Rural Marketing in India -
With Special Reference to Agricultural Produce in India


By

Mr. N.S. Shibu
B.Pharm, MBA, M.Phil(Mgmt), PhD(Mgmt)
Head
Department of Management Studies
Bharathidasan University College
Perambalur-621 212
 


RURAL AGRI- MARKETING IN INDIA - WITH SPECIAL REFERENCE TO AGRICULTURAL PRODUCE IN INDIA

ABSTRACT

Around 700 million people, or 70% of India's population, live in 6,27,000 villages in rural areas. 90% of the rural population is concentrated in villages with a population of less than 2000. Rural marketing is as old as the civilization. Surplus of agro - products are exchanged in earlier days in the barter system. The introduction of currency, transport, and communication has increased the scope of rural market. This paper discusses the present scenario of rural marketing especially rural produce, and its importance, current trends, and highlights certain problems related to rural marketing. Further it highlights the improvements that make the rural marketing system most effective.
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RURAL AGRI - MARKETING IN INDIA - WITH SPECIAL REFERENCE TO AGRICULTURAL PRODUCE IN INDIA

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

GROSS CROPPED AREA BY 1997 CROP WISE PERCENTAGE GIVEN BELOW

CROP

PERCENTAGE AREA

SUGGER CANE

2

COTTON

4

RICE

22

WHEAT

13

OTHER CEREALS

19

PULCESS

13

OIL SEEDS

15

OTHERS

12

TOTAL

100


More than 40 % of the gross cropped area under non- food grains is under oilseeds. Principally groundnut and rapseed and mustered, cotton and sugar cane area the other major non- food grain crops.

VEGETABLES (share in production)

CROP

% 0F TOTAL PRODUCTION

TOMATO

8

ONION

8

BRINJAL

9

CAULIFLOWER

6

OKAR

6

PEAS

3

POTATO

25

CABBAGE

6

OTHER

29

TOTAL

100


FRUITS

The major fruits share in total fruit production

Fruit name

Percentage of fruit Production

BANANA

27

APPLE

2

CITRUA

8

MANGO

23

GUVA

3O

OTHERS

37


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.

NATIONAL DAIRY DEVELOPMENT BOARD PLAN ESTIMATION FOR YEAR 2010

Year 1999

Year 2010

6 lack liters per day sale

34 lack litters per day

9.11 lack litters per day procurement

71 Lack lit per day

174 ml per consumption per day

230 ml per consumption per day


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.

TYPES OF RURAL MARKETS

HAATS /SANDIES (mostly for weekly market for all commodities)

MANDIS (mostly for all types of grains)

COMMODITY SPECILISED MARKETS

Nasik for onions and Grapes market, Nagpur for Orange market, Delhi for Apples market, Salem{TN} for Mangoes, Farkka market for potato market and Calcutta / Assam for tea market.

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.

OTHER FACTORS INFLUENCING MARKETING

Natural calamities and Market conditions (demand, supply and price). Pests and diseases, Drought or too much rains, Primitive methods of cultivation, lack of proper storage facilities which exposes grain to rain and rats, Grading, Transport, Market Intelligence (up to date market prices to villagers), Long chain of middlemen (Large no. of intermediaries between cultivator and consumer, wholesalers and retailers, Fundamental practices (Market Dealers and Commission Agents get good part of sale of receipts).

MAJOR LOSERS IN AGRICULTURAL MARKETING

Small and marginal farmers , 75% villagers are illiterates or semiliterate, they facing difficulties like proper paper procedures for getting loans and insurance. The farmers facing high interest rates for their credits (Local money lending system). Most of the credit needed for agricultural inputs like seeds, pesticides, and fertilizers.

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

COST BENEFIT ANALYSIS IN THIS SECTOR

Cost benefit can be achieved through development of information technology at the doorsteps of villagers. Most of the rural farmers need price information of agri-produce and inputs. If the information is available farmers can take quick decision where to sell their produce, if the price matches with local market farmers no need to go near by the city and waste of money & time it means farmers can enrich their financial strength.

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.

AGRO- PROCESSING INDUSTRY

India is the second largest producer of fruits and vegetables in the world with an annual production of more than 110 million tonnes of fruit and vegetable only 1.3 percent of the output is processed by the organised sector commercially, the reason higher consumption in fresh form. However, as the packaging, transportation and processing capacities increase, the market for processed fruits and vegetables is projected to grow at the rate of about 20 % per annum. 100 % export oriented units (EOU) and Joint venture units required improving the processing industry.

KISAN MANDI

There is a need to promote direct agricultural marketing model through retail outlets of farmer's co-operatives in urban areas. The direct link between producers and consumers would work in two ways: one, by enabling farmers to take advantage of the high price and secondly, by putting downward pressure on the retail prices.

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.

SUGGESTIONS FOR SOUND AGRICULTURAL MARKETING IN INDIA

* Suitable structure of support prices for various farm commodities adjusted from time to time.
* Adequate arrangement of agricultural produce on support price if the price falls below the level.
* Regulated infrastructure of markets and warehouses, which ensure fair prices
* Rural roads must be compliment and coordinate with railways, nearest waterways (port), airports if possible.
* The efficient marketing is predominantly influenced by efficient distribution system it means products such ultimate consumer in the quickest time possible at minimum cost.
* The development of communication systems appropriate to rural market may cost up to six times as much as reaching an urban market through established media, need rural communication facilities.
* The state marketing board or federation or market committees also the producers, traders and sellers have necessarily to be consulted as they have the principle interest towards it s use.
* The arrivals of various products such as
   Food grains
   Vegetables
   Dairy products
   Flowers etc. need speedy transport.
* Public weighing machines one in each rural market to ensure correct weightment both for farm and non-farm arrivals. Storage godowns and an office also required.
* For storage facilities the government should not depend on private agencies to store food grains (National commission on Agriculture recommended).
* Rural markets need more number of godowns and ancillary platforms for packaging places, market office cum information cell, bank and post office.
* Rural marketing is the nerve center of a rural economy, rural markets are the channels for the movements of goods and services as well as to promote cultural integration.
* Agricultural technology must reach all over the country, irrespective of size of land holding.
* Improve physical communication facility to nook and corner of the country.
* Land reforms need effectively implemented, because the land is basic asset of rural people.
* Rural communication must be in regional language and dialects.
* The existing marketing staff must be increased and adequate training must be given.
* Extending of financial support for modernization of the agro-processing units is also needed.
* Processing units should utilise fully capacity.
* There is need to find out markets for agro-processed products within and out side of the country.
* The proper packaging technology must be improved.

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. Marketing of Agricultural inputs by Manohar Lal Jalan., Published by Himalaya Publishing House (Delhi). 1988.
2. Agricultural Price Policy in India by Raj Kumar Singh., Published by Print well Publishers (Jaipur). 1990.
3. Communication and Rural Development by J.B. Ambekar Yadav. Published by Mittal Publications (New Delhi). 1992.
4. Development of Agricultural Marketing in India by Dr. Rajagopal Published by Print well (Jaipur).
5. Marketing Management by Philip kotlar. 1992. 8th edition.
6. Rural Marketing by T.P.Gopal Swamy published by Wheeler publishings (New Delhi) 1998.
7. CMIE report 97
8. Indian agrl. Journal of agril.economics vol. 54
 


Mr. N.S. Shibu
B.Pharm, MBA, M.Phil(Mgmt), PhD(Mgmt)
Head
Department of Management Studies
Bharathidasan University College
Perambalur-621 212
 

Source: E-mail October 2, 2008

           

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