3.3 Agricultural Marketing, Post Harvest Management, Value Addition and Food Processing
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Twelfth Five Year Plan Tamil Nadu 3.3 AGRICULTURAL MARKETING, POST HARVEST MANAGEMENT, VALUE ADDITION AND FOOD PROCESSING Introduction small and marginal farmers, often lacking the ability to produce enough marketable The agricultural sector needs surplus for larger and remunerative markets. well functioning markets to drive growth, As a result, farm gate sales are high in the employment and economic prosperity in rural State (about 45 percent) and this is due to areas. Due to globalization, liberalization and lack of information on market prices and on privatization of the economy, agricultural required quality parameters. If farmers are marketing has become the key driver of the to get better prices, level of farm gate sales agricultural sector. As agriculture plays has to be brought down by giving the farmer, a major role in deciding the economy of access to distant and bigger markets. the country, the schemes for agricultural production receive high priority resulting in Currently, agricultural markets are increased agricultural production. Though regulated under ‘State Agricultural Produce our farmers have succeeded in the production Marketing (Regulation) Act 1987 and Rules front, they have not achieved appreciably in 1991'. Besides, there are other regulations terms of price realization for their produce viz: - Essential Commodities Act and various owing to their inaccessibility to efficient and Control Orders issued thereunder. All scientific marketing system. The middlemen, these have partially created restrictive and commission agents and traders are depriving monopolistic marketing structures. them of their due share of profit. An efficient and organized marketing system would Marketing Channels ensure the maximum price realization to the farmers, which will induce them to The agricultural marketing channels produce more and market their produce in are distinguished from each other on the basis an increasing proportion. of market functionaries involved in carrying the produce from the farmers to the ultimate Presently, marketing system (including consumers. The marketing channels can be collection, handling, storage, transport, divided into four broad groups viz: a) Direct processing, wholesaling, retailing, exports to consumers, b) through public agencies and associated infrastructure and support or cooperatives, c) through wholesalers and services) is fragmented and is uncoordinated, retailers and d) through processors. with inadequate infrastructure and supply chains involving high wastage and losses. As Direct to Consumers a result, the producer gets about only 30-40 Uzhavar Sandhaigal (Farmers’ Markets) percent of final price, as compared to around 60 percent in advanced countries. Even To promote direct marketing facilities, an additional margin of 3 percent in final the Uzhavar Sandhaigal (Farmers’ Markets) price translates into 10 percent increase in have been set up in the urban areas in net income of the farmers and that itself is Tamil Nadu for the benefit of farmers as a powerful incentive to invest in agriculture. well as consumers. 179 farmers’ markets But, this requires cutting down of the long are functioning in Tamil Nadu. Farmers chain of intermediaries, which can happen get higher price i.e., 10-15 percent more only with improved market access by farmers, than the prevailing wholesale market price interconnected markets, efficient supply and consumers also benefit by paying 5-10 chain and a robust marketing information percent less than the prevailing retail price system. Most of the farmers in the State are due to the absence of middlemen. 88 Agriculture and Allied Sectors Through Public Agencies and The agricultural marketing system Cooperatives in Tamil Nadu needs to be strengthened. Out of the total agricultural production, Regulated Markets only 20 percent arrives at the regulated and cooperative markets, while nearly 45 percent Regulated markets act as a common is farm level sales, 10 percent by private forum for farmers and traders on equal footing trading mandies and more than 25 percent is for marketing of agricultural produce, thereby not at all accounted. eliminating multi middlemen. In Tamil Nadu, at present there are 277 Regulated markets, Cooperative Marketing Societies (CMS) 164 Rural godowns and 188 Godowns are functioning under 21 Market committees. There are 110 Marketing Societies Also, there are 288 Transaction sheds, 353 functioning all over the State. The cooperative Drying yards, 89 Farmers’ rest houses, 183 marketing societies have tie up with the sanitary facilities, 10 Rural Business Hubs cooperative wholesale stores. This enables (RBHs) and 189 market information facilities the cooperative marketing societies to procure in regulated markets. During the Eleventh the farmers’ produce, process it and sell it to Five Year Plan period, around 17.50 L.MT/ the cooperative wholesale stores so that the annum agricultural commodities were farmers get a good price and consumers get transacted, about 4.37 lakh farmers were good quality produce at a reasonable price. benefited by regulated market transaction. During the plan period, 13,280 farmers Through Wholesalers and Retailers and 701 traders had availed the pledge loan facilities. Commodity Groups Forty important agricultural The Department of Agricultural commodities have been notified so far under Marketing and Agri Business has concentrated Tamil Nadu Agricultural Produce Marketing in the formation of commodity groups and (Regulation) Act 1987. Though there is a direct tie-up with traders are made to fetch provision in the Act for notifying fruits and 15-20 percent higher income to the farmers. vegetables, cattle, poultry, sheep, pisciculture Agri-Business Centre (ABC) is focusing on and apiculture products, these commodities market linkage/tie-up arrangement through are yet to be notified. MoUs between commodity group farmers and traders/ firms/private entrepreneurs to Pledge loan facility helps the farmers realize better remuneration by the farmers. to avoid distress sale of agricultural produce So far, 1657 commodity groups have been during harvest season by storing their produce formed and 1179 MoUs were made between in the godowns of regulated markets and farmers and traders through 21 ABCs during also to meet their immediate requirements the Eleventh Five Year Plan. Similarly, and preparations for next cropping season. Rural Business Hubs (RBH) created under Small and marginal farmers can avail pledge NADP, envisaged expansion of opportunities loan upto 75 percent value of the produce through which farmers have increased access and other farmers can avail upto 50 percent to markets through forward linkages. value of the produce limited to the maximum of `2.00 lakh with 5 percent rate of interest, Through processors upto a period of six months. Traders can Direct Channel- Farmers- Processors/ avail pledge loan upto 50 percent value of the Bulk consumers produce limited to the maximum of ` one lakh with 9 percent rate of interest upto a period Apart from linking the farmers to of three months consumer through farmers’ organizations, 89 Twelfth Five Year Plan Tamil Nadu other initiatives for reducing transaction interactions and linkages among growers – costs are a) establishment of direct channel traders – processors – exporters, c) Developing between farmers and processors/bulk wholesale markets by providing necessary consumers, through contract farming, infrastructure facilities, d) Prevention of b) Large Retail Chains, c) Agri Export post-harvest losses, e) Construction of roads Zones (AEZ), d) Specialised Markets- viz:- linking villages with nearby assembling and Mega Market (Velanvilaiporul Perangadi), wholesale markets (similar to sugarcane Terminal Markets and Market Complexes for rural roads), f) Greater private investment agricultural commodities. in revamping agricultural marketing, g) Developing commodity exchanges, h) Developmental issues Capacity building training on post-harvest management, value addition and processing, a) Dominance of non-formal quality and food safety for the farmers and channels, b) Need for institutional innovation market intermediaries and i) Strengthening of for efficient alternative system responsive Market Intelligence and Information System. to market signals including stakeholders’ Tamil Nadu Irrigated Agriculture Modernization and Waterbodies Restoration and Management Project (TN- IAMWARM) Fig.3.3.1: Agri Business Centre 90 Agriculture and Allied Sectors During the Eleventh Five Year Plan providing both forward and backward linkages period, for the benefit of farmers of 61 sub- through assured purchase at reasonable basins, 293 marketing infrastructure like price for their produce by making formal/ ABCs, Storage godowns, Drying yards, informal arrangements. This scheme is being Collection centers and Pack houses and 3280 implemented in coordination with State Bank supporting equipments were provided under of India and its subsidiary banks and other IAMWARM project. Awareness campaigns 448 nationalized banks. During the Eleventh numbers at a cost of ` 0.36 crore, benefiting Five Year Plan, a venture capital assistance 8,960 farmers and other stakeholders were of ` 15.30 crore for 28 agri business projects also conducted. was sanctioned by TNSFAC. Tamil Nadu Small Farmers Agri Status of Grading and Packaging Business Consortium (TNSFAC) System, Warehouse/godowns, Cold Small Farmers Agri Business chain:\ Consortium is functioning in association with The storage capacity available