Factors influencing agriculture marketing

Author: Govindarasan

FACTORS INFLUENCING AGRICULTURE MARKETING

By

Dr. M. Govindarasan. MA., M.Phil., Phd. Project Associate, Department of Humanities and Social Science, Indian Institute of Technology, Madras, Chennai - 600 036.

and

K.Valarmathi, Full Time Phd Research Scholar, Department of Economics, Presidency Colloge, Chennai 600 005.

India's farming crisis The distress of farmers in India can be traced back to the introduction of technology-led, capital intensive farming in the heyday of the Green Revolution. With the advent of 'economic liberalisation' and the globalisation of trade, this distress has been aggravated. Unfair rules of the multilateral global trading regime have depressed global and domestic prices, and denied Indian farmers adequate remunerative prices. The poor farmer is squeezed between high input costs and low returns. Credit obtained from formal or informal banking systems is unable to bail him out of this precarious situation. Caught in a vicious debt trap, many farmers have resorted to suicide. BT cotton and the debt trap Misled and misguided, the changeover to Bt cotton proved to be a total failure, causing severe losses for our cotton growers. The enormous loss and the resultant debt trap forced thousands of cotton growers to commit suicide. Bt cotton proved to be a total fiasco. Thousands and thousands of farmers have already committed suicide, and there seems to be no end to this tragic situation. Trends in suicide remain unabated even now, especially among cotton growers. Significantly, farmer suicide is reported mainly from the high-tech agriculture belts, such as Andhra Pradesh, Karnataka, Tamil Nadu and Punjab.

All these states have embraced capital intensive and 'cutting edge' technology in the name of boosting production. In areas where traditional agricultural practices and organic farming are prevalent, such as Orissa, Jharkhand, Bihar, Chhattisgarh, suicide is unheard of. The ripple effect As far as agriculture is concerned, it is alarming that India is moving towards a point of no return. From being a self-reliant nation of food surplus, the country is becoming a net importer of food. In this context, policies to promote contract and corporate farming, the use of genetically modified seeds such as Bt cotton, and genetic synthesis in aquaculture and industrial poultry farming, threaten to undermine food security and the livelihoods of poor farmers. There are authenticated reports that alarmingly high numbers of cattle have died from grazing on Bt cotton residues in fodder. And, the Government of India's Genetic Engineering Approval Committee (GEAC), under the Ministry of Environment and Forestry, is baffled at the news of sheep mortality, on account of grazing in the Bt cotton fields in Warangal district in Andhra Pradesh. The GEAC has already admitted that toxicity studies on Bt cotton leaves have not yet been conducted, and although it has now asked the department of biotechnology to conduct studies, the lukewarm attitude of GEAC to ascertain the level of Bt toxin responsible for killing livestock is highly questionable. Whose trade organisation? The production of transgenes through genetic manipulation is bad science, unethical, and totally against the natural order that is responsible for the evolution and sustainability of life. It is fraught with the danger of genetic pollution and contamination, the destruction of ecosystems, environmental degradation and DNA deviations.

The liberalisation of heavily subsidised edible oil imports led to the decline in oil seed prices in India, financially ruining oil seed growers in the country. This totally negated previous efforts to make India almost self sufficient in the oil seed sector by 1998. Now, almost 50 per cent of edible oil is imported, resulting in annual spending of $1,800 million in foreign exchange. Inept, amateurish and mediocre handling of our priorities is to blame for this ugly situation. The Government is playing a faulty game of cash crops over food crops, and promotion of corporate farming at the cost of traditional agro-rural systems, especially in the dry and arid zones of the country. Such policies will further add to displacement and migration to urban areas. Blind trade liberalisation and a market driven economy will throw the country into a cobweb of trans-national corporations. Importing oil seed is only the tip of the iceberg; it is a prelude to the beginning of the end of Indian agro-systems and their ultimate take-over by multinational corporations. Distorting, or not distorting... Heavy subsidies given to the farming sector in developing countries are basically responsible for dismantling India's agro-system, making it economically unrewarding. Some 'trade experts' and negotiators in the developed world try to justify their misdeeds by putting subsidies into categories: "trade-distorting" and "non trade-distorting

Government should remain determined in all future negotiations to focus primarily on the interests of small and marginal farmers. Agriculture is not only for trade; it is a way of life. RURAL MARKETING Rural marketing facilitate flow of goods and service from rural producers to urban consumers at possible time with reasonable prices, and agriculture inputs/ consumer goods from urban to rural. Marketing as a function has started much earlier when civilization started but not recognized as marketing. All economy goods are marketed in terms of goods and services (Barter system). Now money is being practiced as a good exchanging medium. The market may be a street, or a small town/ metropolitan city, Developments in infrastructure, transport, and communication facilities has increased the scope of the rural market. Environment The difference between rural and urban markets on the basis of various socio – economic factors, most dominant among them being the source of income, the frequency of receipt of income, the seasonal nature of income and consumption. Rural markets are small, non- contiguous settlement units of village relatively low infrastructure facilitates, low density of population, their life styles also being different. Rural consumers are mostly farmers whose income receipts are dependent on the vagaries of nature.

Agri-Marketing Rural population has been increased about 74% of the total population; the demand for products and services has increased a lot in rural areas. Green revolution in the North and white revolution in the West has brought about a new prosperity in the lives of rural people. Government emphasis on rural development has caused significant changes in the rural scenario. Moreover, the special attention given for infrastructure development through the successive Five-year plans has improved the buying and consumption pattern of rural people.

The Rural Agro – Products: The rural agro-products are * Fruits & Vegetables * Grains * Flowers Rural sale products * Milk & poultry products * Handicrafts and Hand loom products * Tribal village products like tamarind, Lac, soapnut etc The peculiar characteristics of agricultural produce are: * Bulkiness * Perishability * Wide varietal differences * Dispersed production * Processing needs for consumption * Seasonality India is the largest producers of mangos and banana in the world, and top ten producers of apples and pineapples. Other fruits, guava, sapota, papaya etc.

Area under fruits which was estimated to 1.45 millions hectares in 1970-71 grow slowly and gear up after 1991-92 to 2.8 million hectares. DAIRY India is the largest milk producer and processing of milk was largely in the cooperatives sector.Rural marketing depends on agricultural produce, the production is seasonal and the consumption is spread out equalization of demand and supply has to be done. In addition, the raw agricultural produce as marketed by farmers has to be processed by many middlemen This include collection and assembling, financing, grading and standardization, storage, transportation, wholesaling and retailing these functions performed by village merchants, commission agents, wholesalers, processors etc.

These people seek returns commensurating with their investments of capital, time and labour. As a result, the middlemen get more share of the price than the producers.

REGULATED MARKETS: There are more than 5000 primary and Secondary Agricultural produce wholesale assembling markets functioning in the country. These markets are meant for the farmers to take their produce for sale. These markets facilitate formers, immediate cash payments. The directorate of state Agricultural Marketing Board or Registrar of cooperative marketing societies is controlling these markets. The market is run by an elected committee comprising of members from the farmers community, commission agents/wholesalers and some government nominees from Directorate of state agriculture / cooperative societies.

COOPERATIVE MARKETING: Another major improvement for rural producers is the formation of cooperative societies. Farmer's common interest helped to increase the incomes of the farmers and avoid exploitation of the middlemen. There are about five lack cooperatives working but very few cooperative societies in selected areas like Dairy, sugar, oilseeds, Mahagrape in Maharastra, tomato growers in Punjab etc. succeeded in cooperative processing industry. Problems in Rural Marketing The rural market offers a vast untapped potential. It is not that easy to operate in rural market because of several problems and also it is a time consuming affair and it requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems. The problems are. * Underdeveloped people and underdeveloped markets * Lack of proper physical communication facilities * Inadequate Media coverage for rural communication * Multi language and Dialects * Market organization & staff Underdeveloped people and underdeveloped markets The agricultural technology has tried to develop the people and market in rural areas.

Unfortunately, the impact of the technology is not felt uniformly through out the country. Some districts in Punjab, Haryana or Western Uttar Pradesh where rural consumer is somewhat comparable to his urban counterpart, there are large areas and groups of people who have remained beyond the technological breakthrough. In addition, the farmers with small agricultural land holdings have also been unable to take advantage of the new technology. Lack of proper physical communication facilities Nearly 50 percent of the villages in the country do not have all weather roads. Physical communication to these villages is highly expensive. Even today, most villages in eastern part of the country are inaccessible during monsoon season.

Inadequate Media coverage for rural communication A large number of rural families own radios and television sets there are also community radio and T.V sets. These have been used to diffuse agricultural technology to rural areas. However the coverage relating to marketing is inadequate using this aid of Marketing. Multi language and Dialects The number of languages and dialects vary from state to state region to region This type of distribution of population warrants appropriate strategies to decide the extent of coverage of rural market.

THE MAJOR WEAKNESS AND CHALLENGES IN THIS SECTOR * Traditional mind not to react new ideas. * Agricultural income mostly invested in gold ornaments and weddings. * Low rural literature. * Not persuading new thinking and improved products EMERGING TRENDS IN MARKETS ON LINE RURAL MARKET (INTERNET, NICNET): Rural people can use the two-way communication through on – line service for crop information, purchases of Agri-inputs, consumer durable and sale of rural produce online at reasonable price.

Farm information online marketing easily accessible in rural areas because of spread of telecommunication facilities all over India. Agricultural information can get through the Internet if each village have small information office

NEED BASED PRODUCTION: Supply plays major role in price of the rural produce, most of the farmers grow crops in particular seasons not through out the year, it causes oversupply in the market and drastic price cut in the agricultural produce. Now the information technology has been improving if the rural people enable to access the rural communication, farmers' awareness can be created about crops and forecasting of future demand, market taste. Farmers can equates their produce to demand and supply, they can create farmers driven market rather than supply driven market. If the need based production system developed not only prices but also storage cost can be saved. It is possible now a days the concept of global village.

MARKET DRIVEN EXTENSION: Agricultural extension is continuously going through renewal process where the focus includes a whole range of dimensions varying from institutional arrangements, privatization, decentralization, partnership, efficiency and participation. The most important change that influences the extension system is market forces. There is a need for the present extension system to think of the market driven approach, which would cater the demands of farmers.

RECENT DEVELOPMENTS IN TAMILNADU: Many remote villages now connected to main roads and link roads with the help of innovative technique of grass root development by the people for the people of the people. "Uzhavar sandhai" the another development of rural farmers reducing middle men and also cost to the benefit of urban society. The Innovative –" Uzhavar sandhai" The recent changes in agricultural produce sale by farmers in Uzhavar sandhai leads to direct selling vegetables and other commodities to urban needs. Government of Tamilnadu started Uzhavar sandhai all over the state for the purpose of direct selling their produce to urban needs, not only selling of rural produce but also exchange of their ideas each others. Procurement Prices / Support Prices These prices are more than minimum prices, which facilitates government bulky procurement for Public Distribution System and maintains buffer stock levels.

Farmer has little control over prices, which are determined by the broad factors of, supply and demand market at large. CONCLUSION Considering the emerging issues and challenges, government support is necessary for the development of marketing of agricultural produce. The government may adjust suitable budget allocations to rural infrastructure plans, and proper supervision for effective plan implementation. The core areas like transport, communication, roads, credit institutions, crop insurance for better utilization of land and water at appropriate level. The rural people and markets will definitely develop rural income and reduce poverty, on the whole countries economy will boost at an expected level.

MANAGE an extension management institution may provide extension services to rural people in crop information, price information, insurance and credit information by using various media. MANAGE may recommend / advice to central and state governments on suitable infrastructure development, current problems in rural markets and problem solving techniques.

REFERENCES

1. Communication and Rural Development by J.B. Ambekar Yadav. Published by Mittal Publications (New Delhi). 1992.

2. Development of Agricultural Marketing in India by Dr. Rajagopal Published by Print well (Jaipur).

3. Marketing Management by Philip kotlar. 1992. 8th edition.

4. Rural Marketing by T.P.Gopal Swamy published by Wheeler publishings (New Delhi) 1998.

5. Indian agrl. Journal of agril.economics vol. 54

6.Krishan Bir Chaudhary, chairman of India's largest farmers' organisation



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About the Author

Dr. M. Govindarasan. MA., M.Phil., Phd. Project Associate, Department of Humanities and Social Science, Indian Institute of Technology, Madras, Chennai - 600 036.

and

K.Valarmathi, Full Time Phd Research Scholar, Department of Economics, Presidency Colloge, Chennai 600 005.