Economic Analysis of Peas Seed Marketing in Rewari

Economic Analysis of Peas Seed Marketing in Rewari

District of Haryana

Manoj Siwach1 and Richa

2

Abstract

Seed is the fundamental input in crop production, with high quality forming the basis of high

productivity. Quality seed accounts for 20-25 per cent of productivity. Every factor in agriculture

product on is of secondary to the quality of seed which has a direct bearing on productivity in

agriculture. Seed accounts for a minor portion of total Costs in majority of crops and yet on these

vital inputs depend the returns one obtains from other costly input. Usually, there are three

marketing channels for marketing of vegetable seeds. Channel I represents marketing of seed by

producer to the consumers through commission agents, company and dealers. In second channel,

the commission agents are by passed by the producers. Finally in the third channel the seed is

sold directly by the produces to the consumer. The study has worked out the marketing

efficiency and price spread under these three channels. The findings of the study suggest that

marketing cost and price spread were high in channel I and least in channel III. Channel III was

found to be more efficient while channel I was the least efficient. Lack of market information

with 55.91 per cent emerged to be the main marketing problem.

Introduction

A good marketing and delivery system is essential for the success of any seed production. Seed

is marketed through a network of distributors and dealers by the private seed Companies as well

as the public sector corporations. The production of quality seed will be of no use if it does not

reach the farmers in time. Seed marketing is more difficult process than agricultural marketing.

Marketing of seed includes procurement of raw seed processing and sale of seed in areas of need,

sale promotion efforts and other related activities. Besides, the marketing promotion is necessary

to create demand for new varieties of seeds. A distributor / stockiest is generally appointed for a

region which may consist of one or more states. However, in some areas, the companies reserve

1Associate Professor, Department of Economics, CDLU Sirsa. Email: [email protected]

2Research scholar, Department of Economics, CDLU Sirsa. Email: [email protected] (Corresponding

author)

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mailto:[email protected]

the right to appoint more than one distributor in a state depending upon the potential of the state.

The dealers are appointed at district level. In some districts there may be more than one dealer

again depending upon the potential of the districts, and marketing strategy of the seed agency.

Seed demand is seasonal and for a particular seed it lasts only for three or four weeks in the

season. The distributors, dealers and retailers are paid sales commission by the companies on.

Normally 15 to 20 per cent commission is given to distributors who pass 12 to 17 per cent to the

dealers while the retailers get 9 to 14 per cent gross discount on sales. Thus, it was important to

estimate the marketing cost, margin and efficiency with their marketing problems for seed

production. Considering this issue, the present study was taken up with the objective of

estimating the marketing cost, margin, efficiency with marketing problems of peas seed

production in Rewari district (district with highest production of peas seed) in the state of

Haryana.

Methodology

The present study investigates the cost of marketing, efficiency and marketing problems

from peas seed production in Rewari district of Haryana. The selection of district has been made

on the basis data of firms registered in Haryana State Seed Certification Agency (HSSCA)

Panchkula. Two blocks Khol and Jatusana were selected purposively from Rewari district and

75 respondents from each block were selected for the study. In this way, total 150 respondents

were selected from Rewari district for the study. The primary data regarding marketing cost and

margin from different channels intermediates and regarding marketing problems from the

farmers were collected for the year 2016-17 by survey method. In the marketing cost of peas

seed, three channels were in operation in Rewari district. The details of these channels are given

in table 1.

Table 1

Marketing Channels of Peas Seed in Rewari District

Channel 1 Producer Commission Agent Company Dealer Consumer

Channel 2 Producer Company Dealer Consumer

Channel 3 Producer r r Consumer

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The marketing efficiency in present study was calculated by Shepherd’s formula. The formula is

as under.

Where,

ME= Index of marketing efficiency

V= Value of goods sold (consumer price)

TMC= Total marketing cost

The higher the ratio, the more the marketing efficiency and vice-versa

Producer Share in Consumer’s Rupees: Producer’s share in consumer’s rupees was

measured by the formula given below.

Where,

Ps= Producer’s share in consumer’s rupee

Pf= Price of producer received by the farmer and

Pc= Price of the producer paid by the consumer

Simple tabular analysis and average /percentage method were used for the

calculation. The marketing problems faced by producer were calculated by Garrett Ranking

method. The preferences of all marketing problems faced by producers were obtained by the

formula given below.

Where,

Rij =Rank given for ith

factor by jth

individual

Nj = Number of factors ranked by jth

individual

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The preferences of all marketing problems faced by producers were obtained by through

a schedule and personal calls.

Results and Discussion

Findings related to disposal pattern, marketing cost, marketing efficiency and marketing

problems of peas seed has been presented in below table 2, 3, 4, and 5 respectively. Disposal

pattern of peas seed marketing through different marketing channels in Rewari district are

presented in table 2.

Table 2

Disposal Pattern of Peas seed production through Different Marketing Channels

Sr.

No.

Channel Khol block Jatusana block Overall (Rewari)

No. of

Farmers

Quantity

sold

No. of

Farmers

Quantity

sold

No. of

farmers

Quantity

sold

1. I 64 704 (85) 61 641 (81.35) 125 1345(83.38)

2. II 06 66 (08) 08 84 (10.66) 14 150 (9.30)

3. III 05 55 (07) 06 63 (7.99) 11 118 (7.32)

Total 75 825 75 788 150 1613

Note: Figures in parentheses are the percentages to total quantity sold by all the farmers

Quantity sold is in quintals

From the findings, it is revealed that 85 and 83 per cent of seed growers sold their product

through channel I in blocks Khol and Jatusana respectively. Channel II was used only by 8 and

10.66 per cent farmers in two blocks respectively, while, channel III was used by 7 and 11 per

cent respectively. Further, 1345, 150 and 118 quintals of seed was sold through channel I, II and

III respectively.

The findings related to marketing cost and price spread in all three channels in Rewari

district have been presented in table 4. From the findings, it was revealed that farmer’s net price

was high (rupees 3875 per quintal) in channel III. There was no marketing cost of farmers in

channel I and II, while, it was rupees 321.5 per quintal in channel III. Agent purchase price or

farmers sale price in channel I was calculated to be as rupees 3650 per quintal, while, margin of

agent was rupees 225.5 per quintal. Company purchase price in channel I and II was calculated

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to be rupees 4325.5 and 3800 per quintal respectively. Margin of company was high in channel I.

Distributor purchase price was reported to be rupees 9250.5, and 8539 per quintal in channel I

and II respectively.

Table 3

Price Spread under Different Marketing Channels of Peas Seed in Rewari District

Sr.

No.

Components Channel

1

Channel

2

Channel

3

1 Price received by the farmer 3650.00 (33.95) 3800 (38.14) 3875.00 (92.35)

2 Marketing cost of farmer* 0.00 0.00 321.50 (7.66)

3 Purchase price of commission agent 3650.00 (33.95) 0.00 0.00

4 Marketing cost of agent** 450.00 (4.19) 0.00 0.00

5 Margin of commission agent 225.50 (2.10) 0.00 0.00

6 Purchase price of company 4325.50 (40.23) 3800.00 (38.14) 0.00

7 Marketing cost of company*** 1699.50 (15.81) 1709.00 (17.15) 0.00

8 Margin of company 3225.50 (30.00) 3030.00 (30.41) 0.00

9 Purchase price of distributor 9250.50 (86.04) 8539.00 (85.71) 0.00

10 Marketing cost of distributor**** 271.50 (2.53) 277.50 (2.79) 0.00

11 Margin of Distributor 570.50 (5.31) 529.00 (5.31) 0.00

12 Purchase price of dealer 10092.50 (93.87) 9345.5 0(93.80) 0.00

13 Marketing cost of dealer***** 146.50 (1.36) 143.00 (1.44) 0.00

14 Margin of dealer 512.00 (4.76) 474.50 (4.76) 0.00

15 Consumer purchase price 10751.00 (100.00)

9963.00 (100.00)

4196.50 (100.00)

16 Total marketing cost (2+4+7+10+13) 2567.50 (23.88) 2129.50 (21.37) 321.50 (7.66)

17 Total marketing margin (5+8+11+14) 4533.50 (42.17) 4033.50 (40.48) 0.00

18 Price spread 7101.00 (66.05) 6163.00 (61.86) 321.50 (7.66)

19 Producer’s share in consumer’s

rupees

33.95 38.14 92.33

Note: Figures in parentheses are percentage to the total

The detail of * to *****are given in tables given as annexure

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Margin of distributor was reported to be rupees 570.50 and 529 per quintal in channel I

and II respectively. Finally, dealer purchase price was rupees 10092.5 and 9345.5 per quintal in

channel I and II. Marketing cost per quintal was rupees 512 and 474.5 per quintal respectively.

Consumer purchase price was higher in channel I as against channel II. Price spread was found

rupees 7101, 6163 and 321.50 per quintal in channel I, II, and III respectively. Finally, it was

revealed that marketing cost was the highest in channel I.

A related study of Vaidya (1995) reported that total cost of potato seed marketing was Rs

68.38 per bag of 80 kg, which included transportation, packing, and labour costs. In other related

study of Patil and Deshmukh (2002) concluded that in cotton seed marketing seven channels

were in practice. Channel I involved farmer, MSSC, wholesaler, retailer and farmer. Channel II

involved farmer, MSSC, wholesaler and farmer. Channel III involved farmer, private processor,

wholesaler, retailer and farmer. Channel IV involved farmer, private processor, retailer and

farmer. Channel V involved farmer, retailer and farmer. Channel VI involved farmer, private

processor and farmer and last channel involved farmer to farmer transaction. Seed growers

fetched the highest price in channel VII and the lowest in channel I. Producer share in consumer

price was the highest in channel VII and the lowest in channel II and channel III. So channel VII

was the most efficient channel.

The findings related to marketing efficiency and problems of peas seed in Rewari district

have been presented in table 4 and 5 respectively. It was found that price spread was the highest

in channel III and the lowest in channel I, so first rank was given to channel I.

Table 4

Marketing Efficiency in Rewari District

Sr.

No.

Test of marketing efficiency Channel

1 2 3

1 Price spread (in rupees) 7101 (III) 6163 (II) 321.5 (I)

2 Share of producer in consumer’s rupee (%) 33.95 (III) 38.14 (II) 92.33 (I)

3 Marketing cost per rupee of consumer's price 23.88 (III) 21.37 (II) 7.90 (I)

4 Marketing margin per rupee of consumer's price 42.17 (III) 40.48 (II) 0.00 (I)

Total score 12 8 4

Mean value 3 2 1

Rank III II I

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Table 5

Constraints of Peas Seed Marketing in Rewari District

Sr.

No.

Factors Ranks and Score Values of factors Mean

Score

Rank

Ranks I II III IV V VI VII VIII IX X XI

Score

value (x)

83 72 65 59 55 50 45 41 35 28 17

1 Lack of market

information

f 24 19 22 10 13 12 14 13 04 06 13 55.91 I

fx 1992 1368 1430 590 715 600 630 533 140 168 221

2 Non-remunerative

price

f 14 21 13 04 19 21 06 19 16 09 08 52.31 II

fx 1162 1512 845 236 1045 1050 270 779 560 252 136

3 Compulsory weight

cut per quintal

f 17 14 13 16 16 12 13 13 16 11 09 52.18 III

fx 1411 1008 841 944 880 600 585 533 560 308 153

4 Rejection of produce f 18 15 06 14 06 20 22 12 13 08 16 50.35 IV

fx 1494 1080 390 826 330 1000 990 492 455 224 272

5 Lack of transportation

facility

f 8 6 15 20 21 20 19 11 8 12 10 49.99 V

fx 664 432 975 1180 1155 1000 855 451 280 336 170

6 Exploitation of price

by intermediates

f 13 14 16 13 16 03 09 19 15 20 12 49.31 VI

fx 1079 1008 1040 767 880 150 405 779 525 560 204

7 Delay in payments

f 16 16 09 08 12 17 10 14 14 12 22 48.47 VII

fx 1328 1152 585 472 660 850 450 574 490 336 374

8 Male practices in

marketing system

f 05 09 22 20 10 10 12 13 19 21 09 48.01 VIII

fx 415 648 1430 1180 550 500 540 533 665 588 153

9 Problem of grading

f 06 16 12 19 17 08 18 07 19 10 18 48.23 IX

fx 498 1152 780 1121 935 400 810 287 665 280 306

10 Lack of govt. support

price

f 16 14 09 07 10 12 17 09 19 21 16 47.62 X

fx 1328 1008 585 413 550 600 765 369 665 588 272

11 Lack of cooperative

societies

f 13 06 13 19 10 15 10 20 07 20 17 47.6 XI

fx 1079 432 845 1121 550 750 450 820 245 560 289

Total 150 150 150 150 150 150 150 150 150 150 150

Source: Primary Survey

Mean score is in percentage.

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Share of consumer’s rupee received by producer was the lowest in channel I and the

highest in channel III. Marketing cost and marketing margin per rupee of consumer’s price was

the lowest in channel III and the highest in channel I. After giving rank according to their value,

mean score was calculated and it was found that among three channels, III was more efficient. In

a related study Punjab, Chahal et al (2004) concluded that there were five peas marketing

channels and marketing efficiency happened to be highest in channel IV (9.13) and lowest in

Channel I (0.61). The indices of marketing efficiency in channels II, III and V were found to be

0.87, 1 and 1.13 respectively. In another study carried out by Bhosale et al. (2006) found that the

marketing efficiency of cucumber was the highest in channel III followed by channel II and I

The findings on marketing problems related to peas seed marketing in Rewari district

have been presented in table 5, which revealed that lack of market information (with 55.91 per

cent) wass the major reason for not selling their produce on a profitable price. Non-remunerative

price, compulsory weight cut and rejection of produce were other major problems reported by

the respondents. In a related study carried out by Verma et al. (2004), it was revealed that

various type of malpractices such as deducting certain amount of extra quantity (karda) etc were

common in almost all markets. The problem of cheating in weighing by the traders was reported

by 30 per cent of sample farmers. Undue delay in receiving payments after the sale of their

produce was reported by 37.50 per cent of sample farmers.

Summary and Suggestions

It can be concluded on the basis of the results that total marketing cost, margin and price

spread were the highest in channel I and the least in channel III. Producer’s share in consumer

rupee was the highest in channel III due to least number of intermediates. As far as marketing

problems faced by the producers are concerned, first rank was given to the problem of lack of

market information and the last rank was given to the problem of lack of cooperative societies. It

is suggested that government should take relevant steps on the basis of the problems earmarked

in the study.

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References

Bhosale R. A, V. G. Naik, S. S. Wadkar and J. M. Talathi (2006) “Price Spread in Marketing of

Cucumber in Pen Tahsil of Raigad District of Maharastra State” Indian Journal of

Agricultural Marketing, 49(2):12-14.

Chahal S. S, Rohit Singla and Poonam Kataria (2004) “Marketing Efficiency and Price

Behavior of Green Peas in Punjab” Indian Journal of Agricultural Marketing, 18

(1):115-128.

Verma A.R, A.M Rajput and R.S Patidar (2004) “Price Spread in Marketing of Onion in Indore

District of Madhya Pradesh” Indian Journal of Agricultural Marketing, 18 (2): 66-

76.

Vaidya, C. S. (1995) “Marketing of Seed Potato in Himachal Pradesh.” Indian Journal of

Agricultural Marketing, 9 (2): 94-104.

Patil H. N, A. K. Kawarkhe and K. V. (2002), “Hybrid Cotton Seed in Marathwada Region of

Maharashtra State” Indian Journal of Agricultural Marketing, 16 (3):114-121.

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Annexure 1

*Marketing cost of farmer

Sr.

No.

Components of marketing cost Amount in rupees per quintal

1 Loading and unloading charges 0.00 0.00 10.00 (0.24)

2 Labour charges 0.00 0.00 22.50 (0.54)

3 Pre cleaning 0.00 0.00 75.00 (1.79)

4 Gunny bags 0.00 0.00 77.50 (1.84)

5 Transportation cost 0.00 0.00 50.00 (1.19)

6 Cold storage charges 0.00 0.00 81.00 (1.93)

7 Interest on cold storage charges 0.00 0.00 05.50 (0.13)

Total 0.00 0.00 321.50 (7.66)


Annexure 2

**Marketing Cost of Commission Agent

Sr.

No.


1 Loading and unloading charges 85.00(0.79) 0.00 0.00

2 Labour charges 87.50(0.81) 0.00 0.00

3 Pre cleaning 105.00(0.98) 0.00 0.00

4 Gunny bags 90.00(0.84) 0.00 0.00

5 Transportation cost 82.5(0.77) 0.00 0.00

6 Cold storage charges 0.00 0.00 0.00

7 Interest on cold storage charges 0.00 0.00 0.00

Total 450.00(4.19) 0.00 0.00


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Annexure 3

Marketing cost of company***

Sr.

No.


1 Loading and unloading 115.0 (1.07) 117.50 (1.18) 0.00

2 Transportation charges 82.50 (0.77) 90.00 (0.90) 0.00

3 Seed treatment 0.00 0.00 0.00

4 Grading 200.00 (1.86) 200.00 (2.01) 0.00

5 Purety testing 300.00 (2.79) 300.00 (3.01) 0.00

6 Cleaning 82.50 (0.77) 90.00 (0.90) 0.00

7 Colouring 200.00 (1.86) 205.00 (2.06) 0.00

8 Packing material 275.00 (2.56) 265.00 (2.66) 0.00

9 Labour charges 80.00 (0.74) 92.50 (0.93) 0.00

10 Power & irrigation 101.50 (0.94) 100.00 (1.00) 0.00

11 Quantity loss @ 2per cent 94.50 (0.88) 76.00 (0.76) 0.00

12 Cold storages charges 90.00 (0.84) 90.00 (0.90) 0.00

13 Interest on cold store @12.5 per

cent

06.00 (0.06) 6.00 (0.06) 0.00

14 Miscellaneous charges 72.50 (0.67) 77.00 (0.77) 0.00

Total 1699.50 (15.81) 1709.00 (17.15) 0.00


Annexure 4

Marketing cost of distributor****

Sr.

No.


1 Loading and unloading 27.50 (0.26) 26.50 (0.27) 0.00

2 Labour charges 50.00 (0.47) 51.50 (0.52) 0.00


4 Power & irrigation 50.00 (0.47) 52.50 (0.53) 0.00

5 Shop rent 19.00 (0.18) 22.00 (0.22) 0.00


Total 271.50 (2.53) 277.50 (2.79) 0.00


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Annexure 5

Marketing cost of dealer*****

Sr.

No.


1 Loading and unloading

16.50 (0.15)

16.00 (0.16) 0.00


3 Shop rent 17.50 (0.16) 17.50 (0.18) 0.00

4 Labour charges 25.00 (0.23) 22.50 (0.23) 0.00

5 Power and irrigation 37.50 (0.35) 35.00 (0.35) 0.00


Total 146.50 (1.36) 143.00 (1.44) 0.00


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Documents

Economic Analysis of Peas Seed Marketing in Rewari