the produce directly to end-consumers. Though the infrastructure at these market places is currently lying idle, traders are setting up shop inside these places and selling fresh farm produce to consumers. It is important to keep the operating capacities up and running in order to achieve viability of business in these kinds of models.

In addition to the aforementioned C2C operating marketing models, some of the other marketing models in practice are initiatives undertaken by FPOs/FIGs, with government support, in certain regions of the country. One such model is described below wherein the primary producers, with support from the VIUC initiative and state government, are selling vegetables directly to the end consumer without the intervention of any traders/middlemen.

MAHARASHTRA

In Maharashtra, the Vegetable Growers Association of India (VGAI) has been implementing the VIUC

The Government launched a new scheme – the Vegetable Initiative for Urban Clusters (VIUC) during 2011-12 as a sub-scheme of Rashtriya Krishi Vikas Yojana (RKVY) for addressing all concerns related to the demand and supply side of the vegetable sector, enhancing vegetable production and productivity, and encouraging the establishment of an efficient supply chain in one major urban centre in each state which is either the state capital or any other city having a population of one million or above.

Vegetable Initiative for Urban Clusters (VIUC) for Enhancing Vegetable Production and Productivity

If there is no such city which satisfies this criteria, then any other urban cluster closer to one million population is selected for the purpose. At present, all state capital cities are covered under the scheme except Haryana and Jammu & Kashmir, where Gurgaon, Jammu and Srinagar have been taken up under the scheme, respectively. The scheme encourages mobilisation of farmers into groups/ associations and their tie-up with financial institutions and aggregators.

Department of Agriculture and Cooperation declared the year 2014 as “Year of Farmer Producer Organisations (FPOs)”. This marks the beginning of a year-long drive to increase awareness about the importance of FPOs across stakeholders.

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Trends in marketing emerging out of the VIUC programme

The key to the success of any business enterprise is the development of an effective marketing strategy. The success of the strategy is dependent upon the method of marketing as well as available infrastructure facilities. Retail marketing is one of the key aspects of the Vegetable Initiative for Urban Clusters (VIUC) Programme. It aims at establishing an effective linkage between producer and consumers as well as big aggregators. It minimises the vicious chain of intermediaries and commission agents as they grab a major percentage of farmers’ profits and increase the retail price of produce for consumers. An aggregation of production volumes opens up many alternatives for the producers and increases their bargaining power. Formation of farmers’ groups, production, and marketing through groups eventually aims at marketing in bulk and increasing the bargaining power of producers and making available vegetables at acceptable prices to consumers.

Under the Vegetable Initiative for Urban Clusters, around 5.8% to 7.6% of the total funds have been allocated for the development of marketing infrastructure under the Action Plan of 2011-12 and 2012-13 at the national level. In order to make the action plan more sensible, most of the states have included the marketing component; different states have allocated between 1% to 23% of the total funds for development of marketing infrastructure. the marketing component includes the establishing of linkages with various markets, retail outlets, mandis and constructing the marketing infrastructure. Under the VIUC scheme, subsidy has been provided for construction of rural markets/apni mandis, construction of environmentally controlled retail outlets/markets, construction of collection centres/ aggregation centres at production clusters and distribution of static and motorised vending carts.

Under the Action Plan 2011-12, approximately 52% of financial utilisation has been achieved along with 40% physical achievement, while under the Action Plan 2012-13, around 23% physical and financial utilisation has been achieved so far. If we observe the fund utilisation under the marketing component in different states, then Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Haryana, Jharkhand, Kerala, Manipur, Mizoram, Nagaland, Sikkim and Uttarakhand have utilised over 100% of the funds allocated under this component. While the practical utility of these structures are visible only in very few states like Andhra Pradesh, Haryana, Kerala, Manipur, Sikkim and Uttarakhand, there are some other states which are showing very low physical and financial achievement for the marketing component where farmers are successfully carrying

Under the Action Plan 2012-13, approximately 61% of the released funds have been utilised in the twenty two states, namely, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Jammu, Srinagar, Jharkhand, Kerala, Maharashtra, Manipur, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tripura, Tamil Nadu, Uttar Pradesh, and Uttarakhand. However, Maharashtra is utilising funds under the action plans of 2012-13 for activities in 2013-14. Under Action Plan 2013-14, thirteen states, namely, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Gujarat, Himachal Pradesh, Jammu, Srinagar, Madhya Pradesh, Kerala, Rajasthan, Sikkim, and Tripura have started the utilisation. Among the twenty two states, Andhra Pradesh, Assam, Kerala and Mizoram lead in terms of utilisation, having utilised over 100% of the total approved funds under the action plan of 2012-13. In these states, a major portion of the funds have been utilised for vegetable cultivation followed by other important components.

A state-wise and component-wise view of fund utilisation is depicted in Figure 1 and Figure 2 respectively, for Action Plan 2012-13.

Figure 1: State-wise utilisation of funds in 2012-13 (in percentage)

0.00%

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40.00%

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ipur

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60.00%

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100.00%

120.00%

Figure 2: Component-wise utilisation of funds (in perentage) under Action Plan 2012-13

Seed Infrastructure1.08%

Organic Farming 2.94%

Promotion onINM/IPM 0.71%

Vegetable SeedlingProduction 3.30%

Seed Productionof Vegetables 0.32%

Promotion of FarmerGroup 9.79%

AdministrativeCost 0.61%

HRD Training of Farmers 1.58%

Base Line Survey 0.18%

Markets 2.96%Post Harvest

Management 3.50%

Vegetable Cultivation44.27%

Protected Cultivation

12.71%

Other 16.4 %

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Financial Summary of the VIUC Scheme

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out marketing with different output selling alternatives. In Andhra Pradesh, the state government has taken a very concrete step of opening collection centres at the village level in different clusters which has reduced the transportation cost by about 80-90%. The Department of Agriculture (Marketing) purchases the vegetables from famers at market price and then sells the produce through special stalls in Rythu Bazaar. In addition to this, the Department has also provided the FPOs of other clusters with motorised and fabricated vending vans for retail selling in the city. These vans are equipped with weighing scales, branded plastic pouches and sealing machines.

In Kerala, the state government has linked the farmers with established FPOs namely VFPCK (Vegetable and Fruits Promotion Council Keralam) and SFPCK for marketing of the produce. These FPOs reach out to consumers through cluster collection centres cum mini mandis where farmers themselves auction the produce to buyers, permanent POS counters in the city, mobile sales outlets, and several retail sale centres. Further, door to door sales have also been promoted in some selected areas.

Similarly, the Directorate of Agriculture in Goa has provided the facility of linking the farmers with Goa State Horticulture Corporation Limited (GSHCL) for selling some specific types of produce. GSHCL Vans directly collect the produce from farms, grade and sort the produce at their collection centres, thereafter the produce is sold from POS kiosks at prefixed prices.

In Manipur, collection centre-cum-pack houses have been provided to farmers which serve the dual purpose of sorting and grading of the produce as well as aggregation. In Assam, Odisha, Sikkim, Tamil Nadu the nodal agency has opened retail outlets, where farmers can sell their produce for retail selling at remunerative prices. In Gujarat, Jammu, Haryana, Odisha and Uttarakhand, farmers have been provided with motorised and static vending carts which are pragmatic solutions for retail selling in cities and mandis. In some other states like Delhi, Maharashtra, Haryana, Punjab, although marketing infrastructure is not available, but farmers are carrying out direct marketing with residential societies and retail outlets like Reliance Fresh, Mother Dairy, Big Bazaar and Bharti Walmart and other local retail outlets. In Maharashtra, farmers have set an excellent example of direct marketing with residential societies of Mumbai and Pune. It was observed that the selling prices of these vegetables were about 25-30% lower than normal retail selling prices. In the end the farmers and consumers mutually benefit from this arrangement–farmers are able to get a higher value realisation for their produce on spot cash basis, consumers get fresh vegetables at reasonable prices.

Till date, approximately `150 million has been spent under the marketing infrastructure component of VIUC which is only 40% of the total financial target and 30% physical achievement. States like Bihar, Goa, Gujarat, Jammu, Maharashtra, Nagaland, Punjab, Rajasthan, and Tripura have not been able to utilise this marketing component due to non-availability of funds and other reasons. In some of the states, like Arunachal Pradesh, Chhattisgarh, Jharkhand, though the infrastructure has been created but farmers are unable to utilise these.

In the northern region of country, farmers have been actively carrying out direct marketing of vegetables without any infrastructure support like aggregation centres or retail outlets. FIG members of Delhi, Haryana, Punjab, Uttarakhand are directly marketing their produce in retail outlets of big companies (Reliance Fresh, Mother Dairy, Bharti Walmart) using these firm’s collection centres as well as mandis without the involvement of middlemen and commission agents. Farmers are obtaining highly remunerative prices from this method of marketing as they are not bound to sell their product to these outlets forcibly. This type of assured marketing is providing the necessary impetus to farmers for growing exotic vegetables which are in demand nowadays and fetch highly lucrative prices. In Jammu & Kashmir, although the FPO members are carrying out direct marketing with Army Base Camps but the small quantity is not supporting the feasibility of business. Due to non-availability of collection centres in Haryana and Jammu & Kashmir, FPOs are unable to carry out large business transactions.

In north eastern states like Meghalaya and Sikkim, the nodal agency is supporting the farmers by providing the facility of aggregation centres and retail outlets. But in Arunachal Pradesh, the small size of collection

Direct marketing with private retail outlets and mandis in Delhi, Punjab, Haryana

Joint marketing with the aggregation centre and direct marketing with local mandis in Madhya Pradesh constructed under the scheme

Joint marketing with support of nodal agencies in Meghalaya and Sikkim

Joint marketing with the retail outlets constructed under the scheme in Odisha

Direct marketing with the help of collection centre and government-operated markets in Maharashtra, Rajasthan, and Goa

Northern Region

Eastern Region

Southern Region

Western Region

Central Region

North Eastern Region

Direct marketing with the help of collection centre and government operated markets in Andhra Pradesh, Kerala and Tamil Nadu

Figure 3: Region-wise marketing arrangements under the VIUC programme in different states

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centres constructed under the scheme may not be able to cater to FPO members. They also require transportation vehicles from feeder districts to the capital and neighbouring state Assam and rural/district marketing centres. In Manipur, FPO members are utilising the availability of the same infrastructure for collection centre as well as pack house, while in Tripura, no such infrastructures have been constructed. Even with the availability of infrastructure in most of the north-eastern states, farmers are still carrying out individual marketing.

In the western regions, farmers of Maharashtra are successfully carrying out direct marketing by opening temporary kiosks in residential societies. This does not require additional infrastructure for selling the produce, and both farmers and consumers are being benefitted from this system. The nodal agency has supported the farmers to some extent by opening a collection centre at the taluka level for aggregation of the produce at a common point. Farmers of Rajasthan have taken the initiative of opening a makeshift collection centre in the production cluster and selling the produce to big traders instead of selling the produce to big markets of Jaipur and Delhi. This initiative has reduced the transportation charges as well as additional commission charges paid to intermediaries in big markets. In Goa, farmers are carrying out direct marketing with GSHCL but it does not absorb all types of produce. In order to sell other produce, farmers need to go to mandis, wholesale markets or sell through roadside kiosks. In Gujarat, farmer producer companies are trying to tie-up with retail outlets but lack of business expertise is hindering the farmers in starting the business.

In Madhya Pradesh and Chhattisgarh in the central region, farmers are directly marketing their produce to local mandis. Though Chhattisgarh has undertaken

the construction of rural markets, retail markets and distribution of static and motorised vending carts for FPO members, farmers have been able to avail of some motorised vending carts for retail selling.

In the eastern region, Odisha has opened up retail outlets and aggregation centres for facilitating the marketing for farmers. But a monopolistic condition has been created as only one aggregator is present to absorb the produce at arbitrary prices. Farmers are facing the problem of getting low prices for their produce and are now searching for other alternatives. In West Bengal, FPOs have been tied-up with organised retailers. Also the distribution of motorised carts to FPOs has facilitated the retail marketing in cities. In Jharkhand, the nodal agency has established markets and mandis under the scheme but farmers are not able to utilise them. FPO members of Bihar are carrying out direct marketing with local retailers like Knids Green Private Ltd and local mandis. As of date the nodal agency has not made any effort to facilitate marketing in the state.

The southern region is very progressive in terms of facilitating the marketing for farmers. Recently Andhra Pradesh and Tamil Nadu had opened up collection centres at the village level for aggregation of the produce at remunerative prices. In Andhra Pradesh, the Department of Agriculture & Marketing is supporting farmers by purchasing the produce from collection centre and selling at special stalls in Rythu Bazaars under Manakurayalu project. In Tamil Nadu, farmers are highly pleased with the construction of collection centre. Chennai Horticulture Produce Producer Company Limited (CHPPCL) in Tamil Nadu has also opened its retail outlet and is trying to establish linkages with various organisations for an assured supply of vegetables. In Kerala, farmers are carrying out marketing with the support of the VFPCK and SFPCK from packaging to retail marketing.

Monthly Newsletter | VIUC | January 2014 | Issue-11

in terms of its affect as well as economic feasibility than conventional chemical sprays.

HARyANA

As marketing is a very important component of the VIUC initiative, FIG members of Sonipat Vegetable Farmer Producer Company Ltd have been taken on exposure visit to Atarna village to learn about marketing methods. Similarly, members of New Panipat Cooperative Vegetable & Fruits Growers Marketing Society have been taken on exposure visit to Vegetable & Fruits Producer Company at Ucchani Farm Karnal and KVK at Salaru. Collective activities are proving beneficial to farmers as a result of which, more than 500 farmers are carrying out joint production of seasonal crops like potato, tomato, cucumber, radish and carrot etc., on more than 500 ha. FPO members are jointly carrying out collection, transportation and marketing of approximately 150 MT of produce to nearby mandis as well as carrying out direct marketing with Bharti Walmart, Mother Dairy, Reliance Fresh and Big Bazaar. Approximately 95% and 68% of the funds have been utilised under Action Plans 2011-12 and 2012-13 respectively.

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Karnataka has also opened up collection centres under the marketing component.

Apart from the four southern states, a greater effort needs to be undertaken to actualise the marketing component in different regions of the country. More marketing infrastructure facilities need to be developed, especially in the north-eastern and eastern regions of the country where farmers are still unable to derive benefits from the scheme due to poor transportation and marketing infrastructure. State nodal agencies should allocate major parts of the funds for developing marketing infrastructure as well as subsidy for transportation, which is a major requirement of the

farmers. In major parts of the country like Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Jammu & Kashmir, Jharkhand, Meghalaya, Mizoram, Nagaland, Punjab, Tripura and Uttarakhand, there is a need for strengthening marketing infrastructure and linking up the farmers with local outlets and institutions for assured supply of vegetables on a weekly and monthly basis. On the lines of direct marketing with residential societies in Maharashtra, farmers in Goa and other states can adopt this approach and start with small quantities of produce. In addition to strengthening infrastructural facilities, farmers need better orientation for developing forward linkages with various stakeholders and deriving the benefits thereof.

Training about agriculture machineries

Demonstration of seed drill

Healthy crop with the application of Beauveria bassiana

Joint harvesting and collection

Seedling production

Updates from the states of Delhi, Punjab, Jammu and Kashmir, Haryana, and Uttarakhand that comprise the northern region are as stated below:

DELHI

Considering the benefits of training programmes in improving the technical skills and enhancing business competencies, the members of all the four FPOs in Delhi have been provided with technical training on productivity enhancement, marketing, and FPO management. In addition to this, FPO members have been taken on an exposure visit to Pusa New Delhi for learning about farm machineries. The members of Krishak Bharti Seeds and Fertilizers Ltd have been linked with Jubilant Foodworks for supplying mushroom on daily basis and the activity will start soon. As an organic pesticide, Beauveria bassiana has been sprayed for control of pests like termites; white flies and white ants etc. and very positive results have been observed from its application. The spray has proved very advantageous

Northern Region Update

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Welfare Society, Farmer to Fork Vegetable Producer Welfare Society and Fatehgarh Sahib Vegetable Producer Association. Since majority of the farmers of the cluster belong to the small and marginal category, prior to implementation of VIUC scheme, their economic conditions were far from stable. Although their production was good, but heavy investment in inputs, production practices and extra commission paid for delivery of the produce to the market yielded very poor returns. With the introduction of the VIUC scheme in the cluster, and the identification and mobilisation of the farmers into groups, these farmers have been able to create their own identity. Resource Institutions have provided quality training to farmers on all aspects, from production to marketing through exposure visits, front line and result demonstration techniques. They have also supported the tying up of farmer groups with Agriculture Universities and KVK and other institutions for on-farm solution of their problems. Farmers have received technical advisory which has led to minimum production losses and consequently better yields. Still the economic returns were low due to heavy investment in agricultural inputs. Farmers also face problems with seed germination and the receipt of low quality inputs despite paying high prices for the same. Then the farmers groups decided to collectively purchase the inputs like vegetable seeds, Urea, DAP and other inputs in bulk through their society. Resource institutions have also supported this by identifying bulk suppliers and manufacturers of these inputs who are ready to sell at lower prices than the market. The farmers have consequently saved around 7-10% of the input cost. In order to facilitate the marketing of produce like garlic, cucumber, okra, cauliflower, radish, watermelon and tomato, the resource institutions have helped the producer companies forge links with retail outlets like Reliance Fresh, and local mandis. This has resolved the major problem of input procurement as well as output marketing and farmers are now earning profits. At this moment, all the FPOs are working independently and carrying out business transactions without the involvement of any middlemen and

JAMMU & KASHMIR

The FPO members of Jammu Oriental Fresh Farmer Producer Company Limited have been provided with technical training in Udhampur, Kathua and Reasi. The farmer members have been taken on exposure visits to Talwara, Punjab for learning about farm machineries.

As input supplement, FIG members of Reasi and Udhampur have received seeds and agri-booklets. The FPO members have jointly purchased neem oil, organic fungi, and traps. Seed trials have been conducted at seed production units and at farmers’ field. In Kashmir, Srinagar Farmers’ Producers Company Limited has been registered with more than 3200 farmers.

In Jammu, approximately 59%, 70%, and 40% of the funds have been utilised while in Kashmir, approximately 91%, 63%, and 31% of the funds have been utilised under Action Plans 2011-12, 2012-13 and 2013-14 respectively.

PUNJAb

In Ludhiana, Patiala and Fatehgarh Sahib clusters of Punjab, around 164 Farmers Interest Groups have been promoted with approximately 3000 small and marginal farmers as members. These farmers have been absorbed into five registered societies namely Good Day Vegetable Producer Farms Welfare Society, Ludhiana Quality Control Organization, Shaheed Udham Singh Vegetable Producer Farmers

Poly-house established by FIG member for off-season vegetable production

Training on protected cultivation through exposure visit

Plastic crates available for packaging

FPO members of Jammu Oriental Fresh FPO on exposure visit to Talwara Punjab (Photographs provided by Actech Jammu)

Joint purchase of neem oil and other organic inputs (Photographs provided

by Actech Jammu)

Bountiful production of radish (Photographs provided by Actech

Jammu)

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know-how about seedling production methods under protected cultivation.

Approximately 26% of the funds have been utilised under Action Plan 2011-12.

MAHARASHTRA

Agribusiness activities are at their full steam in all the FPOs of the state. FPO members of the Pune and Nashik cluster have achieved input marketing worth more than `5 lakhs through purchase of agro-chemicals, mixed fertilisers, bamboo tissue culture plants, stakes, tissue culture seeds of potato, seeds of maize and green manure. In case of output marketing, they are carrying out direct marketing and have done business of approximately 55 MT of tomato, cabbage, brinjal, chili, onion, and other

The western region comprises the states of Maharashtra, Goa, Rajasthan. Updates from these states are as below:

GOA

In North and South Goa, FIG meetings have been organised for planning of the Rabi season and deciding upon the strategies of business. Members of Krishi Samruddhi Farmers Producers Company Limited in North Goa and Krishi Sujalam Farmer’s Producers Company Limited in South Goa have been provided with training on water melon and chili production and pest management practices. These trainings were organised in collaboration with the Directorate of Agriculture. FIG members of South Goa have been linked with Zuari Agro Chemicals Limited for

commission agents. All the five FPOs have so far done business worth more than `45.00 lakhs with a profit of more than `2.00 lakhs on such input purchasing and marketing. Subsidy availed under the scheme on poly house and pack house to farmers has helped boost the confidence of farmers to grow high value vegetable crops with assured returns. The formation of groups and FPOs has benefitted the farmers to a great extent and the socio-economic condition of the farmers has improved considerably.

UTTARAKHAND

With the support of the Department of Horticulture in Dehradun, farmers are carrying out production of high value crops like broccoli and protected cultivation of tomato using stakes in poly-houses. To facilitate marketing of produce, farmers have also been provided with static vending carts. As a collective activity, the FPO members of Kotdwar Sumati

Foundation Agriculture Cooperative Society (SFACS), Pauri SFACS, Haridwar SFACS have collectively purchased around 200-800 qtl of fertilisers and chemicals for protection of crops. They are carrying out joint production, collection, transportation and marketing of approximately 12 MT of peas, french beans and cauliflowers. Around 1 MT of produce is being directly marketed with Amol Agro International and the remaining produce is being marketed in nearby mandis. In addition to this, they are also carrying out processing of vegetables.

Approximately 95% and 74% of the funds have been utilised under Action Plans 2011-12 and 2012-13 respectively.

Training on chilli and water-melon production and pest management

practices

Training on chilli production

Input shop of Darana Agro Producer Company

Direct marketing at residential society of Moshi (Pune)

Retail marketing in mandis on static vending carts provided by Department

of Horticulture

Production of broccoli

Tomato cultivation in poly-house

Western Region Update

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Mitra Marketing Cooperative Society have informally started the input business with the procurement of more than 200 kg of seeds of okra, long yard bean, bitter gourd, cucumber, tomato, fenugreek, spinach, and onion from retailers for selling at reasonable prices to farmers. In order to commence the business, both the FPOs have been linked with VNR seeds for input dealership. The cooperatives in Dhamtari cluster have started the business activities for the Rabi season. Krishi Vikash Bahuddeshiya Swayatta Sahkari Samitee

obtained in every season but the heavy transportation cost and marketing scenario has adversely affected the enthusiasm of farmers for vegetable production. Regular training and sensitisation programs motivated the farmers to start vegetable production as a profitable enterprise. The produce is sold in Mohana Mandi, Jaipur and Azadpur Mandi, Delhi. High transportation cost is incurred in the process. In addition to this, too many intermediaries in the marketing channel between farmers and big traders consequently reduce the farmers’ profit. With the support of RI and conducting various meetings, discussions and search for big traders, the FPO created a temporary structure for aggregation of produce at the village level, which is only 3-4 km away from the farm. This initiative has substantially reduced the time and transportation cost by more than 80%. Now, only `8000-10,000/- is incurred for transportation of produce to Mohana and Azadpur Mandis, which was earlier `50,000-60,000/-. Around 1000 farmers are collecting their produce at this makeshift collection centre. Some of the FPO members are involved in packaging of the produce in different sizes of packets for easy transportation of the produce. Some big traders have been linked with the aggregation centre for absorbing the produce at remunerative prices. Aggregation and joint marketing has reduced the transportation charges and completely eliminated the commission charges to around `100,000/- and the FPO members are marketing more than 90,000 qtl of produce, thereby saving around `5-7 lakhs. The farmers are now making around 30% more profit and approximately `30-32 lakhs has been saved as profit by the company. Earlier farmers were only limited to production of some selected types of vegetables but this type of resourcefulness has motivated the farmers to expand the business further and they have decided to produce various types of vegetables, throughout the year, as per the market demand.

seasonal vegetables. In the newly added cluster, Ahmednagar, farmers have started the use of drip irrigation and mulching paper for vegetable production. Farmers are gradually moving from traditional farming using chemicals to organic farming. Use of bio control is saving around 50% of the spraying cost.

Approximately 86% and 42% of the funds have been utilised under Action Plans 2011-12 and 2012-13, respectively.

RAJASTHAN

Ashu Kisaan Agro Producer Company has around 19 FIGs and majority of the farmers belong to Chaksu cluster of Jaipur district. As the operational holding size is less than 0.5-1 ha area; therefore, most of the farmers belong to the small and marginal category. Prior to the formation of group, these farmers were growing only selected type of vegetables for selling in a particular season and were saving remaining quantity of produce for family consumption. As most of the state is semi-arid, prevailing agro-climactic conditions favour vegetable production throughout the year. President of the FPO Mr. Ramswarup Gurjar stated that the soil and climatic condition of the state is very good thus abundant production can be

Farmers unloading the produce to aggregation centre

FPO members involved in packaging of the produce

Cultivation using mulching paper

Central Region Update

The central region comprises the states of Chhattisgarh and Madhya Pradesh. Updates from these states are as below:

CHHATTISGARH

Acting upon the positive response of farmers from the VIUC scheme, a review meeting was organised in the presence of Director (SHM) in Raipur, for assessing project progress and VIUC area extension process. Members of Pragatishil Marketing Cooperative Society and Kishan

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procurement and collective transportation of approximately 2800 quintal of seasonal vegetables. FIG members of Patitapaban Farmers Producers Company Limited have received around 20 qtl of Chipsona variety seeds of potato at subsidised rates with a buy-back arrangement. Members of Ranisukadei Farmer Producer Company Limited and Maa Charchhika Farmer Producer Company Ltd. have purchased more than 2 qtl of bitter gourd, brinjal, cabbage, cauliflower, cucumber seeds, etc.

After the Phailin cyclone in October 2013, farmers of two FPOs of Cuttack district have procured seeds and sold to the share holders.

Approximately 33% of the funds have been utilised under Action Plan 2011-12.

has purchased okra seeds (VNR –Deepika) worth more than `1.00 lakh and is planning to purchase more seeds of an amount around ̀ 72,000 in a few days. A framework is being prepared to present to SFAC for supporting FPOs in establishing their marketing network.

Approximately 100% and 79% of the funds have been utilised under Action Plans 2011-12 and 2012-13, respectively.

MADHyA PRADESHIn Bhopal and Sehore, meetings have been organised for business expansion and demand generation of agri-input. Members of Unnat Kisan Producer Company Ltd (UKPCL) and Kisan Ekta Samrudhhi Producer Company Limited (KESPCL) have done agri-business through collective purchasing of more than 160 MT of fertilizers like Urea, SSP and DAP from various dealers of Kissan

Urea, Sriram Fertilizers, IPL and Cargil. In addition to this, they have also purchased around 6 MT seeds of wheat and methi and more than 3 kg seeds of tomato and cauliflower. More than 500 farmers have been benefitted under input distribution programme. Each farmer has received material of about `16,500/- for hybrid vegetable production and `11,250/- for open pollinated vegetables.

Approximately 57% of the funds have been utilised under the Action Plan 2011-12.

FPO shop of Unnat Kissan Producer Company Limited

Farmers purchasing seeds from input shops

Comprising the states of Bihar, Jharkhand, West Bengal and Odisha, the eastern region has reported successful endeavours under the VIUC scheme. Updates from these states are as below:

bIHAR

In Patna, Nalanda and Vaishali, FIG meetings have been organised for mobilising share capital, collective vegetable production and marketing. Cluster-level meetings have been organised for combined purchasing of seeds, fertilisers and pesticides. Among input distribution, lentil seeds and biogym has been distributed to farmers in Patna and Nalanda. Nalanda Agro Producer Company has jointly purchased pesticides worth more than `2.00 lakhs. Similarly, Prakash Agro Producer Company in Vaishali has jointly purchased fertiliser worth `3.00 lakhs and seeds of `2.00 lakhs for selling at FPO outlets.

Approximately 100%, 94% and 9% of the funds have been utilised under Action Plans 2011-12, 2012-13 and 2013-14, respectively.

ODISHA

In Puri and Khurda, farmers have been linked with NABARD for infrastructure development. Members of Jayadev Producers Company Limited, Patitapaban Farmers Producers Company Limited, and Gatiswardev Producers Company Limited have done the collective

Eastern Region Update

Retail shop of Maa Charchhika Farmer Producer Company

Meeting of farmers with Nabard

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Comprising the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura updates from these states are as stated below:

MANIPUR

In Bishnupur, Thoubal, Imphal East and West, activities are going on under the components of seedling

production, hybrid cultivation, and vegetable cultivation under green houses. With the support of the Department of Horticulture and RI staff, the FPO has set up one stall for creating awareness among the public in the Sangai festival, which is one of biggest fairs in Manipur Under the infrastructure creation component, work on market aggregation centre and pack house has been completed.

Approximately 100% and 50% of the funds have been utilised under Action Plans 2011-12 and 2012-13, respectively.

MEGHALAyA

In the East Khasi Hills area, harvesting of cabbage is in progress, while the harvesting of carrot, radish and chilli is over, wherein a bountiful production has been obtained.

Approximately 83% of the funds have been utilised under Action Plan 2011-12.

TRIPURA

In the year 2013-14, the VIUC programme has been extended and now it is covering four districts of Tripura viz; Mohanpura, Teliamura, Bishalgarh and Sonamura. In the year 2013-14, only one component has been taken up in the Action Plan which is cultivation of winter hybrid and early summer vegetables.

Approximately 100%, 69% and 68% of the funds have been utilised under Action Plans 2011-12, 2012-13 and 2013-14, respectively.

Collection center at Golapalli cluster

Collection centre

North East Region Update

Vegetable production of brinjal and chive in open field and tomato under protected condition

FPO stall in Sangai festival

Collection centre cum pack house in Imphal West

Harvested produce of carrot, radish and cauliflower

Open field hybrid vegetable cultivation

Seed distribution to FIG members

Southern Region Update

Comprising the four southern states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. updates from these states are as below:

ANDHRA PRADESH

The FPOs are directly working with the Commissioner of Agricultural Marketing and the CEO of Rythu Bazaars as

part of running collection centres in the villages, and they are playing a vital role at all stages-starting from procuring the vegetables from the farmers to handing over the produce to the aggregation centre set up in Hyderabad city by the Agricultural Marketing Department. The Department of Agricultural (Marketing)

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has provided all the infrastructure support like crates, computers, printers, grading tables, weighing balances to the FPOs for the use of collection centres on loan basis, in order to strengthen them. The farmers are sowing seeds in the Rabi with technical support in terms of cultivation practices and adoption of new technologies.

Approximately 100% each and 28% of the funds have been utilised under Action Plans 2011-12, 2012-13 and 2013-14, respectively.

Arunodaya Vrutti Farmers Producer Mutually Aided Cooperative Society

Arunodaya Vrutti Farmers Producer Mutually Aided Cooperative Society is one of the most progressive cooperatives of Navabpeth Mandal of Rangareddy district. President of the FPO Mr. Venkataih and other farmer members expressed sincere gratefulness to the Department of Horticulture and RI for their never ending support under the VIUC programme. The FPO is covering around 49 FIGs with approximately 750 farmer members. Majority of the farmers of this cluster grow cauliflower, chilli, tomato, carrot, brinjal, and bottle gourd as their main crops. Farmers of this FPO are very adaptive in terms of applying the latest package of practices on the field as well as in marketing. With the standard training and awareness programmes on comprehensive production and marketing practices, farmers have become aware about the different schemes. In addition to technical support, the Department of Horticulture has supplied various inputs like seeds, pandals, trellises, mulching papers, plastic crates etc. Training on collective activities has motivated the farmers for to carry out group activities and they are being highly benefitted. by collective procurement and marketing, farmers are saving almost 15-20% of the cost as compared to individual purchase and marketing. One of the much awaited programmes of opening a collection centre in the cluster has resolved the most important problem of vegetable marketing. Earlier farmers of the FPO were going to Rythu Bazaar for selling the produce which is

almost 55-60 km away from the village. It included high transportation costs and commission paid to intermediaries which was around 10-15% of the total cost. But the opening of the collection centre at the village has solved many problems. The collection centre is situated hardly 5-10 km away from the production clusters so the transportation cost is almost negligible. The collection centre is well equipped with a weighing machine and crates in which farmers weigh the produce which is then safely packed in plastic crates. From the collection centre, produce is dispatched to Rythu Bazaars for which the cost is being paid by the Department. This initiative has proved to be a boon to the farmers as it is not only saving the time which was otherwise being wasted in selling through commission agents and also saving transportation and additional commission charges.

From the current marketing system, farmers are saving approximately 25-30% profit which was earlier only 7-10%.

KERALA

The VIUC programme is currently under progress in five districts of Kerala which are Kozhikode, Palakkad, Kannur, Ernakulum, and Thiruvananthapuram. Activities have been done for the components of vegetable seedling production, vegetable cultivation, marketing, promotion of farmers groups and training to farmers. Training has been provided

Sowing of Rabi season crop

Collection centre at Nawabpeth mandal

Weighing machine at collection centre

Plastic crates for packaging at collection centre

Seedling production

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to farmers on different techniques connected with cultivation of vegetables in roof top gardens, various aspects of vegetable production, technologies, and plant protection. As regards market infrastructure, retail outlets have been established in Palakkad and Thiruvananthpuram.

Approximately 100% each and 38% of the funds have been utilised under Action Plans 2011-12, 2012-13, and 2013-14, respectively.

TAMIL NADU

Farmer's name: Sri Pallani, Cluster: Kilpadappai Bhendi cluster, Village: Kilpadappai, block: Kundrathur, District: Kanchipuram

Mr. Pallani is one of the most progressive farmers of the Kilpadappai Bhendi cluster. He grows brinjal as the major crop and in the last season, he grew the Ujala variety of brinjal

on around 0.2 ha area. From this crop, he harvested around 35 pickings of the crop with an average yield of 23 MT/ha. Mr. Pallani said that the majority of the farmers of this cluster were facing the problem of marketing of their produce. They sell their produce in Thambaram and other local markets, where the brinjal fetched only `15 per kg of produce. Since the average cost of cultivation is about `30,500/- he was saving only `38,500/- every season. Under Peri-metro scheme, collection centres have been opened in the different clusters of Tamil Nadu state to facilitate marketing. Collection centres have provided a direct link between producers' groups and bulk end-buyers, thereby cutting out middlemen (traders) and securing a higher share of the returns for the primary producers. It has also reduced the cost of transportation of the produce. Mr. Pallani has since delivered his produce at the vegetable collection centre located at Peerkankaranai and has obtained `25/- per kg of the produce and has earned a net profit of `84,500 which is about 220% over his previous returns. Other farmers of the cluster are also selling their produce to this collection centre and have been benefitted by this initiative of the Horticulture Department of Kanchipuram district. Farmers are taking advantage of the presence of several buyers to auction their commodities, awarding it to the highest bidder and thereby maximising their gains.

Harvesting of produce and ready for marketing

Picking of brinjal

Selling the produce at Peerakankarani collection centre

Feature Article – Rythu bazaar

The establishment of direct linkages between farmers/growers of vegetables and consumers in urban clusters has become imperative and Rythu Bazaar is an example of one such initiative in Hyderabad, Andhra Pradesh.

Rythu Bazaars are farmers' markets operating in Hyderabad. These were introduced with a view to eliminate the middlemen and arrange facilities for the farmers to sell their produce directly to the consumers at rates fixed every day with reference to price of Bowenpally wholesale market in Hyderabad. It is run by the Government of Andhra Pradesh for small farmers with small landholdings. In this market, farmers bring vegetables and sell directly to the consumers, thereby eliminating middlemen. Thus, the produce available is economical and farm fresh.

The first Rythu Bazaar was established in 1999 in Hyderabad. Rythu Bazaars provide facilities to farmers for selling their produce directly to consumers under a proper marketing infrastructure, provisioning adequate space and supportive facilities and an administrative system and government protection. There are 9 Rythu Bazaars in Ranga Reddy Districts a including Hyderabad. They are: Kukatpally, Alwal, Mehdipatnam, Vanasthalipuram, Erragadda, Saroornagar, Falaknuma, and Ramakrishnapuram.

The key stakeholders are the officials of the Agri Produces Marketing Department who ensure regulation; Joint Collectors who are response for the effective functioning; Estate Officers who are responsible for maintenance and upkeep of the

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infrastructure; farmers of the FPO who bring in the produce and SHGs of the Department of the Women and Children in Rural Areas (DWCRA) who sell products as a group in these Rythu Bazaars only.

Rythu Bazaars cater to millers who sell paddy and other Kharif crops, members of the SHGs of Department of Women and Children in Rural Areas (DWCRA), who deal with commercial vegetables like potatoes and onions and farmers who sell other vegetables. While millers and the DWCRA SHG members pay a monthly rent of around INR 10,000 and INR 800 for each shop respectively, the farmers can sell their produce at the Rythu Bazaar free of cost.

Typically a Rythu Bazaar caters to the produce brought in from 10 to 15 villages covering about 250 farmers along with 10 SHGs of the DWCRA. These villages are selected by a team consisting of Mandal Revenue Officers, Horticulture Consultants and Agriculture Officers.

Every farmer/grower seller at the Rythu Bazar is issued a photo identity card that includes details like name, address, products grown, and size of land, either owned or leased in by him/her. This identity card is issued with the aim of preventing the entry of middlemen into the Rythu Bazaar Market. Only a person with a valid photo identity is allowed to enter the Rythu Bazaar to sell his/her farm products. Normally the space or the shops are allocated to the farmer sellers on a daily, first come first allot/serve basis.

It is a normal practice and a laudable one that the price for products to be sold at the Rythu Bazaar is fixed every morning by the Estate Officers. The committee is set up by the State Administration, in consultation and agreement with the user farmers from each Bazaar. It has been working, and the agreed principle that the prices for any vegetable item be around 20 to 25% more than the wholesale prices and 25% less than the normal retail price for an item in any of the retail markets in the vicinity. The logic is that if the prices in Rythu Bazaars are higher than the local retail market prices, there is no incentive for consumers to come to the former and, on the other hand, if the prices are fixed lower than the wholesale market rates, there is no incentive for the farmers to sell their produce there.

An online market information system has been developed to keep officials at all the Rythu Bazaars

updated about every day/daily wholesale rates as well as Rythu Bazaar prices to help consumers be informed to decide and make their own choice. A consumer can refer to the prices online and, thus, prevent over-charging by the farmers, too. The ‘Retail Price’ for each item is displayed on the ‘Notice Board’ at the entrance of the Rythu Bazaars and at different location within the Bazaar, too.

Rythu Bazaars have tried to provide transportation, electricity and water supply to the farmer users. Proper covered sheds, toilet facilities to market users, facilities for cleaning/dressing of vegetable produce, grading and sorting, weighing, packaging, storage, parking, telephone, internet and fax. It is believed and observed that the user famers and the consumers/buyers are mostly satisfied. Arranging these kinds of basic facilities encourages and enhances the farmers’ marketing initiative and the environment.

Each Bazaar is under the control of an Estate Officer. The Estate Officer is responsible for general administration, including issuance of identity cards and wholesale price discovery and fixation of retail prices in the Bazaars. These officers are given periodic training, to upgrade their skills and understand the minute trading/auction skills from time to time to help them perform their roles efficiently. Frequent and periodic impromptu inspections are held by the Joint Collectors and other members of Marketing Department to ensure that all officers in-charge are performing their duties and responsibilities, efficiently. Senior officers of the Department concerned interact with farmers and the consumers to get their feedback and suggestions/complaints about the Bazar. Based on this feedback on the issues and the observations, improved directives are communicated to the officials of each Rythu Bazaar to look into matters of concern and try to do their best to improve the system both in the interest of farmer/growers as well as consumers.

The expenditure of setting up and maintaining a Rythu Bazar is met from funds made available by the Agricultural Produce Market Committee under the State APMC Act, vehicle parking charges, hoardings to display some Companies Products, as well as the funds collected via leasing a part of the Rythu Bazar premises to Millers and SHG groups, mostly from the Cooperatives within the State or Dairy industry, etc.

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16 Monthly Newsletter | VIUC | February - March 2013 | Issue-04Monthly Newsletter | VIUC | December 2013 | Issue-10

SMALL FARMERS’ AGRIbUSINESS CONSORTIUM(Society sponsored by Dept. of Agriculture & Cooperation, Govt. of India)NCUI Auditorium Building, 5th Floor, August Kranti Marg Hauz Khas, New Delhi - 110016Tel: +91-11-26862365, 26966017, 26966037 | Fax: +91-11- 26862367 Email: sfac@nic.in | Web: www.sfacindia.com

Rythu Bazaar has, over a period of time, gained rich and very conducive development experience to share in terms of enhancing per unit area productivity and thereby increasing farmers’ income, helping them to be aware of changing requirements and new demands of the consumers. On an average, there are about 150 to 500 farmers participating in the selling activities and the Rythu Bazaar attracts consumers in the range of 1,500 to 15,000;

‘ManaKuragayalu’ which literally translates from Telugu as “our vegetables” – is an initiative to further link up the FPOs’ produce into the ‘Rythu Bazaar’ marketing model. This initiative has gained significant traction with sustained volumes and consistent supply of quality vegetables. The differentiator in this initiative has been the well sorted and hygienically packed produce (with minimal human handling effort) being brought to the sales point in mobile units with freshness intact.

Events of SFAC : January 2014

Launch of “Equity Grant and Credit Guarantee Fund Scheme” for Farmer Producer Companies on 1st January, 2014. It provides access to a grant upto `10 lakhs to double member equity and also seek collateral-fee loans upto `1 crore from banks, which in turn can seek 85% cover from the Credit Guarantee Fund (guidelines available on www.sfacindia.com). The scheme is being implemented by SFAC.

SFAC assessed the requirement of Post Harvest Management infrastructure by FPOs. Model plans for establishment of PHM for 2 FPOs for the states of Haryana, Nagaland, Tripura and Uttarakhand. Plans for Delhi, Meghalaya and Mizoram are underway.

SFAC is collaborating with Warehouse Development Regulatory Authority to accredit warehouses owned by FPOs.

Presentation by SFAC on status of value chain analysis of apple to Secretary, Department of Agri & Cooperation.

SFAC was made the Nodal agency to implement national demonstration project for promotion of FPOs and value chain development of Pulses Millets under National Food Security Mission. This project has a coverage of 110,000 farmers (110 FPOs) spread across 11 states.