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RAPID MARKET APPRAISAL FOR FOOD GRAINS
(MAIZE AND SORGHUM)
By:Anuj JaiswalAnusha ChapaLokesh Kumar AgarwalShushrita MallikSurbhi KatochVinodsingh Salunkhe
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Flow of content IntroductionObjectiveMethodologyMandis and LayoutMaizeSorghumDeficiencies Suggestions
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Introduction
Rapid growth and expansion in sectors such as Information technology Software development Business process outsourcing Mobile telephony Banking and financial services Manufacturing
… But not agriculture .
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Drivers of Indian Agriculture
Farmers who are Small-scale producers with fragmented land holdings Subject to significant weather and price risk
Firms that Develop, commercialize seed-based technologies Pursue innovative product development/delivery strategies
The market Low level of knowledge and information Barriers to entry, Regulatory uncertainty and malpractices Commission agent with own interest Long supply chain with high intermediaries
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Objective of the studyTo understand and identify :
the market participants. the marketing channels and .Pricing strategies of food grains market.
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MethodologyRapid Market Appraisal - Structure, Conduct and
Performance (S>C>P) Approach followed to get a reconnaissance about the food grain (maize and sorghum)market.
Consumer marketing research done in the form of applied sociology that concentrates on understanding the attitudes and behaviours of participants in market, and it aims to understand the effects and comparative success of each participant
Study area – Panna market and Sardarnagar market.
Tools used – Venn diagram, flowcharts, pie diagram.
Mandis Mandis – agricultural markets set up by state governments to
procure agricultural produceTotal Mandis – 6,800Most agricultural areas with population more than 10,000
have MandisAverage population catered to each Mandi – 1.36 lakhs
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Sardarnagar Grain Mandi LayoutVEGETABLE MARKET
ENTRY
Main commission
agent
auctioning
C.A
C.AWei
ghin
g m
achi
neC.
A
C.A
C.A
storage storage
W.M
VEHCILE
VEHCILE
EXIT
storage
storage
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MAIZE
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Structure Market Participants -
Farmers Village Representative (20) Commission Agents (12) Traders
MANDI
FARMERS
TRADERS
COMISSION AGENT
VILLAGE REPRESEN
TATIVE
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Structure Marketing Channel -
FARMER
COMMISSION AGENT
FARMER
FARMER COMMISSION AGENT FARMER
VILL. REPRE
VILL. REPRE
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Structure
Market Share The commission agent was the most influential participant of the
market and had the maximum share in terms of power. He was the one who decides the price for the commodity base on some standards.
Product Differentiation And Quality Standard For maize there was no processing facility i.e. no value addition
was done. The CA divided the maize in 4 grades on the basis of kernel size and moisture content.
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Pricing Strategies Price formation was done by a group of CA’s and also by
auction as per the grades of the maize kernel. Usually price fixed is more than the MSP (>Rs.1100/q)
The CA takes 2%-4% margin from the farmers. The supply and demand of maize is variable as per the
seasonality in production. Regulations And Stimulations
There is no political control in the fixing of prices and the demand and supply.
The CA gives immediate cash after the transaction has happened OR as and when required by the farmers (based on trust).
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Conduct Buying And Selling Strategies
It is a weekly market , on Thursday the grains market is established.
50 kg -10 q is the range of volume of transaction. Once the price is fixed there can be no bargaining. The price fixed is uniform from all the CA’s , it depends on the
relations and trust between the farmer and the CA’s to whom they (farmers) want to sell.
There is no facility provided by the CA to the farmer in terms of logistics, the farmer is himself responsible for it.
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Performance Economic Parameters
The market margin is quite less as compared to fruits and vegetables market.
Since there is always a supply followed by demand so as such there is no price risk.
Social Parameters Many labourers for loading. Unloading, packaging, brooming
are employed apart from the main market players. The ratio of men : women is 90:10 in the market.
Environmental Parameters The waste material is collected and is fed to the poultry birds.
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SORGHUM
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Structure Market Participants
Farmers (A.P, Karnataka, Maharashtra) Commission agents (30) Dealers Traders
COMMISSION AGENTS
FARMER
S
DEALERS
TRADER
S
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Structure Marketing Channel -
FARMER
COMMISSION AGENT
DEALERS
CONSUMERS
FARMER
COMMISSIO
N AGEN
T
TRADERS
EXPORTERS
FARMER COMMISSION AGENT FARMER
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Structure Market Share The commission agent were the most influential participants
of the market . Among the 30 CA’s only 6 were the most influential. Above all one CA ( Mr. Jadishwar ) had the control of the whole market and had the maximum share in terms of power. He was the one who decides the price for the commodities.
Product Differentiation And Quality Standard For sorghum there was no processing done. There were two
types of sorghum : Yellow sorghum White sorghum
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Pricing Strategies – Price formation was done by one CA . Auction was done for the
sale to the traders and dealers. The CA takes 3% margin from the farmers. If the farmers store
there produce for long then they charge 4% margin . Whereas the large CA’s charge 10% for the same.
The supply and demand of sorghum is variable as per the seasonality in production.
Regulations And Stimulations – There is no political control in the fixing of prices and the
demand and supply , all is done by the CA. The CA gives immediate cash after the transaction has
happened or on the same day.
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Conduct Buying And Selling Strategies –
It is a weekly market , on Tuesday the market is established. All types of commodities are sold and bought.
200 kg -300 q is the range of volume of transaction of sorghum..
The price fixed by the bigger CA is the benchmark for other CA’s , it depends on the willingness and trust between the farmer and the CA’s to whom they (farmers) want to sell.
The farmers bring there produce by there own vehicles or rented vehicles.
The CA financial support to the farmers as and when required.
Storage facility is available with every CA.
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Performance Economic Parameters –
The market margin is high as it is an interstate market and also export quality produce is available.
The number of sellers are less than the number of buyers in the market.
Social Parameters – Many labourers for loading. Unloading, packaging weighing,
brooming are employed apart from the main market players. The ratio of men : women was 80:20 in the market.
Environmental Parameters – The waste material is collected ,sieved and taken by the
workers present . The wastage is quite low.
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Deficiencies Information flow to the farmers. Lack of modern weighing machines. No separate platform for different commodities. No authentic grading of the produce. No role of APMC body. No facilities for transport. Storage houses were not in a good condition. No direct access to the main road.
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Recommendations Concerns
Development of integrated infrastructure such as proper warehouse facilities.
Huge investment, lack of aggregated supply , lack of graded produce
Participation of professional traders and buyers
Interested in quality produce.
Modernization of weighing method and logistic support to farmers
Investment and acceptance of change
Promotion of export Stringent international quality parameters, High transportation cost
Access to the market information Lack of communication platform and Illiteracy of farmers
Recommendations And Concerns
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Retailers
Organized
distribution
outlets
Commission agent
APMC YARD
Processor
Extension
Planning
Input
Farmers
Retailers(unorganize
d)
Ultimate
consumers
Commission agent APMC YARD
Intermediary
Designing the effective chain
• Middleman is not a villain. He is actually making up for the weak infrastructure. He has become a villain by blocking information flow & market signals
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Let’s look beyond immediate gains to ensure a more stable market for our farmers future generations