STUDY OF SUPPLY CHAIN MANAGEMENT AND MARKETING …...CERTIFICATE Mr. SARFARAZ ASGHAR has...

STUDY OF SUPPLY CHAIN MANAGEMENT AND MARKETING OF

APPLE IN KASHMIR REGION OF JAMMU AND KASHMIR, INDIA

SSAARRFFAARRAAZZ AASSGGHHAARR B.Sc. (Ag.)

MASTER OF BUSINESS ADMINISTRATION

(AGRIBUSINESS MANAGEMENT)

2015

STUDY OF SUPPLY CHAIN MANAGEMENT AND MARKETING OF

APPLE IN KASHMIR REGION OF JAMMU AND KASHMIR, INDIA

BY

SARFARAZ ASGHAR

B.Sc. (Ag.)

PROJECT REPORT SUBMITTED TO PROFESSOR JAYASHANKAR TELANGANA

STATE AGRICULTURAL UNIVERSITY IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

(AGRIBUSINESS MANAGEMENT)

CHAIRPERSON: Dr. Y RADHA

SCHOOL OF AGRIBUSINESS MANAGEMENT

COLLEGE OF AGRICULTURE

PROFESSOR JAYSHANKAR TELANGANA

STATE AGRICULTURAL UNIVERSITY

(Formerly part of Acharya N. G. Ranga Agricultural University)

RAJENDRANAGAR, HYDERABAD-500030

2015

CERTIFICATE

This is to certify that the project report entitled “STUDY OF SUPPLY CHAIN

MANAGEMENT AND MARKETING OF APPLE IN KASHMIR REGION OF JAMMU

AND KASHMIR, INDIA” submitted in partial fulfilment of the requirements for the

degree of ‘Master of Business Administration’ of the Professor Jayashankar Telangana State

Agricultural University (Formely part of Acharya N. G. Ranga Agricultural University),

Hyderabad, is a record of the bonafide original research work carried out by Mr. SARFARAZ

ASGHAR under our guidance and supervision.

No part of the project report has been submitted by the student for any other degree or

diploma. The published part and all the assistance and help received during the course of

the investigations have been duly acknowledged by the author of the project report.

(Dr. Y. RADHA)

Chairman of the Advisory Committee

Project report approved by the Student Advisory Committee Chairperson : Dr. Y. Radha Professor School of Agribusiness Management College of Agriculture Rajendranagar, Hyderabad – 500030 _________________________ Member : Dr. Seema Professor and Head School of Agribusiness Management College of Agriculture Rajendranagar, Hyderabad – 500030 _________________________ Member : Shri M.H.V.Bhave Associate Professor & Head Department of Statistics & Mathematics College of Agriculture Rajendranagar, Hyderabad – 500030 ________________________ Date of final viva- voce

CERTIFICATE

Mr. SARFARAZ ASGHAR has satisfactorily prosecuted the course of project and

that project report entitled “STUDY OF SUPPLY CHAIN MANAGEMENT AND

MARKETING OF APPLE IN KASHMIR REGION OF JAMMU AND KASHMIR,

INDIA” submitted is the result of original research work and is of sufficiently high standard

to warrant its presentation to the examination. I also certify that neither the project report nor

part thereof has been previously submitted by him for a degree of any university.

Date: Chairperson

DECLARATION

I, SARFARAZ ASGHAR, hereby declare that the project report “STUDY OF

SUPPLY CHAIN MANAGEMENT AND MARKETING OF APPLE IN KASHMIR REGION

OF JAMMU AND KASHMIR, INDIA” submitted to the Professor Jayshankar Telangana

State Agricultural University for the degree of Master of Business Administration in

School of Agribusiness Management in the major field of Agribusiness Management is the

result of the original project work done by me. I also declare that no material contained in the

project report has been published earlier in any manner.

Place: Hyderabad (SARFARAZ ASGHAR)

Date: RMBA/2013-25

LIST OF CONTENTS

Chapter No . Title Page No. I INTRODUCTION II REVIEW OF LITERATURE III MATERIAL AND METHODS IV RESULTS AND DISCUUSSION V SUMMARY AND CONCLUSION LITERATURE CITED

SYMBOLS AND ABBREVIATIONS

% : Per cent

@ : At the rate of

& : And

et al. : and other people

etc. : Et cetera

�c : Celsius

q : quintal

Fig. : Figure

ha : Hectare

i.e : That is

J&K : Jammu and Kashmir

JKHPMC : Jammu and Kashmir Horticulture Planning and

Marketing commission

Kg : Kilogram

MT : Million Tonnes

No. : Number

RBQ : Rank Based Quotient

RRBs : Regional Rural Banks

Rs. : Rupees

S. No. : serial number

t/ha : tonnes/hectare

Viz. : Namely

Acknowledgement

It is by the lavish and boundless blessing of the Almighty God that the author has been able to complete his studies successfully hitherto and present this humble piece of work for which I am eternally indebted.

With a humble heart, the author extol the genuine cooperation, inspiration, advice, affection and the unconditional support offered to him by the Chairperson of his Advisory Committee, Dr. Y. Radha, Professor, School of Agribusiness Management, College of Agriculture, Rajendranagar, PJTSAU, Hyderabad right from the initiation of the work to shaping of the manuscript.

The author also greatly express his deep sense of gratitude and a great privilege to work under the highly exceptional guidance of Dr. Seema, Professor and Head, SABM, College of Agriculture, Rajendranagar, Hyderabad and Member of Advisory committee, for her counsel and suggestions.

The author expresses his sincere thanks to Sri M.H.V.Bhave, Associate Professor and head, Department of Statistics and Mathematics and Member of the Advisory Committee for his invaluable guidance, suggestions and support during the author’s course of study.

Furthermore, the author expresses his deep sense of gratitude to Dr. P. Radhika, Associate Professor, School of Agribusiness Management, College of Agriculture, Rajendranagar, PJTSAU for her continuous support and encouragement at all times.

The author also expresses his heartfelt love and affection from the inner core of heart to his beloved parents Shri Ajaz Asghar and Smt. Asfa Khatoon, for their blessings, guidance, inspiration, encouragement and moral support throughout his educational career. They have been the source of confidence and motivation all through his life.

The author owes much also to his loving brothers Shahnawaz and Mumtaz for their everlasting affection, support and encouragement in his life.

It is time to surface out genuflect love and affectionate gratitude to the author’s dearest friends Owais, Sankupar, Kamran, Amir, Shyam, Tabassum, Surekha, and Vidyasagar and for their blessings, inspiration, encouragement and moral support throughout his educational career.

Gladly the author expresses his sincere thanks to Amir, Ahmad Mansoor, Owais, Kamran Irshad, Naeem, Anwar, Zakir, and Zubair for extending their help in data collection. Words are not enough to express my heartfelt thanks to my senior Zubair, Donbor, Poonam, Arshia, Vinay Kumar, Rajiv Ranjan, and Radha Priyanka; my dear juniors Gulab, Priyabatra Sahu, Ghulam Hassan and Irshad and also thankful to Non-teaching staff Upendra, Victoria and Anand for their moral support, which instilled in me confidence to proceed forward.

Finally the author is very much thankful to Acharya N. G. Ranga Agricultural University and Indian Council of Agricultural Research for the financial support received to pursue MBA(Agribusiness).

Date: SARFARAZ ASGHAR

Place: Hyderabad (AUTHOR )

AUTHOR : SARFARAZ ASGHAR

TITLE OF THE PROJECT WORK

:

STUDY OF SUPPLY CHAIN MANAGEMENT AND MARKETING

OF APPLE IN KASHMIR REGION OF JAMMU AND KASHMIR,

INDIA

DEGREE : MBA (ABM)

FACULTY : AGRICULTURE

DEPARTMENT : SCHOOL OF AGRIBUSINESS MANAGEMENT

CHAIRPERSON : Dr. Y. RADHA

UNIVERSITY : PROFESSOR JAYSHANKAR TELANGANA

STATE AGRICULTURAL UNIVERSITY

YEAR OF SUBMISSION

: 2015

ABSTRACT Apple (Mallusdomestica) is the most important temperate fruit in India. India is the

fifth largest producer of apple in the world. India produced 2497.68 metric tonnes of apple,

out of which Jammu and Kashmir produced1348 metric tonnes of apple in 2013-14. In

Jammu and Kashmir, apple is cultivated in an area of about 143.58 thousand hectares with

an average productivity of 11.47 t/ha (http://www.agriexchange.apeda.gov.in). Apple is

cultivated almost across all regions of Kashmir valley with Baramulla and Shopian districts

being the major producers. Apple is a non-climacteric fruit and requires extra care while

transporting it to different markets.

The study was conducted inBaramula and Shopian districts of Jammu and Kashmir statewith the following objectives

To identify the supply chain of apple in Kashmir valley. To identify the marketing channels of apple and assess their marketing

efficiency. To identify the constraints in apple marketing

About 80 apple growers and 40 market intermediaries were selected from four tehsils viz., Rafiabad, Sopore, Kellar and Shopian in Jammu and Kashmir state. The results of the study showed the supply chain, marketing channels and marketing efficiency, price spread and constraints associated with various aspects of production and marketing. Four channels of marketing were identified which are:

Channel I: Producer ─ Pre-harvest contractor ─ Commission agent cum wholesaler

─ Retailer ─ Consumer

Channel II: Producer ─ Village trader ─ Wholesaler (local) ─ Commission

agent(distant) ─Wholesaler (distant) ─ Retailer (distant) ─ Consumer

Channel III: Producer ─ JKHPMC ─ Wholesaler ─ Retailer ─ Consumer

Channel IV: Producer ─ Consumer

The producer’s share in consumer’s rupee was the highest in channel IV since it is

the shortest channel (60.99 per cent), whereas the producers share in consumer’s

rupee in channel I, II, and III were 39.09 per cent, 23.49 per cent and 44.19 per cent

respectively.

The marketing efficiency index of channels I, II, III and IV was 0.641, 0.30, 0.79

and 2.56 respectively.

The constraints analysis of farmers through RBQ value revealed that spurious

pesticides and fungicides, involvement of too many middlemen, inadequate grading

facilities and lack of labeling and trademark were ranked the highest among the

constraints identified under production, marketing, value addition and policy

aspects respectively.

The traders expressed that high transport cost and dual inter-state taxation were the

major constraints under marketing and policy aspect respectively.

The study suggested an overall improvement in providing market information, quality of

fruits, provision of cold storage, etc. to increase producer’s share in consumer’s rupee. It

was also suggested to have one time taxation on weight basis to avoid the problem of dual

inter-state taxation.

Chapter I

INTRODUCTION

1.1 PRELUDE

“India’s future is in her farms. Agriculture has the potential to accelerate growth

and social development in India” Mukesh Ambani.

The state of Jammu and Kashmir comprising of temperate, cold, arid and hilly areas, is

located in the North-Western region of India and faces more complex problems in agriculture

development than that of plains due to extreme agro-climatic conditions, topographic situation

and numerous other factors. Jammu and Kashmir is known as temperate fruit bowl of India and

is bestowed by nature with the production of variety of apples (Delicious, American, Maharaji,

Hazratbali, Razakwari, Kesari and others) in considerable quantity. In India majority of

cultivated varieties of apple (Malus domestica) were introduced by British officers way back in

1865. The horticulture sector of the state of Jammu and Kashmir is spread over an area of 3.70

lakh hectares with an annual production of 19.13 lakh metric tonnes. Apple from Kashmir

occupies the dominant position and holds about 70.39 per cent of total apple production in

India. Between 1974-75 and 2013-14, the area under apple production has gone up from 46189

hectares to 1432815 hectares. Kashmiri apple has lived up to its reputation for being one of the

choicest fruits from among various fruits available in different markets of India. (Greater

Kashmir, 07 May, 2014).

Marketing is a comprehensive function; it is concerned with every aspect of the produce

from its inception, design, pricing, distribution, selling and promotion until it finally reaches the

hands of the consumer. It includes all activities involved in the creation of time, place, form and

possession utility. American Marketing Association defined marketing as the performance of

business activities that directs the flow of goods and services from producers to users. The

marketing pattern of apple is different from other agriculture commodities. It is a complex

phenomenon as it involves lot of nodes and channels. The agricultural commodities in general

are first brought to the wholesale markets near the production area and then supplied from there

to the terminal markets. A large number of middlemen are involved in the channels of trade

between the apple producers and the consumers. There is also an evidence of collusion amongst

the apple merchants to control apple prices within the market and to influence pricing in other

market. The marketing system for apple is therefore, of utmost importance for those growers

who specialise in apple production and of great importance to all those people who are

concerned with the producer’s share in the consumer’s price. Apple marketing in the Kashmir

valley, virtually in its entirety, is carried out by the private sector, comprising of pre-harvest

contractors, forwarding agents, commission agents, wholesalers and retailers.

Apple marketing, being a complex phenomena, requires special treatment and utmost

care at present, in the Kashmir Valley. Due to powerful intermediaries, the present marketing

system has an inherent tendency to give more benefits to the intermediaries at the cost of apple

growers. The present marketing structure shows that 87% of the marketing activities are solely

performed by the powerful intermediaries (Reshi et. al., 2010).

1.2 APPLE PRODUCTION IN INDIA

Among all the states in India, Jammu and Kashmir ranks first in apple production

with a total production of 1348 MTS followed by Himachal Pradesh (412 MTS) and

Uttaranchal (123 MTS) during the year 2012-2013 (Fig 1.1 and Fig 1.2).

Table 1.1 Export (quantity and value) of apple to major countries from India

(2014)

S. No. Country Quantity (kg) Value (Rs.)

1 Bangladesh 3,07,01,908 63,75,97,571

2 Nepal 49,14,306 18,63,06,570

3 Sri Lanka 4,44,316 3,44,90,521

4 United Arab Emirates 30,607 34,16,895

5 Saudi Arabia 420 14,761

6 Switzerland 50 1,435

Total 3,60,98,057 86,23,76,795

Source: DGCIS Annual Export 2014

S

S

Source: AP

Source: AP

prod

uction

(000

Ton

nes)

F

EDA, 2013

Fig 1.

EDA, 2013

0

200

400

600

800

1000

1200

1400

JamK

Fig 1.1 App

.2 Apple pro

mmu and Kashmir

1348

le producin

oduction in

Himachal Pradesh

412

2012yea

ng states in I

major state

Uttaranchal

123

‐13ar

India

es of India

ArunachaPradesh

2

l

India exported a total of 3,60,98,057kg of apples to other countries and earned a

total of Rs. 86,23,76,795 as foreign earnings (APEDA, 2013). Bangladesh was the

major importer (3,07,01,90kg) followed by Nepal (49,14,306kg) and Sri Lanka

(4,44,316kg) during 2014 (Table 1.1).

1.3 HISTORY OF APPLE IN KASHMIR

There are lot of mentions about apple in Kashmir in the history, where the

famous Chinese pilgrim Huen Tsang, who travelled to Kashmir has made a mention of

various temperate fruits like Pears, Apricot, Grape and Apple. The breathtaking and the

stunning beauty of the valley of Kashmir and its temperate fruits like apple have been

complimented by people from different areas including writers and travellers belonging

to different ages and nationalities. Modern cultivator of fruit trees consider that apple

has an origin starting from the temperate zone of Britain in the North West to

Himalayas in the South East which accounts for a very vast area.

Till 1945, there was no clear identification of scientific nomenclature and

detailed report of fruit tree-varieties of various kinds that are grown in Kashmir. It was

only after various surveys, it was identified the availability of 113 varieties of apples, 62

varieties of pears, 31 of plum, and 14 of cherry in early, medium, and late groups,

besides scores of Wild Crabs variety of apples, etc. But still there are various ancient

records which state that the cultivation of the temperate fruits like apple is nearly 3000

years old. Kalhana in Rajtarangni makes mention of it in the reign of King Nara

(1000BC). One of the most famous places in the valley of Kashmir noted for its apple

cultivation is Sopore in Baramulla district, for it has lot of apple yards.

(www.indianmirror.com, 2014).

1.4 STATUS OF APPLE PRODUCTION AND MARKETING IN JAMMU AND

KASHMIR

The state has the largest potential for production of quality temperate horticulture

crops. It has created niche production of apple, pear, cherry and dry fruits. Among

temperature fruits, apple ranks first position in terms of production and productivity.

The annual production of apple in the state is about 9.09 lakh tons with an average yield

of 10.09 tons per hectare. However the production and productivity of apple crop has

been fluctuating during last two decades. This was due to drought or some other

climatic conditions. In spite of this, apple production has increased from just 6 lac tons

in 1950-51 to more than 16.47 lac tons in 2013-14. The apple productivity of the state

(11.47 t/ha) is much higher than the national level of 6.86 t/ha and that of the average of

10.82 t/ha or that of China (9.93 t/ha), which is the world’s highest producer of apple

(Directorate of Horticulture Planning and Marketing J&K, 2013).

However, the latest trend indicates that there has been conversion of paddy

fields into apple orchards as it is more profitable to farmers. The agriculture land is

shrinking at an alarming rate in Kashmir valley, particularly in South Kashmir, once

known as the rice bowl of Kashmir. The Horticulture Department in its recent report

(Horticulture Digest, Jammu and Kashmir, 2014) mentioned that the area under the

apple crop has increased by 3378 hectares from 1,40,156 ha in the year 2012-13 to

1,43,534 ha in 2013-14 (Table 1.2).

Table 1.2 Area, Production and Productivity of apple crop in Jammu & Kashmir

(2005-2006 to 2013-2014)

Year Area

(000 ha)

Production

(000 MT)

Productivity

(t/ha)

2005-2006 111.88 1151.34 10.29

2006-2007 119.04 1222.28 10.26

2007-2008 127.80 1311.85 10.26

2008-2009 133.10 1332.81 10.01

2009-2010 139.04 1336.79 9.61

2010-2011 141.72 1852.42 13.07

2011-2012 141.94 1775.53 12.50

2012-2013 142.38 1370.5 9.34

2013-2014 143.58 1647.69 11.47

Source: Directorate of Horticulture Planning and Marketing, Jammu and Kashmir

Supply chain in apple production comprises of vast network of input suppliers,

marketing channel and services that helps in production of apple and right up to the

delivery of apple to final consumer. Many national and international companies market

their brands of fertilizers and plant protection chemicals to farmers through their

agencies or local dealers. There exists vast supply chain network which helps in

movement of apple to customers via different stages of marketing.

The biggest wholesale market for apple is Fruit and Vegetable Market

Azadpur, Delhi, where about 70 per cent of the total traded apple is distributed,

followed by Mumbai, Bangalore, Ahmadabad and others (Reshi et. al., 2010). The

season of market arrivals from Kashmir is August to November with a peak in

September to October. There are a number of marketing channels, of which the

predominant are:

• Farmer – Pre-harvest contractor – Commission agent – Wholesaler –

Retailer – Consumer.

• Farmer – Forward agent – Commission agent – Wholesaler – Retailer –

Consumer.

• Farmer – Commission agent – Wholesaler – Retailer – Consumer.

The sale through pre-harvest contractor is the most important system of

marketing. Normally the small orchardists sell their crop at flowering stage to the

contractor who organizes plant protection, plucking and packaging of fruit. The

medium and large orchardists prefer to market their produce through second and third

channels respectively.

It has been found that price risk is faced by growers and contractors since there is

no guarantee of increasing trend in the market price of the fruit as it was fluctuating.

There is no support from the Government in the home market and perishability of the

product also becomes proximate cause of dwindled price. Also, there is poor integration

of domestic markets with those of national markets. In view of shipment of fruit to the

wholesale market by unrefrigerated trucks (vehicles), growers have no option left but to

sell the produce immediately at lower price (Zahoor and Tapan, 2014).

With this back ground, the present study on apple production and marketing in

Kashmir region was carried out to understand the supply chain and marketing efficiency

of apple with the following objectives.

1.5 OBJECTIVES OF INVESTIGATION

1. To identify the supply chain of apple in Kashmir valley.

2. To identify the marketing channels of apple and assess their marketing efficiency. 3. To analyse the constraints in apple marketing.

1.6 SCOPE OF THE STUDY

The study was conducted to understand the supply chain of apple and its

marketing efficiency along with the constraints in apple marketing in selected districts

of Jammu and Kashmir. An attempt has been made to understand the scenario of apple

marketing in the Kashmir region of Jammu and Kashmir. The perception of farmers and

dealers towards distribution and marketing strategies and the factors influencing the

marketing efficiency have been examined. The study will also give an idea about the

market structure in Kashmir and the same will be useful for both the dealers and the

farmers in planning future marketing strategies in particular for Kashmir and the

country in a wider context. The study would also be helpful to maximise the efficiency

of marketing channels by addressing the various constraints in apple marketing.

1.7 LIMITATIONS OF THE STUDY

The present study is not a wholistic study but with the following limitations

• The study is based on the data collected from recall memory of the respondents

including farmers/growers/traders, which may not reflect the data in true sense.

• As the respondents do not understand the genuine purpose of the research study,

they have the sense of fear to part with the exact information.

• Investigator of the study has limited resources in terms of time, manpower and

money.

• Respondents are also having the limitation of time.

• Generalization of result is also not possible as the study pertains to a selected

area.

1.8 STRUCTURE OF THE REPORT

The study is presented in six chapters as follows

I. Introduction: The importance of the study, problem setting and objectives are

covered.

II. Review of literature: The available and relevant literature is thoroughly

reviewed.

III. Material and Methods: The methods and material encompassing sampling,

data collection, analytical tools, concepts and terms are explained.

IV. Results and Discussion: The results and discussion chapter presents the results

obtained after the analysis of the data collected.

V. Summary and Conclusions: Summary and conclusions are presented along

with the suggestions and policy implications.

CHAPTER II

REVIEW OF LITERATURE

With a view to evaluate the objectives of this study, it is considered significant to have an

idea of the findings of some earlier research studies and methods adopted there in. The

review of literature familiarizes the researchers with the work that has already been done in

the area of their interest and also provides useful information in planning the study. A number

of studies have been conducted on the production and marketing of fruits in India and abroad.

This chapter is devoted to examine the research work done in the past on different aspects of

the problem under study. The studies having direct or indirect relation with the production

and marketing of apple, market arrivals and prices, various marketing channels, costs,

constraints/problems in their production and marketing etc. are included under the following

heads in this chapter.

2.1 Supply chain analysis of fruits and vegetables

2.2 Marketing channels and marketing efficiency of fruits and vegetables

2.3 Constraints in production and marketing of fruits and vegetables

2.1 Supply chain analysis of fruits and vegetables

Negiet al.(2014)highlighted the need and importance of efficient supply chain to

remove various bottlenecks and reduce the losses and wastage in fruits and vegetable sector.

Their research conducted on the supply chain of fruits and vegetables sector in India suggest

that the supply chain is highly inefficient which is leading to huge losses and wastages and

less income to the stakeholders. The authors stressed upon the need to set up the cold chain

infrastructure and food processing units to reduce post production spoilage.

NavitaMahajan(2013) in her study points towards the importance of cold storage in

supply chain management and value chain addition of apples in Himachal Pradesh. As per

her study, over 90% of fruit is sold through open market system like Push cart vendors,

Roadside vendors, Non permanent shops, which do not have any cold chain facility to

maintain the products temperature. So the product which is kept for 2-3 months gets severe

heat injuries and deterioration in quality due to temperature outside, especially during April-

May, if not kept in temperature controlled storage facility.

MitulDeliyaet al. (2012) reported the various constraints faced by marginal and small

farmers in supply chain management of horticulture products. Due to improper supply

chain,almost 30% loss is evident in fruits. Their study indicated that the benefits to

consumers and producers can increase by 20%-25% in the most perishable commodity with

appropriate supply chain operations.

Nityanand and Prachee (2011) observed that the supply-chain management of

perishable food products is a very typical issue, which is to be adequately managed to gain

the competitive advantage for optimum profit in the current scenario.

Vishwanadham (2010) analysed the deficiencies in the Indian supply chain in the food

retail. The most important problem associated with the Indian food industry is the inefficient

supply chain as a result of which about 20 per cent of the food produce worth Rs. 10,000

crore is wasted. Only through developing an efficient supply chain can India’s population

have access to affordable superior quality food produce while ensuring remunerative prices to

the farmers. Manufacturers, wholesalers, distributors and retailers can achieve tangible

benefits through innovative network and inventory optimisation. The benefits may include

enhanced demand intelligence, improved sales and services, optimised inventory levels,

increasing profitability and margins and enhanced trading partner collaboration.

Gibson et al. (2009) observed that the retailers are more reliant than ever on supply

chain management for organizational success. The focus of supply chain management is to

cut down inventory levels while maintaining high in-stock availability, reducing

transportation expenses in the context of fuel price volatility. Efforts are well under way to

link supply chain strategies to organizational plans.

Bhardawajet al. (2008) studied the factors influencing the supply chain of fruits and

vegetables in India and concluded that backward marketing is the least efficient in supply

chain in the country. There is lot of price spread in inputs for farmers particularly in

pesticides where cost is very high for the final consumer.

Leigh (2006) gave a detailed account of the evolution of retail supply chain

management. He discussed a number of changes that are taking place in modern retail supply

chain in direct response to the changing demands of consumers. He also explained how these

changes prompt a number of implications for the management of the retail supply chains.

Raghunath and Ashok (2005) studied Indian agricultural produce supply chain and

distribution system towards an integrated supply chain system and concluded that the best

way to increase efficiency in supply chain of agricultural produce is to integrate various

inputs needed by farmer in one channel and then bulk purchase. The authors also suggested

various channels for distribution of agricultural produce in cities through most efficient

channels to decrease price spread.

Lokollo (2004) studied on cooperative marketing of fruits and found it to be highly

effective and efficient in social upliftment of poor and small farmers. The author concluded

that by proper and efficient supply chain management, there is a huge impact on poverty

reduction in developing countries.

Masini (2004) studied the supply chain planning optimization in the fruit industry in

Argentina and points towards the processing industry and its importance in value chain

addition in apple. She also calculated a mathematical model for consistent supply of apple to

juice processing plants.It optimally decides production plans for fruit and juice to satisfy

customer orders from different markets, while it optimally allocates sources of raw material

and processing plants, based on capacities and cost.

Seyed-Mahmoud Aghazadeh (2004) in his paper explores ways of improving logistics

and distribution supply chains of the food retail industry. The results reveal slow progress in

accomplishing the goals of leaner supply chains and easier distribution. The study discusses

how consumer driven, time-phased planning provides solutions to these challenges such as

including the consumer in the supply chain planning process, managing product life cycles,

promotional planning, planning for seasonal products, integrating with category management,

determining cost-effective supply channels and planning capacities at the store level.

Ayiekoet al. (2003) studied fresh fruits and vegetable supply chain system in Kenya

and suggested several policies to make the supply chain more efficient. The authors stressed

up on the need of bulk purchases of inputs to reduce cost as well as précised delivery date

calculations to minimize losses due to spoilage.

Cotteril (1996) studied food distribution and supply chain system in United Kingdom

and United States of America and compared their efficiency in supply chain management.

Their comparison revealed the superiority of cooperative based supply chain system

prevalent in United Kingdom and Western European nations than corporate based supply

chain. The bargaining power of cooperative based supply chain was found to be much higher

than individual based.

2.2 Marketing channels and marketing efficiency of fruits and vegetables

Murthy et al. (2009) in their study on marketing and post-harvest losses in fruits i.e.

mango, banana, grape and pomegranate found that the marketing cost, margin and efficiency

of marketing depends primarily on the channels of marketing. The marketing cost in mango,

banana, grape and pomegranate accounted for nearly 16.82, 27.52, 23.15 and 20.98 per cent

respectively. Farmer’s net margin in the consumer’s rupee was low due to the predominant

role played by the wholesalers and retailers who among themselves shared about 46 per cent

in mango and 68 per cent in grapes. In banana and pomegranates, the farmer’s net share in

consumer’s rupee was 53 and 50 per cent respectively. The market efficiency in mango,

grape, banana and pomegranate was 0.85, 2.13, 1.12 and 1.01 per cent respectively.

Singh and Gajamana(2007) observed that one of the important measures of marketing

efficiency is the share of producer in the price paid by the ultimate consumer-buyer. The

study revealed that the farmer-producer of tomato, cabbage, cauliflower and cucumber

received less than 50 per cent price paid by the consumer-buyer, the range being 37.26 per

cent (tomato) to 49.16 per cent (cauliflower). The share of producer includes the marketing

cost which is very high.

Sekhon (2006), in his study, have examined the marketing of apple in Amritsar. It was

found that 99 per cent of the pear was sold in Delhi market by contractors and farmers. The

sale in local Amritsar market was just about 1 per cent. Two marketing channels were

generally used in both Delhi and Amritsar markets. Channel-I: Producer-Pre-harvest

Contractor-Retailer-Consumer. Channel-II: Producer-Retailer-Consumer. The producer’s

share in the consumer’s rupee was the highest (70 per cent) in channel-II in Amritsar market.

It was due to self-sale in local market where marketing costs were less.

Khatkaret al.(2005) found that, in marketing of mushroom in Haryana, major share of

consumer’s rupee has gone to the pockets of the middlemen. He therefore advocated the

government intervention to safeguard the farmers’ interest by introducing cooperative

marketing and processing of agricultural products. One of the important aspects of

agricultural marketing of a country is the behaviour of prices of the agricultural produces.

The prices of agricultural commodities are lowered generally during the harvesting period. A

number of studies revealed that a large number of middlemen function at various stages of

agricultural marketing in India.

Murthy et al.(2004) in the research estimated the post harvest loss of grapes at

different stages of handling viz. field level, transit and wholesale marketing level and at retail

level. The loss at the field level due to damages in bunches or berries, which were estimated

in field at Bijapur, Karnataka, worked out to 7.31%. The water berry or mummy is the major

contributing factor accounting for about 43.3% of loss at the field.Some other major causes of

loss at the field level are damage to the berries due to insects and pest and loose berries drop

at the time of harvesting due to sunburn injury, physical injury etc.

Devaraja (2000) examined the various channels involved in the marketing of fruits

and vegetables in Belgaum district. The study showed that the amount spent by the producers

towards the marketing of 56 horticulture produce like fruits and vegetables was more than 55

per cent of the cost of inputs used for raising the produce. The commission agents played a

dominant role in marketing of fruits and vegetables in the district. Direct sales to retailers

were less than 10 per cent. The old practice of selling fruit orchards to pre-harvest contractors

was dominant. Most of the produce was sold through auction and bargaining. The study

suggested that there is a need to control the activities of commission agents for encouraging

self-marketing.

Subrahmanyamand Gajamana (2000) studied the farmer’s share in consumer rupee for

fruits in Punjab. They reported that most of the small and marginal farmers lease out their

orchards to pre-harvest contractors. Producers’ share in the consumer rupee varied from 25

per cent to about 40 per cent in most of the fruit growers. The pre-harvest contractors who did

not make any fixed investment on the orchards also got more than the producer’s share. There

is no doubt they had to incur some expenses on the watch and ward of their orchards, picking,

packing, transportation of the produce, etc. They also reported that in “ApniMandi” scheme

also the domination of the traditional fruit and vegetable retailers outnumber the farmers.

Azad (1991) found the various marketing channels and middle men involved in

movement of apple from producer to consumer. The excess involvement of middlemen was

the major cause of low share of producer in consumer’s money.

Acharyaand Agarwal (1987) analysed the production and marketing of apples in

Himachal Pradesh and Kashmir and identified various marketing channels in Azadpurmandi

in Delhi. The apples of Jammu and Kashmir were shown to fetch lower prices due to late

arrival in market as well as lack of proper transport system to Delhi

2.3 Constraints in production and marketing of fruits and vegetables

JavidBhat (2010) examined the problems related with the pre-harvesting operations in

Kashmir valley and cited credit availability, militancy, lack of cooperative agency, lack of

subsidy inputs, among the various reasons hindering the marketing operations of apple.

Among post harvest operations, the author points towards lack of grading facility, labelling,

problem of marketing credit, commission agents monopoly and lack of group marketing

among other several factors.

Palaniappanet al. (2010), in their study, concluded that during the year 2008-09, the

major reasons for the low productivity of apple were price variability, bacterial diseases,

erratic moisture and poor water use efficiency, etc. Even in India’s peak apple harvest month

of October, apple prices were higher than for other competing fruits.

Reshiet al. (2010) stated that the pre harvest and post harvest practices followed by

growers in Kashmir were primitive compared with those followed in USA,China and

Australia.No special provisions from government regarding monitoring, finance,precautions,

standard pesticides and fungicides and fertilizers. Also there is derth of cold storage and

shipment problem along with packing material availability.

Sunil Kumar (2003) in his article “Role of future markets in stabilisation of agro

commodity prices” expressed concern over the wide price fluctuations in the commodity

markets and the absence of market based risk instruments and the plight of farmers towards

less risky cultivation which perpetuates the growth of Indian agriculture

Asifand Hashmi (1998) analysed the various constraints in apple production and

marketing and concluded that for fetching premium price, spray and disease management

should be strictly followed in apple orchard. The author also suggested various markets in

India where farmers of Jammu and Kashmir can fetch premium price for their produce.

Subrahmanyam (1998) summarised that there are two types of risks faced by the

cultivators viz. i) the price risk i.e. the wide price fluctuations due to oversupply in peak

season and ii) the risk created by the middlemen in the market i.e. illegal deductions,

overcharging, offering low prices through collusion and under weighing.

Atteri and Chand (1997) examined that the yield growth rates of fruits were negative

while for vegetables these were positive during 1991 to 1995. However, due to lack of

infrastructural facilities, almost one-third of total fruits and vegetable crops production worth

Rs.5000 crore was found to be lost annually. This can be saved through processing and

preserving these crops well in time.

Ghulam (1994) through his comparative study of apple in Himachal Pradesh and

Kashmir concluded that Jammu and Kashmir has more production than Himachal Pradesh

annually. J&K apples were found much tastier than apples of Himachal Pradesh but still do

not fetch the price that Himachal Pradesh apple does. Many reasons were behind it, as one of

the main reasons is that Himachal Pradesh's apples come to the market at least three months

before the Kashmiri apple. Another factor contributing to

the popularity of Himachal apples is their shape, size and colour.

Nizamuddin Khan (1990) in his paper on needing remunerative agricultural marketing

has highlighted the various ills prevailing in agricultural marketing. According to him,

Agriculture marketing in India is suffering from different infrastructural, organizational, and

functional intersections; it is inefficient and non-remunerative to producers, the sellers.

Distress sales, especially in villages, were the common practice during the glut seasons.

Small and marginal farmers were adversely affected and they were forced to mortgage their

surplus to the commission agents in order to obtain loans at the time when they were in

distress. Inadequate infrastructural facilities like weather roads and storage, farmers of small

size, marketable surplus, non suitable linkage to the regulated and rural markets from the

villages as well as producers. Weak organizations were the significant factors, which prevent

the growers to get fair price from their per unit of marketed surplus in the markets.

Chapter III

MATERIAL AND METHODS

The present study was carried out in the state of Jammu and Kashmir with

special emphasis on selected districts viz., Baramulla and Shopian and also in general

the whole of the Kashmir region was studied to know the supply chain of apples based

on primary data. The specific objectives pertain to the analysis of supply chain

identification, marketing strategies and constraints of apple production and marketing in

Kashmir valley. This chapter presents the description of study area, nature and method

of data collection, sampling procedure and analytical tools applied in attaining the

objectives of the study under the following sub headings.

3.1 Description of study area.

3.2 Sampling procedure

3.3 Data collection

3.4 Items studied under investigation from farmers

3.5 Items studied under investigation from traders

3.6 Tools of analysis

3.1 DESCRIPTION OF STUDY AREA

3.1.1 Geographical description of the state

Jammu and Kashmir State constitutes the Northern most extremity of India. It is

situated between 32.17 degree and 36.58 degree North latitude and 37.26 degree and

80.30 degree East longitude. The Himalayas divide Kashmir valley from Ladakh while,

the Pir Panjal range, which encloses the valley from the West and the South, separates it

from the Great Plains of Northern India. The Kashmir valley has an average height of

1,850 metres above mean sea-level. In the West and North Western part, the state shares

boundary with China, while in East and North East, Pakistan and Afghanistan countries

have the boundaries with Jammu and Kashmir (Fig 3.1).

Physical map Political map

Fig 3.1 Maps of Jammu and Kashmir

Source: mapsofindia.com

The total area of the State of Jammu and Kashmir is about 2,22,236 sq km. The

State shares a 221 km international boundary with Pakistan in the Jammu region and

365 km with China in its Ladakh sector. The line of control (LoC), which divides the

Indian and Pakistani parts of the state, is 1001 km long. The Siachin border with China

is 465 km long (www.wikipedia.com).

3.1.2 Demographic description of the study area

The population of Indian administrated J&K State was around 12,548,925 as per

2011 census. The male population was 6,665,561 and the female population was

5,883,365. The population growth since the last census was 23.71 per cent and the

whole population of the state forms 1.04 per cent of the entire population in India.

Jammu and Kashmir has a population density of 56 per sq km (www.wikipedia.com).

Baramulla district

Baramulla district is one of the 22 districts in the state of Jammu and Kashmir.

The district covered an area of 3,353 km² with a population of 1,015,503 at the time of

2011 census. Of the total population, 542,171 (53.4%) were males and 473,332 (46.6%)

were females, the sex ratio being 873 females for every 1,000 males, which is much

lower than the national average of 940 (www.censusindia.gov.in).

The district has a population density of 305 inhabitants per square

kilometre. Its population growth rate over the decade 2001-2011 was 20.34 per cent.

Baramulla has a literacy rate of 66.93 per cent, with male literacy of 77.35 per cent and

female literacy of 55.01 per cent.

Shopian district

Shopian district has a population of 265,960. The district has total area of 307 km²

with a population density of 852 inhabitants per square kilometre. Its population growth

rate over the 2001–2011 decade was 25.85 per cent. Shopian has a sex ratio of

951 females for every 1000 males, and a literacy rate of 62.49 per cent.

(www.wikipedia.com).

3.2 SAMPLING PROCEDURE

3.2.1 Selection of the study area

The two districts viz., Baramulla and Shopian were selected purposively as they

represent the top two apple producing districts of Jammu and Kashmir. Of these two

districts, Shopian district is known as the Apple Bowl of the state as it is famous for

horticulture sector for its premium quality of apple. The challenges and conditions of

production and marketing were almost similar in both the districts. These two districts

represent a combined area of 3660 square kilometres. Because of the similar product

nature and way of cultivation of apple, as well as growing challenges faced by the

farmers of these districts, these two districts formed an ideal place for the study.

Table 3.1 Details of the selected study area in Jammu and Kashmir

District Tehsil Village

Baramulla

Rafiabad Kitardaji

Dangiwicha

Sopore Goripora

Darpora

Shopian

Kellar Moshwal

Potterwal

Shopian Arshipora

Sharatpora

Two tehsils from each of the two selected districts and two villages from each of

selected tehsil were selected randomly. This constitutes the final study area of eight

villages representing four from each of the two selected districts in the state of Jammu

and Kashmir (Table 3.1).

In Baramulla district, two tehsils viz., Sopore and Rafiabad were selected. Two

villages named as Goripora and Darpora were selected for study from Sopore tehsil.

Kitardaji and Dangiwicha villages were selected from Rafiabad tehsil. From Shopian

district, two tehsils namely Kellar and Shopian were selected, while two villages

namely Moshwar and Potterwal were selected form Kellar tehsil, and from Shopian

tehsil, the villages selected for the study were Arshhipora and Sharatpora.

3.2.2 Selection of the respondents

A total of ten farmers and five traders from each of eight villages were selected

randomly, thus making the final sample to a total of 80 farmers and 40 traders/dealers.

3.3 DATA COLLECTION

3.3.1 Nature and source of data

The primary data on apple production, post production operations, market

functionaries and various constraints were collected from the sample farmers through a

pre-tested questionnaire. Similarly, primary data were also collected from dealers /

intermediaries regarding quantity handled, various marketing channels and constraints

faced by them through a pre-tested questionnaire.

The relevant secondary data were collected from books, web sources, Directorate

of Horticulture Planning and Marketing, Jammu and Kashmir and Sher-E-Kashmir

University of Agricultural Sciences and Technology of Kashmir, Jammu and Kashmir,

etc.

3.4 ITEMS STUDIED UNDER INVESTIGATION FROM FARMERS

3.4.1 Varieties grown

Farmers grow a lot of varieties in apple orchards such as Red Delicious,

American Apirogue, Ambari, Hazratbali etc. These varieties mature at different times

of the year, thus prolonging the harvesting season.

3.4.2 Cropping pattern

The information on different crops cultivated by the farmers along with apple

production are also collected and recorded.

3.4.3 Post production operations and costs

A lot of activities are performed by farmers after the fruit gets ready for

harvesting which adds to the cost of production. The cost of activities such as spraying,

plucking, grading, transport etc. were calculated to get an idea of post production costs.

3.4.4 Identification of market functionaries

There exist a lot of market functionaries which leads to price spread. The

existence of large number of market functionaries leads to inefficiencies in the supply

chain of apple from producer to consumer. An attempt was made to identify the various

market functionaries which are dealing with apple produce.

3.4.5 Supply chain of apple production

Supply chain of apple production starts from the supply of inputs required by the

input manufacturers until the various inputs required for production are made available

to the farmers. A lot of goods and services are involved to produce the apple through

different channels. The motive is to make inputs available to the farmer in most efficient

and profitable way.

3.4.5 Constraints faced by the farmers

Constraints faced by the farmers were grouped under the following heads

a. Production constraints

b. Marketing constraints

c. Value addition constraints

d. Policy constraints

The constraints were framed with five options against each and Likert Scaling

technique was used to measure the score of each constraint.

3.5 ITEMS STUDIED UNDER INVESTIGATION FROM TRADERS

3.5.1 Area of operation

Traders were classified as local, state level and national level dealers based on

their area of operation. .

3.5.2 Marketing channels and their cost of operations per unit of product

The market functionaries involved in different marketing channels of apple

marketing were identified. The items handled by the functionaries and the per unit cost

of each operation were identified to calculate the efficiency of identified marketing

channels.

3.5.3 Marketing efficiency

Marketing efficiency is a measure of market performance. The movement of

goods from producer to the ultimate consumer at the lowest possible cost consistent

with the provision of service desired by the consumers is termed as efficient marketing.

It is desired to achieve efficiency in marketing of apple so as to maximize the profit as

well as for competitive advantage in terms of final prices of apple in the market.

3.5.4 Pre-harvest contractor

The persons who agree to buy the produce generally even before the actual

harvesting takes place as per the terms and conditions prevailing in the market. In a

way, they are forward traders.

3.5.5 Wholesaler

The merchant middlemen who buy and sell agricultural commodities in large

quantities. They may either buy from farmers or from other pre-harvest contractors.

3.5.6 Distant wholesaler

One who involves in buying activity by contacting the wholesaler over telephone.

He is the one who performs marketing activity in distant markets as Delhi, Lucknow,

Jammu, etc.

3.5.7 Commission agent

The commission agents are the one who act as an agent between farmer-producer

or pre-harvest contractors and wholesaler in arranging the sales of apple. In regulated

agricultural markets, any business man registered with market committee can act as

commission agent.

3.5.8 Retailer

Retailers buy goods from wholesaler and sell them to consumers in small

quantities. Retailers are closest to consumers.

3.5.9 Supply chain of apple marketing

Supply chain of apple marketing starts from procurement of apple from farmers

up to delivery to the final consumer. A lot of goods and services are involved in

marketing of apple from producer to the final consumer. The motive is to make apple

available to customers in most efficient and profitable manner.

3.5.10 Constraints faced by traders

Constraints faced by the traders were grouped under the following headings

a. Marketing constraints

b. Policy constraints

The constraints were framed with five options against each and Likert scaling

technique was employed to measure the score of each constraint.

3.6 TOOLS OF ANALYSIS

The data collected from primary sources were analyzed in multiple stages.The

collected data were tabulated by using Microsoft excel and is illustrated appropriately to

make meaningful inference. Price spread, producer share in consumer’s rupee,

middlemen’s margin and channel efficiency were calculated by using simple

percentages to arrive at the results. The data were summarized by using simple means

and Likert scaling techniques and were supported by the use of statistical tools like

averages and percentages to obtain meaningful results.

3.6.1 Cost of marketing

The total cost incurred on marketing, in cash or in kind, by the producer-seller

and by various intermediaries involved in the sale and purchase of the commodity till

the commodity reaches the ultimate consumer was computed as follows.

C = Cf +Cm1 + Cm2 + Cm3 + ……….Cmn

Where

C = Total cost of marketing of the commodity.

Cf = Cost paid by the producer from the time, the produce leaves the farm till sale.

Cmn = Cost incurred by nth middleman in the process of buying and selling the

product.

3.6.2 Producer’s share in consumer’s rupee

It is the price received by the producer as a percentage in consumer’s price.

If ((PC) is a consumer’s price and (PF) is the producer’s price then the producer’s

share in consumer’s rupee may be expressed as follows.

3.6.3 Marketing margin of middleman

This is the difference between the total payments (cost + purchase value) and

receipts (sale price) of the middleman (ith agency).

a) Absolute margin of the ith middleman (Ami)

(Ami) = PRi – (Ppi + Cmi)

b) Percentage margin of the ith middleman (Pmi) PRi – (Ppi + Cmi ) Pmi = ––––––––––––— × 100 PRi

Ps = (PF/PC) × 100

Where,

PRi = Total value of receipts per unit in rupees (sale price).

Ppi = Purchase value of goods per unit in rupees (purchase price).

Cmi = Cost incurred on marketing per unit in rupees.

3.6.4 Analysis of price spread under different channels

It is the difference between the price paid by the consumer and the price received

by the producer. The price spread was worked out by using following method

Where,

Pp = price paid by the consumer

Pf = price received by the producer

3.6.5 Analysis of marketing efficiency under different channels

Marketing efficiency is a measure of market performance. It is calculated by using

the Shepherd’s formula as follows

Where,

ME = Index of marketing efficiency

V = Value of goods sold

I = Total marketing cost

3.6.6 Rank Based Quotient

The constraints faced by the producer and marketing intermediaries of apple were

identified. The quantification of data was done by first ranking the constraints based on

the responses obtained and then calculating the Rank Based Quotient (RBQ).

(Sabarathanam, 1988) which is as follows

Price spread = Pp - Pf

ME = [(V/I)-1]

fi (n+ 1 – i) R.B.Q. = ————— × 100 N × n

Where,

fi = maximum number of respondents reporting a particular constraint under

ith rank

N= number of respondents

n = number of constraints identified

i = rank of attributes

Chapter IV

RESULTS AND DISCUSSION

In accordance with the pre-determined objectives of the study, data have been

collected and analyzed by using suitable techniques. This chapter deals with the presentation

and discussion of the results emerged from the research work. For easy understanding and

convenience of this chapter, it is presented under the following sub-heads:

4.1 Socio economic characteristics of the respondents

4.2 Identification of supply chain

4.3 Marketing channels, marketing efficiency and price spread of apple

4.4 Problems associated with production and marketing of apple

4.1 SOCIO ECONOMIC CHARACTERISTICS OF THE RESPONDENTS

The socio economic characteristics of the respondents include age group, educational

status, land holdings, type of crop grown, etc. This analysis helps to have a comprehensive

understanding about the socio economic conditions of the respondents so as to execute the

research in a most appropriate manner and make suggestions accordingly.

4.1.1 Educational status of the respondents

The particulars regarding the educational status of the respondents are presented

separately for farmers and traders in Table 4.1. It is observed from the figures that 8 out of 80

farmers were illiterates, which constituted 10 per cent. A total of 26.25 per cent of the

farmers were educated up to class 7th , while 18.75 percent of the farmers are educated up to

class 10th. The number of farmers who completed education up to intermediate and degree

level was 18 each (22.5 per cent).

A total of 5 out of 40 respondent traders were illiterate, while 27.5 per cent of the

traders were inter passed and 17.5 per cent traders were having education up to degree level.

The number of traders who were educated up to 7th class were 9, while total traders who had

education up to class 10th were 8.

Table 4.1 Distribution of the respondents based on educational status

S. No. Education level Farmers Traders

Number Per cent Number Per cent

1 Illiterate 8 10.00 5 12.50

2 Up to 7th 21 26.25 9 22.50

3 8th to 10th 15 18.75 8 20.00

4 Intermediate 18 22.50 11 27.50

5 Degree 18 22.50 7 17.50

Total 80 100 40 100

Thus, among the two categories of farmers and traders under study, the highest per

cent of farmers are having the education up to 7th standard (26.25), while the same was

observed high in intermediate level of traders (27.50 per cent).

4.1.2 Age group of the respondents

It is observed from Table 4.2 that the number of farmers respondents were maximum

in the age group of 41 to 50, constituting about 35 per cent of the total farmers respondents

followed by 25 respondents in the age group of 31 to 40 (31.25 per cent). The farmers

respondents in the age group of 20 to 30 were 17, while in the age group of 51 to 60 there

were 10 respondents.

Table 4.2 Distribution of respondents based on age

S. No. Age group (years) Farmers Traders

Number Per cent Number Percent

1 20-30 17 21.25 8 20

2 31-40 25 31.25 14 35

3 41-50 28 35 13 32.50

4 51-60 10 12.50 5 12.50

Total 80 100 40 100

It is also observed that out of 40 traders / intermediaries respondents, maximum

traders were in the age group of 31 to 40, constituting 35 per cent followed by age group of

41 to 50 with 13 respondents (32.50 per cent). Traders in the age group of 20 to 30 were 8 in

number, while traders in the age group of 51 to 60 were 5 in number.

Among the two groups under study, the highest per cent of farmers were observed

under the age group of 41-50 (35 per cent), while the same is observed in the age group of

31-40 years in traders category. The lowest per cent is recorded in the age group of 51-60

years in both groups of the respondents.

4.1.3 Operational land holdings

The data from Table 4.3 shows that Shopian district had smaller average land holding

of 0.85 ha, while Baramulla has comparatively larger land holding at 0.98 ha. However, the

average land holding of both the districts is very low at 0.915 ha.

Table 4.3 Average land holding of the respondent farmers

S. No. District Average operational land holding (ha)

1 Shopian 0.85

2 Baramulla 0.98

Overall 0.915

4.1.4 Cropping pattern

It is observed from Table 4.4 that apple monoculture was the most prevalent type of

farming among selected farmers as it earns the highest income to the farmer. A total of 57.5

per cent (46) farmers were cultivating apple only, while farmers cultivating apple and pear

were 15 (18.75 per cent). Farmers cultivating apple and plum were 9 (11.25 per cent),

while apple and other crops cultivated in the orchard were 10 (12.5 per cent).

Table 4.4 Distribution of the farmers based on the crops cultivated

S. No. Crop Number of farmers Per cent

1 Apple 46 57.50

2 Apple and pear 15 18.75

3 Apple and Plum 9 11.25

4 Apple and other crops 10 12.50

Total 80 100.00

4.1.5 Varieties cultivated

Farmers in Kashmir cultivate a lot of varieties of apple in their orchard. Since the

maturity time of different apple varieties are slightly different, it extends the harvesting

season. The most common variety of apple cultivated is Red Delicious followed by Maharaji,

Ambri, American Aperogue etc.

4.1.6 Area of operation of traders

The total 40 respondents involved in supply chain and marketing of apple are

categorized into three groups viz., local, state level and national level, based on their area of

operation. It is evident from Table 4.5 that 18 (45 per cent) traders operate at national level

followed by 12 (30 per cent) and 10 (25 per cent) at local and state level respectively.

Table 4.5 Distribution of traders based on area of operation

S. No. Area of operation Number of respondents

Per cent

1 Local 12 30

2 State level 10 25

3 National level 18 45

Total 40 100.00

4.2 IDENTIFICATION OF SUPPLY CHAIN

4.2.1 Identification of supply chain in apple production

In this section, an attempt has been made to identify the various supply chains

prevailing among apple growing farmers and traders in Jammu and Kashmir state. This

includes input supply to farmers, post harvest management and marketing supply chain of

apple. The data pertaining to it was compiled from primary data collected from different

functionaries.

The supply chain of apple starts from various agri-inputs which a grower uses to

produce apple. There are a lot of inputs and consequently lot of input suppliers in the supply

chain to farmers. These input suppliers either supply directly to the farmer or through

wholesaler or agents in the villages. The various input supply chains identified in apple

production are as follows

Channel I

JKHPMC (planting material)

Wholesaler/ Agent (fertilizer and pesticides) Farmer’s cooperatives Producer

RRB (credit)

Channel II

Private nursery (Planting material)

Retailer (Fertilizer and pesticide) Producer

Credit (Commission agent)

In channel I, Jammu and Kashmir Horticulture Promotion and Marketing Corporation

(JKHPMC) sells planting material to the farmers associations. Farmers association also

purchases fertilizers and pesticides from the wholesaler in bulk while Regional Rural Bank

(RRB) provides the credit. The cooperatives then provide these inputs to the farmers at

reasonable rates.

Channel II shows that producer directly purchases the planting material from private

nursery and village level retailers supply fertilizer and pesticides. Commission agent provides

credit facility to the farmer. Farmer is bound to sell his produce to the commission agent in

this channel. Usually small farmers who can not avail credit from institutional sources avail

this input supply chain.

4.2.2 Cost of inputs in apple production

The total input cost of production of apple is given in Table 4.6. The table denotes

that the cost of plant (Rs. 23044.56 per ha) made the highest value in inputs of apple

production, followed by fertilizer cost (Rs. 11193.93), manure cost (7794.93) etc. The total

input cost for one hectare of apple was amounted to Rs. 49518.07.

Table 4.6 Maintenance cost in apple production

S. No. Cost components Cost Per cent

1 Labour 4496.62 9.74

2 Manure 7494.93 14.61

3 Fertilizer 11193.66 21.61

4 Plant protection 2129.30 6.10

5 Plant 23044.56 44.66

6 Miscellaneous 1559.00 3.04

Total 49518.07 100.00

4.2.3 POST HARVEST MANAGEMENT OF APPLE

Post harvest management of apple

The various activities, generally practiced in post harvest management of apple in selected

area are as given under.

Harvesting of apple

Apple fruits are harvested fully ripe because they do not continue to ripe after harvest.

The fruits for local markets are harvested at fully ripe stage as indicated by the attractive skin

colour while for distant markets, the fruit are harvested when they are crisp and just started

turning red.

The fruits are plucked singly by hand and one or two leaves are left attached to

peduncle to represent freshness. Harvesting is generally done during morning and evening

time to prevent moisture loss from the fruits and increase shelf life.

Grading

The harvested apple are initially placed under shaded area in the orchard on torpelene

sheet where sorting and grading is done. Fruits are rapidly graded, with removal of damaged,

spoiled, insect infested and poor graded fruits, ensuring that fruits are handled carefully and

scratches do not appear on the fruits.

Packaging

Packaging is done mostly in CFB or wooden boxes. The side slits between wooden

strips is kept open at few places for release of respiratory heat. Newspaper strips are placed at

the bottom of the box as well as criss crossing the individual apple to prevent scratches of

fruits. On top of boxes, a layer of apple leaves are used.

Commodity movement

Pre-harvest contractor market over 70 per cent of apple produced in the selected area.

Most pre-harvest contractors are commission agents or wholesale merchants in cities like

Jammu and Delhi. Some of them are financed by wholesale fruits merchants and are obliged

to sell the fruits to their financer. The per-harvest contractor directly supply the commodity to

the wholesaler and export houses located in the area. Some of the export houses directly

purchase the orchards from the growers by making advance payments.

The commission agents and wholesale merchants play a greater role in the distribution

of the produce after purchasing it from pre-harvest contractors. They forward the produce to

big cities in the country. At the terminal markets, agents who operate on commission basis

arrange to sell the produce. The daily arrival at the terminal markets are sold either by auction

or by mutual negotiation.

The fruits packed and forwarded for marketing from Baranulla and Shopian districts

accounts for 75 per cent of the harvested lot. Only the best quality of fruits are selected for

interstate trade while the slightly inferior quality produce is sold in markets within the state.

The premium quality of apple are selected to be marketed in cities like Delhi,

Mumbai, Bengaluru while “A+” grades of apple are mainly marketed in tier 2 cities as

Ahmedabad, Lucknow etc. “A-“ grade of apple are marketed in plains on North India and

Western part of the country.

4.2.4 Identification of supply chain in apple marketing

The various intermediaries involved in supply chain of apple marketing are as follows

A. Channel I: Producer ─ Pre-harvest contractor ─ Commission agent cum wholesaler

─ Retailer ─ Consumer

B. Channel II: Producer ─ Village trader ─ Wholesaler (local) ─ Commission

agent(distant) ─Wholesaler (distant) ─ Retailer (distant) ─ Consumer

C. Channel III: Producer ─ JKHPMC ─ Wholesaler ─ Retailer ─ Consumer

D. Channel IV: Producer ─ Consumer

Apple is made available to the final consumer through these four channels after

production.

Apple growers of the selected areas sell the standing crop to pre-harvest contractors at

flowering stage for a year or two in the month of March - April. The crop contractor negotiate

and settle the price to be paid and terms and conditions of payment directly with the grower.

The pre-harvest contractors have a clear picture of the yield potential of the orchard as a

whole and decide the price of the lease accordingly.

The price offered on a per tree basis varies according to the age category. i.e., a tree in

its prime bearing stage (15 to 25 years) with an annual yield of 100 kg fetches Rs. 1800 per

year from pre-harvest contract, whereas the rate for trees in the early bearing period ( 5 to 14

years) is Rs. 1000 per tree per year. Harvesting of fruits is done by the contractor. The farmer

receives 50 per cent of settled price in advance (at the point of framing of deal) and the rest at

the time of harvest. Loading the truck for transport to distant cities is done at the farm gate

itself.

The pre-harvest contract system prevailing in the study area has an impact on the

health and life of the apple orchard. In case of per-harvest contractor who arrive at “pink bud

stage” of apple tree, it is valid for only that year. In this one year contract, the orchard owner

is responsible for the cultural operations except spray against Apple Scab which is done by

contractor. However, the cost incurred on this account would be deducted by the contractor in

the final settlement.

In case the contract is for 2 to 3 years, though the contractor is responsible for all the

operations, he works with profit motive in mind and does not care about the health of the

orchard as they are not sure of continuing the contract during the next term. Most of such

orchards belong to absentee land lords who are having government jobs and settles in towns.

4.3 MARKETING CHANNELS, MARKETING EFFICIENCY AND PRICE SPREAD

The marketing channel is the chain of intermediaries through whom the products pass from

producer to final consumer.

The following channels were identified in apple marketing in the study area

Channel I: Producer ─ Pre-harvest contractor ─ Commission agent cum wholesaler ─

Retailer ─ Consumer

Channel II: Producer ─ Village trader ─ Wholesaler (local) ─ Commission agent (distant)

─Wholesaler (distant) ─ Retailer (distant) ─ Consumer

Channel III: Producer ─ JKHPMC ─ Wholesaler ─ Retailer ─ Consumer

Channel IV: Producer ─ Consumer

4.3.1 Price spread

4.3.1.1 Price spread in marketing channel - I

As given in Table 4.7, the channel I comprised of Producer ─ Pre-harvest contractor

─ Commission agent (cum wholesaler) ─ Retailer ─ Consumer. The producer price from the

pre-harvest contractor was Rs. 4300 per qtl, which is 39.09 per cent of the consumer rupee.

Table 4.7 Marketing costs, margins and price spread of apple in Channel I

[Producer ─ Pre-harvest contractor ─ Commission agent (cum wholesaler) ─ Retailer ─

Consumer]

S. No.

Particulars Rs./q Per cent share in consumer’s rupee

1 Net price received by producer/contractor’s purchasing price

4300.00 39.09

Cost incurred by pre-harvest contractor 631.40 5.74

A Watch and ward 33.00 0.30

B Picking and grading 124.30 1.13

C Container cost 13.20 0.12

D Transportation cost 66.00 0.60

E Loading/unloading charges 16.50 0.15

F Commission to mediator @ 6 per cent of the producer’s price

157.40 2.34

G Miscellaneous charges 121.00 1.10

Margin of the pre-harvest contractor 688.00 6.26

2 Pre-harvest contractor sale price/wholesaler purchase price

5619.40 51.08

Cost incurred by commission agent cum wholesaler

961.94 8.74

A Market fee @ 2 per cent 121.20 1.02

B Transportation cost 124.30 1.13

C Cost of packing/ repair of boxes 145.20 1.32

D Spoilage/wastage 110.00 1.00

E Commission @ 6 per cent 337.14 3.06

F Miscellaneous charges 133.10 1.21

Commission agent cum Wholesaler margin 1200.10 10.91

3 Wholesaler sale price/Retailer purchase price

7780.50 70.73

Cost incurred by the retailer 1160.13 10.54



C Cost of packing 80.30 0.73

D Spoilage/wastage 130.90 1.19



Retailer margin 2060.30 18.73

Retailer sale price/consumer purchase price 11,000.00 100.00

PRICE SPREAD 6700.00

The per quintal marketing cost incurred by the pre-harvest contractor includes watch

and ward @ Rs. 33 (0.30 per cent), picking and grading @ Rs.124.3 (1.13 per cent), container

cost at Rs. 13.2 (0.12 per cent), transportation cost @ Rs. 66 (0.60 per cent), loading and

unloading charges at Rs. 16.5 (0.15 per cent), and miscellaneous expenditures of Rs. 121

(1.10 per cent). All these costs together accounted to Rs.631.4 per quintal which constituted

5.74 per cent of consumer’s rupee. The price at which the pre-harvest contractor sold to the

wholesaler was Rs. 5619.4 resulting in a profit margin of Rs. 688 per quintal (6.62 per cent).

The cost incurred by the Commission agent cum wholesaler was Rs. 961.94 per quintal which

includes 2 per cent market fee (Rs. 121.2), 6 per cent commission (Rs. 337.14/q),

transportation costs (Rs.124.3/q), spoilage losses 9(Rs. 110/q), cost of bag and repair of boxes

(Rs. 145.2/q) etc. Subsequently the produce is sold to the retailer at Rs. 7708.5 per quintal, by

including the miscellaneous charges of Rs. 133.1/q (1.21 per cent), leaving a profit margin of

Rs. 1200.1 constituting 10.91 per cent of consumer’s rupee.

The retailer’s expenditure accounted to Rs. 1160.13 per quintal, of which the

commission of 6 per cent accounted to Rs. 446.83/q, transportation cost accounted for Rs.

145.2, spoilage loss was Rs. 130.9. The miscellaneous charges were Rs. 201.3. The retailer

received a margin of Rs. 2060.3 which is 18.73 per cent of the consumer’s rupee.

The total price spread in this channel is Rs. 6700. Of the three intermediaries involved

in the marketing channel I, the retailer’s margin is higher (18.73%) followed by that of

commission agent cum wholesaler (10.91%) and pre-harvest contractor (5.74%). Thus the

total marketing cost accounted to 25.02 per cent of the consumer’s price, while 35.93 per cent

was towards marketing margins by the three intermediaries involved in this channel.

4.3.1.2 Price spread in marketing channel - II

The marketing channel II, comprises of producer, village trader, local wholesaler,

distant commission agent, distant wholesaler, distant retailer and final consumer. The Table

4.8 indicates that the cost incurred by the village trader towards watch and ward was Rs. 18.3

per quintal accounting to 0.10 per cent of consumer’s price. Similarly, the cost of picking and

grading amounted to Rs.75.03 per quintal (0.41 per cent of consumer’s price). The

commission to the mediator who arranged for the contract (@ 8 per cent of the price paid to

the producer) accounted to 1.87 per cent of the consumer’s rupee and miscellaneous charges

account to Rs. 95.16. per quintal. Thus, the total cost incurred by the local trader/contractor

was Rs. 550.79 per quintal which attributes to 3 per cent of the consumer’s rupee. The

produce is sold to local wholesaler at a price of Rs. 5582.79 per quintal by adding his own

margin of Rs. 732 (4 per cent of consumer’s rupee).

The cost incurred by the second functionary in channel II ie., local wholesaler was

Rs. 1348.09 per quintal i.e., 7.36 per cent of the consumer’s rupee. The major components of

local wholesaler expenditures included transportation cost (Rs. 250), spoilage losses

(Rs. 201.3) and commission to the mediator (Rs. 334.96). The margin to the local wholesaler

accounted for Rs. 819.84. The produce was sold to distant commission agent at Rs. 7750.72

per quintal.

Table 4.8 Marketing costs, margins and price spread of apple in Channel II

[Producer ─ Village trader ─ Wholesaler (local) ─ Commission agent (distant)

─Wholesaler (distant) ─ Retailer (distant) ─ Consumer]

S. No. Particulars Rs./q Per cent share in consumer’s rupee

1 Net price received by the producer/contractor’s purchase price

4300.00 23.49

Cost incurred by village trader 550.79 3.00


B Picking and grading 75.03 0.41

C Container cost/packing material 18.40 0.10

D Commission @ 8 per cent 344.00 1.87

E Miscellaneous charges 95.16 0.52

Margin of the contractor 732.00 4.00

2 Commission agent (distant) purchase price

5582.79 30.50

Cost incurred by wholesaler (local) 1348.09 7.36

A Transportation cost 250.00 1.37

B Packing material 292.80 1.60

C Loading/unloading charges 78.69 0.43

D Spoilage losses 201.30 1.10


F Market fee @ 2 per cent 111.65 0.61

G Miscellaneous charges 78.69 0.43

Margin of the wholesaler(local) 819.84 4.48

3 Commission agent (distant) purchase price

7750.72 42.35

Cost incurred by commission agent (distant)

1226.10 6.70

A Container cost 91.50 0.50


C Loading/unloading 76.86 0.42


Margin of commission agent (distant) 797.88 4.36

4 Commission agent sale price/wholesaler (distant) purchase price

9774.70 53.41

Cost incurred by the wholesaler (distant)

2534.08 13.84






Margin of the wholesaler (distant) 865.59 4.73

5 Wholesaler (distant) sale price/retailer purchase price

13174.37 71.99

Cost incurred by the retailer 3343.94 17.71



C Market fee @ 2 per cent 163.48 0.89




Margin of the retailer 1781.69 9.73

Retailer sale price/consumer purchase price

18300.00 100

PRICE SPREAD 14,000.00

The cost incurred by the distant commission agent accounted to Rs. 1226.10 per

quintal which included transportation cost (Rs. 786.9), packing material cost (Rs. 91.5),

loading and unloading (Rs. 76.86). The distant commission agent got the margin of

Rs. 797.88 per quintal (4.36 per cent of consumer’s rupee) and sold the produce to the distant

wholesaler.

The distant wholesaler’s purchase price was Rs. 9774.70 per quintal. The cost

incurred by the distant wholesaler was Rs. 2534.08, of which major costs incurred were on

spoilage losses (Rs. 984.54/q), transportation (Rs. 225.09), commission (Rs. 684.22),

container cost (126) etc. The margin, which distant wholesaler receives was Rs. 865.59 per

quintal constituting 4.73 per cent of consumer’s rupee. Distant wholesaler sold the apple to

retailer at Rs. 13174.37 per quintal.

The cost incurred by the distant commission agent accounted to Rs. 3343.94 per

quintal which included transportation cost (Rs. 225.09), packing material cost (Rs. 151.89),

spoilage losses (Rs. 1464), commission paid (Rs. 922) etc. The retailer got the margin of

Rs. 1782.63 per quintal (9.74 per cent of consumer’s rupee). The final consumer’s price was

Rs. 18,300 per quintal.

The price spread which shows the difference between price paid by the consumer and

price received by the producer was Rs. 14,000 per quintal in channel II.

4.3.1.3 Price spread in marketing channel - III

Price spread for apple in marketing channel-III is given in Table 4.9. This table

indicates that the net share of producer in consumer’s rupee was 44.19 per cent. The producer

himself does the work of watch and ward. The produce, when ready for harvest, is sold to

Jammu and Kashmir Horticulture Promotion and Marketing Corporation (JKHPMC).

JKHPMC incurred Rs. 99.24 on picking and grading, Rs. 254.92/q on container box,

Rs. 128.43 on transport and unloading. The other miscellaneous charges were Rs. 17.51 and

Rs. 138.166 respectively. The margin for JKHPMC was Rs. 420.33 per quintal which was

4.23 per cent of consumer’s rupee.

The wholesaler purchased apple from JKHPMC at Rs. 5358.76 per quintal and incurred

Rs. 991.09 as total marketing cost, which included spoilage (Rs. 180.97), 6 per cent

commission (Rs. 321.48), 2 per cent market fee (Rs. 107.17), etc. Finally, the wholesaler

retains a margin of Rs. 1235.71 constituting 12.7 per cent of consumer’s money.

JKHPMC incurred Rs. 99.24 on picking and grading, Rs. 254.92/q on container box,

Rs. 128.43 on transport and unloading. The other miscellaneous charges were Rs. 17.51 and

Rs. 138.166 respectively. The margin for JKHPMC was Rs. 420.33 per quintal which was

4.23 per cent of consumer’s rupee.

The wholesaler purchased apple from JKHPMC at Rs. 5358.76 per quintal and incurred

Rs. 991.09 as total marketing cost, which included spoilage (Rs. 180.97), 6 per cent

commission (Rs. 321.48), 2 per cent market fee (Rs. 107.17), etc. Finally, the wholesaler

retains a margin of Rs. 1235.71 constituting 12.7 per cent of consumer’s money.

The retailer paid Rs. 7585.56/q to the wholesaler for one quintal of apple. The retailer

incurs Rs. 1477.51 per quintal which accounted to 15,18 per cent of consumer’s price.

Spoilage costs accounted to Rs. 671.37 followed by commission (7 per cent of price paid to

wholesaler) which amounted to Rs. 375.11, Packing costs of Rs. 127.46, transportation

charges of Rs. 107.03 etc. The margin retained by retailer was 6.87 percent of consumer’s

money which amounted to Rs. 666.93.

The total price spread in this channel was Rs. 5430/q.

Table 4.9 Marketing costs, margins and price spread of apple in Channel III

[Producer ─ JKHPMC ─ Wholesaler ─ Retailer ─ Consumer]

S. No. Particulars Rs./ quintal Per cent share in consumer’s rupee

1 Net price received by the producer/JKHPMC purchase price

4300 44.19

Cost incurred by JKHPMC 638.43 6.65

A Picking and grading 99.24 1.02

B Container cost 254.92 2.62

C Transportation cost 128.43 1.32

D Loading and unloading 17.51 0.18

E Miscellaneous charges 138.16 1.42

Margin of JKHPMC 420.33 4.23

2 JKHPMC sale price/wholesaler purchase price

5358.76 55.07

Cost incurred by wholesaler 991.09 10.18



C Packing box repair 71.09 0.73

D Spoilage 180.07 1.86



Wholesaler margin 1235.71 12.7

3 Wholesaler sale price/Retailer purchase 7585.56 77.96

price

Cost incurred by retailer 1477.51 15.18

A Packaging 127.46 1.3

B Transportation 107.03 1.10

C Loading and unloading 68.11 0.70

D Commission @ 7 per cent 375.11 3.85

E Spoilage 671.37 6.90

F Miscellaneous 128.43 1.32

Margin of retailer 666.93 6.85

Retailer sale price/consumer purchase price

9730 100

PRICE SPREAD 5430

4.1.3.4 Price spread in marketing channel – IV

Price spread of apple in identified marketing channel IV is given in table 4.10. This

table indicates that the net share of the producer in consumer’s rupee was 60.99 per cent. The

cost incurred by the producer was Rs. 695.66 which is 9.86 per cent of consumer’s price. The

margin retained by the producer was Rs. 2054.37/q which is 29.14 per cent of consumer’s

rupee.

The price spread was Rs. 2750/q in channel IV

Though this channel is the most profitable, it is rarely followed by farmers with big land

holdings. Only farmers with small land holdings, that too near to roads and highway follow

this marketing chain to cater to the demands from passengers and tourists.

Table 4.10 Marketing costs, Margins and Price spread of Apple in Channel IV

[Producer ─ Consumer]

S. No. Particulars Rs./quintal Per cent share in consumer’s rupee

1 Net price received by the producer 4300 60.99

Cost incurred by the producer 695.66 9.86


B Container cost 166.38 2.36

C Picking and grading 150 2.13

D Transportation charges 47.23 0.67

E Miscellaneous 275.65 3.91

Margin of the producer 2054.37 29.14

Producer sale price/Consumer purchase price

7050 100

PRICE SPREAD 2750

Thus the above analysis clearly shows that the longer the channel and the number of

intermediaries in the system, bigger is the price spread and the share of producer in

consumer’s rupee declines.

The above results are in accordance with the findings of Bhardawaj et. al. (2014) who

also gave similar results in their study on supply chain efficiency of apple in Azadpur market

in Delhi.

4.3.2 Marketing efficiency

The marketing efficiency of each channel is analysed and presented in Table 4.11

Marketing efficiency index (MEI) represents the effectiveness of a marketing system in

which it operates. The marketing efficiency for channel I, II, III and IV were 0.461, 0.306,

0.79 and 2.56 respectively.

Table 4.11 Marketing efficiency of apple in different channels

(Rs. /qtl)

Particulars Channel I Channel II Channel III Channel IV

Consumer’s price 11000 18300 9730 7050

Total marketing cost (price spread)

6700 14000 5430 2750

Marketing efficiency 0.641 0.306 0.79 2.56

*Total marketing cost includes marketing cost and profit margin of intermediaries

It is observed from this efficiency index that channel IV was the most efficient one.

This is because channel IV does not involve intermediaries and hence, it is the most efficient

among the four identified channels.

4.4 PROBLEMS IN PRODUCTION AND MARKETING OF APPLE

To identify the problems in production and marketing of apple, producers, pre harvest

contractors, wholesaler, retailers etc. who are the important functionaries involved were

interviewed with the help of the questionnaire. For identification of severity of constraints for

farmers, a total of 20 problems were identified under four sub headings namely a) Production

constraints, b) Marketing constraints, c) Value addition constraints and d) Policy constraints.

For identification of constraints from dealers/intermediaries side, two major heads were listed

as a) Marketing constraints and b) Policy constraints.

The analysis of constraints based on RBQ are presented in Table 4.12 and Table 4.13

for the constraints faced by the farmers and the traders respectively.

The results from Table 4.12 revealed that among the five production constraints,

spurious pesticide and fungicide was found to have an RBQ of 99.98, occupying the first rank

and determines its severity. Lack of technical know-how stood as the second most

problematic constraint with RBQ value of 80.00 followed by reduced area (60.00), lack of

improved varieties (40.00) and problem of timely availability of credit facility (20.00).

Table 4.12 Constraints faced by the farmers

S. No.

Constraints

Rank R.B.Q. Overall rank

I II III IV V

1 2 3 4 5 6 7 8 9

I Production constraints

1 Reduced area under apple crop

0 3 21 16 0 60.00 III

2 Lack of improved varieties

3 5 7 24 1 40.00 IV

3 Lack of latest technical know-how

2 24 8 4 2 80.00 II

4 Spurious pesticide and fungicides

26 0 4 2 8 99.98 I

5 Lack of timely availability of credit facility

7 6 5 3 19 20.00 V

II Marketing constraints

1 Commission agent monopoly

3 9 7 16 5 35.00 IV

2 Availability of marketing credit

0 4 11 5 20 20.50 V

3 Lack of fruit growers co-operative marketing society

2 6 18 6 8 69.21 III

4 Too many middle men involved in marketing

28 0 3 5 4 90.01 I

5 Lack of proper transport 4 22 7 3 4 82.10 II

III Value addition constraints

1 Lack of proper cold storage

3 9 23 1 4 75.00 III

2 Fewer processing plants 0 2 14 18 6 40.30 IV

3 Lack of proper grading 10 21 5 0 4 90.00 I

4 Lack of packing material 22 7 3 8 0 87.51 II

5 Others 0 6 6 13 15 14.50 V

IV Policy constraints

1 Lack of regulated market 2 13 18 6 1 58.50 III

2 Lack of labelling and trade mark

7 19 8 0 6 98.00 I

3 Lack of promotion of export

3 12 13 14 1 31.00 IV

4 Taxation 27 5 0 4 6 97.50 II

5 Others 0 0 0 7 33 23.50 V

Among the five marketing constraints faced by the farmers it is evident from the table

that involvement of too many middlemen was seen as the major marketing constraint faced

by the farmer with an RBQ of 90.01, followed by lack of proper transport (82.1), lack of fruit

growers co-operative marketing society (69.21), commission agent monopoly (35.00) and

availability of marketing credit (20.50).

The analysis of constraints pertaining to value addition by farmers revealed that lack

of proper grading was the major problems as measured by the highest RBQ value of 90.00

followed by lack of packing material coupled with high cost of wooden boxes with a RBQ

value of 87.51, lack of cold storage facility with RBQ value of 75, fewer processing plants

with RBQ value of 40.30, etc.

Of the different policy constraints faced by the farmer, lack of labelling and trade

mark and high taxation on export emerged as the first two major constraints, followed by lack

of regulated market and lack of export promotion.

Among the various marketing constraints faced by traders/intermediaries, it is evident

from Table 4.13 that high transport costs was the main concern for the traders. Traders have

to send the produce mainly up to Azadpur mandi in Delhi which costs a lot. Lack of group

marketing received RBQ value of 92 ranking and came second while lack of market for third

grade apples received RBQ value of 70.5 with third rank.

Table 4.13 Constraints faced by traders

S. No.

Constraints

Rank R.B.Q. Overall rank

I II III IV V

1 2 3 4 5 6 7 8 9

I Marketing constraints

1 Lack of group marketing 3 25 7 3 0 92.00 II

2 High transport cost 26 5 4 2 3 97.50 I

3 Lack of future and forward marketing

3 7 10 20 0 27.00 IV

4 Lack of market for third grade apple

7 9 21 0 3 70.50 III

5 Others 0 0 5 2 33 19.50 V

II Policy constraints

1 Lack of registered trade mark

5 9 18 4 4 78.00 III

2 Dual inter-state taxation 21 3 5 7 4 97.50 I

3 Lack of brand promotions by the government

5 18 10 5 3 82.00 II

4 Lack of transportation and storage subsidy

5 6 9 7 12 13.50 V

5 Lack of soft loans for cooling vehicles

3 5 10 18 4 41.00 IV

Lack of future and forward marketing came fourth with RBQ value of 27 and others

stood fifth in list of marketing constraints for traders with RBQ value of 19.5.

Under the policy constraints for traders/intermediaries, they explained dual inter-state

taxation was the foremost policy constraint with RBQ value of 97.5 followed by lack of

brand promotion from the government (RBQ value of 82), lack of registered trademark (RBQ

value of 78), lack of soft loans and lack of transportation and storage subsidy.

Chapter V

SUMMARY AND CONCLUSION

Apple (Malus domestica) is an important temperate fruit of India. India ranks fifth

position in apple producing countries of the world. In India, apple is grown mainly in the

states of Jammu and Kashmir and Himachal Pradesh, which together account for 95.57 per

cent of total apple production in the country with 70.39 per cent of production contributed

from Kashmir region alone.

The demand for apple in the country and abroad is increasing over time. It earns a

sizeable amount of foreign exchange through its export. Inspite of good produce obtained,

without proper marketing, all efforts go in vain. In the light of above facts, it is felt necessary

to conduct a study and examine over the supply chain and marketing channels of apple

besides understanding the problems associated with them.

The study was taken with the following specific objectives

1. To identify the supply chain of apple in Kashmir valley.

2. To identify the marketing channels of apple and assess their marketing efficiency. 3. To analyse the constraints in apple marketing.

Baramulla district stood first in apple producing districts of Jammu and Kashmir state

followed by Shopian district. Hence, these two districts were selected purposefully for the

present study. Finally a sample of 80 farmers and 40 traders were selected randomly for data

collection. The data used were collected through personal interview of selected apple growers

and marketing intermediaries with the help of separate pretested questionnaire. The data on

various supply chains prevailing in production and marketing, price paid and received, cost

incurred, marketing margins along with the constraints faced were collected from the market

functionaries. The data collected were analysed with appropriate statistical tools and

techniques.

5.1 MAJOR FINDINGS OF THE STUDY

The data on educational status of farmers and traders revealed that the highest per cent

of farmers were educated up to 7th standard (26.25), while the highest per cent of

traders were educated up to intermediate level (27.50). The age group analysis of the respondents revealed that maximum number of farmers

(35 per cent) fall under the age group of 41-50, while that of traders fall under the age

group of 31-40 (35 per cent).

The average operational holding of the selected farmers was very low at 0.195 ha.

The analysis of cropping pattern in the study area revealed that majority of the

farmers (46) were cultivating mono cropping of apple followed by apple and pear

inter cultivation with 15 farmers.

The most predominantly cultivated varieties of apple included Red Delicious,

Maharaji, Ambri, American Apirogue, etc.

Out of the forty selected traders for the study, 18 traders were operating at national

level followed by 12 at local level and 10 traders at state level.

Supply chain identified in apple production includes all those intermediaries who help

in apple production and marketing. The main source of credit to farmers were RRBs

and commission agents.

The four important channels of marketing identified in the study are:

I. Channel I: Producer ─ Pre-harvest contractor ─ Commission agent cum

wholesaler ─ Retailer ─ Consumer

II. Channel II: Producer ─ Village trader ─ Wholesaler (local) ─ Commission

agent (distant) ─Wholesaler (distant) ─ Retailer (distant) ─ Consumer

III. Channel III: Producer ─ JKHPMC ─ Wholesaler ─ Retailer ─ Consumer

IV. Channel IV: Producer ─ Consumer

The price spread worked out for four marketing channels was Rs. 6,700/q,

Rs. 14,000/q, Rs. 5,430/q and Rs. 2,750/q.

The producer’s share in consumer rupee was 39.10%, 23.49%, 44.19 % and 60.99%

respectively in channel I, II, III, and IV.

The marketing efficiency also ranged from 0.306 in channel II to 2.56 in channel IV.

The constraints analysis of farmers revealed that spurious pesticides and fungicides,

involvement of too many middlemen, inadequate grading facilities and lack of

labelling and trademark ranked as the highest among the constraints identified under

production, marketing, value addition and policy aspects respectively.

The traders expressed that high transport cost and dual inter-state taxation were the

major constraints under marketing and policy aspects respectively.

5.2 CONCLUSION

• The forward and backward supply chain of apple needs to be strengthened by

identifying the ideal source of supply and delivery of various resources and

products.

• The marketing costs could be decreased by identifying a suitable channel for

supply of apple to distant markets, for which co-operative marketing is considered

the best.

• The marketing efficiency could be increased by reducing the number of market

functionaries and also reducing the marketing costs and margins imposed by each

one of them

• Measures should be taken up to attend major problems identified in the study,

which include spurious pesticide menace, large number of intermediaries, lack of

proper grading, lack of labelling and trademark, high transportation charges and

dual inter-state taxation.

5.3 SUGGESTIONS AND POLICY IMPLICATIONS

1. The pre-production supply chain should be more organised to facilitate the grower to

purchase inputs at a reasonable rate and at a convenient place for which co-operative

societies need to be encouraged to supply all the required inputs at one place.

2. It is suggested that the farmers can form producers association and collectively market

the produce more on co-operative lines to minimize the price spread.

3. The marketing regulations need be strengthened to reduce the number of

intermediaries and also the commission paid at various levels.

4. Adequate and timely information about the market arrivals, price prevailing etc. will

help in forecasting the demand in different markets.

5. Marketing infrastructure such as access to market yards, better transport facilities,

timely credit availability, provision of cold storage facilities etc. will help in facing

the marketing risks and improve the socio-economic conditions of the producer and

trader.

6. Since the market rate of apple fluctuates, there should be a minimum price fixed (per

kg. or per Box) by the government so that growers will at least be sure of the

minimum returns.

7. Since apple export has great potential from J&K state, it should be given the status of

an industry to promote export earning and widen the market.

8. Quality labelling and trademark should be promoted to fetch the premium price in the

market.

9. A one-time taxation on weight basis of apple should be charged by transportation

department to avoid the problem of dual inter-state taxation.

LITERATURE CITED

Acharya, S. S. and N. L. Agarwal. 1987. Production and Marketing of Apples. Mittal Publications. 78-104.

Anandaraj, P. and V. Chinniah. 2011. A study of the marketing problems of mango growers (using factor analysis) in Madurai District, Tamil Nadu. Indian Journal of Marketing. 12,(4): 18-24

Annual report on export of apple from India. 2014. DGCIS annual export report, 2014.

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