NABARD RESEARCH STUDY - 12
NABARD
A Collaborative Study on Agriculture Marketing Infrastructure in Kerala Centre for Agroecology and Public Health Department of Economics University of Kerala
vkfFkZdfo'ys"k.k ,oavuqla/kkufoHkkx Department of Economic Analysis & Research jk"Vªh; —f"kvkSjxzkeh.kfodklcSad] eqacbZ National Bank for Agriculture and Rural Development, Mumbai
2021 A COLLABORATIVE STUDY ON AGRICULTURE MARKETING INFRASTRUCTURE IN KERALA
Dr Manju S Nair
Professor, Department of Economics Hon. Director, Centre for Agroecology and Public Health, University of Kerala
Centre for Agroecology and Public Health, National Bank for Agriculture and Rural Department of Economics Development University of Kerala (NABARD)
1 DISCLAIMER
This study has been supported by the National Bank for Agriculture and Rural Development (NABARD) under its Research and Development (R&D) Fund. The contents of this publication can be used for research and academic purposes only with due permission and acknowledgement. They should not be used for commercial purposes. NABARD does not hold any responsibility for the facts and figures contained in the book. The views are of the authors alone and should not be purported to be those of NABARD.
About NABARD Research Study Series
The NABARD Research Study Series has been started to enable wider dissemination of research conducted/sponsored by NABARD on the thrust areas of Agriculture and Rural Development among researchers and stakeholders. ‘A Collaborative Study on Agriculture Marketing Infrastructure in Kerala’ is the twelfth in the series. The list of studies in the series is given at the end of this report. Agricultural marketing is “a process which starts with a decision to produce a saleable farm commodity and it involves all aspects of market structure of system, both functional and institutional, based on technical and economic considerations and includes pre and post-harvest operations viz. assembling, grading, storage, transportation and distribution” (National Commission on Farmers, 2006). Well- functioning market infrastructure is essential for easy access to markets, in terms of product quality, safety and reliability of supply. It also shortens delivery times and preserves products’ freshness. The pursuit of quality and competitiveness starts from the application of modern and cost-effective production and processing techniques and technologies. The study examines the structural and functional dimensions of existing agriculture marketing institutions with a focus on marketing infrastructure and tries to synthesise opinion of multiple stakeholders. The aim is to strengthen the marketing infrastructure facilities for future development of agriculture. Hope this and other reports we are sharing would help generate debate on issues of policy relevance. Let us know your feedback.
Dr. KJS Satyasai Chief General Manager Department of Economic Analysis and Research
CONTENTS Executive Summary Chapter 1 : Introduction 1.1 Agriculture Marketing Infrastructure in India 1.2. Agriculture Marketing Infrastructure in Kerala 1.3. Statement of the Problem 1.4. Objectives of the study 1.5. Study Area 1.6. Chapterisation 1.7. Limitations of the study Chapter 2: Conceptual Framework and Research Methodology 2.1. Infrastructure which enables agriculture marketing functions 2.2 Conceptual Framework of the study 2.3. Primary and Secondary data 2.4. Sample Study Area 2.5. Crop specific marketing infrastructure 2.6. Data collection Tools Chapter 3: Structure of Agricultural Marketing Institutions in Kerala 3.1. Institution wise structure of the existing agricultural markets in Kerala 3.2. Farmer Producer Organisations (FPOs) in Kerala 3.3. Institutions providing Crop Specific Marketing Infrastructure Chapter 4: Agriculture marketing infrastructure in Kerala: An analysis of wholesale markets 4.1. Structure-Conduct-Performance Analysis 4.2. An Analysis of Wholesale Markets (Secondary data analysis) 4.2.1. Infrastructure Facilities in the markets 4.2.2. Institutional Environment 4.2.3. Structure of wholesale markets 4.2.4. Conduct of the market 4.3. Wholesale Markets – Analysis of Farmer Details 4.3.1. Distribution of buying and selling activities 4.3.2. Expenditure on selling the products
3 4.3.3: Reasons for sale in WM 4.3.4. Price Determination 4.4. Whole Sale Market – Analysis of Trader Details 4.4.1. Purchase value, Sale value and profit 4.4.2. Marketing Margin 4.4.3: Details of price and price information 4.4.4. Details of resale point 4.4.5. Effectiveness and timeliness of the information 4.5. Infrastructure Facility in the Whole Sale Market 4.5.1. Infrastructure for buying, selling and demand creation. 4.5.2. Infrastructure for demand creation production decision 4.5.3. Infrastructure for the function of physical movement of goods 4.5.4. Infrastructure for facilitation 4.5.5. NIAM classification of Infrastructure facilities 4.5.6. Own infrastructure – trader 4.6. Overall satisfaction – farmers and traders 4.7. Factors contributing to the inefficiencies in WM – Principal Components Methods Chapter 5 : Agriculture Marketing Infrastructure in Kerala: WAM/RPM 5.1. Trivandrum – WAM/RPM 5.1.1. Infrastructure Facilities in the market 5.1.2. Institutional Environment 5.2. Idukki – WAM/RPM 5.2.1. Infrastructure Facilities in the market 5.3. Performance of Wholesale Agricultural Markets/Rural Periodic Markets 5.3.1. Socio-economic-market operation details of sample respondents 5.3.2. Infrastructure Facilities Available in the Market 5.3.3. NIAM Classification of Infrastructure Facilities 5.4. Overall Satisfaction of Sellers 5.5. Factors contributing to market inefficiencies
4 Chapter 6: Agriculture Marketing Infrastructure in Kerala: VFPCK 6.1 Structure and Conduct of VFPCK markets 6.1.1 Infrastructure 6.1.2 Administrative Structure 6.1.3 Structure of market 6.1.4 Conduct 6.2. VFPCK Market – Analysis of Farmer Details 6.2.1. Reasons for sale in VFPCK 6.2.2. Marketing cost 6.3. VFPCK Markets – Analysis of Trader Details 6.3.1. Marketing Cost 6.3.2. Reason for purchase from VFPCK 6.4. Performance of VFPCK -Analysis of Available Market Infrastructure - views of farmers and traders 6.4.1 Infrastructure for buying, selling and demand creation 6.4.2. Infrastructure for the Physical Movement of Goods 6.4.3. Infrastructure for Facilitation 6.4.4. NIAM Classification 6.4.5. Own infrastructure 6.4.6. Problems identified for market inefficiencies and suggested solutions Chapter 7: Crop Specific Infrastructure - Spices 7.1. Spices Park, Puttady 7.2. Infrastructure Facilities 7.3. Institutional Environment 7.4. Structure of the market 7.5. Conduct of the market 7.6. Monitoring 7.7. Performance of the market 7.8. Service Facility: Input supply 7.9. Issues in conduction of markets: Backward and Forward Linkages 7.10. Maintenance 7.11. Traders view: Allu Cardamom and MAS Enterprises Ltd.
5 7.12. Performance of the Spices Park: Analysis of Primary Data 7.12.1. Infrastructure facilities available for the farmers 7.12.2. Problems identified by the farmers Chapter 8: The Alternative Marketing Structures: FPO 8.1. Introduction 8.2. Tejaswini: The Coconut Farmers Producing Company 8.3. Activities and Functioning 8.4. Asset Details of the company 8.5. Revenue and Sales 8.6. Creation /Facilitation of infrastructure 8.7. Problems 8.8. Measures to overcome 8.9. Conclusion Chapter 9 Warehousing – Problems and Prospects 9.1 Introduction 9.2. Central Warehousing Corporation (CWC) 9.3. Central Ware houses in Kerala 9.4. Kerala State Warehousing Corporation 9.4.1. Operational procedures of the SWHs 9.5. Results of primary data 9.5.1 Storage Facilities – Normal and Reservation 9.5.2 Disinfection Extension Services (DES) 9.5.3. Income, Expenditure and profit of State warehouses 9.6. Results from FGDs and Individual Interviews Chapter 10: Required Infrastructure and estimated expenditure 10.1. Infrastructure requirements in Wholesale Markets 10.1.1. NIAM Classification 10.1.2. Infrastructure requirements in WAM/RPM 10.1.3. Infrastructure requirements in VFPCK markets 10.2. Required Infrastructure facilities 10.3. Specification and Cost Estimation
6 Chapter 11: Summary and Conclusions 11.1. Wholesale Market 11.2. Wholesale Agriculture Markets/Rural Periodical Markets 11.3. VFPCK 11.4. State Ware Houses 11.5. FPOs
Appendices References
7 LIST OF TABLES Title Table 2.1: Sampling Details and information collected Table 2.2: Details of variables identified for understanding agriculture marketing infrastructure Table 3.1: Wholesale Assembling Markets in Kerala Table 3.2: Periodical markets in Kerala Table 3.3: District wise list of FPOs under Producers Fund Table 3.4: Quantity of produce handled by Horticorp for the last five years Table 4.1: Infrastructure facilities Table 4.2: Details of staff strength Table 4.3: Farm size wise value of crops cultivated and sold in markets Table 4.4: Distribution of buying and selling activities Table 4.5: Expenditure on Selling of total products during last month Table 4.6: Reason for sale in the particular market Table 4.7: Number of pending days Table 4.8: Details of payment to be received Table 4.9: Price determining factors Table 4.10: Information about the market price Table 4.11: Effectiveness and timeliness of information Table 4.12: Details of Transportation cost occurred for marketing Table 4.13: Total cost incurred for marketing Table 4.14: Mean value of total quantity Table 4.15: Details of price and price information Table 4.16: Details of the selling market point Table 4.17: Effectiveness and timeliness Table 4.18: Details of trading license Table 4.19: Reason for buying commodities in the selected markets Table 4.20: Details of auction hall -Farmer’s Opinion (in per cent) Table 4.21: Details of auction hall – Trader’s Opinion (in per cent) Table 4.22: Infrastructure for demand creation or production decisions – farmer’s opinion (in per cent)
8 Table 4.23: Infrastructure for demand creation or production decisions – trader’s opinion (in per cent) Table 4.24: Infrastructure for transportation – Farmer’s view (in per cent) Table 4.25: Infrastructure for transportation – Trader’s view (in per cent) Table 4.26: Infrastructure for storage – Farmer’s view (in per cent) Table 4.27: Infrastructure for transportation – Trader’s view (in per cent) Table 4.28: Infrastructure for standardisation – Farmer’s view (in per cent) Table 4.29: Infrastructure for standardisation – Trader’s view (in per cent) Table 4.30: Infrastructure for grading and packing – Farmer’s view (in per cent) Table 4.31: Infrastructure for grading and packing – Trader’s view (in per cent) Table 4.32: Infrastructure for market financing – Farmer’s view (in per cent) Table 4.33: Infrastructure for market financing – Trader’s view (in per cent) Table 4.34: Infrastructure for market information – Farmer’s view (in per cent) Table 4.35: Infrastructure for market information – Farmer’s view (in per cent) Table 4.36: Infrastructure for Market integration – Farmer’s view (in per cent) Table 4.37: Infrastructure for market integration – Trader’s view (in per cent) Table 4.38: NIAM classification – Infrastructure for core facility – farmer’s view Table 4.39: NIAM classification – Infrastructure for core facility – trader’s view Table 4.40: NIAM classification – Infrastructure for support facility – farmer’s view Table 4.41: NIAM classification – Infrastructure for support facility – trader’s view Table 4.42: NIAM classification – Infrastructure for service facility – farmer’s view Table 4.43: NIAM classification – Infrastructure for service facility – trader’s view Table 4.44: NIAM classification – Infrastructure for maintenance facility – farmer’s view Table 4.45: NIAM classification – Infrastructure for maintenance facility –trader’s view Table 4.46: Own infrastructure trader Table 4.47: Overall satisfaction farmer Table 4.48: Overall satisfaction trader Table 4.49: KMO and Bartlett’s test for factors responsible for market inefficiency and Cronbach Alpha showing reliability Table 4.50: Factors of market inefficiencies extracted by principal component analysis Table 5.1: Wholesale Assembly Markets – Infrastructure Table 5.2: Wholesale Assembly Markets: Infrastructure Table 5.3: Nature of trade activity (RPM Sellers)
9 Table 5.4: Marketing Expenditure incurred Table 5.5: Expenditure incurred for shop (Percent) Table 5.6: Mean difference in the purchase value and sales value of selected agriculture commodities sales in a month Table 5.7: District wise total revenue, cost, marketing cost and market margin in a month Table 5.8: Payment Schedule Table 5.9: Details of purchasing, storage and physical treatment Table 5.10: Details of selling price and information Table 5.11: Details of trading license Table 5.12: Details of Auction Hall – views of sellers Table 5.13: Infrastructure for physical movement of goods (Transportation) - views of sellers Table 5.14: Infrastructure for storage facilities – views of sellers Table 5.15: Infrastructure for standardization – views of farmers Table 5.16: Infrastructure for Grading and Packing – views of sellers Table 5.17: Infrastructure for market financing (views of sellers) Table 5.18: Infrastructure for market information – views of sellers Table 5.19: Infrastructure for market integration – views of sellers Table 5.20: Core facility Table 5.21: Support facility Table 5.22: Services Infrastructure Table 5.23: Maintenance Facility/Green initiatives Table 5.24: Own Infrastructure Table 5.25: Overall satisfaction of seller Table 5.26: Problems Identified for Market Inefficiencies Table 6.1: Basic infrastructure facilities Table 6.2: Value of agricultural produce sold by farmers in VFPCK Table 6.3: Agriculture marketing activities Table 6.4: Sale of Tapioca, Banana, Coconut, Ginger and Cowpea Table 6.5: Sale of Spinach, Cucumber, Snake gourd, bitter gourd, and chilly Table 6.6: Details of Auction amount, Market fee, Trader Amount and Farmer amount Table 6.7: Reasons for selling in this market Table 6.8: Source of information, payment schedule and pending payments
10 Table 6.9: Price determination, satisfied with price determination, and price information Table 6.10: Reselling, effectiveness and timeliness of the information Table 6.11: Details of cost incurred for marketing Table 6.12: Purchase and Sales details of traders in VFPCK Table 6.13: Marketing cost incurred Table 6.14: Overall marketing margin during last month Table 6.15: Determining factors of choice of VFPCK and Setting of market prices Table 6.16: Storage facility and physical treatment Table 6.17: Effectiveness and Timeliness of the information Table 6.18: Reason for purchase from VFPCK Table 6.19: Auction hall Table 6.20: Efficacy of market in demand forecasting Table 6.21: Transportation, storage, value addition, standardization and grading – views of farmers (in percent) Table 6.22: Transportation, storage, value addition and standardization -views of traders (in percent) Table 6.23: Market financing, market information and market integration - views of farmers (in percent) Table 6.24: Market financing, information and integration views of traders (in percent) Table 6.25: Core facility and support facility -views of farmers Table 6.26: Core facility and support facility-views of traders Table 6.27: Availability of Service infrastructure for farmers and traders Table 6.28: Maintenance facility (frequency) for farmers and traders Table 6.29: Own infrastructure for traders Table 6.30: Problems & solution identified from farmers and traders Table 7.1: Area wise distribution of spices Table 7.2: Details of trade activity Table 7.3: Details of selling last month Table 7.4: Reasons for selling in the market Table 7.5: Problems and solutions identified Table 8.1: Projects by TCFPCL Table 8.2: Asset Details of TFPCL Table 8.3: Revenue and Expenses
11 Table 8.4: Liabilities Table 8.5: Agriculture marketing functions facilitated by TFPCL Table 8.6: Organic manure unit: Infrastructure Table 8.7: Horticulture Nursery Unit Table 8.8: Agro-processing Unit – Infrastructure Table 9.1: Performance of Central Warehouses in Kerala 1st July 2020 Table 9.2: Covered capacity (MT) of warehouses in Kerala (01.09.2019) Table 9.3: Normal storage charges for major commodities (per bag) Table 9.4: Monthly Reservation charges Rs. Per sq.ft fixed by Corporation for different storage facilities Table 9.5: Storage Capacity, utilisation & Reservation particulars of selected SWHs (June2020) Table 9.6: Income, Expenditure and Profit of selected SWCs in Kerala (June2020) Table 10.1: Specification and Cost Estimation of Needed Infrastructural Facilities in Whole Sale Markets Table 10.2: Specification on different equipments Table 10.3: Financial specification Table 10.4: Description on cold chain components
12 LIST OF FIGURES Figure 3.1: Agriculture Marketing Institutions in Kerala Figure 8.1: Decentralised structure of TCFPCL: Mobilisation of farmers Figure 8.2: Administrative Structure of TFPCL
13 ABBREVIATIONS
AMI Agriculture Marketing Infrastructure AMIGS Agricultural Marketing Infrastructure, Grading and Standardization APEDA Agriculture and Processed Food Products Export Development Authority APEDA Agricultural and Processed Food Products Export Development Authority APMC Agricultural Produce Market Committee CWG Central Warehouse Godowns DES Disinfection Extension Services FAO Food and Agriculture Organisation FCI Food Corporation in India FGD Focus Group Discussions FPO Farmer Producers Organisation GBY GraminBhandaran Yojana GOI Government of India GoK Government of Kerala GrAMs Gramin Agriculture Markets GST Goods and Services Tax ICAR Indian Council of Agricultural Research ISO International Organization for Standardization KSCSC Kerala State Civil Supplies Corporation KSWC Kerala State Warehousing Corporation LSG Local Self Government MT Million Tonne NABARD National Bank for Agriculture and Rural Development NDD Nedumangad NFSA National Food Security Act NGO Non Government Organisation NWR Negotiable Warehouse Receipts PEG Private Entrepreneurs Guarantee POPI Producer Organisation Promoting Institutions PWD Public Welfare Department
14 RPM Rural Periodical Markets RRA Rapid Rural Appraisal SD Standard Deviation SEZ Socio Economic Zone SHG Self Help Group SSLC Secondary School Leaving Certificate SWG State Warehouse Godowns TVM Trivandrum VFPCK Vegetables and Fruits Promotion Council of Kerala WAM Wholesale Assembly Markets WM Wholesale Market WR Warehouse Receipts
15 Executive Summary ‘A Collaborative Study on Agriculture Marketing Infrastructure in Kerala’ was awarded to Centre for Agroecology and Public Health, Department of Economics, University of Kerala from R & D fund of National Bank for Agriculture and Rural Development (NABARD) during 2019-20. The study examines the structural and functional dimensions of existing agriculture marketing institutions with a focus on marketing infrastructure and tries to synthesis opinion of multi stakeholders, with an aim to strengthen the marketing infrastructure facilities for future development of agriculture. Specific Objectives of the study include, 1. To assess institution wise infrastructure associated with agriculture marketing functions a. Infrastructure for the function of transfer of ownership of products from the farmers/ producers to the consumers- selling, buying and demand creation. b. Infrastructure for the function of physical movement such as transportation and storage, function of changing the form of product, standardization and grading and packaging. c. Infrastructure for the facilitation function- market financing, and market information/ market integration. 2. To understand the perception and opinion of both farmer and non-farmer stakeholders on agriculture marketing infrastructure. 3. To assess empirically the institution wise infrastructure requirement for agricultural marketing. 4. To assess the District- wise data of warehousing infrastructure required, available and the gaps based on primary/ secondary data analysis. The efficacy with which the markets perform their three major function as, being platform for exchange, infrastructure for physical movement and value addition and that of facilitation function is being analyzed in depth by adopting Structure- Conduct-Performance (S-C-P) framework. The study is supported both by secondary and primary data. Marketing networks, infrastructure facilities, and investment procedures in agriculture marketing system of the state of Kerala is evaluated on the basis of exhaustive secondary data. For assessing institution wise, commodity wise marketing infrastructure and necessary investments made for promotion of agricultural marketing infrastructure, primary survey is conducted. After analyzing the production clusters in Kerala state (calculated on the basis of the data on crop-wise production (2016-2017), Directorate of Economics & Statistics), two districts Thiruvananthapuram and Idukki are selected for in-depth analysis, which are found to be distinct in (a) coverage of all major crops, (b) presence of agriculture marketing institutions and (c) spread of markets. (Wholesale Market/ Wholesale Assembly Markets (WAMs)/ Regional Periodical Markets (RPMs)). The sample population include; • Nedumangad (Rural) &Anayara (Urban) Wholesale Markets are selected from Thiruvananthapuram district on the basis of rural urban division, out of the six wholesale markets in Kerala. Data is collected from a total of forty sample units (ten farmers and ten traders each from the two markets).
16 • Two Wholesale Assembly Markets (five percent of total WAMs in one district) and three Rural Periodical Markets (five percent of total RPMs of each district) are randomly selected. Fifty sellers (five sellers from each market) are interviewed from the ten selected markets. • Thejaswini, the Farmer Producer Company, Kasaragod selected for understanding the role played by Farmer Producer Companies. • To study crop specific infrastructure, the six farmer’s markets operated by VFPCK in the two districts are selected and data was collected from a total sample of sixty (thirty farmers and thirty traders). • Spices Park, Puttady, Idukki, the online trading Centre is also selected and stakeholders interviewed. Primary data collection started with the informal field visit to get general impression and based on the insights, formal sample survey of farmers and traders in the selected markets was conducted using interview schedule. In addition, qualitative techniques including Rapid Rural Appraisal, case study, Focus Group Discussion, in-depth interviews were used to gather information from various stakeholders including farmers, traders, middlemen, administrative officials and consumers. Detailed organizational visit and observation were used as a tool to understand the role and responsibilities of various agencies in providing agricultural marketing facilities. The existing infrastructure provided by them and limitations of their present role is also evaluated. A Principal Component Analysis is used to delineate the most important factors contributing to inadequate infrastructure in agriculture markets so that appropriate policy suggestions can be done. The required infrastructure is specified after consolidating the views of different stake holders and the cost to be incurred for the same is also worked out in consultation with experts. Results: Wholesale Markets: Analysis of the selected Wholesale Markets in Kerala reveals that, even though many of the core and support facilities (as per NIAM classification) are present in the markets, conduct and performance of the Wholesale Markets are far below the benchmarks. Principle Component Analysis shows that, many administrative problems including lack of enthusiasm from the part of authorities, bad work culture, strong trade unionism, delayed payment for farmers, inactive administrative councils, nepotism and functional factors such as inappropriate physical conditions to deal with perishability of produce, high operational costs, and absence of online trading facility contribute towards market inefficiencies. Competition through creating condition for transparent price discovery is low because traders are few and, in several occasion, price is set by negotiation and this leads to distress sales. The infrastructure for storage, grading, packaging, value addition, market integration and facilitation is very low, hence even after establishment of Wholesale Markets, post-harvest loss remains high. The provision for forward and backward linkages and demand forecasting is also absent in the market and thus, setting up of Wholesale markets has not yet yielded the cent per cent desired results. Wholesale Assembly Markets/ Rural Periodical Markets (RPM): Wholesale Agriculture Markets/ Rural Periodical Markets work differently from that of WAMs/RPMs in other states. WAM/RPMs have a function to mobilize the surplus products from farmers to the second round of supply chain, and thus becomes the most important place where the farmer comes in direct contact with the consumer/
17 wholesale/retailer in most of the states. In Kerala, these markets are filled with sellers, who buy produce from traders in the neighboring states and sell in these markets. There is large variability in the structure, conduct and performance of markets, where some of the markets have good infrastructure facilities while others lack the basic minimum facilities such as trading halls, drainage, weighing machines, and waste management facilities. Storage facilities, grading facilities, and quality testing mechanism are not available in any one of the markets. Hence the WAMs/RPMs in Kerala require immediate attention aimed at revamping the structure Crop Specific Infrastructure: VFPCK Farmer’s market was an initiative towards establishing markets where farmers have an active role in the conduction of market, and infrastructure is established with the financial support of government, and managerial functions is coordinated by both farmers and government officials. The primary data reveals that both farmers and traders are satisfied with conduction of market, especially relating to dissemination of market information, price fixation and timeliness of marketing activities and the markets have core and supportive infrastructure facilities. However, it is important to convert the farmers markets from mere auction centers, to centers for storage and value addition, by which the current problems faced by both farmers and traders can be curtailed. Regarding marketing infrastructure for spices, Spices Park has all the modern infrastructure facilities including electronic auctioning, facilities for drying, grading and packing, but the market fails in establishing transparent price discovery mechanism as the auctioneers and traders co-opt and few of them dominates the market. It keeps the original producers- the farmers away from the market. As the marketing cost and fee for storage, packing and grading are high, direct benefit to farmers are comparatively less. In addition, the market lacks facility for quality control mechanism which adversely affect exporting prospects of spices. Farmer Producers Organization: Functioning of FPO, marks the best form of alternative marketing as it succeeds in establishing the needed infrastructure and abolishes middlemen. However, the selected FPO TFPCL, experienced procedural delays and market restrictions from the government which negatively affected the full-fledged establishment of its processing Centre, in turn creating problems in repayment of loans and financial crisis. The bureaucratic delays should be avoided by eliminating some of the obsolete laws and issuing special allowances to FPOs, as is given to MNCs. Ware Housing: There is shortage of scientific ware housing facility and state itself is the major user of ware housing facility in some of the districts, and in some others private companies storing nonagricultural commodities are the users. The cost of storage is high compared to neighboring states, and quality is comparatively low. Action Points – Stakeholders Based on the study the following infrastructure facilities are identified in each market for which government investment is required. Wholesale Markets - E – auction facility, infrastructure for cleaning, sorting grading, packaging, quality testing labs, green initiatives including solar plant/biogas plant, cold chain management system (cool room, controlled atmospheric storage with supporting reefer trucks, pack houses, ripening chambers, retail shops etc.) are to be established to collect vegetables from the leading clusters in Idukki and Trivandrum and to transport it to retail outlets
18 - Competitive working environment in the market by reducing procedural delays and strengthening farmer participation. Develop/ stipulate managerial procedures so that more traders can be attracted by which the market can be run in full capacity and can develop its activities further. - Markets are reported to have issues in finding resources to meet day to day activities, especially electricity bills, tax payment etc. Many of the infrastructure facilities such as cold storage is not used citing the feasibility problem. Measures must be adopted to meet the maintenance cost. - Measures to ensure forward and backward linkage, demand forecasting and input supply. Wholesale Agriculture Markets/Rural Periodical Markets - Infrastructure for quality control - Ensuring auction platform for regional farmers: Currently farmers in the region are not able to use the infrastructure at the market, since bulk quantities of goods are coming from neighbouring states. - The infrastructure in RPMs is pathetic. Auction hall, selling platform, Price display, waste management system, boundary wall, crop specific infrastructure, roofing etc. are essential in all markets. - Technical support for LSGs: Most of the RPMs are under reconstruction with an aim to ensure essential infrastructure. But, many of the reconstructed markets are not usable. Hence it is essential to have an authority that can provide with technical support in constructing markets so that the financing will not go waste. - Refining the legal aspects relating to responsibility of LSGs towards markets: Even though the jurisdiction of markets comes under LSGs, there is no clarity on the role and responsibility of LSGs. There is not a single department that is wholly responsible for fair conduction of market, instead it is scatted over the health, revenue and Public works department of LSGs. It is important to have a centralised authority to monitor the functioning of market so that essential infrastructure, quality control, entry and exit can be organised efficiently. - In many markets there exists entry restrictions, that effect the performance of markets and infrastructure facilitation. For instance, number of selling platform, physical structure of market building, etc. affect entry and exit and there by market functioning. - Infrastructure for demand forecasting is quintessential in all markets. Given the small quantity of transaction of goods in the markets in Kerala, possibilities of clustering, online platforms etc should be mooted. Vegetable and Fruit Promotion Council Kerala (VFPCK) - Infrastructure like cold storage, cool chamber and concrete floors for fruits and vegetable handling facility should be created - Vehicles needed in VFPCK to bring agriculture products from field to the market and to distribute it to the retail shops
19 - Infrastructure for value addition facilities to be provided for those VFPCKs which are ready to initiate value addition units - Given the perishability of goods and the large geographical area covered by the dealers, it is very important to arrange well equipped, weather sensitive transportation facilities, which can be very helpful for the traders. - Establishing retail outlets can increase the acceptance of farmers markets in the locality and this can earn more profits to farmers. - Establishing crop specific infrastructure facilities, based on the agroclimatic zones can promote farmers to do agriculture more scientifically and profitably. State Ware Houses - SWH Corporation should be provided with more warehousing facility - Scientific ware houses must be constructed particularly in districts where spice production is dominant FPOs - Infrastructure assistance should be provided to FPOs. - Technical and managerial expertise to be provided to farmers. - Bureaucratic delays from the part of government should be avoided by scrapping some of the age-old laws and issuing special allowance to FPOs.
20 CHAPTER 1 Introduction
Agricultural marketing is “a process which starts with a decision to produce a saleable farm commodity and it involves all aspects of market structure of system, both functional and institutional, based on technical and economic considerations and includes pre and post-harvest operations viz. assembling, grading, storage, transportation and distribution” (National Commission on Farmers, 2006). To get the best advantage in marketing of agriculture produce, the producer/farmer should enjoy infrastructure facilities which should have provision for – (a) storing agricultural goods (b) holding capacity, (c) adequate & cheap transport (d) clear information regarding the market conditions etc. and only with such facilities can agriculture become a vocation providing sustainable livelihood opportunities. Well-functioning market infrastructure is essential for easy access to markets, in terms of product quality, safety and reliability of supply. It also shortens delivery times and preserves products’ freshness. The pursuit of quality and competitiveness starts from the application of modern and cost- effective production and processing infrastructure techniques and technologies. It also includes access to financial and information services and high coordination between producers and buyers. A value chain approach with marketing infrastructure at all nodes facilitates a systemic method to the development of the agricultural sector (GIZ, 2015). Realising the importance of market infrastructure, the country wise experiences in World Development Report (2008) highlights the necessity of investment in all market oriented agricultural infrastructure (storage, processing and marketing) (FAO, 2012). Farmers are subject to a number of social, economic and developmental constraints that make their participation in the market both risky and costly, often leaving them “unconnected.” Proper investment in agricultural market infrastructure development has the potential to alter the existing traditional agriculture or subsistence farming into a modern, dynamic and commercial farming system. The report points to the inadequacy and inefficiency of marketing infrastructure as a major problem faced by both farmers and traders in the contemporary era and calls for integrated approach to systematically improve investment in agriculture market
21 infrastructure. The report emphasizes the fact that a well-structured and managed market infrastructure is essential at all stages of the supply chain if agriculture is to be a feasible vocation. 1.1. Agriculture Marketing Infrastructure in India Prior to independence, importance was given to ensure flow of agro-raw materials for the industry and for the purpose markets were established and regulated by the government. Soon after independence, India experienced a deficit in food production and marketing system was designed to handle deficit and there were strict regulations on agriculture trade. The precedence of British era was continued and the ‘Agriculture Produce Market Act’ (APMA) was passed by state governments during the sixties. And states set up and regulated marketing practices in wholesale markets. However, the focus of five-year plans was to attain self-sufficiency in food production and with policies of Green Revolution being in place, measures were adopted to ensure uninterrupted input supply to farmers for which new governance and research structures were introduced. Agriculture Produce Market Committee (APMC) was constituted and all whole sale markets and assembling markets were brought under the committee in each area. As a result, well laid out market yards and sub yards were constructed. In the post Green revolution era technological advancement was given importance and after the liberalization, agriculture sector was opened up and there was surplus production. Currently, government is working towards the idea of ‘National unified market’ where ICT enabled marketing is given major thrust. As a part of this, National Agriculture Market (e-NAM) was launched and Model Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act was passed in 2017. However, secondary data sources show that there exist inefficiencies in market and “farmer is effectually a bad purchaser of the inputs as well as a poor seller of his/her outputs”. Most important measure of market efficiency – the magnitude of price dispersion for various products are quite large in India when price is compared among different states. Inefficiency and inadequacy of agricultural market infrastructure is often pointed out as a major reason for agriculture market inefficiencies in India as elaborated below. There has been a large gap in the development of storage infrastructure, transportation, mechanization, grading standards, export promotion, processing industry support and market intelligence in India which requires upgradation (NABARD, 2018). With regard to grading infrastructure, only around seven percent of the total quantity sold by farmers is graded before sale. Regarding cold storage facilities, there are about 4411 cold storages in country and three tier system exist. But these are inadequate and many of the farmers are not aware of the facilities or how to make benefit out of these facilities. Similarly, even though there is a network of institutions providing long/medium/short term credit for agriculture related activities, many of the farmers depend on money lenders. (Acharya S.S, 2008; Balram Dogra, 2009; Iyengare H., 2004; Gopalswamy T.P,2005; GouravBiswa, 2016). There are 435 market information system centres and 60 Agri export zones in the country but still market intelligence is uncompetitive and resulting high price dispersion causes value leakage due to high level of value chain segmentation and non-transparent pricing structure (GOI, 2016).
22 The Committee of state ministers, in charge of ‘Agriculture Marketing to Promote Reforms’ noted that major challenges include fragmented supply chain with inadequate market infrastructure, long intermediation and lack of accurate and timely market information/intelligence system. Along with this, limited access of agriculture produces markets, licensing barriers, high wastages in supply chain, long gestation period of infrastructure projects and seasonality of agriculture produce, high marketing cost and less farmers’ price realization are the major issues faced by agriculture marketing in India (GOI, 2017). Considering the importance of filling market and market related infrastructural deficit, Government of India had launched reform-linked schemes on Development/ Strengthening of Agricultural Marketing Infrastructure namely ‘Grading and Standardization – Up gradation of Laboratories’, in 2004 to attract investments in agricultural marketing. Later in 2014, an Integrated Scheme for Agricultural Marketing (ISAM) was introduced. A new scheme for supporting agricultural marketing infrastructure has been approved for implementation from October 2018 for the period in consonance with the 14th Finance Commission i.e., up to March 2020. This sub-scheme AMI lays special focus on developing and upgrading of GraminHaats as GrAMs through strengthening of infrastructure. These GrAMs may function as farmer-consumer market (retail market) and collection/ aggregation points (spokes) with linkages to secondary market (hub) with participation of FPOs and other eligible promoters. 1.2. Agriculture Marketing Infrastructure in Kerala Kerala has witnessed a remarkable transformation in agricultural sector since its formation in 1956. The agro-climatic conditions in the State suit for the cultivation of a variety of seasonal crops and perennial crops. In Kerala, small and marginal farmers grow cash crops like coconut, rubber, tea, coffee, pepper, cardamom, arecanut, ginger, nutmeg, cinnamon etc. and food crops like paddy, tapioca and banana gives the agricultural sector of Kerala a distinct flavour. The key production highlights (Ministry of Food Processing Industries, 2017) of the state shows the state is one of the largest producers of banana, cocoa, pineapple, tapioca, and sweet potato with enabling infrastructure of two mega food parks, four food parks, one agro-processing SEZs, and eleven quality control laboratories. Besides, Kerala is a major producer of spices including cardamom, cinnamon, clove, turmeric, nutmeg, tea, coffee and vanilla and produces about ninety six percent of the country’s national output of pepper. Besides, Kerala has a substantial share in the four plantation crops of rubber, tea, coffee and cardamom. These four crops together occupy 7.05 lakh ha, accounting for 34.6 per cent of the net cropped area in the State. Kerala’s share in the national production of rubber is 78 per cent, cardamom 88 per cent, coffee 21 per cent and tea 4.7 per cent in the year 2017-18 (GoK, 2019) The marketing infrastructure of the state is provided by institutions under the Central and State Government in addition to Farmer Producer Organisations. The State has also attempted to reduce the problem of middleman intervention and indirect marketing of farm produce through programmes organized by Department of Agriculture and other allied agencies like Horticorp, VFPCK, etc.
23 However, in spite of all these interventions, there is a lack of appropriate and effective linkage between the producers and sellers which has limited the development of agriculture in the State. The Strategy Document for Kerala (Doubling of Farmers’ Income by 2022, ICAR, 2018) noted the need for strengthening of existing markets by developing low cost storage structures and processing units which is essential for the development of agriculture. Many of the commodities are sold immediately after harvest resulting in low price realization due to market glut and incumbent distress sales. The immediate cash needs of the farmers could effectively be met if warehouse receipts are used as negotiable instruments in getting credit. It also highlights major constraints in Kerala agriculture as, increasing share of marginal farms, labor shortage & high wage rate, low orientation towards food crops, weak institutional infrastructure, lack of regulation & poor investment in agricultural marketing, limited presence of new forms of agriculture marketing, low adoption of resource conservation technologies, low scale of farm level value addition and processing, conversion of farm land for nonfarm purposes, losing competitiveness of niche crops in international market, etc., which requires immediate attention and action from all stake holders. The inappropriateness and limitations of available infrastructure is identified as a major hurdle towards the agriculture development of the state, it gets manifested into post-handling output loss in agriculture, which drastically reduces not only income share of farmers but also cuts upon the food security of the population. The above said aspects throws light to the necessity of adopting appropriate policies to increase and improve the quantity and quality of infrastructure facilities for agriculture marketing, if agriculture in Kerala has to be transformed into a viable, dynamic and sustainable activity. The initiation of policies in this direction, first requires an in-depth understanding of the existing scenario and hence it becomes imperative to assess the current status of agriculture marketing infrastructure in Kerala. Such a study will highlight the shortcomings of agriculture marketing infrastructure and also identify the challenges faced both by farmers and non-farmer stakeholders with reference to the commodities they produce and trade. The proposed study “A Collaborative Study on Agriculture Marketing Infrastructure in Kerala” is an attempt in this direction. 1.3. Statement of the Problem The need for a well-developed marketing network, both institution wise and infrastructure wise as a prerequisite for sustainable agricultural growth is acclaimed globally. But studies show that India lags behind when compared to other developing countries in the provision of sufficient marketing infrastructure facilities which adversely affects the prospects of farmers and other stakeholders engaged in the agricultural and trading sectors. The case of Kerala is particularly deplorable as state has not initiated the APMC act and also lacks a well-developed market infrastructure for sales and post handling operations. The institution wise marketing structure reveals that public sector dominates the scenario with the presence of State Department of Agriculture, other specialised institutions like VFPCK, HORTICORP, commodity specific boards like Spices Board, KERAFED, grading institutions like AGMARK, information institutions like AGMARKNET etc. The landscape of marketing institutions off late is also noted by the presence of co-operatives and private institutions including FPOs. The
24 scope of FPOs in crop planning, input supply, technology infusion, and primary marketing becomes significant in the current scenario, where government policies are tailored to meet the infrastructural requirements of FPOs. Understanding the structure and functions of the government and private institutions in the agriculture market scenario provides background for further examination of infrastructure facilities provided and required. These organisations provide different post handling infrastructure facilities including market place, shops, auction hall, electronic weigh bridge, dormitory, storage, cold storage and other facilities. Commodity specific post handling marketing infrastructure also needs attention since the post handling requirements of major crops are different. The main stakeholders connected with marketing institutions are agriculture labourer, farmers, farmer clusters, transport operators, shop owners, traders, exporters, retailers, government officials, NGOs etc. Understanding the perception and opinion of both farmer and non-farmer stakeholders in relation to agriculture marketing infrastructure can provide insights into the shortcomings, limitations and challenges of the existing system and provide guidelines for future policy initiatives. A systematic study enlightening the roles, responsibilities and functioning of the existing infrastructure facilities of agriculture marketing institutions have not been attempted in a holistic manner and the study as “A Collaborative Study on Agriculture Marketing Infrastructure in Kerala” is an attempt in this direction. The present study on the one hand examines the structural and functional dimensions of existing agriculture marketing institutions with a focus on marketing infrastructure and on the other hand attempts at synthesising the opinion of multi stakeholders to strengthen the marketing infrastructure facilities for future development of agriculture.
1.4. Objectives of the study 1. To assess institution wise infrastructure associated with agriculture marketing functions a. Infrastructure for the function of transfer of ownership of products from the farmers/ producers to the consumers- selling, buying and demand creation. b. Infrastructure for the function of physical movement such as transportation and storage, function of changing the form of product, standardization and grading and packaging. c. Infrastructure for the facilitation function- market financing, and market information/ market integration. 2. To understand the perception and opinion of both farmer and non-farmer stakeholders on agriculture marketing infrastructure. 3. To assess empirically the institution wise infrastructure requirement for agricultural marketing. 4. To assess the District- wise data of warehousing infrastructure required, available and the gaps based on primary/ secondary data analysis.
25 1.5. Study Area The study is supported both by secondary and primary data. Marketing networks, infrastructure facilities, and investment procedures in agriculture marketing system of the Kerala state is evaluated on the basis of exhaustive secondary data. Secondary data sources on agricultural marketing infrastructure include data sources on AMIGS scheme, from Directorate of Marketing and Inspection, Faridabad, Ministry of Agriculture, Department of Agriculture Government of Kerala, VFPCK, Directorate of Economics and Statistics, Government of Kerala reports etc. A primary survey is found necessary for assessing institution wise, commodity wise marketing infrastructure and necessary investments made for promotion of agricultural marketing infrastructure. After analyzing the production clusters in Kerala state (calculated on the basis of the data on crop-wise production (2016-2017), Directorate of Economics & Statistics), two districts Thiruvananthapuram and Idukki are found to be distinct in (a) coverage of all major crops, (b) presence of agriculture marketing institutions and (c) spread of markets. (Wholesale Market/Wholesale Assembly Markets (WAMs)/ Regional Periodical Markets (RPMs)). Hence these two districts are selected for in-depth analysis. On the basis of rural urban division, out of the six wholesale markets in Kerala, Nedumangad (Rural) &Anayara (Urban) Wholesale Markets are selected from Thiruvananthapuram district. Spices Park, Puttady, major centre of spice trade in Idukki is selected for analyzing market infrastructure facilities for spice trade. Two Wholesale Assembly Markets (which is five percent of total WAMs in one district) and three Rural Periodical Markets are randomly selected (the same methodology i.e., five percent of total RPMs of each district). Thus, a total number of two Wholesale markets, four WAMs and six RPMs in addition to Spices Park are selected for understanding the infrastructure availability related to the three marketing functions such as function of transfer of ownership, function of physical movement and facilitating functions. Thejaswini, the Farmer Producer Company with registered office at Kasaragod is selected for understanding the role played by Farmer Producer Companies. Additionally, to study crop specific infrastructure, the farmer’s markets operated by VFPCK in the two districts is studied. Farmers and traders from six farmer markets run by VFPCK in the two districts are chosen for sample survey. Crop specific marketing infrastructural facilities, infrastructure investments, and infrastructure requirements is also analyzed on the basis of both primary and secondary data. To understand the perception and opinion of stakeholders regarding the available marketing infrastructure and the needed infrastructure and the policies that need to be adopted, synergizing the views of all stakeholders is needed, as such primary data is to be collected from various stakeholders in the area of agricultural marketing. Marketing department officials, market officials, farmers, traders and exporters are identified as the stakeholders. Survey, interviews, and FGDs are conducted to assess their perception regarding agriculture marketing infrastructure. Detailed organizational visit and observation generated idea regarding the role and responsibilities of various agencies in providing agricultural marketing facilities. The existing infrastructure provided by them and limitations of their present role is also evaluated.
26 The study examines the structural and functional dimensions of existing agriculture marketing institutions with a focus on marketing infrastructure on the one hand and on the other hand attempts at synthesising the opinion of multi stakeholders to strengthen the marketing infrastructure facilities for future development of agriculture. The inferences derived from the study could be utilized for preparing integrated development planning at local, district and state level. 1.6. Chapterisation The scheme of the study is as follows. Chapter I is the introduction Chapter which places the background of the study, Statement of the problem, Objectives of the study and Study Area. Chapter II provides the conceptual framework and methodology of the study. It elaborates the theoretical background of the study, the data sources, sampling tools, data collection methods and the variables. Structure of Agriculture marketing institutions in Kerala is given in Chapter III. The details of all major institutions, Wholesale Markets, Wholesale Agriculture Markets, Rural Periodical Markets, Alternative Marketing Structure, Vegetable and Fruit Promotion Council Keralaetc., are given in this chapter. Chapter four to eight analyses the collected primary data. Chapter four is on Agriculture Marketing Infrastructure in Kerala: an analysis of Whole sale markets, five is on Wholesale Agriculture Markets/Rural Periodical Markets, six is on Vegetable and Fruit Promotion Council Kerala, and seven is on Spices Park. The structure, conduct, performance and analysis of infrastructure facilities in each of these markets are analysed. Chapter eight focuses on the infrastructure facilities in FPOs and nine analyses the specifics of ware housing facilities in the state. Chapter ten specifies the infrastructure requirement in all the above said market with cost estimations. The final chapter concludes the study and provides policy suggestions. 1.7. Limitations of the study The study on ‘Agriculture Marketing Infrastructure in Kerala’ is based primarily on two Wholesale Markets, ten Wholesale agricultural Markets/Rural Periodical Markets and six VFPCKs from Trivandrum and Idukki districts. Farmers and traders in each of these markets were the primary source of provision of data. Care should be ensured once the results are generalised because the agro climatic and crop specific peculiarities of these districts vary with the other districts. Also, the crops that are traded in other Wholesale Markets and other markets may also be different. The infrastructure and funds that are available within each Wholesale Market is different, and same is the case with different WAMs/RPMs and VFPCKs. Hence the requirement of each Wholesale Market, WAM/RPM and VFPCK is also different. Hence generalisations should be done carefully.
27 CHAPTER 2 Conceptual Framework and Research Methodology
Agriculture marketing- the activities, agencies and policies involved in the procurement of farm inputs by the farmers and the movement of agriculture products from the farms to consumers, is intended to make production, supply and trade of agricultural produce sustainable, economically beneficial and equitable. Agriculture marketing includes both pre-production and post production functions and the respective (input and output) supply chains i.e., all operations related to the procurement, collection, grading, storage, food and agro processing, transportation, financing, and selling of agriculture produce as well as market demand analytics and associated information that interconnects the business operations. Conversely, agriculture marketing systems- governmental systemic interventions in rules, regulations and policy in agriculture marketing- aims at creating an enabling environment to effectively manage the multi stakeholders associated with both product marketing and input marketing; the farmers, traders, wholesalers, processers, importers, marketing cooperatives, regulated market committees and retailers. Thus, the marketing system include sub systems such as production sub systems, regulatory sub systems, distribution subsystems and consumer sub systems and the efficacy with which the conflicting interests of all stakeholders is managed forms the base of marketing effectiveness and market efficiency.
The interventions aimed at establishing efficient marketing systems foresee a market where farmers being primary producers reap best possible benefits by selling adequate quantity at a fair price without impairing the quality of produce and the price spread is minimum between primary producers and ultimate consumer (GOI, 1976). An efficient marketing system facilitates sale of the products and thus monetize the produce, providing sustainable livelihood for farmers. For this adequate and effective infrastructure facilities forpre and post-harvest operations viz. assembling, grading, storage, transportation and distribution is necessary. Infrastructure facilities also include facilities for market financing and market information/integration, which provides a demand signaling platform and thus equates supply of and demand for agriculture produce and determines equilibrium price. Inefficiencies in marketing infrastructure can hinder the profit margin received by all stakeholders and can adversely
28 affect the production and distribution of agriculture produce, making an impact on both food security of the nation and effecting the quality of life of farmers.
Coming to the state of Kerala, there is a lack of appropriate and effective linkage between the producers and sellers which has limited the development of agriculture in the State. Kerala lacks a well-developed agricultural market infrastructure for sales, post handling, assembling, sorting, grading, processing, packing, labelling, cold storage, transportation, quality certification facilities etc. both for domestic and export markets. The private sector is also not attracted for making sufficient investment in agricultural marketing in the state (Govt. of Kerala, 2016). The inadequate marketing infrastructure facilities prevents efficient post-handling of agriculture produce which in turn reduces the income share of farmers and adversely affect the next production cycle, eventually threat food security of the state. Against this backdrop, it becomes imperative to initiate steps to address the core problems relating to quantity and quality of agriculture marketing infrastructure, so as to ensure that agriculture marketing systems function effectively to monetize all agricultural produce. This has to start with assessing and analysing the nuances of existing agriculture marketing infrastructure in Kerala, so that the challenges and prospectus relating to marketing infrastructure as experienced by various stakeholders including farmers, traders, consumers and administrative officials can be exposed. The proposed study “A Collaborative Study on Agriculture Marketing Infrastructure in Kerala” is an attempt in this direction.
2.1. Infrastructure which enables agriculture marketing functions
The focus of the study is to assess the institution wise infrastructure associated with agriculture marketing functions. For this purpose, infrastructure that enables the following agriculture marketing functions are focused. a. Infrastructure for the function of transfer of ownership of products from the farmers/ producers to the consumers- selling, buying and demand creation.
It includes infrastructure that helps in the activities of selling and buying and demand creation. The exchange function take place when seller is able to produce according to the interests of the consumer and the consumer is able to pay something of value in return for the produce which is agreeable to the seller and thus both gets satisfied. In this demand creation process the magnitude of price spread is very much important. A well-organized marketing infrastructure system can communicate backwards from Fork-to-farm, in advance to production, such that the entire supply chain will function to serve the forecasted demand. And this naturally reduces the price spread (difference between the price paid by consumers and the net price received by the producer) as there is shorter supply chains and better information. To promote transparency and cross stakeholder linkage, government take necessary steps to restrict monopolistic or oligopolistic arrangements and ensure efficient marketing.
b. Infrastructure for the function of physical movement such as transportation and storage, function of changing the form of product, standardization and grading and packaging and value addition
29 Markets provide infrastructure facilities for transportation, storage, standardization, grading and packaging. Agriculture produce, being perishable in nature need more effective storage and transportation facilities so as to reduce the produce loss. According to statistics, currently the post- harvest losses of various commodities range from 3.9 -6.0 % for cereals, 5.8-18.0 % for fruits and 6.8 to 12.4 % for vegetables. (ICAR, 2010). In order to reduce the post-harvest loss and to generate more income to farmers it is important to have facilities for standardization, grading and packing. In this regard, governments can make investment towards ensuring adequate infrastructure for physical movement and standardization through direct investment in market infrastructure, establishing institutions for research and training for value addition and by ensuring uniform standards in all markets.
c. Infrastructure for the facilitation function- market financing, and market information market integration
Facilitating functions are not a direct part of either the exchange of title or the physical movement of produce but they are the enabling factors for marketing. There will be inevitable lags between investing in the necessary raw materials (e.g., machinery, seeds, fertilizers, packaging, flavorings, stocks etc.) and receiving the payment for the sale of produce and in smoothening the process market financing, market integration/ information is very much important. The effective linking of demand centers and supply regions has to be done by effective integration of marketing system (both vertical and horizontal) which would reduce price dispersion across regions and curtail price fluctuations.
In short, infrastructure facilitates the following flows and interconnections in the agri-markets (GOI, 2017),
i. the flow of agriculture produces, mediated by transportation, storage, processing etc.
ii. ii. the flow of money, reconciled through cost, price, income, margin, saving, credit etc.
iii. the flow of information on demand, manifested in quality, volume, specifications etc.
A well-developed marketing infrastructure which enables the three major functions of agricultural markets can improve marketing efficiency and effectiveness in the marketing system which gets demonstrated in increase in the revenue generation, rate of market expansion, success of unification in the market (integration), increase in competitiveness, facilitation of selling channels and the efficacy in which demand signals to supply side. The interplay of various stakeholders in determining these flows and the efficiency with which government manages the market ensure whether increase in the farm production is translated into proportionate increase in the level of real income in the economy, good production years do not coincide with low revenues to the producers (achieved through effective storage and proper regional distribution) and both consumers and producers are satisfied (GOI, 2017). Along with efficiency, equity in the markets is also important in which not only ‘spread in time’ but ‘spread in place’ has to be initiated as far as agriculture marketing infrastructure is concerned, since,
30 otherwise production slumps with price bumps and production gluts with price slumps occur. All these aspects need to be examined while undertaking a study of agriculture marketing infrastructure.
2.2. Conceptual Framework of the study
Agriculture marketing is a complex process involving multi stakeholders and interlinkages among these actors, and, has a spatial and temporal dimension to it. Hence in order to study the details of agricultural marketing infrastructure it is important to adopt a research methodology which has a strong conceptual framework and uses system approach using both qualitative and quantitative research methods along with prudent data analysis techniques.
Marketing theories largely derives its roots from the classical economic theories of perfect competitive markets where demand for and supply of produce determines equilibrium price quantity relation and assumes efficient markets with good information exchange and integration. The neo classical model of Structure, Conduct ad Performance (S-C-P) model is a widely used tool in analysing agriculture marketing infrastructure. S-C-P framework is used for explaining how markets behave and the various markets behave differently. This paradigm postulates that the market structure determines the market conduct, which then sets the performance of the market. It envisages that the number of sellers and buyers determines the behaviour of economic agents and thereby determine how close it comes to meeting the standard of reference of social welfare. (Caves, 1992).
Farm size, distribution, location, tenure, cropping structure, market infrastructure, market organisation are the important variables that determine the structure of markets. Conduct of market is analysed by credit facilitation, market information and pricing. Performance of markets are analysed by timeliness, credibility, sustainability, efficiency, equity and technical progress in agriculture markets. To have a comprehensive understanding it is necessary to have a Commodity System Approach by which the horizontal and vertical integration with regard to particular commodities can be studied and thus the limitation of basic S-C-P model can be solved. The study tries to bring in dynamism into the analysis by adopting aspects of institutional economics in which institutional aspects that include the legal and political intervention in marketing infrastructure is analysed to understand performance in the selected markets. Thus, a combination of neo classical model of S-C-P along with concepts of institutional economics is adopted for the study and commodity wise analysis will be adopted so as to mark the various input and output supply chains in various markets. In short, the efficacy with which the markets perform their three major function as, being platform for exchange, infrastructure for physical movement and value addition and that of facilitation function is being analysed in depth by adopting S-C-P framework.
2.3. Primary and Secondary data
The study starts with analysing the secondary data in order to identify gaps in current knowledge and to place the research gap with in the context of existing knowledge. Research reports, government reports, data from official websites and agriculture statistics is reviewed to understand the details of
31 agriculture marketing infrastructure. Marketing networks, infrastructure facilities, and investment procedures in agriculture marketing system of the Kerala state is thus evaluated on the basis of exhaustive secondary data. Secondary data sources include data sources on AMIGS scheme, from Directorate of Marketing and Inspection, Faridabad, Ministry of Agriculture, Department of Agriculture Government of Kerala, VFPCK, Directorate of Economics and Statistics, Government of Kerala reports etc. The data relating to price and market margins is analysed to understand the trend in agriculture marketing and its relation to marketing infrastructure.
Primary data collection started with the informal field visits to get general impression and based on the insights particulars of needed data is understood. Primary data for the study consists of;
i. Implementation of a formal sample survey of farmers and traders in selected markets: A primary survey is found necessary for assessing institution wise, commodity wise marketing infrastructure and investments made in promotion of agricultural marketing infrastructure. To understand the perception and opinion of stakeholders on the available marketing infrastructure and the needed infrastructure and the policies that need to be adopted, synergizing the views of all stakeholders is needed, as such primary survey is to be conducted among various stakeholders in the area of agricultural marketing. Marketing department officials, market officials, farmers, traders, entrepreneurs and exporters are identified as the stakeholders.
ii. Rapid Rural Appraisal of markets (use of mixture of informal surveying and interview techniques with various stakeholders) – the method becomes necessary as the prime objective of the study is to initiate an assessment of existing infrastructure and required facilities from the point of view of major stakeholders including farmers, traders, auctioneers, consumers and administrators. This demands a participatory approach where qualitative data collection tools are used and the power of dialoguing and joint visioning is utilised. So that RRA is chosen as a major method of the study.
2.4. Sample Study Area
Sample surveys serve its purpose only if they are a true representation of the population. Hence, samples are chosen cautiously so that the selected samples are capable of providing generalised information on agriculture marketing in Kerala.
For in-depth study two sample districts- Trivandrum and Idukki, are selected after analyzing the production clusters in Kerala (calculated on the basis of the data on crop-wise production (2016- 2017); Directorate of Economics & Statistics), which were found to be distinct in (a) coverage of all major crops, (b) presence of agriculture marketing institutions (govt. institutions and alternative markets) and (c) spread of markets.
32 Regulated markets in Kerala include both wholesale markets and Assembling markets/ Rural Periodical markets. Wholesale markets, under the direct control of state/central government standalone from the WAM/RPM as it has registered farmers and traders/auctioneers indulging in direct marketing and exhibits entry restrictions. The two wholesale markets in Trivandrum – World Market, Anayara and Rural Agriculture wholesale market, Nedumangad is selected from the six-wholesale markets in Kerala as samples to understand the dynamics in direct marketing. A sample of ten farmers and ten traders each from the two markets, is selected for survey, making the total sample from whole sale markets forty. Likewise, from Idukki, Spices park, Puttady where major share of spice trade in Kerala is happening is selected and fifteen farmers and three traders are selected for survey. In addition, stakeholders other than farmers and traders are interviewed to attain detailed information relating to structure and conduct of the markets.
Two Whole Sale Assembly Markets (which is above five percent of total WAMs in one district) from each district is selected. Whole sale Assembly Market, Palayam and Wholesale Assembly Market, Nedumangad from Trivandrum district and WAM, Kattappana and WAM, Nedunkandam from Idukki district are the selected ones. Similarly, six RPMs are selected for in-depth analysis, the markets beingKazhakootam market, Nanniyod market andPothencode market from Trivandrum district and Thookupalam market, Pambanar market andElappara market from Idukki district for understanding the infrastructure availability related to the three marketing functions such as function of transfer of ownership, function of physical movement and facilitating functions. Five sellers each are interviewed from the ten selected markets for sample survey and thus from the two districts fifty sellers are surveyed.
To understand the alternative marketing structure Tejaswini Farmer Producer Company, Kasaragod is selected.
2.5. Crop specific marketing infrastructure
It is important to have crop specific analysis in order to understand the input and output supply chain and crop specific infrastructure facilities in the state. Vegetable and Fruit Promotion Council Kerala (VFPCK) the major player in vegetable and fruit marketing in Kerala with 9708 SHGs promoting organic farming is selected for study. Three Agriculture markets (KarshakaVipani) each from the two districts are studied in-depth by collecting data from five farmers and five traders from each of the markets. Thus, a total sample of sixty (thirty farmers and thirty traders) are taken to understand the dynamics of crop specific agriculture marketing. The Farmers markets in Vembayam, Maranalloor and Kovilnada (Trivandrum district), Parathode, Thankamani, Santhigram (Wayanad district) are chosen. Crop specific marketing infrastructural facilities, infrastructure investments, and infrastructure requirements is reviewed based on the primary data.
Agriculture marketing infrastructure for Tapioca, Banana, Pepper, Coconut, Ginger, Cardamom and vegetables are given special focus in the study. Spinach, cow pea, cucumber, bitter gourd, snake
33 gourd and chilly are selected since they are the commonly collected vegetables in the two district and they have a very high demand in the market.
Following is a narration of stakeholders in each of the subsystems of agriculture marketing systems and the information collected from each of these stakeholders is used for studying agriculture marketing infrastructure and related challenges.
Table 2.1: Sampling Details and information collected
34 2.6. Data collection Tools Both qualitative and quantitative data collection methods are adopted since, qualitative methods are quintessential to reveal the ‘conflict of interest’ among various stakeholders that quantitative research techniques may not fulfil. The study uses the following tools to obtain primary data from the stakeholders: 1. Interview schedule: From both the selected farmers and trades, data regarding farm market supply as a percentage of production/trade, marketing infrastructure in the respective markets, marketing costs, required facilities in the market etc is collected using interview schedule. Perception of farmers and traders on marketing infrastructure is also collected to understand the factors that cause inefficiencies in market. Separate questionnaires are prepared for collecting data from farmers and traders in wholesale markets and in WAM/RPM. 2. Observation: To understand the dynamics of functioning of selected markets observation is an important tool. Information related to supply chains, process of auctioning, organisation of markets, monopoly practices in markets, conduct of marketing and power relation are noted through participant observation in markets. 3. Open ended questionnaires: Data relating to structure and conduct of markets is collected using open ended questionnaires served to administrative officials and other stakeholders. 4. Rapid Rural Appraisal: The approach involves using a combination of flexible research techniques, including semi structured interviews with individuals or groups; the construction of social or geographical maps, or matrix ranking of preferences; and the use of key indicators for phenomena which cannot easily be measured directly. It can give a focus on the dynamic aspects of the agriculture marketing system, and on local innovations and trends; and its use within a ‘systems’ framework recognizes interrelationships between, economic, political and agro-ecological aspects relating to marketing. Views of various stakeholders about required infrastructure in agriculture marketing can be understood by deploying these qualitative techniques. 5. Case studies: Performance of FPOs is studied using case study approach. For this in-depth interview is administered with stakeholders of FPOs. Table 2.2: Details of variables identified for understanding agriculture marketing infrastructure Marketing Infrastructure – Variables I. Exchange functions 1. Details of production and sales 2. Marketing Cost 3. Auction Hall & Facilities II. Physical Functions 1. Transportation 2. Storage a) Loading unloading a) Cold storage
35 b) Transportation inside market b) Ripening chamber c) Road facility c) Dry storage d) Transportation from field to market d) Godowns e) Package transportation e) Mobile storage f) Check post f) Ware house g) Parkingh) g) Drying yards h) Refrigerated trucks h) Washing facility i) Assaying 3. Value Addition 4. Standardization a) Food irradiation unit a) Uniform standards b) Inhouse product testing lab b) Display of samples c) Machinery c) Economic loads d) Skilled labours d) Quality testing labs e) Branding e) Quality certification f) Patenting f) Weighing machines g) Surveillance camera 5. Grading & Packing 6. Crop Specific Infrastructure Facilities a) Scientific lab b) Grading apparatus c) Electronic weighing d) Labelling facility e) Despatching facility
III. Facilitation Functions 1. Market Financing 2. Marketing Information a) Credit facility to buyers a) Computerized date b) Credit facility to sellers b) Data management c) Bank/ ATM c) Record keeping d) Loan facility d) Information dissemination e) Incentives e) Market survey f) Credit sharing f) Information counters g) Shares g) Notice board h) Advertisement i) Training 3. Market Integration a) Market intelligence d) Horizontal integration b) Risk bearing e) Trade link c) Vertical integration f) ICT
36 A Principal Component Analysis is used to delineate the most important factors contributing to inadequate infrastructure in agriculture markets so that appropriate policy suggestions can be done. Suggestions about the agriculture marketing infrastructure from different stakeholders for each item, particularly, modernization and renovation of whole sale markets, procurement, processing centers, cold storage, market information, intelligence, outlets, labs, machines for grading, processing, drying chamber, storage/cold storage, organic certification etc. is also evaluated. The required infrastructure is specified after consolidating the views of different stake holders and the cost to be incurred for the same is also worked out in consultation with experts.
37 CHAPTER 3
Structure of Agricultural Marketing Institutions in Kerala
Agriculture marketing infrastructure includes the infrastructure and associated logistics that is necessary in handling the agriculture produce and empower farmers to directly connect with other market. Market infrastructure is important not only for the performance of various marketing functions and expansion of the size of the market but also for transfer of appropriate price signals leading to improved marketing efficiency. It is important to analyse the existing structure of agriculture marketing institutions in Kerala to have an understanding of the agriculture marketing infrastructure, since it is these institutions which provide infrastructure facilities for marketing of agriculture produce. The present chapter looks into the structure of agriculture marketing institutions in Kerala, with focus on infrastructure faculties provide On a whole the marketing institutions can be classified into markets directly under the control of State Government, other institutions under the state government with objectives of providing specific marketing infrastructure facilities or crop specific facilities, Central government sponsored institutions, all these falling under the purview of Government institutes. Additionally, there are private institutes categorised as Farmer Producer Companies which provide infrastructure facilities for marketing. The figure below provides details of agriculture marketing institutions in the state of Kerala.
38 Figure No.3.1: Agriculture Marketing Institutions in Kerala
Agricultural Marketing
Institutional wise Marketing Structure
Central Government State Government Other Agricultural Marketing Farmer Producer Agricultural markets Marketing Institutions Institutionsilitating Organisations (121) Functions
Vegetable and Fruit Wholesale Markets Promotion Council Spice Board (6) Kerala
Kerala State Horti- cultural Product Wholesale Assem- Tea Board bling Markets Development Corpo- (346) ration Kerala Kerakarshaka Sahakarana Federa- Coffee Board Regional Periodical tion Markets (1100) Kerala State Co-opera- tive Rubber Marketing Federation Limited (Rubber Mark) Tobacco Board Kerala State Co- operative Marketing Federation (MARKETFED) Coconut Develop- ment Board Kerala Agro Industris Coporation Ltd.
Kerala State Ware- Agricultural and housing Corporation Processed Food Products Export Oil Palm India Development Limited Authority Plantation Corpora- tion of Kerala
39 Agriculture markets functioning under State Government are classified into Whole Sale Markets (6), Whole Sale Agricultural Markets (346) and Regional Periodical Markets (1100). Other agricultural marketing institutions supporting production and distribution of agricultural crops include VFPCK and HORTICORP. Spices Board, Tea Board, Coffee Board, Tobacco Board and Coconut Development Board are the commodity boards under the Central Government which provide infrastructure facilities for marketing of specific crops. Additionally, Agriculture and Processed Food Products Export Development Authority (APEDA) which is focused on monitoring and facilitating exports of agriculture produce has a virtual office in Kerala. APEDA’s duty is to involve in creation of cold chain infrastructure for horticulture produce to improve quality and value addition of produce and to achieve optimum shelf life resulting into increased quality exports of agriculture produce. Detailed description of institution wise structure of existing agricultural markets in Kerala is provided below. 3.1. Institution wise structure of the existing agricultural markets in Kerala I. Regulated Markets Regulated markets in Kerala include, markets which are established/monitored by government departments/ LSGs. The efficient management of regulated markets overcomes the deficiencies at market level and ensures justice to the producer-sellers as well as traders. In Kerala, the Whole sale markets, Wholesale Assembly Markets and Rural Periodical markets function under the monitoring of government. 1. Whole sale Markets Agricultural Wholesale Markets were designed and established under the Kerala Agricultural Market Project (KAMP), with financial assistance from the European Union (EU) in Kerala. The markets regulated by Agriculture Development and Welfare Department in Kerala, provides a platform for the farmers to sell their products directly to the consumers through auctioning Out of the six whole sale agricultural markets functioning in Kerala, three are urban wholesale markets, Anayara (Trivandrum), Maradu (Ernakulam), and Vengeri (Kozhikode), and three are rural whole sale markets, namely Nedumangadu, (Trivandrum), Muvattupuzha (Ernakulam) and Sultan Bathery (Wayanad). The administrative structure of the markets includes, one secretary (Deputy Director of Agriculture), one assistant secretary (Assistant Director of Agriculture), one accountant (Junior Superintendent), one lower division clerk, one attender and one driver. The market secretary is in charge of conducting the daily activities and the Executive committee headed by the District collector as chairman, monitor the activities of the market. The executive committee is an eleven-member committee consisting of President, Secretary, Treasurer, Joint Secretary and Vice President among others. Their major function is to procure the agricultural products from farmer groups in the district, to facilitate in all activities of its trade like weighing, transportation, auction, etc., for which their wages are paid as per the rate determined by the Executive Committee. There are district wise organised farmer groups as clusters which are registered as per the Societies Act (NIAM, 2012), which mainly
40 engage in the collection of agricultural farm produces like vegetables and fruits from the different parts of each concerned district, for marketing and thus ensures active participation in the market. Major activity in the market is the process of auction. Auction is based on the public auction method and the base price is determined on the basis of the relative market prices on open market in that particular day (NIAM, 2012). Each market has fixed particular days as market day and on the specified days auction take place. Farmers sell their produce through auctioning for which essential support is given by the market officials. All major crops including plantain, tapioca, vegetables and fruits are traded in the. The market provides additional services including farmer training and facilitation programs, so as familiarise farmers with market information, pricing and value addition activities. The markets are envisaged as a centre of trade where shops are rented to individual shopkeepers and facilities for cold storage, warehousing and transportation and other financial services are provided. A financial assistance of Rs 30 lakhs was provided for the linking of the six wholesale markets under the electronic National Agriculture Market (e-NAM); thereby upgrading the trading in these markets to the online trading platform (The Hindu, 2017). Wholesale markets are equipped with weigh bridge, administrative office, auction halls, guest house, toilet complex and a bank and is envisaged as a model market. Entry to the markets for both farmers and traders are restricted by a registration fee, with an aim to entertain only genuine farmers and traders. Many markets collect cess from both farmers and traders to meet the daily expenses of running markets. The presence of farmers in the governing structures helps to ensure transparency in working of the markets. Traders in the market include both retailers and intermediary buyers. Other than meeting the maintenance expenditure, the revenue generated is used for paying transport subsidy for farmers, trader incentives, support for auctioning process and for waste management. In short, the vision is to enable the market function as a platform where the farmers and consumers can come together and exchange information which helps in demand forecasting and efficient marketing. 2. Wholesale Assembling Markets (WAMs) in Kerala Wholesale Assembling markets are regional markets monitored by Local Self Governments and they aim at assembling the produce from rural periodical markets/ farmers for selling or for value addition. There are altogether 346 wholesale assembling markets in the state. It is assumed that lesser quantities of agricultural commodities are traded in WAM compared to the wholesale markets. There are 346 wholesale assembly markets that sell items including meat, fish, vegetables, fruits, spices and grocery. (GOI,2017 Report of Committee on Doubling Farmer’s Income) However, there are markets for particular products such as cattle market or fish markets where the entire auction area is demarcated for one item.
41 Table 3.1: Wholesale Assembling Markets in Kerala
S. District No. Commodities traded Godown Cold Gra No. of storage ding mar C S P S P P kets W W S F R S GGGGCC 1 Alappuzha 5 Banana, copra, vegetables, beans, cucumber, fruits, yam 2 4 0 0 1 0 0 2 Ernakulam 35 Banana, coconut, tapioca, pepper, vegetables, areca nut, copra 2 2 29 1 13 3 0 3 Idukki 28 Pepper, areca nut, cardamom, banana, vegetables, rubber 0 3 28 3 5 1 0 4 Kannur 8 Pepper, copra, tapioca, cashew, areca nut 0 0 8 0 0 0 0 5 Kasaragod 3 Copra, pepper, ginger, cashew, areca nut 0 0 3 0 0 0 0 6 Kollam 13 Banana, pepper, cashew, ginger, vegetables 0 2 0 0 0 0 0 7 Kottayam 22 Rubber, pepper, coconut, tapioca, banana, vegetables 0 5 22 1 0 0 0 8 Kozhikode 9 Copra, coconut, areca nut, banana, vegetables 1 1 6 2 0 2 1 9 Palakkad 14 Vegetables, coconut, tapioca, rice, banana 0 5 12 1 4 0 0 10 Pathanamthitta 8 Banana, yam, pepper, ginger 0 2 0 0 0 0 0 11 Thiruvananthapuram 23 Pepper, coconut, tapioca, tapioca, ginger, vegetables 0 4 0 0 0 0 0 12 Thrissur 28 Banana, vegetables, pineapple, coconut, areca nut, vegetables 7 10 23 0 17 1 0 13 Wayanad 5 Pepper, ginger, turmeric, coffee 0 0 5 0 0 0 0
Source: Directory of Wholesale Agricultural Produce Assembling Markets in India, Govt. of India, 2004
Out of the 14 districts considered, Ernakulam has the greatest number of WAMs (35), followed by Idukki and Thrissur (28 WAMs each) and Thiruvananthapuram (23 WAMs). These four districts also include the greatest number of godown facilities in the wholesale assembling markets, out of which majority are public sector godowns. In Kerala, a total of 136 Public Sector Godowns, 12 CWGs, 38 SWGs and 8 SFGs are there, however, they are not evenly distributed across the districts. Cold storage facilities are relatively lesser in WAMs, with 40 PRC units and 4 PSC units. No standardised grading facilities is present in any of the districts except Kozhikode, with a standard grading facility available in Changaramkulam market where areca nut is the major commodity traded.
42 All the wholesale assembling markets are under the regulation of National Natural Resource Management schemes of the government. Major commodities traded in WAMs in Alappuzha are coconut, copra and banana among other vegetables and fruits. While all other WAMs in the district had go-downs, only Chengannur market lacked such facilities. Cold storage facility is available only in the Alappuzha Dara WAM, whereas none of the markets had scientific grading facilities and relied mainly on visual grading by the traders and farmers. In the case of Ernakulam district, major agricultural commodities traded are banana, coconut, areca nut, pepper, rubber, ginger, etc. The district has no scientific standardisation and grading facilities in its WAMs. Almost all the go-down facilities present in the district are maintained by the public sector. Regarding cold storage facilities, there are both PSC, PRC facilities in many WAMs, except a few. In Idukki, there are 28 wholesale assembling markets, out of which two involves cattle trading. The major agricultural commodities sold in Idukki include rubber, ginger, cardamom, pepper, coffee, areca nut, lemongrass oil, cashew nut, turmeric and so on. There are no standard grading facilities in the district WAMs. All the assembling markets are under the regulations of NRM, government of Kerala. While only a few units have cold storage facilities, majority of them are equipped with public sector controlled go-downs. In Kannur, the major products traded are pepper, cashew, yam, tapioca and areca nut apart from ginger and banana. Here, none of the eight WAMs possess cold storage or grading facilities. PSGs are available in all the market units. Kasaragod has only three wholesale assembling markets, at Kasaragod, Kanhangad and Neeleshwaram, respectively. All three of them lack basic trading facilities like cold storage and grading amenities. This adversely affects the trade of perishable agricultural products like vegetables. However, the commonly traded commodities here are areca nut, cashew, copra, pepper and ginger. There are go-down facilities available in all the three markets. Apart from the two fish markets and one cattle market, there are ten wholesale agricultural produces assembling markets in Kollam district. However, most of them lack the basic amenities of cold storage, go-down facilities, etc. Scientific grading facilities are absent in all of the markets. The major products traded are pepper, cashew, areca nut, banana and vegetables. The Kollam district WAMs are mainly involved in the selling of rubber, banana, coconut, tapioca and pepper. None of the markets have scientific grading facilities, which affect the standardisation of the commodities like pepper and rubber a lot. In Kozhikode major agriculture products traded include coconut, arecanut, banana and vegetables and is a major centre of trade. The market has infrastructure facilities for warehousing, storage and grading. There are one Central Ware housing godown, one state warehousing godown, six PSGs, two SFG and two PSC in the market. Additionally, there is one facility for grading of agricultural produce which is the single facility in the state for grading. In Palakkad, the major agricultural products traded are rice, vegetables, tapioca, pepper, coconut, banana, areca nut, etc. and like in the case of other districts, there are no standard grading facilities available in the district WAMs. Even though there are only few cold storage units, PSG and SWG go- down facilities are available in most of the WAMs.InPathanamthitta, the major crops produced and
43 traded in the WAMs include yams, banana, vegetables, pepper, ginger, areca nut, etc. While only Anantharamapuram and Thiruvalla WAMs have go-down facilities, none of the wholesale assembling markets in Pathanamthitta had proper cold storage or scientific grading facilities. In Thiruvananthapuram, apart from a few WAMs having SWG go-down facilities, none of the wholesale assembling markets had cold storage or scientific grading facilities. The major crops traded are vegetables, banana, coconut, pepper, areca nut, etc. among which majority are easily perishable in nature. So, waste disposal and damage to commodities are other problems that arise because of lack of proper storage infrastructure. In the case of Thrissur, there are better go-down facilities like SWC, CWC, PSG facilities, and cold storages in almost all the WAMs. However, there is a lack of grading facilities in all the wholesale assembling markets. The major commodities traded here are banana, areca nut, vegetables, coconut, nutmeg, tapioca and pineapple. In Wayanad, there are only five WAMs, which mainly trade pepper, ginger, turmeric and coffee. Even if there are go-down facilities in all the WAMs of the district, there is a lack of grading and cold storage facilities in all the wholesale assembling markets. 1. Rural Periodical Markets (RPMs) in Kerala The RPMs are shandies/ small hats operating at village level periodically, like every week or fortnight. The agricultural commodities traded include vegetables and fruits, which are usually fresh farm produce and will be to satisfy the local demand and mostly rural farmers take part in trade in such markets (NABARD, 2018). In RPMs, the direct selling by small farmers is facilitated. However, there are agents who occasionally interfere with their market interests. The major drawback with rural periodical markets is that there is a lack of superior infrastructural facilities compared to wholesale markets or WAMs. Apart from that, opportunities for small farmers to access larger markets that offer better values are low. Of the total 1290 Rural periodical markets in Kerala, an estimated 821 daily markets, 147 weekly markets, 173 markets functioning 2 days per week and 149 markets functioning once in a week (GOI, 2017). However, with more people demanding the products on a daily basis, such periodical markets with specific operational timings are decreasing in number. As per the latest data revealed by Report on Committee on Doubling Farmers income, the number of periodical markets has reduced to 1014, with some markets ceased to operate. Table 3.2: Periodical markets in Kerala
Sl. No Type of markets Number 1. Total rural primary markets (Panchayat markets) 1076 2 Urban Periodical Markets a) Municipal corporation markets 85 b) Municipality markets 129 Total number of markets in the state 1290 Source: Report of Survey on markets in Kerala ,2005-06, Directorate of Economics and Statistics, Kerala
44 Among a total of 1290 markets in the state during 2005-06, 1076 market units were rural primary markets or panchayat markets out of which 993 were open markets and 83 were regulated markets, and apart these, 129 and 85 market units of municipality markets and municipal corporation markets, respectively are there (GOK, 2009). The functioning of the local self-government controlled agricultural markets were not identical or uniform, instead they were functioning in accordance with the regional or local agricultural activities, cropping pattern and trading practices. So, the time schedule varies considerably among these market units, when some are entirely day markets while some are partially functioning day and partially during night. The traders, farmers, etc have to pay a particular amount as cess to bring the commodities to the market and sell. The cess rate is as fixed by the authorities that vary with respect to the amount brought for sale and the type of vehicle used for its transportation. This can be Rs.2-7 per load, Rs.4- 9 for two wheelers, Rs. 25-163 for large trucks or Rs. 4-193 for other vehicles (NIAM, 2012), which varies from district to district. Apart from these the farmers and traders need to pay a rent to the owner of that market in return to the facilities and amenities he/she has provided for its functioning. The amount of rent differs mostly because the nature of working of the market units also differs considerably. According to NIAM report, 2012, a total transaction of about Rs.2744 lakh is taking place per day in Kerala in such markets. I. Alternative Marketing Structures: Along with the markets, alternative marketing infrastructure also play a very important role in the state. There are alternative marketing structures arising which include direct marketing, farmer cooperatives, contract farming and Farmer Producer Companies. Other institutions include, 3.2. Farmer Producer Organisations (FPOs) in Kerala The concept of Farmer Producer Organisation (FPO) refers to collectivization of producers, especially small and marginal farmers, into producer organisations so that it emerges as one of the most effective pathways to address the many challenges of agriculture but most importantly, improve access to investments, technology and inputs and markets. Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India has identified farmer producer organisation registered under the special provisions of the Companies Act, 1956 as the most appropriate institutional form to mobilize farmers and build their capacity to collectively leverage their production and marketing strength. Farmer Producer organisations are helpful in accessing better farming inputs and financial services along with farming techniques. Presently, out of the 5000 FPOs in India, 121 are in Kerala. The state level FPOs are funded by NABARD under Producers Fund and 105 FPOs comes under this category. Another 16 FPOs are funded under the scope of Producer ID fund. FPOs are registered bodies with farmers or producers of agricultural commodities as shareholders in it. The major objectives of FPOs are to work for the improvement of the farming conditions and techniques, which also includes marketing, and also the benefits and welfare of the member farmers. The following table shows the list of district wise list of 105 FPOs under the Producers fund along with the major commodities produced and marketed.
45 Table 3.3: District wise list of FPOs under Producers Fund
S. No. District FPOs Commodities traded/ Activities
1 Trivandrum 7 Organic Vegetables, honey, food crops, jackfruit, copra, coconut, poultry
2 Kollam 3 Vegetables, food crops, multi activity, poultry
3 Pathanamthitta 6 Processed Jackfruit, vermicomposting, dairy, honey, coir
4 Alappuzha 4 Value added agricultural produce, vegetables, paddy, turmeric
5 Kottayam 5 Eco-friendly food products, contract planting, organic manure, dammer, honey, dairy
6 Ernakulam 6 Vegetables, nutmeg, neera nursery, rubber scrap, coconut oil extraction, pokkali paddy and shrimp
7 Idukki 38 Vegetables, spices value addition, vermicompost production, coffee, cocoa, cardamom, pepper, ginger, nutmeg value addition, cocoa processing, coconut oil extraction, arrowroot powder
8 Thrissur 6 Paddy, clove, production and value addition of crops
9 Palakkad 12 Rice, mango, vegetables, plantation (banana, pepper, clove, etc.), dairy, biofertilizer, organic rice, nutmeg value addition, jackfruit, seeds, etc.
10 Kozhikode 8 Honey, organic vegetables, cocoa, cloves, neera and value-added products, coconut oil, fruit processing
11 Malappuram 6 Poultry, fish, mushroom, rice, coconut value addition
12 Wayanad 11 Coffee, jackfruit, vegetables, pulses, paddy procurement and rice marketing, tubers, pepper, etc.
13 Kannur 5 Coconut, poultry, mango
14 Kasaragod 5 Organic pepper, value added fruits and vegetables, honey
Source: NABARD, 2019
Considering the 105 FPOs under the Producers fund, a majority of them are engaged in production and marketing activities of commodities like vegetables, spices like pepper, clove, cardamom, coconut, honey, coffee, rice, pulses, fruits like banana, mango, cocoa, etc. There are some FPOs that trade value added products like value added fruits and vegetables, rice flour, coconut oil, neera units, value added nutmeg, processed banana, mushroom, etc. apart from bio fertilisers, manure, seedlings, vermin compost production, etc. Fish and meat products, goat rearing and poultry farming are also practiced in about 14 FPOs. There are Producer Organisation Promoting Institutions (POPI), which provide support to the FPOs and ensures that the latter reaches sustainable capacity to function, even if the POPI withdraws its financial support. It also provides technical support to the FPOs. Some of the important functions or responsibilities of a POPI include managing systems and procedures in an FPO, resource mobilisation, identification and promotion of activities of clusters, auditing and assessment of activities, imparting
46 awareness to FPOs and interactions with them, credit support for preparing business plans, grants for storage, sorting and grading (primary processing) facilities, grants for capacity building and skill enhancement of FPOs’ members, among others (nabkisan.org). In Kerala, there are numerous POPIs working for providing support to the FPOs across the districts. The major POPIs are Santhigram, Marayamuttom Service Cooperative Bank Ltd, JaivasreeToxinfree Food Products Co Ltd, AnanthapuriCoconut FPC Ltd, Trivandrum DCB, Kerala Gandhi SmarakaNidhi , Trivandrum, Venad Poultry FPC Ltd, KVK, Kannur, Pathanapuram SCB, Integrated Rural Technology Centre (IRTC), KVK, Kasargod, Kera Suraksha Federation of Coconut Producers Societies and High range Development Society. 3.3. Institutions providing Crop Specific Marketing Infrastructure: Crop specific marketing infrastructure are very important in ensuring efficient marketing since perishability, demand, scope for value addition is different for diverse products. Kerala produces spices, garden crops, vegetables and fruits and Government has taken initiatives towards effective storage, grading, standardisation, value addition and selling of each product. Major departmental initiatives include the following; 1. Vegetable Fruit Promotion Council Kerala (VFPCK): The VFPCK, registered under The Companies Act of 1956 is an agricultural marketing organisation which looks into enhancing the overall development of vegetable and fruit cultivation and marketing in the state. The major share of the company belongs to farmers, financial institutions and the government, with the Self-Help Groups (SHGs) formed by farmers acquiring about 50 percent of its share, government holding 30 percent and the VFPCK managing just 20 percent. The farmer SHGs under the VFPCK acts as the initial core units for facilitating rural credit, extension activities, group marketing, value addition methods, Participatory Technology Development, export promotion, etc. VFPCK is indulged in both input supply to farmers and in marketing the output effectively profitable to farmer; and this makes the initiatives unique. On the one hand it promotes organic farming by starting seed nursery, and by providing organic fertilisers and pesticides to SHGs; on the other, with the support of same SHGs ‘Farmers Market’ are created where the produce is marketed in an. During last year, 98.7 metric tons of seeds were produced and distributed by setting up Hi-tech Vegetables Seed Production Centre and at the same time marketed around one lakh metric tons of fruits and vegetables worth of three crores. Along with arranging marketing infrastructure for storage and transportation the council has established a Risk Fund to manage the price fluctuations in the market and farmers are benefitting from them. In addition, most of the Farmers Market are having their own building, storage facility and auction hall and an Agriculture officer is appointed to overview the activities of the market and guide the farmers. VFPCK has 288 SHGs all over Kerala and this farmers’ network ensure smoothening of both input and output supply chains. To ensure the quality of products being produced and distributed, Laboratory facilities are arranged. The council gives Rs. 1 per kg as
47 Sales promotion incentive to farmers and currently retail outlets “thalir” is started to enter in to direct retailing. With the support of APEDA, a Pack House has established in Wayanad and around 60 metric tons of produce have been exported under the aegis of VFPCK. VFPCK is trying to improve facilities for value addition and prepares to explore the possibilities of export market, and the farmers with their active participation make the initiative a success. However, more of such facilities are required as the need has increased with respect to trading and storage. There is a huge requirement of more advanced information and communication technology (ICT) facilities at the units, as well as electricity or power requirement. 2. Kerala State Horticultural Products Development Corporation (HORTICORP) HORTICORP, established in the year 1989, is another important initiative from government towards facilitating agriculture marketing. The main functions include, procuring vegetables and fruits, marketing of agricultural products through its own retail outlet units, enhance storage facility, make provision of seeds and inputs, taking part in and organizing various agricultural exhibitions and fairs, etc. The haritha stalls under HORTICORP provides vegetables and fruits to customers at a reasonable price, whereas procurement activities are done through the Karshakasangamam directly from farmers, thereby freeing the farmers from the exploitations from middlemen in trade. HORTICORP is functioning in all districts of Kerala except Kasaragod, and it aims to provide value added products to its customers, like cut vegetables depending on the necessity of the dish, chips, etc. Amruth honey from Mavelikkara, cut vegetables from Anayara or Amruth chips are some of the examples of such products. Anayara (Trivandrum), Chadayamangalam (Kollam), Pathanamthitta, Kottayam, Harippad, Alappuzha, Ernakulum, Trissur, Palakkad, Mavelikkara, Kozhikode, Kannur, Malappuram, Wayanad and Munnar are the district wise procurement centres of HORTICORP. The HORTICORP also integrates its functioning and cooperates with other agencies like VFPCK or KERAFED. The table below shows the quantity of produce handled by Horticorp for the last five years Table 3.4: Quantity of produce handled by Horticorp for the last five years
Year Procurement from farmers Procurement from traders Total Procurement Qty (in MT) Amt. (in crores) Qty (in MT) Amt. (in crores) Qty (in MT) Amt. (in crores) 2012-13 5721 10 7428 15 13,149 25 2013-14 13,862 28 14,224 31 28,086 59 2014-15 14,291 39 13,915 28 28,206 67 2015-16 12,478 19 13,167 24 25,645 43 2016-17 7003.92 18.38 14,333 32 21,336.92 50.38
1. Kerala KerakarshakaSahakarana Federation (KERAFED) Being the core and apex institution of coconut cultivators of Kerala, this co-operative federation has the highest position among the country’s coconut oil producers. For instance, the Krunagappally unit of KERAFED in Kollam has a whopping capacity of around 200 tons per day. The federation
48 ensures that the value-added products like coconut oil are of superior quality, having made from best quality copra procured from the farmers and then marketed under the brand name of KERA. 2. Kerala State Co-operative Rubber Marketing Federation Limited (Rubber Mark) The Rubber Mark was established in 1971, forming the supreme institution of the Rubber marketing co-operatives in Kerala, India. There are a number of 38-member farmer societies that comes under Rubber Mark functioning throughout the state, along with active co-operation from the government as well as the Rubber Board. Apart from procuring, processing and marketing to domestic companies and agents, the federation also engages in encouraging export markets through export marketing. For instance, the Rubber Mark had started trading with many Asian countries since 2002. The specialty of the agency is that it is the only government agency in the country that procures natural rubber straight from the producers, and engages in marketing them to various companies that manufactures tyres or shoe, after scientific processing. 3. Kerala State Co-operative Marketing Federation (MARKETFED) The MARKETFED is an agency primary aimed at upliftment and empowerment of the farmers and agriculturalists. It was established on 24th December 1942 as the South Malabar District Wholesale Co-operative Store Ltd, which later, on 10th August 1960, was made into the MARKETFED, forming the apex of marketing co-operative societies. The functioning of it is across the state, for the upliftment of the farmers. Their major aims are to provide adequate marketing and infrastructural facilities to tie farmers of the state, reasonable but fair prices for their products, elimination of middlemen and agents by facilitating direct purchasing of the agricultural commodities from market, which can also stabilise the product specific markets, etc. it also ensures uninterrupted supply of agricultural inputs at fair prices, credit flexibility and also export promotion by means of establishing export based marketing units for products pepper, cardamom, cocoa, turmeric, etc. The MARKETFED functions as an encouraging or upliftment agency of farmers also. Especially by dealing with several selected commodities like spices, arecanut, cashew, etc. along with other products like rubber or tapioca. 4. Kerala Agro Industries Corporation Ltd. The joint venture of the state and central governments has established the KAIC in 1968, with its major objective in ensuring technical advancement in agriculture. The institution acts as an apex body in enhancing mechanisation and technological improvement in agricultural activities through various measures like the establishment of several agro based industrial units, encouraging and promoting the promoting the production and sale of value-added products, civil construction, better infrastructural development, etc. It also engages in devising better and sustainable waste management solutions at low cost. Apart from these, the agency facilitates the sound implementation of numerous state and central government schemes for agricultural development.
49 Central Government Organisations: The majority of the Central government organisations that deals with agricultural marketing are crop or commodity-based ones like tea board, tobacco board, spices board, coffee board, etc. 5. Tea Board Tea Board is working as a statutory body of the Ministry of Commerce of the Central Government. The Board is established of 31 individuals (counting Chairman) taken from the Members of Parliament, tea cultivators, tea traders, tea brokers, buyers, and agents of Governments from the major tea producing states, trade unions and other worker’s organizations. The Board being reconstituted at regular intervals of three years, has huge capacities and duties under the regulation of the Central Government. The essential elements of the Tea Board are rendering financial and technically specialized help for cultivation, development, manufacturing and marketing of tea; export promotion; aiding research and development exercises for increasing tea production and improvement of tea quality; extend budgetary help with a restricted manner to the farm labourers and their wards through labour welfare plans; to promote and aid both financially and technically the unorganised small farmers sector; collection and upkeep of statistical information and publication and furthermore such different exercises as are appointed occasionally by the Central Government. Tea Cess is required on all tea cultivated in India under Section 25(1) of the Tea Act, 1953. This Act accommodates for collecting cess up to 50 paise per kilogram of tea produced in India. The Cess at present is levied by the Central Excise Department and credited to the Consolidated Fund of India subsequent to deducting the costs of collection. Assets are discharged by the Central Government for Tea Board every now and then based on the authorized spending plan after due assignment by the Parliament. Such funds are in turn utilised for meeting the non-plan outlays. The regional office of Tea Board in Kerala is situated in Willington Island Kochi. The sector is receiving financial support from the Board every year. Under the ‘small growers development scheme’ 346 lakh rupees was received as grant in aid to Self Help Groups and about 193.28 lakh was received for promoting green tea during last year. With the financial support amounting Rs. 11 lakh a factory is setup in Idukki. For Replanting and plant rejuvenation, about 36 lakh rupees is dispersed. Around 3635 small growers in Kerala are getting aid from Tea Board. 6. Coffee Board Right from the 18th century, coffee plantations began to have major share in Indian commercial plantations. Post-World War II, after the coffee industry suffered from setbacks due to pests, diseases and below optimum prices, the government of India put forward the Coffee Act VII in 1942 and established the Coffee Board, under the administrative capacity of the Ministry of Commerce and Industry. The Board includes 33 members, from Chairman, Secretary, Chief Executive Officer to stakeholders concerned with coffee trade interests, curing establishments, interests of labour and consumers, representatives of governments of the principal coffee growing states, and Members of Parliament.
50 From 1996, the Board remains a facilitating and aiding agency for coffee cultivators and especially for the sector’s value chain, engaging itself in major functions like promotion of research and development, technical advancement, improvement of quality, facilitating aids to growing coffee sector, export promotion as well as domestic marketing to coffee products, among others. It emphasises obtaining of higher value returns in the case for exports, better product quality and quantity and also the encouragement to domestic marketing. Post 1996, the functions began to be deregulated, and the board gave much emphasis to ensuring facilities like permits for Indian coffee exports, along with issuing of the Certificates of Origin as part of the International Coffee Agreement. This is realised by the 395 coffee exporters registered with the Board. The major market destinations for Indian coffee include the USA, Japan, Australia, Canada, New Zealand, Russia, etc., the trade to which are made easier with incentivised export possibilities. Kerala is the second largest coffee producing state in the country with predominantly robust cultivation in small holdings. In Kerala, Coffee Board regional offices are located in the districts of Idukki and Wayanad. In order to develop appropriate technologies for Robusta suitable for this region, a regional research station was established during 1977-78 in an area of 166 hectares near Chundale village in Wayanad district of Kerala. The station has 30 hectares of coffee research farm, 15 scientific and technical staff and adequate laboratory facilities to pursue research in various disciplines. 7. Spice Board The Spices Board of India is the apex organization formed by the Government of India in 1987 for the development of spices sector in the country. This organization comes under the purview of Ministry of Commerce and Industry of the Union Government. In view of Kerala’s importance as a major producer of spices and Kochi as a major traditional port for export of spices, the headquarters of the Board is located in Kochi, a city in the central part of the state. In the course of working of the Board, it has been trying for adding additional divisions or centre and taking up newer activities. As a part of infrastructure development, Research Centres have been established. Indian Cardamom Research Institute (ICRI) was established by the erstwhile Cardamom Board in 1978 at Myladumpara in Kerala and is now under the control of the Board. The institute organized three more research stations, one at Hassan district of Karnataka, another in Dindigal of Tamil Nadu and the third at Gangtok in Sikkim. Research stations in Hassan and Dindigal concentrate on location specific research for small cardamom growing areas while the station at Gangtok initiates research effort in large cardamom in the areas of Sikkim and Darjeeling district of West Bengal. The Research Station at Myladumpara in Kerala has grown into a major one with the setting up of separate divisions for Crop Improvement, Biotechnology and Post-Harvest Technology. In the year 1989 the Board made another organizational expansion by starting Quality Evaluation Laboratory at its head office with the intention of facilitating quality checking of the spices. The Laboratory offers analytical services to exporters, traders, farmers and research organizations in spices and spice products. It also undertakes analysis of consignment sample under the mandatory inspection of the Board. To empower the growers of spices and ensure better price realization, the Board has established a Spices Park at
51 Chinaware, Madhya Pradesh in the year 2008. The Board formed another Park at Puttady, Idukki district in 2011. Spices Parks are primarily intended to benefit the growing community through quality improvement, grading, packing, warehousing, etc. for value addition. Exporters can also set up their unit in the Parks for processing spices under the terms and can avail storage and credit facilities from the Park. There have been attempts by the Spices Board to expand its areas of activities as well as to modernize them in tune with the changing times. Training on GAP, World Spice Congress, e-marketing, e-auction, setting up of web-sites, office mechanization, etc. are examples for these efforts. 8. Coconut Development Board Coconut Development Board is a statutory body established by the Government of India for the integrated development of coconut production and utilization in the country with focus on productivity increase and product diversification. The Board which came into existence on 12th January 1981, functions under the administrative control of the Ministry of Agriculture and Farmers Welfare, Government of India, with its Headquarters at Kochi in Kerala and Regional Offices at Bangalore in Karnataka, Chennai in Tamil Nadu, Guwahati in Assam and Patna in Bihar. There are five State Centres situated at Pitapally in Odissa, Kolkata in West Bengal, Thane in Maharashtra, Vijayawada in Andhra Pradesh and Port Blair in the Union Territory of Andaman & Nicobar Islands. The Board has 12 Demonstration cum Seed Production (DSP) Farms in different locations of the country and now 10 farms are maintained. A Market Development cum Information Centre has established in Delhi. The Board has set up a Technology Development Centre at Vazhakulam near Aluva in Kerala and a Field office at Thiruvananthapuram in Kerala. It aims at performing the following functions like working for the promotion of coconut industry in Kerala, aiding financially for increasing the area under cultivation of coconut, imparting technical aid and advice for coconut cultivators, promoting advanced farming techniques in coconut farming, ensuring reasonable and incentive prices for coconut products to farmers, providing marketing assistance and tips for expansion of market, export and import regulations for coconut products, financially assisting various schemes for improving and promoting the quality and quantity of coconut production in the state, facilitating research and collection of information on coconut production and marketing, publicity activities and providing information regarding the coconut and its products, and also fixing grades and standards for the coconut products. 9. Kerala State Warehousing Corporation The Kerala State Warehousing Corporation was established in 20th February 1959, under the Warehousing Companies Act of 1962. The KSWC acts as a licensed corporation and about half of its share capital is held by the Central Warehousing Corporation, and the rest of the half by the Government of Kerala. With head office (Ernakulam), three zonal offices, nine regional offices and 60 warehouses across the state, the agency functions in enhancing the storage and warehousing facilities for agricultural products.
52 There are no product wise distinction and almost all types of agricultural commodities are stored in their units. The major objective is to ensure scientific and well-developed storage facilities for agricultural products, along with easy credits and holding power to the farmers, helping them in getting a fair price for their products. Thus, a huge amount of product waste can be avoided. Apart from this, it also issues a warehousing receipt that is negotiable with provision to pledge it any bank to the farmers who avails its facilities. The receipt ensures quantity, better quality, market value and even insurance from fire or theft, to the farmers who avails its facilities. 10. National Agriculture Market (e-NAM) The major online trading platform for agricultural commodities in India is National Agriculture Market or eNAM.The market encourages farmers, merchants and consumers with web-based exchanging of agricultural items. Initiated by the Ministry of Agriculture, Government of India, the electronic market platform for the country was introduced on 14 April 2016 by Prime Minister of India. The Portal is overseen and controlled by Small Farmers’ Agribusiness Consortium (SFAC) with the innovative technical support from, NFCL’s iKisan division. The eNAM is connected with 585 markets (APMCs) in 16 states and 2 territories, with more than 45 lakh farmer enrolment in 15 states. The market is facilitating and aiding traders and exporters in obtaining quality items in mass, at one place and guarantee straight and transparent money related exchanges. The Government intends to interconnect more than 22,000 GrAMs, neighbourhood local farmer markets, with the domain. To give better grading services and measuring administrations, the Agriculture Department is facilitating through the AGMARK for proper certification and affirmation. In excess of 400 agricultural markets in 13 States have joined the eNAM service since it was initiated in April 2016. The Union government expects the regular e-market platform to be sent in 585 wholesale agricultural markets all over the nation over by March 2018 (The Hindu, 2019).Dissimilar to most different States that are a piece of eNAM, Kerala doesn’t have an Agricultural Produce Market Committee (APMC), an administrative and regulatory system for agricultural trade. However, the state will not find it an obstacle in benefitting from the services of eNAM. Brokers and commission agents who have been utilized to physical money exchanges and managing in cash than online transactions would need to be taught and convinced to take up online transactions. To summarise, agriculture marketing infrastructure facilities in the state is provided by Wholesale Markets, Wholesale Assembling Markets and Rural Periodical Markets. As the state has not implemented APMC act, these markets do not satisfy all the features and regulations envisaged in the act. However, all these markets are regulated by State/ LSG institutions, and thus monitoring is ensured. Along with these markets, both Central and state government has taken initiative for crop specific marketing, and the farmers are benefitted from these additional marketing infrastructure. Major crops of Kerala including coconut, pepper, coffee, tea and vegetables has separate marketing infrastructure systems.The details of the infrastructure facilities available to farmers and traders along with requirements is to be examined in detail and the following chapters is an attempt at this end.
53 CHAPTER 4 Agriculture Marketing Infrastructure in Kerala: An Analysis of Wholesale Markets
The prime objective of the study- to assess institution wise infrastructure associated with agriculture marketing functions- is accomplished by selecting nineteen markets as samples (two wholesale markets, ten wholesale assembly markets/Rural periodical markets, six farmer’s markets and Spices Park) and collecting data from relevant stakeholders relating to production, distribution, regulatory and consumer subsystems. The sample was selected in such a way that the samples sufficiently provide data relating to crop specific infrastructure, as for analysis, the major crops produced in Kerala- pepper, cardamom, coconut, banana, tapioca and vegetables- was selected for generating an in-depth understanding of agriculture marketing infrastructure. The S-C-P (structure- conduct- performance) model is adopted for analyzing the data collected from sample survey. The information is generated by employing both qualitative and quantitative tools for data collection. Data relating to structure and conduct of markets is largely derived from the in depth and unstructured interviews conducted with various stakeholders and through Rapid Rural Appraisal while analysis relating to market and market infrastructure is based on the sample survey using interview schedules. Chapter IV deals with the Whole sale markets governed by State Government, Chapter V with WAM/RPM which is governed by the LSG. Chapter VIand VII deals with the crop specific infrastructure where Farmer’s markets run by VFPCK and Spices Park is analysed. From each market, data is collected from farmers, traders, administrative officials and consumers. 4.1. Structure-Conduct-Performance Analysis The framework Structure, Conduct and Performance paradigm (SCP) is used as an analytical framework, to make relations amongst market structure, market conduct and market performance. Structure of each market is determined by the enabling environment which include the institutional environment and market infrastructure and this in turn reflects in or determines the conduct and performance of markets. Analysing the institutional environment and infrastructure can reveal how the structure of market is determined and is maintained. Especially, the number of sellers and buyers,
54 product differentiation and entry restriction are majorly dependent on the infrastructure facilities each market possess and vice versa. Structure of market determines the conduct and performance of each market. Conduct of market is studied by analysing the process of agriculture marketing in which the distribution channels and market linkages are explored. Performance of markets is assessed based on volume of revenue generated and transactions. Performance is also understood in terms of the infrastructure facilities available in all markets. Also, the perception of all stakeholders with regard to facilities in market and additional requirements that may improve the performance of market is analysed. 4.2. An Analysis of Wholesale Markets (Secondary data analysis) Regulated marketing system in India is an aftermath of British legacy and even though APMC act was not passed in Kerala, the markets in Kerala are under the monitoring of Government. Wholesale markets are governed by Department of Agriculture Development and Welfare. Wholesale markets were established with a view to provide infrastructure for trading by ensuring facilities for storage and direct auctioning. This can be seen as first step towards e-nam where farmers are coming in direct contact with traders/consumers by avoiding middlemen using the possibilities of technology and thus able to sell their products directly. With a vision to ensure basic infrastructure for agriculture marketing, six wholesale markets were established in Kerala, of which two are in Trivandrum district. The two Wholesale markets in Trivandrum, Rural Agriculture Wholesale Market, Nedumangad and Wholesale Market, Anayara were established during 2003-04 with the support from European Economic Community and both are currently governed by Department of Agriculture Development and Farmer’s Welfare, Government of Kerala. PWD and Nirmitikendra were the agencies who implemented the project. Both markets have a mission to bring together the farmers and traders together so that efficient marketing of agriculture products can take place. Following is an analysis of the infrastructure and institutional facilities in both markets and its impact on the structure, conduct and performance of market based on primary data collected from various stakeholders. 4.2.1. Infrastructure Facilities in the markets Infrastructure facilities in a market primarily determine the efficiency of agriculture marketing since without essential facilities trade cannot take place. For a good market, basic infrastructure such as auction hall, marketing stalls, market yard, facilities for storage and value addition, and service facilities is a necessity. Understanding the dearth of markets where farmers can sell their products directly to traders, wholesale markets were established. The whole sale markets were set up with an aim to create a market with all modern infrastructure facilities and thus can act as a model market in Kerala. The markets were planned such a way to make it as an agri-business centre where auction of agriculture produce from the locality take place and facilities for storage, grading, standardization and value addition are available. The market was provided with essential human and physical capital for efficient functioning. Following table 4.1 shows the infrastructure facilities in the two wholesale markets.
55 Table 4.1: Infrastructure facilities
SL. No. Basic Facilities Anayara Nedumangad
1 Auction Hall 800sq.m 700 sq.m
2 Marketing stalls 3 36
3 Cold Storage 6 6
4 Cool chambers 6 0
5 Bunk Shops 84 10
6 Weigh bridge 4 1
7 Processing unit 0 1
8 Godown 0 1
9 Office Building 1 1
10 Toilet complex/rest room 1 1
11 Electrical room 1 1
12 Dormitory 1 1
13 Camera 23 0
Source: Primary data
With regard to the physical infrastructure, the most important facility is auction hall which is functioning effectively. The auction hall is well roofed and tiled and has good ventilation. Price index, details of online payment to farmers, guidelines, name of farmers and traders are displayed in the notice board. Crop specific infrastructure is arranged for banana, which is the major crop. There are electronic weighing machine and mobile tray to move the auctioned goods. Toilet facility and drinking water facility is arranged adjacent to the auction hall. And thus, the two markets provide to farmers the basic facility to conduct trading. Facility for storage is established in the market. Both markets have cold storage facility, but they are not being used. Primary issue related to this is perishability of produce. Once they are taken outside the cold chamber, they suddenly perish since cold storage facility is not available during transporting the products. So, it is important to keep the entire supply chain weather sensitive. Similarly, the high electricity charges are another issue, so that solar energy or other green energy sources has to be experimented. The markets have bunk shops which has been rented out. However, in Nedumangad there are ten small bunk shops out of which only one is rented out. Services such as toilet facility, guest house, drinking water are available in both markets. And weigh bridge, security and office building are
56 functioning. The market is surrounded with a compound wall and both the markets are easily accessible since they are situated near to town. Anayara market has surveillance camera on its campus. 4.2.2. Institutional Environment The administrative structure of the market includes both government officials and representatives of farmers at the executive council. This combination is adopted to ensure the participation of farmers in the functioning of markets so that quality can be ensured. Following table 4.2 shows the details of staff strength in both the markets. Table 4.2: Details of staff strength
Designation Anayara Nedumangad Secretary 1 1 Assistant secretary 1 1 Accountant/ junior superintend 1 1 Clerk 2 1 Attender /DTP 1 1 Driver 1 1 Part time sweeper /cleaning 8 1 Security 3 3 Auction Assistant 4 0
Source: Primary data The staff strength in both the market include a Secretary, Assistant secretary, Accountant, clerk, Attender who are appointed by the government as permanent staff. In addition, driver, sweeper, securities, casual labours and auction assistants including computer operators are working for daily wages for facilitating market services. Casual labors are paid Rupees 660 per day and auction assistant and computer operator have Rupees 725 per day. Around 1.5 lakhs rupees is spent in the markets to pay the wages of casual labors per month, which amounts to 48 lakhs rupees per year and they are met from the market funds. It is visible that for paying the salary of staff, who are not farmers, more amount is spent from the market fund. It is reported by some farmers that the farmer representatives are not paid even an honorarium for being a part of the process of administrative structure and they are often neglected when it comes to decision making process. It was mentioned by a few farmers that, by setting up the market actual benefit is received by staff, who are getting a good salary, while the farmers are not getting the revenue of what they sell in the market correctly. And there were opinion differences with the administrative officials and the farmers with regard to establishing basic infrastructure facilities. It was said that in spite of the staff strength, the infrastructure facilities are not maintained neatly. Farmers were of the
57 opinion that there are minimum facilities in the auction hall and the nearby surroundings are not maintained well and unhygienic, and they lack a platform to raise their voice. However, farmers in Anayara market, organized in clusters are more comfortable and maintains a good relation with the administrative staff. Together they have more bargaining powers in price fixation and in committee meetings, compared to more fragmented or individual farmers in the Nedumangad market, which is a rural market. Similarly, the staff except the Agriculture officer does not have any know how with the agriculture and this creates issues during the time of auction, especially in mediating the grading process. Also, input supply activities and creation of linkages which is expected to be led by the administrative staff is not taking place as they are not having a managerial expertise in matters relating to agriculture, as per the views of the farmers. 4.2.3. Structure of wholesale markets The Anayara Wholesale market is established in 24-acre area and around 300 farmers and 30 traders are registered in the market for trading activities. Out of these, 80 farmers and 15 traders are active in the day-to-day auction process. The three major Farmer Clusters namely Pallichal Cluster, Venganoor Cluster and City Cluster which consist of groups of farmers are active in the auction process and there is a linkage between the Farmers, official and traders which ensure uninterrupted supply of agriculture produce and demand forecasting. Nedumangad wholesale market started its sales operation since 2011. About 1400 farmers and 265 traders are registered in the market and around fifty farmers and twenty traders participate daily in the auction process. Major crops for sale include banana, tapioca, coconut, ginger and vegetables (cow pea, ladies finger, ivy gourd, bitter gourd, passion fruit, yam, spinach). Major Traders in these markets include Well Gates, Amrutham, Kunnil Hyper market, Big Bazar and individual retailers. Farmers and traders have to register in the market in order to enter into trading activity, and a registration form is available in the market for both farmers and traders. Farmers have to fill the form and submit it to the market along with a testimonial given by Krishi bhavan and for both a membership fee of 250 rupees is charged for lifetime membership. In addition, for traders and farmers who does not have a life time membership, the market charges Rs. 250 as entry fee. Moreover, two percentage of value of quantity sold for each commodity in auction is being charged as a service charge from both farmers and traders in the market. This amount is utilized for giving salary for temporary staff including cleaning and auction staffs, clerk and to pay wages of loading workers. As an income generation activity shops are leased to vendors for a monthly rent of Rs. 10000/-. In contrast, Wholesale market in Anayara doesn’t charge registration fee and cess from both traders and farmers. Instead, they have to submit a certified application form from agricultural officer to the market in order to get registration. Earlier, a cess was charged from farmers and it was redistributed as bonus, however this practice has ceased. Regular inspections are conducted by the market authority to the fields at a three-month interval, so as to ensure that the farmers are bringing their own produce. The institutional environment rightly reflects in the rules related to registration; Unlike Nedumangad market, in the Anayara market where huge fund is mobilized through renting of shops, registration fee is not charged and the stress is
58 more on including more genuine farmers which is ensured by field inspection. This ensures healthy competition among farmers to produce more and in increasing the trade volume, and to prevent imported vegetables coming to market for auctioning. In both markets, Horticorp is a major and regular trader and they play an active role in price determination and procuring surplus amount in the market. Price is determined jointly by the farmer representative, trader representative and Horticorp, in par with average commodity price in the other major markets such as Chala, Thembammuttam, Kalliyur and Horticorp. Auction starts with calling one rupee above the base price. However, in Nedumangad, farmers argue that they are not part of price discovery mechanism and the administration does not have genuine farmers as representatives in the executive committee. Horticorp, being the single largest trader in the market, act as a monopoly in the market, as during harvesting season/ bumper crops, farmers do not have any other choice but to sell the products to Horticorp, for which they are not paid on time. Also, it is predetermined that Horticorp will procure the remaining amount (as per the instruction from Agriculture Department), competitive auction is not taking place for many products and market officials do not try to bring in more traders, by which farmers may get a better price, which is above the base price fixed by Horticorp. The pendency of payment is very high in Nedumangad market and the farmers in Nedumangad has approached the Hon’ble high court for receiving the pending payment. 4.2.4. Conduct of the market Both Anayaramarket and Nedumangad market conducts auction in three days in a week. Anayara market auction is on Sunday, Tuesday and Thursday and in Nedumangad, auction days are Monday, Wednesday and Friday. Around six to ten locally produced crops, mostly vegetables, banana and tapioca are marketed and the volume of trade is about 400 metric tons annually. Price index of each produce, details of money credited to farmer’s account are displayed in the notice board of the auction hall. The auction take place in the presence of market staff and electronic weighing machine is used. Commodities are graded in to first, second and third quality and differential base price is fixed. The unsold commodity is procured by Horticorp. Market authorities collect the amount of commodity sold from traders and disburse the amount to the farmer’s bank account within one week. Payment from retail traders normally take four to five days to reach farmers while from Horticorpreaches the farmers very late. Horticorp takes a time up to 4 months for paying money to farmers. Details of auction is recoded and digitized and the data is available to both farmers and traders. In Nedumangad market each sold quantity is kept in the mobile tray and this helps in carrying the commodities inside market. With regard to the financial support to meet marketing cost to farmers, markets have adopted different stance. Anayara market pays the loading and unloading charges and transportation incentive worth of Rs. 500 is given to two farmers who bring the produce of their clusters to the market. In Nedumangad market transport subsidy was given in the earlier days, but it has ceased now. An incentive of 1.5 rupees for each one-kilogram agricultural products was given as transportation subsidy up to
59 those farmers having a distance limit of 25 Km from farming area to market. After that, an amount of 2 rupees would be given up to 50 Km. There exists dispute among trade unions and farmers regarding loading and unloading charges in Nedumangad market and some of the farmers have filed a case against the trade unions, that the farmers should be allowed to load their products independently. Major revenue share in each market includes the rent and security deposit collected from shop owners in the market to whom the shops are leased. And thus, a market fund is maintained. In addition, Anayara market has a ‘Revolving Fund’ that helps them to meet the day-to-day expenses, whereas Nedumangad market does not have such facility. The maintenance of existing infrastructure is done with the revolving fund in the Anayara market. In order to ensure the quality of products sold, Nedumangad market has taken some initiatives. Pesticide residue test is conducted with the help of Agriculture University in three-month interval. However, the test is expensive and the results are received only after two months which prevents any immediate action. Many functional and administrative issues can be found in the market relating to conduct of marketing activity. One major issue sighted by the farmers in each market is the delay in disbursement of money to the farmers account by Horticorp. Accounts shows that around one crore rupees has to be given by Horticorp to the farmers as arrears of past four months. Lack of accuracy in payment discourage farmer’s participation in markets. And as the online trading facility is not established in the markets, only few traders can take part in the auctioning process. If there is an online auction platform farmer can reach to more traders, which may reduce the dependency on Horticorp. In addition, lack/ non functioning of storage/cold storage facility is an important problem. In both markets, cold storage facility is not functioning. And it is said that once you take out the products from cold storage, as there is no network of air-conditioned transport facility the vegetables perish immediately and so there is no use of cold storage. Also, markets are not able to pay the high electricity bills arising from functioning of cold storage. So, it is important to make investment in agriculture infrastructure more evenly to affect the entire supply chain, and the capacity of the newly built infrastructure may not have practical use. An initiative to make the storage weather insensitive should stress on making essential facilities on both farmers and traders’ stake, so that the entire supply chain get modernized. Another issue is lack of transparency and democracy in governance of markets. In Nedumangad market the executive committee in which farmers are members are not summoned for about six months. Similarly, farmers report that the actions taken by the market governing body is not finding results to transfer the arrears to farmers. And farmers complain that they are not getting any training or any initiative is not taken for value addition or input supply. Since the transport subsidy is ceased, farmers find it difficult to bring in produce to market. Lack of transportation facilities are the most important bottleneck that the farmers face.
60 The markets also face competition from other super markets. Since it is government owned and controlled, flexibility and autonomy in decision making is lacking which make it difficult for them to deal with new competition in the markets. Also, disputes of farmers organization with Kerala Head Load Workers Association are hindering the smooth functioning of the markets. Fixation of output quota by market officials is another important issue. Due to the lack of sufficient traders, the market officials limit the transaction quantity of commodity from farmers. For example, output quota for banana is 50 bunches of bananas from per farmer per market day. As cold storage facility is not functioning, additional quantities perishes and leads to output loss for farmers. So that it is important to develop infrastructure for value addition. This can help farmers to generate additional income. Similarly, facilities for grading and standardization are very much important. Currently there exists no guidelines relating to grading in the market. And farmers have the opinion that many first quality products are graded as second and third quality by Horticorp and market officials, and lower price is fixed for these products. This compels farmers to sell products at a lower price than their expectation. Performance of Wholesale Markets – Primary Data Analysis Performance of the markets is understood by examining the benefit that farmers and traders derive out of the market. As such the cultivation details of the farmers, the revenue generated, the marketing cost etc. are analysed. Similarly, the trade details of the traders and their marketing margin is also examined. Along with this detailed examination of the infrastructure status in the markets is also done. In order to have an understanding of the existing infrastructure in the markets, the opinion of the major stakeholders regarding the same is required. Data is collected from ten farmers and ten traders each from both Anayara and Nedumangad Whole Sale Market with regard to their sales and marketing details and also about the available infrastructure and utilisation. The first sub section provides the analysis of the data collected from farmers, second on the data collected from traders and third on the infrastructure analysis based on the views of both farmers and traders.
61 Section A
4.3. Wholesale Markets – Analysis of Farmer Details As a prelude, the socio demographic- economic details of the farmers is given. (Detailed tables are provided in Appendix 1). The average age of a farmer registered with Anayara WM is 51.8 and that of Nedumangad WM is 47.9. The sample consists of only one female farmer and she is from Nedumangad market. For 80 per cent of registered farmers, their main occupation is agriculture. Educational background of the farmers reveals that majority belong to SSLC or below level of educational qualification. Land size distribution of farmers reveal that 50 per cent have small land holdings, 20 per cent have medium size land holdings and 30 per cent have large size holdings. Sixteen farmers have availed loans and the mean amount of loan for small, medium and large farmers are Rs.1,80,636, Rs.2,54,628 and Rs.5,47,487 respectively, the average liability for the total sample being Rs.3,36,703. On an average a farmer in Anayara has been selling in the WM since last 5.7 years and 6.1 years in Nedumangad market. Year wise quantity and value of crops cultivated, amount used for own consumption and average quantity and value of sales in WM along with RPM and other markets for each crop is given in Appendix 1. Separate average value for small, medium and large farm size holders is given for both Anayara and Nedumangad Market. Annual sales on an average per farmer is 5696 kilos for tapioca (Rs.1,26,486), 13194 kilos for banana (Rs.2,99,324), 2650 kilos for ginger (Rs.1,33,250), 1260 kilos for cowpea (Rs.72,962), 511 kilos of spinach (14,994), 1731 kilos of cucumber (Rs.38402), 5603 kilos of snake guard (Rs.1,35,979) and 3474 kilos of bitter guard (Rs.2,11,034). Table 4.3: Farm size wise value of crops cultivated and sold in markets
Total Value Own Consumption WHM WAM RPM Other mkt Total per year Anayara Small µ 7743.333 154418 14695 208540 N32 2 3 SD 4132.219 165228.2 15054.3 138950.7 Medium µ 3210.5 486949.5 42218 511269 N22 1 2 SD 651.2454 390166.7 . 420670.6 Large µ 6481 804035.2 369500 1143944 N551 5 SD 2169.389 274511.6 . 342316
62 Total µ 6205.6 589212.3 369500 23869.33 736787.8 N1091 3 10 SD 2959.24 372610.5 . 19126.45 521965.8 Nedumangad Small µ 2506.143 247730.3 1170 34500 110116 286922 N771127 SD 2044.835 221323.8 . . 842.8713 257959.8 Medium µ 9462 750440 70000 13714 832959 N221 1 2 SD 972.9789 248632.9 . . 144341.7 Large µ 35955 2434050 1160245 3630250 N111 1 SD . . . . Total µ 7242.2 566904.2 410471.7 34500 77982 730462.2 N101031310 SD 10631.85 716661.4 650234.1 . 55660.91 1065988 Total Small µ 4077.3 226994.2 1170 34500 62405.5 263407.4 N10911410 SD 3603.05 204557.5 . . 55774.87 223799.5 Medium µ 6336.25 618694.8 70000 27966 672114 N441 2 4 SD 3672.059 307395.3 . 20155.37 316903.1 Large µ 11393.33 1075704 764872.5 1558328 N662 6 SD 12188.15 709302.5 559141.2 1060203 Total µ 6723.9 577471.2 400228.8 34500 50925.67 733625 N201941620 SD 7614.09 564481 531309 . 47581.9 816900.6
Source: Primary data
The value of all the crops sold in WM is aggregated and land size wise distribution of value of sales in each market is given in table 4.3. Out of the twenty who bring their crops to the WM, four also sell in WAM, one sell in RPM and six sells in other markets including VFPCK. Value of output worth Rs.7,33,625 is provided by each farmer per year, of which Rs.4,00,228 is generated by sales in the WM.
63 4.3.2. Distribution of buying and selling activities Sixty-five per cent of the farmers undertake agricultural activities alone but 35 per cent are engaged in agriculture activities as part of cooperatives. Sixty per cent sell agricultural produce around the year and 50 per cent face difficulty in finding buyers near to the locality. Table 4.4: Distribution of buying and selling activities
How do you undertake agricultural trade activity?
Number Percent
Alone 13 65.0
Cooperative 7 35.0
Total 20 100.0
Do you sell agricultural produce around the year?
Yes 12 60.0
No 8 40.0
Total 20 100.0
If no at what period of the year do you sell/buy?
During bumper crop 8
Do you face difficulties in finding buyers near to locality?
Yes 10 50.0
No 10 50.0
Total 20 100.0
Source: Primary data
The sales details of different commodities from tapioca to chilly including gross weight, net weight, floor price, auction rate, auction amount, market fee, loading charge and trader and farmer amount is provided in tables given in Appendix 1. It is inferred from the tables that farmer incur market fee and loading charges in Nedumangad market, whereas it doesn’t exist in Anayara market. The floor price and auction rate vary within a range of Rs.36 to Rs.38 in the case of banana to Rs.65 to Rs.70 in the case of cowpea. For Anayara market, the trader amount and farmer amount are same because market fee and loading charge is not levied from the farmer. Whereas, in NDD both these are reduced from the farmer before the payment to him is made and hence the difference between trader amount and farmer amount. 4.3.3. Expenditure on selling the products The major expenditure that the farmers in Nedumangad have to incur is loading charge and market fee. The average amount spent by farmers in Nedumangad as market fee is Rs.2367 and loading charge is Rs.1429/-.
64 Table 4.5: Expenditure on Selling of total products during last month (Rs.)
Markets Market fee Loading charge Trader amount Farmer amount
Anayara µ 288893 288893
N1010
SD . . 257071.7 257071.7
Nedumangad µ 2367.3 1429.9 189494.1 114733.5
N 10 9 10 10
SD 2772.4 1763.1 245906.9 134160.1
Total µ 2367.3 1429.9 236577.8 197230.1
N 10 9 20 20
SD 2772.461 1763.114 249412.6 215297.4
Source: Primary data
4.3.4: Reasons for sale in WM
The major reasons identified for sales in the corresponding Wholesale Market is the possibility that extensive quantity can be sold, better prices, regularity of consumers, government market, existence of auction platform, better transportation facilities and incentives.
Table 4.6: Reason for sale in the particular market
Anayara Nedumangad
Reasons Number Percent Number Percent
Extensive quantity can be sold 10 100 7 70
Government Market 9 90 1 10
Price better 9 90 5 50
Regular consumer 10 100 8 80
Better Infrastructure 10 100 10 100
Storage 7 70 2 20
Auction Platform 10 100 9 90
Transport facilities 10 100 10 100
Incentives 10 100 9 90
Source: Primary data
65 Table 4.7 gives the details of the number of pending days for payment as reported by the farmers. On an average, the pending days in Anayara WM is 105 days and in Nedumangad WM is 34 days. On an average, Rs.2,29,787 is the pending amount to be received by the farmers in the WM. The main trader that has to pay the pending payment is Horticorp.
Table 4.7: Number of pending days
Markets Particulars N Minimum Maximum Mean SD
Anayara Number of pending days 10 0 180 105.6 74.25
Nedumangad Number of pending days 10 14 60 34.4 14.38
Source: Primary data
Table 4.8: Details of payment to be received
Goods Anayara Nedumangad Total
µN SDµN SDµNSD
Tapioca Qty sold 41 1 . 2409.333 3 2591.42 1817.25 4 2424.711
Amt: pending 906 1 . 47198 3 49099.33 35625 4 46291.47
Banana Qty sold 4073 1 . 1378.5 10 1553.045 1623.455 11 1682.493
Amt: pending 93679 1 . 50028 10 53266.43 53996.27 11 52218.77
Coconut Qty sold 17 1 . 17 1 .
Amt: pending 765 1 . 765 1 .
Ginger Qty sold 625 2 813.1728 625 2 813.1728
Amt: pending 28726.25 2 33649.44 28726.25 2 33649.44
Vegetables Qty sold 186 1 . 1897 4 1835.893 1554.8 5 1764.478
Amt: pending 4650 1 . 68796.25 4 55682.4 55967 5 56110.12
Total Amt: pending 324525 8 333272.7 121515.2 7 162660.9 229787.1 15 279042.7
Source: Primary data
4.3.5. Price Determination
Details of price determination in each market, as opined by the farmers is given in table 4.9. Farmers view that both the market officials, farmer representative and Horticorp sets the price in Anayara and Market Officials determine price in Nedumangad after examining the price in different markets. The process of floor price determination is done by negotiation in Anayara market. In Nedumangad market farmers opine that market officials determine the price based on prices in other markets. Majority of farmers in Anayara are satisfied with the price determination mechanism, however opposite is the case with the farmers in Nedumangad. Majority do not have knowledge about the price
66 before they bring the commodity to the market. Majority also feel that there is compulsion to sell below the market price. Table 4.9: Price determining factors Who sets the price at market? Number Percent Anayara Market officials 1 10 Hoticorp 1 10 All the above 8 80 Total 10 100 Nedumangad Market officials 8 80 Hoticorp/Spice Board/VFPCK 2 20 Total 10 100 Price determination Anayara Negotiation between farmers, Horticorp mediated by market officials 9 90 Market officials based on price in other markets 1 10 Nedumangad Market officials based on price in other markets 10 100 Satisfied with the price determining mechanism Anayara Yes 8 80 No 2 20 Total 10 100 Nedumangad No 10 100 If_no, what are the reasons? Anayara Price is very low 1 50 price is unanimously determined by officers 1 50 Nedumangad Price is very low 9 90 price is unanimously determined by officers 1 10
Source: Primary data
Table 4.10: Information about the market price
Knowledge about the price before you bought the produce to the market Number Percent Anayara Yes 2 20 No 8 80 Total 10 100 Nedumangad Yes 2 20 No 8 80 Total 10 100
67 If yes, how did you get market price information Anayara Cooperative 1 50 colleagues 1 50 Nedumangad colleagues 2 100 Compulsion to sell below the fixed prices Anayara Yes 8 80 No 2 20 Total 10 100 Nedumangad Yes 9 90 No 1 10 Total 10 100 Source: Primary data
4.3.6. Effectiveness and timeliness of information
Farmers provided opinion regarding the effectiveness and timeliness of the price information. Effectiveness and timeliness are rated high in the Anayara market, but it is rated low in Nedumangad market.
Table 4.11: Effectiveness and timeliness of information
Effectiveness of the information Number Percent
Anayara Effective 9 90
Undecided 1 10
Total 10 100
Nedumangad Effective 1 10
Undecided 3 30
Not effective 6 60
Total 10 100
Timeliness of the information
Anayara Timely 9 90
Undecided 1 10
Total 10 100
Nedumangad Timely 1 10
Undecided 4 40
Not timely 5 50
Total 10 100 Source: Primary data
68 Table 4.12: Details of Transportation cost occurred for marketing
Markets Daily cost Monthly cost
Anayara Mean 399.7778 5364.444
N9 9
SD 549.259 7033.539
Nedumangad Mean 453 3942
N1010
SD 439.875 5310.52
Total Mean 427.7895 4615.79
N1919
SD 481.2202 6051.466
The average monthly transportation cost for a farmer is Rs.5364 in Anayara and Rs.3942 in Nedumangad. Reimbursement facility for transportation is available in all markets. The reimbursement amount is Rs 1.5 per kg up to a distance of 25 kilometers and 2 Rs above that. Data shows that in Anayara, since the farmers are operating in a cluster it is economic load that they bring to the market and hence reimbursed amount is greater than the transport cost. However, in the case of NDD market individual farmers bring their own products and the reimbursement amount does not meet their transport cost, as opined by the farmers. Total cost incurred for marketing shows that the total cost per month is Rs.5475 and Rs.7568 for a farmer in Anayara and Nedumangad respectively. Table 4.13: Total cost incurred for marketing
Markets Daily Monthly Anayara Mean 436.7778 5475.556 N99 SD 541.491 6977.871 Nedumangad Mean 866.801 7568.076 N1010 SD 764.9141 9647.748 Total Mean 663.1058 6576.882 N1919 SD 686.6779 8326.59 Source: Primary data
69 Section B 4.4. Whole Sale Market – Analysis of Trader Details Information regarding the structure-conduct and performance of Whole Sale Market and views regarding the available infrastructure and analysis of infrastructure requirement can become complete, only if it is assessed from the part of the traders also. As such ten traders each form Anayara WM and NDD WM is selected. The general information, details of trade activity etc. is given below. Of the total samples, 75 per cent are male, regarding their educational qualifications, 55 per cent have SSLC, 25 per cent higher secondary and 15 per cent degree with not much difference between traders in Anayara and Nedumangad. The modus operandi of engaging in trade activity is alone for 50 per cent and 70 per cent of traders in Anayara and Nedumangad. Out of the sample traders selected, five are super markets/restaurants e.g., Kunnil Hypermarket, Koncheril traders, Pathayappura, Welgate, Shesquare etc. Horticorp is a major trader in both the markets, which purchases the excess quantity in the market. On an average, a trader in Anayara has been in trade business for the last eleven years and in Nedumangad the average period of trade activity of a trader is four years. The details of sale quantity and price of each crop is provided in Appendix 2. 4.4.1. Purchase value, Sale value and profit Average value of quantity of each crop brought for both the markets and the amount at which it is resold is given in the table along with the differences in sales price and purchase price. For calculating the mean buy value and sales value, Horticorp is removed from both the markets. Table 4.14: Mean value of total quantity Goods Anayara Nedumangad Total
µ N SD µ N SD µ N SD
Tapioca Buy value 16454.29 7 18920.09 8154.286 7 3745.374 12304.29 14 13792.7 Sale value 32610 7 34777.02 8934.429 7 4120.619 20772.21 14 26775.98 Difference 16155.71 7 20257.64 780.1429 7 815.1851 8467.929 14 15917.21 Banana Buy value 49494.29 7 77135.03 69592 8 156274.7 60213.07 15 121936.6 Sale value 58897.43 7 87005.44 75328 8 171733.7 67660.4 15 134396.7 Difference 9403.143 7 11202.02 5736 8 15536.4 7447.333 15 13343.74 Coconut Buy value 30735 4 24773.55 65200 6 118132.5 51414 10 90962.99 Sale value 59150 4 48551.93 73677.67 6 140385.3 67866.6 10 108586.2 Difference 28415 4 36939.31 8477.667 6 22469.84 16452.6 10 29005.75 Ginger Buy value 42280 3 6064.85 157779.8 8 425985.9 126279.8 11 360475.7 Sale value 77400 3 30280.69 321627.5 8 888285.5 255020 11 752019.3 Difference 35120 3 24681.62 163847.8 8 462307.6 128740.2 11 391595.6 Cowpea Buy value 14690 6 10181.24 119660.6 7 280735 71212.62 13 205951.1 Sale value 15416.67 6 10832.57 87105.43 7 191110.8 54018.31 13 140336.1 Difference 726.6667 6 3594.027 -32555.1 7 89715.96 17194.3 13 65788.14
70 Spinach Buy value 6858 5 3599.1 12674 8 11509.83 10437.08 13 9500.993 Sale value 13604.8 5 9015.577 19509.5 8 25164.02 17238.46 13 20134.95 Difference 4819.143 7 6806.932 6076 9 13901.8 5526.125 16 11046.28 Cucumber Buy value 11616.43 7 15712.22 29854.29 7 46123.39 20735.36 14 34428.98 Sale value 16194.86 7 17843.59 46982.86 7 81198.8 31588.86 14 58695.75 Difference 4578.429 7 4521.157 13322.22 9 32310.13 9496.813 16 24187.1 Snakegourd Buy value 13352 5 17941.45 26352 7 52150.34 20935.33 12 40562.46 Sale value 18390 5 20644.65 38630.29 7 82402.36 30196.83 12 62986.7 Difference 5038 5 3817.652 9549.778 9 26803.32 7938.429 14 21251.37 Bitter gourd Buy value 13040 3 19901.68 10980 1 . 12525 4 16282.26 Sale value 13863.33 3 21228.71 13608 1 . 13799.5 4 17333.64 Difference 823.3333 3 1329.524 2628 1 . 1274.5 4 1411.605 Chilly Buy value 16470 3 16029.3 16470 3 16029.3 Sale value 21176 3 23674.66 21176 3 23674.66 Difference 4706 3 7893.12 4706 3 7893.12 Total Buy value 145863.6 7 149599.1 406678.2 9 992131 292571.8 16 742819.7 Sale value 216682.9 7 196877.3 569165.9 9 1453480 414954.6 16 1083901 Difference 70819.29 7 81152.16 162487.7 9 461545.2 122382.8 16 344169.8 Source: Primary data
The buy value of tapioca is Rs.12,304 and the sale value Rs.20,772, yielding a difference of Rs.8,467.9. Similarly for banana the corresponding values are Rs.60,213, Rs.67,660 and Rs.7,447, for coconut Rs.51414, Rs.67886 and Rs.16,452, for ginger 1,26,279, Rs.2,55,020 and 1,28,740, for cowpea Rs.71,212, Rs.54,018 and Rs.17,194, for spinach Rs.10437, Rs.17,238 and Rs.5,526, for cucumber, Rs.20,735, Rs.31,588 and Rs.9,496, for snake gourd Rs.2,09,35, Rs.30,196 and Rs.7,038, for bitter gourd Rs.12,525, Rs.13799 and Rs.1,274 and the total mean buy value, sale value and difference is Rs.2,92,571, Rs.4,14,954 and Rs.1,22,382 respectively. 4.4.2. Marketing Margin Difference between sale value and purchase value, marketing cost and marketing margin of the traders in Anayara and Nedumangad for the selected crops is given below. Mean profit for traders in Anayara is Rs.70,819, after reducing the marketing costs the average marketing margin for a trader in Anayara is Rs.59,083. (Horticorp is avoided). In Nedumangad market, the difference between sale value and purchase value price is Rs. 1,62,487 and marketing cost is Rs.82,652 the marketing margin being Rs.79,834 for Nedumangad market. On an average, the mean value of difference between sales and purchase is Rs.1,22,382, the marketing cost being Rs.51,626 and the market margin being Rs.70,756
71 Table 4.14: Total profit, marketing cost and market margin
Markets Total profit Marketing cost Market margin Anayara Mean 70819.29 11736.29 59083 N777 Std. Deviation 81152.16 21045.06 67022.99 Nedumangad Mean 162487.7 82652.89 79834.78 N999 Std. Deviation 461545.2 226670.7 235030.7 Total Mean 122382.8 51626.88 70755.88 N161616 Std. Deviation 344169.8 169999.3 177118.3 Source: Primary data
4.4.3: Details of price and price information
The reason for selecting the particular market has been collected from the traders. Six traders opined each from Nedumangad and Anayara that it is because of the organic product that they purchase from the particular market. Horticorp purchase because of the government stipulation. Regarding price setting, 77.8 per cent of the traders from Anayara feel that it is through negotiation, whereas 90 per cent people from Nedumangad opine that it is through auction.
Table 4.15: Details of price and price information Determination of the choice Number Percent Anayara Price 1 11.1 Proximity 1 11.1 Government order 1 11.1 Organic 6 66.7 Total 9 100 Nedumangad Fair scaling 3 30 Government order 1 10 Organic 6 60 Total 10 100 Who sets the price you buy for? Anayara Negotiation 7 77.8 Market officials 1 11.1 Auction 1 11.1 Total 9 100
72 Nedumangad Market officials 1 10 Auction 9 90 Total 10 100 Knowledge about the market price before selling Anayara Yes 2 22.2 No 7 77.8 Total 9 100 Nedumangad No 10 100 Source: Primary data
4.4.4. Details of resale point
For majority, the resale point is retail shops both in Anayara and Nedumangad. Some traders have super market chains where the commodity is resold. Some others have shops in their locality where they resell these items. Horticorp collects the agricultural products and sell it through their mobile vans and regional outlets.
Table 4.16: Details of the selling market point
Goods Markets WAM RPM Retail Export Own consumption Tapioca Anayara 0 0 8 1 1 Nedumangad 0 0 0 0 0 Banana Anayara 0 0 8 0 1 Nedumangad 1 0 8 0 0 Coconut Anayara 0 0 4 0 1 Nedumangad 1 0 5 0 0 Ginger Anayara 0 0 3 0 0 Nedumangad 1 0 8 0 0 Cowpea Anayara 0 0 7 0 1 Nedumangad 1 0 6 0 0 Spinach Anayara 1 0 5 0 0 Nedumangad 1 0 8 0 0 Cucumber Anayara 1 0 8 0 0 Nedumangad 1 0 7 0 0 Gourd Anayara 0 0 6 0 1 Nedumangad 1 1 6 0 0 Bitter guard Anayara 0 0 3 0 1 Nedumangad 0 0 3 0 0 Chilly Anayara 0 0 0 0 0 Nedumangad 1 0 2 0 0 Source: Primary data
73 Details regarding resale and related information shows that 50 per cent traders in Anayara take two or three days for resale and 50 per cent take one week, whereas for Nedumangad traders the period needed for resale is 2 or 3 days for ninety per cent. Traders operating in Anayara and Nedumangad who own super markets have got their own storage capacity. Small traders have their own refrigerating facility. The available storage facility is modern for three persons in Anayara. Majority carry out physical treatment before bringing it for resale. Sixty, 40, 50, 40 per cent in Anayara engage in sorting, packaging, grading and cutting activities whereas the corresponding per cent is 80, 70, 70 and 30 per cent in Nedumangad. Regarding the resale price, majority sets the price themselves, particularly at a higher premium for organic products.
4.4.5. Effectiveness and timeliness of the information
Only a lesser per cent of traders consider the market as effective and timely both in Anayara and Nedumangad. Big traders view that separate counters must be opened for local domestic purchases, because it is affecting the effectiveness of the market. They also view that they should be given more prominence because they are big traders and their time is more valuable. There are management issues as reported by traders in Nedumangad.
Table 4.17: Effectiveness and timeliness
Markets Effectiveness Number Percent Timeliness Number Percent
Anayara Highly effective 1 10 Very timely 1 10
Effective 1 10 Timely 1 10
Undecided 6 60 Undecided 6 60
Not effective 2 20 Not timely 2 20
Total 10 100 Total 10 100
Nedumangad Effective 3 30 Timely 3 30
Undecided 7 70 Undecided 7 70
Total 10 100 Total 10 100
Source: Primary data
74 Table 4.18: Details of trading license Do you have a trading license? Frequency Percent Anayara Yes 10 90 Nedumangad Yes 10 100 Are there restrictions imposed on unlicensed? Anayara No 9 100 Nedumangad Yes 8 80 No 2 20 Total 10 100 Are there any restrictions for entry and exit? Anayara No 9 100 Nedumangad Yes 9 90 No 1 10 Total 10 100 Are there problems in trading and marketing? Anayara No 9 100 Nedumangad Yes 1 10 No 9 90 Total 10 100 Source: Primary data All the traders operating in both the markets have trading license and traders from Nedumangad opine that there are restrictions on unlicensed and restriction for entry and exit. In Nedumangad, two types of registration are made, one permanent registration (life time membership – Rs.250) and the other temporary registration for infrequent purchases in the market (Rs.25 per day).
Table 4.19: Reason for buying commodities in the selected markets Reasons Markets Very % Bad % Medium % Good % Very % Total bad Good Price better Anayara 1 11.1 1 11.1 2 22.2 4 44.4 1 11.1 9 Nedumangad 1 10.0 0 0.0 0 0.0 9 90.0 0 0.0 10 Regular Anayara 0 0.0 1 11.1 1 11.1 1 11.1 6 66.7 9 consumer Nedumangad 0 0.0 0 0.0 1 10.0 0 0.0 9 90.0 10 Storage Anayara 0 0.0 7 77.8 2 22.2 0 0.0 0 0.0 9 Nedumangad 0 0.0 7 70.0 3 30.0 0 0.0 0 0.0 10 Auction Anayara 0 0.0 0 0.0 1 11.1 2 22.2 6 66.7 9 platform Nedumangad 0 0.0 0 0.0 0 0.0 3 30.0 7 70.0 10 Transportation Anayara 0 0.0 1 11.1 2 22.2 6 66.7 0 0.0 9 facility Nedumangad 0 0.0 4 40.0 4 40.0 2 20.0 0 0.0 10 Incentives/ Anayara 6 66.7 1 11.1 1 11.1 1 11.1 0 0.0 9 subsidy Nedumangad 5 50.0 4 40.0 0 0.0 1 10.0 0 0.0 10
75 Organic Anayara 0 0.0 1 11.1 8 88.9 0 0.0 0 0.0 9 Nedumangad 3 30.0 6 60.0 1 10.0 0 0.0 0 0.0 10 Credit facility Anayara 0 0.0 0 0.0 1 11.1 2 22.2 6 66.7 9 Nedumangad 1 10.0 0 0.0 0 0.0 4 40.0 5 50.0 10 Nearest Anayara 0 0.0 0 0.0 4 44.4 3 33.3 2 22.2 9 Market Nedumangad 0 0.0 3 30.0 4 40.0 3 30.0 0 0.0 10 Source: Primary data
The major reason for buying in Anayara market is because of the presence of Auction Hall, credit facility, nearness of the market followed by availability of organic products, transportation facility and regular consumers. In Nedumangad availability of Auction Hall, regular provision of agricultural commodities, availability of credit facility followed by better prices and organic products are the reasons for purchase from this market. Section C 4.5. Infrastructure Facility in the Whole Sale Market – Analysis Based on Opinion of Farmers and Traders The available infrastructure in the WM is analysed below with regard to the opinion of the farmers and traders. The satisfaction level of the market infrastructure facility is also rated on a five- point scale and the information collected in this regard is also summarized. The major infrastructural facilities that are to be provided by a market include infrastructure for a) buying, selling and demand forecasting b) physical movement of goods c) facilitation function. This section analyses the availably of these infrastructure facilities according to the views of farmers and traders along with the satisfaction level of farmers and traders. 4.5.1. Infrastructure for buying, selling and demand creation. Auction hall is the main infrastructure facility available for buying and selling. Availability of Auction Hall and the facilities within the auction hall and the satisfaction regarding the same is provided in the tables below. Auction platform is available to both Anayara and NDD markets, however crop specific auction platform is available only in NDD WM for banana. Price display facility is available both in Anayara and NDD, but farmers notice it only in the case of Anayara. This is because in Anayara, a relatively big notice board is placed and price is written in the board, whereas in NDD, in the notice board, a printed paper which gives the price details is pasted, which is not noticed by many farmers. Payment display is found both in Anayara and NDD, but farmers in NDD notice it because it is displayed in the auction hall, whereas in Anayara it is displayed near the office. Weighing machines and Notice Board is available in both the markets. Majority have average and above satisfaction regarding the items in Auction hall. Traders also have similar views regarding availability of infrastructure, except in the case of price display and payment display. They are aware of the price display mechanism in Nedumangad unlike the farmers. Traders rate the facilities in the Auction Hall at a higher scale compared
76 to the farmers. All the available infrastructure in the Auction Hall is provided by the market itself. The tables showing actual numbers are provided in the appendix 3 and the tables giving details in per cent is provided below.
Table 4.20: Details of auction hall -Farmer’s Opinion (in per cent)
Facilities Markets Yes No Satisfaction 12 3 4 5 Auction platform Anayara 100.0 0.0 0.0 0.0 0.0 77.8 22.2 Nedumangad 100.0 0.0 0.0 20.0 0.0 80.0 0.0 Crop specific Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 auction platform Nedumangad 80.0 20.0 0.0 37.5 12.5 62.5 0.0 Price display Anayara 80.0 20.0 0.0 0.0 0.0 75.0 25.0 Nedumangad 10.0 90.0 0.0 100.0 0.0 0.0 0.0 Payment display Anayara 20.0 80.0 0.0 0.0 0.0 100.0 0.0 Nedumangad 90.0 10.0 0.0 22.2 22.2 55.6 0.0 Weighing machine Anayara 100.0 0.0 0.0 0.0 10.0 60.0 30.0 Nedumangad 100.0 0.0 0.0 20.0 10.0 70.0 0.0 Notice board Anayara 90.0 10.0 0.0 0.0 0.0 77.8 22.2 Nedumangad 80.0 20.0 0.0 37.5 25.0 37.5 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
Table 4.21: Details of auction hall – Trader’s Opinion (in per cent)
Facilities Markets Yes No Satisfaction 12 3 4 5 Auction platform Anayara 100.0 0.0 0.0 0.0 0.0 11.1 88.9 Nedumangad 100.0 0.0 0.0 0.0 0.0 20.0 80.0 Crop specific Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 auction platform Nedumangad 100.0 0.0 0.0 0.0 0.0 60.0 40.0 Price display Anayara 100.0 0.0 0.0 0.0 0.0 55.6 44.4 Nedumangad 80.0 20.0 0.0 12.5 0.0 62.5 25.0 Payment display Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Weighing machine Anayara 100.0 0.0 0.0 0.0 0.0 11.1 88.9 Nedumangad 100.0 0.0 0.0 0.0 20.0 80.0 0.0 Notice board Anayara 100.0 0.0 0.0 0.0 11.1 22.2 66.7 Nedumangad 100.0 0.0 0.0 0.0 0.0 100.0 0.0
77 4.5.2. Infrastructure for demand creation and production decision
Farmers have poor opinion regarding the efficacy of markets in demand forecasting and production decisions, particularly in NDD WM. Fifty per cent of the farmers in Anayara opine that the only sort of help received in demand forecasting and production decision is through informal discussions. None in Nedumangad WM provided afavourable opinion. Regarding provision of insurance also, no one from NDD WM opined that insurance facility was available, whereas 80 per cent of the farmers from Anayara WM had positive opinion regarding insurance. Traders also have the view that the WM do not have methods by which demand forecasting or production decisions can be made.
The marketing channel that is operating in the Anayara WM is producer-wholesaler-retailer- consumer for 80 per cent of the farmers in Anayara, whereas for NDD, the marketing channel for all is the same.
Table 4.22: Infrastructure for demand creation or production decisions – farmer’s opinion (in per cent)
Opinion Markets Yes % No % Demand forecasting Anayara 5 50.0 5 50.0 Nedumangad 0 0.0 10 100.0 Market helps in production decisions Anayara 5 50.0 5 50.0 Nedumangad 0 0.0 10 100.0 Insurance provision Anayara 8 80.0 3 30.0 Nedumangad 0 0.0 10 100.0 Marketing channel Producer-consumer Anayara 0 0.0 10 100.0 Nedumangad 0 0.0 10 100.0 Producer-retailer-consumer Anayara 1 10.0 9 90.0 Nedumangad 0 0.0 10 100.0 Producer-wholesaler-consumer Anayara 1 10.0 9 90.0 Nedumangad 0 0.0 10 100.0 Producer-wholesaler-retailer-consumer Anayara 8 80.0 2 20.0 Nedumangad 10 100 10 100.0 Source: Primary data
78 Table 4.23: Infrastructure for demand creation or production decisions – trader’s opinion (in per cent)
Opinion Markets Yes % No % Demand forecasting Anayara 1 11.1 8 88.9 Nedumangad 0 0.0 10 100.0 Market helps in production Anayara 1 11.1 8 88.9 decisions Nedumangad 0 0.0 10 100.0 Insurance provision Anayara 0 0.0 9 100.0 Nedumangad 0 0.0 10 100.0 Marketing channel Producer-consumer Anayara 0 0.0 9 100.0 Nedumangad 0 0.0 10 100.0 Producer-retailer-consumer Anayara 0 0.0 9 100.0 Nedumangad 0 0.0 10 100.0 Producer-wholesaler-consumer Anayara 1 11.1 8 88.9 Nedumangad 0 0.0 10 100.0 Producer-wholesaler- Anayara 8 88.9 1 11.1 retailer-consumer Nedumangad 10 100.0 0 0.0 Source: Primary data
4.5.3. Infrastructure for the function of physical movement of goods Infrastructure for the function of physical movement of goods include infrastructure for transportation, storage, value addition, standardization and grading and packing. Infrastructure for Transportation Both markets have facility for loading/unloading facility and road facility. Transportation from field to market facility is not provided by the market directly, but subsidy for transport is provided. Refrigerated trucks/insulated vans etc. is not at all available in both the markets. Formal check post facility is not available, the only available one is a gate and a security counter. Regarding satisfaction of the infrastructure facility available for transportation, 80 per cent of the farmers in NDD consider the facilities as very bad, whereas majority of the farmers in Anayara treat it as very good. Majority are also satisfied with road facility inside the market. Traders also have the same view regarding the infrastructure facilities available for transportation. The facilities are provided by market itself and Government.
79 Table 4.24: Infrastructure for transportation – Farmer’s view (in per cent)
Infrastructure Markets Facility Agency Satisfaction
Yes No Market Govt SKS 1 2 3 4 5 Loading/Unloading Anayara 90.0 10.0 33.3 66.7 0.0 0.0 11.1 0.0 55.6 33.3 facility arranged Nedumangad 100.0 0.0 30.0 70.0 0.0 80.0 0.0 0.0 20.0 0.0 Transportation Anayara 90.0 10.0 77.8 11.1 11.1 0.0 0.0 0.0 77.8 22.2 inside market Nedumangad 30.0 70.0 100.0 0.0 0.0 33.3 0.0 33.3 33.3 0.0 (commodity) Road facility Anayara 100.0 0.0 80.0 10.0 10.0 0.0 0.0 0.0 60.0 40.0 inside market Nedumangad 100.0 0.0 0.0 100.0 0.0 10.0 10.0 10.0 60.0 10.0 Transportation Anayara 20.0 80.0 0.0 50.0 50.0 0.0 0.0 0.0 0.0 100.0 from field to Nedumangad 10.0 90.0 0.0 100.0 0.0 0.0 0.0 0.0 100.0 0.0 market Passenger transport Anayara 90.0 10.0 0.0 100.0 0.0 0.0 0.0 0.0 88.9 11.1 Nedumangad 20.0 80.0 0.0 100.0 0.0 0.0 0.0 0.0 100.0 0.0 Check post Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 20.0 80.0 100.0 0.0 0.0 0.0 0.0 100.0 0.0 0.0 Parking facility Anayara 90.0 10.0 88.9 11.1 0.0 0.0 0.0 0.0 66.7 33.3 Nedumangad 100.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 50.0 50.0 Refrigerated trucks/ Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 insulated van Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Maintenance of Anayara 10.0 90.0 100.0 0.0 0.0 0.0 0.0 0.0 100.0 0.0 vehicle Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data Table 4.25: Infrastructure for transportation – Trader’s view (in per cent)
Infrastructure Markets Facility Satisfaction YesNo12345 Loading/Unloading Anayara 88.9 11.1 0.0 0.0 100.0 0.0 0.0 facility arranged Nedumangad 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Transportation Anayara 22.2 77.8 0.0 0.0 0.0 100.0 0.0 inside market (commodity) Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Road facility inside Anayara 100.0 0.0 0.0 0.0 0.0 0.0 100.0 market Nedumangad 100.0 0.0 0.0 0.0 0.0 30.0 70.0 Transportation from Anayara 22.2 77.8 0.0 0.0 0.0 0.0 100.0 field to market Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Passenger transport Anayara 66.7 33.3 0.0 0.0 16.7 33.3 50.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Check post Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 10.0 90.0 0.0 0.0 0.0 0.0 0.0
80 Parking facility Anayara 100.0 0.0 0.0 0.0 0.0 0.0 100.0 Nedumangad 90.0 10.0 0.0 0.0 0.0 11.1 88.9 Refrigerated trucks/ Anayara 11.1 88.9 0.0 0.0 0.0 100.0 0.0 insulated van Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Maintenance of Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 vehicle Nedumangad 10.0 90.0 100.0 0.0 0.0 0.0 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
Storage facilities
Infrastructure for storage facilities includes cold storage, ripening chambers, dry storage, godowns, mobile storage unit, ware housing etc. As per the opinion of farmers, cold storage is available in Anayara and Nedumangad, whereas all the other infrastructure facilities for storage are not available in both the markets. Even though cold storage is available, currently it is not under use because of high operating cost, particularly electricity charges. Also, farmers report that technical staff required for taking care of the cold storage facility is also not available in the market. Hence farmers are not satisfied with the facilities. Small godowns are available in the market for rent in both the markets, but farmers are not using it. Traders also have the same opinion regarding the storage facilities inside the market. Table 4.26: Infrastructure for storage – Farmer’s view (in per cent)
Infrastructure Markets Facility Agency Satisfaction Yes No Market Govt 1 2 3 4 5 Cold storage Anayara 70.0 30.0 100.0 0.0 0.0 0.0 42.9 57.1 0.0 Nedumangad 100.0 0.0 100.0 0.0 80.0 10.0 10.0 0.0 0.0 Ripening chambers Anayara 80.0 20.0 100.0 0.0 0.0 0.0 25.0 75.0 0.0 Nedumangad 20.0 80.0 100.0 0.0 50.0 0.0 50.0 0.0 0.0 Dry storage Anayara 10.0 90.0 100.0 0.0 0.0 0.0 0.0 100.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Godowns Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Mobile units Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Ware houses Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Drying yards Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Washing facility Anayara 20.0 80.0 50.0 50.0 0.0 0.0 50.0 50.0 0.0 Nedumangad 30.0 70.0 66.7 33.3 33.3 33.3 0.0 33.3 0.0 Assaying Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
81 Table 4.27: Infrastructure for transportation – Trader’s view (in per cent)
Facilities Markets Facility Agency Satisfaction Yes No Market 1 2 3 4 5 Anayara 88.9 11.1 100.0 0.0 62.5 12.5 0.0 25.0 Nedumangad 50.0 50.0 100.0 0.0 0.0 0.0 100.0 0.0 Ripening chambers Anayara 77.8 22.2 100.0 0.0 0.0 0.0 0.0 100.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Dry storage Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Godowns Anayara 66.7 33.3 100.0 0.0 33.3 33.3 0.0 33.3 Nedumangad 10.0 90.0 100.0 0.0 100.0 0.0 0.0 0.0 Mobile storage Anayara 11.1 88.9 100.0 0.0 0.0 0.0 0.0 0.0 units Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Ware houses Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Drying yards Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 10.0 90.0 100.0 0.0 0.0 100.0 0.0 0.0 Washing facility Anayara 66.7 33.3 100.0 0.0 0.0 33.3 50.0 16.7 Nedumangad 20.0 80.0 100.0 0.0 0.0 50.0 50.0 0.0 Assaying Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
Value Addition Infrastructure facilities required for value addition include food irradiation unit, inhouse product resting laboratory, machinery skilled labourers, infrastructure for branding or patenting etc. None of the facilities are available in these markets according to the farmers and traders. However big traders have infrastructure facilities for value addition, they own it privately. Standardisation The infrastructure needed for standardization includes facilities for setting uniform standards, display of samples, economic loads, quality testing labs, quality certification, weighing machines, surveillance camera etc. Out of these seven items only weighing machines is available in both the markets. Surveillance camera is available only in Anayara Market. Economic loads are available in Anayara market because, the farmers in Anayara operate in cluster form. Two farmers each from a cluster of around twenty members collect the produce from all the farmers operating in the cluster and bring the load to the market, and hence it is termed as economic loads/collective loads. This is not happening in NDD because, the farmers operate individually in NDD market. Traders also keep the same opinion with regard to infrastructure available in the WM for standardization.
82 Table 4.28: Infrastructure for standardisation – Farmer’s view (in per cent)
Facilities Markets Facility Satisfaction
Yes No Market 1 2 3 4 5
Uniform standards Anayara 30.0 70.0 33.3 0.0 0.0 0.0 100.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Display of samples Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Economic loads Anayara 80.0 20.0 0.0 0.0 0.0 0.0 0.0 100.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Quality testing labs Anayara 20.0 80.0 50.0 0.0 0.0 0.0 100.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Quality certification Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Weighing machines Anayara 90.0 10.0 66.7 11.1 0.0 11.1 44.4 33.3
Nedumangad 100.0 0.0 40.0 0.0 20.0 10.0 70.0 0.0
Surveillance camera Anayara 90.0 10.0 88.9 0.0 0.0 0.0 55.6 44.4
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
Table 4.29: Infrastructure for standardisation – Trader’s view (in per cent) Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Uniform standards Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Display of samples Anayara 33.3 66.7 0.0 0.0 33.3 0.0 66.7 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Economic loads Anayara 44.4 55.6 0.0 0.0 25.0 50.0 25.0 (collective loads) Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Quality testing labs Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Quality certification Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Weighing machines Anayara 100.0 0.0 0.0 0.0 11.1 11.1 77.8 Nedumangad 60.0 40.0 0.0 0.0 33.3 33.3 33.3 Surveillance camera Anayara 100.0 0.0 0.0 0.0 0.0 11.1 88.9 Nedumangad 30.0 70.0 0.0 33.3 66.7 0.0 0.0 Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
83 Grading and Packing The facilities needed for grading and packing include scientific labs, grading apparatus, electronic weighing, machines for packing, labelling and dispatching facility. However out of these only Grading apparatus and electronic weighing is available in NDD and TVM markets. Majority are satisfied with the electronic weighing apparatus. Manual grading is done for banana and vegetables in Anayara and NDD markets. Table 4.30: Infrastructure for grading and packing – Farmer’s view (in per cent)
Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Scientific labs Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Grading apparatus Anayara 80.0 20.0 0.0 12.5 12.5 75.0 0.0 Nedumangad 30.0 70.0 33.3 33.3 33.3 0.0 0.0 Electronic Anayara 90.0 10.0 0.0 0.0 0.0 100.0 0.0 weighing Nedumangad 90.0 10.0 0.0 22.2 11.1 44.4 22.2 Machines for Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 packing Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Labeling facility Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Dispatching Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 facility Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
Table 4.31: Infrastructure for grading & packing-Trader’s view (in per cent) Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Scientific labs Anayara 0.0 100.0 0 0 0 0 0 Nedumangad 10.0 80.0 0 0 100 100 0 Grading apparatus Anayara 0.0 100.0 0 0 0 0 0 Nedumangad 0.0 100.0 0 0 0 0 0 Electronic weighing Anayara 100.0 0.0 0 0 0 0 100 Nedumangad 40.0 60.0 0 0 0 100 0 Machines for packing Anayara 0.0 100.0 0 0 0 0 0 Nedumangad 40.0 60.0 0 0 0 100 0 Labelling facility Anayara 0.0 100.0 0 0 0 0 0 Nedumangad 10.0 90.0 100 0 0 0 0 Dispatching facility Anayara 0.0 100.0 0 0 0 0 0 Nedumangad 0.0 100.0 0 0 0 0 0 Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
84 4.5.4. Infrastructure for facilitation
Facilitation function of a market are divided into three – financing, provision of information and market integration. Infrastructure facilities needed for each of the three is given as separate tables below.
Regarding market financing, the infrastructure facilities needed are credit facility to buyers, credit facility to sellers, availability of bank/ATM, loan facility, incentives, credit sharing, shares etc. Of these only two items are available according to the farmers. i.e., Bank/ATM facility for farmers in Anayara and incentives for both Anayara and NDD. Eighty per cent of farmers in NDD report that incentives are available. However, farmers in NDD are not satisfied with the incentives, because of the long delay in receipt of incentives. Credit sharing facility is available to farmers in Anayara, since the market provides them credit as and when such schemes are available. Other facilities are not at all available in both markets. As far as traders are considered credit facility is available to all of them in Anayara market, but only 40 per cent of traders in Nedumangad market opine that they have credit facility. Availability of ATM is also reported by traders in Anayara. Regarding other infrastructure facilities for market financing, traders also report that none of the other facilities are available in the market.
Table 4.32: Infrastructure for market financing – Farmer’s view (in per cent) Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Credit facility to buyers Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 10.0 80.0 0.0 0.0 0.0 100.0 0.0 Credit facility to sellers Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 10.0 90.0 0.0 0.0 100.0 0.0 0.0 Bank/ATM Anayara 80.0 20.0 0.0 0.0 12.5 62.5 25.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Loan facility Anayara 10.0 90.0 0.0 0.0 0.0 100.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Incentives(specify) Anayara 80.0 20.0 0.0 0.0 0.0 0.0 100.0 Nedumangad 40.0 60.0 25.0 25.0 25.0 0.0 0.0 Credit sharing Anayara 10.0 90.0 0.0 0.0 100.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Shares Anayara 20.0 80.0 0.0 0.0 0.0 50.0 50.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
85 Table 4.33: Infrastructure for market financing – Trader’s view (in per cent)
Facilities Markets Facility Satisfaction
Yes No 1 2 3 4 5
Credit facility to buyers Anayara 88.9 11.1 0.0 0.0 12.5 25.0 62.5
Nedumangad 40.0 60.0 0.0 0.0 0.0 25.0 75.0
Credit facility to sellers Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Bank/ATM Anayara 100.0 0.0 0.0 0.0 0.0 22.2 77.8
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Loan facility Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Incentives Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Credit sharing Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Shares Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
Market information The infrastructure needed for provision of market information, in terms of computerized data, data management, record keeping and notice board is available, according to all the farmers in both the markets. However, information dissemination to farmers and traders is happening only in Anayara, and 70 per cent of farmers from Anayara also opined that education regarding market is provided to them. Regarding satisfaction of the three infrastructure facilities available for market information, farmers in Anayara are more satisfied. A member from the cluster will be available during the price determination process in Anayara along with Horticorp officials and market officials. This is not happening in NDD, according to the farmers and that is why satisfaction regarding market information is less in NDD market. Training to farmers is given on an average four times a year in Anayara. Except advertisement and market surveys all other market information infrastructure facilities are available in the market according to the traders and majority are satisfied by the facilities.
86 Table 4.34: Infrastructure for market information – Farmer’s view (in per cent) Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Computerized data Anayara 90.0 10.0 0.0 0.0 11.1 88.9 0.0 Nedumangad 100.0 0.0 0.0 30.0 20.0 50.0 0.0 Data management- record keeping Anayara 90.0 10.0 0.0 0.0 100.0 0.0 0.0 Nedumangad 100.0 0.0 0.0 0.0 100.0 0.0 0.0 Information Dissemination to Anayara 80.0 20.0 0.0 0.0 0.0 100.0 0.0 farmers and traders Nedumangad 30.0 70.0 0.0 0.0 33.3 66.7 0.0 Market surveys Anayara 10.0 90.0 0.0 0.0 100.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Information counter Anayara 70.0 30.0 0.0 0.0 0.0 100.0 0.0 Nedumangad 40.0 60.0 0.0 25.0 25.0 25.0 25.0 Notice board/price display Anayara 90.0 10.0 0.0 0.0 0.0 88.9 11.1 Nedumangad 70.0 30.0 0.0 28.6 71.4 0.0 0.0 Advertisement Anayara 10.0 90.0 0.0 0.0 0.0 100.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Market education Anayara 70.0 30.0 0.0 0.0 0.0 57.1 42.9 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data Table 4.35: Infrastructure for market information – Farmer’s view (in per cent) Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Computerized data Anayara 100.0 0.0 0.0 0.0 0.0 77.8 22.2 Nedumangad 100.0 0.0 0.0 0.0 0.0 80.0 20.0 Data management- record keeping Anayara 100.0 0.0 0.0 0.0 0.0 55.6 44.4 Nedumangad 100.0 0.0 0.0 0.0 0.0 90.0 10.0 Information Dissemination to Anayara 100.0 0.0 0.0 11.1 0.0 66.7 22.2 farmers and traders Nedumangad 80.0 20.0 0.0 0.0 12.5 75.0 12.5 Market surveys Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Information counter Anayara 88.9 11.1 0.0 0.0 0.0 62.5 37.5 Nedumangad 60.0 40.0 0.0 0.0 0.0 100.0 0.0 Notice board/price display Anayara 100.0 0.0 0.0 0.0 0.0 66.7 33.3 Nedumangad 90.0 10.0 0.0 0.0 0.0 100.0 0.0 Advertisement Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Market education Anayara 33.3 66.7 0.0 0.0 0.0 100.0 0.0 Nedumangad 20.0 80.0 0.0 0.0 0.0 100.0 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
87 Market Integration Of the different facilities for market integration, farmers from Anayara opine that market intelligence facility is obtained from the market and majority are satisfied with the available facility. Vertical market integration facility is available in both the markets, whereas 90 per cent of farmers in Anayara and 60 per cent from NDD opine that horizontal integration is available, particularly in determination of price. Some farmers from Anayara opine that market integration including digitization, ICT tools etc. are not available. However forward integration etc. is available in both markets, because the surplus is procured byHorticorp. Traders have difference in opinion from farmers regarding the availability of infrastructure facilities for market integration. None of the traders in Nedumangad opined that facilities for market intelligence are available in Nedumangad market. Similar is the opinion with regard to forward integration in both the markets.
Table 4.36: Infrastructure for Market integration – Farmer’s view (in per cent)
Facilities Markets Facility Satisfaction Yes No 12345 Market intelligence Anayara 80.0 20.0 0.0 0.0 0.0 62.5 37.5 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Risk bearing Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Vertical integration Anayara 100.0 0.0 0.0 0.0 0.0 50.0 50.0 Nedumangad 100.0 0.0 0.0 0.0 30.0 70.0 0.0 Horizontal integration Anayara 90.0 10.0 0.0 22.2 0.0 77.8 0.0 Nedumangad 60.0 40.0 0.0 33.3 16.7 50.0 0.0 Trader linkage Anayara 40.0 60.0 0.0 0.0 0.0 100.0 0.0 Nedumangad 10.0 90.0 0.0 0.0 0.0 100.0 0.0 Digitization Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 ICT tools Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Forward integration Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 10.0 90.0 0.0 0.0 100.0 0.0 0.0 Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
88 Table 4.37: Infrastructure for market integration – Trader’s view (in per cent)
Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Market intelligence Anayara 22.2 77.8 0.0 0.0 50.0 0.0 50.0 Nedumangad 20.0 80.0 0.0 0.0 0.0 100.0 0.0 Risk bearing Anayara 11.1 88.9 0.0 0.0 0.0 0.0 100.0 Nedumangad 30.0 70.0 0.0 33.3 33.3 33.3 0.0 Vertical integration Anayara 11.1 88.9 0.0 0.0 100.0 0.0 0.0 Nedumangad 70.0 30.0 0.0 0.0 42.9 57.1 0.0 Horizontal integration Anayara 88.9 11.1 0.0 0.0 12.5 87.5 0.0 Nedumangad 80.0 20.0 0.0 0.0 50.0 50.0 0.0 Trader linkage Anayara 66.7 33.3 0.0 0.0 0.0 100.0 0.0 Nedumangad 80.0 20.0 0.0 12.5 12.5 75.0 0.0 Digitization Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 10.0 90.0 0.0 0.0 0.0 100.0 0.0 ICT tools Anayara 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0 Forward integration Anayara 22.2 77.8 0.0 0.0 0.0 100.0 0.0 Nedumangad 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
4.5.5. NIAM classification of Infrastructure facilities According to NIAM classification, the infrastructure facilities needed for agriculture markets is classified into core facility, support facility, service facility and maintenance facility. Details of the requirement in this regard as specified by farmers is provided below. Core facilities Regarding platform for automatic weighing, AnayaraWMhas facility, but only one out of the ten farmers is aware of this facility. This facility is not at all used by any of the farmers. Platform for automatic weighing is available in NDD too but not in use. Auction platform are available in both markets. Regarding loading and unloading, such facility is enjoyed by farmers in Anayara and Nedumangad.
89 Table 4.38: NIAM classification – Infrastructure for core facility – farmer’s view
Facilities Facility Satisfaction
Yes No 1 2345
Platforms for Automatic weighing Anayara 1 9 0 0 0 1 0
Nedumangad 1 9 0 100 0
Auction Platforms Anayara 9 1 0 0 0 3 6
Nedumangad 10 0 0 2 3 3 2
Packaging &LabelingEquipments Anayara 0 10 000 00
Nedumangad 0 10 0 0 0 0 0
Drying Yards Anayara 0 10 0 0 0 0 0
Nedumangad 0 10 0 0 00 0
Loading, Unloading & Anayara 8 2 0 1 0 5 2
Nedumangad 1 9 6 0 0 1 0
Dispatch facilities Anayara 0 10 0 0 000
Nedumangad 0 10 0 0 0 0 0
Grading facilities Anayara 8 2 0 1 2 5 0
Nedumangad 8 2 0 1 2 5 0
Standardisation facilities Anayara 4 6 0 0 0 4 0
Nedumangad 1 9 0 0 0 1 0
Price Display Mechanism Anayara 7 3 0 00 52
Nedumangad 2 8 1 1 0 0 0
Information Centres Anayara 7 3 0 0 0 7 0
Nedumangad 4 6 1 1 1 0 1
Storage I Cold Rooms Anayara 8 2 0 0 2 5 1
Nedumangad 9 1 7 2 0 0 0 90 Public Address System Anayara 9 1 0 0 1 71 The farmers in Nedumangad do not want loading and unloading facility and they went to court to get permission to load and unload stock themselves. Existing grading facilities are only manual one both in Anayara and Nedumangad -Although price display mechanism is available for farmers in NDD very few notices it. Cold storage rooms are available in both markets but it is not functional and hence the satisfaction with regard to cold storage rooms is minimal for the farmers. In Anayara, there is a hall for provision of training and extension services to the farmers. The traders, however are aware of the platform for automatic weighing, but they are also not using it. Traders in Anayara are aware of the price display mechanism in Anayara, but not in Nedumangad. Traders are also aware of information centre and storage/ cold rooms in Anayara and Nedumangad. Regarding cold room, traders are not at all satisfied, but regarding other available facilities they are satisfied.
Table 4.39: NIAM classification – Infrastructure for core facility – trader’s view Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Platforms for Automatic weighing Anayara 8 1 0 0 2 5 1 Nedumangad 0 10 0 0 0 0 0 Auction Platforms Anayara 9 0 0 0 0 1 8 Nedumangad 9 1 0 0 0 7 2 Packaging &LabelingEquipments Anayara 0 9 0 0 0 0 0 Nedumangad 1 9 0 0 0 1 0 Drying Yards Anayara 0 9 0 0 0 0 0 Nedumangad 0 10 0 0 0 0 0 Loading, Unloading & Anayara 8 1 0 0 4 3 1 Nedumangad 9 1 0 3 6 0 0 Dispatch facilities Anayara 1 8 0 0 0 1 0 Nedumangad 1 9 0 0 0 1 0 Grading facilities Anayara 8 1 0 0 1 5 2 Nedumangad 3 7 0 0 0 3 0 Standardization facilities Anayara 2 7 0 0 1 1 0 Nedumangad 0 10 0 0 0 0 0 Price Display Mechanism Anayara 8 1 0 0 0 6 2 Nedumangad 2 8 0 0 0 2 0
91 Information Centres Anayara 8 1 0 0 0 6 2 Nedumangad 7 3 0 0 1 2 4 Storage I Cold Rooms Anayara 8 1 0 6 1 1 0 Nedumangad 6 4 0 6 0 0 0 Ripening Chambers Public Anayara 7 2 0 0 0 3 4 Address System Nedumangad 0 10 0 0 0 0 0 Extension and Training to Fanners Anayara 4 5 0 0 0 3 1 Nedumangad 3 7 0 1 0 2 0 Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
Support facility
The NIAM classification of support facility includes eleven items from water supply, power supply, sanitary facilities, posts and telephones, banking input supply and necessary outlets, repair/ maintenance facilities and availability of rain proofing.
Table 4.40: NIAM classification – Infrastructure for support facility – farmer’s view
Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Water Supply Anayara 7 3 0 0 0 5 2 Nedumangad 9 1 5 4 0 2 1 Power Anayara 9 0 0 0 0 5 4 Nedumangad 10 0 0 0 0 4 6 Sanitary Facilities Anayara 7 3 0 0 0 7 0 Nedumangad 6 4 3 4 0 0 Posts Anayara 1 9 0 0 0 1 0 Nedumangad 0 10 0 0 0 0 0 Telephones Anayara 2 8 0 0 0 1 1 Nedumangad 0 10 0 0 0 0 0 Banking Anayara 7 3 0 0 0 7 0 Nedumangad 0 10 0 0 0 0 0 Input supply und Necessity Anayara 7 3 0 1 0 6 0 Outlets POL Nedumangad 5 5 1 4 0 0 0 Repair I Maintenance Anayara 1 9 0 0 1 0 0 Service Office Nedumangad 1 9 0 1 0 0 0 Computerized systems Anayara 7 3 0 0 1 6 0 Nedumangad 3 7 0 0 1 1 0 Rain Proofing Anayara 9 1 0 0 0 7 2 Nedumangad 9 1 6 1 0 1 1 Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
92 Provision of water supply, power, sanitary facilities and computerized system and rain proof is available in both the markets. In NDD, farmers opine that sanitary facilities and water supply is very poor because of the fact that waste and wastewater from slaughter house runs off to the source of water supply. Cleaning and maintenance of toilet facilities is also very poor. Rain proof facility in NDD market is also very poor. InAnayara, the support facilities available are rated with a relatively good level of satisfaction reported by the farmers. Banking facility (ATM) and input supply facility is available in Anayara according to 70 per cent (provision of seeds, grow bags, fertilizer, pesticide etc.) and in NDD according to 50 per cent of farmers. Postal and telephone services and repair and maintenance services is not available in both the markets. Similar views are reported by traders operating in both the markets regarding support facilities.
Table 4.41: NIAM classification – Infrastructure for support facility – trader’s view
Facilities Markets Facility Satisfaction Yes No 1 2 3 4 5 Water Supply Anayara 9 0 0 0 0 7 2 Nedumangad 9 1 0 1 1 6 1 Power Anayara 9 0 0 0 0 0 9 Nedumangad 9 1 0 0 1 0 8 Sanitary Facilities Anayara 9 0 0 0 0 7 2 Nedumangad 10 0 0 6 2 2 0 Posts Anayara 0 9 0 0 0 0 0 Nedumangad 0 10 0 0 0 0 0 Telephones Anayara 1 8 0 0 0 1 0 Nedumangad 0 10 0 0 0 0 0 Banking Anayara 7 2 0 0 1 2 4 Nedumangad 1 9 0 0 1 0 0 Input supply und Necessity Anayara 8 1 0 0 2 5 1 Outlets POL Nedumangad 0 10 0 0 0 0 0 Repair I Maintenance Anayara 0 9 0 0 0 0 0 Service Office Nedumangad 1 9 0 1 0 0 0 Computerized systems Anayara 1 8 0 0 0 0 1 Nedumangad 2 8 0 1 0 1 0 Rain Proofing Anayara 9 0 0 0 0 2 7 Nedumangad 10 0 0 7 2 1 0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
93 Service Infrastructure
The service facility ranges from availability of rest rooms, market education facilities, soil testing facilities, drainage, covered drainage, availability of sitting facility, compound wall, toilets, parking space, fire to toilets. Rest room, market education facility is available at Anayara Market, whereas drainage, covered drainage, compound wall, toilets parking space, security etc. is available in all markets with varied degrees of satisfaction reported by farmers. Table 4.42: NIAM classification – Infrastructure for service facility – farmer’s view
Facilities Markets Available Yes No 12 345 Rest rooms Anayara 0 0 0 8 0 8 2 Nedumangad 0 0 1 0 0 1 9 Sheds for animals Anayara 0 0 0 0 0 0 0 Nedumangad 0 0 0 0 0 0 0 Market education Anayara 0 0 1 4 3 8 2 Nedumangad 0 0 0 0 0 0 10 Soil testing facilities Anayara 0 0 0 3 0 3 7 Nedumangad 0 0 0 0 0 0 10 Drainage Anayara 0 0 1 8 0 9 1 Nedumangad 2 4 1 2 0 9 1 Covered drainage Anayara 1 0 1 7 0 9 1 Nedumangad 4 2 2 2 0 10 0 Sitting facility Anayara 0 0 3 4 0 7 3 Nedumangad 0 0 0 0 0 0 10 Compound wall Anayara 0 0 0 9 0 9 1 Nedumangad 4 5 1 0 0 10 0 Toilets Anayara 0 0 0 8 0 8 2 Nedumangad 4 4 2 0 0 10 0 Parking space Anayara 0 0 0 4 5 9 1 Nedumangad 0 0 0 4 6 10 0 Fire fighting Anayara 0 0 0 8 1 9 1 Nedumangad 0 1 1 1 2 5 5 Security Anayara 0 1 7 1 0 9 1 Nedumangad 0 0 3 4 3 10 0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data Farmers are not satisfied with the toilets and drainage facilities at NDD market. Also, in NDD the farmers are not satisfied with the compound wall, as one portion of the wall is not maintained property. Since drainage facility is poor in NDD, waste water logging is happening and this is creating unhygienic environment in the market.
94 Table 4.43: NIAM classification – Infrastructure for service facility – trader’s view
Facilities Markets Available Not Available 12 3 4 5 Rest rooms Anayara 0 1 0 3 0 5 Nedumangad 0 0 0 0 0 10 Sheds for animals Anayara 0 0 0 0 0 9 Nedumangad 0 0 0 0 0 10 Market education Anayara 0 0 0 2 0 7 Nedumangad 0 0 0 1 0 9 Soil testing facilities Anayara 0 0 0 0 0 9 Nedumangad 0 0 0 0 0 10 Drainage Anayara 0 0 0 8 1 0 Nedumangad 0 3 6 1 0 0 Covered drainage Anayara 1 0 0 6 1 1 Nedumangad 0 3 6 1 0 0 Sitting facility Anayara 0 1 0 2 0 6 Nedumangad 0 1 1 1 0 7 Compound wall Anayara 0 0 0 6 3 0 Nedumangad 0 3 4 3 0 0 Toilets Anayara 0 0 0 9 0 0 Nedumangad 0 6 1 2 1 0 Parking space Anayara 0 0 0 1 8 0 Nedumangad 0 1 0 2 6 1 Fire fighting Anayara 0 0 0 6 2 1 Nedumangad 0 0 1 2 0 7 Security Anayara 0 0 0 7 2 0 Nedumangad 0 0 1 8 1 0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
Maintenance facility Maintenance facilities are also termed as green initiatives of the market. Cleaning facility and garbage collection facility is available in both the markets, whereas facility for garbage disposal or vermin composting is not available. Even though bio gas plant is available the plant is not functioning. Hence many of the farmers of both the markets are not aware of the facilities. Revolving fund for maintenance is also not available in the market. The available facilities are rated unsatisfactorily by farmers in Nedumangad. Similar opinion is shared by traders in Anayara and Nedumangad.
95 Table 4.44: NIAM classification – Infrastructure for maintenance facility – farmer’s view
If yes rating of availability Maintenance Facility/Green initiatives Yes No 12345 Cleaning facility Anayara 10 0 0 1 2 6 1 Nedumangad 10 0 4 3 1 2 0 Garbage collection Anayara 10 0 0 1 2 6 1 Nedumangad 7 3 2 3 1 1 0 Garbage disposal Anayara 1 9 0 0 0 1 0 Nedumangad 0 10 0 0 0 0 0 Waste utilization A.Vermin composting Anayara 0 10 0 0 0 0 0 Nedumangad 0 10 0 0 0 0 0 B. Biogas plant Anayara 5 5 0 2 2 1 0 Nedumangad 4 6 1 2 1 0 0 C. Bio gas power Anayara 1 9 0 0 0 1 0 Nedumangad 0 10 0 0 0 0 0 Revolving fund for Anayara 1 9 0 0 0 1 0 maintenance Nedumangad 0 10 0 0 0 0 0 Solar/wind energy Anayara 1 9 0 0 1 0 0 Nedumangad 2 8 1 1 0 0 0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
96 Table 4.45: NIAM classification – Infrastructure for maintenance facility –trader’s view
If yes rating of availability Yes No 12345 Cleaning facility Anayara 9 0 1 0 1 7 0 Nedumangad 10 0 0 2 3 4 1 Garbage collection Anayara 9 0 0 1 1 7 0 Nedumangad 10 0 0 1 4 4 1 Garbage disposal Anayara 1 7 0 0 0 1 0 Nedumangad 1 9 0 0 0 1 0 A.Vermin composting Anayara 0 9 0 0 0 0 0 Nedumangad 0 10 0 0 0 0 0 B. Biogas plant Anayara 1 8 0 0 1 0 0 Nedumangad 5 5 3 0 2 0 0 C. Bio gas power Anayara 0 9 0 0 0 0 0 Nedumangad 1 9 0 1 0 0 0 Revolving fund for Anayara 0 9 0 0 0 0 0 maintenance Nedumangad 1 9 1 0 0 0 0 Solar/wind energy Anayara 0 9 0 0 0 0 0 Nedumangad 0 10 0 0 0 0 0
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
4.5.6. Own infrastructure – trader
Many traders have own infrastructure as shown in the table. 50 per cent of traders in Anayaraand Nedumangad has got storage facilities whereas godown facility is available for 30 per cent and 20 per cent of traders in Anayara and Nedumangad. Washing facility and weighing machine is available for almost all the traders in both the markets. Value addition infrastructure is available for 60 per cent and 70 per cent of traders in Anayara and Nedumangad. Branding facility is available for 40 per cent of traders in both the market. Grading and Packaging facilities are also available for many of the traders because Kunnil, Welgate and Shesquare own super markets within the district.
97 Table 4.46: Own infrastructure trader
Facilities Yes Percent No Percent Storage Anayara 5 55.6 4 44.4 Nedumangad 5 55.6 4 44.4 Godown Anayara 3 33.3 6 66.7 Nedumangad 2 20 8 80 Washing facility Anayara 9 100 0 0.0 Nedumangad 9 90.0 1 10.0 Weighing machine Anayara 8 88.9 1 11.1 Nedumangad 6 60 4 40.0 Value addition Anayara 6 66.7 3 33.3 Nedumangad 7 70 3 30.0 Transportation Anayara 7 77.8 2 22.2 Nedumangad 4 40 6 60 Branding Anayara 4 44.4 5 55.6 Nedumangad 4 40 6 60 Packaging Anayara 6 66.7 3 33.3 Nedumangad 9 90 1 10 Grading Anayara 6 66.7 3 33.3 Nedumangad 9 90 1 10
Note: 1-Very Bad, 2-Bad, 3-Average, 4-Good, 5-Very good. Source: Primary data
4.6. Overall satisfaction – farmers and traders
Farmers and traders are satisfied with the location and accessibility of the markets, both in Anayara and Nedumangad. Regarding the physical and operational conditions also traders are satisfied in both markets, however farmers are not satisfied with the physical and operations conditions in the market. Table 4.47: Overall satisfaction farmer
Number Markets Very Low % Moderate % High % Very % low high Location Anayara 0 0 0.0 4 40.0 5 50.0 1 10.0 Nedumangad 0 1 10.0 4 40.0 4 40.0 1 10.0 Accessibility Anayara 0 0 0.0 4 40.0 5 50.0 1 10.0 Nedumangad 0 1 10.0 4 40.0 5 50.0 0 0.0 Physical Anayara 0 0 0.0 3 10.0 8 80.0 1 10.0 conditions Nedumangad 3 10.0 4 30.0 3 60.0 0 0.0 Operational Anayara 0 0 0.0 2 20.0 7 70.0 1 10.0 conditions Nedumangad 0 7 70.0 2 20.0 1 10.0 0 0.0 Source: Primary data
98 Table 4.48: Overall satisfaction trader
Number Markets Very low % Low % Average % High % Very high % Location Anayara 0 0.0 1 11.1 3 33.3 3 33.3 2 22.2 Nedumangad 0 0.0 2 20.0 7 70.0 1 10.0 0 0.0 Accessibility Anayara 0 0.0 0 0.0 2 22.2 5 55.6 2 22.2 Nedumangad 0 0.0 1 10.0 7 70.0 2 20.0 0 0.0 Physical conditions Anayara 0 0.0 0 0.0 0 0.0 7 77.8 2 22.2 Nedumangad 0 0.0 0 0.0 5 50.0 5 50.0 0 0.0 Operational Anayara 0 0.0 0 0.0 1 11.1 6 66.7 2 22.2 conditions Nedumangad 0 0.0 0 0.0 5 50.0 5 50.0 0 0.0
Source: Primary data 4.7. Factors contributing to the inefficiencies in WM – Principal Components Methods
Forty-four variables are identified as contributing to inefficiencies in the market. Opinion of the farmers and traders is elicited in this regard in a five-point scale and Factor Analysis is undertaken to derive out the major factors contributing to market inefficiencies.
Factor Analysis of Reasons for Market Inefficiencies Table presents KMO and Bartlett’s Test for Factors responsible for market inefficiencies. Kaiser- Meyer-Olkin Measure of Sampling Adequacy is found to be 0.697 which indicates the proportion of variance in the variables reasonably caused by the underlying factors. High values (close to 1.0) generally indicate that a factor analysis may be useful to explain the factors causing credit exclusion.
Table 4.49: KMO and Bartlett’s test for factors responsible for market inefficiency and Cronbach Alpha showing reliability
KMO and Bartlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.697
Bartlett’s Test of Sphericity Approx. Chi-Square 3146.24
df 946
Sig. 0.000
Cronbach’s Alpaha 0.836
Source: Primary data The significance level of Bartlett’s Test of Sphericity is less than 0.05 which indicates that the variables are related and hence the factor analysis is useful to examine the factors for credit exclusion. Factor analysis by Principal Component Method using Varimax Rotation extracted eleven factors which is capable of explaining 71.63 percentage of variance of all the forty-four variables related to
99 market inefficiencies. For clarity in the explanation of results small coefficients with absolute value below 0.5 were suppressed and the results are given in Table 4.50. Table 4.50: Factors of market inefficiencies extracted by principal component analysis Factors Variables Factor Loading Per cent of Variance Political factors Lack of enthusiasm from authorities 0.796 Bad work culture 0.769 Strong trade unions 0.767 11.81 Nepotism 0.703 Inactive administrative councils 0.683 Political intervention 0.667 Market specific Delayed payments 0.741 problems Public private partnership not included -0.703 Private investment low -0.674 10.38 Disputes 0.661 Cooption among traders 0.516 Less market regulations 0.512 Physical and Low physical conditions 0.812 Operational Condition Accessibility low 0.795 7.31 of markets High operational costs 0.691 Location problems 0.672 Infrastructure Issues Lack of subsidies 0.659 State policies not favourable for infrastructure 0.652 Inadequate infrastructure 0.623 7.18 Public investment less 0.592 Less market development 0.537 Awareness/Coordination Lack of awareness 0.713 issues Lack of co-ordination 0.654 6.95 Lack of knowledge 0.581 Price factors Low price 0.770 Not enough price for organic products 0.642 5.52 Invasion of products from other states 0.514 Exports/value addition No APMC act 0.800 Processing/value addition less 0.737 5.49 Export less 0.511 Marketing costs High cost of transportation 0.734 No cold chain facility 0.665 5.09 Tax concession low 0.546 Market rate high 0.789 Land issues Lack of land available for cultivation 0.782 4.42 Government policies ineffective 0.606 Financial issues Unavailability of credit 0.789 3.94 High marketing cost 0.659 Demand issues Mismatch between demand and supply 0.601 3.45 No demand forecasting methods 0.486 Source: Primary data
100 From the Table 4.50 it can be seen that eleven factors are identified as contributing to inefficiencies. The First Factor consists of six variables viz., lack of enthusiasm from the part of the authorities, bad work culture, strong trade unionism, nepotism, inactive administrative councils, political intervention etc. Since these variables are related to political factors, the factor has been identified as political factors contribution to inefficiencies. These variables explain 11.81 per cent of variance. Among the variables in Factor one, the variable lack of enthusiasm from the part of the authorities (0.796 factor loading) is the most important factor reported by farmers and traders as contributing to market inefficiencies. Variables like bad work culture (0.767 factor loading) strong trade unionism (0.767 factor loading) also contributes to market inefficiencies. Factor two comprises of six variables and this factor explains 10.86 per cent of variance in market inefficiency contributing factors. The identified variables are delayed payments, disputes, co-option, no market regulation etc. Public private partnership and private investment are viewed as not necessary by the farmers and traders. The second factor is termed as market specific factors. Factor three comprises of variables like inadequate or inappropriate physical conditions, issues relating to accessibility, operational costs, location etc. each with factor loading of 0.812, 0.795, 0.691 and 0.672 respectively. Factor three could explain 7.31 per cent of variance in market inefficiencies. Factor four includes six variables related to infrastructure availability and hence the factor has been termed as infrastructure factors, the variables being lack of subsidies, state policy not favourable or infrastructure, inadequate infrastructure, public investment less, less market development etc. Factor four explains 7.18 per cent of variance in market inefficiencies. All the variables in factor four, are very influential variables for market inefficiencies as reported by their factor loadings. Factors five, six, seven, eight, nine, ten and eleven has been termed as awareness issues, issues related to price, exports/value addition issues, marketing costs, land issues, financial issues and demand forecasting issues. Of these, lack of awareness is the most important contributor in the awareness problems (0.713), low price (0.77) in price issues, unavailability of credit (0.781) towards financial problems etc. Thus, these factors must be looked into immediately by the policy makers in order to solve the inefficiencies related to marketing of agriculture produce. To summarise,the Wholesale markets in the state were established to improve efficiency in food production and distribution by encouraging competition through creating conditions for transparent price discovery at relatively low costs and by enhancing market information to various actors. This role reduces per unit market cost, promotes stable market for local produce and encourages increased output and productivity. By centralizing transactions at a single location, reducing the period for transactions and separating wholesale and retail functions in the distribution system, whole sale markets promote greater transparency and better price formation through an interplay of supply and demand. Storage and handling conditions are also enhanced, leading to significant reductions in post-harvest lost especially in the case of perishable products. Against these specified benefits expected from Wholesale Markets, analysis of the existing ones in Kerala reveals that the conduct and performance of the Wholesale Markets are far below the benchmarks. Many functional and administrative crisis can be found in the market relating to the conduct of market activity. Lack of accuracy in payments result in discouragement of farmer’s participation in the markets. As of now, online trading facility is
101 not established in the markets. Competition through creating condition for transparent price discovery is also low because traders are few and, in several occasion, price is set by negotiation. During the times of bumper crops, there is distress sales and no mechanism for price regularity. The infrastructure for storage, grading, packaging, value addition, market integration and facilitation is very low, hence even after establishment of Wholesale Markets, post-harvest loss remains high. The provision for forward and backward linkages and demand forecasting is also absent in the market. The farmers also faced difficulty because of the perishability of the product and wanted the market to be opened on all days. Hence to conclude the issues in relation to the structure, conduct and performance of the Wholesale Markets needs to be addressed for making it meet the true requirements of farmers, traders and other stakeholders.
102 CHAPTER 5 Agriculture Marketing Infrastructure in Kerala: An Analysis of Wholesale Assembly Markets/Rural Periodical Markets in Kerala
WAM/RPM are the markets in which majority of consumers depend upon for purchasing essential commodities for living and agriculture produce forms the major commodity that is traded in this market. In Kerala under each LSG, there is at least one market and they are entrusted with the maintenance of the markets. In order to assess the infrastructure facilities and requirement, five WAM/ RPM were selected each from Trivandrum and Idukki.
5.1. Trivandrum – WAM/RPM
For in-depth analysis, from Trivandrum district two WAMs- Palayam and Nedumangad are selected. For understanding the RPM, markets in Kazhakootam, Pothencode and Nanniyodu are chosen. Unlike the other states, the structure and function of WAM/RPM are very different in Kerala, as the state is dependent on other states for agriculture produce and imports a large share of agriculture produce traded in the state. In other states WAM/ RPM has a function to mobilize the surplus products from farmers to the second strand of supply chain, and thus becomes the most important place where the farmer comes in direct contact with the ultimate consumer/ wholesaler/retailer. And it is assumed that after grading and standardization the surplus produce has to go to the wholesale markets. But the WAM/RPMs in Kerala show a unique pattern where mostly the markets are filled with sellers, who buy produce from an ‘invisible famer’ in the neighboring state, through an intermediary. Naturally, this large supply chain creates ramifications in price determination, quality of products and conduct of markets. From the observation of functioning of markets and discussion with stakeholders relating to additional requirements, the following insights were revealed.
5.1.1. Infrastructure
Infrastructure facilities at the five markets are compared in the below table to understand how the absence and presence of the infrastructure facilities may affect the structure, conduct and performance of the markets.
103 Table 5.1: Wholesale Assembly Markets – Infrastructure
Basic Facilities Palayam Nedumangad Kazhakootam Potencode Nanniyode Auction Hall No No No No No Individual platform Yes No Yes No No Shops Yes Yes Yes Yes Yes Weigh bridge No No No No No Sitting facility Yes No No No No Office Building Yes No No No No Toilet complex/ rest room Yes No Yes No Yes Electricity Yes No Yes No Yes Crop specific platform No No No No No Storage No No No No No Waste management Facility Yes No Yes No Yes Quality Test No No No No No Source: Primary data
5.1.2. Institutional Environment The two WAM- Palayam and Nedumangad and the RPMs are governed by Local Self Governments. Palayam and Kazhakootam markets are monitored by Trivandrum Corporation, and there is an administrative office inside the Connemara market, Palayam where a health inspector and office assistants directly oversee the working of the market. Infrastructure: Compared to other markets, the two markets – Palayam and Kazhakootam - are better with regard to infrastructure facilities. New Trading hall with roofing and flooring has been built in the two markets. In Kazhakootam market, there is separate trading platform to sell tapioca which is a high demand commodity. And the sellers are provided with individual selling platforms. Also, corporation cleaning staff cleanses the whole area two times and the market is protected with a wall. However, there is no waste management facility inside market, but a biogas plant is installed. The waste collected is transported to Vilapilsala and the sellers are advised to take away any waste generated since there is no facility inside market. With regard to service facilities, the market does not have any security system. But there are good toilet facilities, light and fan facility. There is parking facility for two wheelers, but the market space is less and so during evening the market is congested. Occasional quality checks are done from the Corporation to ensure quality of produce. Palayam market is being renovated. The vegetables market and shops are renovated and renovation of fish market has to start. Even though the market has toilet facilities, drainage, they are not functioning properly. And the trading hall which is built does not accommodate all sellers. One important attraction of the market is the parking facility provided to buyers and the proper maintenance of the facility by the security guard.
104 Conduct: Sellers in the Palayam market buy produce from Chala and Vilapilsala markets and resale it in the market. Sellers have to incur floor rent, transportation expense, travel expense, waste management charge (Rs.150 per day), loading charge (Rs. 25 for 70 kg), in order to sell in the market. Market does not have a price discovery mechanism and there is variation in price. In Kazhakootam, the new market started functioning before four months and the working time is from 5.am to 9 p.m. Majority of the vegetables come from Tamil Nadu and Mysore and the two major wholesalers in the market buy the produce from them. All the other retailers are buying from the wholesalers and selling the product at a hiked rate to individual consumers. Only one shop is selling local vegetables produced nearby to the market which are organic. There are individual sellers who sell tapioca, spinach, chilly and jack fruit which is produced locally, but they are of small quantity. Major trade happens with the middlemen and seller in market based on the mutually agreed price and quantity. The sellers do not have any association and they are fragmented in their opinions. There exists much variation in price inside the market among different sellers and at different times of the day. There is no price discovery mechanism operate since auction facility is not there and price index is not displayed in the market. Every seller fixes a price, which is above the price at which they bought the produce from wholesalers. And the margin varies between Rs.5 to 20 per kg. depending on the nature of consumer, time of sale etc. for instance, during evenings, the prices drop very much as there is a rush of consumers. Retailers pack the vegetables into small quantities and sell them to consumers, who are local people. The retailers get the produce at credit which they repay once they sell all the quantities purchased from wholesaler, that may take at least two days. As the new market starting functioning few months early, the market is not leased out. So, none of the sellers have to pay registration fee or rent. There are some disputes among the sellers and farmers. Farmers are of the opinion that they have to compete with the cheap imports from other states as premium price is not getting for their organic produce and there is no auction facility or a place to sell directly. The three other markets Nedumangad, Pothencodeand Nanniyodelacks basic infrastructure facilities. Nedumangad is Wholesale Assembly Market and is governed by the Nedumangad Municipality and Pothencode market is under Pothencode Panchayat. The market is leased for an amount of 20 lakhs and rent has been collected from sellers. However, the markets lack basic infrastructure such as trading hall, internal roads, drainage, weighing machines, parking facility and waste management facility. The new market building has been under construction for three years, but it is not completed yet. Traders has to give entry fee (Rs.40), floor rent (Rs.40), shop rent (Rs. 1000), loading charges in the market. They are deprived of the basic facilities such as toilet facility, drinking water facility. Once a famous and renowned market, the market is losing its significance as there does not have basic infrastructure.
105 Around 110 sellers are there in the market and major trading days are Wednesday and Saturday. In Pothencode market, local farmers turn up in early morning and sell their produce just outside the market, since the farmers are not provided with an auction hall and facility to sell. Most of the agriculture produce come from Tamil Nadu, and the wholesalers has occupied the newly built trading hall and converted it into a storage space. The market is very unhygienic and many of the sellers has reported to have skin infections and other disease because of the poor infrastructure. The market is situated adjacent to the bus stand and there are space constraints. Poor infrastructure has resulted in increased production loss. This has led to loss incurred by sellers. 5.2. Idukki – WAM/RPM Five markets are selected from Idukki for detailed study. Two WAMs-Kattappana market and Nedunkandam Market – and three RPMs- markets at Thookupalam, Elappara and Pambanar are selected. Being unique in its topography and with presence of migrant population from Theni, the markets in Idukki need to be analyzed distinctly. 5.2.1. Infrastructure Facilities in the market Following table depicts a comparison of infrastructure facilities in the markets in Idukki. The marketing infrastructure and requirement are discussed in detail below.
Table 5.2: Wholesale Assembly Markets: Infrastructure
Basic Facilities Kattapapna Nedumkandam Thookupalam Pambanar Elappara Auction Hall No No No No No
Individual platform Yes No Yes No Yes
Shops Yes Yes Yes Yes Yes
Weigh bridge No No No No No
Sitting facility Yes No No No No
Office Building Yes No No No No
Toilet complex/rest room Yes No Yes No No
Electricity Yes No Yes No Yes
Crop specific platform No No No No No
Storage No No No No No
Waste management Facility Yes No Yes No No
Quality Test Yes No Yes No No
Source: Primary data
106 The most important market in Idukki is Kattappana market, which is under the Kattappana Municipality. Being set up a longtime ago, the market is a major trading center where not only vegetables, meat and fish but also all items are being trade.Municipality gains around Rs.82,09,707/-as provisional tax rent and Rs. 2 crore 10 lakhs as property tax. The market is situated in three lines and in the upper line, vegetables are sold. Both wholesale shops and retail shops are in the market and they work from 7a.m. to 9p.m. A total of around 100 shops are in the market and there are traders who comes to the market on the market day which is Saturday and sell vegetables by paying an entry of Rs. 230. The yard is not rain proof, so they are paying around Rs. 250 as rent for Tarpaulin sheet by which they make a temporary shed. They are paying a floor rent to the auctioneer who has taken the trading yard for one year for the amount of Rs. 10 lakhs. Others are paying rent ranging from 3000 to 15000 based on the facilities of the shop. The market has basic facilities such as toilet, which is use and pay and electricity and water supply, drainage and rain proof except the trading yard where temporary sellers sell. Traders have to meet the transportation cost and loading and unloading fees. Traders are paying a license fee of Rs.1000 and Employment tax of Rs.1000. also, they are contributing towards development of market infrastructure. For instance, the traders on an average paid Rs. 28000/- towards building drainage and doing the rain proof. The Merchant Association is very active and meeting are being conducted. Almost all vegetables are coming from Theni and Kamabam, the nearby places in Tamil Nadu. Tapioca and coconut mostly come from within Kerala, mainly from Guruvayoor, and Moolamattam. VFPCK is also supplying vegetables, especially cow pea, ginger, turmeric, bitter gourd and banana in the market. There are large traders who sell 1.5 tons of tapioca and coconut to retail shops. Currently the waste is being collected in the early morning by Municipality workers and is sent to dumping yard at Puliyanmala. The work of Incinerator and Bio converter plant is progressing for which around 30 lakhs are invested by the Municipality with contribution from traders. The market is not having storage facility, grading or assaying facility and the traders are compelled to give donations for every program. The market prices for spices are taken from average price at spice board auction. However, for vegetables there is no transparent system for price fixation and price is not displayed. The other WAM, Nedumkandam literally lacks the essential infrastructure including trading hall, electricity and toilet facilities. Most of the sellers are migrant traders from Tamil Nadu who stays in their shop itself. Around 25 shops are functioning in the market including one Haritha Kendra. Floor rent is collected from traders and for waste management Rs. 60 is collected by the Panchayat. The market is in grave need of essential infrastructure such as internal roads, drainage, electricity and good shops. The market unhygienic and not accessible. With regard to the two RPMs, Thookupalam, under Karunapuram Panchayat and Pambanar market under Peerumade Panchayat, the infrastructure facilities are pathetic. Auction day in Thookupalam market is on Sunday and all the traders are sitting in the floor since the Panchayat has initiated construction of new market which may take at least three years for completion. And the
107 traders are not provided with alternative infrastructure which makes the trading difficult. Vegetables come from Kambam and Theni and traders are paying a floor rent of Rs. 40. In the Pamabanar market there is a lack of basic infrastructure such as drainage, drinking water, auction hall, rain roofing, price display and facility for waste management. Still the traders are paying a license fee of Rs. 1700 and shop rent about Rs. 1500. There are about 50 sellers in the market and they are employing a security by collecting Rs. 60 from the sellers. Market in Elappara is a best example for how lack of maintenance and imprudent construction of market by panchayat can lead to ceasing functioning of the market. A new market was constructed with the financial help of Rs. 25 lakhs from NABARD, in the place of old market. Once a market where trade was affluently happening, after construction, the trade was stopped, owing to the poor planning and construction of market infrastructure. The shops constructed were not spacious enough and the materials used for construction was of poor quality. The sellers were not able to use the shops and the market was inaccessible and the trade slowly stopped. Currently the market has less than 10 sellers and the trade has been very less. 5.3. Performance of Wholesale Agricultural Markets/Rural Periodic Markets The performance of RPM/WAM is understood by collecting and analysing primary data from ten WAM/RPM in Kerala, five each from the districts of Thiruvananthapuram and Idukki. Fifty samples sellers are also randomly selected from WAM/RPM five from each market. The socio- demographic and market operation details are reported in the first section and the infrastructure facilities as perceived by the sample is analysed in the second section. Section A 5.3.1. Socio-economic-market operation details of sample respondents As given in Appendix 4 tables, five sellers are selected from each of the markets, thus forming 25 from Trivandrum and 25 from Idukki. In Trivandrum, within Nanniyode market, a panchayat stall and VFPCK stall within the market is selected. Seventy per cent of the sample traders are male and 30 per cent are females. Mean age of the seller is 53 in Trivandrum and 49 in Idukki, and the average years of engagement in trading business is 19 in both markets. The startup capital amount for a trader in Trivandrum is an average amount of Rs.46,580 and Rs.19,080 in Idukki. Ninety-four per cent of the sellers in RPM engage in trade activity alone, with 100 percent of Idukki traders engaging in trade alone. Seventy-six per cent of the sellers participate in trade year around. Regarding the products that are brought for sale, only one person out of the 50 bring his/her own product to the market (in Kazhakuttam market). Only 10 per cent collect it directly from domestic farmers. Another 10 per cent collect it from intermediary traders in Kerala, 18 per cent from wholesale seller in the same market, 8 per cent from different markets inside Kerala and 52 per cent from other states, particularly Tamil Nadu and Karnataka. Buying of agriculture produce from other states for resale in the RPM is rampant in Idukki, where 84 per cent of the sellers are doing the same thing. In Trivandrum, this is happening for five traders, that too particularly in Nanniyode and Pothencode
108 market. Purchasing from WS seller in the same market and resale in the same market happens mainly in Kazhakuttam. It is the Wholesale seller who orders bulk purchase and from them retail sellers purchase their required quantity.
Table 5.3: Nature of trade activity (RPM Sellers)
Activities Trivandrum Idukki Total Number % Number % Number % Trade activity Alone 22 88 25 100 47 94 With a partner 1 4 0 0 1 2 Others 2 8 0 0 2 4 Total 25 100 25 100 50 100 Participation in trade year around Yes 21 84 17 68 38 76 No 4 16 8 32 12 24 Total 25 100 25 100 50 100 Nature of buying agricultural produce for sale Own produce 1 4 0 0 1 2 Directly collect from domestic farmers 3 12 2 8 5 10 From intermediary traders in Kerala 4 16 1 4 5 10 From wholesale seller in the same market 8 32 1 4 9 18 From different market inside Kerala 4 16 0 0 4 8 From other states 5 20 21 84 26 52 Total 25 100 25 100 50 100
Source: Primary data
Marketing Expenditure Incurred The sample collected is in such a way that some are operating shops within the market and some sit in the market and engage in selling activities. The expenditure incurred for the trade activity is given in table; these expenses form the marketing expenses. Out of the total sample collected, seven operate shops in Trivandrum and 14 operate shops in Idukki. Per month rent is Rs.7057 for Trivandrum and Rs.3759 for Idukki. The shops also have electricity expenses. Labour cost is incurred by five sellers in Trivandrum and three sellers in Idukki, the average cost of labour charges being Rs.28800 for Trivandrum and Rs.37000 for Idukki. These eight sellers that incur labour cost are big sellers owning shops within the market and employing two or three labourers per day, and their average sales turn over being Rs.20,000 per day. Transportation cost forms a major cost incurred by the sellers with a mean value of Rs.7839 for markets in both the districts. Loading charges to an extend of Rs.3090 and Rs.2133 is incurred by sellers in Trivandrum and Idukki respectively. Product loss to an extend of Rs.5143 in
109 Trivandrum and Rs.674 in Idukki is also happening. A seller in Trivandrum incurs an average marketing cost of Rs.20,794 and the concerned value in Idukki is Rs.13,403. Considering both the markets the mean expenditure incurred for marketing is Rs.17098. Table 7 shows the per cent distribution of marketing cost. The most important component of marketing cost is transport cost (25.55 per cent) followed by rent (16.08) and market fee (14.9 percent). Table 5.4: Marketing Expenditure incurred
Items Trivandrum Idukki Total Mean N SD Mean N SD Mean N SD Rent 7057 7 7068.9 3759 14 3218 4858 21 4926 Electricity 564 7 349.7 216 15 138 327 22 274 Labour 28800 5 33544.0 37000 3 19287 31875 8 27700 Credit 100 3 173.2 6903 3 4711 3501 6 4772 Transport 7595 20 11192.0 8215 13 20265 7839 33 15115 Market fee 823 18 589.3 329 19 291 569 37 519 Loading 3091 16 2874.8 1446 15 2133 2295 31 2637 Packing 1888 4 2181.9 900 2 849 1558 6 1806 Product loss 5144 19 10685.3 675 11 711 3505 30 8709 Others 136 7 106.9 127 12 220 130 19 183 Total Marketing cost 20794 25 34237.7 13403 25 28487 17098 50 31394 Source: Primary data
Table 5.5: Expenditure incurred for shop (Percent)
District Trivandrum Idukki Total Mean N SD Mean N SD Mean N SD Rent 11.7976 25 24.19616 20.3648 25 25.51446 16.0812 50 24.98655 Electricity 0.862 25 2.05556 5.1388 25 13.41146 3.0004 50 9.73827 Labour 6.5596 25 16.6385 6.8508 25 20.89278 6.7052 50 18.69269 Credit 0.1792 25 0.896 6.4344 25 18.3481 3.3068 50 13.2388 Transport 32.0216 25 28.40306 19.092 25 23.22713 25.5568 50 26.49578 Market 12.7468 25 24.01418 17.1696 25 27.66615 14.9582 50 25.73603 Profession 0 25 0 2.1408 25 7.22866 1.0704 50 5.17327 Loading 12.3804 25 17.00234 10.1776 25 13.39856 11.279 50 15.19068 Packing 4.4256 25 13.27521 0.482 25 2.19188 2.4538 50 9.62485 Production 18.7748 25 22.76781 10.546 25 21.59131 14.6604 50 22.34963 Others 0.3716 25 0.86074 2.316 25 5.28196 1.3438 50 3.87198
Source: Primary data
110 Difference in the sales value and purchase value of selected agriculture commodities Per month difference in the sales value and purchase value of each agriculture commodity is given in the table. On an average, a seller receives Rs.29560 per market as the difference between purchase price and sale price with Rs.29082 in Trivandrum and Rs30018 in Idukki. Within vegetables, the difference between sales value and purchase value is highest in the case of bitter guard, chilly and cucumber in Trivandrum and cowpea and bitter guard in Idukki. Regarding tapioca, a seller in Idukki get a surplus value of Rs.4480 followed by coconut (Rs5892) and ginger (Rs.4269) whereas the corresponding values in Trivandrum are Rs.7476, Rs.5925 and Rs.3208. The figures are summarized and analysed in the next table in terms of total revenue, cost and difference between cost and revenue along with marketing cost and marketing margin. Table 5.6: Mean difference in the purchase value and sales value of selected agriculture commodities sales in a month
District Trivandrum Idukki Total
Mean N SD Mean N SD Mean N SD
Tapioca 7475.636 11 6186.721 44480 10 87542.05 25096.76 21 61857.86
Banana 7368.75 8 9198.328 3720 5 2398.333 5965.385 13 7395.026
Coconut 5925.833 12 7889.075 5892.308 13 7644.874 5908.4 25 7599.202
Ginger 3208.571 14 4629.476 4269.333 15 5598.29 3757.241 29 5090.385
Cowpea 3905.882 17 7901.758 16248 5 27903.75 6710.909 22 14963.48
Spinach 4593 10 3311.955 200 1 . 4193.636 11 3409.772
Cucumber 6812.727 11 8899.625 1195 8 1844.893 4447.368 19 7310.669
Gourd 5380.909 11 5990.902 1291.429 7 1620.776 3790.556 18 5123.254
Bitter guard 16866.67 3 26962.44 5320 9 12113.22 8206.667 12 16314.44
Chilly 11053.85 13 23024.32 1500 1 . 10371.43 14 22267.93
Sales-Purchase 29082.17 24 42972.44 30018.4 25 61477.74 29559.84 49 52676.6
Source: Primary data
Cost, Revenue and Marketing Margin
Since marketing cost cannot be separated for each agriculture output, marketing margin can only be estimated for the total products. Table 9 shows that the difference between sales revenue and purchase cost is Rs.29092 for Trivandrum, Rs.30018 for Idukki and Rs.29560 for both the markets as an average. When the marketing cost is subtracted from this difference, market margin is obtained. The market margin as an average is Rs.7630 for Trivandrum and Rs.16615for Idukki. It is to be noted that only the crops selected in the study are considered here and the sellers sell other agricultural products also including tomato, potato, ladies’ finger, onion, pumpkin etc. which are common items in Kerala food dishes and hence marketing margin may be higher than what is reported.
111 Table 5.7: District wise total revenue, cost, marketing cost and market margin in a month Districts Total revenue Total cost Difference Marketing Market cost margin Trivandrum Mean 189395 162954.3 29082.17 20793.76 7630.333 N2524242524 SD 311469.6 279292.7 42972.44 34237.68 43195.33 Idukki Mean 113977.6 83959.2 30018.4 13403.2 16615.2 N2525252525 SD 176701.4 116262.1 61477.74 28487.08 43046.94 Total Mean 151686.3 122650.7 29559.84 17098.48 12214.45 N5049495049 SD 253497.1 213839.7 52676.6 31393.6 42908.74 Source: Primary data
Payment Schedule
Table 5.8 shows the payment schedule of the traders. Fifty two percent have to pay on buying, six per cent even before buying and for 18 per cent the payment schedule is pay after sale. Daily payment schedule is available for 6 per cent and weekly and monthly for 14 per cent and 2 per cent.
Table 5.8: Payment Schedule
Number Percent
Monthly 1 2 Weekly 7 14 Daily 3 6 Pay after sale 9 18 On buying 26 52 Before buying 3 6 Others 1 2 Total 50 100 Source: Primary data
112 Details of purchasing, storage and physical treatment
Price and proximity are the two factors that determine from where purchase should be made for resale. Majority do not have information on market price before entering into purchase, those who get information get it form colleagues in the market. Physical treatment is made by many before resale, physical treatment includes sorting, grading, packaging and cutting manually.
Table 5.9: Details of purchasing, storage and physical treatment
Number Percent Number Percent Factors that determine the choice of purchase If yes, source of information (N=11) Price 15 30 Cooperative 0 0 Proximity 25 50 Commission Agent 2 18.2 Other 3 6 Colleagues in The Market 6 54.5 Availability 7 14 Traders 1 9.1 Total 50 100 Others 2 18.2 Price setting Own Storage facility Myself 2 4 Yes 1 2 The Seller 34 68 No 49 98 Negotiation 4 8 Total 50 100 Other 10 20 Physical treatment to maintain quality Total 50 100 Yes 32 64 Awareness of market price before auctioning No 18 36 Yes 11 22 Total 50 100 No 39 78 Type of physical treatment Total 50 100 Sorting 19 59.4 Grading 17 53.1 Packaging 6 18.8 Cutting 21 65.6 Divisioning 11 34.4 Source: Primary data
Regarding sales in the market, the seller himself sets the price and awareness regarding the market price is available for majority of sellers and the source of market price is mainly colleagues. Around half of the sellers consider information on prices as effective and timely whereas the other half do not have any opinion regarding this.
113 Table 5.10: Details of selling price and information Number Percent Setting of selling price Myself 46 92.0 The Buyer 1 2.0 Negotiations 1 2.0 Other 2 4.0 Total 50 100.0 Awareness of market price before selling Yes 46 92.0 No 4 8.0 Total 50 100.0 Source of market price Colleagues 35 76.1 Trader 5 10.9 Dealers 4 8.7 Newspaper 1 2.2 Market Officials 1 2.2 Total 46 100.0 Effectiveness of information Effective 27 54.0 Undecided 23 46.0 Total 50 100.0 Timeliness of information Timely 28 56.0 Undecided 22 44.0 Total 50 100.0 Source: Primary data
Details of trading licenses
Sixty-four per cent of the sellers have trading license and as an average an amount of Rs.1131 was paid per year for trading license renewal in Trivandrum and Rs.3098 in Idukki. Some sort of restrictions is kept for entry for new sellers in Kazhakkoottam market.
114 Table 5.11: Details of trading license Number Percent Trading license Yes 32 64 No 18 36 Total 50 100 Entry restrictions Yes 3 6 No 47 94 Total 50 100 Payment for trading license Payment Trivandrum Mean 1131.2 N25 Std. Deviation 3025.971 Idukki Mean 3098 N25 Std. Deviation 6145.467 Total Mean 2114.6 N50 Std. Deviation 4895.88 Source: Primary data
Section B Section B examines the infrastructure facilities available in market as reported by the sample along with satisfaction levels. 5.3.2. Infrastructure Facilities Available in the Market: Selling Platform Details of Selling Platform as opined by the sellers is provided in table 5.12. Selling platforms is available for 66 per cent and crop specific selling platform is available only according to five persons (10 per cent). Selling platform is available in Kazhakuttam, Palayam, Elappara, Pothencode and Nanniyode. However, in Elappara, the platform is not used because of the very bad condition. Payment display is available in VFPCK stall in Nanniyodeand Pothencode has auction hall. Weighing machine is available for 78 per cent of the sellers. Selling platform is provided by different agencies including Corporation, Municipality, Panchayat and VFPCK based on the locality. Fifty per cent of the sellers reported the condition of the Selling Platform as below average.
115 Table 5.12: Details of Auction Hall – views of sellers
Selling Crop Specific Price Display Payment Display Weighing Notice Board Auction Machine Platform Facility Yes 33(66) 5(10) 0 1(2) 39(78) 0 No 17(34) 45(90) 50(100) 49(98) 11(22) 50(100) Satisfaction Very Bad 20(40) 0 0 0 0 0 Bad 5(10) 0 0 0 0 0 Average 3(6) 0 0 0 0 0 Good 3(6) 3(6) 0 0 5(10) 0 Very Good 2(4) 2(4) 0 1(2) 34(68) 0 Note: Per cent in parentheses. Source: Primary data
Infrastructure for Performing Physical Functions of the Market The first category of infrastructure needed for performing physical function of market is transportation. Table shows the transport related infrastructure facilities in the market and satisfaction regarding the same. Loading facility is available in all markets. Ninety per cent have road facility and eight two per cent have facilities for transporting from purchase point to market. All sellers have facilities for passenger transport. Trucks/insulated AC vans etc. is not available in any of the markets. Parking facility is available in Kazhakkootam, Palayam and Nanniyode. Kazhakkootam provides parking facility only for two wheelers and the sellers raised complaints regarding the parking of loading vehicles in front of the market as this affect their sales because of the inconvenience caused to the sellers. In Palayam, parking fee is charged, whereas for Kazhakkootam and Nanniyode parking is free. Nanniyode market do not have an official parking space, but free space is available for parking. Majority have average level of satisfaction with the loading facility with specific difference between markets. and same is the case with road facilities. Table 5.13: Infrastructure for physical movement of goods (Transportation) - views of sellers
Loading Trans: Road Transfrom Passenger Check Parking Trucks/ Mainte Inside Field Post Insulated nance Van (AC) of Vehicle Facility Yes 50(100) 0 45(90) 41(82) 50(100) 0 15(30) 0 5(10) No 0 50(100) 5(10) 9(18) 0 50(100) 35(70) 50(100) 45(90) Satisfaction Very Bad 1(2) 0 2(4) 2(4) 0 0 0 0 0 Bad 7(14) 0 14(28) 2(4) 0 0 1(2) 0 0 Average 28(56) 0 3(6) 17(34) 0 0 2(4) 0 0 Good 13(26) 0 8(16) 19(38) 22(44) 0 11(22) 0 1(2) Very Good 1(2) 0 18(36) 1(2) 28(56) 0 1(2) 0 4(8) Note: Per cent in parentheses. Source: Primary data
116 Infrastructure for storage functions Infrastructure facilities for storage is analysed in table 5.14. Cold storage, dry storage, mobile storage units, ware house or drying yards is available in none of the markets. Banana is frequently sold in all the markets but only in Nanniyode market a ripening chamber is available. A Panchayat stall selling vegetables is inside the market, which has got a ripening chamber for banana. Regarding godown, public sector godown is available in none of the markets. However, two big wholesale sellers in Nedumangad market has their own godown. It is a big store room for storing vegetables coming from other states. Sellers from Kazhakkootam, Palayam, Nanniyode, Kattappana, and Pothencode opine that washing facility is available within the market. Opinion regarding the washing facility is very bad for Pothencode, Palayam and Katappana markets, whereas it is very good for traders from Kazhakkootam.
Table 5.14: Infrastructure for storage facilities – views of sellers
Facility Cold Ripening Dry Godowns Mobile Ware Drying Washing Assaying storage chambers storage storage units houses yards facility Yes 0 1(2) 0 2(4) 0 0 0 30(60) 0 No 50(100) 49(98) 50(100) 48(96) 50(100) 50(100) 50(100) 20(40) 50(100) Satisfaction Very Bad 0 0 0 0 0 0 0 15(30) 0 Bad 0 0 0 0 0 0 0 5(10) 0 Average 0 0 0 0 0 0 0 5(10) 0 Good 0 1(2) 0 1(2) 0 0 0 0 Very Good 0 0 0 1(2) 0 0 0 5(10) 0
Note: Per cent in parentheses. Source: Primary data
Infrastructure for Value Addition Facilities for value addition including machinery, in house product testing laboratory etc. is not available in any of the markets. Only in Nedumkandam market, one seller owns a food irradiation unit. He sells cardamom powder, turmeric powder and some ayurvedic items. The items are sold under his brand name. Other facilities for value addition are not reported from any market. Infrastructure for Standardisation Standardisation facilities are low in RPM markets. Infrastructure for uniform standards is not available. When sellers travel to destination including other states or when dealers bring loads to the markets, collective loads are happening. Quality testing labs, and Quality certification infrastructure etc. is not available. Regarding surveillance camera, camera is installed by the Panchayath in Nanniyode market, sellers feel it as very helpful for preventing theft at night. In Palayam also one seller reported that he has installed camera and CCTV for his shop. The satisfaction with the available infrastructure facilities is high for the sellers.
117 Table 5.15: Infrastructure for standardization – views of farmers
Uniform Display Economic loads Quality Quality Weighing Surveillance standards of samples (collective testing labs certification machines loads) camera Facility Yes 15(30) 34(68) 25(50) 0 0 37(74) 6(12) No 35(70) 16(32) 25(50) 50(100) 50(100) 13(26) 44(88) Govt 0 0 0 0 0 0 5(10) Satisfaction Very Bad 0 0 0 0 0 0 0 Bad 0 0 0 0 0 0 0 Average 0 0 0 0 0 0 0 Good 0 4(8) 3(6) 0 0 3(6) 5(10) Very Good 15(30) 30(60) 22(44) 0 0 34(68) 1(2)
Note: Per cent in parentheses. Source: Primary data
For grading and packing the only available equipment is electronic weighing. Scientific labs, grading apparatus, dispatching facility etc. is not available. Machinery available for packing is only seen in the case of the seller from Nedumkandum, the machinery being his private machinery. Table 5.16: Infrastructure for Grading and Packing – views of sellers
Scientific Grading Electronic Machines Labeling Dispatching labs apparatus weighing for packing facility facility Facility Yes 0 0 22(44) 1(2) 0 0
No 50(100) 50(100) 28(56) 49(98) 50(100) 50(100)
Satisfaction Very bad 0 0 0 0 0 0
Bad 0 0 0 0 0 0
Average 0 0 0 0 0 0
Good 0 0 4(8) 1(2) 0 0
Very good 0 0 18(36) 0 0 0
Note: Per cent in parentheses. Source: Primary data
Market Financing Market financing facility is also rare in the RPMs. Credit facility to sellers is available in Kazhakootam and Nanniyode markets. These sellers can avail this facility from whole sale traders, they pay cash after the sale. Bank/ATM facility is only found in one market, i.e., in Nanniyode market, a Co-operative society is operating in this market.
118 Table 5.17: Infrastructure for market financing (views of sellers)
Credit facility Credit Bank/ATM Loan Incentives Credit Shares to buyers facility to facility sharing sellers Facility Yes 0 2(4) 5(10) 0 0 0 0
No 50(100) 48(96) 45(90) 50(100) 50(100) 50(100) 50(100)
Satisfaction Very Bad 0 0 0 0 0 0 0
Bad 0 0 2(4) 0 0 0 0
Average 0 0 1(2) 0 0 0 0
Good 0 1(2) 2(4) 0 0 0 0
Very Good 0 1(2) 0 0 0 0 0
Note: Per cent in parentheses. Source: Primary data
Market Information Infrastructure regarding provision of market information is also weak in the markets. Palayam market has got an office for managing market data. From Nanniyode, the VFPCK stall is having data management systems. Along with that the Panchayat stall also maintains a data management system. Palayam market also has an information counter. Hence in general the infrastructure for market information is generally low in RPMs.
Table 5.18: Infrastructure for market information – views of sellers
Computer Data Information Market Counter Notice Advertis Market Data Manage Dissemination surveys board ement education ment Facility Yes 2(4) 3(6) 1(2) 0 5(10) 0 0 0
No 48(96) 47(94) 49(98) 50(100) 45(90) 50(100) 50(100) 50(100)
Satisfaction Very Bad 0 0 0 0 0 0 0 0
Bad 0 0 0 0 0 0 0 0
Average 0 0 0 0 5(10) 0 0 0
Good 1(2) 2(4) 1(2) 0 0 0 0 0
Very Good 1(2) 1(2) 0 0 0 0 0 0
Note: Per cent in parentheses. Source: Primary data
Market Integration Market integration facility is available according to 15 sellers. Horizontal integration is happening in almost all markets because traders are connected with traders outside Kerala and within the districts. Vertical integration is happening in some markets, particularly in Pothencode and Palayam because
119 small traders purchase from these markets and sell in other places. In VFPCK stall in Nanniyode, horizontal integration is happening because of integration with Horticorp. Outwardly, forward integration is happening only in the case of one person in Nedumkandam market, because he has agro- business. Table 5.19: Infrastructure for market integration – views of sellers
Market Risk Vertical Horizontal Trader Digitali ICT Forward intelligence bearing integration integration linkage sation integration Facility Yes 15(30) 3(6) 12(24) 6(12) 35(70) 1(2) 1(2) 1(2) No 35(70) 47(94) 38(76) 44(88) 15(30) 49(98) 49(98) 49(98) Panchayat 0 0 1(2) 0 0 0 0 0 Satisfaction Very Bad 0 0 0 0 0 0 0 0 Bad 0 0 0 0 0 0 0 0 Average 0 0 0 0 2(4) 0 0 0 Good 12(24) 2(4) 12(24) 6(12) 23(46) 1(2) 1(2) 0 Very Good 3(6) 1(2) 0 0 10(20) 0 0 1(2)
5.3.3. NIAM Classification of Infrastructure Facilities Core and Service facility Out of the thirteen core facilities, Auction Platform is available in two markets (VFPCK and Pothencode), loading facility in all markets and information centre in one market. Ripening chamber is found only in the Panchayat stall in Nanniyode. All other facilities including storage/cold rooms/ grading facilities etc.were not available. Out of the twelve support facilities, water supply is available according to fifty per cent of the traders, power supply according to thirty traders, sanitary facilities in six markets, banking in only one market, input supply and necessary outlet in two and repair and maintenance service office in one market. Water Supply and Sanitary facilities are not available in Nedumangad, Pamabanar, Elappara and Thookkupalam. Rain proofing is reported by only 66 per cent of the sellers. The facilities, particularly water supply, sanitary facilities in Kazhakuttamare rated satisfactory by the sellers whereas in other markets it is rated less than satisfactory. In Elappara there is a service workshop inside the market. Input supply and necessary outlets are found in Nedumkandam and Nanniyode. Regarding rain proofing, footpath sellers inside the market have no rain proofing. Sellers in Thookkupalam market have no rain proofing because all sellers are being shifted to nearby place since the market is being rebuild.
120 Table 5.20: Core facility
Facilities Facility Satisfaction
Yes No Very Bad Bad Average Good Very Good
Platforms for Automatic weighing 0 50(100) 0 0 0 0 0
Auction Platforms 10(20) 40(80) 1(2) 3(6) 1(2) 3(6) 2(4)
Packaging & Labeling Equipments 1(2) 49(98) 0 0 0 1(2) 0
Drying Yards 0 50(100) 0 0 0 0 0
Loading, Unloading & 50(100) 0 1(2) 7(14) 28(56) 13(26) 1(2)
Dispatch facilities 0 50(100) 0 0 0 0 0
Grading facilities 0 50(100) 0 0 0 0 0
Standardization facilities 15(30) 35(70) 0 0 0 0 15(30)
Price Display Mechanism 0 50(100) 0 0 0 0 0
Information Centers 5(10) 45(90) 0 0 5(10) 0 0
Storage / Cold Rooms 0 50(100) 0 0 0 0 0
Ripening Chambers Public
Address System 1(2) 49(98) 0 0 1(2) 0
Extension and Training to Fanners 1(2) 49(98) 0 0 0 1(2) 0
Note: Per cent in parentheses. Source: Primary data Table 5.21: Support facility
Facility Facility Satisfaction Yes No Very Bad Bad Average Good Very Good Water Supply 25(50) 25(50) 4(8) 1(2) 1(2) 4(8) 5(10) Power 30(60) 20(40) 3(6) 3(6) 2(4) 5(10) 17(34) Veterinary Services 0 50(100) 0 0 0 0 0 Sanitary Facilities 30(60) 20(40) 15(30) 5(10) 5(10) 0 5(10) Posts 0 50(100) 0 0 0 0 0 Telephones 0 50(100) 0 0 0 0 0 Banking 5(10) 45(90) 0 2(4) 1(2) 2(4) 0 Input supply & Necessity Outlets POL 10(20) 40(80) 0 0 5(10) 5(10) 0 Repair I Maintenance Service Office 5(10) 45(90) 0 0 0 2(4) 3(6) Computerized systems 1(2) 49(98) 0 0 0 0 1(2) Rain Proofing 33(66) 17(34) 3(6) 2(4) 5(10) 11(22) 12(24) Note: Per cent in parentheses. Source: Primary data
121 Table 5.22: Services Infrastructure
Facility Available Total Not Very Bad Bad Average Good Very Good (Available) Available Rest rooms 17(34) 33(66) 0 3(6) 6(12) 8(16) 0 Sheds for animals 0 50(100) 0 0 0 0 0 Market education 1(2) 49(98) 0 0 0 1(2) 0 Soil testing facilities 1(2) 49(98) 0 0 0 1(2) 0 Drainage 30(60) 20(40) 10(20) 10(20) 5(10) 5(10) Covered drainage 10(20) 40(80) 0 5(10) 0 0 5(10) Sitting facility 13(26) 37(74) 0 0 3(6) 9(18) 1(2) Compound wall 30(60) 20(40) 5(10) 5(10) 2(4) 13(26) 5(10) Toilets 30(60) 20(40) 15(30) 5(10) 5(10) 0 5(10) Parking space 15(30) 35(70) 0 1(2) 2(4) 11(22) 1(2) Fire fighting 0 50(100) 0 0 0 0 0 Security 10(20) 40(80) 1(2) 0 0 7(14) 2(4)
Note: Per cent in parentheses. Source: Primary data
Table 5.23: Maintenance Facility/Green initiatives
FacilityMaintenance If yes rating of availability Facility/Green initiatives Yes No Very Bad Bad Average Good Very Good Cleaning facility 30(60) 20(40) 2(4) 1(2) 7(14) 20(40) 0 Garbage collection 30(60) 20(40) 3(6) 1(2) 4(8) 22(44) 0 Garbage disposal 15(30) 35(70) 0 10(20) 1(2) 4(8) 0 Waste utilization A.Vermin composting 0 50(100) 0 0 0 0 0 B. Biogas plant 0 50(100) 0 0 0 0 0 C. Bio gas power 0 50(100) 0 0 0 0 0 Revolving fund for maintenance 0 50(100) 0 0 0 0 0 Solar/wind energy 0 50(100) 0 0 0 0 0
Note: Per cent in parentheses. Source: Primary data
Service facility Regarding service infrastructure, 34 per cent of sellers report that rest rooms are available, but the provision for rest room is within their own shops, market doesn’t provide any rest room. Market education is provided by VFPCK stall in Nanniyode. Drainage facility is available in Kazhakkootam,
122 Pothencode and Nedumkandam market and covered drainage is available in Kazhakuttam and Kattappana. Compound wall around markets and availably of toilets is reported by 60 per cent of sellers. Parking space is also reported by 30 per cent of the sellers. Regarding security, a security is appointed by the sellers with a monthly salary on share basis in Elappara and Pambabnar. Nanniyod market has a CCTV camera. Maintenance Facility Cleaning facility and garbage collection is reported by 60 per cent of the sellers, whereas availability of infrastructural facility for garbage disposal is reported only by thirty per cent. A fee of Rs.50/- is given for waste collection in Palayam. In Kattappana, waste collection is done by the Muncipal Corporation. Regarding waste utilization, none of the infrastructure facilities are available inside the market. In Kattappana market the waste generated by the market is collected by the Muncipality. Own infrastructure It is interesting to note that some sellers are having own infrastructure. Storage facility is available for one, godown for four and drying yard for one. Washing facility is available for 28 per cent, weighing machine for 74 per cent Table 5.24: Own Infrastructure
Iteams Yes Percent No Percent Storage 1 2.0 49 98.0 Godown 4 8.0 46 92.0 Ripening chamber 1 2.0 49 98.0 Drying yards 1 2.0 49 98.0 Washing facility 14 28.0 36 72.0 Weighing machine 37 74.0 13 26.0 Value addition 1 2 49 98 Transportation 8 16.0 42 84.0 Branding 3 6.0 47 94.0 Packaging 1 2.0 49 98.0 Grading 0 0 0 0 Electric equipments 1 2.0 49 98.0 Other infrastructure 4 8.0 46 92.0
Source: Primary data
5.4. Overall Satisfaction of Sellers
Sellers have high rating regarding the location and accessibility of RPMs. However regarding the physical conditions and operational conditions majority have low opinion, particularly in the case of Pothencode, Palayam, Thookkupalam, Elappara markets.
123 Table 5.25: Overall satisfaction of seller
Number Very Low Low Moderate High Very High Total
Location 4(8) 0 4(8) 32(64) 10(20) 50(100)
Accessibility 2(4) 4(8) 4(8) 31(62) 9(18) 50(100)
Physical Conditions 7(14) 16(32) 13(26) 11(22) 3(6) 50(100)
Operational Conditions 3(6) 17(34) 13(26) 13(26) 4(8) 50(100)
Source: Primary data 5.5. Factors contributing to market inefficiencies Farmers have reported the reasons for the inefficiencies in the market. The major solutions as given by them are also given in the table 5.26. Majority recommended for government intervention in price setting, facility for credit, subsidy and interest free loans, facility for government provision of store rooms, incentives, free provision of entry into market stalls for sales, parking facility, provision of water supply and toilet facilities. Table 5.26: Problems Identified for Market Inefficiencies Problems Causes Yes No High price No: Solutions /cess/rent/ Facility Market fee Price setting 3(6) 47(94) 3(6) 0 Availability,Ensure base price, Govt intervention Credit 38(76) 12(24) 0 38(76) Facilitate credit,Govt assistance,Govt subsidy,Interest free loans, Scaling/weighing 1(2) 49(980) 0 1(2) Facility for scaling Storage problem 16(32) 34(68) 0 16(32) Facility for cold storageRoom in market, govt Provision Perishability 25(50) 25(50) 0 25(50) Government assistance,Storage facility High marketing costs 31(62) 19(38) 31(62) 0 Free provision, Incentives, Reduce market fee,Subsidize Lack of space 25(50) 25(50) Conflict between sellers for Facilitate auction hall,Covered space, limited space, no selling room,Expansion platform, no trading hall of hall,Market development Four wheeler parking facility, stop Other causes Block of vehicles, outside trading, completion of rain incomplete rain proof, proof, covered room, electric light, insufficient light, strong door, open to all traders, no toilet facility provision of water supply,Toilet facility Source: Primary data
124 To summairse, the Wholesale Assembly Markets/Rural Periodical Markets work differently from that of WAMs/RPMs in other states. In other states WAM/RPMs have a function to mobilise the surplus products from farmers to the second round of supply chain, and thus becomes the most important place where the farmer comes in direct contact with the consumer/wholesale/retailer. In Kerala these markets are filled with sellers, who buy produce from traders in the neighbouring states and sell in these markets. The WPM/RPMs show difference in the presence of facilities and operations. Palayam, Kattappana and Kazhakkuttam markets are relatively better in their performace and availability of infrastructure facilties, but the situation in Nanniyode, Elappara and Pothencode are worse. Basic infrastructure facilities such as trading halls, drainage, weighing machines, waste management faciltiesetc are not available in the markets. Some markets do not even have basic facilities such as toilet and drinking water. Storage facilties, grading facilites, quality testing mechanism etc is not available in any one of the markets. Hence the WAMs/RPMs in Kerala require immediate attention aimed at revamping.
125 CHAPTER 6 Agriculture Marketing Infrastructure in Kerala: An Analysis of Vegetable and Fruit Promotion Council Keralam (VFPCK)
Vegetable and Fruit Promotion Council, Keralam (VFPCK) was established in the state to bring many fold improvements in the field of production and marketing of fruits and vegetables employing the farmer participatory approach through Self Help Groups. The present chapter looks into the structure, conduct and performance of VFPCK markets with particular focus on the infrastructure facilities provided by VFPCK and the stakeholder view regarding the same is also examined. For this purpose, from Trivandrum, three VFPCKs are selected randomly, the selected ones being Vembayam, Maranalloor and Kovilnada. Similarly, from Idukki the selected VFPCKs are Thankamani, Santhigram and Parathode. Five farmers and five traders from each of these markets is randomly selected and data is collected using detailed interview schedule. Along with this indepth interviews were conducted with the officials in the market. The chapter is divided into two sections. Section I looks into the structure, conduct and performance of VFPCK markets. Section II analyses the primary data collected from farmers and traders operating in VFPCK. Socio-economic details of the farmers, cultivation specifics and operations in the market, socio economic details of the traders and trading details and opinion of the farmers and traders regarding the infrastructure facilities in the VFPCK markets along with reasons for inefficiencies is provided.
Section I 6.1. Structure and Conduct of VFPCK markets Vegetable cultivation in Kerala experience many issues including cheap import from neighbouring states, small holding, high input cost and difficulties in marketing. In order to deal with these problems, VFPCK introduced Farmer’s markets in different districts. The markets were set upped
126 with the principle of ”Self Help, Participation and Prosperity” and these markets has emerged as a new hope to farmers that can improve their livelihood. Infrastructure facilities at the selected farmer markets and structure of functioning of the selected markets is narrated below.
6.1.1. Infrastructure:
Infrastructure in the three different markets are narrated below.
Table 6.1: Basic infrastructure facilities
Basic Facilities Idukki Trivandrum SKS SKS SKS SKSV SKS SKS Erattayar Thankamani Parathode embayam Maranallor Kovilnada Auction Hall 1 111 1 1 Market yard 1 111 1 1 Cold Storage 0 000 0 0 Ripening Chamber 0 000 1 1 Weighing machine 2 232 2 2 Processing unit 0 000 0 1 Godown 0 000 1 0 Office Building 1 111 1 1 Toilet complex/rest room 1 111 1 1 Drinking water 1 110 0 0 Fan/lights 51245 6 5 Computers (documention) 1 111 1 2 Waste Management Plant 0 010 0 1 Crop specific area 0 000 0 0 Parking area 1 111 1 1 Outlet 0 010 0 0 Weather station 1 111 1 1 Source: Primary data
All the six markets have the essential infrastructure and they are working efficiently. With financial support from VFPCK, the auction hall, market yard, office building, furniture is ensured in all the six markets. However, service facilities (toilet and drinking water) are ensured to the staffs but farmers and traders does not have separate facilities. In Thankamani market, a fertiliser depot is also working in the market. In all the markets, primarily vegetables- yam, spinach, bitter gourd, tomato, ladies’ finger, cucumber, chilly, cow pee, jack fruit and banana are auctioned. SKS Parathode, in Konnathady Panchayat is the first established VFPCK market in Idukki and started functioning during 2005. Sunday and Wednesday are the auction days and for selling cow pea and bitter gourd, it functions on Friday also with limited farmers and traders and the auction time is
127 from 9a.m to 1pm. It is situated in 20 cents of land and 45 SHGs are attached to the market. SKS, Erattayar is situated in 27 cents and the auction take place during Tuesday and Friday and auction time is from 2.pm to 4.p.m. There are 16 self-help groups in which around one hundred and fifty farmers are actively participates and 12 traders attached to the market. Both farmers and traders have to register in the market in order to trade in the market and whether to provide membership for a farmer is a collective decision of general body meeting. In the SKS, Thankamai, 350 farmers organised in 25 SHG is attached to the market and around 16 traders from within the district and other districts are participating in auction. The market is situated in 36 cent area and have essential infrastructure including electricity and drinking water. The auction days are Sunday and Wednesday and auction happens from 1pm. To 3 p.m. SKS Kovilnada has food processing unit and cut vegetables are sold. Both SKS Kovilnada and Maranallor have ripening chambers which is mainly used for ripening bananas. In all markets weather station is functioning and it is beneficial in forecasting and planning. All the markets provide facilities for farmers to directly sell their produce and thus ensure, essential infrastructure. 6.1.2. Administrative Structure The administrative structure and functional division of the market is laudable. There is a Deputy manager and two staff (secretary and assistant secretary) for every market who monitors the function of the market. Deputy manager managers all activities of the market starting from formation of SHGs, training programs, input supply to the farmers and the office staff do the documentation and account keeping works. Deputy manager is paid with a salary of Rs. 40000/- and the other staff with a basic pay of 15000. The functioning of the market is organised in such a way that the conduction of activities is done with the participation of farmers. Each farmer in the market is a share holder and the general body meeting is conducted to discuss on important activities and to decide up on common issues. Through election a president, vice president and a treasurer are elected for two-year term and they facilitate the activities and receive an honorarium. And there are three different groups of farmers to look up on important issues related to production, credit, and marketing possibilities and issues. The farmers in the production group decide up on matters related to production decision, demand forecasting and input supply chain and the credit group collects information on new schemes and credit facilities available to farmers. The marketing group is in charge of conducting the auction at the market and to handle the relations with traders. Thus, the market is working with active planning and participation from the part of farmers, with support of government staff. 6.1.3. Structure of market On an average each market has more than hundred farmers and around15 traders and there are entry restrictions to the market. In order to get membership in the market rules are stipulated. For instance, in some markets first the farmer has to be a member of the SHG. It is stipulated that the farmer should have sold vegetables amounting 5000kg (or more than Rs. 15000 in Thankamani market) in the market and an application has to be submitted to the President. A SHG must have at least 10 members for becoming a share holder in the market. The application is discussed in executive committee and a decision is taken regarding membership. To become a member a farmer has to pay Rs. 500/-
128 which considered as a share in the market and is refundable. In addition to that the farmers have to pay to the market 5 % of quantity sold in the market towards meeting the day to day expenditures in market. This is used for paying electricity and water bill, rent (Rs. 1000 to VFPCK) and to pay honorarium to President and Treasurer. Of this, the amount remaining after meeting the expenses is paid to farmers as bonus which amount to 2% of the amount paid. In SKS Parathode, entry for traders is free, but in the other two markets traders has to pay an entry fee of Rs. 100 and has to register with the market. The price is determined by taking the highest price in near by VFPCK markets in Parathode and in the other two markets average price in the 17 VFPCK markets is taken as price. Farmers who are not shareholders of the market can sell their products by paying a registration fee of Rs. 250. 6.1.4. Conduct In all markets auctioning is the major form of marketing activity. Farmers brings their produce in the market and sell it through auctioning. The base price is taken by finding the average price in other VFPCK markets. The money is paid to the farmers in the next auction day by the market officials. During the auction, a receipt is given to farmers. However, in Parathode, auction is not taking place instead the highest price in other VFPCK markets is determined as price and the products are sold to traders at that price. And it is said that farmers receive a margin up to 5-10 rupees, comparing to the market price. There are no loading workers in the market, farmers are assigned with the duty and they divide the work among themselves and receive an honorarium for the same. During the time of bumper crops, with initiative of market, produce is traded to wholesalers in other districts and sold at a reduced price. For traders Credit facility is arranged. Post-dated cheque with one-week time is allowed for purchase of produce. In SKS Thanakamani, 50 paise per kg is given as an incentive, for farmers selling above 100 kg. Also, insurance subsidy is also given to farmers. The total turnover during last year for the market was Rs.17984760/- The market also provides farmers with input supply. Organic fertiliser such as fish amino acid and seeds are being distributed to farmers. Vermin compost is maintained in the market and it is also used as a fertiliser by the farmers. Farmers are also given training for initiating organic farming activities. Thus, the markets help in reducing the cost of production through provision of input on the one hand and ensures better income for farmers by establishing essential marketing infrastructure.
129 Section II Section A 6.2. VFPCK Market – Analysis of Farmer Details The average age of a farmer registered in VFPCKs in Trivandrum is 54.93 and that in Idukki VFPCKs is 54.53. The sample consists of only one female farmer and she is from Idukki VFPCK. For 100 per cent of registered farmers in Trivandrum, their main occupation is agriculture, and in Idukki, out of the 15 farmers selected one was a government employee, and for all others their main occupation is agriculture. Educational background of the farmers reveals that majority belong to SSLC or below level of educational qualification. Detailed tables are provided in Appendix 5. Land size distribution of farmers reveal that 47 per cent have small land holdings, 40 per cent have medium size land holdings and 13 per cent have large size holdings in Trivandrum VFPCKs whereas the corresponding value in Idukki is 40 per cent, 47 per cent and 13 per cent. Twenty seven farmers have availed loans and the mean amount of loan for small, medium and large farmers are Rs.2,77,200, Rs.2,10,946 and Rs.7,81,125 respectively, the average liability for the total sample being Rs.3,19,955. On an average a farmer in Trivandrum has been selling in the VFPCK since last 15 years and 13 years in Idukki market. Year wise quantity and value of crops cultivated, amount used for own consumption and average quantity and value of sales in VFPCK along with RPM and other markets for each crop is given in Appendix 5. Separate average value for small, medium and large farm size holders is given for both Trivandrum VFPCK and Idukki VFPCK. Annual sales on an average per farmer is 15530 kilos for tapioca (Rs.2,56,094), 12315 kilos for banana (Rs.4,84,432), 570 kilos for coconut (Rs.19,950), 470 kilos for ginger (Rs.44,757), 1325 kilos for cowpea (Rs.51,637), 3138 kilos of spinach (77,615), 15715 kilos of cucumber (Rs.23,197), 811 kilos of snake guard (Rs.10.420) and 5320 kilos of bitter guard (Rs.1,54,211). Altogether 13, 28, 1, 13,20,6,6,3,14 farmers bring tapioca, banana, coconut, ginger, cowpea, spinach, cucumber, snake guard and bitter guard respectively to the VFPCK. The value of all the crops sold in WM is aggregated and land size wise distribution of value of sales in each market is given in table. Out of the twenty-eight who bring their crops to the VFPCK, one also sells in WAM, six sells in RPM and four sells in other markets. Value of output worth Rs.7,41,694.7 is provided by each farmer per year, of which Rs.6,64,700 is generated by sales in the VFPCK.
130 Table 6.2: Value of agricultural produce sold by farmers in VFPCK
District Farm size Own Consumption VFPCK WAM RPM Others Total value Trivandrum Small µ 4643.571 286020 407115 406991.4 N7 7 2 7 SD 3243.173 193284.3 484488.4 334012 Medium µ 6309.167 742023.5 748333.3 N6 6 6 SD 3023.211 403508.6 404286.5 Large µ 13112.5 3737388 3750500 N2 2 2 SD 13198.15 2558075 2544877 Total µ 6439 928603.7 407115 989329.3 N15 15 2 15 SD 5309.94 1374768 484488.4 1361025 Idukki Small µ 3943.333 76457.25 1078800 315175 N6 4 1 6 SD 2400.728 91419.04 . 397889.5 Medium µ 9497.857 325745 13600 230200 71425 423364.3 N7 71227 SD 5719.152 334541.7 . 298116.2 99949.54 317144.4 Large µ 7490 796255 431460 258675 1278150 N2 2 1 2 2 SD 494.9748 67804.47 . 283090.2 90297.54 Total µ 7008.333 321427.2 13600 492665 165050 494060 N15 13 1 4 4 15 SD 4822.034 340621.1 . 437397.3 204281.3 451963.6 Total Small µ 4320.385 209815.4 631010 364614.6 N13 11 3 13 SD 2791.515 190003.4 517447 352160.1 Medium µ 8026.154 517873.5 13600 230200 71425 573350 N13 13 1 2 2 13 SD 4785.402 412861.7 . 298116.2 99949.54 383178.2 Large µ 10301.25 2266821 431460 258675 2514325 N4 4 1 2 4 SD 8287.513 2250823 . 283090.2 2049152 Total µ 6723.667 646700.4 13600 464148.3 165050 741694.7 N30 28 1 6 4 30 SD 4992.048 1061438 . 404582.9 204281.3 1027768
Source: Primary data
Details regarding agricultural marketing activity is given in Table 6.3. Nearly seventy-seven per cent of the total farmers engage alone in agricultural activity, with 93 per cent of farmers in Trivandrum engaging alone in agricultural activity and the corresponding per cent for Idukki being 60.40.
131 Table 6.3: Agriculture marketing activities
Districts Trivandrum Idukki Total
N%N%N%
Trade activity
Alone 14 93.3 9 60 23 76.7
With a partner 1 6.7 0 0 1 3.3
Others 0 0.0 6 40 6 20.0
Total 15 100.0 15 100 30 100.0
Do you sell agriculture produce around the year?
Yes 15 100.0 13 86.7 28 93.3
No 0 0.0 2 13.3 2 6.7
Total 15 100.0 15 100.0 30 100.0
If no at what period of the year do you sell/buy?
During bumper crop 0 0 2
Do you face difficulties in finding buyers near to locality?
Yes 10 66.7 11 73.3 21 70.0
No 5 33.3 4 26.7 9 30.0
Total 15 100.0 15 100.0 30 100.0
If yes above why?
Bulk quantity 2 20.0 1 9.1 3 14.3
Bulk quantity and low price 1 10.0 3 27.3 4 19.0
Low price 6 60.0 7 63.6 13 61.9
Season time 1 10.0 0 0.0 1 4.8
Total 10 100.0 11 100.0 21 100.0
How long have you been selling in the market?
Mean N Std. Deviation
Trivandrum 15.3333 15 6.92477
Idukki 13.4667 15 2.35635
Total 14.4 30 5.17021
Source: Primary data
All the VFPCK farmers in Trivandrum sell products around the year, whereas in Idukki two farmers reported that they sell only when there is bumper crop. Seventy per cent above reported that they face issues in finding buyers near the locality, the major reason being low price.
132 The sales details of different commodities from tapioca to bitter guard including gross weight, net weight, floor price, auction rate, auction amount, market fee, trader and farmer amount is provided in tables. Generally, the auction rate and base price is same for all the selected crops in the VFPCK markets is both districts. This is because base price is fixed by the authorities after consultation with VFPCKs in the districts. The authorities take care that the auction rate does not fall below the base price. Auction rate is decided by negotiation and not by auction in the true sense. In Trivandrum, sales take place at the base price, there is no negotiation or auction. In Idukki, in Santhigram auction is taking place and auction is done only when all traders assemble and hence there is difference in base price and auction price. The difference is highest in banana, ginger, cowpea and bitterguard.
The farmers are given an amount after subtracting the market fee from the auction amount. The market fee charged from the farmers is 5 per cent of the total trade amount. Out of this two per cent is reimbursed to the farmers as incentive during festival season.
Table 6.4: Sale of Tapioca, Banana, Coconut, Ginger and Cowpea
Gross Net Floor Auction Auction Market Trader Farmer weight weight price Rate amount Market Amount amount Tapioca Trivandrum µ 2868.0 2731.9 21.1 21.0 59143.3 2956.9 59143.2 56186.4 N99989999 SD 3036.7 2975.0 6.4 6.8 70220.4 3511.0 70220.4 66709.4 Total µ 2868 2731.8 21.1111 21 59143.33 2956.88 59143.22 56186.44 N99989999 SD 3036.7 2975.0 6.4 6.8 70220.4 3511.0 70220.4 66709.4 Banana Trivandrum µ 2434 2129 48 48 95722 4786 95722 90936 N1515151515151515 SD 2912 2668 10 10 108435 5422 108435 103014 Idukki µ 1810 1558 21 29 42204 1955 42208 40389 N1414141414131414 SD 2105 1834 5 4 42483 2127 42488 40674 Total µ 2133.1 1853.3 34.6 38.8 69885.7 3471.5 69887.7 66533.9 N2929292929282929 SD 2529.7 2281.5 15.6 11.8 86358.5 4395.4 86358.7 82065.7
133 Coconut Idukki µ 47 47 35 35 1645 82 1645 1563 N11111111 SD ...... Total µ 47 47 35 35 1645 82 1645 1563 N11111111 SD ...... Ginger Trivandrum µ 329 329 125 125 42650 2132.33 42650 40517.67 N33333333 SD 142.6 142.6 43.3 43.3 25827.9 1291.1 25827.9 24536.8 Idukki µ 111.4 243.8 73.8 74.3 16239.3 811.72 16239.3 15427.6 N1010101010101010 SD 60.6 432.2 24.3 23.9 23638.7 1181.9 23638.7 22456.8 Total µ 161.6 263.5 85.6 86.0 22334.1 1116.5 22334.1 21217.6 N1313131313131313 SD 123.5 380.6 35.5 35.1 25776.2 1288.7 25776.2 24487.4 Cowpea Trivandrum µ 149.6 149.6 55.6 55.6 8424.4 421.8 8424.4 8002.7 N99999999 SD 119.3 119.3 8.8 8.8 7241.8 361.4 7241.8 6880.4 Idukki µ 318.1 315.9 32.7 39.8 11993.8 599.5 11993.8 11394.3 N1212121212121212 SD 331.6 329.3 5.5 8.7 12312.3 615.7 12312.3 11696.5 Total µ 245.9 244.6 42.5 46.6 10464.1 523.3 10464.1 9940.7 N2121212121212121 SD 271.1 269.2 13.5 11.7 10374.4 518.5 10374.4 9855.9 Source: Primary data
Table 6.5: Sale of Spinach, Cucumber, Snake gourd, bitter gourd, and chilly
Gross Net Floor Auction Auction Market Trader Farmer weight weight price Rate amount Market Amount amount Tapioca TVM µ 392.5 392.5 24.2 24.2 9698.3 484.7 9698.3 9213.7 N66666665 SD 729.1 729.1 8.6 8.6 18242.3 911.9 17292.2 1795.8 Total µ 392.5 392.5 24.2 24.2 9698.3 484.7 9698.3 9213.7
134 N66666665 SD 729.1 729.1 8.6 8.6 18242.3 911.9 17292.2 1795.8 Cucumber TVM µ 270.3 270.3 15.8 15.8 3999.2 199.5 3999.2 3799.7 N66666666 SD 255.2 255.2 7.4 7.4 3683.4 184.1 3683.4 3499.3 Total µ 270.3 270.3 15.8 15.8 3999.2 199.5 3999.2 3799.7 N66666666 SD 255.2 255.2 7.4 7.4 3683.4 184.1 3683.4 3499.3 Snake gourd TVM µ 261.5 261.5 18.5 18.5 3352.5 167.5 3352.5 3185 N22222222 SD 323.1 323.1 9.2 9.2 3574.4 178.9 3574.4 3395.5 Idukki µ 68 68 10 10 680 34 680 646 N11111111 SD ...... Total µ 197.0 197.0 15.7 15.7 2461.7 123.0 2461.7 2338.7 N33333333 SD 254.3 254.3 8.1 8.1 2961.3 148.1 2961.3 2813.1 Bitter gourd TVM µ 111.7 111.7 56.7 56.7 6200.0 310.0 6200.0 5890.0 N33333333 SD 67.1 67.1 2.9 2.9 3593.0 179.7 3593.0 3413.4 Idukki µ 740.2 740.2 17.5 34.6 21509.8 1075.1 21509.8 19553.3 N1111111111111111 SD 1208.6 1208.6 3.8 8.4 34760.9 1738.2 34760.9 33433.2 Total µ 605.5 605.5 25.9 39.4 18229.1 911.1 18229.1 16625.5 N1414141414141414 SD 1093.6 1093.6 17.0 12.0 31208.3 1560.5 31208.3 29924.4
Source: Primary data
Table 6.6: Details of Auction amount, Market fee, Trader Amount and Farmer amount
Districts Auction Market fee Trader Amount Farmer amount amount Trivandrum Mean 151975.4 7598.2 151975.4 144377.2 N15151515 Std. Deviation 129438 6472.179 129438 122965.8 Idukki Mean 75740.33 3762 75940.67 71898.47 N15141515 Std. Deviation 61863.16 3208.615 61733.33 59493.33 Total Mean 113857.9 5746.241 113958 108137.8 N30293030 Std. Deviation 106952.4 5434.192 106879.3 101817.9 Source: Primary data
135 On an average, the auction amount in Trivandrum for the selected farmers is Rs.151875 per month, with an average expense on market fee of Rs 7598. Hence the farmers in Trivandrum on an average is getting an amount of Rs.1,44,372 whereas farmers in Idukki get an amount of Rs.71,898 after paying an average amount of Rs 3,762 as marketing fee and the traders get an amount of Rs.75,940. The auction amount for all the VFPCK in all the sample markets under consideration is Rs.1,13,857 and the marketing fee being Rs.5746. 6.2.1. Reasons for sale in VFPCK As regards the major reasons for selling in the VFPCK markets, factors such as government regulated market which ensures surety in revenue, better price, regular consumer, better infrastructure, availability of incentives, possibilities to sell any quantity, availability of transportation facility, nearness of markets etc. are the reasons for farmersboth in Trivandrum and Idukki. Table 6.7: Reasons for selling in this market
Very bad Bad Average Good Very good Very bad Bad Average Good Very good
Price better Incentives/subsidy Trivandrum (N) 0 0 6 8 1 0 2 1 10 2 % 0.0 0.0 40.0 53.3 6.7 0.0 13.3 6.7 66.7 13.3 Idukki(N) 0 1 0 3 11 1 0 3 5 6 % 0.0 6.7 0.0 20.0 73.3 6.7 0.0 20.0 33.3 40.0 Regular consumerothers Trivandrum(N) 0 0 3 11 1 0 1 3 10 1 % 0.0 0.0 20.0 73.3 6.7 0.0 6.7 20.0 66.7 6.7 Idukki(N) 0 0 2 11 2 0 7 7 1 % 0.0 0.0 13.3 73.3 13.3 0.0 0.0 46.7 46.7 6.7 Better infrastructure Any quantity can sell Trivandrum(N) 0 0 0 10 5 0 0 0 7 8 % 0.0 0.0 0.0 66.7 33.3 0.0 0.0 0.0 46.7 53.3 Idukki(N) 0 0 2 6 7 0 1 1 8 5 % 0.0 0.0 13.3 40.0 46.7 0.0 6.7 6.7 53.3 33.3 Storage Govt mkt Trivandrum(N) 0 6 6 3 0 0 0 0 1 14 % 0.0 40.0 40.0 20.0 0.0 0.0 0.0 0.0 6.7 93.3 Idukki 3 10 0 2 0 1 0 1 8 5 % 20.0 66.7 0.0 13.3 0.0 6.7 0.0 6.7 53.3 33.3 Auction platform Nearest Market Trivandrum(N) 0 0 1 11 3 0 0 0 4 11 % 0.0 0.0 6.7 73.3 20.0 0.0 0.0 0.0 26.7 73.3 Idukki(N) 1 1 3 7 3 0 0 0 1 14 % 6.7 6.7 20.0 46.7 20.0 0.0 0.0 0.0 6.7 93.3 Transportation facility Trivandrum(N) 0 0 6 8 1 % 0.0 0.0 40.0 53.3 6.7 Idukki(N) 0 1 2 10 2 % 0.0 6.7 13.3 66.7 13.3 Source: Primary data 136 The major forms of source of information are VFPCK office for the farmers in Trivandrum, VFPCK office and farmers cooperatives in Idukki. 53 per cent of farmers in Trivandrum and 60 per cent in Idukki reported pending payments. The average number of pending days varies between Trivandrum and Idukki, with 23.5 days for Trivandrum and 11 days for Idukki. Regarding the question of who sets the price, 93 per cent opine that price is set within the VFPCK
Table 6.8: Source of information, payment schedule and pending payments Source of information on market (N) Percent Trivandrum Idukki Total Trivandrum Idukki Total Farmers 0 1 1 0.0 6.7 3.3 Agriculture office 14 6 20 93.3 40.0 66.7 Media/newspaper 0 2 2 0.0 13.3 6.7 Farmer cooperatives 1 6 7 6.7 40.0 23.3 Total 15 15 30 100.0 100.0 100.0 Payment schedule for sold goods Daily 10 1 11 66.7 6.7 36.7 Receives amount from traders 4 8 12 26.7 53.3 40.0 Next market day 1 6 7 6.7 40.0 23.3 Total 15 15 30 100.0 100.0 100.0 Pending Payments Trivandrum Idukki Total Yes 8 9 17 53.3 60.0 56.7 No 7 6 13 46.7 40.0 43.3 Total 15 15 30 100.0 100.0 100.0 Average Number of pending days Tvm 23.5 9 31.4 Idukki 11.1 9 7.5
Source: Primary data As regards the opinion regarding determination of price, majority opine that price is determined by VFPCK. Around 50 per cent are satisfied with the price determination. Those who are not satisfied consider inadequate price as the major reason. All are aware of the market price. Around 50 per cent consider that there exists compulsion to sell at a fixed price.
137 Table 6.9: Price determination, satisfied with price determination, and price information
Price Determination
Trivandrum % Idukki % Total %
Mkt Officials (Price Forecast) 0 0 1 6.7 1 3.3
Mkt Officials (Price of other mkts) 15 100 14 93.3 29 96.7
Total 15 100 15 100.0 30 100.0
Satisfied With Price Determination 0.0
Yes 10 66.7 9 60.0 19 63.3
No 5 33.3 6 40.0 11 36.7
Total 15 100.0 15 100.0 30 100.0
Compulsion To Sell At Fixed Price
Yes 10 66.7 6 40.0 16 53.3
No 5 33.3 9 60.0 14 46.7
Total 15 100.0 15 100.0 30 100.0
Knowledge About The Market Price
Yes 0 0.0 11 73.3 11 36.7
No 15 100.0 4 26.7 19 63.3
Total 15 100.0 15 100.0 30 100.0
Source: Primary data Only 40 per cent in Trivandrum consider the quality of information they receive as effective, whereas in Idukki 64.7 per cent consider it as effective. Majority opine that price fluctuations do not occur on the same day. All the farmers in Trivandrum opine that they are able to sell the whole produce that they bring to the market. However, 53 per cent of the farmers in Idukki opine that they are not able to sell the whole produce in the market itself. Majority report the information received as timely. No specific quota is fixed by the VFPCK normally regarding the amount that the farmers bring to the market.
Table 6.10: Reselling, effectiveness and timeliness of the information
Trivandrum % Idukki % Total % Qualify effectiveness of the information Highly effective 2 13.3 3 20.0 5 16.7 Effective 6 40.0 11 73.3 17 56.7 Undecided 7 46.7 1 6.7 8 26.7 Total 15 100.0 15 100.0 30 100.0
138 Qualify timeliness of the information Very timely 2 13.3 3 20.0 5 16.7 Timely 6 40.0 11 73.3 17 56.7 Undecided 7 46.7 1 6.7 8 26.7 Total 15 100.0 15 100.0 30 100.0
Source: Primary data
6.2.2. Marketing cost
Details of transport cost and market charges incurred per month is given in the table.
Table 6.11: Details of cost incurred for marketing
Trivandrum Idukki Total Mean N SD Mean N SD Mean N SD Transport cost Per day 341 15 376.0 129 15 109.4 235 30 292.7 Per month 2588 15 1350.6 918 15 878.5 1753 30 1405.4 Market Charges Per day 1096 14 1072.5 496 14 364.2 796 28 843.3 Per month 8035 14 6483.5 3773 14 3202.6 5904 28 5466.7 Per month 9890 13 7531.1 4429 15 3370.0 6965 28 6228.1
Source: Primary data
In Trivandrum, the monthly transport cost is Rs.2588, whereas in Idukki it is 878 Rs, averaging to Rs.1753 for the total sample. Market charges of Rs.8034 in Trivandrum and Rs.3733 in Idukki is paid by the farmers, the market charge being 5 per cent of the total value of produce. Out of this market charge, around two per cent is reimbursed to the farmers during festive seasons as bonus. Section B 6.3. VFPCK Markets – Analysis of Trader Details Information regarding the structure-conduct and performance of VFPCK and views regarding the available infrastructure and analysis of infrastructure requirement can become complete, only if it is assessed from the part of the traders also. As such five traders each form the six VFPCKs is selected, the total sample of traders becoming thirty. The general information, details of trade activity etc. is given below. Details are given in Appendix 6. Of the total samples, 90 per cent are male, regarding their educational qualifications, 78 per cent have SSLC or below educational qualification, 20 per cent higher secondary and 3 per cent degree. The modus operandi of engaging in trade activity is alone for 93 per cent and 86 per cent of traders in Trivandrum and Idukki. Out of the sample traders selected seventeen are whole sale traders, with two from Trivandrum and 15 from Idukki. The retailers in the sample traders belong to Trivandrum. Ninety-
139 three per cent participate in trade activities year around. Out of the total twenty-five traders, five have availed loan for mobilization of startup capital and 25 has used their own savings for startup capital. The average amount of startup capital is Rs.7,15,00 for the total sample, with an average amount of Rs.20,333 for Trivandrum and Rs.1,22,66 for Idukki. The purchase value of the different agricultural commodities by the traders in the VFPCK markets, district wise and in aggregate along with sales value and the difference between purchase value and sales value is given in the table 6.12.
Table 6.12: Purchase and Sales details of traders in VFPCK Trivandrum Idukki Total µ N SD µ N SD µ N SD Tapioca Buy value 22915 5 15171.6 22915 5 15171.6 Sell value 31560 5 21951.5 31560 5 21951.5 Diff 8645 5 7436.3 8645 5 7436.3 Banana Buy value 54923 13 40815.0 221827 11 312544.6 131421 24 224849.0 Sell value 63308 13 45373.5 248494 11 337570.3 148185 24 243933.1 Diff 8385 13 6756.8 26667 11 28630.6 16764 24 21605.6 Coconut Buy value 23200 2 21496.1 23200 2 21496.1 Sell value 27560 2 24833.6 27560 2 24833.6 Diff 4360 2 3337.5 4360 2 3337.5 Ginger Buy value 5040 1 . 23490 10 18510.1 21813 11 18420.3 Sell value 6480 1 . 25450 10 19789.1 23725 11 19625.5 Diff 1440 1 . 1960 10 1409.6 1913 11 1346.4 Cowpea Buy value 22874 7 24951.6 90970 10 115659.3 62931 17 94612.0 Sell value 25500 7 27508.0 100826 10 127894.8 69809 17 104617.6 Diff 2626 7 3200.3 9856 10 12635.2 6879 17 10348.8 Spinach Buy value 15807 6 13308.9 15807 6 13308.9 Sell value 19260 6 15658.2 19260 6 15658.2 Diff 3453 6 2437.8 3453 6 2437.8 Cucumber Buy value 19894 7 31287.1 19894 7 31287.1 Sell value 27111 7 41491.7 27111 7 41491.7 Diff 7217 7 10314.1 7217 7 10314.1 snake gourd Buy value 5025 4 1916.5 5025 4 1916.5 Sell value 8085 4 4106.2 8085 4 4106.2 Diff 3060 4 2372.8 3060 4 2372.8 Bitter guard Buy value 9222 5 7426.1 66256 10 48773.4 47245 15 48161.3 Sell value 10800 5 8611.6 76512 10 57363.3 54608 15 56255.2
140 Diff 1578 5 1190.1 10256 10 9638.7 7363 15 8835.1 Chilly Buy value 5400 1 . 3500 3 2095.2 3975 4 1956.8 Sell value 6480 1 . 4093 3 2298.7 4690 4 2224.1 Diff 1080 1 . 593 3 300.2 715 4 345.4 Overall Buy value 89723 15 72252.2 283851 15 346152.3 186787 30 264785.3 Sell value 107937 15 87764.3 318240 15 377252.8 213088 30 289590.3 Diff 18214 15 17422.9 34389 15 35295.8 26302 30 28559.1 Source: Primary data
Banana, ginger, cowpea, bitterguard and chilly is purchased in both Trivandrum and Idukki markets. The major agricultural produce that is being traded in both areas are banana, followed by cowpea and bitterguard. The mean buy value and sales value for tapioca is Rs.2,2915 and Rs.31,560, for banana it is Rs.1,31,420 and Rs.1,48,184 for coconut Rs.23,200 and Rs.27,560, for ginger Rs.21,812 and Rs.23,725, for cowpea Rs.62,930 and Rs.69,809, for spinach Rs.15,806 and Rs.19,260, for cucumber Rs.19,894 and Rs.27111, forsnakeguardRs.5,025 and Rs.8,085, for bitterguard Rs.47,244 and Rs.54,608, and for chillyRs.3,975 and Rs.4,690. The highest mean difference between sale value and buy value happens in the case of banana followed by tapioca, bitterguard and cucumber. In Trivandrum all the agricultural produce under consideration of the study is traded in selected VFPCK, whereas in Idukki, the selected traders do not buy tapioca, spinach, cucumber and snake guard from the VFPCK. 6.3.1. Marketing Cost The different types of marketing cost incurred by the traders are transportation, packaging, produce loss, loading/off loading and others. The monthly mean marketing cost incurred in Trivandrum VFPCK is Rs.7,428 and Idukki VFPCK is Rs.24,168, the average being Rs.15778. Transportation cost forms a major component of marketing cost, the mean transport cost being Rs.4,724 in Trivandrum and 21,853 in Idukki. In Idukki, the traders are really dealers who supply these agricultural products to whole sale markets in Trivandrum and other states and also retail shops in other districts of Kerala. Hence the transportation cost incurred by traders in Idukki is much higher than that incurred by traders in Trivandrum who supply agricultural produce in and around shops in Trivandrum. When marketing cost is subtracted from the difference between sales value and purchase value, the marketing margin of the traders is worked out. The marketing margin for an average trader is Rs.10,503 per trader with Rs.10,785 for Trivandrum traders and Rs.10,220 in Idukki. The marketing margin, if separated for crops gives an idea that for crops like ginger and chilly the marketing margin is high since bulk purchase is done and sales of small quantity is possible in the case of these crops.
141 Table 6.13: Marketing cost incurred
Transport Packaging Produce loss Others Total
Trivandrum Mean 4724.667 385.7143 1828.929 1800 7428.333 N157 14215 SD 6574.749 514.5502 2240.833 2404.163 8444.17 Idukki Mean 21853.33 5792.667 24168.4 N15 6 15 SD 22282.4 6668.839 23302.88 Total Mean 13289 385.7143 3018.05 1800 15798.37 N307 20230
SD 18342.24 514.5502 4314.184 2404.163 19210.56
Source: Primary data
Table 6.14: Overall marketing margin during last month
Buy value Sell value Difference Market cost Market margin
Trivandrum Mean 89723.07 107937.3 18214.27 7428.333 10785.93 N1515151515 Std. Deviation 72252.24 87764.32 17422.89 8444.17 15338.59 Idukki Mean 283850.7 318239.5 34388.8 24168.4 10220.4 N1515151515 Std. Deviation 346152.3 377252.8 35295.76 23302.88 37110.21 Total Mean 186786.9 213088.4 26301.53 15798.37 10503.17 N3030303030 Std. Deviation 264785.3 289590.3 28559.07 19210.56 27901.65
Source: Primary data As to the question of factors determining the choice of purchase from VFPCK, majority of traders both in Trivandrum and Idukki purchase from VFPCK because the agricultural produce is organic. The other measures are proximity, availability, good dealings and price, both in Trivandrum and Idukki. Regarding setting the price, the major methods of setting as reported by traders in Idukki are negotiation and auction, whereas in Trivandrum the price setting mechanism includes market officials and auction. Around 77 per cent opine that they are not aware of the market price before they bring the product to the market.
142 Table 6.15: Determining factors of choice of VFPCK and Setting of market prices
Trivandrum Idukki Total Trivandrum Idukki Total
Determines the choice Setting the price
Price 1 1 2 Negotiation 0 10 10
% within choice 50 50 100 % within price 0 100 100
Proximity 1 4 5 Market officials 15 0 15
% within choice 20 80 100 % within price 100 0 100
Fair scaling 1 1 2 Auction 0 5 5
% within choice 50 50 100 % within price 0 100 100
Availability 2 2 4 Total 15 15 30
% within choice 50 50 100 % within price 50 50 100
Organic 10 5 15 Know about the market price
% within choice 66.7 33.3 100 Yes 1 6 7
Good dealings 0 2 2 % within knowledge 14.3 85.7 100
% within choice 0 100 100 No 14 9 23
Total 15 15 30 % within knowledge 60.9 39.1 100
% within choice 50 50 100 Total 15 15 30
% within knowledge 50 50 100
Source: Primary data Around 77 per cent of the traders report that they take one to five days to resell the quantity, without much difference between Trivandrum and Idukki, and 33 per cent of the traders in Trivandrum report that they take one week to resell the product. Only six per cent are able to resell the product immediately. This has implication for infrastructure since storage facilities and godown facilities are needed as the time for resale increases. Physical treatment of the agricultural produce is done by 30 per cent of the traders.
143 Table 6.16: storage facility and physical treatment
Trivandrum Idukki Total Trivandrum Idukki Total
Time to resell Physical treatment
Immediately 0 2 2 Yes 4 5 9
% within time to resell 0.00 100.00 100.00 % within physical treatment 44.40 55.60 100.00
% within VFPCK 0.00 13.30 6.70 % within VFPCK 26.70 33.30 30.00
1 to 5 days 10 13 23 No 11 10 21
% within time to resell 43.50 56.50 100.00 % within physical treatment 52.40 47.60 100.00
% within VFPCK 66.70 86.70 76.70 % within VFPCK 73.30 66.70 70.00
Week 5 0 5 Total 15 15 30
% within time to resell 100.00 0.00 100.00 % within physical treatment 50.00 50.00 100.00
% within VFPCK 33.30 0.00 16.70 % within VFPCK 100.00 100.00 100.00
Source: Primary data
Only five traders in Idukki opine that information from VFPCK is ineffective. This is only with regard to the information on price. Thirty-six per cent consider the information as effective, with 33 per cent from Trivandrum and 40 per cent in Idukki. Regarding timeliness, 80 per cent in Trivandrum consider it as very timely in Trivandrum and 6.7 per cent consider it as effective. In Idukki, around half do not have any opinion about the timeliness of information and 47 per cent consider the information as not timely. Table 6.17: Effectiveness and Timeliness of the information
Trivandrum % Idukki % Total %
Effectiveness Highly effective 1 6.7 1 6.7 2 6.7 Effective 4 26.7 5 33.3 9 30.0 Undecided 10 66.7 4 26.7 14 46.7 Not effective 0 0.0 5 33.3 5 16.7 Total 15 100.0 15 100.0 30 100.0 Timeliness 0.0 0.0 0.0 Very timely 12 80.0 0 0.0 12 40.0 Timely 1 6.7 0 0.0 1 3.3 Undecided 2 13.3 8 53.3 10 33.3 Not timely 0 0.0 5 33.3 5 16.7
Total 15 100.0 15 100.0 30 100.0
Source: Primary data
144 6.2.2. Reason for purchase from VFPCK As regards the reasons for purchase from VFPCK, the major reasons cited by traders are better price, organic products, availability of auction platform, nearest market and regular consumers. Table 6.18: Reason for purchase from VFPCK
TVM Idukki Total TVM Idukki Total N%N%N% N % N % N %
Price better Auction platform
V bad 1 6.7 1 6.7 2 6.7 Bad 1 6.7 0 0.0 1 3.3
Bad 3 20.0 2 13.3 5 16.7 Average 3 20.0 0 0.0 3 10.0
Average 7 46.7 4 26.7 11 36.7 Good 7 46.7 9 60.0 16 53.3
Good 4 26.7 7 46.7 11 36.7 V good 4 26.7 6 40.0 10 33.3
V good 0 0.0 1 6.7 1 3.3 Total 15 100.0 15 100.0 30 100.0
Total 15 100.0 15 100.0 30 100.0 Organicitems
Storage V bad 5 33.3 5 33.3 10 33.3
V bad 1 6.7 13 86.7 14 46.7 Bad 7 46.7 1 6.7 8 26.7
Bad 12 80.0 1 6.7 13 43.3 Average 3 20.0 8 53.3 11 36.7
Average 2 13.3 1 6.7 3 10.0 V good 0 0.0 1 6.7 1 3.3
Total 15 100.0 15 100.0 30 100.0 Total 15 100.0 15 100.0 30 100.0
Regular consumer Transportation facility
Average 1 6.7 1 6.7 2 6.7 V bad 0 0.0 1 6.7 1 3.3
Good 0 0.0 1 6.7 1 3.3 Bad 1 6.7 1 6.7 2 6.7
V good 14 93.3 13 86.7 27 90.0 Average 4 26.7 9 60.0 13 43.3
Total 15 100.0 15 100.0 30 100.0 Good 6 40.0 4 26.7 10 33.3
Incentives/subsidy
V good 4 26.7 0 0.0 4 13.3
Very bad 7 46.7 13 86.7 20 66.7 Total 15 100.0 15 100.0 30 100.0
Bad 7 46.7 1 6.7 8 26.7 Nearest market
Average 1 6.7 1 6.7 2 6.7 Average 4 26.7 5 33.3 9 30.0
Total 15 100.0 15 100.0 30 100.0 Good 9 60.0 10 66.7 19 63.3
Vgood 2 13.3 0 0.0 2 6.7
Total 15 100.0 15 100.0 30 100.0 Source: Primary data
145 Section C 6.4. Performance of VFPCK -Analysis of Available Market Infrastructure - views of farmers and traders The major infrastructural facilities that are to be provided by a market include infrastructure for a) buying, selling and demand forecasting b) physical movement of goods c) facilitation function. This section analyses the availably of these infrastructure facilities according to the views of farmers and traders along with the satisfaction level of farmers and traders. 6.4.1 Infrastructure for buying, selling and demand creation. Auction Hall is the major infrastructure for buying and selling of agricultural commodities. Details of Auction Hall in VFPCKs is provided in the table below.
Table 6.19: Auction hall
Satisfaction
Yes % Very bad % Bad % Average % Good % Very good % Auction platform Trivandrum 15 50.0 0 0.0 0 0.0 0 0.0 9 60.0 6 40.0 Idukki 13 43.3 0 0.0 0 0.0 0 0.0 8 61.5 5 38.5 Crop specific auction platform Trivandrum 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Idukki 9 30.0 0 0.0 0 0.0 1 11.1 8 88.9 0 0.0 Price display Trivandrum 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Idukki 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Payment display Trivandrum 2 6.7 0 0.0 1 50.0 0 0.0 1 50.0 0 0.0 Idukki 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Weighing machine Trivandrum 14 46.7 0 0.0 0 0.0 0 0.0 3 21.4 11 78.6 Idukki 15 50.0 0 0.0 0 0.0 0 0.0 6 40.0 9 60.0 Notice board Trivandrum 14 46.7 0 0.0 0 0.0 3 21.4 10 71.4 1 7.1
Idukki 14 46.7 0 0.0 1 20.0 0 0.0 4 80.0 0 0.0
Source: Primary data
146 Auction Platform is available in all markets in Trivandrum and Idukki with a good amount of satisfaction regarding Auction Platform reported by traders and farmers. The available space in the auction platform is allotted to different crops in two markets in Idukki, Parathode and Santhigram. Farmers are satisfied with the crop specific auction platform. Price display is not available in any of the market in Trivandrum, however in Idukki it is available according to six farmers in the market. Weighing machine is available in all markets and notice board in all markets in Trivandrum and all market in Idukki. 23 farmers out of the 25 opine that VFPCK market helps in demand forecasting and 20 view that market helps in production decision. 63 per cent view that market provides insurance provision to the farmers. Insurance is available for banana, and the premium amount is Rs.3 per banana plant and the insured amount, Rs.100 per VFPCK. The marketing channel that is in operation is producer – wholesaler – retailer – consumer in both VFPCKs.
Table 6.20: Efficacy of market in demand forecasting
Trivandrum Idukki Total %
Demand forecasting 11 12 23 76.7 % 47.8 52.2 100.0 Market helps in production decisions 8 12 20 66.7 % 40.0 60.0 100.0 Insurance provision 11 8 19 63.3 57.9 42.1 100.0 Marketing channel Producer-wholesaler-consumer 1 (6.6%) 1 (6.6%) 2 6.7 Producer-wholesaler-retailer-consumer 14(93.4) 14(93.4) 28 93.3 Total 15 15 30 100.0
Source: Primary data
6.4.2. Infrastructure for the Physical Movement of Goods Of the different facilities required for physical movement of goods, loading unloading facility, road facility inside market is available in all markets. In Maranalloor VFPCK, transportation facility is available from field to market. In Parathode, trader’s vehicle goes and collect farmer’s product when required. Due to limited space in all the VFPCK, they have a constraint for parking, but traders and farmers park their vehicle inside the market for loading and unloading. Passenger transport facility is easy in Santhigram and Parathode in Idukki and Maranalloor in Trivandrum, because these are located more or less near busstop. Farmers complain that in the other markets, the markets are far away from main road and public transport facilities. Refrigerated trucks and other storage facilities, particularly cold, dry, mobile units, ware houses, drying yards, assaying units etc. are not available. Godown facility is available in Maranalloor and ripening chambers is available in Maranallorr and Kovilnadu.
147 Table 6.21: Transportation, storage, value addition, standardization and grading – views of farmers (in percent)
Facility Satisfaction Satisfaction Yes 1 2 3 4 5 Yes 1 2 3 4 5 Transportation Value Addition Loading/ TVM 0.0 0.0 0.0 0.0 0.0 0.0 Foodirra 33.3 0.0 0.0 0.0 100.0 0.0 Unloading Idukki 93.3 0.0 0.0 0.0 92.9 7.1 diation unit 0.0 0.0 0.0 0.0 0.0 0.0 Transportation TVM 6.7 0.0 0.0 0.0 0.0 100.0 Inhouse 6.7 0.0 0.0 0.0 100.0 0.0 inside market Idukki 40.0 0.0 0.0 0.0 83.3 16.7 testing lab 0.0 0.0 0.0 0.0 0.0 0.0 Road facility TVM 100.0 13.3 0.0 13.3 33.3 40.0 Machinery 33.3 0.0 0.0 0.0 100.0 0.0 inside market Idukki 100.0 6.7 13.3 0.0 46.7 33.3 0.0 0.0 0.0 0.0 0.0 0.0 Transportation TVM 33.3 0.0 0.0 0.0 60.0 40.0 Skilled 33.3 0.0 0.0 0.0 80.0 20.0 from field to Idukki 13.3 50.0 0.0 0.0 50.0 0.0 labors 0.0 0.0 0.0 0.0 0.0 0.0 market Passenger TVM 0.0 0.0 0.0 0.0 0.0 0.0 Branding or 6.7 0.0 0.0 0.0 100.0 0.0 transport Idukki 53.3 0.0 12.5 12.5 75.0 0.0 patenting 6.7 0.0 0.0 0.0 100.0 0.0 Check post TVM 0.0 0.0 0.0 0.0 0.0 0.0 Standardisation Idukki 6.7 0.0 0.0 0.0 100.0 0.0 Uniform 0.0 0.0 0.0 0.0 0.0 0.0 Parking TVM 93.3 0.0 7.1 21.4 57.1 14.3 standards 0.0 0.0 0.0 0.0 0.0 0.0 facility Idukki 86.7 0.0 15.4 23.1 53.8 7.7 Display of 0.0 0.0 0.0 0.0 0.0 0.0 Refrid: trucks TVM 6.7 0.0 0.0 0.0 0.0 100.0 samples 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Economic 13.3 0.0 0.0 0.0 0.0 100.0 Vehicle TVM 0.0 0.0 0.0 0.0 0.0 0.0 loads 6.7 0.0 0.0 0.0 0.0 100.0 maintain Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Quality 0.0 0.0 0.0 0.0 0.0 0.0 Storage testing labs 0.0 0.0 0.0 0.0 0.0 0.0 Cold storage TVM 0.0 0.0 0.0 0.0 0.0 0.0 Quality 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 6.7 0.0 0.0 0.0 100.0 0.0 certification 0.0 0.0 0.0 0.0 0.0 0.0 Ripening TVM 86.7 0.0 0.0 0.0 69.2 30.8 Weighing 100.0 0.0 0.0 0.0 26.7 73.3 chambers Idukki 6.7 0.0 0.0 0.0 0.0 100.0 machines 93.3 0.0 0.0 0.0 28.6 71.4 Dry storage TVM 0.0 0.0 0.0 0.0 0.0 0.0 Surveillance 60.0 0.0 0.0 0.0 55.6 44.4 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 camera 6.7 0.0 0.0 0.0 100.0 0.0 Godowns TVM 26.7 0.0 0.0 0.0 50.0 50.0 Grading and packing Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Scientific 0.0 0.0 0.0 0.0 0.0 0.0 Mobile TVM 0.0 0.0 0.0 0.0 0.0 0.0 labs 0.0 0.0 0.0 0.0 0.0 0.0 storage units Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Grading 0.0 0.0 0.0 0.0 0.0 0.0 Ware houses TVM 6.7 0.0 0.0 0.0 100.0 0.0 apparatus 6.7 0.0 0.0 0.0 100.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Electronic 100.0 0.0 0.0 0.0 33.3 66.7 Drying yards TVM 0.0 0.0 0.0 0.0 0.0 0.0 weighing 13.3 0.0 0.0 0.0 50.0 50.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Machines for 33.3 0.0 0.0 0.0 100.0 0.0 Washing TVM 86.7 0.0 0.0 7.7 46.2 46.2 packing 6.7 0.0 0.0 0.0 0.0 100.0 facility Idukki 26.7 0.0 25.0 50.0 25.0 0.0 Labelling 13.3 0.0 0.0 0.0 100.0 0.0 Assaying TVM 0.0 0.0 0.0 0.0 0.0 0.0 facility 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Dispatching 93.3 0.0 0.0 0.0 71.4 28.6 facility 0.0 0.0 0.0 0.0 0.0 0.0 Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good
148 Table 6.22: Transportation, storage, value addition and standardization -views of traders (in percent)
Facility Satisfaction Satisfaction Yes 1 2 3 4 5 Yes 1 2 3 4 5 Transportation Value Addition Loading/ TVM 0.0 0.0 0.0 0.0 0.0 0.0 Food 33.3 0.0 0.0 0.0 80.0 20.0 Unloading Idukki 100.0 0.0 0.0 6.7 20.0 73.3 irradiation unit 0.0 0.0 0.0 0.0 0.0 0.0 Transportation TVM 0.0 0.0 0.0 0.0 0.0 0.0 Inhouse testing 0.0 0.0 0.0 0.0 0.0 0.0 inside mkt Idukki 0.0 0.0 0.0 0.0 0.0 0.0 laboratory 0.0 0.0 0.0 0.0 0.0 0.0 Road facility TVM 100.0 0.0 6.7 13.3 73.3 6.7 Machinery 33.3 0.0 0.0 0.0 100.0 0.0 Idukki 100.0 0.0 0.0 0.0 66.7 33.3 0.0 0.0 0.0 0.0 0.0 0.0 Transportation TVM 86.7 0.0 0.0 0.0 61.5 38.5 Skilled labors 53.3 0.0 0.0 0.0 62.5 37.5 from field Idukki 6.7 0.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Passenger TVM 6.7 0.0 0.0 0.0 0.0 100.0 Branding or 33.3 0.0 0.0 0.0 100.0 0.0 transport Idukki 93.3 0.0 14.3 42.9 28.6 0.0 patenting 0.0 0.0 0.0 0.0 0.0 0.0 Check post TVM 0.0 0.0 0.0 0.0 0.0 0.0 Standardisation Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Uniform 93.3 0.0 0.0 0.0 78.6 21.4 Parking TVM 100.0 0.0 0.0 13.3 73.3 13.3 standards 6.7 0.0 0.0 0.0 0.0 100.0 facility Idukki 93.3 0.0 0.0 7.1 85.7 0.0 Display of 0.0 0.0 0.0 0.0 0.0 0.0 Refrigerated TVM 0.0 0.0 0.0 0.0 0.0 0.0 samples 53.3 0.0 0.0 0.0 75.0 25.0 trucks Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Economic 20.0 0.0 0.0 0.0 33.3 66.7 Vehicle TVM 0.0 0.0 0.0 0.0 0.0 0.0 loads 0.0 0.0 0.0 0.0 0.0 0.0 maintain Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Quality testing 0.0 0.0 0.0 0.0 0.0 0.0 Storage labs 0.0 0.0 0.0 0.0 0.0 0.0 Cold storage TVM 0.0 0.0 0.0 0.0 0.0 0.0 Quality 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 certification 0.0 0.0 0.0 0.0 0.0 0.0 Ripening TVM 93.3 0.0 0.0 0.0 42.9 57.1 Weighing 86.7 0.0 0.0 0.0 46.2 53.8 chambers Idukki 33.3 0.0 0.0 60.0 40.0 0.0 machines 20.0 0.0 0.0 0.0 66.7 33.3 Dry storage TVM 0.0 0.0 0.0 0.0 0.0 0.0 Surveillance 60.0 0.0 0.0 0.0 44.4 55.6 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 camera 60.0 0.0 0.0 0.0 11.1 88.9 Godowns TVM 26.7 0.0 0.0 0.0 75.0 25.0 Grading and packing Idukki 6.7 0.0 0.0 0.0 100.0 0.0 Scientific labs 13.3 0.0 0.0 0.0 50.0 50.0 Mobile units TVM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Grading 0.0 0.0 0.0 0.0 0.0 0.0 Ware houses TVM 6.7 0.0 0.0 0.0 100.0 0.0 apparatus 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Electronic 86.7 0.0 0.0 0.0 46.2 53.8 Drying yards TVM 0.0 0.0 0.0 0.0 0.0 0.0 weighing 20.0 0.0 0.0 0.0 66.7 33.3 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Machines 40.0 0.0 0.0 0.0 100.0 0.0 Washing TVM 93.3 0.0 0.0 21.4 50.0 21.4 for packing 13.3 0.0 0.0 0.0 100.0 0.0 Idukki 26.7 0.0 0.0 25.0 75.0 0.0 Labelling 33.3 0.0 0.0 0.0 100.0 0.0 Assaying TVM 0.0 0.0 0.0 0.0 0.0 0.0 facility 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Dispatching 80.0 0.0 0.0 0.0 91.7 8.3 facility 0.0 0.0 0.0 0.0 0.0 0.0
Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good
149 Regarding infrastructure for value addition, food irradiation units, skilled labour and branding facility is available only in Kovilnada, since Kovilnada VFPCK has a cut vegetable unit. Standardisation infrastructure including uniform standards, display of samples, economic loads, quality testing labs, certification etc. is not available in any markets. Surveillance camera is available in Kovilnada and Maranalloor and despatching facility is available in more or less all markets on demand from traders. As far as traders are concerned, in Idukki loading/unloading facility is helped by the market, whereas in Trivandrum, traders have to do that on their own. In all other infrastructure facilities for the physical movement of goods, traders have the same opinion as farmers. Regarding satisfaction level of the available infrastructure, they are more or less satisfied with the working of the available ones. 6.4.3. Infrastructure for Facilitation Regarding facilitation infrastructure, credit facility to buyers is available in all markets in Trivandrum and Idukki. Credit sharing facility is not available, however farmers own shares of their representative markets. Table 6.23: Market financing, market information and market integration - views of farmers (in percent)
Facility Satisfaction Satisfaction Yes 1 2 3 4 5 Yes 1 2 3 4 5 Market financing Market Information Credit facility TVM 73.3 0.0 0.0 0.0 72.7 27.3 Notice board/ 60.0 0.0 0.0 33.3 66.7 0.0 to buyers Idukki 33.3 0.0 0.0 0.0 100.0 0.0 price display 46.7 0.0 57.1 0.0 0.0 42.9 Credit facility TVM 26.7 0.0 0.0 0.0 50.0 50.0 Advertisement 0.0 0.0 0.0 0.0 0.0 0.0 to sellers Idukki 0.0 0.0 0.0 0.0 0.0 0.0 6.7 0.0 0.0 0.0 0.0 100.0 Bank/ATM TVM 0.0 0.0 0.0 0.0 0.0 0.0 Market 93.3 0.0 0.0 7.1 64.3 28.6 Idukki 6.7 0.0 0.0 0.0 100.0 0.0 education 60.0 0.0 0.0 0.0 44.4 55.6 Loan facility TVM 53.3 0.0 0.0 0.0 50.0 50.0 Market Integration Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Market 93.3 0.0 0.0 0.0 64.3 35.7 Incentives TVM 93.3 0.0 0.0 0.0 50.0 50.0 intelligence 86.7 0.0 0.0 7.7 38.5 53.8 Idukki 86.7 0.0 0.0 0.0 30.8 69.2 Risk bearing 100.0 0.0 0.0 0.0 80.0 20.0 Credit sharing TVM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 6.7 0.0 0.0 0.0 0.0 100.0 Vertical 100.0 0.0 0.0 0.0 80.0 20.0 Shares TVM 60.0 0.0 0.0 0.0 11.1 88.9 integration 93.3 0.0 0.0 0.0 50.0 50.0 Idukki 93.3 0.0 0.0 0.0 64.3 35.7 Horizontal 100.0 0.0 0.0 0.0 86.7 13.3 Market Information integration 86.7 0.0 0.0 0.0 76.9 23.1 Computerized TVM 100.0 0.0 0.0 0.0 60.0 40.0 Trader linkage 100.0 6.7 0.0 0.0 86.7 6.7 data Idukki 93.3 0.0 0.0 0.0 78.6 21.4 66.7 0.0 10.0 90.0 0.0 0.0 Record TVM 100.0 0.0 0.0 0.0 40.0 60.0 Digitization 6.7 0.0 0.0 0.0 100.0 0.0 keeping Idukki 86.7 0.0 0.0 0.0 76.9 23.1 0.0 0.0 0.0 0.0 0.0 0.0 Information TVM 93.3 0.0 0.0 0.0 64.3 35.7 ICT tools 0.0 0.0 0.0 0.0 0.0 0.0 Dissemi: Idukki 86.7 0.0 0.0 0.0 30.8 69.2 0.0 0.0 0.0 0.0 0.0 0.0 Market TVM 0.0 0.0 0.0 0.0 0.0 0.0 Forward 60.0 0.0 0.0 0.0 100.0 0.0 surveys Idukki 0.0 0.0 0.0 0.0 0.0 0.0 integration 26.7 0.0 0.0 0.0 100.0 0.0 Information TVM 66.7 0.0 0.0 0.0 80.0 20.0 counter Idukki 93.3 0.0 0.0 0.0 50.0 50.0
Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good
150 With regard to market information, computerized data, data management, information dissemination, information counter etc. is available in all markets with a relatively high degree of satisfaction. Market information infrastructure facilities including market information and market education is also available in most VFPCKs. Table 6.24: Market financing, information and integration views of traders (in percent)
Facility Satisfaction Satisfaction Yes 1 2 3 4 5 Yes 1 2 3 4 5 Market financing Market Information Credit-buyers TVM 86.7 0.0 0.0 0.0 38.5 61.5 Information 60.0 0.0 0.0 0.0 77.8 22.2 Idukki 73.3 0.0 0.0 9.1 9.1 81.8 counter 80.0 0.0 0.0 0.0 83.3 16.7 Credit-sellers TVM 0.0 0.0 0.0 0.0 0.0 0.0 Notice board 60.0 0.0 11.1 22.2 66.7 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 86.7 0.0 7.7 15.4 76.9 0.0 Bank/ATM TVM 6.7 0.0 0.0 0.0 100.0 0.0 Advertisement 6.7 0.0 0.0 0.0 100.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 13.3 0.0 0.0 50.0 50.0 0.0 Loan TVM 0.0 0.0 0.0 0.0 0.0 0.0 Market 0.0 0.0 0.0 0.0 0.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 education 20.0 0.0 0.0 33.3 66.7 0.0 Incentives TVM 0.0 0.0 0.0 0.0 0.0 0.0 Market Integration Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Market 86.7 0.0 0.0 0.0 76.9 23.1 Credit sharing TVM 0.0 0.0 0.0 0.0 0.0 0.0 intelligence 20.0 0.0 0.0 0.0 100.0 0.0 Idukki 0.0 0.0 0.0 0.0 0.0 0.0 Risk bearing 100.0 0.0 0.0 0.0 80.0 20.0 Shares TVM 0.0 0.0 0.0 0.0 0.0 0.0 6.7 0.0 0.0 0.0 100.0 0.0 Idukki 33.3 0.0 0.0 0.0 60.0 40.0 Vertical 100.0 0.0 0.0 0.0 80.0 20.0 Market Information integration 46.7 0.0 0.0 0.0 85.7 14.3 Computerized TVM 93.3 0.0 0.0 0.0 42.9 57.1 Horizontal 100.0 0.0 0.0 0.0 80.0 20.0 data Idukki 93.3 0.0 0.0 7.1 78.6 14.3 integration 66.7 0.0 0.0 10.0 80.0 10.0 Data TVM 100.0 0.0 0.0 0.0 46.7 53.3 Trader linkage 100.0 0.0 0.0 0.0 93.3 6.7 management Idukki 100.0 0.0 0.0 6.7 86.7 6.7 86.7 0.0 0.0 7.7 92.3 0.0 Information TVM 100.0 0.0 0.0 0.0 46.7 53.3 Digitization 26.7 0.0 0.0 0.0 100.0 0.0 Dissemination Idukki 100.0 0.0 0.0 6.7 93.3 0.0 6.7 0.0 0.0 100.0 0.0 0.0 Market TVM 13.3 0.0 0.0 0.0 50.0 50.0 ICT tools 6.7 0.0 0.0 0.0 100.0 0.0 surveys Idukki 13.3 0.0 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Forward 33.3 0.0 0.0 0.0 100.0 0.0 integration 0.0 0.0 0.0 0.0 0.0 0.0
Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good Risk bearing is undertaken by all markets, according to the farmers, since futurepayment is guaranteed by the market. Regarding horizontal integration, VFPCKs are integrated to other VFPCKs for price determination. If there is excess supply of agricultural products, it is sold in ‘Sasya’ government outlet, hence there is horizontal integration in quantity of sales only. Regarding vertical integration, the VFPCK is integrated with traders and government institution and commission agents. If there is excess produce, commission agents collect this and five to ten per cent commission is charged. In Parathode, if there is excess supply of agricultural produce, the market officials hire a vehicle and
151 transport it to the nearby shops and the received amount is divided among the farmers. Any loss is compensated though the risk fund for those farmers who have made their contribution to the risk fund. 6.4.4. NIAM Classification Under the core facility classification of NIAM, platforms for automatic weighing is not available in any of the markets. Auction Platforms, Loading/Unloading facilities, information counters, extension and training facilities, water and electricity supply, sanitary facility, computerized systems, facility for rain proofing etc. is available in all VFPCKs.
Table 6.25: Core facility and support facility -views of farmers
Facility Satisfaction Satisfaction Yes 1 2 3 4 5 Yes 1 2 3 4 5 Core facility Support facility Platforms for TVM 0 0 0 0 0 0 Water Supply 15 0 1 0 8 6 Auto weighing Idukki 0 0 0 0 0 0 14 0 1 1 12 0 Auction TVM 15 0 0 0 8 7 Power 15 0 0 0 6 9 Platforms Idukki 14 0 0 1 13 0 15 0 0 0 1 14 Pack/Labeling TVM 4 0 0 0 4 0 Sanitary 13 1 2 2 1 7 Idukki 0 0 0 0 0 0 Facilities 13 0 0 5 8 0 Drying Yards TVM 0 0 0 0 0 0 Posts 0 0 0 0 0 0 Idukki 1 0 0 0 0 1 0 0 0 0 0 0 Loading/ TVM 13 0 0 0 0 0 Telephones 0 0 0 0 0 0 Unloading Idukki 13 0 0 0 0 13 0 0 0 0 0 0 Dispatch TVM 1 0 0 0 1 0 Banking 0 0 0 0 0 0 facilities Idukki 13 0 0 0 0 1 0 0 0 0 0 0 Grading TVM 11 0 1 0 8 2 Input supply & 11 0 1 4 5 1 facilities Idukki 5 0 0 0 4 1 Necessity Outlets 15 0 1 4 10 0 Standardi TVM 0 0 0 0 9 4 Repair/Mainte 0 0 0 0 0 0 sation Idukki 2 0 0 0 2 0 nance Servic 0 0 0 0 0 0 Office Price Display TVM 0 0 0 0 0 0 Computerized 11 0 1 0 0 0 Mechanism Idukki 0 0 0 0 0 0 systems 8 0 1 0 7 0 Information TVM 13 0 0 0 2 1 Rain Proofing 13 1 0 0 3 9 Centres Idukki 13 0 0 0 9 4 14 0 1 1 11 1 Cold Rooms TVM 0 0 0 0 0 0 Idukki 0 0 0 0 0 0 Ripening TVM 8 1 0 0 4 3 Chambers Idukki 0 0 0 0 0 0 Extension and TVM 11 0 0 0 7 4 Training Idukki 9 0 0 0 3 9
Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good
152 Manual grading facility is available for banana and cow pea in all markets. Organic input supply provision is also available in all markets. In Maranalloor, chemical fertilisers is also provided along with organic. Subsidized inputs are provided in all markets, in Marnalloor in addition to the subsidized inputs, inputs are also supplied on a retail basis at a subsidy rate. Traders also have the same view regarding the availability of core facilities in the VFPCK markets.
Table 6.26: Core facility and support facility-views of traders
Facility Satisfaction Satisfaction
Yes 1 2 3 4 5 Yes 1 2 3 4 5 Core facility Support facility Platforms- TVM 0 0 0 0 0 0 Water Supply 15 0 1 0 10 4 auto weighing Idukki 0 0 0 0 0 0 13 0 0 1 10 2 Auction TVM 15 0 0 1 7 7 Power 13 0 0 0 5 8 Platforms Idukki 14 0 0 0 10 4 13 0 0 0 1 12 Pack/ Label TVM 5 0 0 0 5 0 Veterinary 2 0 0 1 0 1 ing Equip: Idukki 0 0 0 0 0 0 Services 2 0 0 0 1 1 Drying Yards TVM 0 0 0 0 0 0 Sanitary 13 0 0 7 3 3 Idukki 2 0 0 0 2 0 13 0 1 3 8 1 Loading/ TVM 1 0 0 0 1 0 Posts 0 0 0 0 0 0 Unloading Idukki 9 0 0 0 3 6 1 0 0 0 1 0 Dispatch TVM 13 0 0 0 11 2 Telephones 1 0 0 1 0 0 Idukki 2 0 0 0 2 0 0 0 0 0 0 0 Grading TVM 15 0 0 0 9 6 Banking 1 0 0 0 1 0 Idukki 9 0 0 0 9 0 1 0 0 0 1 0 Standardis TVM 13 0 0 0 7 6 Input supply 11 0 2 5 3 1 ation Idukki 3 0 0 0 1 2 14 0 0 6 8 0 Price Display TVM 1 0 0 1 0 0 Repair- Office 2 0 0 1 1 0 Mechanism Idukki 1 0 0 0 0 1 0 0 0 0 0 0 Information TVM 10 0 0 0 7 3 Computerized 1 0 0 0 1 0 Centres Idukki 9 0 0 1 7 1 systems 0 0 0 0 0 0 Cold Rooms TVM 1 0 0 0 1 0 Rain Proofing 13 0 0 0 7 6 Idukki 0 0 0 0 0 0 15 0 0 0 14 1 Ripening TVM 12 0 0 0 8 4 Chambers Idukki 2 0 0 1 1 0 Extension/ TVM 5 0 0 0 4 1 Training Idukki 5 0 0 1 3 1
Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good Regarding infrastructure facility for services, rest room is available only in Vembayam VFPCK in Trivandrum, it is available as a room for conference in the upstairs of the VFPCK building office.
153 Market education is provided to all farmers, as training around four times a year. Drainage facility, firefighting, security etc. is not available in the markets. Proper sitting facility is not available, two or three chairs are the only available ones. Toilet facility is inside the office; hence the farmers and traders find it difficult to use it. Table 6.27: Availability of Service infrastructure for farmers and traders
Facility Satisfaction Satisfaction Yes 1 2 3 4 5 Yes 1 2 3 4 5 Service infrastructure for farmersService infrastructure for farmers Frequency Districts Yes 1 2 3 4 5 Yes 1 2 3 4 5 Rest rooms TVM 6 0 1 0 4 1 6 1 0 0 5 0 Idukki 0 0 0 0 0 0 0 0 0 0 0 0 Sheds for TVM 1 1 0 0 0 0 0 0 0 0 0 0 animals Idukki 1 1 0 0 0 0 0 0 0 0 0 0 Market TVM 14 1 0 0 9 4 0 0 0 0 0 0 education Idukki 12 0 0 0 3 9 0 0 0 0 0 0 Soil testing TVM 8 0 0 0 7 1 8 0 0 3 5 0 facilities Idukki 8 0 0 0 7 1 0 0 0 0 0 0 Drainage TVM 2 0 0 0 2 0 2 1 0 0 1 0 Idukki 2 1 0 0 1 0 0 0 0 0 0 0 Covered TVM 1 0 0 0 1 0 0 0 0 0 0 0 drainage Idukki 1 0 0 0 1 0 1 0 0 0 1 0 Sitting TVM 11 0 1 4 6 0 8 0 1 5 2 0 facility Idukki 9 0 1 3 5 0 5 0 0 2 1 2 Compound TVM 12 0 1 4 7 0 13 0 0 0 5 8 wall Idukki 13 0 0 12 1 0 15 0 0 1 13 1 Toilets TVM 13 0 4 3 2 4 15 0 2 5 1 7 Idukki 14 1 2 0 10 1 15 0 1 3 11 0 Parking TVM 14 0 1 4 8 1 15 1 0 4 9 1 space Idukki 14 0 0 0 12 2 14 0 0 0 14 0 Fire fighting TVM 1 1 0 0 0 0 4 2 0 1 1 0 Idukki 1 0 0 0 1 0 2 0 0 0 2 0 Security TVM 0 0 0 0 0 0 0 0 0 0 0 0 Idukki 0 0 0 0 0 0 0 0 0 0 0 0 Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good Cleaning and garbage collection is done by farmers or the staff entrusted for the same by the market. However, no facility is available for garbage disposal. For waste utilization, only Parathode and Kovilnada have a vermi-compost unit. Other waste utilization methods of biogas plant or bio gas power is not available in any of the VFPCKs. Revolving fund is also not available in any of the VFPCKs.Traders also have the same opinion regarding the availability and satisfaction of the facilities. 154 Table 6.28: Maintenance facility (frequency) for farmers and traders
Facilities Districts Maintenance facilities for farmers Maintenance facilities for traders Total 1 2 3 4 5 Total 1 2 3 4 5 Cleaning TVM 7 0 0 3 3 1 14 0 0 5 9 0 facility Idukki 15 0 0 0 3 12 15 0 0 0 6 9 Garbage TVM 4 0 0 1 3 0 5 0 0 5 0 0 collection Idukki 12 0 0 0 0 12 15 0 0 0 7 8 Garbage TVM 0 0 0 0 0 0 0 0 0 0 0 0 disposal Idukki 1 0 0 0 0 1 3 0 0 0 2 1 Waste utilization A.Vermin TVM 4 0 0 3 1 0 5 0 0 4 1 0 composting Idukki 5 2 3 0 0 0 4 0 2 0 2 0 B. Biogas TVM 0 0 0 0 0 0 0 0 0 0 0 0 plant Idukki 0 0 0 0 0 0 0 0 0 0 0 0 C. Bio gas TVM 0 0 0 0 0 0 0 0 0 0 0 0 power Idukki 0 0 0 0 0 0 0 0 0 0 0 0 Revolving TVM 0 0 0 0 0 0 0 0 0 0 0 0 fund Idukki 1 0 0 0 1 0 1 0 1 0 0 0 Solar/wind TVM 0 0 0 0 0 0 0 0 0 0 0 0 energy Idukki 0 0 0 0 0 0 0 0 0 0 0 0
Source: Primary data. Note: 1-Very Bad, 2-Bad,3-Average,4-Good,5-Very Good 6.4.5. Own infrastructure The own infrastructure facility available for traders in VFPCK is provided in the table below. Farmers generally do not have any of the infrastructure facility, except for washing and weighing. Two traders have facility for storage, godown and grading. Weighing machine is privately owned by the traders. Table 6.29: Own infrastructure for traders Facilties Districts Number Percent Storage TVM 2 13.3 Idukki 0 0.0 Godown TVM 2 13.3 Idukki 1 6.7 Washing TVM 11 73.3 Idukki 2 13.3 Weighing machine TVM 13 86.7 Idukki 4 26.7 Value addition TVM 0 0.0 Idukki 1 6.7 Transportation TVM 5 33.3 Idukki 14 93.3 Packaging TVM 5 33.3 Idukki 2 13.3 Grading TVM 3 20.0 Idukki 12 80.0 Source: Primary data 155 6.4.6. Problems identified for market inefficiencies and suggested solutions The major problems identified by farmers and traders, the reasons for the problems and the suggestions given by the farmers and traders to solve the same is given in the tables below.
Table 6.30: Problems & solution identified from farmers and traders
Problems & solutions identified from farmers Problems Yes Percent Causes Solutions Price setting TVM 5 33.3 Low price, no price stability Price stability Idukki 9 60 Low price Base price, fix support price Credit TVM 8 53.3 Not available, insufficient Provision of credit facility in facility, market Idukki 15 100 Not available Provision of credit facility in market Scaling/ weighing TVM 1 6.7 Partiality in weighing Should not be allowed TVM 3 20 No store room Store room Storage problem Idukki 7 46.7 No facility, no godown Facilitate godown Information flow TVM 1 6.7 No price display Provide price display Perishability TVM 7 46.7 No cold storage facility Provide cold storage Idukki 7 46.7 no vehicle Provide vehicle High marketing costs TVM 2 13.3 High transportation cost To be met by the market Idukki 2 13.3 High commission Reduce it TVM 3 20 Complex insurance, problem Simplification of insurance in rainy season Lack of other facility Idukki 2 13.3 Jackfruit to be included, establishment of ,non Facilitate revolving fund Problems & solutions identified from traders Price setting TVM 5 33.3 High price, no facility Price stability, reduce price, provide incentives Idukki 9 60 High price, no incentive Study local market, reduce price, open market facility Credit TVM 6 40 No facility Credit facility Idukki 2 13.3 No facility Credit facility with free interest, vehicle loan Information flow Idukki 1 6.7 Delay Price fixation Perishability TVM 1 6.7 Hartal, natural calamities Economic assistance Lack of other facility TVM 2 13.3 No bonus, no incentives Provide incentives Idukki 1 6.7 No bonus, no incentives Provide incentives
Source: Primary data The major problems identified are issues in price setting, unavailability of credit facilities, perishability of the products etc. The other major reasons as given by farmers for market inefficiencies is the invasion of agricultural products from neighboring states, the less provision for exports, lack of awareness about government schemes, less concessions, difficulty in getting access to financial institutions, high rate of interest, not getting favorable price for organic products etc. To summarise, VFPCK Farmer’s market was an initiative towards establishing markets where farmers have an active role in the conduction of market, and infrastructure is established with the
156 financial support of government, and managerial functions is coordinated by both farmers and government officials. Small and marginal farmers usually find difficulty in finding buyers from the locality and the new initiative created a platform for farmers and traders to meet and do business effectively. The primary data reveals that both farmers and traders are satisfied with conduction of market, especially relating to dissemination of market information, price fixation and timeliness of marketing activities. Particularly, farmers find that the market is helpful in demand forecasting and provision for input supply as an added advantage. To traders, availability of fresh and organic produce is the most important factor that attracts them to farmer markets, since in most of the other markets, vegetables are usually coming from neighboring states and they are of low quality. Along with this, good record keeping, in which all data relating to sale and purchase of agriculture produce are digitized increase transparency and precision in dealings. Both opine that since the VFPCK market is a government regulated one, they have more confidence operating in VFPCK market. However, farmer’s survey shows that payment is delayed and many of them have huge dues to be received. Considering the marketing infrastructure, all the markets have essential infrastructure such as auction hall, market yards and weighing machines, but none of them have facilities for cold storage or value addition. Only one of the markets has a processing center, where cut vegetables are sold, in other markets there are no facilities to deal with the problem of bumper crop. And this is a major issue, at times farmers have to sell their produce at very low price. This quintessentially shows the need for more infrastructure including cold storage, ripening chambers and facilities for value addition, packing, grading and standardization. Similarly, there is a dearth of service facilities such a rest room, toilets, waste management facilities, surveillance cameras and fire fighting facilities. There is crop specific and district specific difference relating to marketing margins. Transportation cost forms a major share of marketing margin, but still, transportation facilities are a major component that get neglected when it comes to marketing infrastructure. Given the perishability of goods and the large geographical area covered by the dealers, it is very important to arrange well equipped, weather sensitive transportation facilities, which can be very helpful for the traders. Establishing retail outlets can increase the acceptance of farmers’ markets in the locality and this can earn more profits to farmers. Also establishing crop specific infrastructure facilities, based on the agroclimatic zones can promote farmers to do agriculture more scientifically and profitably. In short, it is important to convert the farmers markets from mere auction centres, to centers for storage and value addition, by which the current problems faced by both farmers and traders can be curtailed. This essentially involve developing essential capacity, both physical and human, that makes farmers capable of handling the complex process of agriculture marketing from input supply to marketing of agriculture produce, by eliminating the intermediaries.
157 CHAPTER 7 Crop Specific Infrastructure - Spices
India is the largest producer, consumer and exporter of spices in the world and produces more than 65 spices in different varieties out of the 109 Spices listed by ISO. India has a significant share of 48% in quantity and 43% in value of the world trade in spices and nowadays major importers such as USA and Europe are demanding more quality compliance in recent years that necessities refining the process of production, storage, standardisation and export facilitation infrastructure. Spices Parks has been set up by the Spice Board to cope with the new challenges emerging in spice trade. Spices Parks can be defined as an industrial park for processing and value addition of Spices and Spice products which offers the processing facilities at par with the international standards. Eight regional crop specific Spices Parks has been established in various parts of the country with an aim to have an integrated operation for cultivation, post harvesting, processing for value addition, packaging, storage and exports of spices and spice products by meeting the quality specifications of the consuming countries. The basic objective is to provide common infrastructure facilities for both post-harvest and processing operations of spices and spice products, which also aims at backward integration by providing rural employment. In addition to common infrastructure, Spices Parks are having facilities for value addition and carries educative services. The aim is to ensure a better pricing for the produce by shortening the channels in the supply chain system currently followed locally. For detailed analysis Spices Park, Puttady is selected. Insights from the observation and in- depth interview with all stakeholders is narrated below: 7.1. Spices Park, Puttady Spices Park, Puttady is established with an aim to facilitate trade of spices especially of black pepper and cardamom by Spice Board, India with a total outlay of Rs. 28 crores and it started functioning during February 2011. The Spices Park has facilities for auctioning of spices and has infrastructure for transportation, storage, value addition, grading and packing for both pepper and cardamom. Along with this, it provides infrastructure for facilitation function by providing banking and credit facilities.
158 7.2. Infrastructure Facilities Infrastructure for the function of transfer of ownership: The SpicesPark has essential facilities for trade where auction companies and traders can meet and negotiate on prices and quantity of trade. Auction Centre: Board has established a full-fledged Electronic Auction centre for cardamom in the first floor of the Administrative building. The Hall is of 600 square meter areas and the E-Auction system has a higher end server with 60 bidder terminals, which can be extended to 100 bidder terminals. The updates of auction are available online which helps the farmer to keep in touch with the demand and price of different grades of cardamom and ensure fair prices from auction centres. This also helps in knowing the general market behaviour and planning the production cycle accordingly. Both the auction companies and traders are registered with Spice Board, by fullfilling conditions of financial credibility and taking trader/auctioneer license from the Board. Infrastructure for Physical Functions: Transportation: The SpicesPark is situated near from town and has good road connectivity to the state high way. There are roads inside Spices Park which makes movement of goods easier inside the campus. For transportation of materials from building to building inside the Park, Board has installed a GODREJ Diesel Forklift Truck model GX 200 D of 2T capacity at 500 mm load center, fitted with Diesel Engine of 56HP @ 2300 rpm, with Automatic Torque. And for transportation of materials within the Godown, Board has installed 5 pallet trucks of Capacity 2.5 T. Storage: Five numbers of Warehouses are built in the Spices Park for storing of both the raw materials and finished products of Cardamom & Pepper and it include: i) One raw material Gowdown each for Cardamom and Black pepper having area of 804 and 600 sq. meters respectively ii) One finished product Gowdown each for Cardamom & Black pepper and both having an area of area 600. Sq. Meters each are established iii) One puff Gowdown for Cardamom which is of area 583 sq. for keeping the product with out defects in the long run. Farmers, auction companies and traders use the godown for keeping both cardamom and pepper so as to make profit out of price fluctuations. Infrastructure for Processing: (Grading and Standardisation and Packing) Spices Park has ensured crop specific processing facility for both cardamom and pepper. Board has installed a Cardamom Processing plant of capacity 2 Tons per hour. The facilities include pre- cleaning, grading, sorting, weighing and packing of dried whole Cardamom. The processing line includes facility for grading of Cardamom based on its size and further sorted out based on colour with the help of colour sensors. The packing facility included in the processing line provide both bulk and consumer pack of 25 gm, 50gm & 100 gm. Also, Board has established a processing plant of Black Pepper and the capacity of the plant for pre cleaning facilities is 24 Tons per day. The dried Black Pepper is cleaned through aspiration, gravity
159 separation, magnetic separation and vaccum de-stoner mechanisms. The cleaned Black Pepper can be graded based on its size. The processing facility of the plant includes cracking and grinding of Black Pepper with a capacity of 500 kg per Hour. Apart from these facilities, separate packaging facilities for whole pepper, ground pepper and cracked pepper were also established. The packing facility included in the processing line provide both bulk and consumer pack of 25 gm, 50gm & 100 gm. In addition, Board has established a sterilization facility with a capacity of 250 Kg per hour in batch process and a drying yard with an area of 3000 sq. met. Value Addition A full-fledged white pepper production unit is established in the Spices Park with a production capacity of 1 Ton per day. The technology for the production of White Pepper is developed by the National Institute for Interdisciplinary Science and Technology. Infrastructure for facilitation function: The Spices Park gives facilitation function in which facilities are provided for market information and financing. Banking Services: The Spices Park has a bank in its compound and ATM inside campus. Credit facility is also arranged. Also, a business centre is opened inside the campus to facilitate trade and it provides with market information. An office cum sales counter of M/s FSTL is functioning in the Spices Park in the two storied Building of area 500 square meters. Services/ Maintenance Infrastructure: Spices Parkhas common infrastructure facilities developed such as internal road, drainage, power station, common generator for power backup, rain water harvesting, weighing bridge etc. Board has set up a two storied administrative building of area 1200 square meter. The ground floor of the block is of 620 square meters. The administrative Office and the Zonal Office of the Board is functioning in the block. Besides, there are 12 rooms available for functioning as the offices of registered Auctioneers & Dealers of Cardamom and for other stake holders. A restaurant of 460 square meters with all amenities and a Guest House, which is a 3 storied building of area 577 sq. meters with six bed rooms, dining hall and kitchen facilities is also established in the campus. A power station with 630 KVA transformer and 250 KVA D.G. is setup to ensure uninterrupted power supply. The Spices Park has initiated efforts like green energy and as a part of it, all the street lights established in the park is under the Solar Power system and waste management plant is also functioning. A firefighting system is also established at the Spices Park, Puttady for ensuring safety. General facilities available includefully computerized Pit Type Weighbridge of 50 T capacity and plastic pallets for stacking of cardamom/pepper bags in go downs. Following is a narration of how the institutional environment and infrastructure effects the structure, conduct and performance of the market.
160 7.3. Institutional Environment Spices Park is governed by Spice Board of India and for conducting day to day functions, five departments are being formed - development department, marketing department, finance department, research department and administrative department. All the departments are working under an Assistant Director and follows a strictly hierarchical structure of administration. Spices Park’s marketing section is monitoring the players during auction and take necessary steps to curb uncompetitive practices. Auction company has to submit trade transaction details to Spices Park and this is verified by the authorities, since tax has to be paid not based on the average auction price, but price quoted for each lot and the volume of trade transaction. 7.4. Structure of the market: Structure of the market is analysed by looking into variables relating to market forces, and categories related to the enabling environment. There are twelve auction companies in the market who are registered with Spice Board. These auction companies collect produce from the farmers. Major companies include MAS Enterprises Ltd., Header Systems Ltd, Cardamom Planters Marketing Co- operative Society, Greenhouse Cardamom Co. Ltd., South Indian Green Cardamom Co. Ltd., Sugandagiri Spice Promoters and Traders Pvt. Ltd., Idukki District Traditional Cardamom Producers Company and The Kerala Cardamom Producers Company Ltd. Around 400 traders take part in the auction in which trading/ exporting companies including Allus Cardamom Point, SRM Traders, Kingfisher Spices, Vignesha Spices, P.J Thomas and Co. RAM exports, Sanjay Traders and individual farmers participate. Major auction companies have their own pooling centres and own infrastructure for storage, grading and packing. Since for registration, procedure is complicated and demand large amount as security deposit, only large companies with financial credibility can register as auction companies. So there are entry restrictions to the market and price discovery is not always independent of the major players, instead major auction companies create artificial price hike in the market and this has led to monopoly features in the market, with the same company acting as buyer and seller and taking away the commission from auction and farmers being provided with false demand and price forecast. For instance, a single auction company and trader have around sixty percent of trade share. For farmers, cheap substitutes from foreign countries, especially Guatimalaaffects their profitability. And artificial hike in the price may drive away the genuine consumers leading to a steep fall in the price of cardamom. Additionally, there are apprehensions relating to the quality of product, especially the high pesticide residue which may seriously effect trade in the market in the long run. Good infrastructure has attracted major players in spice trade to the Spices Park, and they are provided facilities from storage, grading, packing to credit facilities. The market is working efficiently with trade in alternative days. However, there are issues related to equity and fairness which is related to the conduct and performance of the market.
161 7.5. Conduct of the market: e-Auction has replaced the traditional outcry auctions of Cardamom in Kerala. In the new system, licensed dealers are provided with a user id and password. The dealers have to log into the system to participate in the auction. A bid is made with key depressions using a normal computer keyboard and identity of bidders is protected during the auction process. Highest bidder’s name is displayed only on the Auction Master’s terminal. There is a main display board showing lot number, quantity, number of bags, current highest bid etc of each lot kept in the auction. The e-Auction system started in 2007, has brought transparency in the auction process and is running successfully. Auction is conducted at the centre in alternative days so as to organise the trade activities in par with the other auction centre at Bodinayak, the major trading centreestablished before the setting up of Spices Park, Puttady. There was a monopoly of Tamil Nadu based traders and farmers in cardamom trade. However, region wise monopoly has changed after the functioning of the centre since traders from North India as well as Kerala are active in auction process and farmers get a chance to sell their produce at fair price to pooling centres. Twelve auction companies are registered in the market and each of them are assigned with particular days of auctioning. In order to register as an auction company, the company has to provide ten crores as bank guarantee. Around sixty-five traders are physically being present during the auction time, and others take part from either Mumbai or from Theni, the other auction centres. Since e- auction facility is available, around 400 traders who are registered with Spice Board can participate in the auction. The traders check the size and quality of cardamom and decide up on price. Any quantity of cardamom, above 1.5 kg can be traded in auction. The cardamom is collected by the auction companies from farmers directly. There are pooling centres managed by the auction companies and farmers sell the product to auction companies based on the average market price, which is available to farmers on the online portal. Of the total quantity collected, a sample of 1.5 kg is taken. Of this 50 g is displayed on the Notice Board so that the traders can examine all the lots before entering to the auction hall. A 100 gram is given to traders so that he can check the product at the time of procurement from the godown. Farmer gets the price of 1.35 gram of cardamom. Price of 50g is paid by the auction company to Growers Development Fund and the rest is met by trader. Traders have to pay the amount fixed during auction to auction company within one week and the company will disperse the amount within two weeks to farmers. The company gets one percent of the total volume of trade as commission. Traders resale it to auctioneers / exporters or retailers. The price at which resale is happening is not known since the supply chain is very much diverse. 7.6. Monitoring: Malpractices: Auction companies reduce the price of farmer’s lots and hike the price when the lot of traders / auction companies comes in. And most of the auction companies have traders and they buy their own products and thus create a fake price hike in the market. Many of these companies have connections with real estate groups and fertiliser industry, this boom in price of cardamom leads to
162 increased cultivation and hoarding. Spices Park is closely watching these trends and is trying to take necessary steps. Quality issues: European countries have issued guidelines on the quality of products and due to high pesticide residue, the cardamom from Kerala has been rejected. So, Spice Board is taking necessary steps to curtail use of chemical fertilisers and pesticides. 7.7. Performance of the market: During recent months, price of cardamom is very high and most of the farmers are not using the facilities for storage and standardisation, they are directly selling it to nearby shops or to the pooling centres after drying for which majority of the farmers are having a facility of their own at home. 7.8. Service Facility: Input supply Along with trading facilities Spices Park is providing support for farmers to ensure good input supply. Both farmers and auction companies and export houses are benefitting from the subsidy schemes and credit facility provided by the Board. Individual farmers are getting support- the major schemes include Spport for Replanting (rupees 1 lakh as subsidy), Scheme for Rejuvenation (32000/-), Scheme for sucker nursery (Rs. 25000/-) and support for irrigation (Rs. 21175 for sprinkle irrigation and Rs. 10000 for pumps). Subsidy for dryer to the farmers is at an amount of 1 lakh (33% of expenditure on dryer) with a view to ensure basic facilities to farmers. The support is given after three inspection at three levels and the officials visit plantations and thus maintains contact with individual farmers. Farmers applications are processed online and basic details are there in the application management system which makes the monitoring fool proof. 7.9. Issues in conduction of markets: Backward and Forward Linkages Cardamom cultivation is a booster to real estate, fertiliser industry and labour supply. On the backward linkage, there are labourers from Tamil Naidu who comes in the morning and work in plantation with a salary of Rs.300. Around 300 jeeps are transporting these labourers form Theni to Idukki. This is also a way to transport the banned fertilisers and pesticides to Kerala. In addition, real estate group is playing an important role in hiking the demand for lease cultivation and auction companies have a big hand in escalating the malpractices. Spice Board has taken actions to cancel license of some of the auction companies, but it is difficult to make the general public realise the malpractices in the marker. With regard to pepper, cultivation activities up to harvest is monitored and regulated by Ministry of agriculture, but the post handling comes under Spice Board. Small farmers are not benefiting from the unit as the minimum amount needed for processing is 500 kg. Also, in order to give produce to pooling centres the farmer should possess at least 25 cents of lands. Mostly, the farmers do not have bulk quantities and they have to pay additional amount for each activity in addition to transport cost. Some of the farmers sell the produce as raw or depend on
163 private facilities that are near to the plantations. To solve this, Spices Park is making efforts to organise farmers so that they can make use of the infrastructure facilities at the park and indulge in direct marketing. However, the efforts are not completely successful, since there was lack of motivation and every one preferred to increase their own profit only. Similarly, for getting the exporting licences there are many bottlenecks and it is important to train farmers to acquire that by forming cooperatives or FPOs. However, there are some models worth mentioning. For instance, Tribal hamlet in Vallakkadavu is exporting spices to Germany. And there are individuals who benefit from online trading, and thus make use of facilities at the park, especially the packing facility by which cardamom can be packed in packets of 50 g to 50 kg. 7.10. Maintenance: FSTL was maintaining the whole infrastructure in the park till last year. Now due to some technical problems, facilities except the auction centreare leased out to BOS Naturals Private Ltd, the major spice trader in India. They are charging a service fee for grading, storage and packing. Spice Board monitors the export channel also. To export, traders have to log in to website and has to enter into price quantity agreement with importers. Then the marketing officials of the Spice Board take sample and conducts necessary lab test to check for pesticide residue and phytosanitary conditions and issues necessary certificates including Certificate of Origin. 7.11. Traders view: Allu Cardamom and MAS Enterprises Ltd. Interview with traders revealed major infrastructure bottlenecks faced by the traders. Regarding physical infrastructure majority of them are having facilities for storing, grading, standardisation and packing. To them the three major problems include pesticide residue, artificial colouring, and immature capture of cardamom. Unrestricted pesticide use has destroyed the fertility of soil and has created a nexus of auction companies, farmers and pesticide industry. Many of the countries including Saudi Arabia and Oman has rejected the consignments sighting the high pesticide residue and the European market is not accessible. They are of the opinion that the Spice Board should introduce strict monitoring measures/infrastructure to tackle these issues. 7.12. Performance of the Spices Park: Analysis of Primary Data Primary data is collected from farmers who cultivate spices, particularly cardamom and pepper. Those who have Cardamom Registration both permanent and temporary were selected for the study. The period of data collection was March 2020, when the cardamom prices were very high (i.e., between 2500 to 3200 per kg). Hence many of the cardamom growers were directly selling their crop to the retail shops near their home. The socio demographic characters of the sample show that only one among the fifteen spice growers sample was a female, majority had education plus two and below and for eighty per cent their main occupation was agriculture. Regarding their cultivation habits, some cultivate crops other than
164 pepper and cardamom, tapioca is cultivated by three, bananaby six, ginger by five, cow pea by six, spinach by six, cucumber by two, snakeguard by three and bitterguard by six. Out of the fifteen sample farmers who were cultivating cardamom, only three are now taking part in the auction process in Spicepark. They bring their cardamom to the pooling centres of auction companies like Mass, Allooss Cardamom etc. The Auction companies pool the crop and engage in the trading process at Spices Park. All the other farmers were doing the same process, when price of cardamom was low. But since the price of cardamom was very high during the data collection time, many farmers were directly selling their product to small shops who acted as collecting points to supply to wholesale operators in the market. This is because this marketing process gave them immediate cash, whereas operations at Sprice Park required pending days for payments (around three weeks), even though the price received was lesser by around Rs.100 per kilo. Pepper is also sold though collection agents who supply the same to the wholesale traders. On an average a small farmer gets Rs.2,71,250 per year and a medium scale farmer gets Rs.19,34,167. The large-scale farmers in the sample earns around Rs.1,38,12,500. The large farmers are exporters through societies and dealers. This revenue earned is particular to this year because cardamom prices were very high and yield is received five times per year. Table 7.1: Area wise distribution of spices
Small Medium Large Total µ N SD µ N SD µ N SD µ N SD Pepper Area 56 5 65.51 100 7 79.05 84.28 12 75.13 Own Qty 1.8 5 0.44 2 7 0.5 1.92 12 0.47 Value 966 5 857.71 580 7 151.9 717.85 12 526.69 WHM Qty 161.6 5 144.52 385.62 6 209.95 299.46 11 213.41 Value 200529 5 376672.7 112585 6 64489.25 146409.6 11 227383.4 Others Qty 597 1 . 597 1 . Value 179100 1 . 179100 1 . Total Qty 163.4 5 144.19 411.11 7 208.83 322.64 12 220.01 Value 201495 5 377526.6 81955.56 7 66444.47 124648.2 12 223839.8 Carda Area 57.75 4 48.78 177.77 8 132.54 850 3 180.21 191.5 15 224.39 mom Own Qty 1 4 0 1 8 0 2 3 0 1.07 15 0.26 Value 2225 4 206.15 2400 8 357.07 500 3 140.32 2214.28 15 581.58 WHM Qty 121.75 4 123.24 727.12 8 1327.68 525.33 12 1102.15 Value 269025 4 270344.2 1780738 8 3331818 1276833 12 2763733 Others Qty 4011 3 2138.29 4011 3 2138.29 Value 10027500 3 5345727 10027500 3 5345727 Total Qty 122.75 4 123.24 813.88 8 1268.31 5525 3 832 952.92 15 1681.32 Value 271250 4 270337.3 1934167 8 3222730 13812500 3 1804320 2307500 15 4238213 Source: Primary data 165 All farmers except one engage in trade individually. Sixty per cent sell agricultural produce around the year and since cardamom prices are very high currently, they do not face difficulty in finding a buyer near their home. Table 7.2: Details of trade activity How do you undertake agricultural trade activity? Trade activity Number Percent Alone 14 93.3 With a partner 1 6.7 Total 15 100 Do you sell agricultural produce around the year? Yes 9 60 No 6 40 Total 15 100 Do you face difficulties in finding buyers near to locality? No 15 100 Source: Primary data
The details of sales during last month is given in the table. It shows that the auction rate in the WM is higher than the rate at which the farmers sell their product at the collection shops. The price difference between local collection shops and auction rate for pepper is Rs.13 for small farmers and Rs.10 for medium farmers. Similarly the difference in the price in Spices Park and the collection points where the farmers sell is Rs.320 per kilo for small farmers, Rs.100 per kilo for medium farmers and Rs.300 in the case of large farmers. Table 7.3: Details of selling during last month Small Medium Large Total µ N SD µ N SD µ N SD µ N SD Pepper Quantity 61 5 39.37 349 7 304.30 229 12 270.30 Auction rate in WM 300 5 0 300 7 0 300 12 0 Selling price 287 5 13.03 290 7 12.58 288.75 12 12.27 Farmer amount 17507 5 10682.73 101210 7 92317.08 66123.75 12 81621.84 Cardamom Quantity 51.85 4 59.66 253.56 8 448.41 460 3 312 200.09 15 361.14 Auction rate in Wm 2500 4 0 2500 8 0 2500 3 0 2480 15 77.45 Selling price 2280 4 216.79 2400 8 357.07 2200 3 210.31 2366.66 15 301.58 Farmer amount 118218 4 150208.9 608560.1 8 1124219 1012000 3 2014000 473546.4 15 904693.3 Source: Primary data
166 Table 7.4: Reasons for selling in the market Very bad % Bad % Average % Good % Very good % Immediate payment 0 0.0 0 0 4 26.66 1 6.66 10 66.66 Regular consumer 0 0.0 3 20.0 12 80.0 0 0.0 0 0.0 Storage 11 73.3 4 26.7 0 0.0 0 0.0 0 0.0 Auction platform 12 80.0 3 20.0 0 0.0 0 0.0 0 0.0 Transportation facility 0 0.0 0 0.0 1 6.7 11 73.3 3 20.0 Incentives/subsidy 10 66.7 2 13.3 2 13.3 0 0.0 1 6.7 Others 3 20.0 0 0.0 11 73.3 1 6.7 0 0.0 Nearest Market 0 0.0 0 0.0 0 0.0 4 26.7 11 73.3 Any quantity can be sold 0 0.0 0 0.0 0 0.0 6 40.0 9 60.0 Govt market 12 80.0 2 13.3 1 6.7 0 0.0 0 0.0 Source: Primary data
The major reasons for selling in the nearby shops include immediate payment and nearness of market. But many opined that they may sell the product to the auctioneers, if the price fluctuates or becomes low. 7.12.1. Infrastructure facilities available for the farmers Out of the selected fifteen farmers, none of them are using the infrastructure facilities at Spices Park. On enquiry it is known that the facilities in Spices Park is used by auctioneers and trades. Out of the selected fifteen samples, three supply their products to auctioneers and the other twelve supply their product to near by collection shops, who further supply it to wholesalers/exporters. Data elicited from these thirteen farmers show that transportation facility is available for them, regarding storage, when price is high, they normally don’t use it and when they need it, they depend on private parties which provide storage facility at rent. But specified scientific storage is not available with private parties and they are not using the facilities at Spices Park because the quantity may be less and the price is high. Value addition facilities are not available in the local markets, but for pepper it is available at Spices Park, but nobody is using it. Weighing machines are available in all local shops and the farmers have to give a sample of 150 gm to the traders for testing the grade. Regarding infrastructure facilities for facilitation, the local markets do not provide any facility except the presence of Bank/ ATM. However, all these facilities are available in the Spices Park. The farmers get a subsidy for replantation from Krishi Bhavan at the rate of Rs.35 per plant. Krishi Bhavan supply pepper plant, organic manures and seeds to farmers. Krishi Bhavan also provides training facilities to the farmers and some organic inputs and provide finance for rain shelter at a subsidy of Rs.50,000. Farmers are not aware of the availability of godown facilities. State government provide electricity subsidy for cardamom farmers. Farmers get subsidy from spice board for purchasing motor pump for irrigation, they got a subsidy of Rs.18000, the actual cost being 2 lakhs.
167 7.12.2. Problems identified by the farmers The farmers mentioned many problems, the most important ones being storage problem and high marketing cost. Even if they want to store the product they do not do so because the storage cost at Spices Park is high. The same is the case with State Ware House Corporation. They may keep the product at local godowns, but the price and quality of godowns is not as per requirement. Drying charges is also high. A drying machine cost Rs.3 lakhs, of which one lakh is given as subsidy. Only one of the sample farmers own a drying machine. For drying, all others depend on rented facility, the cost being Rs.12 per kg.
Table 7.5: Problems and solutions identified
Yes % Causes Solutions
Price setting 14 93.3 Low prices Price stability, government action Credit 13 86.7 No facility Facilitate Storage problem 10 66.7 High charges, no govt laws, Free service, subsidy, reduce charges not perishable High marketing costs 1 6.7 High drying charge Subsidy
Other causes 1 6.7 No subsidy Subsidy for input supply
Source: Primary data
168 CHAPTER 8 The Alternative Marketing Structures Tejaswini Farmer Producers Company Ltd.: A Case Study 8.1. Introduction Collectivization of producers, especially small and marginal farmers, into producer organisations improve access to investments, technology, inputs and markets for farmers. Farmer Producer’s organisations envision to maximize profit for farmers, by shortening the supply chain and eliminating the intermediaries in the agriculture marketing, depicts the most important form of alternative marketing structures. Since 2011, both national government and state governments are promoting creation and facilitation of FPOs, so that the major bottlenecks in agriculture marketing including fragmented supply chain with inadequate market infrastructure, lack of accurate and timely market information/intelligence system, produce loss and price fluctuations can be curtailed. Small and marginal farmers account for ninety-two per cent of the total operational land holdings in Kerala and FPOs attain greater importance since cash crops forms a major part of cultivation which need better input supply, value addition and marketing infrastructure. Of the 121 FPOs in Kerala, one FPO that won the award for Best Farmer Producer Organization from NABARD is selected for detailed study. Rapid Rural Appraisal is used, in which information relating to infrastructure, organizational structure, physical functions and service functions are collected from Board members, farmers, staff and other stakeholders using participatory data collection tools. Focus was given to assess the existing infrastructure facilities for agriculture marketing and its status and needed facilities for future. Along with it, the organizational structure, managerial aspects relating to marketing, volume of transaction of both inputs and outputs are analyzed. Kannur and Kasaragod districts play an important role in agriculture production and marketing in the state and the farms mostly following integrated organic farming techniques traditionally, is recognised as the future of agriculture sector of Kerala. Coconut and arecanutare the major crops, pepper, coco, coffee, vanilla and cashew are cultivated as intercrops in the farms and most of the people are dependent on agriculture for a living. While the other inter crops including cashew, pepper
169 and coco finds market, majorly export market for organic crops, value addition and marketing of coconut was a major problem for the farmers in the districts. Coconut is cultivated in 85972 ha and 67085 ha area in Kannur and Kasaragod respectively, in which the bordering areas of the districts including Cherupuzha, Panathady, West and East Elery are centres of coconut production. It was in this background some farmers under the initiative of Sri.Sunny George, a KarshakaSree awardee thought of possibilities of making value added products from coconut and marketing it profitably. Organising farmers in to a collective and convincing them about the advantages of Farmer Producers Organisation was a difficult task, but it was done effectively by the core team members with an effort of around two years. 8.2. Tejaswini: The Coconut Farmers Producing Company: TCFPCL TCFPCL, the farmer producer company was registered on 03/06/2013 as an Indian non- governmental company limited. The company brings together 3,78,568 members spread across fifteen panchayats in the districts of Kannur and Kasaragod who cultivates 91252 acres of land. The company was set up with an objective to undertake programs for employment generation, growth and diversification of agriculture and agro-based industries to increase food production, and export of agriculture products, in primary, and value-added forms. It also envisages promoting organisation of marketing chain both for domestic and export marketing and make advantage of forward and backward linkage by integrating producers’ associations. The strength of the company is its democratic functioning and organisational structure which is depicted in the organogram.
Figure 8.1: Decentralised structure of TCFPCL: Mobilisation of farmers
170 At the bottom level farmers are organised into 272 Producer Societies and they form into Organic Producer Cells. These cells are integrated into Producer Federations and there are 15 federations. They include Cherupuzha (33 cells), Udayagiri (23), Alakkode (30), Therthally (14), Chemberi (17), Kudiyanmala (14), Payyavur (14), Naduli (10), Mayoori (11), Palayalal (14), Karivellur (20), Perumbadavu (16), Puligome (12), Sreekandapuram (10), Mallur (34). Thus, a total of 30100 farmers are part of the clusters and they cultivate around 91252 acres of land. Around 40 per cent of the stakeholders are females and there are farmers from SC and ST communities, rightly representing the diverse demography of the state. Each year a general body meeting is conducted and all the farmers participate in it and evaluate the functioning and discuss future plans. An annual report is published every year including the verified account statement and transparency is assured in functioning. There are shareholders and 15-member director board which makes managerial decisions. It started with an authorised capital of Rs. 4 Cr and the paid-up share capital is Rs. 1,64,26,250. There are 363 shareholders of which 209 are individuals and 154 are societies associated with 30280 farmers. Out of this, 8500 society members and 363 shareholders are females. Of this, 14500 farmers are marginal farmers and 15780 are small farmers. For the farmers, 320 training sessions were conducted in which around 9400 members participated. Annual business turnover of the company is 95 lakhs and credit requirement is 250 lakhs, of which 181 lakhs is gained from NABARD, 20 lakhs from NABKISAN and 30 lakh from SBI. A total of Rs. 216 lakhs are availed and the producer members have Kisan Credit Card (KCC) facility. Rs. 25 lakhs are received as promotional assistance from government agencies and DIC registration, input dealership and Mandis registration is completed. The company has business tie up with INDOCERT for organic value-added products and has developed backward and forward linkages. Figure 8.2: Administrative Structure of TFPCL Departments
171 The day to day functioning of the company is dealt by four administrative managers, who were the founders of the company. There are four departments namely; Purchase, Production, Marketing and Financing departments working under the administrative directors and each of these departments have managers assigned with particular responsibilities. The office of the company is situated at East Elery, near to the town which makes administrative functions easier. The are five staff working at the office and other contract labours working at the company site. TFPCL provides employment opportunities to the younger generation in the area and thus contribute towards improving livelihood of the staff as well as farmers. 8.3. Activities and Functioning: The company is indulged in diversified activities starting from the input supply to value addition and marketing of Agri- products. Since 2013, the company is indulged in developing essential infrastructure for storage, value addition, grading and packing and standardisation along with initiating direct selling and providing market intelligence for the farmers. These are done with availing funding from agencies including NABARD, CDB and state government. Major projects initiated by the company and its funding source and status is given in the table. Table 8.1: Projects by TCFPCL
Title of the project Assistance from Focus Area Amount Utilised PRODUCE Fund NABARD Producer Organisation development 6.46 L Replanting and CDB (Coconut Cutting and removal of old Rejuvenation Development Board) senile palms and rejuvenation with new seedlings 24 L Laying Out Of CDB Scientific cultivation 65 L Demonstration Plot (LoDP) Scheme Mission for Integrated The Directorate of Development of Cashewnut & Cocoa Replanting coca 12 L Horticulture (MIDH) Development (DCCD) Organic Vermin Compost Coocnut Development Vermin compost making 10 L Unit Board Trainings Coconut Development Neera Technician, FoCT, CPS 20 L Board leader training Source: Primary data
Thejaswini is implementing the central schemes of Government of India and state schemes of Government of Kerala for agriculture development of small and marginal farmers in agribusiness activities. The major financers for the company include NABARD, Coconut Development Board, Directorate of Coco and Cashew Development. From the funding from NABARD agri-processing centre is established at Cherupuzha and there are facilities for coconut oil making, soap making and
172 manure. The company received PRODUCE fund worth of Rs. 18 million and the administrative cost of FPO is met from the fund. Currently, organic manure is produced and distributed at the centre. The company also procures coconut and agri produces from farmers and processes it at their plant at Peringome, Kannur. As part of Skill Development Training Programme of Coconut Development Board, Company had organized 24 batches of FOCT and 8 batches of Neera Technician training programmes at their training centers. The company is pioneer in organizing small and marginal farmers as Farmer Producer Societies, Farmers Producers Federations for endowing them with collective power and economies of scale. It provides a platform for increased accessibility and cheaper availability of agricultural inputs to small and marginal farmers and in establishing forward and backward linkages in supply chain management. This initiative has triggered mobilization of farmers for aggregation across the Kannur and Kasargod districts of Kerala with ultimate aim of sustainable business model and augmented incomes. Recently the company has entered in to the task of Responsible Tourism (RT) initiatives of department of tourism, Government of Kerala to integrate the products, services and the local community for utilizing the opportunities in tourism. 8.4. Asset Details of the company TFPCL currently has asset worth of around two crore which has been established since its inception in 2014. TFPCL holds around five acres of land, in which its processing centre at Peringome is constructed. In addition, TFPCL has a nursery in Cherupuzha town. The centre is well equipped with post modern machinery for processing, packing and standardising coconut and has a biogas plant attached to it. Along with that TFPCL is involved in direct marketing through its Neera stalls, which was the pioneer initiative of the company. Also, the company has good safety mechanisms and waste management system. Asset details of the company is shown in the table below: Table 8.2: Asset Details of TFPCL Items Value
Land & Development 24,26,925.00
Plot of Land 0.4047 at Peringome 12,64,520.00
Plot of Land 0.9714H at Peringome 29,48,210.00
Plot of Land 0.0184 at Peringome 2,23,340.00
Building & Structures under construction 6,5 92,521.69
Neera Stall 3,600.00
Furniture & Fittings 16,500.00
Equipments& Tools 6,39,859.00
Motor Bike 66,000.00
Motor Pump & Fitting 55,564.00
Tally Software 18,500.00
Electrical Fitting 2,86,458.82
173 Plant and Machinery 39,47,500.00
Stitching Machine 6,800.00
Bio Gas Plant 4,71,030.00
Generator 5,84,746.00
Computer and Accessories 35,722.61
Induction Motor 58,983.00
Soap Unit Machineries 4,55,328.00
De Husking Machine 3,50,000.00
Bronze Vessel 6,258.00
Electric Motor 1,68,000.00
Pouch Packing Machine 6,15,500.00
Voltage Stabilizer 32,500.00
Chillar machine 76,800.00
Copra Dryer Chamber 9,99,686.00
Conveyer System 2,23,750.00
Transformer 8,49,600.00
Expeller 2,59,600.00
Fire & Safety Equipment 1,00,081.70
Helical Gear Motors 76,700.00
Mobile Phone 1,500.00
Weighing Machine 8,600.00
Electrical Fittings at Peringome Factory 19,53,048.00
Total 19231210.13
Source: Primary data
8.5. Revenue and Sales: The company is successfully running its centre at Perigome and has started to receive revenue. The company is among the major traders of coconut water, coconut oil, honey and manure named Krishimitra and is looking to increase its revenue. During 2018, the company had earned a profit of Rs. 608173/- , but in the year 2019 it dropped. Details are shown in the table below:
174 Table 8.3: Revenue and Expenses
Revenue 2019 2018 Revenue from operations 8613260.9 9788555 Other income 354249 2763115 Total revenue 89,67510- 12551670/- Expenses Cost of materials consumed 965202 1366470 Purchase of stock in trade 4078920.5 5356709 Changes in inventories of finished goods work 43330 188966 Employee benefit expenses 406102 672200 Finance costs 1502366 912423 Depreciation 168994 194834 Other Expenses 1976618 3251892 Total Expense 9141535/- 11943496/- Profit -174025.37 608173/- Source: Primary data
Table 8.4: Liabilities
Borrowings (Major heads) Amount
Loan from NABAD 11,214,680.00
Borrowings from directors 3805000.00
Trade payables (others) 1185832.00
Stock (raw materials) 4,144.768.11
Stock (finished goods- soap, coconut oil) 26,434.3
Short term loans 1327335.00
Source: Primary data
Major liabilities of the company include the long-term loan from NABARD worth of amount Rs. 11214680/- and other short-term loans worth of Rs.1327335/-. 8.6. Creation /Facilitation of infrastructure TCFPCL facilitates the three aspects of agriculture marketing; namely a. Exchange functions b. Infrastructure for transportation, storage, value addition, grading and standardisation. c. Sharing market intelligence and financing d. Service Functions The objective of the company is socio economic upliftment of farmers through productivity improvement, cost reduction, collective marketing, processing and product diversification. And for
175 that, creation/facilitation infrastructure is the most import aspect and the company successfully fulfilled these functions by creating a processing centre, marketing chains as well as input output linkages. TFPCL is involved in many activities from input supply to value addition and marketing. It includes, agriculture nursery, organic manure unit, coconut oil extraction unit, pocking of honey, curry masala powder making unit and marketing of spices and agriculture inputs. Thus exchange (direct marketing and demand forecasting), input supply, value addition and marketing are performed. Details are given in the following table: Table 8.5: Agriculture marketing functions facilitated by TFPCL
Name of Facility/item Capacity /Status Amount invested Exchange Function Eco Spots 10 5L Infrastructure Input Supply Animal Feed Pellet Unit 1000 p/day 2 Cr Cherupuzha Gardens - 15L Grading and Standardisation Cherupuzha Fruits and Vegetable Processing cluster 1.5 Cr. Value Addition Coconut Oil dryer and expeller 22000 nuts /day 2.61 Cr Coconut milk and Desiccated coconut powder 50000 nuts /day Cr Virgin Coconut Oil 20000 Husks/day 25 L Chocolate making Unit 10000 kg/per day Chocolate making Unit Service Functions Eco farm Tourism - Smart Village - 10 Cr Market financing and intelligence - 10L Source: Primary data
Regarding exchange functions, the products are directly sold by TFPCL and coconut is collected from farmers using farmer cooperatives. This provides an opportunity to farmers to market their produce easily and helps in receiving better prices. Along with this, facilities for storage, standardisation and value addition ensures that coconut is not perished during the harvest season. The ecotourism and smart village initiatives provides additional income to farmers. 1. Exchange function: Infrastructure for the function of transfer of ownership Organic Producer Cells and Eco Spots: The TCFPCL initiated formation of Organic Producer Cells (OPC) by associating around 100 organic certified growers in the area. Each OPC has to register with the company. The cell has to collect organic produces from its member farmers as per the demand and the products are sold at the Eco Spots. Thus, the OPC act as a direct link between producer and ultimate customer. In addition, Neera
176 and value-added products produced at Thejaswini Processing Centre, Thirumeni are sold at ‘Eco Shops’. The products are sold under the brand name ‘Palm Fresh’. Input Supply Organic manure unit: Organic manure is produced at Perigome, Kannur. TFPCL is distributing the manure to member farmers and other organic farmers in the Panchayat. Coconut water and damaged coconuts are used for generating bio-gas and slurry from the biogas plant is used for making manure. The pith after removing the fibber from coconut husk is also used for making organic manure. Infrastructure facilities at the Organic manure unit is and its cost is given in the table.
Table 8.6: Organic manure unit: Infrastructure
Components Amount
Pith Mini Screener 56100.00
Neem Expeller 370000.00
Conveyer System 77500.00
Lab Equipment 22000.00
Stitching Unit 15500.00
Building Shed No. 1 760000.00
Building Shed No. 2 550000.00
Shed for Bio- Gas Plant 215000.00
Effluent Treatment Plant 510000.00
Electrification 20000.00
Furniture, Weighing Scale and Equipment’s 105000.00
Engagement of marketing consultants and managers 1050000.00
Total 3751100.00
Source: Primary data
The organic manure unit is constructed by spending around 37 lakh rupees and has all facilities including neem expeller, conveyer system, lab equipment, effluent treatment plant and bio gas plant. This ensures efficient functioning and safety of labourers. Horticulture Nursery Unit: TFPCL ensures supply of seedlings to farmers by nurturing a nursery – ‘Cherupuzha gardens’ at Cherupuzha. The nursery has all modern facilities including polyhouse, shade net house, poly tunnel, sprinkler and mist chamber. In the organic nursery, seedlings of all plants including that of coconut, jackfruit seedlings are nurtured and sold. Infrastructure facilities at the nursery and its cost are given in detail.
177 Table 8.7: Horticulture Nursery Unit Components Amount Various Nursery Seedlings 710000 Fencing 162000 Gate 5000 Work Shed 12000 Pipe Line 8000 Office cum Store 25000 Shade net House 135000 Poly Houses 110000 Mist Chamber 7500 Poly Tunnel 38000 Land Preparation 205000 Water Storage Tank 32000 Pump Set 30000 Sprinkler/ (mist drip) 50000 Mother Plant Block 32000 Total 1561500
Source: Primary data
The nursery unit established with a cost of around fifteen lakhs, helps in supplying seedlings to its farmer members at cheap cost and also helps to protect the indigenous varieties of all traditional crops. The company also organises and participates in seed exhibitions and promote farmers to nurture organic varieties of crops that is suitable to the climate and soil of the region. 1. Infrastructure for Physical Functions Storage and Value Addition: Integrated Agro Processing Complex: The integrated Agro Processing complex of Thejaswini CFPC Ltd, which is under construction is situated in four acres at Perngome Panchayat, 60 kms east of Kannur town. The centre under construction has developed infrastructure facilities worth of around two crore, and currently the coconut oil extraction unit is functioning. Table 8.8: Agro-processing Unit – Infrastructure Components Amount De- husker 448500.00 Copra Dryer 3700200.00 Expeller System with all accessories 4778000.00 Copra Cutter 630500.00 Filter Press 1260000.00 Oil Storage Tank 1145000.00 Drag Chain 320000.00 Pouch Making Machine 726290.00 Stabiliser for PPM 39350.00
178 Cooler attached to the PPM 76800.00 Preliminary and Pre- operative expenses 350000.00 Building (4500 sq. ft.) 4100000.00 Effluent Treatment Plant 1000000.00 Electrification 1550000.00 Generator 740000.00 Furniture, Weighing scale and office equipment’s 225000.00 Electric motor, pump, Tank and others 102500.00 Standardisation, e- commerce, etc. 500000.00 Bottle filling machine 131000.00 Working Capital 2218000.00 Total 24041140.00 Source: Primary data
The company has a dryer cum expeller unit with capacity of 22000 nuts per day. It has machines including De husker, copra dyer, expeller system, copra cutter, oil storage tank, pouch making machine and cooler and thus provide facilities for storage, grading, standardisation and value addition of coconut. The raw material is directly procured from farmers and around 30000 farmer families are being benefitted. Coconut oil is also used as a raw material for handmade bath soap. Handmade bath soap: Handmade bath soap unit has been completed. Thejas Beauty soap is produced with five varieties of fragrance and the unit has the capacity to produce 5000 pieces per day. Along with this, Thejas Gold Turmeric powder, masala powder, Palm fresh Neera: extracted using CPCRI technology are produced and sold. Other activities: Other activities include making of coir fibre. Under TFPCL, a society named Cherupuzha YCVSS is working to produce high quality coir fibre. And Umbrella Programme for Natural Resource Management (UPNRM) is being implemented by taking a loan worth of Rs. 180.88 lakh. Service Functions: FoCT(Friends of Coconut Tree): The company trained 604 FoCT people in the districts and they are working as coconut climbers and 6 batch of Neeratechnicians and four batch of leaders of CPSs. The company trained 205 society leaders of Kannur and Kasargod and they actively work as leaders for their respective producer societies. Awards: National Entrepreneurship Award 2017 from Ministry of Skill Development and Entrepreneurship, Government of India State Award, 2016 for best farmer producer organisation from NABARD Best Business Plan Award, ICAR Central Plantation Crops Research Institute 2018 In-depth interview with Director Board members has revealed the current problems faced by the company, in spite of being a pioneering FPO in Kerala, and major insights are discussed below.
179 8.7. Problems 1. Shortage of Working Capital: Due to delay in complete functioning of the processing unit owing to procedural delays there is shortage of working capital. 2. At present the Farmers don’t have enough money to purchase organic manure and planting materials. 3. The supply of organic manure in the Panchayath schemes are now given to the retail manure Depots within the area of the respective Panchayaths. Direct and wholesale supply is not allowed under Panchayath schemes and so, manure from FPO cannot be sold to other farmers. 4. The Transportation of goods from Kannur district to Kasargod and other districts are restricted and this make problems. 5. The availability of workers, transportation and other facilities in the Production and marketing are affected due to the issue of Covid-19. 6. Increase in loss due to the less utilization of the capacity of the Unit. 8.8. Measures to overcome the problems 1. Increase the share capital by issuing new shares. 2. Business Development Assistance from NABARD and other Government Agencies. 3. Search for more fund with less interest. 4. More effective utilization of the three tire structure (Federations and Societies) of the Company for the raw-materials collection and marketing of the products. 5. Increasing the business tie-ups with other FPOs and other reputed organizations in the Country. 6. Increase the production and sales to reduce the cost of production and marketing. 7. Planning to run the unit and office in a more professional way by appointing new experienced and trained staffs and skilled labours. TFPCL have formed different departments for the smooth functioning of the Company – (a) Purchase Department - Purchase of coconut, Seeds and other raw-materials, price fixing, collection, transportation, etc. (b) Production Department – Production of Coconut oil, organic manure, Soap, Spices, Honey, planting materials, etc., Cost accounting, Stock management, etc. (c) Marketing Department – Publicity, Sales, Market research, Digital Marketing, etc. (d) Finance Department – Budget, planning, Accounting, Cost and Stock Statements. (e) Administration Department headed by the Chairman, Managing Director, CEO and the head of the Directors from each department – For the evaluation and modification of the functioning of each department, Human Resources and Management, Planning, etc.
180 8.9. Conclusion FPOs follow a holistic approach in agriculture marketing initiatives and it can be the best form of alternative marketing. However, procedural delays and market restrictions from the part of government is negatively affecting the smoot functioning of FPOs. In spite of starting the construction of processing centre in 2014, due to difficulties in getting sanction from Panchayat and Electricity Board the functioning of the centre was delayed and till now, the entire capacity of the centre has not been utilised. This has created problems in repayment of loans and loss in the recent years. It is very crucial to provide technical and managerial expertise to farmers so that they can efficiently manage all activities of processing centre. Also, the bureaucratic delays from the part of government should be avoided by scraping some of the age-old laws and issuing special allowances to FPOs, as is given to MNCs.
181 CHAPTER 9 Warehousing – Problems and Prospects
The chapter analyases the objective ofassesing the extent of warehousing infrastructure in the state, performance of existing warehouse facilities, identification of the gap between the existing and required facilities. The findings of the study in this section are mainly determined through the secondary data sources collected from different state warehouses with direct individual interviews and focus group discussions with concerned officials, farmers and traders in respective warehouses. 9.1 Introduction Warehouses are scientific storage structures especially constructed for the protection of the quantity and quality of stored products. It plays a crucial role in storing, preserving and protecting agriculture and related commodities against insects, pests and rodents. Warehousing is now seen as an integral part of the supply chain where goods are not only stored for safekeeping, but also where other value processes are implemented, thereby minimising wastage and costs. In addition, warehousing has become an essential factor that enables food producers to access credit in the form of pledge financing. Warehouses are primarily licensed by state governments under state warehousing laws. In India there are three public sector agencies which are involved in building large-scale storage and warehousing capacities. These are the Food Corporation of India (FCI), Central Warehousing Corporation (CWC) and 17 State Warehousing Corporations (SWCs). While the FCI uses its warehouses mainly for storing food grains, the storage capacities with CWC and SWCs are used for the storage of food grains as well as other items. The main functions of warehousing development in India are scientific storage, financing, price stabilization and market intelligence. In scientific storage the product is protected against quantitative and qualitative losses by the use of such methods of preservation as are necessary. Warehouses meet the financial needs of people who store the produce by providing value for the goods stored. Nationalized banks advance credit on the security of the warehouse receipt issued for the stored products to the extent of 75 to 80% of their value. Another important function of warehouses is regulating price levels by regulating the supply of goods in the markets. More goods from the buffer
182 are released when supplies are less and less is released when supplies are more in the markets. By checking the tendency to making post-harvest sales among the farmers, warehouses help in price stabilisation of agricultural commodities. Farmers can store their products in warehouses during the post-harvest season, when prices are low and sell it once they are assured of good returns on their products. Warehouses even inform farmers about the current market prices, thereby preventing distress sales and apprise them about the emergence of favourable market conditions, so that they get the best value for their product. Offering market intelligence in the form of price, supply and demand information so that market users may develop selling and buying strategies. The CWC was founded in 1957 to provide logistics support to the agricultural sector. Currently, it operates around 514 warehouses across the country with a storage capacity of 10.27 million tonnes. Other than storage and handling, CWC also offers services such as disinfestations, pest control, fumigation, clearing and forwarding, handling and transportation, procurement and distribution. State Warehousing Corporations exist in 17 States to provide storage facilities and pest control services for various agricultural commodities belonging to farmers of that State. These warehouses work under different Warehousing Acts enacted by the respective State Governments (http://cewacor.nic.in/). For promoting warehousing facilities government of India implemented two major schemes such as GraminBhandaran Yojana (GBY) and Private Entrepreneurs Guarantee (PEG), 2008 Scheme. This scheme was implemented by the Department of Agriculture and Cooperation, Ministry of Agriculture and has since been merged with other existing schemes to be renamed as Agricultural Marketing Infrastructure (AMI) scheme, which is a sub-scheme of Integrated Scheme for Agricultural Marketing (ISAM).The objective of the scheme was to promote construction of scientific warehouses in the rural areas of the country. The scheme provides subsidy of 25%. NABARD has sanctioned projects to several Primary Agricultural Credit Societies for setting up warehouses so as to provide the nearest source of scientific warehousing to the farmers. In 2008, Government of India enacted a scheme for creating additional storage capacity for food grains through the private sector, CWC and SWC. Under this scheme, Food Corporation of India (FCI) gives a guarantee of ten years to private parties for assured hiring of warehouses. For expeditious construction of godowns, it was decided that wherever CWC or SWC have their own land within the identified locations the CWC or SWC will construct godowns on priority for which FCI would give a guarantee of 9 years for storage charges(https:// niti.gov.in). 9.2. Central Warehousing Corporation (CWC) Central Warehousing Corporation (CWC), a Schedule ‘A’-Mini Ratna, Category – 1 Central Public Sector Enterprise (CPSE) is a statutory body which was established under ‘The Warehousing Corporations Act, 1962’. Its aim is to provide reliable, cost-effective, value-added, integrated warehousing and logistics solution in a socially responsible and environment friendly manner. The authorisedcapital and total paid up capital of CWC are Rs. 100 crore and Rs. 68.02 crore respectively. During 2018-19, the turnover of CWC was Rs. 1604.62 crore, its Profit Before Tax was Rs. 225.42 crore and its Profit After Tax was Rs. 163.61 crore. CWC has paid a total dividend of Rs 49.08 crore
183 for the year 2018-19 to its shareholders. As a premier Warehousing Agency, CWC is operating 415 warehouses as on 31.12.2019 with a total storage capacity of 101.44 lakh MT including 25 Container Freight Stations (CFSs)/ Inland Clearance Depots (ICDs), 3 Air Cargo Complexes (ACCs), 2 Inland Check Posts (ICPs) at Petrapole and Attari and 3 Temperature Controlled Warehouses. Warehousing activities of CWC includes food grain warehouses, industrial warehousing, custom bonded warehouses, container freight stations, inland clearance depots and air cargo complexes (http://cewacor.nic.in/). Apart from storage and handling, CWC also provides services in the area of clearing & forwarding, handling & transportation, disinfestation, fumigation etc. CWC also offers consultancy services/ training to different agencies for construction of warehousing infrastructure.CWC has 19 State Warehousing Corporations (SWCs) as its associates. Central Warehousing Corporation is 50% shareholder in the equity capital of the SWCs. The total investment of CWC in SWCs is Rs. 61.79 Crore. As on 31.12.2019, these SWCs were operating 2055 warehouses with a total storage capacity of 354.85 lakh MT. Scientific storage and handling services for more than 400 commodities include Agricultural produce, Industrial raw-materials, finished goods and variety of hygroscopic and perishable items. Scientific Storage Facilities for more than 200 commodities including hygroscopic and perishable items through network of 436 warehouses in India with its 3,631 trained personnel; Import and Export Warehousing facilities at its 30 Container Freight Stations in ports and inland stations; Bonded Warehousing facilities; Disinfestation services and Handling, Transportation & Storage of ISO Containers are the major functions of Central Warehousing Corporation(http://cewacor.nic.in/). 9.3. Central Ware houses in Kerala There are 11 central ware houses around different parts of Kerala. The table 9.1 explains performance of central warehouses in Kerala. Table 9.1: Performance of Central Warehouses in Kerala 1st July 2020 Capacity Rated FG* Capacity Capacity Total utilised Total vacant capacity used by FCI used by others capacity capacity +20% (MT) (MT) (MT) % (MT) % (MT) % (MT) % Trivandrum 19000 22800 5000 21.9 14000 61.4 19000 83.3 3800 16.7 Trichur 32590 39108 0 0.0 32044 81.9 32044 81.9 7064 18.1 Kunnamthanam 12600 15120 7960 34.9 4640 30.7 12600 83.3 2520 16.7 Kozhikode 12254 14705 0 0.0 12244 83.3 12244 83.3 2461 16.7 Kochi 5030 6036 0 0.0 4640 76.9 4640 76.9 1396 23.1 Kannur 9590 11508 0 0.0 9625 83.6 9625 83.6 1883 16.4 Kanjikode 20000 24000 0 0.0 15245 63.5 15245 63.5 8755 36.5 Kakkancherry 10000 12000 0 0.0 10000 83.3 10000 83.3 2000 16.7 Kakkanad 21850 26220 0 0.0 13917 53.1 13917 53.1 12303 46.9 Ernakulam 14065 16878 0 0.0 9562 56.7 9562 56.7 7316 43.3 Edathala 11700 14040 0 0.0 10750 76.6 10750 76.6 3290 23.4 Total 168679 202415 12960 6.4 136667 67.5 149627 73.9 52788 26.1
Source:http://cewacor.nic.in/, * FG Over & above (MT)
184 The total rated capacity in 11 central warehouses is 202415 MT (rated capacity+20%FG over & above) in which only 6.4 percent is utilized by the FCI. (The minimum available space needed for FCI is stipulated as a storing capacity of 5000 MT). Nearly 68 percent of the storage facilities are utilized by others, and 26 percent is reported as vacant storage space. 9.4. Kerala State Warehousing Corporation Kerala State Warehousing Corporation (KSWC) came into existence on 20th February 1959 and functions under the Warehousing Corporations Act 1962. The Warehousing Corporations Act 1962 was passed repealing the Agricultural Produce Development and Warehousing Corporations Act 1956. Over the last two decades, the need for warehousing has also been felt in non-agricultural sectors such as retail commerce. Kerala State Warehousing Corporation provides a package of services briefed as below. http:// www.kerwacor.com/old/facilities.html • Provision of space to accept notified commodities from various clients. • Acts as an enabler for credit through pledge of negotiable warehouse receipts with banks. • Scientific storage through a chain of 60 number of warehouses scattered all over the state at reasonable rates. • Helps the depositors to keep their goods indemnified against loss of damage due to fire, and burglary. • Handling and Wagon clearance, Transport facilities to depositors like major fertilizer companies etc. on their request on actual plus nominal supervisory charges. • Container House Stuffing, open yard and godown facility. • Godown facilities are provided on area reservation basis on attractive terms. • Acting as a procuring agent of Govt. for Rubber, Copra and other Agricultural commodities under Price Support Scheme. • Special storage for Hygroscopic commodities like fertilizer, sugar, chemicals etc. • Acting as a quality control agent for public sector undertaking etc. for purchase of food grain and other agricultural products. • Disinfestation Extension Service at the door steps of farmers, traders, co-operatives, and Govt. Organization at economical rates. • Fumigation of stores, record rooms, ship, libraries, containers, including exportable commodities. • Spraying against the formation of cob-web and controlling of spiders in offices, Hotels, factories etc..
185 • Spraying against weed in the premises of godowns, Factories, Hotels etc. • General disinfestation work in Airport, Railway Coaches etc. • Spraying of organic pesticide against Eriophid Mite on coconut palms in the state under state Govt. • Antitermite treatment for pre and post construction structures. • Periodical chemical bating to control Mice, Rat, Bandicoots in stores, factories, residential building. KSWC has offered its helping hand to the Public Sector organizations in designing and constructing buildings and godown making use of the technical know-how and personnel available with the Civil Engineering Wing. Container Fright Station functions at Thripunithura with most modern facilities like Mechanised handling, Computerised documentation, 42,000 Sq. Ft. covered area, Container Parking Yard, Dormitory facilities for truck operators, Fool Proof Security Arrangement etc. 9.4.1. Operational procedures of the SWHs All types of agricultural commodities and other commodities notified by the Government from time to time are accepted for storage in a Warehouse. The main purpose behind the whole warehousing scheme is to give scientific storage to the agricultural produce and also to arrange easy credit and holding power to the agriculturists to enable them to get a better price for their produces. A Warehouse Receipt (WR) incorporating the quantity, quality, market value and particulars of insurance against fire, theft will be issued to the depositor. The warehouse receipt is negotiable in nature and can be pledged in any bank for obtaining advance not exceeding 60 percent. WR finance can play an important role in smoothening income for farmers by providing liquidity at times when cash flows dry out. Warehouse receipt financing has been primarily developed to provide liquidity for depositors while allowing them to hold on to their goods till they receive a better price; allow farmers to use this system to avoid a distress sale and obtain working capital; improve the transparency and efficiency of goods stored. KSWC is a statutory Corporation having 50% Share Capital by Central Warehousing Corporation and 50% share capital by the Govt. of Kerala. It has its Corporate Office at Ernakulam with 3 Zonal Offices, 9 Regional Offices and 55 Warehouses scattered all over the state. The total rated capacity of state warehouses in Kerala is 198004 MT. The district wise State Ware Houses are shown in table 2. Out of this 75.5 percent is stored in owned and remaining 24.4 percent is stored in rented facilities.
186 Table 9.2: Covered capacity (MT) of warehouses in Kerala (01.09.2019)
Sl.no Districts Number of SWHs Owned Hired Total 1 Trivandrum 5 13994 7241 21235 2 Kollam 5 29456 7990 37446 3 Pathanamthitta 2 4740 4163 8903 4 Alappuzha 6 17113 6061 23174 5 Kottayam 5 17624 6112 23736 6 Idukki 3 8002 550 8552 7 Ernakulam 4 20337 3190 23527 8 Thrissur 4 12150 5781 17931 9 Palakkad 4 17539 12930 30469 10 Malappuram 3 16850 1856 18706 11 Kozhikode 2 0 1333 1333 12 Wynad 3 8935 2537 11472 13 Kannur 5 18564 770 19334 14 Kasargod 4 12700 3478 16178 15 Total 55 198004 63992 261996 % 75.5% 24.4% 100% Source: Official data from Kerala State warehousing corporation,Ernakulam(01.09.2019)
9.5. Results of primary data For in-depth understanding of the utilisation and requirement of warehouses direct interviews and focus group discussions were conducted at all warehouses in Trivandrum and Idukki districts. Individual interviews were conducted with the Senior Assistant Managers of selected SWHs and focus group discussions were conducted with concerned officials, farmers and traders in respective warehouses. 9.5.1 Storage Facilities – Normal and Reservation Normal warehousing facilities will be realized on the entire item held in a warehouse on a weekly basis (Up to 4 weeks) at bag rate fixed by SWC. The storage charge for normal warehousing basis is distinct from reservation basis. The rate varies for different commodities under normal facilities, as given below (Table 9.3).
187 Table 9.3: Normal storage charges for major commodities (per bag)
Commodities Weight/unit 1st week 2nd week 3rd week 4th week Upto 50kg Food grains except paddy Standard rate 3 4.6 5.9 6.7 High rate 3.45 5.3 6.8 7.8 Grams/pulses/dhal Standard rate 3.65 5.6 7.3 8.3 High rate 4.05 6.25 8.1 9.2 Basmati/Biriyani rice Standard rate 3 4.6 5.9 6.7 High rate 3.45 5.3 6.8 7.8 Sugar Standard rate 3.65 5.55 7.3 8.3 High rate 4.05 6.25 8.1 9.2 Cardamom Standard rate 29.1 44.95 58.2 66.15 High rate 32.05 49.6 64.15 72.85 Pepper Standard rate 4.95 7.55 9.8 11.15 High rate 5.4 8.35 10.8 12.25 Source: Official data collected from State Warehouse Corporations
In addition to the facility of storage on normal warehousing basis customers will be provided with storage facility on reservation or area basis, also on metric ton basis (4 weeks and above). Quantity reserved on area basis should be for minimum of 30sq.m and on ton basis it should be for 50MT and above. In the event of cancellation of reservation, for the left over quantity if any in that reserved area, it will be treated on normal warehousing basis. The minimum period of reservation will be one month consisting of two consecutive fortnights. Reservation will be made in terms of complete month in terms of tonnage or floor area for storage in the warehouse. The stack height of the commodity shall be the one fixed by the Corporation in accordance with the storage practices, laid down for each commodity. Extension of reservation will not be granted for less than one month. The reservation charges will be payable by the depositor for the area/MT reserved at the prescribed rate irrespective of whether the reserved area/MT remains totally or partly unutilized during the period of reservation. When reservation is made by a depositor, one month reservation charges will be recovered in advance. Over & above reservation will be calculated as opening balance plus deposit less quantity reserved during the month. The charge for reservation facility is based on area and the charges may vary on the basis of certain specialized storages. The charge fixed by the Corporation for general and specialized storages is given in below table 9.4.
188 Table 9.4: Monthly Reservation charges Rs. Per sq.ft fixed by Corporation for different storage facilities Area basis reservation Rs. Cement Rs.
Standard rate 20.2 Standard rate(MT) 105.7
High rate 22.35 High rate(MT) 132.1
Open yard Cardamom
Standard rate 10.75 Standard rate 31.75
High rate 12.15 High rate 35
Fertilizer Office space
Standard rate (MT) 86.5 Standard rate 24.25
High rate(MT) 108.25 High rate 26.75
Source: Official data collected from State Warehouse Corporations
9.5.2 Disinfection Extension Services (DES)
KSWC undertakes Disinfestation Extension Services at the door steps of the Farmers, Traders, Industrialists etc., on short calls as well as on yearly contract basis as per the request of the customers. The services consist of fumigation, general disinfestation, weed control and termite control. KSWC had formulated very effective Anti-coagulant Rat Poisoning Bait in the name of “RODOFOE”. KSWC acts as Nodal Agency to supply “RODOFOE” for the Government Level Rat Control Campaigns in the state.For 50 gram packet of RODOFOE the corporation will charge Rs. 12.60+18% GST.The storage facilities, reservation particulars, utilisation, income, expenditure and profit details of Trivandrum and Idukki warehouses is shown in Table 9.5 and Table 9.6.
Table 9.5: Storage Capacity, utilisation& Reservation particulars of selected SWHs (June2020) Trivandrum Idukki Storage Attin Neduman Neyya Palli Tvm Vandan Katta Thodu capacity (MT) Gal gad tinkara Chal medu ppana puzha Owned 3100 4058 2276 2560 2000 4186 2800 1016 Hired 2789 3563 500 0 0 0 0 550 Total 5889 7621 2776 2560 2000 4186 2800 1566 Effective (owned) 4299 5563 2026.48 1869 1460 3056 2044 1143 Utilised 6121.352 7750.359 2776 2506.8 2252.25 4546.853 2802.45 1566 % of utilisation 104 102 100 98 113 109 100 100
189 Reservation(mt) KSCSC 5480.667 1058 2276 1659 1130 0 2036 9396sq.ft KSCSC-Office(sq.ft) 0 215.2 150 187 15M2 0 1157 650 KSCSC-rented 0 3563 3000 sq.ft 0 0 0 0 Census 0 0 0 674 0 0 0 KSBC 0 18853 sq.ft 0 0 0 0 0 KSBC office 0 3393sq.ft 0 0 0 0 0 CPMC 0 0 0 0 801 0 0 CPMC office 0 0 0 0 445sq.mt 0 0 KCPMC 0 0 0 0 900 0 0 KCPMC office 0 0 0 0 500sq.mt 0 0 KSCCF 0 0 0 0 0 675 mt 0 KSCCF SQ.MT 0000 0200 Others (pvt.godown) 100 sq.ft 0 80.7 sq.ft 0 634 2522 mt 0 0
Others (pvt. office) 00004M2 1401 sq.mt 0 0
Source: Official data collected from selected SWCs in Kerala
The total storage capacity of state warehouses of Trivandrum district is 21235 and Idukki district is 8552 MT. The percentage utilization of each warehouse is shown in table 3 where majority of the state warehouses utilized more than cent percent. It is understood that the demand for warehousing facilities is greater than the supply provided. In all state warehouses we found that government agencies reserve warehousing facilities for their own consumption leaving very little space available for private traders of warehouses. As per the views of officials in state warehouses, at present Pallichal state warehouse required around 3000sq.ft of area and above 10000 sq.ft of area for Trivandrum (Chalai). In the cases of other three state warehouses the requirement is filled with the hired buildings, but there is additional demand for ware housing facility in all the three places. Demand for scientific warehousing is very high in Idukki district because of the necessity of farmers and traders to store spices with a view to hedge against price fluctuations and to use ware house receipts. Table 9.6: Income, Expenditure and Profit of selected SWCs in Kerala (June2020) Income Expenditure Profit Area Storage DES Rent NFSA PCW Electy: Total Salary Imprest Handling Rent Total Trivandrum Attingal Amt 540619 30209 54298 0 0 0 625126 103364 13988.5 0 190435 307787.5 317338.5 % 86.5 4.8 8.7 0.0 0.0 0.0 100.0 33.6 4.5 0.0 61.9 100.0 Nedumangad Amt 760269.1 7000 0 0 0 0 767269.1 84364 21744 3755 215754 325617 441652.1 % 99.1 0.9 0.0 0.0 0.0 0.0 100.0 25.9 6.7 1.2 66.3 100.0
190 Neyyatinkara Amt 220894 7040 1956 1965 0 0 231855 62571 4321 0 27000 93892 137963 % 95.3 3.0 0.8 0.8 0.0 0.0 100.0 66.6 4.6 0.0 28.8 100.0 Pallichal Amt 226532 22167 0 2450 0 0 251149 84901 22665 6081 0 113647 137502 % 90.2 8.8 0.0 1.0 0.0 0.0 100.0 74.7 19.9 5.4 0.0 100.0 Trivandrum Amt 296674 208767 30817 0 0 0 536258 157215 64858 118837 23000 363909 172349 % 55.3 38.9 5.7 0.0 0.0 0.0 100.0 43.2 17.8 32.7 6.3 100.0 Idukki Vandanmedu Amt 453255 52093 54495 0 0 0 559843 120477 8551 14150 0 143178 416665 % 81.0 9.3 9.7 0.0 0.0 0.0 100.0 84.1 6.0 9.9 0.0 100.0 Kattappana Amt 258386 0 5215 0 4000 2078 269679 90289 3948 3600 0 97837 171842 % 95.8 0.0 1.9 0.0 1.5 0.8 100.0 92.3 4.0 3.7 0.0 100.0 Thodupuzha Amt 134573 0 0 0 0 0 134573 26268 1466 4207 34650 66591 67982 % 100.0 0 0 0 0 0 100.0 39.4 2.2 6.3 52.0 100.0
Source: Official data collected from selected SWCs in Kerala 9.5.3. Income, Expenditure and profit of State warehouses The income and expenditure in state warehouses differ according to its functioning. The sources of income of state warehouses are rent from depositors and service charges from DES (Disinfection Extension Services). Above 80 percent of the income are coming from storage facilities utilized by government and private depositors. The expenditure for warehouse are limited and out of five warehouses three warehouses in Trivandrum and one warehouse Idukki are occupied both rented and owned. The expenditure of each warehouses consists of salaries of staff, imprest (expenses for miscellaneous), handling charges and rent for hired spaces. Salaries and rent for hired spaces are the major expenditure in selected warehouses. The profit across the state warehouses varied from Rs.67982 to Rs.441652. 9.6. Results from FGDs and Individual Interviews The primary users of the selected warehousing facilities are government agencies like Kerala State Civil Supplies Corporation (KSCSC), Kerala Cardamom Processing and Marketing Company (KCPMC), Kerala State Beverages Corporation, Kerala State Co-operative Consumers’ Federation Limited (Consumerfed) etc. From the data given in table 3 it is observed that the major part of the state warehouses are occupied by the Kerala State Civil Supplies Corporation (KSCSC), which is a governmental retail agency supplying life’s essential commodities from agricultural commodities to medicines at subsidized price fixed by state government. It also procures agricultural commodities directly from farmers at Minimum Support Price and distributed through PDS. The private traders
191 who are considered as the main users of selected warehouses stored the commodities vary widely on the basis of the area requirement such as rice, sugar and spices in Trivandrum district and Cardamom, pepper, and Coffee in Idukki district. When compared to traders the proportion of farmers in using government warehousing facilities are very low because most of them are small farmers and try to sell their products in local markets immediately after the harvest for their daily expenses. In Idukki district some big farmers are also act as traders whose demand for warehousing facilities is very high when compared to the supply of warehousing. Trivandrum Official’s response towards working of State warehouses: In five state warehouses in Trivandrum district such as Attingal, Nedumangad, Pallichal, Neyyatinkara and Trivandrum main (Chalai), the warehousing facilities are mainly occupied by government agency KSCSC. The major commodities stored by KSCSC in state warehouses are rice, sugar pulses, chilly and coconut oil. The SWCs are allowed to give ware house facility to private traders, only if there is vacant space after providing space to KSCSC. KSCSC is in need of further space in all major areas since the available space is not enough mainly for keeping NFSA stock, particularly during the Covid period. From the discussion with the officials it is known that some traders have approached them for keeping agricultural commodities, but due to unavailability of space, Ware Houses are unable to provide facilities to them. As per the views of officials in state warehouses, at present Pallichal state warehouse require around 3000sq.ft of area and above 10000 sq.ft of area for Trivandrum (Chalai). In the cases of other three state warehouses also there is additional demand for warehousing facilities. Trader’s response towards working of state warehouses: We also tried to collect information regarding warehouse operations through focus group discussions. Earlier traders used to keep their products in SWCs in Trivandrum district. In Trivandrum district the traders were using the warehousing facilities for storing normal rice, biriyani rice, basmati rice, sugar and spices for whole sale purposes. These traders collected commodities from millers or directly from farmers of Tamil Nadu, Andra Pradesh, Karnataka and also from the whole sale dealers of Northern states. Most of the traders used these warehousing facilities to store their commodities for three months and above. Some of them mentioned that due to high loading/unloading charges (not following government rates) they are not interested in the government warehouses. Similarly, the traders viewed that the pulses is of high value and very sensitive to infestation. Because of the absence of proper scientific warehouses, they are forced to choose private scientific warehouses of Tamil Nadu which they feel as less expensive and provide better services. Traders preferred warehouses in those places where loading/unloading charges are very low. The major problem pointed out by the traders is that the officers often deny facilities because the available warehousing space is scarce. In Trivandrum, the traders are unaware about the government schemes and benefits of Negotiable Warehouse Receipts (NWRs).
192 Idukki Official’s response towards working of State warehouses: In three state warehouses of Idukki district such as Vandanmedu, Kattapana and Thodupuzha the utilization of warehousing facilities varies widely. Vandanmedu is a biggest cardamom plantation village in India and is one of the world’s largest auction centres for cardamom. The users of warehousing facilities are largely a private company KCPMC (Kerala Cardamom Processing and Marketing Company). It is observed that all private traders in Vandanmedu, who own their personal warehouses are also forced to store it in state warehouses for pledge finance mainly because of price fluctuations which lead to high demand for warehousing facilities. From the direct interview with the Senior Assistant Manager of SWH Vandanmedu Idukki district it is observed that a new scientific Cold Storage unit has been established at Vandanmedu with provisions to separately store spices, vegetables and other sensitive commodities, and an anteroom to maintain temperature in hot and humid climates. These passage rooms or anteroom are kept in the temperature range of + 100C / + 120C to prevent condensation on the product. The cost for constructing the anteroom is approximately Rs. 40 lakhs. Provisions for hydraulic stalker, Diesel generator set, data logger etc. are also included in this. A quality control laboratory for grading and other purposes was also set up to monitor the quality aspects of the stored agricultural produces. The total construction cost may approximately turn out to be Rs.75 to 80 lakhs. It is viewed that the facility is expected to support directly around 150 farmers. The major portion of warehousing facilities in Kattapana and Thodupuzha are utilized by KSCSC for rice and spices. Trader’s response towards working of state warehouses: In Idukki district the traders have knowledge in NWRs and they pledge their receipts up to five years. Currently there are no government cold storage facilities in selected regions (except the space provided by Spices Park, Idukki). The traders argued that there is no facility for grading of cardamom in state warehouses which is compulsory for further marketing processes. Grading of cardamom is completely based on its external features namely weight, color, pod size, pod surface finishing and blacks & dots. Therefore, the traders viewed that they need scientifically full-fledged cold storage facilities with specified space and a quality control laboratory for grading high valued and sensitive commodities.
193 CHAPTER 10 Required Infrastructure and Estimated Expenditure
An analysis of agriculture marketing infrastructure in Kerala explicitly shows that, in spite of the efforts taken by different government departments and LSGs, agriculture marketing infrastructure is poor, which is reinforced by the incompetent institutional environment. This throws light in to need of proper planning and developing need-based investment at different structures of markets. This chapter tries to plot the required marketing infrastructure facilities in each type of market and discusses an action plan with regard to the functioning of the markets. The required infrastructure in each market is understood by collecting the views of farmers, traders and market officials. The analysis of the required infrastructure in each market is given in the following Section. 10.1. Infrastructure requirements in Wholesale Markets The infrastructure required in both the whole sale markets – Anayara and Nedumangad as reported by the farmers and traders is specified below. Infrastructure needed for the physical movement of goods as required by the farmers include transportation facilities from field to market, quality testing labs and certification, godownsetc in both Anayara and Nedumangad markets. Traders require transportation facility, cold storage, ware houses, quality certification, machines for packing, infrastructure for labelling and despatching facility etc. Farmers and traders in Nedumangad demand surveillance camera in the market. Generally, the facilities demanded by farmers and traders in Nedumangad is high compared to the farmers in Trivandrum. Farmers and trades require refrigerated trucks, ripening chambers, godowns, ware houses, food irradiation units, facilities for branding/patenting etc. Traders and farmers in market also want more labourfor weighing and movement of products inside the market. Despatching facility is demanded by the traders as despatch to their shop as per the order through telephone or social media like whatsapp will save their valuable time. Both farmers and traders require credit facilities, bank/ATM facilities, loan facilities and incentives. Farmers also demand market surveys, information dissemination facilities to farmers and traders. Information counter and notice board/price display is also demanded in Nedumangad. Similar to the physical movement infrastructure, farmers and traders demand facilitating infrastructure for market integration, in 194 Nedumangad as compared to Anayara. In Anayara facilitation infrastructure for market integration is demanded more by traders. 10.1.1. NIAM Classification Infrastructure demanded as per core NIAM classification is packing and labelling equipment, despatch facilities, grading facilities, cold room, price display mechanism, information centres, ripening chambers etc and these facilities are demanded mainly by farmers and traders in Nedumangad. Regarding support facilities farmers and traders in Nedumangad demand water supply, sanitary facilities, input supply and necessary outlets, repair and maintenance service office and computerised systems. The demand for infrastructure for support facilities is less in Anayara.With regard to service infrastructure also, the demand for infrastructure is very high in Nedumangad, both for farmers and traders, the demanded infrastructure being rest rooms, market education, soil testing facility, drainage, covered drainage, sitting facilities, compound walls and toilets. In Anayara, the facilities demanded is basically sitting facility for traders and farmers inside the Auction Hall.Both farmers and traders in Anayara and Nedumangad demand maintenance facility, particularly infrastructure for waste utilisation. Infrastructure for vermin composting, biogas plant, bio gas power, revolving fund for maintenance and solar energy is demanded by almost all in both Anayara and Nedumangad markets. Farmers and traders also demand infrastructure for cleaning facility, garbage collection and garbage disposal. 10.1.2. Infrastructure requirements in WAM/RPM A clear idea about the required infrastructure at RPMs can be obtained only after consolidating the opinion of the sellers in WAMs/RPMs. As such information regarding the required infrastructure is collected from farmers and traders and is summarised below. Regarding the required infrastructure for physical movement of goods and services, majority requires quality testing labs, surveillance camera etc. In Trivandrum, traders wanted labelling facility, however in Idukki they do not want labelling facility as most of the products come from Tamil Nadu. Traders in Trivandrum would also like to get infrastructure for dispatching products as per the telephone calls from the customers. Those markets which are spacious, would like to have small vehicles to move goods from one part of the market to the other. Road facility inside the market is needed in NDD, Palayam and Pothencode. Maintenance of vehicle facility inside the market is demanded by many traders in all markets. Market in Elappara, which is a NABARD funded market is the only market which has this facility. However, this market is not functioning properly (unstructured infrastructural facility is the problem.). Parking facility is required by all markets particularly, Pothencode, Kattappana, Nedumkandum, Thookkupalam, Parathode and Elappara. People also demand for check post in all the markets. Markets are in need of storage facilities. Facilities for cold storage is demanded by traders as there won’t be distress sale. Similarly, godowns and ware houses are also demanded by traders. Weighing machines are demanded by small traders in both markets. Dispatching facility is also demanded by traders as per orders from the customers.
195 Regarding infrastructure for facilitation function, all sellers in all markets demand credit facility, loan facility and incentives. Notice board, price display information counter, etc is also required by majority of traders in all RPMs. They also demand facilities for market integration, particularly vertical, horizontal and forward integration. If incentives are given to traders for purchase form WM/VFPCK it would be beneficial for both the traders and customers. Market surveys for understanding the needs of customers and traders is also requested by the traders. Traders also request for a risk bearing fund to be provided by the market. The core facilities in the priority of demand made by RPM traders include Auction Platforms, storage rooms, cold storage rooms, price display mechanisms, ripening chambers, setting up of information centres, etc. Regarding the support facility, the major support infrastructure facility required are water supply, sanitary facilities, input supply outlets, banking facility and in Trivandrum, rain proofing facility particularly in NDD, Pothencode, Nanniyode and Thookkuplam. Regarding service infrastructure, they demand rest rooms, and covered drainage facility. A lot of diseases are reported by Pothencode sellers due to unhealthy environment. There is an urgent need for constructing drainage facility in NDD and Thookkupalam. Security services are also required by many markets. Regarding maintenance facility in markets, since available waste management facility is very poor in markets, markets are in dire need of investment in maintenance infrastructure. In many markets since waste disposal facility is not available, traders take their after sales waste to their home and have to treat it themselves. If a vermin compost or biogas plant or bio gas power is established in the market, that would be good according to the traders. 10.1.3. Infrastructure requirements in VFPCK markets All farmers in VFPCK demand transportation facilities for collecting produce from field to market. Only Maranalloor and Kovilnada VFPCK have their own vehicle to send their produce to traders. Most of the farmers in Trivandrum and Idukki and some traders in Trivandrum district demand provision of transportation facilities. Due to limited space in all the VFPCK, they have a constraint for parking, but traders and farmers park their vehicle inside the market for loading and unloading. Some farmers and traders also require parking facilities. Refrigerated trucks for sale of agricultural commodities is demanded mainly by farmers in both the districts, traders prefer refrigeration facility in their own shops. Farmers demand cold storage facility in all markets, to keep the excess produce that is not sold on a particular day. This happens during season time when there is bumper crop and unsold produce can be stored and sold on other days if cold storage facility is available. Farmers in Vembayam demand ripening chambers and the other two markets in Trivandrum have ripening chambers. Godown facility is demanded by all farmers and traders, since only Maranalloor VFPCK, has a store room for storing manure. Most of the markets need a washing and toilet facility outside the office building. Farmers in two markets in Trivandrum and all markets in Idukki demand a food irradiation unit. Kovilnada has a food irradiation unit as a cut vegetable unit and it is functioning well. Traders
196 also opined the need for food irradiation unit. Farmers and traders require in house product laboratory, facility for branding/patenting, quality certification and labs, surveillance camera. Labelling infrastructure for labeling and dispatching is also required by some farmers. Majority of traders and farmers require credit facility. Credit facility of around one month time is given to traders in all markets. Farmers demand credit facility in all markets to carry out agricultural activities. Farmers in Trivandrum require an ATM near the VFPCK. Farmers and traders require loan facility. As of now the farmers can avail agricultural loans from Nationalised Banks through Kissan Credit Cards, with around 7 per cent interest rate. For those who repay the loan without default, an interest waiver of 3 per cent is provided by Central Government and an interest subsidy of 1 to 2 per cent is provided by VFPCK. Farmers in all markets demand more loan incentives. The SKS farmers is linked with traders and VFPCK market is linked with other markets for price determination. In Parathode, if there is excess supply of agricultural produce, the market officials hire a vehicle and transport it to the nearby shops and the received amount is divided among the farmers. Risk fund is available in all VFPCKs but the farmers demand more amount as risk fund. Auction platform is required by farmers in Thankamani and Santhigram. These markets have an auction platform, but during season times the existing one is not sufficient. In Kovilnada also farmers prefer one more Auction Platform. Rest room and sitting facility is very limited in the market, farmers and traders demand sitting facility in all markets, it would be good if sitting facility is available within the Auction Hall. Toilet facilities are demanded by farmers and traders in all markets except Maranalloor and parking space in all markets. Cleaning facility, infrastructure for garbage collection, garbage disposal is demanded in all markets both by farmers and traders. Similarly, vermicomposting is required by all farmers in Trivandrum except Kovilnada and in all markets in Idukki. All waste utilization infrastructure including biogas plant and bio gas power is demanded in all markets. Same is the case with revolving fund for maintenance. 10.2. Required Infrastructure facilities On summarising the analysis, the following are the most important requirements in the concerned markets. Wholesale Markets - Major renovation of existing infrastructure like buildings and market roads, drainage etc - E – auction facility to be created - Construction of training hall and staying facilities including dormitories should be given importance - Facilities for cleaning, sorting grading, packaging and labelling to be introduced - Quality testing labs to be instituted
197 - Green initiatives including solar plant/biogas plant to be introduced - Most importantly a cold chain management system to collect vegetables from the leading clusters in Idukki and Trivandrum and to transport it to retail outlets to be introduced. - Competitive working environment to be created - Measures to be introduced to strengthen farmer participation - Measures to ensure forward and backward linkage, demand forecasting and input supply - Provision of training to farmerss. Wholesale Agriculture Markets/Rural Periodical Markets - Quality testing labs - Cleaning, sorting, grading, packaging and labelling facility - Facility for cold storage - Weighing machines - Drainage facility - Green initiatives including solar plant/biogas plant to be introduced Vegetable and Fruit Promotion Council Keralam (VFPCK) - Provision of Cold room - Green initiatives including solar plant/biogas plant - Provision of godown/store room State Warehousing Corporation - Additional Scientific Ware Housing Capacity to be created Infrastructure connecting all markets - Most importantly a cold chain management system needs to be adopted 10.3. Specification and Cost Estimation Specification and Cost estimation of the major infrastructural facilities is given below. The specification and cost estimation has been done in consultation with experts, particularly the agriculture engineers and also after referring to the existing project documents.
198 Table 10.1: Specification and Cost Estimation of Needed Infrastructural Facilities in Whole Sale Markets (as from the document submitted by Nedumangad Wholesale Market) Items No Rate Cost Items No Rate Cost Cleaning Packing Prewashing tanks for 3 50000 150000 Horizontal Packing Machine with 1 1700000 17,00,000 cleaning tubers end sealed chain mechanism with labelling and hole punching attachments Steel Perforated Trays/ 6 12000 72000 Box strapping machine for 1 53000 53,000 Crates for washing in Cartoon packing-400 W these tanks Wheel barrows 3 8000 24000 Semi automatic Cartoon Sealing 1 70000 70,000 Machine Vegetable Bubble 2 250000 500000 Hand Tabletop Heat Impulse 3 2000 6000 washing Machine – 3 Sealing Machine Chamber Trays and Crates 50 1500 75000 Sack Sealing/Bag Closer 2 7500 15,000 Stitching Machine High Pressure Industrial 1 100000 100000 Vacuum Sealing Machine with 1 70000 70,000 Jet Cleaner Nitrogen Flushing Scrubber/Dryer Machine 1 200000 200000 Colour Laser Printer 2 40000 40,000 for cleaning Auction for Label Printing Platforms and Store Rooms Wet and Dry Type 1 25000 25000 Sub Total 19,54,000 Industrial Vacuum Cleaner Sub Total 11,46,000 Item No Rate Cost Sorting, Grading & Stacking Biogas Plant 30 M3 15,00,000 Manual sorting &grading 50 1000 50000 Aerobic Compost Units -2 Nos 7,00,000 accessories – crates and boxes Assaying equipments LS 200000 200000 Mini Material Collection Units 70,000 Vegetable Drier-300 kg 1 300000 300000 Collecting Bins, Boards, wheel barro, training etc 1,30,000 Manual Stacker with electric motor for lifting 1 200000 200000 Segregating Shed 3,50,000 1000 kg manual stacker 2 70000 140000 Total Amount 37,50,000 4 wheel electric forklift 1 900000 900000 Item Stacking Trays 50 5000 250000 Solar Power Plant – Own Grid -50 KV Capacity 350,000 Shelving racks in cold chamber for storing vegetables LS 160000 160000 Soft ware, server, computerisation, digitalisation for e-NAM auction 90,00,000 Total 22,00,000 Source: Official documents of Nedumangad Wholesale Market 199 Establishment of Cold Chain System (after consultation with State Assistant Agriculture Engineer and referring the document submitted by Directorate of Agriculture to the Government of Kerala under the Rebuild Kerala Initiative) Based on a very preliminary assessment, 30 Pack Houses to cater 10 Distribution Centres further to cater 150 retail outlets in various locations are proposed under the project. This can be modified based on the market survey and production status of various vegetable production clusters. Each pack houses should have space allocation for mobile precoolers, two 10 MT reefers, water harvesting structure with at least 1 lakh litre capacity, Solar assisted UPS system, compost unit, water source, water tank etc. Infrastructure: Infrastructure development include construction of twenty PEB cold storage building at various suitable markets of 300 Sq. m. floor area each. Garage spaces for reefer vans, reefer trucks, mobile pre-coolers are also required. Water harvesting and storage structures should be constructed. To convert biomass wastes generated from the pack houses into bio-manure, vermi or aerated compost units should be constructed.
Table 10.2: Specification on different equipments
Sl. Description Specification No. Rate Amount No (Rs.lakhs) (Rs.lakhs) 1 PEB ReeferGarages 100 sq.m 40 0.094/sqm 376 2 PEB for Pack Houses 200 sq. m 30 0.0124/sqm 744 3 PEB for Distribution Centre cum Cold Storage 500 sq.m. 10 0.124/sqm 620 4 Compost Unit (Vermi, Aerobic) Various capacity 40 2.5/unit 100 5 Water Harvesting Structure 100000 litre 40 4.8/unit 192 6 Water source development &Water storage structures Various capacity 40 12/unit 480 7 Approach Roads Various 40 10/unit 400 Total 2912 Source: proposal submitted by Agriculture Department under the Rebuild Kerala Initiative
Equipment: The equipment and machinery required other than the cleaning, conveying and packing machinery and refrigeration equipment are biomass shredders to crush the biomass waste generated in the pack house enabling quick composting of the same, water supply system with a water lifting pump, storage tank and distribution line and a solar power generating system of desired capacity. Diesel generator of required capacity suitable for the functioning of cold rooms are also proposed at each cold store and the pack house. The equipment for minimal processing of vegetablesis also included. The financial outlay of these are shown in the table below.
200 Table 10.3: Financial specification Description Specification No Rate (Rs.lakh) Amount (Rs.lakh) Biomass Shredder 1500kg/hr 40 0.65/each 26 Solar & DG Standby Power 200KVA 40 10.50/each 420 Veg. Bubble Washer 1500kg/hour 30 2.5/each 75 Shrink Wrapping Machine 10m/min 40 3.00/each 120 Veg. Cleaning & peeling machine 400kg/hour 10 1.75/each 17.50 Veg. cutter cum slicer 660kg/hour 10 1.00/each 10 Vacuum Packaging Machine Various 10 1.00/each 10 MA packing machine Various 10 3.00/each 30 Tray drier 100kg/batch 10 4.00/each 40 Flindized Bad Drier 60kg/hour 10 6.15/each 61.5 Steel Furniture Various 40 0.50/unit 20 Steel utensils Various 40 0.30/unit 12 Crates, others Various 80 0.20/unit 16 Total 858 Source: Primary data Cold Chain Components: As stated earlier, the cold chain comprises components like mobile pre- coolers, stationary precoolers, pack house, reefer trucks, cold storage room, reefer vans and refrigerated display racks for the CA supermarkets.
Table 10.4: Description on cold chain components
Sl.No Description Specification Number Rate Amount 1 Mobile Pre Coolers 1QF -1.00MT 120 14.00/each 1680 2 Farm Pre Coolers 1.00-2.00MT 20 1.05/MT 42 3 Pack Houses 40 MT 30 0.85/MT 1020 4 Reefer Trucks 7.00 MT 10 22.00/each 220 10.00MT 10 28.00/each 280 5 Cold Storage 80 MT 10 0.85/MT 680 6 Distribution Reefer Vans 4.00 MT 20 12.00/each 240 7 CA display racks 150 0.80/each 120 Total 4282.00 Source: Primary data
The total installed capacity of Cold Storage is 2000 MT. Thus, the total capital cost for the project is Rs. 80.52 Crores.
201 Thus, the agriculture marketing infrastructure facilities in the state needs thorough modification to cater to the needs of the stakeholders. All the markets that the study has examined including Wholesale Market, Rural Periodical Market, Spices Park, VFPCK are not fulfilling the stipulated functions mainly because of the inappropriate conduct and performance in terms of infrastructure facilities. There is a large lacuna in terms of the available and required scientific ware housing facility. All these limitations need to be addressed immediately to transform agriculture into a remunerative vocation for the farmers and other stakeholders and also to provide food self sufficiency to the population.
202 CHAPTER 11 Summary and Conclusions
Inadequacy and inefficiency of marketing infrastructure is pointed out as the major reason for post-harvest loss in agriculture with its consequent effect on food security. A well structured and managed marketing infrastructure is essential at all stages of supply chain if agriculture is to be a feasible vocation. The present study on ‘Agriculture Marketing Infrastructure in Kerala’ examined the structural and functional dimensions of existing agriculture marketing infrastructure in Kerala with a focus on marketing infrastructure and attempted at synthesising the opinion of multi stakeholders to strengthen the marketing infrastructure facilities for future development of agriculture with a view to provide food self sufficiency and security along with sustainable income generation or farmers. Following were the specific objectives of the study. 1. To assess institution wise infrastructure associated with agriculture marketing functions a. Infrastructure for the function of transfer of ownership of products from the farmers/ producers to the consumers- selling, buying and demand creation. b. Infrastructure for the function of physical movement such as transportation and storage, function of changing the form of product, standardization and grading and packaging. c. Infrastructure for the facilitation function- market financing, and market information/ market integration. 2. To understand the perception and opinion of both farmer and non-farmer stakeholders on agriculture marketing infrastructure. 3. To assess empirically the institution wise infrastructure requirement for agricultural marketing. 4. To assess the District- wise data of warehousing infrastructure required, available and the gaps based on primary/ secondary data analysis. Two Wholesale Markets, Anayara and Nedumangad, ten WAMs/RPMs, six VFPCKs, a representative FPO, Spices Park, State Ware Hose were selected for indepth analysis. Rapid Rural
203 Appraisal, Focus Group Discussion, interview schedules, observation etc were the tools used for data collection. Data were collected from twenty farmers and twenty traders form the Wholesale Markets, fifty sellers from ten WAMs/RPMs, thirty farmers and thirty traders from six VFPCKs and fifteen farmers form Spices Park. Additionally, interviews were conducted with exporters, market officials, marketing officers, administrative officers, dealers, officers and beneficiaries of State Ware Houses and officers and farmers of FPOs. The analytical framework of Structure-Conduct-Performance is used to explain the intricacies of the market. The required infrastructure along with the cost estimation for selected infrastructure requirement is also provided. It is understood that the marketing facility in each of the market analysed is far below the bench marks. The major findings in this regard are given below. Major Findings of the study The study shows that, in spite of the efforts taken by different government departments and LSGs, agriculture marketing infrastructure needs improvement, which requires constructive changes in the institutional environment.
Wholesale Markets: Wholesale markets in the state were established to improve efficiency in food production and distribution by encouraging competition through creating conditions for transparent price discovery at relatively low costs and by enhancing market information to various actors. Against these specified benefits expected from Wholesale Markets, analysis of the existing ones in Kerala reveals that the conduct and performance of the Wholesale Markets are far below the benchmarks. Many functional and administrative crisis can be found in the market relating to the conduct of market activity. Lack of accuracy in payments result in discouragement of farmer’s participation in the markets. As of now, online trading facility is not established in the markets. Competition through creating condition for transparent price discovery is also low because traders are few and, in several occasion, price is set by negotiation. During the times of bumper crops, there is distress sales and no mechanism for price regularity. The infrastructure for storage, grading, packaging, value addition, market integration and facilitation is very low, hence even after establishment of Wholesale Markets, post-harvest loss remains high. The provision for forward and backward linkages and demand forecasting is also absent in the market. The farmers also faced difficulty because of the perishability of the product and wanted the market to be opened on all days. Hence to conclude the issues in relation to the structure, conduct and performance of the Wholesale Markets needs to be addressed for making it meet the true requirements of farmers, traders and other stakeholders. The major suggestions with regard to Wholesale Markets include – • Renovation of existing infrastructure facilities like buildings to be done
• Drinking water problems, scientific waste management problem etc should be resolved
• Green energy sources should be established
204 • Market Information and Market Intelligence system should be strengthened for linking a greater number of agriculture markets
• Cool room, controlled atmospheric storage with supporting reefer trucks, pack houses, ripening chambers, retail shops etc is to be established.
• Markets are reported to have issues in finding resources to meet day to day activities, especially electricity bills, tax payment etc. Many of the infrastructure facilities such as cold storage is not used citing the feasibility problem. Some measures must be adopted to meet the maintenance cost
• There are limited initiatives towards market integration or building up backward /forward linkages and demand forecasting. In spite of having all basic facilities in the market, very few traders are coming, which has a grave impact on the actual volume of produce auctioned/traded. So along with ensuring the infrastructure it is important to develop/ stipulate managerial procedures by which the market can be run in full capacity and can develop its activities further.
11.2. Wholesale Agriculture Markets/Rural Periodical Markets
To summairse, the Wholesale Assembly Markets/Rural Periodical Markets work differently from that of WAMs/RPMs in other states. In other states WAM/RPMs have a function to mobilise the surplus products from farmers to the second round of supply chain, and thus becomes the most important place where the farmer comes in direct contact with the consumer/wholesale/retailer. In Kerala these markets are filled with sellers, who buy produce from traders in the neighbouring states and sell in these markets. The WPM/RPMs show difference in the presence of facilities and operations. Palayam, Kattappana and Kazhakkuttam markets are relatively better in their performace and availability of infrastructure facilities, but the situation in Nanniyode, Elappara and Pothencode are worse. Basic infrastructure facilities such as trading halls, drainage, weighing machines, waste management facilitiesetc are not available in the markets. Some markets do not even have basic facilities such as toilet and drinking water. Storage facilities, grading facilities, quality testing mechanism etc is not available in any one of the markets. Hence the WAMs/RPMs in Kerala require immediate attention aimed at revamping. The major measures needed to be adopted in RPMs include:
• Measures for quality control: Infrastructure for quality testing must be installed in all markets
• Ensuring auction platform for regional farmers: Currently farmers in the region are not able to use the infrastructure at the market, since bulk quantities of goods are coming from neighbouring states.
• The infrastructure in RPMs is pathetic. Auction hall, selling platform, Price display, waste management system, boundary wall, crop specific infrastructure, roofing etc. are essential in all markets.
205 • Technical support for LSGs: Most of the RPM s are under reconstruction with an aim to ensure essential infrastructure. But, many of the reconstructed markets are not usable. So that it is essential to have an authority that can provide with technical support in constructing markets so that the financing will not go waste.
• Refining the legal aspects relating to responsibility of LSGs towards markets: Even though the jurisdiction of markets comes under LSGs, there is no clarity on the role and responsibility of LSGs. There is not a single department that is wholly responsible for fair conduction of market, instead it is scatted over the health, revenue and Public works department of LSGs. It is important to have a centralised authority to monitor the functioning of market so that essential infrastructure, quality control, entry and exit can be organised efficiently.
• In many markets there exists entry restrictions, that effect the performance of markets and infrastructure facilitation. For instance, number of selling platform, physical structure of market building, etc. affect entry and exit and there by market functioning.
• Infrastructure for demand forecasting is quintessential in all markets. Given the small quantity of transaction of goods in the markets in Kerala, possibilities of clustering, online platforms etc should be mooted.
11.3. VFPCK
VFPCK Farmer’s market was an initiative towards establishing markets where farmers have an active role in the conduction of market, and infrastructure is established with the financial support of government, and managerial functions is coordinated by both farmers and government officials. Small and marginal farmers usually find difficulty in finding buyers from the locality and the new initiative created a platform for farmers and traders to meet and do business effectively. Considering the marketing infrastructure at the studies VFPCKs, all the markets have essential infrastructure such as auction hall, market yards and weighing machines, but none of them have facilities for cold storage or value addition. Only one of the markets has a processing center, where cut vegetables are sold, in other markets there are no facilities to deal with the problem of bumper crop. And this is a major issue, at times farmers have to sell their produce at very low price. This quintessentially shows the need for more infrastructure including cold storage, ripening chambers and facilities for value addition, packing, grading and standardization. Similarly, there is a dearth of service facilities such a rest room, toilets, waste management facilities, surveillance cameras and firefighting facilities. There is crop specific and district specific difference relating to marketing margins with reference to the crops sold through VFPCKs. Transportation cost forms a major share of marketing margin, but still, transportation facilities are a major component that get neglected when it comes to marketing infrastructure. Given the perishability of goods and the large geographical area covered by the dealers, it is very important to arrange well equipped, weather sensitive transportation facilities, which can be very helpful for the traders. Establishing retail outlets can increase the acceptance of farmers’ markets in the locality and
206 this can earn more profits to farmers. Also establishing crop specific infrastructure facilities, based on the agroclimatic zones can promote farmers to do agriculture more scientifically and profitably. It is important to convert the farmers markets from mere auction centres, to centers for storage and value addition, by which the current problems faced by both farmers and traders can be curtailed. This essentially involve developing essential capacity, both physical and human, that makes farmers capable of handling the complex process of agriculture marketing from input supply to marketing of agriculture produce, by eliminating the intermediaries. The major suggestions with regard to VFPCKs are provided below.
• Infrastructure like cold storage, cool chamber and concrete floors for fruits and vegetable handling facility should be created • Vehicles needed in VFPCK to bring agriculture products from field to the market and to distribute it to the retail shops • Infrastructure for value addition facilities to be provided for those VFPCKs which are ready to initiate value addition units • Given the perishability of goods and the large geographical area covered by the dealers, it is very important to arrange well equipped, weather sensitive transportation facilities, which can be very helpful for the traders. • Establishing retail outlets can increase the acceptance of farmers markets in the locality and this can earn more profits to farmers. • Also establishing crop specific infrastructure facilities, based on the agroclimatic zones can promote farmers to do agriculture more scientifically and profitably. 11.4. State Ware Houses There is shortage of scientific ware housing facility and state itself is the major user of ware housing facility in some of the districts, and in some others private companies storing nonagricultural commodities are the users. The cost of storage is high compared to neighboring states, and quality is comparatively low. The major recommendations for Ware Houses include: • SWH Corporation should be provided with more warehousing facility • Scientific ware houses must be constructed particularly in districts where spice production is dominant 11.5. FPOs Collectivization of producers, especially small and marginal farmers, into producer organisations improve access to investments, technology, inputs and markets for farmers. Farmer Producer’s organisations envision to maximize profit for farmers, by shortening the supply chain and eliminating the intermediaries in the agriculture marketing, depicts the most important form of alternative marketing structures. TCFPCL, the farmer producer company was registered on 03/06/2013 as an Indian non-
207 governmental company limited. The company brings together 3,78,568 members spread across fifteen panchayats in the districts of Kannur and Kasaragod who cultivates 91252 acres of land. The company was set up with an objective to undertake programs for employment generation, growth and diversification of agriculture and agro-based industries to increase food production, and export of agriculture products, in primary, and value-added forms. It also envisages promoting organisation of marketing chain both for domestic and export marketing and make advantage of forward and backward linkage by integrating producers’ associations. The company is indulged in diversified activities starting from the input supply to value addition and marketing of Agri- products. Since 2013, the company is indulged in developing essential infrastructure for storage, value addition, grading and packing and standardisation along with initiating direct selling and providing market intelligence for the farmers. These are done with availing funding from agencies including NABARD, CDB and state government.In- depth interview with Director Board members has revealed the current problems faced by the company, in spite of being a pioneering FPO in Kerala, and major issues are a) Shortage of Working Capital: Due to delay in complete functioning of the processing unit owing to procedural delays there is shortage of working capital b) At present the farmers don’t have enough money to purchase organic manure and planting materials c)the supply of organic manure in the Panchayath schemes are now given to the retail manure Depots within the area of the respective Panchayaths. Direct and wholesale supply is not allowed under Panchayath schemes and so, manure from FPO cannot be sold to other farmers d) the transportation of goods from Kannur district to Kasargod and other districts are restricted and this make problems e) the availability of workers, transportation and other facilities in the production and marketing are affected due to the issue of Covid-19 f) increase in loss due to the less utilization of the capacity of the unit. The major suggestions with regard to FPOs are • Infrastructure assistance should be provided to FPOs. • Technical and managerial expertise to be provided to farmers • Bureacrats delays from the part of government should be avoided by scrapping some of the age- old laws and issuing special allowance to FPOs. To conclude, the study reiterates the need for strategic intervention in the existing market scenario to improve investment in agriculture marketing infrastructure and also to bring about positive structural and functional changes in the marketing institutional environment. This requires systematic schemes reflecting the needs of the stake holders and mobilisation of investment funds from different sources.
208 APPENDICES Appendix 1 Whole sale market Table 1: Average Years of Age IFWS N Minimum Maximum Mean Std. Deviation Anayara 10 38 65 51.8 8.82924 Nedumangad 10 23 69 47.9 13.64999
Table 2: Social and Economic Status Sex-wise distribution IFWS Number Percent Anayara Male 10 100 Nedumangad Male 9 90 Female 1 10 Total 10 100 Educational status Anayara Below SSLC 2 20 SSLC/Equal 4 40 High School 2 20 Degree 2 20 Total 10 100 Nedumangad Below SSLC 2 20 SSLC/Equal 4 40 High School 3 30 Degree 1 10 Total 10 100 Occupational Status Anayara Agriculture 8 80 Retired 1 10 Business 1 10 Total 10 100 Nedumangad Agriculture 8 80 Mechanical engineer 1 10 Retired 1 10 Total 10 100
209 Table 3: Percentage distribution of size of farm Anayara Nedumangad Total Small Number 3 7 10 % within Farm size 30.00% 70.00% 100.00% % within WM 30.00% 70.00% 50.00% Medium Number 2 2 4 % within Farm size 50.00% 50.00% 100.00% % within WM 20.00% 20.00% 20.00% Large Number 5 1 6 % within Farm size 83.30% 16.70% 100.00% % within WM 50.00% 10.00% 30.00% Number 10 10 20 % within Farm size 50.00% 50.00% 100.00% % within WM 100.00% 100.00% 100.00%
Table 4: Farm wise total liability of the farmers in Wholesale markets Wholesale markets Farm size Mean N Std. Deviation Anayara Small 191071 1 . Medium 372256 2 294317.6 Large 504785.4 5 292852.5 Total 432438.8 8 272906.5 Nedumangad Small 178550 5 141625.4 Medium 137000 2 42426.41 Large 761000 1 . Total 240968.8 8 237114.5 Total Small 180636.8 6 126776.7 Medium 254628 4 218912.7 Large 547487.8 6 282047.9 Total 336703.8 16 266026.5
210 Table 5: Farm wise quantity of tapioca cultivated and sold in markets
Farm Size Own consu: WHM Sell WAM sell RPM sell Other mkt:sell Total Per Year
Qty Value Qty Value Qty Value Qty Value Qty Value Qty Value Anayara
Small µ 20 440 1388.5 13968 1990 5000 1609 22473.33
N33 2 2 1133
SD 10 220 270.8219 17488.16 . . 386.5786 15494.13
Medium µ 15 330 15485 340670 15500 341050
N2 2 2 2 2 2
SD 7.07107 155.5635 20499.03 450978.6 20506.1 451063.4
Large µ 20 1232.8 6380 140360 6220 140800
N5 5 5 5 5 5
SD 0 1772.755 4037.326 88821.17 4346.493 88821.17
Total µ 19 814.4 7294.111 156786.2 1990 5000 6692.7 145352
N1010 9 9 1 1 1010
SD 5.67646 1267.401 9311.251 207669.8 . . 9007.116 199302
Nedumangad
Small µ 21 522 1497 46941 10 210 500 10500 3000 60000 2940 61605
N55 5 51111 1 1 5 5
SD 8.94427 365.9508 1981.516 44204.57 ...... 2286.097 46398.71
Medium µ 0 0 0 0 0 0 0 0 0 0 0
N11 1 11111 1 1 1
SD......
Large µ 30 630 18000 378000 1970 41370 20000 420000
N1 1 1 1 1 1 1 1
SD ......
Total µ 19.2857 462.8571 3640.714 87529.29 660 13860 250 5250 1500 30000 4957.143 121337.5
N77 7 73322 2 2 7 6
SD 11.70063 364.084 6559.053 134218.6 1134.504 23824.59 353.5534 7424.621 2121.32 42426.41 6977.465 152085.8
Total
Small µ 20.625 491.25 1466 37520.14 10 210 500 10500 2495 32500 2440.875 46930.63
N88 7 71111 2 2 8 8
SD 8.63444 303.571 1622.539 40156.32 . . . . 714.1779 38890.87 1871.803 41339.47
Medium µ 10 220 10323.33 227113.3 0 0 0 0 0 0 10333.33 341050
N33 3 31111 1 1 3 2
SD 10 220 17030.37 374668.1 ...... 17039.17 451063.4
Large µ 21.6667 1132.333 8316.667 179966.7 1970 41370 8516.667 187333.3
N6 6 6 6 1 1 6 6
SD 4.08248 1604.584 5961.884 125393.3 . . 6838.25 138936.9
Total µ 19.1176 669.6471 5695.75 126486.3 660 13860 250 5250 1663.333 21666.67 5978.059 136346.6
N171716163322 3 31716
SD 8.33578 992.5017 8182.409 177386.2 1134.504 23824.59 353.5534 7424.621 1526.445 33291.64 8041.557 178008.4
211 Table 6: Farm wise quantity of banana cultivated and sold in markets
Farm Size Own consu: WHM Sell WAM sell RPM sell Other mkt:sell Total Per Year
Qty Value Qty Value Qty Value Qty Value Qty Value Qty Value Anayara
Small µ 28.3333 950 3775 113250 2212.5 87825 4020 135000 N33 2 2 2233 SD 2.88675 229.1288 4808.326 144249.8 2938.029 118475.7 3340.12 105126.8 Medium µ 29 765 9053 111270 111 42218 9637.5 133144 N22 2 2 1122 SD 1.41421 106.066 10277.09 81585.98 . . 9492.909 51627.28 Large µ 32 798 29174 515220 2000 80000 17606 532180 N5 5 5 5 1 1 5 5 SD 5.70088 429.8488 27737.49 151011.3 . . 4989.607 150348.8 T otal µ 30.3 837 19058.44 336126.7 2000 80000 1512 72622.67 11936.5 333218.8 N1010 9 9 1 1 3 3 1010 SD 4.44847 318.2609 23412.65 244827.3 . . 2405.849 87815.62 7967.383 238291.9 Nedumangad Small µ 30.8333 1184.167 4973.167 170735.5 20 960 500 24000 1552 58216 5608 211794.8 N66 6 61111 2 2 6 6 SD 9.70395 362.1659 7259.679 277025.8 . . . . 1991.213 72554.81 8419.101 309586.8 Medium µ 115 4175 9244 333980 2000 700000 8262 396376 14490 590250 N22 2 21111 2 2 SD 120.2082 3995.153 10120.11 339439.5 . . . . 5812.418 174160.4 Large µ 30 1140 17640 670320 17330 658540 35000 1330000 N1 1 1 1 1 1 1 1 SD ...... Total µ 49.4444 1843.889 7329.667 262521.4 6450 453166.7 4381 210188 1552 58216 10847.56 420141 N99 9 93322 2 2 9 9 SD 56.97831 1955.508 8006.889 301246.6 9474.223 392170.7 5488.563 263309.6 1991.213 72554.81 12056.03 454933.8 Total Small µ 30 1106.111 4673.625 156364.1 20 960 500 24000 1882.25 73020.5 5078.667 186196.6 N99 8 81111 4 4 9 9 SD 7.90569 329.8653 6423.04 241862.2 . . . . 2084.322 82010.96 6907.99 253258.3 Medium µ 72 2470 9148.5 222625 2000 700000 8262 396376 111 42218 12063.75 361697 N44 4 41111 1 1 4 4 SD 85.33854 3033.183 8328.1 239078.2 ...... 7010.617 283985.4 Large µ 31.6667 855 27251.67 541070 9665 369270 20505 665150 N6 6 6 6 2 2 6 6 SD 5.16398 409.0355 25252.07 149174 10839.95 409089.6 8387.023 352377.5 Total µ 39.3684 1313.947 13194.06 299324 5337.5 359875 4381 210188 1528 66860 11420.68 374392.5 N191918184422 5 51919 SD 39.36046 1420.212 18014.93 268974 8049.3 370601.2 5488.563 263309.6 1971.235 72347.13 9831.11 349805.9
212 Table 7: Farm wise quantity of pepper cultivated and sold in markets
Own Consumption WAM sell Total Per Year Farm Size Pepper Qty Value Qty Value Qty Value Nedumangad
Large µ 3 900 97 29100 100 30000
N 111111
SD ......
Total µ 3 900 97 29100 100 30000
N 111111
SD ...... Total
Large µ 3 900 97 29100 100 30000
N 111111
SD ......
Total µ 3 900 97 29100 100 30000
N 111111
SD ......
Table 8: Farm wise quantity of coconut cultivated and sold in markets Coconut Own Consumption WAM sell Other MarketSell Total Per Year Farm Size Qty Value Qty Value Qty Value Qty Value Anayara Small µ 164 7280 1772 79740 950 47150 N221 1 22 SD 90.50967 4214.356 . . 1202.082 60599.05 Medium µ 70 1540 210 4620 280 6160 N111 1 11 SD ...... Total µ 132.6667 5366.667 210 4620 1772 79740 726.6667 33486.67 N331 1 1133 SD 83.91265 4456.785 . . . . 933.8808 48950.82 Nedumangad Small µ 20 1000 20 1000 N11 11 SD . . . . Total µ 20 1000 20 1000 N11 11 SD . . . . Total Small µ 116 5186.667 1772 79740 640 31766.67 N33 1133 SD 104.919 4693.243 . . 1005.386 50458.53
213 Medium µ 70 1540 210 4620 280 6160 N111 1 11 SD ...... Total µ 104.5 4275 210 4620 1772 79740 550 25365 N441 1 1144 SD 88.69987 4243.689 . . . . 840.3967 43142.8
Table 9: Farm wise quantity of ginger cultivated and sold in markets
Ginger Own Consumption WAM sell Other MarketSell Total Per Year Farm Size Qty Value Qty Value Qty Value Qty Value Nedumangad Medium µ 34 3434 500 50500 534 53934 N11 1 1 1 1 SD ...... Large µ 617 277765 4800 216000 9583 431235 15000 675000 N11 1 1 111 1 SD ...... Total µ 325.5 140599.5 2650 133250 9583 431235 7767 364467 N22 2 2 112 2 SD 412.2433 193981.3 3040.559 117026.2 . . 10229.01 439160 Total Medium µ 34 3434 500 50500 534 53934 N11 1 1 1 1 SD ...... Large µ 617 277765 4800 216000 9583 431235 15000 675000 N11 1 1 111 1 SD ...... Total µ 325.5 140599.5 2650 133250 9583 431235 7767 364467 N22 2 2 112 2 SD 412.2433 193981.3 3040.559 117026.2 . . 10229.01 439160
214 Table 10: Farm wise quantity of cowpea cultivated and sold in markets
215 Table 11: Farm wise quantity of spinach cultivated and sold in markets
216 Table 12: Farm wise quantity of cucumber cultivated and sold in markets
217 Table 13: Farm wise quantity of snake gourd cultivated and sold in markets
Table 14: Farm wise quantity of bitter gourd cultivated and sold in markets
218 219 220 221 222 223 Appendix 2 Wholesale market traders
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253 NABARD Research Series
S. No. Title of Study Agency 1. Whither Graduation of SHG Members? An National Bank for Agriculture exploration in Karnataka and Odisha and Rural Development (NABARD) 2. Study on Strengthening the value chain of Administrative Staff College TDF Wadi Projects in Andhra Pradesh of India, Hyderabad 3. Developing a roadmap of Social Enterprise Grassroots Research and Ecosystem- as a precursor for a viable Advocacy Movement Social Stock Exchange in India (GRAAM) 4. Sustainability of Old Self Help Groups in Mahila Abhivrudhi Society, Telangana Telangana 5. Impact Assessment of RuPay Card on Rambhau Mhalgi Prabodhini, Weaker and Marginalized Sections in Mumbai Bihar and Uttar Pradesh 6. Getting More from Less: Story of India’s Indian Council for Research Shrinking Water Resources on International Economic Relations (ICRIER) 7. Identifying the Most Remunerative Crop- Centre for Research in Rural and Combinations Regions in Haryana: A Industrial Development Spatial- Temporal Analysis (CRRID) 8. Climate Change Impact, Adaption and ICAR- National Institute of mitigation: Gender perspective in Indian Agricultural Economics and Context Policy Research (ICAR-NIAP) 9. Achieving Nutritional Security in India: Indian Council for Research Vision 2030 on International Economic Relations (ICRIER) 10. Development of Iron Enriched Spent Hen Assam Agriculture Meat Products for Boosting Layer Industry University, Guwahati and Entrepreneurship 11. Farmer Producer Organizations and Agri- Centre for Research in Rural Marketing: Experiences in Selected States, and Industrial Development Relevance and their Performance in (CRRID) Punjab 12. A Collaborative Study on Agriculture Centre for Agroecology and Marketing Infrastructure in Kerala Public Health, Department of Economics, University of Kerala
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