A Major Project Report On VALUE CHAIN ANALYSIS OF CUMIN AND GREEN GRAM IN GUJARAT Prepared by Nirmal Munda. Munaram Naik. Host Organization Cohesion Foundation Trust, Ahmedabad. Reporting Officer: Mr. Dharmendar R. Prasad. (Project Co-ordinator, Cohesion foundation) Faculty Guide Prof. Damodar Jena (KSRM, Bhubaneswar) A REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE MBA IN RURAL MANAGEMENT KIIT School of Rural Management (KSRM) KIIT University Bhubaneswar, Orissa, India 1
ACKNOWLEDGEMENT First and foremost we are thankful to Prof. (Dr.) L. K. Vaswani, Director, KIIT School of Rural Management for placing the MANAGEMENT TRAINEESHIP SEGMENT (MTS) fieldwork component as a part of our course curriculum. We would like to express our gratitude to Prof. Sumita Sindhi MTS Coordinator and faculty guide to facilitate throughout by playing different roles as mentor, coordinator and supervisor and for inputs and moral support for designing and completion of the report. We have immense pleasure in expressing our deep sense of gratitude and sincere thanks to our esteemed Reporting Officer Mr. Dharmendar R. Prasad. We are thankful to the Area Manager Mrs. Pinkyben Patel for her guidance and assessment of this report and her team member Mr. Pratap bhai Patel (Community Trainer) and the whole teams of Cohesion Foundation Trust who facilitated our accommodation and food and made us to learn all the MTS components by doing and interacting with the villagers as well as mahila kisans (farmer). We are thankful for their feedback and insight to our theme paper and support for the all and to share with us useful experiences during the field study. In order to complete fieldwork successfully, we would like to present special thanks to all the research participants and villagers who provided their valuable time and made our stay meaningful and study valuable. Nirmal Munda (13201042) Munaram Naik (13201038) 2
CHAPTER 1 INTRODUCTION 1.1 Green Gram & Cumin This Value chain analysis of Cumin and Green gram was conducted as an assignment for the Host Organisation Cohesion Foundation for the promotion of livelihood of women Farmer (mahila kisan) Gujarat is Situated on the west coast of India, flanked by Rajasthan, Madhya Pradesh, Maharashtra and Pakistan. Although best known for its Industrial production, it is also a major agriculture state. The main crops grown in Kharif season are Great Millet, Bajra, Maize, Paddy, Groundnut and Vegetables in Rabi season these are Cotton, Wheat, Mustard, Cumin and Grams. From above crops we have assignment to do value chain on Cumin and Green Gram. Cumin is a seed spice of an annual herb. It is widely used in flavour and mainly used where spiced foods are preferred. India is the largest producer and consumer of cumin in the world it consumed about 90% within the country and rest 10% are export. Gujarat and Rajasthan are major producer of cumin they contribute about 90% of total porduction. Green gram is an important pulse crop in India. It is also known as Moong and Phaseolus aureus Roxb. Red gram is mainly cultivated and consumed in developing countries of the world. This crop is widely grown in India. The important states producing this pulse are Madhya Pradesh, Maharashtra, Uttar Pradesh, Punjab Andhra Pradesh, Rajasthan, Karnataka and Tamil Nadu. The crop needs a well-distributed rainfall. Heavy rains at flowering are harmful, even moist winds at this stage interfere with fertilization. This pulse does best on deep, well-drained loams in the alluvial tract in the north as well as on the red and black soils of peninsular and southern India. It is also cultivated on light or shallow stony soils to clayey soils. 3
1.1.1 Major producing countries in the world: Green gram is grown throughout the tropical and subtropical countries of the world especially in Asia including India, Pakistan, Bangladesh, Sri Lanka, Malaysia, south China and Farmosa. In World like Africa, U.S.A and has been introduced in Australia. The world production of cumin in 2012 was estimated to be around 300,000 tones were India is the largest producer and Cumin seed contributing 73% to the global production. Other major producing countries of cumin are Syria, Turkey Iran and china. As per the production data for 2012, India s share is 73% to global production, while that of Syria, Turkey, China and Iran has been 16%, 4%, 4% and 3% respectively. GRAPH 1 Major Producing countries of cumin :- Percent of world Production Turkey 4% China 4% Iran 3% Syria 16% India 73% 4
1.1.2 Major producing state of Green gram and Cumin: Maharashtra is the largest producer of Green gram accounting for nearly about 23.05 percent of the total production followed by Karnataka (17.46 percent), Andhra Pradesh (17.39 percent), Bihar (14.69 percent), Rajasthan (7.50 percent), Tamil Nadu (7.25 percent) and Gujarat (6.34 percent). These six major states together contribute about 87 percent of the total production and about 84 percent of the total area in the country in 2001-2002.The productivity is highest in Kerla (824 kg/ha) followed by Punjab (624 kg/ha), West Bengal (580 kg/ha), Bihar (576 kg/ha) and Assam (459kg/ha). Gujarat is the largest producer of Cumin accounting for nearly about 59 percent of the total production in the country followed by Rajasthan (12 percent),and others State (29 percent) like Madhya Pradesh, Uttar Pradesh,West Bengal, Andhra Pradesh and Punjab. These seven states together contribute about 2,00,000 tons of cumin per year. GRAPH 1.2 Major producing state of Green gram 5
Graph 1.2 Major Producing State of Cumin Others, 29% Rajasthan, 12% Gujarat, 59% The major trading centers of Green gram in Gujarat are Tharad, Banaskanta,,Kutch, Patan and Deesa. Production of Green gram is enough to fulfill the domestic requirement of the State but not enough to fulfill the requirements of the Country. The, sowing of green gram took place from first week of June to first week of July and harvesting will be done in the month of October November while arrivals start in the markets by December. For cumin the Major Trading center in Gujarat are Unjha and Rajkot. some of the major trading center are in Rajasthan like Niwai, Kekri, Kota, Jaipur, Jodhpur etc. The major cumin growing area in Gujarat are Saurasthra, Kuthch and Unjha. India exports around 8000 tons of cumin per year. The sowing of cumin took place in the month of November- December and harvesting start from february to march. 6
1.2 Value chain: Value chain is a network of labour and production processes whose end result is a finished commodity- something that can be bought and sold. The value chain contains several stages where particular production, local value addition and marketing processes take place: a) Inputs: List and cost of inputs, mode/terms and conditions of payment (cash or credit), Source of credit, Purpose of credit, Interest rate and terms and conditions of payment, Frequency of borrowing, Fodder development, Agricultural extension services, Labor power etc b) Pre-production: Land development, Sowing, Seed treatment, Fertilizers application etc. c) Production: Weeding, Application of fertilizers and pesticides, Technology, Land Productivity, Water management, Cropping patterns, Multiple crops etc. d) Harvesting: Technology, Labour power, Implements, Transportation etc. e) Post-Harvesting: Storage, Drying, Grading f) Local Value-addition: Aggregation, Retention for later use, Resisting Distress Sales, Milling, Packing, Packing in small packs, etc., g) Marketing: 1) Local market (Petty traders, Middlemen); 2) Wholesale market (market yards, wholesale merchants etc.); 3) Millers or processing units; 4) wholesale or retail selling. The interventions should focus on cutting the chain as much as possible between the producer and consumer through market linkages, branding etc. In the value chain, apart from these different stages, there are some other components within each stage: (1) gaps in each stage of the value chain; (2) constraints in each stage; (3) best practices in each stage and (4) possible interventions to fill the gaps. Within each of these stages there are some characteristics: (a) the relation of production within the stage (b) the organization of production (c) the geographic location of that stage within the chain, and (d) the flows between the stage, other stages in the chain, and with other commodity chain. 7
Value chain examines the relational processes involved between the constituent units and the efficiency and income consequences of the relationship for them. It may able to generate information about variations in gender inequality at this level, which it is difficult to analyze systematically in any other way. Conversely, a gender perspective can serve to introduce the individual person as a unit of analysis (rather than firm) into the value chain analysis, not in terms of individual rationalizing behaviors, but as a link with the dynamics of social stratification. 1.3 OBJECTIVES OF THE STUDY: Despite Green gram and cumin crop have high potential for improving the incomes of the rural poor, the crop has not been fully exploited. Several factors have contributed to this. Insufficient seed production and marketing systems that limit availability of quality seeds of improved varieties to smallholder farmers is a major limiting factor for adopting new varieties. Most of the available high yielding varieties and disease resistant varieties with market preferred traits have not reached the farmers on a large scale and hence the productivity of the crop has more or less remained same. This has resulted in limited quality and volume improvements making it less tradable. Besides production constraints, there is a lack of empirical data and information needed to facilitate formulation of strategies to strengthen groundnut value chain and to increase its competitiveness on small farms. A systematic analysis of the value chains is therefore needed to understand the various factors inhibiting the growth of value in Green gram and cumin. This paper employs a value chain approach and provides a critical overview of the Green gram and cumin subsector in Gujarat state. It examines the demand side factors that affect the crop production, value addition, marketing, trade and utilization of the crop in Gujarat. The paper transcends the usual subsector analysis to identify the existing crop value chains and assesses the post harvest aspects affecting the flow of Green gram and cumin along the value chains until it reaches the consumer. 8
1.4 The specific objectives of the study are: 1. To study the various mile stone that add value from farmers to consumers. 2. To assess the farmer share of the consumer rupee. 3. Finding creative solutions to the bottleneck in the supply chain. 4. To understand the actors who involves in the value chain and how price spread along the value chain. 1.5 Location of project: APMC markets, wholesale markets, retail markets of Radhanpur, Unjha, Patan, Dessa, and Varahi. 1.6 Significance of the study This study will help the Organisation in optimizing inventory at various levels of storage and holding cost. Ensuring smooth flow of material from farm to market to factory to distributor to retailers to consumers. Attempt to know the market demand of various Green gram and Cumin varieties. 9
CHAPTER 2 REASERCH METHODOLOGY 2.1 Study Methodology: The study Value Chain analysis of Green gram and Cumin in Gujarat state structured to capture the essence of the processes and flow of the value chain in Green gram and Cumin. The framework of the study will help understand the levels of the value chain its role and importance, the cost of operation, the barriers to entry, mobility and exit, the economy of scale, the effect of market forces viz. the demand and supply forces, etc. The study has been designed to map the key processes and flows in the value chain of green gram and Cumin in respect to the local market, regional markets. 2.2 Research Planning and fieldwork 2.2.1 Research framework The framework employed in the research Value Chain analysis of Green gram and Cumin in state of Gujarat is a stratified framework in which the stakeholders are employed on the horizontal axis of inquiry and the various concerns and issues, processes and flows, etc are on the vertical axis. This framework is so designed as to map the entire value chain across levels of the value chain and to bring them on a common axis so as to induce a complete and holistic understanding of the chain. 2.2.2Tools and Techniques The study has adopted various tools and techniques for collection of information on various aspects. This study is mainly depend upon primary data collection and personal interviews of farmers and different market agents such as middleman, traders, dal millers, brokers, wholesalers, retailers etc. Some of them are detailed below. ionnaire of the key women farmers. h 10
2.2.2.1 Primary survey through structured questionnaire of the key women farmers Primary research was conducted in fourteen villages of Santalpur taluka of Patan district of Gujarat state to collect first hand information on the specific parameters developed on the basis of objectives of the study. Study comprises primary data collection from women farmers through structured questionnaire. With considering project objectives, design of questionnaire has done and this questionnaire consists of some basic qualitative and quantitative questions. 2.2.2.2 Secondary research Secondary research conducted in different APMC market of Gujarat state. In this research, first hand information from different APMC market offices and discussions were held with various knowledgeable persons in the Agri. product especially in Green gram and Cumin product to collect information related to the issue on hand. 2.2.2.3 Personal interviews of the key respondent/ In depth interviews In depth interviews were conducted to obtain information from the key respondents as middleman, broker, dal mill owners, traders, wholesalers, retailers on the issues and concerns of the value chain of Green gram and Cumin in the study area. Different semi structured questions were prepared for the purpose and used as the tool of research. 2.2.2.4 Observation method Observation research method conducted while there was auction takes place in APMC markets. Different observations were gathered from their reactions, their style of auctioning, style of observing Green gram and Cumin. The investigators impression from their own experience during the course of investigation was also taken as part of observation. 2.3 Study area The study on Value Chain Analysis of Green gram and Cumin in state of Gujarat was conducted according to the convinent sampling of the research. The selection of the study area was on basis of larger producing area of Green gram and Cumin in Gujarat, big APMC markets like Unjha, Tharad, Radhanpur and Patan region of Gujarat where large no of Cumin and Green gram comes from farmers and different village markets, places where large no of green gram, cumin and mills available for processing this Green gram and Cumin to produce finish product, 11
large wholesale markets for Green gram and Cumin (Jeera), size of operation, number of forward and backward linkages, the volume of daily trade, etc. The places covered were mainly in Radhanpur, Unjha and Dessa region of Gujarat state. These two regions are large producing region of Green gram and Cumin in Gujarat as well as in India also. Fourteen villages in Santalpur taluka of Patan district of Gujarat state was also taken up for study purpose to understand the cultivation pattern of Green gram and Cumin, cost of cultivation of Green gram and Cumin in one acre, to know the production in one maan (20 kg) in a acre of land. The major regional market for Green gram and Cumin was covered during the study to develop a good understanding of the Green gram and Cumin value chain. Above map shows that working area of project. Project needed to visit all highlighted area in map especially all APMC markets of from these areas. 2.4 Sampling The study sampling has been done to incorporate all the stakeholders in the study and hence helps to produce a complete picture of the Green gram and Cumin value chain. 12
TABLE 2.1 Sampling methodology showing table Stages /levels Total no of sample/markets Place to visit At village 60 Sherpura,Naliya level,jorabargarh, Jharusa,limgam da,rampura,etc villages At APMC 4 Radhanpur, market Unjha, Tharad, Patan Sampling method Convenience sampling Convenience sampling Data collection method Through structured questionnaire Personal interviews of different agents in market, Secondary research, observation method At dal/cumin mill 6 Dessa, Unjha Convenience sampling At wholesale 16 Dessa, Unjha, Convenience market Radhanpur, sampling Patan At retailers 21 Dessa, Unjha, Convenience Radhanpur, sampling Varahi, Patan,Tharad Personal interviews of dal mill owners Personal interviews of wholesalers Personal interviews of shop owner. 13
2.5 Limitations of research: The limitations of research are as follows 1. At length interviews of the Green gram/cumin mill owners were not possible due to time constraint on the part of the interviewee. 2. No access to the financial records of the players of the value chain was one of the critical limitations. 3. Unawareness of the primary respondent on price, quantum and other important variables of the trade. 4.Communication problem with the key respondent. 14
CHAPTER 3 FINDINGS AND ANALYSIS 3.1 Market and product segmentation: The market based on its own characteristic, consumer preference and habits, volume of trade, supply configuration, demand configuration, etc. defines itself into various categories. There is a wide range of value products ranging from low value to high value, depending on the varieties, quality, colour, size, shape, moisture content etc. Therefore these can be clustered into various segments based on the uniqueness of the species and pulses that consequently define the market for the entire range of products into distinct segments. These are further sub-divided into product lines within these segments. This segregation of market and product into distinct segments provides insight to compare the value chain, keeping into focus the market and product characteristics and find out its uniqueness. 3.1.1 Market segmentation: Green gram & Cumin market is mainly segmented in four parts such as local market (Block level market), regional market for green gram and cumin, wholesale market for green gram and finished cumin (jeera) and retail shops for green gram depending upon available varieties of green gram and cumin. Price of the commodity, availability, demand of the specific varieties of green gram& cumin in the market, availability of the varieties in the market. 3.1.1.1 Local market (Block level market): Local markets are essentially the market in the periphery of 25-30 km accessible by bicycles from village, which include haats of blocks and tahsils, sub division and nearby towns. In local markets there is small number of middleman s, traders, and brokers means small number of buyers. Generally farmers avoid selling their produce in local markets because in local markets they don t get high price per quintal to their produce in local market as compare to regional market. Reason behind low price per quintal is that in local markets, purchasers are not from 15
brokers and millers but they are traders of local markets. These traders procure raw crop at low price per quintal because they have to sell it in further market i.e. in regional market or in processing mill at higher rate. And the fact is that, price per quintal for green gram and cumin in local market always has less than price per quintal in regional market to avoid losses of traders and to adjust all the hidden prices such as loading, unloading, transporting, market charge etc. As per our study we found that all charges such as commission, loading, unloading, market charges are higher in local markets as compare to regional markets. Only the markets charges are same all over the markets. Green gram and cumin from these regional markets goes to mill for processing. The characteristics of these markets are 1. Demand for the average to low value product is based on the availability. 2. Purchasing power of the consumer is the limiting factor for consumption of high value product. 3. Number of sellers and buyers are limited. 4. Only limited varieties are in demand. 5. High value product rarely enters the local market. 6. Demand is affected highly by the religious prohibitions to the extent that the market closes due to absence of the buyers, sellers from the market. 8. The cost of operation is low as the product is consumed locally and the shelf period is low. 3.1.1.2 Regional market Regional markets for green gram and cumin are the bigger markets situated at district place, large cities with variegated supply and demand linkages. The numbers of operators, though limited, are higher than local markets. These markets normally cater to a larger geographic location and the volume of trade is high. The number of buyers is high as compared to the local market. Mostly small, large and big farmers are sale their produce in these markets because they have large quantity of produce and also they have capacity to bear all charges such as loading, unloading and transporting etc. farmers gets higher price per quintal in this market to their produce depending on quality, freshness, shape, size, variety, moisture content of green gram and cumin. 16
The characteristics of these markets are 1. Serves as a channel to cater to up-country markets and distant markets. 2. Serves as a connecting channel with millers, the retailer, end user and the producer 3. More capacity to absorb the glut in the supply due to high number of demand channels. 4. Price fluctuation is high and can happen on a daily basis depending on the demand dal millers or other brokers. 5. Purchasing power of the end buyers is higher than that in local markets. 7. Demands in these markets are affected by local occurrences- festivals, marriages, etc and instances of regional or national occurrence. 8. Costs of operations are higher than the local markets due to logistical factors e.g. market fee, loading/unloading operations, vehicle parking charges, storage costs, Secondary/ tertiary transportation, commissions etc. 3.1.1.3 Wholesale market: Wholesale markets for green gram and cumin are mainly situated at district and tehshil place in Gujarat with various demands and supply from mills and retailers linkages. In wholesale market large numbers of wholesalers procures moong and cumin from mills and sell it to retailers at wholesale rates. Large wholesale markets are available where there is large number of mills working in surrounding area. Wholesale rates are varies depending upon commodity rates available at mills and then retailer rates are decides by wholesalers by considering commodity quality, shape and moisture content. In wholesale market, wholesaler sale commodity in lump sum quantity (in quintal) to retailers. 3.1.1.4 Retail market/ shops: Retail markets/ shops for green gram and cumin are situated at every stage i.e. at village level, tehsil level and at district level. In process of retail shops, they procure commodity from wholesale markets and sale to consumers at retail rates. There are no such rules and regulations in selling process of green gram and cumin to costumers. Retailers procure from wholesalers in quintal as measuring unit and sell it to consumers in kilograms as measuring unit 17
TABLE 3.1 The important markets identified during the field study are as follows Local markets/block Regional Wholesaler markets Retailer markets/shop level markets(apmc) markets(apmc) Radhanpur, Patan Radhanpur, Grossary shops at Dessa, Dessa, village, tehshil and Unjha Patan, district level. Varahi Source: Market survey. 3.1.2 Product segmentation: Product segmentation comprises two product as raw product Green gram and cumin in value chain analysis. 3.2 Market practices and market constraint: 3.2.1 Assembling Assembling is an important marketing function. Assembling includes the operation of collecting Red gram produce from different villages to a central place i.e. primary market and secondary market for its further movement to the Dal millers or the consumers. TABLE 3.2 Major assembling markets in Gujarat: State District Important markets Gujarat Patan Radhanpur, Unjha, Patan, Varahi, Dessa Source: market survey 3.2.2 Arrivals: The disposal of Green gram and Cumin commences shortly after threshing since the producers require funds for the purpose of discharging their various financial problems. Arrivals of Green gram 18
and Cumin in markets are the second function of marketing. Generally, in Gujarat APMC markets are situated in about twenty km far away from Varahi so far farmers can t easily sell their produce in nearby market. There is only one market for farmer to sell their produce. 3.2.3 Dispatches: 3.2.3.1 Green gram and Cumin: Green gram and Cumin was mostly dispatched to the markets within the state or to the markets of the adjoining states. Green gram and Cumin from Gujarat markets dispatched to Delhi, Uttar Pradesh, West Bengal, Karnataka, Chhattisgarh, Tamilnadu, Chennai, Madhya Pradesh, Andhra Pradesh, Punjab and Haryana and also to the foreign countries. TABLE 3.3 Dispatch markets for Red gram: State from where dispatches State to which arrived Gujarat Delhi, Uttar Pradesh, West Bengal, Karnataka, Chhattisgarh, Tamilnadu, Chennai, Madhya Pradesh, Andhra Pradesh, Punjab and Haryana and also to the foreign countries. Source: market survey 3.2.3.2 Major import market of Green gram & Cumin: Pakistan, Syria, China, Myanmar, Sri lanka, Iran 3.2.3.3 Green gram & Cumin: Green gram and Cumin was mostly dispatched to the wholesale markets within the state or to the markets of the adjoining states. 3.2.2 Marketing constraints: The following are main marketing constraints: 3.2.2.1 Distress sale: Due to financial crisis, farmers are forced to sell their produce just after harvesting. During this period, women farmers get lower price due to glut in the market. The producers cannot withhold or store their produce for some period to get better price since the farmers have to meet urgent requirement of money. 19
3.2.2.2 Unstable price: Generally, the price of Green gram and Cumin prevails low in the early post harvest period due to more arrivals in the market and later on prices go up. Due to this unstable price, the women farmers get lesser price. 3.2.2.3 Lack of marketing information: Due to lack of information regarding arrivals and prices in markets, producers market the green gram & Cumin in Radhanpur at low prices which can be avoided. 3.2.2.4 Adoption of standards: Women farmers usually do not grade their produce, as a result they do not get remunerative price in the market. 3.2.2.5 Inadequate storage facilities: Due to inadequate storage facilities in rural areas, farmers loose a substantial quantity of their produce by way of driage, spoilage, rodents etc. Women farmers are also forced to sell their produce just after harvest due to lack of storage facilities. Hence, rural godowns are must to avoid the sale immediately after the harvest. 3.2.2.6 Transportation facilities at producers level: The transportation facilities at village level is good but Radhanpur market is only market for producer to prevailing their produce and they are charged for higher for transportation, which offer them lesser price while prevailing in the markets. 3.2.2.7 Training to producers: The training to producers regarding marketing of their produce is essential. It improves their skill for better marketing of their produce. 20
3.2.2.8 Infrastructure facilities: Due to inadequate infrastructure facilities with producers, traders and at market level, the marketing of Green gram and Cumin is affected adversely. 3.2.2.9 Malpractices in markets: There are many malpractices prevailing in markets like excess weighment, delay in payment, large quantity of samples from the produce, different kinds of arbitrary deductions for religious and charitable purposes from producers, high commission charges, delay in weighing, loading, unloading and weighing charges from producers. 3.2.2.10 Superfluous middlemen: The existence of a long chain of middlemen reduces the share of the consumer s price received by the producer-seller. 3.3 Marketing Channels, Marketing Costs: In this section, we identify and describe the major channels through which green gram and cumin and its derivative products are marketed presently and associated margins, marketing costs and quality requirements. Products typically pass through a number of players/agents along the different marketing channels linking producers with consumers. The strength of the value chain depends on the degree of trust and relationships that exist among the different participants. In situations where sharing of market information is poor and players behave in ways that undermine the activities of others, the value chain is highly underdeveloped and largely inefficient and inequitable. Costs are incurred at each node for cleaning, packaging, transport, and other marketing functions required in buying and selling the product. This tends to increase the marketing costs and lower the share of the consumer price received by the farmers, especially when the value chain is overextended, involving a large number of nodes and players. 3.3.1 Marketing channel that we observed for Green gram and Cumin during our study: 1. Farmer commission agent Miller Wholesaler - Retailer- consumer. 2. Farmer commission agent Trader Miller Broker-Wholesaler Retailer- consumer. 3. Farmer commission agent Trader Miller Broker-Wholesaler Consumer 21
GRAPH 3.2 MARKETING CHANNEL OF GREEN GRAM Producer (Women Farmer) Commission agents Trader Millers Broker Wholesalers Retailers Consumers Source: Market survey 22
Channel 1 is most dominant channel in Gujarat APMC markets. This channel is mostly found in that market place where there is large number of mills available like in Dessa, Chandisore and Unjha and Radhanpur market place. In this channel farmer sale their produce to commission agent and on other hand millers are the direct buyer of this produce from commission agents. Then miller s sale to wholesalers. Retailers purchase from wholesale market and sale it to consumers. Cost incurred in between commission agent and millers is in the form of bag charges, market charge, dalali, loading and unloading charge, transporting, bill commission, weighing charges and it is paid by millers. Cost incurred in between wholesaler and retailer is in the form of loading and unloading, transporting and is paid by retailers. Channel 2 is mostly same as channel 1 and generally found in that place where mills are not available like at Dessa, Unjha, Chandisore and buyer need to sale their green gram and cumin to outside millers. Only trader comes in picture between millers and commission agents. This trader purchase Green gram and Cumin from commission agent at the time of auction and sale it to millers at their own risk and own contact. Cost incurred in between miller through trader is generally in the form of dalali from miller, loading and unloading, transporting etc and all paid by millers. Channel 3 is same as above channels, only one thing is that consumer purchase green gram and cumin directly from wholesale market. At this cost incurred is that only transporting, loading, unloading and this is bear by consumers. 23
3.4 MARKET PLAYRES IN VALUE CHAIN, VALUE ADDITION AT EACH STAGE AND COST INCURRED AT EACH STAGE: As per shown in above diagram, there are eight market players comes in picture in Green gram and Cumin value chain in Gujarat state. Details of all value addition at each stage and cost incurred at each stage are as follow: 3.4.1 Farmer: Farmer is the start point of value chain. At this stage, farmer produce Green gram and Cumin in her/his field and then after harvesting he makes some value addition at farm level such as grading, drying, threshing, sorting etc. Details of cost of operation to cultivate Green gram/cumin in one acre are shown below: TABLE 3.5 Cost of operation of Green gram in one acre Operations Total cost in Rs.(Average) Seed 375 Fertilizers 375 Pesticides 000 Cost of cultivation 5700 (including labour cost, processing cost etc.) Total cost of 6450 production in Rs. Gained price in market 18000 with base price as Rs.6000 for one acre Net profit 11550 Source: Field survey 24
This shows the cost of production of Green gram in one acre. And average production of Green gram in one acre in Gujarat is 2-3 quintal. So average cost of production for one quintal of Green gram is about Rs. 3225. TABLE 4.5.1 Cost of operation of Cumin in one acre Operations Total cost in Rs.(Average) Seed 1200 Fertilizers 2800 Pesticides 700 Cost of cultivation 20500 (including labour cost, processing cost etc.) Total cost of 25200 production in Rs. Gained price in market 45000 with base price as Rs.9000 for one acre Net profit 19800 Source: Field survey This shows the cost of production of Cumin in one acre. And average production of Cumin in one acre in Gujarat is 4-5 quintal. So average cost of production for one quintal of Cumin is about Rs. 6300. At the time of selling this produce farmers have to bear some market charges as decides by market as follow :- This market charges generally comprises commission charge, loading and unloading charge, grading charge, sorting charge, transporting etc. As per our observation in different market, these charges differ by market to market. All the charges given below are for one quintal of Green gram and Cumin: 25
TABLE 3.6 Marketing cost per quintal of Green gram and Cumin showing table at famer and commission agent level Market place Radhanpur Unjha Tharad Operations (in Rs.) Loading 3 3 4 Unloading 3 3 4 Weighing 3 3 4 Transporting 50-60 50-60 50-60 Grading/sorting 10 10 10 Source: market survey In this way, farmers have to pay all above charges per quintal of Green gram and Cumin while selling to commission agent. Commission agent immediately pays cash to farmer by deducting all these above charges. 3.4.2 Commission agent: Farmer from different places approaches to commission agents to sale their crop. Their role is confined to participating in the auctions, procuring crop from farmers and handing it over to the traders. They don t have any cost of operation in terms of fixed or variable cost. They receive a commission in returns shown in above table from the tradres or Millers. 3.4.3 Traders: Traders are the market agents who make connection between commission agent and millers. Traders are the purchaser of Green gram and Cumin for millers. The actors of this segment do not trade in green gram and cumin themselves, but only arrange for the sale through an auction or bargaining system. The auctioneers generally belong to the commission agents in market itself. There is no value addition takes place at trader level. He only purchases green gram and cumin from commission agent and sale it to millers. These traders comes in picture of value 26
chain where there is unavalaibility of mills and also where millers directly are not purchaser and where purchaser( mill) are from outside cities, states. Cost incurred at this stage is in the form of dalali per quintal of green gram and cumin from millers and this is also varies from place to place as shown below: TABLE 3.7 Marketing cost at trader per quintal of Green gram and Cumin Place Radhanpur Unjha Tharad Patan Dalali from dal Rs.5 Rs.5 Rs.5 Rs.5 millers.(per Quintal) Source: market survey 3.4.4 Millers: Processing is an important marketing function in the present day marketing of Green gram and Cumin. Processing convert the raw materials and bring the produce nearer to human consumption. It is concerned with value addition to the produce by changing its form. Pulses and Spices are generally converted into finished products by decutilating and splitting the whole seed. Milling is one of the major food processing industries in the country. Millers procure green gram ad cumin from commission agents directly or through Traders. While procuring this green gram and cumin from commission agent, cost incurred are bag charges, market charge, loading and unloading charge, transporting,, bill commission, weighing charges and when it purchases from trader. Millers want to pay dalali to traders as shown in above table no 3.7. this charge varies from place to place. 27
TABLE 4.8 Marketing cost incurred from commission agent to millers while procuring Green gram and Cumin : Place /Operation Radhanpur Unjha Tharad Patan charges in RS per quintal Market 0.5 1 1.5 10.5 fee/rs.100 Loading 3 3 4 4 Unloading 3 3 4 4 Transport 40-50 40-50 40-50 40-50 Bill commission 10 10 10 10 Packaging of raw 50-60 50-60 50-60 50-60 Red gram Weighing/ truck 40 40 40 40 Source: market survey Near about 50 to 60 percent value addition takes place in mills so that value per quintal of green gram and cumin becomes double or some times more than double after processing. 3.4.6 Wholesaler: Wholesalers procure moong and jeera from millers through broker only. Without broker they can t possible procurement of moong and jeera from mill. While procuring moong and jeera from mill, wholesaler gets 2% discount means Rs.2/Rs.100 discount before each quintal of moong and jeera from mills. At the time of selling this commodity to retailers and also to consumer directly, wholesaler makes 2 percent margin in each quintal of moong and jeera for those retailers who make cash payment. And for those retailers who take on credits, wholesaler s makes 4-5 percent margin in each quintal of moong and jeera and charge Rs.0.75/Rs.100 interest to them. These charges are also same in all wholesale markets in Gujarat. If wholesaler sell moong and jeera to wholesaler 28
TABLE 3.10 Marketing cost incurred while purchasing jeera and moong from mills: Operations in Rs. Charges /Quintal Loading 3 Unloading 3 Transport 40-50 Brokerage 5-6 Octoroi 1-2% on price of goods Source: market survey The above charges are near about same for each market in Gujarat. An only transport charge varies from place to place. 3.4.7 Retailers: Retailers purchase moong and jeera from wholesalers directly and sell it to consumers. Retailers purchase moong and jeera in whole (quintal) quantity and sell in fragmented quantity means in measure of Kgs to consumer. Retailer makes around 10% margin per quintal while selling cumin (jeera) and make 5% margin while selling moong. Retailers also sell it in one kg, two kg, five kg packaging to consumer and for that he need to pay Rs.1-2/ kg packaging charge. TABLE 3.11 Marketing cost incurred while purchasing moong and jeera from wholesaler: Operations in Rs. Charges per quintal Loading 3 Unloading 3 Transport 40-50 Packaging 1-2/ kg Source: market survey 29
3.5 Risk involved at each transaction: 3.5.1 Farmer: Market risk- price fluctuation at market, quality, Production risk- pest attack, cyclone attack, loss due to wild animals. Storage risk- loss in weight results low selling price, deterioration due to rodents. Logistic and infrastructural risk- poor truck-loading practices (returning in damage/loss of product in transit), the poor availability and access to well maintain market centers, collection stations, or other transaction points typically pose further infrastructural risks. Management and operational risk- Inappropriate planting decisions and input use Reduced yield and quality 3.5.2 Commission agent: Market risk- price fluctuation in market at every day, quality of product. Financial risk- risk to not getting payment from miller at sometime. Transport risk- losses in transport, poor transport service. 3.5.3 Miller: Market risk- quality of product, price fluctuation. Storage risk- loss in weight due to loss in moisture content. Environmental risk- quality and safety of products; Brand reputation; market access Capacity underutilization due to raw material shortfall Increased processing charge due to disruption in energy and utilities. Increased wastage of raw materials and products. Added cost to develop/maintain quality and food safety management system. Product rejections, recalls and fines. Deterioration/loss of raw material inventory due to mishandling, power failures, etc. Product wastage/quality deterioration due to power failures. Inability to meet delivery schedules. 30
Damage to own vehicles from degraded roads. Ill health or injury to workers disrupts production. Insufficient, poor quality labor supply (seasonality). Pilferage of product and/ property damage by workers. 3.5.4 Wholesaler: Unmet supplier orders due to insufficient availability/timeliness/uneven quality of product. Higher logistics costs as unfilled freight capacity. Damage to storage/handling/logistics infrastructure. Traders are reluctant to buy and hold commodities because of uncertainty in covering costs through future sales. Inability to meet trade orders at pre-agreed prices without incurring loss. Product rejection recalls and fines. Inability to meet supply schedules. Sudden change in market price. Make off results no sell at that day. Pilferage of product and/ property damage by workers 31
Table: 3.12 Marketing margins to cost of production and farmer share in consumer rupee as base price of Cumin as Rs.9000 per quintal Actors Cost of production/procurement Marketing cost Purchase price Selling price Profit Channel C 1 C 2 C3 C 1 C 2 C3 C 1 C 2 C3 C 1 C 2 C3 C 1 C 2 C3 Farmer 6300 6300 6300 70 70 70 8930 8930 8930 2630 2630 2630 Commission agent 90 90 90 Trader 5 5 Dal miller 9000 9000 9000 636 641 641 9636 9641 9641 11760 11760 11760 2124 2119 2119 Broker 10 10 10 Wholesaler 11760 11760 11760 382 382 382 12142 12142 12142 12385 12385 12385 243 243 243 Retailer 12385 12385 156 156 12541 12541 13795 13795 1254 1254 Consumer 12385 32
3.6 Calculations for different channels: All the calculations for all channels are base on following market price of Cumin per quintal. Calculations shown below are for one quintal of Cumin.. Price per quintal of Cumin: Rs.3500. This study comprises study of all APMC markets in state of Gujarat so that marketing cost is same at each stage for different channel. CHANNEL 1: 1. Farmer Cost of production for one quintal of Cumin: Rs.6,300 Sales price at APMC market per quintal: Rs.9000 At the time of selling Marketing cost incurred per quintal: Rs.70 (loading, unloading, weighing, transporting, grading, and sorting) Effective selling price per quintal: 9000-70 = : Rs.8,930 Profit: 8930-6300 : Rs.2630 Margin to cost of production: 42% 2. Commission agent Commision per Rs 100:Rs 2 Total commision per quintal Rs 90 Profit: Rs.90 Margin to cost of procurement: Miller At the time of procuring: Purchase price per quintal: Rs.9000 Marketing cost incurred per quintal: Rs.636 ( Commission, market fee, loading, unloading, transporting, bill commission, packaging of cumin, weighing, processing charge) Purchase price: 9000 + 636 = Rs.9636 Selling price per quintal: 12000 Selling at 2% discount per quintal to wholesaler and including packaging charge, brokerage to broker. Selling price: 12000 - (12000*0.02) 33
Total selling price: Rs.11,760 Profit: Rs.2124 3. Wholesaler At the time of procuring, Marketing cost: Rs. 382 Total purchase price per quintal: Rs. 12,142 At the time of selling, Wholesaler sells at 2% margin on Cumin mill price per quintal. Total selling price per quintal: Rs. 12,385 Profit per quintal: 12,385-12,142 = Rs. 243 4. Retailer Purchasing time, Marketing cost: Rs.156 per quintal (including loading, unloading, transport, packaging) Total purchase price per quintal: Rs. 12,541 At time of selling, Retailer makes 10% margin on wholesaler price. Selling price, Total selling price: Rs.13,795 Profit: Rs. 1254 34
CHANNEL: 2 1. Farmer Cost of production for one quintal of Cumin: Rs.6300 Sales price at APMC market per quintal: Rs.9000 At the time of selling Marketing cost incurred per quintal: Rs.70 ( loading, unloading, weighing, transporting, grading, and sorting) Effective selling price per quintal: 9000 70 = Rs.8930 Profit: 8930 6300 = : Rs.2630 Margin to cost of production: 68% 2. Commission agent Commission per Rs 100: Rs 2 Commission per quintal Rs 90 Profit: Rs.90 3. Trader Trader takes Rs.5 dalali from miller and this is the profit for trader per quintal. Margin to cost of procurement: 4. Miller At the time of procuring: Purchase price per quintal: Rs.9000 Marketing cost incurred per quintal: Rs.641 (market fee, loading, unloading, transporting, bill commission, packaging of Cumin, weighing, processing charge) Purchase price: 9000 + 641 = Rs.9641 Selling price per quintal: 12000 At the time of selling, Selling at 2% discount per quintal to wholesaler and including packaging charge, brokerage to broker. Total selling price: Rs.11760 Profit: Rs.2119 35
5. Broker Trader takes Rs.10 brokerage from miller and wholesaler and this is the profit for broker per quintal. 6. Wholesaler At the time of procuring, Marketing cost: Rs.382 Total purchase price per quintal: Rs.12,142 At the time of selling, Wholesaler sells Cumin at 2% margin on mill price per quintal Total selling price per quintal: Rs. 12,385 Profit per quintal: 12,385-12,142 = Rs. 243 7. Retailer Purchasing time, Marketing cost: Rs.156 per quintal (including loading, unloading, transport, packaging) Total purchase price per quintal: Rs 12,541 At time of selling, Retailer makes 10% margin on wholesaler price. Selling price, Total selling price: Rs.13,795 Profit: Rs. 1254 Margin to cost of procurement: 36
CHANNEL 3: 1. Farmer Cost of production for one quintal of Cumin: Rs.6300 Sales price at APMC market per quintal: Rs.9000 At the time of selling Marketing cost incurred per quintal: Rs.70 ( loading, unloading, weighing, transporting, grading, and sorting) Effective selling price per quintal: 9000 70 = Rs.8930 Profit: 8930-6300 : Rs.2630 Margin to cost of production: 42% 2. Commission agent Commission per Rs 100: Rs 2 Commission per quintal Rs 90 Profit: Rs.90 3. Trader Trader takes Rs.5 dalali from miller and this is the profit for trader per quintal. Margin to cost of procurement: 4. miller At the time of procuring: Purchase price per quintal: Rs.9000 Marketing cost incurred per quintal: Rs.641 (market fee, loading, unloading, transporting, bill commission, packaging of raw Cumin, processing charge) Purchase price: 9000 + 641 = Rs.9641 37
Selling price per quintal: 12000 At the time of selling, Selling at 2% discount per quintal to wholesaler and including packaging charge, brokerage to broker. Total selling price: Rs.11760 Profit: Rs. 11760 9641 = 2119 Margin to cost of procurement: 5. Broker Trader takes Rs.10 brokerage from miller and wholesaler and this is the profit for broker per quintal. Margin to cost of procurement: 6. Wholesaler At the time of procuring, Marketing cost: Rs. 382. (Including loading, unloading, brokerage, octroi charges.) Total purchase price per quintal: Rs.12142 At the time of selling, Wholesaler sells cumin at 2% margin on mill price per quintal Total selling price per quintal: Rs. 12,385 Profit per quintal: 243 7. Consumer While purchase, Total purchase price per quintal: Rs. 12,385 38
Table: 4.12 Marketing margins to cost of production and farmer share in consumer rupee as base price of Green gram as Rs.6000 per quintal Actors Cost of production/procurement Marketing cost Purchase price Selling price Profit Channel C 1 C 2 C3 C 1 C 2 C3 C 1 C 2 C3 C 1 C 2 C3 C 1 C 2 C3 Farmer 3225 3225 3225 70 70 70 5930 5930 5930 2705 2705 2705 Commission agent 60 60 60 Trader 5 5 Dal miller 6000 6000 6000 485 490 490 6485 6490 6490 7546 7546 7546 1061 1056 1056 Broker 10 10 10 Wholesaler 7546 7546 7546 128 128 128 7674 7674 7674 7827 7827 7827 153 153 153 Retailer 7827 7827 46 46 7873 7873 8267 8267 393 393 Consumer 7827 39
4.6 Calculations for different channels: All the calculations for all channels are base on following market price of Green gram per quintal. Calculations shown below are for one quintal of Green gram. Price per quintal of Green gram: Rs.6000. This study comprises study of all APMC markets in state of Gujarat so that marketing cost is same at each stage for different channel. CHANNEL 1: 5. Farmer Cost of production for one quintal of Green gram: Rs.3225 Sales price at APMC market per quintal: Rs.6000 At the time of selling Marketing cost incurred per quintal: Rs.70 ( loading, unloading, weighing, transporting, grading, and sorting) Effective selling price per quintal: 6000 70 = Rs.5930 Profit: 2705 Margin to cost of production: 84% 6. Commission agent Commission per Rs 100 : Rs 2 Total commission per quintal Rs 60 Profit: Rs.60 Margin to cost of procurement: 2.5% 7. Miller At the time of procuring: Purchase price per quintal: Rs.6000 Marketing cost incurred per quintal: Rs.485 (market fee, loading, unloading, transporting, bill commission, packaging of raw Green gram, weighing, processing charge) Purchase price: 6485 Selling price per quintal: 7700 40
At the time of selling, Selling at 2% discount per quintal to wholesaler and including packaging charge, brokerage to broker. Total selling price: Rs 7546 Profit: Rs.1061 Margin to cost of procurement: 8. Wholesaler At the time of procuring, Marketing cost: Rs.128 Total purchase price per quintal: Rs.7674 At the time of selling, Wholesaler sells at 2% margin on mill price per quintal Total selling price per quintal: Rs. 7827 Profit per quintal: 153 9. Retailer Purchasing time, Marketing cost: Rs.46 per quintal (including loading, unloading, transport, packaging) Total purchase price per quintal: Rs.7873 At time of selling, Retailer makes 5% margin on wholesaler price. Total selling price: Rs.8267 Profit: Rs. 393 41
CHANNEL: 2 8. Farmer Cost of production for one quintal of Green gram: Rs.3225 Sales price at APMC market per quintal: Rs.6000 At the time of selling Marketing cost incurred per quintal: Rs.70 (commission, loading, unloading, weighing, transporting, grading, and sorting) Effective selling price per quintal: 6000 70 = Rs.5930 Profit: 2705 Margin to cost of production: 84% 9. Commission agent Commission per Rs 100 : Rs 2 Commission per quintal Rs 60 Profit: Rs.60 10. Trader Trader takes Rs.5 dalali from miller and this is the profit for trader per quintal. Margin to cost of procurement: 11. miller At the time of procuring: Purchase price per quintal: Rs.6000 Marketing cost incurred per quintal: Rs.490 (market fee, loading, unloading, transporting, bill commission, packaging of crop, weighing, processing charge) Purchase price: 6485 Selling price per quintal: 7546 At the time of selling, Selling at 2% discount per quintal to wholesaler and including packaging charge, brokerage to broker. Total selling price: Rs.7546 Profit: Rs.1056 42
12. Broker Trader takes Rs.10 brokerage from miller and wholesaler and this is the profit for broker per quintal. 13. Wholesaler At the time of procuring, Marketing cost: Rs.128 (Including loading, unloading, brokerage, octroi charges.) Total purchase price per quintal: Rs. At the time of selling, Wholesaler sells dal at 2% margin on mill price per quintal Total selling price per quintal: Rs. 7827 Profit per quintal: 153 14. Retailer Purchasing time, Marketing cost: Rs.46 per quintal (including loading, unloading, transport, packaging) Total purchase price per quintal: Rs.7873 At time of selling, Retailer makes 5% margin on wholesaler price. Total selling price: Rs.8267 Profit: Rs. 153 CHANNEL 3: 8. Farmer Cost of production for one quintal of Green Gram: Rs.3225 Sales price at APMC market per quintal: Rs.6000 43
At the time of selling Marketing cost incurred per quintal: Rs.70 (commission, loading, unloading, weighing, transporting, grading, and sorting) Effective selling price per quintal: 6000-70 : Rs.5930 Profit: 2705 Margin to cost of production: 84% 9. Commission agent Commission per Rs 100: Rs 2 Commission per quintal Rs 60 Profit: Rs.60 10. Trader Trader takes Rs.5 dalali from miller and this is the profit for trader per quintal. 11. miller At the time of procuring: Purchase price per quintal: Rs.6000 Marketing cost incurred per quintal: Rs.490 (market fee, loading, unloading, transporting, bill commission, packaging of crop, weighing, processing charge) Purchase price: 6490 Selling price per quintal: 7700 At the time of selling, Selling at 2% discount per quintal to wholesaler and including packaging charge, brokerage to broker. Total selling price: Rs.7546 Profit: Rs.1056 44
12. Broker Trader takes Rs.10 brokerage from miller and wholesaler and this is the profit for broker per quintal. 13. Wholesaler At the time of procuring, Marketing cost: Rs. 128. (Including loading, unloading, brokerage, octroi charges.) Total purchase price per quintal: Rs. 7546 At the time of selling, Wholesaler sells at 2% margin on mill price per quintal Total selling price per quintal: Rs. 7827 Profit per quintal: 153 14. Consumer While purchase, Total purchase price per quintal: Rs. 7827 45
CHAPTER 5 CONCLUSION AND KEY SUGGESTION 5.1 Conclusion: The research on the value chain of Green gram and Cumin reflects the processes and procedure that are in popular in the traditional value chain. It identified the various levels that exist in the present value chain and analyzed its strength and weakness. The research helped in analyzing the roles and responsibilities of the various players and at the same time looked into the problems of the various players. The study also identified the various farmers of the Green gram and Cumin farming. This research report shows various marking cost incurred at each stage of value chain and what type of value addition done at each level in Green gram and Cumin. It also reflects the market segmentation and product segmentation for Green gram and Cumin, market practices and market constraint. At last report comprises the variation in Green gram and Cumin prices in different marketing channel and farmers share in this and also marketing margins at mill, wholesaler and at retailers. 5.2 KEY SUGGESTION: 5.2.1 Direct marketing: This concept involves marketing of produce i.e. Green gram and Cumin by the women farmer directly to the consumers/millers without any middlemen. Direct marketing enables producers and millers and other bulk buyers to economize on transportation cost and improve price realization. It also provides incentive to large scale marketing companies i.e. millers and exporters to purchase directly from producing areas. Direct marketing by farmers to the consumers has been experimented in the country through Apni Mandis in Punjab and Haryana. The concept with certain improvements has been popularized in Andhra Pradesh through Rythu Bazaars. At present, these markets are being run at the expense of the state 46
exchequer, as a promotional measure, to encourage marketing by small and marginal producers without the help of the middlemen. In these markets, mainly fruits and vegetables are marketed along with other commodities at present. Benefits: It increases profit of the producer. It minimizes marketing cost. It encourages distribution efficiency of the marketing system. It promotes employment to the producer. Direct marketing enhances the consumer satisfaction. It provides better marketing techniques to producers. It encourages direct contact between producers and consumers for demand driven production. It encourages the farmers for retail sale of their produce. 5.2.2 Contract marketing: Contract marketing is a system of marketing, where selected crop is grown for marketing by farmers under a buy-back agreement with an agency (entrepreneur or trader or processor or manufacturer). In the wake of economic liberalization, it has gained momentum as the national and multinational companies enter into contracts for marketing of agricultural produce. They also provide technical guidance, capital and input supply to contracted farmers. Contract marketing ensures continuous supply of quality produce at mutually contracted price to contracting agencies, as well as ensures timely marketing of the produce. Contract marketing is beneficial to both the parties i.e. farmers and the contracting agencies. Advantages to farmers: - Price stability ensuring fair return of produce Assured marketing outlet and no involvement of middlemen. 47
Prompt and assured payments Technical advice in the field of production till harvesting Fair trade practices Credit facility Crop insurance Exposure to new technology and best practices Advantages of contracting agency: Assured supply of produce (raw materials) Control on need based production/post harvest handling Control on quality of produce Stability in price as per mutually agreed contract terms and conditions Opportunities to acquire and introduce desired varieties of crop Help in meeting specific customer needs/choice Better control on logistics Strengthen producer-buyer relationship 5.2.3 Co-operative marketing: The co-operative societies sell the member s produce directly in the markets, which fetch remunerative prices. Co-operative societies market the members produce collectively and secure advantages of economy of scale to its members. Services: Procurement and disposal of farm produce Processing of produce Grading Packing Storage Transport Credit Protection against marketing malpractices 48
Benefits: Remunerative price to producers Reduction in cost of marketing Reduction in commission charges Effective use of infrastructure Credit facilities Timely transportation service Reduces malpractices Marketing information Supply of agricultural inputs Collective processing 5.2.4 Institutional marketing channel: Some institutions have been entrusted with marketing activities of Green gram and Cumin like National Agricultural Co-operative Marketing Federation of India Limited (NAFED). NAFED is the nodal agency for procuring Green gram and Cumin for providing minimum support prices to the farmers for their produce. The main institutional marketing channels for Green gram and cumin are as under: 1. Producer Procuring Agency Miller Consumer 2. Producer Procuring Agency Miller Wholesaler Retailer Consumer 3. Producer Procuring Agency Miller Retailer Consumer Criteria for selection of channels: Following criteria should be considered in selecting a marketing channel: 1. The channel, which ensures the higher share to producer and also provides cheaper price to consumer, is considered as the most efficient channel. 2. The shorter channel having lesser market cost. 3. Avoid the longer channel with more intermediaries causing higher marketing costs and less producers share. 4. Select the channel which distributes the produce appropriately at least expenses and secures the desired volume of disposal 49
Farmer Association :- A Farmer Association is a self managed, independent group of farmers with a shared goal and interest. Benefits of forming a group 1. Access to technical and market information 2. Improved buying and selling power 3. Likely to maintain useful and relevant activities 4. High motivation for sustainability 5. Builds social cohesion 50
CHAPTER 6 Questionnaire for field visit: Value chain information of Green Gram & Cumin Sample No. Information Name State District Taluka Gujarat Patan Santalpur Village Respondent s Name Farmers Name Crop Production/ Food Availability (last one year-2014)* Crop Production/ Food ** Yes/No Season Seed variety Irrigation facility Sowing Harvesting Prod uctio n per acre A B Pulses Spices From where you buy this seed? How far this place from your village? :- How much seed require for sowing in one acre? :- Price of seed: Fertilizer use: Chemical fertilizer Dose Name of fertilizer(brand) Purchase from Stage Requirement (kg/acre) Price(per kg/per qt) 51
Organic fertilizer/biofertilizer: No Name of fertilizer(brand) Purchase from Stage Requirement (qt) Price (per kg/per qt) Which method use for sowing? :- Pesticide : No of doses Name (brand) Purchase from Stage Price(per lit.,per kg) Total in liter For selection of fertilizer, seed, pesticide. Are you take any suggestion from?(shopkeeper, agri. Officer, agriculturalist, developed famer etc.) :- Crop-rotation:- Cost of cultivation :- Work Time in days Labour Wage/labour in Rs. Ploughing Hoeing Sowing Fertilizer dose1 Fertilizer dose2 Weeding1 Weeding2 Weeding3 Weeding4 Weeding5 Spraying1 Spraying2 Spraying3 Spraying4 Spraying5 Irriagation1 Total in Rs. 52
Irriagation2 Irriagation3 Irriagation4 Gap filling Thinning Harvesting phase1 Harvesting phase 2 Harvesting phase 3 Harvesting phase 4 Threshing Total cost of cultivation in Rs. Is farmer knows about pest attack? If yes, mention name of pest? :- Which Care taken by farmer to avoid pest attack, disease attack? :- Is farmer use organic pesticide? If yes, mention names. : Spacing: Row to row spacing: Plant to plant spacing: Which water harvesting/water controlling structures use by farmer to stop water in field? ( bunding, farm pond, terrace) :- What is the use of by-product and crop residue and how they use it after harvesting? :- Selling of product: 1. Immediate after harvesting?(yes/no) :- 2. By storing for some time?(yes/no) :- 3. If they sell product immediate after harvesting, reason for that. :- 4. If they sell product after storing for some time, reason for that. :- 5. Where they store it?(home, own godown, govt.godown) :- 53
6. How they take care of production if they store it? :- Where they sell product?(city market, village market) :- Name of market:- Trader name and address:- If any middle person in process of selling, how much he take from farmer? :- Expenses while selling:(in Rs) 1. Loading:- 2. Unloading :- 3. Weight : 4. Transporting :- Process done on product before selling in market, if yes mention it?(eg. grading, drying) :- Any type of grading done in market and is it affect price of production? :- Price of production when they sell it in market? :- Name of investigator:- Date - Unstructured questions while collecting information from different marketing agents: Commission agents Traders Different varieties of Green grams and Cumin come in market. Most demanded varieties of Green gram and Cumin. Current price of these varieties of Green gram and Cumin Farmers expenses when they sale Green gram and Cumin in mandis. (Commission from commission agents loading and unloading charges, weighing charges, grading, transporting from village to mandi). Green gram and Cumin purchasing process from commission agent to traders. Most demanded varieties prefer for purchasing. Value addition in Green gram and Cumin such as grading, mixing, packaging etc. 54
Trader s expenses (market charges, loading charges, transport, weighing, bill commission, bag charges. In some place there may be or may not be trader between commission agent and mill. It varies from markets to market. If there is a trader between commission agent and miller he charges some commission from commission agent and miller also. Miller Understanding raw material purchasing process from trader or from commission agent directly. Identify suitable varieties of Green gram and Cumin for processing. Types of finish product and their market demand. Where they sell their finish product means place where they sell it either to wholesaler or to retailer. Any broker available in between miller and wholesaler and how much commission he takes from miller and wholesaler. Value addition in moong and jeera to gain more prices. Broker (from miller to wholesaler) Wholesaler Purchasing process of dal from moong and jeera mill and selling process to wholesaler. Commission from miller and wholesaler. Trader expenses from miller to wholesaler. At what price (per quintal) wholesaler purchase moong and jeera from miller. Any type of discount he gives from miller or not. At what price he sale moong and jeera (per quintal) to retailer. Is any middle person in between whole seller and retailer? Wholesaler expenses when he purchases moong and jeera from mill (loading, unloading, octroi, transporting, commission of broker etc.) 55
Some snaps of the field level data collection : 56
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