Mamcos

A STUDY OF PRODUCTION AND MARKETING

OF ARECANUT IN SHIMOGA-MAMCOS

TABLE OF CONTENTS

Chapter No Title Page No

1. Introduction

2. Historical background of Areca nut

3. Agricultural Marketing in India

4. Significance in Marketing of Arecanut

5. Profile of the Society (MAMCOS)

6. Analysis of Survey

7. Conclusions and Suggestions

Annexure

Questionnaire

Bibliography

SRS First Grade College, Chitradurga 1

LIST OF TABLES

Table

No

Title Page

no

1. Details of Areca nut received from members at

various places

2. Areca nut collected from agencies

3. Share capital of MAMCOS, Shimoga

4. Distribution of growers according to their annual

income

5. Areca nut yield per acre in quintals

6. Number of persons cultivating types of Areca

7. Mode of transport used

8. Selling centers opted by respondent

9. Problems faced by growers

10. Payment on sales made to the growers immediately


LIST OF FIGURES

Figures

no

Title Page

no

1. Distribution of growers according to their annual

income

2. Areca nut yield per acre in quintals

3. No. of persons cultivating types of Areca

4. Mode of transport used

5. Selling centers opted by respondent

6. Problems faced by growers

7. Payment on sales made to the growers

immediately


CHAPTER - I

INTRODUCTION TO PROJECT

Introduction

Objectives of the study

Methodology

Scope of the study

Limitation of study

Chapter Scheme


Introduction

Areca nut is one of the important commercial crops in India. It

plays a proximal role in the Religions, Social and cultural life of our

people.

The betel nut is the seed of areca or betel palm and the leaf from

the betel pepper or pan plant. Areca nut is used for chewing. It is

chewing with betel leaf and lime or chanan and little cardamom added

with it. The people chew it with betel leaf and lime after the food for

digestion.

Areca nut is grown in the hot and humid regions of India,

Bangladesh, Sri Lanka and Malaysia and to the smaller extent in the East

inclines and Burma. It is grown with coconut, Jack, Mango, banana and

spice. Areca nut is used in India by all section of the people. It is useful

in one way or other.

Areca nut is one of the main ingredients of “Thambula”, chewing

of which, it is getting to be universal habit forming luxury to the rich and

poor people alike. It is used in Ayurvedic and Veterinary medicine

because of its several alkalizes.

Chewing results in a brick red solution, which will temporary dye

the mouth and lips, become orange brown. The aromatic, which is used

in areca nut, is help full in avoiding the bad smell.


Objects of the study

To know the marketing of arecanut in India

To study the methods of marketing

To know the role –played by the MAMCOS

To know why the formers prefer a particular co-operative society.

To know the reasons for selecting the co- operative society.

To know the problems of the growers.

To find out the solutions to the problems faced by the farmers.

To identify the main reason for the fluctuation of price in the

market.

To know whether the government has taken proper solution to

that.

To suggest some ways and means for production and marketing of

produce.

Methodology

This project study is mainly based on primary as well as

secondary data. The primary data is collected by administering a

structured questionnaire from the selected farmers. Personal interview is

also conducted wherever necessary. The Assistant Manager of

MAMCOS is also interviewed after obtaining opinions of areca nut

growers.

The secondary data is also collected to support our study from

various sources like Areca nut markets, Annual reports of MAMCOS,

Adike pathrike, Magazines, Periodicals, News papers etc.


The collected data is classified, tabulated and analyzed to draw

meaningful conclusions and to suggest some useful measures to improve

the production and marketing of areca nut.

Scope of the Study

Shimoga market for areca nut is an important market in India,

Therefore this particular market area is taken for survey by selecting 60

areca nut growers to elicit problems faced by them in the production,

processing and marketing of areca nut.

The study concentrates on the marketing of areca nut of the

concern. Here, attempt has been made to cover all aspects of marketing

of areca nuts i.e. Buying, Selling, Assembling, Grading, Marking etc.

The marketing has even greater importance and significance as a

whole than for any of the individual beneficiaries of the marketing

process and can be expressed as follows:

The nation’s income is really composed not of money but of the

goods and services which money can buy.

A reduction in the cost of marketing is a direct benefit to society or

company.

Marketing process brings new varieties quality and beneficial goods

to consumers.

Approximately one-third of all persons gainfully employed in the

country are engaged in the field of marketing.

Scientific marketing has a stabilizing effect on the price level.


In a country like India that is striving to break the age-old bondage of

man to misery.

Marketing brings to the very doors of the peasants useful implements.

Scientific marketing also remedies the imbalance in the supply by

making available the surpluses to deficit areas.

Marketing adds value of goods by changing their ownership and by

changing their time and place of consumption.

It adds value to services e.g., business, medical entertainment and

educational services by performing the services involved.

The object of the marketing as of all productive activities is to

satisfy human wants. We do not consume or take bread to give the

farmer a market for his product , but what he grows is the demand of the

people and if that is not satisfied in the locality itself , it is imported from

other centers of production.


Limitation

Being the areca nut marketing in a national level the survey has

been restricted to Shimoga. The sample size selected is due to pacing of

time. The figures in survey finding are given on the basis of 50 farmers.

The study does not show the position of entire market of areca nut in

Shimoga but represents only a certain places of Shimoga.

Chapter Scheme

Chapter-1: Introduction - Deals with Research Design

Chapter-2: History – Deals with historical background of Arecanut

Chapter-3: Agriculture Marketing in India –

Deals with Agriculture Marketing in India.

Chapter-4: Significance in Marketing of Arecanut –

Deals with Marketing of Areca nut

Chapter–5: Profile of the Society (MAMCOS) -

Deals with the profile of MAMCOS, Shimoga Branch

Chapter –6: Analysis of Survey –

Deals with the analysis of survey conducted

Chapter –7: Conclusions and Suggestions -

Deals with the Summary of survey conducted followed by

conclusion and suggestions.


CHAPTER-II

HISTORICAL BACKGROUND OF ARECANUT

Introduction

History

Scientific classifications

Role of Areca nut in India


Historical Background of Arecanut

Introduction

Areca nut is popular as a masticator used either with betel leaves

or as plain or as scented supari. Areca nut has uses in Ayurvedic and

Veterinary medicines, because of its several alkaloids but its utilization

in this manner is negligible on the whole. The habit of chewing areca nut

is typical of the Indian sub-continent and its neighborhood. Its demand

in other parts of the world is chiefly from the section of the population

who migrated originally form this sub-continent. The production of

areca nut is also largely confined to this sub-continent.

Betel nut the seed of the betel palm (Areca catechu) which is

chewed as a stimulant throughout Southern Asia. The betel nut is about 2

inches (5cm) long and is mottled brown and grey in color. The ripened

seeds are gathered between August and November, boiled in water, cut

into slices and dried in the sun, giving a dark-brown or reddish in color.

Each dried nut is then wrapped together with a piece of shell lime in a

leaf of the betel pepper and chewed.

Betel nuts contain the alkaloid arecoline a mild stimulant that

produces a feeling of well being. They are not habit-forming but habitual

chewing of betel nuts eventually blackens the teeth and may cause them

to decay. In some parts of the orient, betel nuts are used a drug to destroy

intestinal worms. Elsewhere they are used as preliminary in veterinary

medicine to de-worm horses, dogs and other animals. It is sometime

prepared raw by drying smoking or salting. The pieces are rolled in a

leaf of betel vine smeared with quick-lime. Betel color saliva red and

blackens the teeth that are neglected.


Scientific classification

The betel nut palm belongs to the palm family palmae. It is genius

Areca spices a ‘Catechu’. The betel vine belongs to the pepper family

‘piper areca’ and is piper betel.

Following table gives the area under and production of areca nut

in the principal growing countries:-

Table

Area = 1000 hectares.

Prodns = 1000 tonnes.

Country Area Production

1) India 174 150

2) Bangladesh 79 57

3) Sri Lanka 20 57

4) Malaysia 04 N.A

India leads in production but even then, it was never sufficient to

meet the internal demand until recently. It had to depend upon imports to

fulfill the gap. The data pertaining to this crop has been collected by the

directorate of Economics and Statistics. Organized research work on this

crop is being conducted from the last 30 years or so. The Government of

India made a financial grant of 5 lakhs to the I.C.A.R (Indian Central

Areca nut Research) for the first time in 1945 for financing measures to

Mysore and develops the production and marketing of areca nut. The

Indian Central Arecanut Committee (I.C.A.C) was constituted in 1949

on the recommendations of an Adhoc committee appointed by ICAR in


1947. There is at present an All India Co-ordinate Project on Areca nut

Research in which all the under mentioned stations are also involved.

A. Main stations:

Central Plantation Crops Research Institute Kaasaragod (Kerala).

B. Regional stations of CPCRI:-

1. Central Areca nut Research Station, Vital (Karnataka).

2. Central Areca nut Research Station, Hirehalli (Karnataka)

C. Sub-Stations of CPCRI.

1. Areca nut Research Station, Palode (Kerala)

2. ------do------- Poochi (Kerala).

3. ------do------- Sreevardhan (Maharashtra).

4. ------do------ Mohitanagar (west Bengal).

5. ------do------ Kahikuchi (Assam).

6. ------do------ Sipi ghat.

(Port Blair Andaman Nicobar)

The departmental program which was formerly being carried out

by the I.C.A.R is now attended to by the Directorate of Areca nut and

Spices Development with Headquarters at Kozhikode. Work on

technological aspects of areca nut has been conducted from time to time

in different Universities and Institutes through specific schemes

sanctioned in the part by the I.C.A.C. some of them are mentioned

below:

(1)Chemistry of Areca nut husk and its destructive distillation utilization

of husk in the preparation of wrapping paper board insulating wool

cellulose plastics moulding powder and also by-products of

destructive distillation of the husk – Forest Research Institute,


Dehradun and the University of Gauhati (Assam) and Travancore

(Kerala).

(2)Utilization of areca palm and nuts in leather tanning and in the

preparation of writing Ink-Central Leather Research Institute, Madras

and Presidency College, Madras.

(3)Preservation of areca fruits and husk in fresh condition- Travancore

University and Central Food Technological Research Institute

Mysore.

(4)Chemical constituents of areca palm and nuts isolation of alkaloids

including their individual components and testing their pharmalogical

action and therapeutic uses – University of Calcutta, Aligarh Andhra

Pradesh.

(5)Utilization of areca nut in the preparation of dentifrice Calcutta

Chemicals Ltd., Calcutta.

(6)Drying of Areca nuts- Central Food Technological Research Institute,

Mysore.

Although the technological work has been done in the past in a

scattered manner on a ad-hoc basis and many remain unavoidable to

some extent in future too, it is expected that many problems on the side

of utilization will also be attended in future. As a result of research work,

a few exotic varieties of areca nut have been identified for better

performance over the local cones. ‘Mangala’ an introduction from China

has already been released for cultivation. Studies have been made on

methods of raising plants, selection of seed nuts and seedlings and NPK

requirements, water management, mixed cropping and pests and disease.


Majority of the growers in Karnataka have been in a position to derive

benefit from such studies but the same cannot be said about planters in

other parts and these aspects has been discussed in the next paragraph.

Many Nurseries exist for raising seedlings and supplying the same

to growers but plants at large are hetrogenous in nature and contain low

yielding types. Diseases like Anabe (foot rot) kole-roga, Yellow leaf and

Band Diseases and Pest-like root Grab Spindle Lug and Fluorescents

Caterpillar continue to take heavy toll of the crop.

Role of Arecanut in India

Areca nut has inspired many poets and musicians. There is hardly

any ‘Kavya’ without any reference to Areca nut. The life span of the

palm is considered to be the same as that of man and it is associated with

the life and culture of our people.

In India, the areca palm is cultivated all along the Western coast

from Maharashtra to Kerala. On the plateau of Karnataka in the Gangetic

delta of West Bengal, Assam and Meghalaya. The fruits are largely used

for chewing with or without betel leaf.

In south India, the conditions of cultivation are quite different

from those prevalent in eastern India. Unlike the Eastern Zone, areca

gardens of the south have to be constantly looked after and a lot of

labour and money is spent on them throughout their life time. Areca nut

is often the principal and several instances the only cash crop of the

locality in which it is produced.

It finds a place of honour at all occasions, births, weddings,

rejoicings and deaths. It is an essential item of custom and is symbolic of

Indian life.


CHAPTER – III

AGRICULTURE MARKETING IN INDIA

Introduction

Problems of Agricultural Marketing in India

Measures taken for improving Agricultural Marketing in

India


Agriculture Marketing in India

In the past, agriculture was carried on by the farmers in India on a

subsistence level, i.e., for-their consumption. As such the question of

agriculture marketing did not receive much importance. But after the

adoption of new agricultural strategy, agriculture is being carried on a

commercial basis, i.e., mostly of sale in the market. Again, a large

number of cash or commercial crops are grown only for sale in market.

Consequently, there is a need for an efficient agricultural marketing

system so as to enable the farmers to have wide markets for their

produce.

The need for and the importance of efficient agriculture marketing

arises from the following factors:-

The ultimate objective of agricultural production cannot be

achieved unless the agricultural products are sold efficiently to the

advantages of farmers, an efficient agricultural marketing is necessary.

Efficient agricultural marketing not only ensures the sale of

agricultural produce to the advantage of farmers, but also assure

adequate and timely supplies of food stuffs to the consumers and raw

materials to the manufacturers.

Problems of Agriculture Marketing in India

It is true that an efficient agricultural marketing system is essential

for India. But, till recently, agricultural marketing in India had been

defective. It has been suffering a number of problems. The main

problems of agricultural marketing in India are:


Lack of organization of the farmers.

Poor paying power of farmers.

Long chain of middlemen.

Multiplicity of market charges.

Mal practices in the market.

Multiplicity in the weights and measures.

Absence of grading.

Adulteration of agricultural produce.

Inadequacy of storage facility.

Absence of adequate transport facility.

Lack of market information.

Inadequate provision of credit.


Measures taken for Improving Agricultural Marketing in India

An efficient agricultural marketing system is essential for the

successful development of agriculture. But the agricultural marketing

system in India is defective in several respects. So remedial measures

have to be adopted for improving the agricultural marketing in the

country had been made by several committees, and in accordance with

these recommendations, a number of measures have been undertaken by

the central and state Governments for improving agricultural marketing

in the country. The various measures of agricultural marketing in India

are:

1. Establishment of regulated markets.

2. Development of co-operative marketing.

3. Standardization of weights and measures.

4. Grading of agricultural produce.

5. Development of warehousing facilities for agricultural produce.

6. Extension of transport facilities to rural areas.

7. Provision of adequate liberal finance for raising and marketing of

agricultural produce.

8. Provision for market information.


CHAPTER – IV

SIGNIFICANCE IN MARKETING OF ARECA NUT

Introduction

Markets

Chain of Intermediaries

Assembling or buying of product

Standardization and Grading

Grading of product

‘AGMARK’ Grade standards for areca

Types of Arecanuts

Pricing of Arecanut

Commodity based organization

Co-operative marketing federation for areca nut

Marketing for areca

Methods of marketing

Payment

Storing and warehousing

Co-operative Marketing of Arecanut

Regulated Markets


Significance in Marketing of Arecanut

Introduction

Marketing of agriculture produce is in crux of rural economy in

our country. It has of late, assumed added importance as the cultivators

have to raise commercial crop for sale in distant markets and the village

self-sufficiency of the gone days has now almost disappeared. There will

be no incentive for the cultivators to increase their production unless

they are assumed of an economic price for their produce.

The cultivators who are generally isolated have no contract with

the distant distributing and consuming centers. Their holdings being

small, the output is little and consequently they do not earn much interest

in the sale of produce.

Marketing of areca nut is more expensive because of the size of

the productive unit, the dispersion of producers, the great disparity in

quality and quantity of products etc., A serious draw back in the existing

marketing system is the inadequate arrangements with regard to

marketing facilities such as collection, storage and transport of the

produce and lack of knowledge of the price structure at every stage.

As areca nut is produced by a large number of small growers

whose financial resource is meager, they are often faced with the

situation where the growers have no option but to part with their produce

at throw-away prices. The cultivators generally have no contact with the

distant distributing and consuming centers and as a result, a substantial

portion of price paid by the consumers goes to the middle man.


Market

A market is a centre about which the focus leading to exchange or

title to a particular product operate and towards which the actual goods

tend to travel. Market can be divided into two types on the basis of

operation.

Primary market is generally a producer’s market. Shimoga is a

primary market, for areca producers often sell their surplus products in

such market through their known market middlemen called commission

agents, Mandis, Mamcos and Apscocs etc.

The produce they assemble passes to the secondary market.

Secondary markets are the wholesale markets and mostly located in

areas of consumption. The produce is handled in large quantities and

specialized operators such as way man brokers and commission agents

become necessary for the performance of different services. They are

having ample facilities for financing, storage and transportation.

Secondary markets are in fact the best forms of organized market for the

settlement of agricultural products in India. Terminal markets are

produce exchange with trade association conducting exporting and

internal distribution of commodities.

Marketing is the performance of all business activities in flow of

goods and services from the point of initial agricultural production until

they are in the hands of ultimate consumer. A farmer should dispose his

produce so as to get the maximum return of price, at the same time we

should look into the interest of the buyer who should get full satisfaction

from the price he pays for areca.


Chain of intermediaries

The produce has to pass through the local user and commission

agents at the assembling centers. The exporters and the importers are at

the top and the whole sellers and retailers at the distributing and

consuming centers. A substantial portion of the price paid by the

consumer represents the cost of handling and the margin of profit earned

by the several intermediaries.

The middleman services are therefore essential to link the

producer with the consumers. Someone has to undertake the curing,

collecting, grading, transporting, selling and delivering to the ultimate

consumer. But considerable economy can be affected through a

combination of producers and co-ordination of numerous unit of

production of marketing.

The commission agents purchase the areca nut through agencies

and growers, brokers; they charge commission at some percentage.

Brokers operate to bring buyer and seller together. Primarily, brokers

sell information of product available for sale or purchase. In recent

amendment, all commission agencies are traders who are not bidding in

auction unit but they appoint agents for bidding in the auction sales.

Assembling or buying of product

Assembling refer to those business activities which are concerned

with concentrating goods under a single management or control. The

object of assembling is to make available the goods wanted by producer

or consumer at their hands. The assembling implies ownership not

merely the physical transfer of goods. In modern times of varied

production and varied demands, assembling as a function of marketing


has assumed great importance. In the case of areca nut which is

produced in scattered small fields in certain seasons, assembling is all

the more importance. Assembling should not be confused with

transportation or storage. These functions of physical supply along with

other functions are performed to assembling their functions are one and

same. Assembling thus implies bringing the goods at convenient points

in the volume, quality and quantity required. It results from buying

efforts.

The dealer who knows where he can purchase at all times a

sufficient quantity of the product he has for sale performing the function

of assembly just as is the merchant who transport a supply merchandise

and holds it in his warehouse until called for by his customer. The

wholesalers of a big Mandi in their turn assembly the produce and break

up these lots into smaller ones for the retail traders and the retailers sell

them to individual consumers.

Standardization and Grading

An efficient system of marketing is of utmost importance to a

country under all conditions and at each stage of its development. In the

present system of commercial production of agricultural crops, there is

no room for complacency about the bewildering confusion prevailing in

the field of marketing. The marketing system in our country is still

antiquated and out of date. The situation is more embarrassing and

complicated for the honest dealer or producer, who on the one hand is

required allay the suspicion of the buyer and on the other hand, to face

the challenge of unscrupulous rivals out for cut throat competition. It is

here that the grading of products on basis of well defined standards in


regard to general appearance, size color and intrinsic quality, helps both

the producer and the consumer. Standardization and grading thus proved

a common language for the buyer or the seller.

The agricultural commodities, as they are raised under varying

environmental conditions and cultural practices show consider variation

in quality. Unless the quality differences are reflected in the prices, the

incentive for the production of the quality produce suffers to the

detriment of industrial needs and consumer preferences. If the

consumers are not assured of their requirement in a pure form and at a

cost within their capacity to pay, there is bound to be general

discontentment in public. It is therefore necessary to gear up the various

marketing services among which standardization and grading play a vital

role.

Standardization is the legislation of the grades or is supported by

legal sanction and this gives permanence to grade over a long period of

time. Standardization indicates the establishment of a certain standard,

based upon intrinsic physical properties or qualities of commodity with a

view to further sub dividing it into several grades or classes. When we

call a commodity, a standard good, we certainly mean that it is of a

certain quality. This quality dependent upon chemical contents, flavor,

size, color, appearance, length of fiber, and amount of moisture etc,

Standardization thus implies a prototype, a model, a pattern or example.

Standards generally serve as the basis for future use and to be effective

they be relatively permanent and must be used by a considerable

proportion of sellers and buyers.

Grading of products


Grading starts where standardization ends. Established standards

are commonly called grades. When standardized goods are further sub-

divided into well defined classes they are known to have been graded.

Grading is simply a means of dividing products of varying quality, size

etc., into lots of conforming of certain standards. Grading is a process of

dividing a quantity of the same kind of goods into uniform groups

according to certain standards of size, shape, color, degree of

cleanliness, acidity or other significant characteristics. Various chemical

and mechanical devices may be used in assorting products or

determining the grade of products.

In India the areca nut products are raised under different

environmental conditions and varying agronomical practices. These

products show considerable variation in regard to quality. For healthy

trade practices, the quality differences should be appropriately reflected

in prices commensurate with the quality of the quality of his produce; he

will not have any incentive to go production of better quality.

In the absence of well defined quality standards and a regular

system of quality marketing products, grading in areca nut commodities

even in the secondary and terminal markets has to be based on

inspection of products. This ultimately adds to the marketing cost and

subjects the producers to systematic exploitation in the trade. The need

for introducing well defined grade standards was therefore felt firstly in

the field of agricultural commodities in order to ensure the producer a

return commensurate with the quality of his produce and buyer his

moneys worth.


‘AGMARK’ Grade standards for areca nut

Areca nut is one of the commodities included in the schedule of

Agricultural Produce Grading and Marketing Act 1937. The Agricultural

produce Grading and Marketing Act is permissive and the grading under

the same to be known as AGMARK grading. The act authorizes the

Agricultural Marketing Adviser, Government of India, to issue

certificates of authorized to persons or corporate bodies who are

prepared to grade and pack the produce on the prescribed lines. The

certificates are issued on individual larger packers. The inspecting staff

of the Central Agricultural Marketing Department inspects the grading

station in charge of the authorized packers and collect samples of the

graded produce from the market.

Although AGMARK grade standards have already been

prescribed under the provisions of the act for sun-dried whole areca nuts

(chali supari), grading under AGMARK is yet to gain momentum and

become popular among both growers and traders. The traders and all

societies dealing in this commodity have not yet adopted the same for

the purpose of internal trade in spite of the many advantages that accrue

from grading. While the grade specifications for the sun-dried whole

areca nut finalized under this scheme have already been accepted,

prescribing AGMARK specifications for boiled areca nuts are under

consideration of the Agricultural Marketing Adviser.

Grading at Producer’s level

For helping the formers to sell their produce at price

commensurate with the quality of the produce sold by them in the

mandis, grading at the producers level has been introduced. Under this


AGMARK scheme, grading services have been provided at regulated at

markets, co-operative societies and in certain warehouses as well.

Grading at farmers level helps to create mutual confidence between the

buyer and the seller. It provides a common language for them since

almost all mandis dealing in areca nuts are functioning as commission

agents and the produce of the individual areca nut growers is sold in

separate lots, they are most appropriate agencies to undertake grading

and pooling of the produce and various media is needed to make it.


Main trade types of areca nuts

Areca nuts produced in India can be broadly classified under the

following heads:

PUDI (Tender cut into small bits, length wise and breath,

wise boiled and dried)

CHALI (Ripe areca sun-dried)

ERASEL (Tender-Tinley sliced, boiled, colored and dried)

UNDE (BETTE) (Tender whole boiled and dried)

IYLON (Tender-sliced and dried)

NAYAMPAK (Tender-cut into pieces and dried)

CHUR (Tender-cut into small bits length, boiled and dried)

OTTARETTU (Tender-cut into 4slices, boiled and dried)

Varieties of areca nuts and centers of production and consumption

Trade types Main centers of production

Main centers of consumption

Ripe Arecanut Kerala, Karnataka, Assam and West Bengal

Kerala and Assam

Ripe Dried Arecanut Kerala, Karnataka, Assam and West Bengal, Tamil Nadu and Maharashtra

Gujarat, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh, Rajasthan, Delhi, Assam and West Bengal.

Processed Green Nuts Kerala, Karnataka and Maharashtra

Tamil Nadu, Andhra Pradesh and Karnataka.


Pricing of Areca nut

Price is the value of product expressed in terms of money. It is the

amount paid by a buyer to seller for unit of product or service. A product

may adopt various price policies for the product being produced by him.

The price of areca nut varies widely from market to market and

even in the same market, there is variation in prices of areca nut markets

mainly due to variation in quality of produce. The prices are liable to

vary on account of difference in size, color, inner characteristics etc. In

addition to the above factors, the varying units of price quotations from

place to place. Like other agricultural products the prices of areca nuts

are subject to well defined seasonal changes. In the absence of any well-

defined standards of quality, it is not possible to get comparable prices

over a long period, even in the same market and these may differ even

from merchant to merchant.

Prices of nuts may be studied considering prices at three levels.

1. The farm level price

2. Whole sale market price

3. Retail market price

The farm level price can be interpreted as the price that a farmer

is receiving for his produce at the village and mandi levels. Wholesale

market price is the price with in find on commodities that is sold in bulk

at the market area. A whole-seller is supposed to supply in big lot to the

retailers. Retail market price is the price which is rolling in the

distribution centers for the consumers.

Reasons for price hike of Areca nut


From the last 4 to 5 years areca nut market has grown rapidly.

This is because of the sudden raise in the prices of areca nut. The reason

for this hike is increase of popularity about ‘Gutka’, which is a tasteful

mixture of areca nut pieces, tobacco powder and required especially in

youths which is the main reason for price hike of areca nut.

If Government bans Gutka or its popularity decreases then areca

nut price may fall down. So, growers today itself find other usages of

areca nut increasing its popularity and improving the productivity of

other by-products.

Marketing of Areca nut in Shimoga

Shimoga is a primary market for areca. This is the chief market for

produce of Thirthahalli, Sagara, Hosanagara, Bhadravathi, Shimoga

area. In this area usually whole nuts are marketed and not much of the

sliced nuts. This area has been brought under rules and regulations

during 1959-60. Reforms in the market practices have been introduced

and it is working properly. Shimoga is one of the important centres for

areca, banana, betel leaves and pepper. Shimoga is sub-divisional head

quarter.

Market Area

All the business related to areca nut is made in the R.M.C yard

located at B.H road, centre of the Shimoga. The yard is established in

1965 and has 50 acres of area. Suitable securities are enforced for the

entire area. There are number of nationalized banks and a district co-

operative bank near by the market yard.

The nuts are sorted and graded into different varieties called Aapi,

Rashi, Idi, Bette, Chikni, Kempugotu and Chooru. No transportation


facility is provided by the concerned authorities to come here. The major

advantage is that all the business relating to areca nut is concentrated on

one place.

Grading by Merchants

Classification of nuts into several grades is invariably practiced by

merchant in all the assembling markets. This is done generally when the

produce is sold by the seller to a merchant.

The grading of whole or sliced boiled nuts is generally done by

hand picking by female who are generally skilled in the job. For

separating the small pieces, circular sieves made of cane with octagonal

gates are often used. Specification of grading is generally different from

merchant to merchant even in the small markets.

Assembling of the nuts

The long chain of intermediaries and ignorance of the grower is

the main cause for this state of affairs. The producers’ sells immature,

un- husked nuts, sun dried ripe nuts with or without shell and also boiled

nuts. The further processing i.e., cutting and boiling need expert

handling and it is undertaken by the curer. Wholesale merchants and

commission agents generally do not act as assembling agents. The role

of co-operative society is insignificance in the market. These societies

act as important assembling agent in the respective areas of the

operation.

Mode of Transport

The areca nut which is ready for market is brought on bull-carts,

Auto carrier, Lorries and trucks to the market for sale.


Method of sale

The unit of quotation is for one quintal. The prices of areca nut are

being settled by Tender System of sales. At Shimoga, sellers

commission agent also bid along with other buyers and as such it is not

in his interest to get the highest prices for his clients.

The sales are being conducted by the respective commission agent

in Mandies in Apscos, Mamcos, in presence of the employees of this

market committee.

As soon as the sale is completed, agreement slips is prepared in

triplicate by the market committee staff on the spot and after obtaining

the signature of the commission agents and traders are taken of the sales.

One copy of the sale is being issued to commission agent and another

copy to the traders and third copy is being retained in the sale-note book

itself for office record.

Method of Weighment

As soon as commodity arrived to the commission agent’s Mandis,

the first weighment is being done by the licensed weigh men by the

market committee. As soon as weighment is completed a receipt called

‘A’ Bill is being issued to the producer and a copy of the same will be

sent to this Market Committee. The commission agents are permitted to

store the bags of the seller in their respective go downs. After the sale,

the second weighment receipts called ‘B’ Bill are issued to the producer.

Resale of the crops

In the distribution of areca nuts the same agencies as in the case of

the agricultural produce such as paddy, wheat is employed. These are

commission agent wholesale merchants and Retailers.


Resale is carried trough commission agents in important

distributing centers such as Bombay, Allahabad, Calcutta, Madras,

Hubli, Agra, Luck now, Bangalore, Gulbarga etc. Terms are being

settled by private negotiations. Wholesale merchants in small market

place order with their agents in distributing centers. The cost of

distribution besides market charges for services rendered in assembling

and distributing markets, include charges for transport and expenses

incidental there to.

Marketing Channels

1. In the market there are commission agents who store the areca nut of

the producers. These agents sell the nuts of the cultivator whenever

they want to sell. The areca nut is sold by closed tender system.

2. There are some more merchants, they will be acting as intermediaries

such as village merchants, local merchants in the town etc,. There are

some merchants in the consuming centers. They are some brokers

who work on behalf of the big merchants.

3. There are some Co-operative sectors also who deal in areca, but

mostly they are like commission agents in selling the goods.

Suggestions for Improvement

Improving the statistics of acreage and production

Although due to mixed cultivation it may be difficult to have

exact statistics of area, arrangement need to be made for recording the

areca nut acreage with greater accuracy, than at present and for

estimating the production annually. A periodical check of areca nut

acreage together with a system of recording yield by selected growers in


different areas should possibly be adopted to have fairly accurate year to

year estimates of production.

Improving the Quality of cured Areca nut

Defective methods of boiling, coloring and drying affect badly the

quality of areca nut, lack of proper knowledge is responsible for this. It

can be improved by educating the growers in the best methods of curing,

providing credit facilities and by introducing improved ovens for drying

areca nuts during the rainy season.

Regulating Imports

India imports a considerable quantity of areca nuts from abroad to

meet its requirements. The prices of imported nuts generally have a

depressing effect on the prices of areca nuts produced in the country and

indirectly discourage production. Hence, imports should be regulated.

Regulating Markets

There exists no regulated market for areca nuts to reduce the

burden of market charges on the growers. Areca nut market should be

regulated.

Marketing Areca nuts on Co-operative Basis

The Marketable surplus which a grower has to offer for sale is

very small because of holding and low yield. It is therefore uneconomic

for appear to be a great scope for organizing curing and marketing of

societies of producers on Co-operative basis.

Marketing Intelligence

Very little information is available about the arrivals, sticks

movements and prices of areca nuts in different markets. The data

available about prices are incomplete and not very reliable. The


necessary arrangement for the collection and dissemination of the

desired information is urgently needed.

Improved Grading

The grading is almost confined to merchants in the assembling

markets, the grower does not derive any benefit from grading there

appears to be an urgent need for the fixation and introduction of standard

grades. The grading work could be taken by producers, co-operative

societies or by Government proposed institution.

Commodity Based Organization

Co-operative marketing societies areca nut have been organized

in Karnataka State on commodity basis having a wide range of

operations. The notable example of societies organized on commodity

basis having a wide area of operation is as follows.

The Malnad Areca Marketing Co-operative Society Ltd.

Shimoga.

The Sirsi Tatagar's Co-operative Society ltd., Sirsi.

The South Canara Agricultural Co-operative Society, ltd.

Managalore.

The Central Areca nut Marketing Co-operative Society ltd.

Mangalore.

The Areca processing and sale Co-operative society ltd. Sagar.

Though these societies are mainly intending to deal in areca nuts,

they are also permitted by their bylaws to handle other subsidiary

plantation produces such as cardamom, Cashew, Soap nut etc. on small

scale.


Co-operative Marketing federation for Areca nut

Co-operative marketing federation of all the societies dealing in

arecanut has been formed in Karnataka State. The main object of this is

to promote co-operative marketing on a state level and to open state

depots in all the important distributing and consuming centers outside

the state. It should be the ultimate object of farming.

Marketing for Areca

Important trade types dealt with by the MAMCOS Shimoga.

Deshavara, Rajalu,

Hasa, Nuli,

Petan, Vantibetta

Methods of Marketing

Process of dealings by Members

The Malnad areca marketing co-operative society is working as an

intermediate between areca and traders. Members send arecanut in

gunny bags to the society. Each and every grower produce is serially

numbered along with initiates for convenience sake. After weighing

concerned authority of the firm issues the bill, i e., called 'A' bill, which

contains quantity of areca nut with number given to gunny bags and

name of the members.

The member could avail the facility of produce loan against the

pledge of the produce. The advancing amount is restricted to 60% of the

market value of that variety of areca nut.

Method of disposing of the Produce

According to the member instruction the society will arrange the

produce for sale. The bags of areca nut, which are serially numbered,


will be exhibited in the society yard. Interested parties quote their prices

and give their quotation to the society. Which is a close tender and the

tender which will be opened by the concerned authority of the regulated

marketing committee. If the members is satisfied with the quoted price

they instruct the society to see the produce. In case if he feels that the

rates are not satisfactory he will reject the offer. However, if the member

agrees to part with quoted price then the concerned authority issues a bill

called the 'B' bill, which contains quantity of areca nut, rate per quintal

of arecanut and the total amount. The amount is credited to his account

after necessary adjustments.

A sales transactions is of two days in week that too limited to

certain hours. The prices which are quoted for the areca nut being a

close tender is finally studies by the regulate marketing yard. Whoever

has quoted the highest price will get the areca nut, after the payment of

the quoted amount.

Payment

Payment of the amount by traders

The price which are quoted for the arecanut by the traders being a

close tender is studied by the regulated marketing yard. The traders who

has quoted the highest price will get areca nut. The trader can take areca

nut. The trader can take arecanut only after the payment of the quoted

amount. The payment can be made in cash or cheque. Discount on the

quoted amount will not be allowed.

Payment to growers


If the member agree to part with the quoted prices. Then the

concerned authority issues a bill called 'B' bill. The amount is credited to

his account after necessary adjustment.

Storing and Warehousing

The growers send their areca nuts to the society in gunny bags.

Here after weighing, the concerned authority of the society issues a bill,

which contains quantity of areca nut with number given to gunny bags

and name the member. After grading the gunny bags are stored in the

spacious warehouse yard, until it is finally disposed off. There is a

separate register maintained in the warehouse containing the number of

bags and other particulars. This can be cross checked by tallying with the

'A' bill and the mentioned above.


CO-OPERATIVE MARKETING OF ARECA NUT

Introduction

Objectives

Characteristics


Introduction

One of the major reforms or measures suggested for the

improvement of agricultural marketing in India is the establishment of

regulated markets. Regulated markets, no doubt, have been useful in

removing several defects of agricultural marketing. But they alone

cannot solve all the problems faced by the farmers. There are certain

problems which are outside the purview and reach of regulated markets.

Such problems have to be solved through the development of co-

operative marketing.

Agricultural products have certain special characteristics.

1) They are produced on a small-scale.

2) Their production is scattered.

3) Their production is specialized.

4) Their production is seasonal.

5) Agricultural products vary in quality.

6) They are perishable.

7) There is a relative inelasticity of demand for agricultural goods.

All these characteristics of agricultural products make the

marketing of agricultural goods difficult for individual formers. So, the

farmers have felt the need for joining hands and forming agricultural co-

operative marketing societies for the efficient marketing of their

produces.

Agricultural marketing in India is subject to several defects. Such

as the existence of too many middlemen taking away the lion’s share of

the price of the agricultural produce paid by the final consumers,

malpractices practiced by the middlemen, excessive market charges,


absence of standardization and grading, lack of transport and storage

facilities, absence of market information, etc., Again, the staying or

holding power of an average Indian farmer is weak. He is forced to sell

his produce immediately after the harvest to get the funds needed by

him. All these problems have resulted in high cost of marketing and

reduced the share of the farmers in the price paid for the agricultural

produce by the ultimate consumers. This has necessitated the

development of the agricultural co-operative marketing societies.

Agricultural co-operative marketing societies can be a part of the

integrated rural credit system. They are an essential prerequisite for the

efficient running of agricultural co-operative credit societies.

An agricultural co-operative marketing society is a co-operative

association formed by the farmers for the purpose of performing one or

more function. Such as processing standardization and grading, storage,

assembling, packaging and selling connected with the marketing of

agricultural produce and improving their efforts. In short, it is a co-

operative association of farmers formed for the purpose of effective and

efficient marketing of their produce.


Objectives of Co-operative Marketing Society

1. To maximize the income of its members or farmers.

2. Obtaining better prices for the produce of members sold through it.

3. Lowering the cost of marketing.

4. Development of orderly marketing.

5. Adoption of better selling methods

6. Improvement of the quality of the produce through standardization

and grading.

7. Elimination of trade abuses.

8. Improved bargaining position as its members are sellers.

9. Development of marketing facilities, such as storage, processing,

transport, packing, finance etc.

Characteristics of agricultural co-operative marketing society

An agricultural co-operative marketing society has certain

characteristics of its own. They are:

Association of farmers

Voluntary association

Open membership

Financial resources

Sale at market price

Equal voting rights

Democratic management

Service motive

Limited dividend

Co-operative education


REGULATED MARKETS

Introduction

Objectives of Regulated Market

Defects of Regulated Markets

Measures for the Improvement of Regulated Markets


Introduction

A regulated market is a wholesale or central market where

dealings in agricultural produces are regulated or controlled by the State

Government through a market committee, consisting of the

representatives of the farmers, traders and commission agents, local

bodies and co-operative societies and the State Government. It is a

market where the buying and selling of agricultural produce takes place

under set of rules and regulations made in this behalf by the State

Government, and all malpractices, such as incorrect weighment,

excessive market charges, unnecessary deductions etc., are curbed and

consequently farmers are able to dispose of their produce at fair prices.

Objectives of Regulated Markets

The main objectives of regulated market are:

1. To create conditions of fair competition and to ensure a fair deal

to the farmers while marketing their produce.

2. To eliminate unfair market practices.

3. To reduce market charges.

Regulated markets have several distinctive features. The main

features of the regulated markets are:-

Market for a specific commodity or a group of commodities.

Government notification.

Market committee.

Area of operation.

Trade practices.

Licensing of functionaries.

Settlement of complaints and disputes.


Reduction in village sales.

Fair prices for products.

Correct weighment.

Uniform unit of quotation.

Reduction in market charges.

Facilities.

Market information.

Prompt payment.

Elimination of middlemen.

Defects of Regulated markets:

Regulated markets are no doubt, of immense help to the grower,

seller, buyers, and even to the final consumers. However, they are

subject to certain limitations and defects. The draw backs of regulated

markets are:

Considering the vastness of the country, the number of regulated

markets present in the country is still far from adequate.

Spacious market yards are must for the development and progress

of regulated markets. But, on account of the paucity of funds, most of

the regulated markets in the country do not have spacious market yards.

It is true that regulated markets have ensured correct weights and

measures end they have introduced metric system of weights. But the

weighment is generally restricted to about 800 lots per day.

Most of the grower-sellers have a grievance over the in-ordinate

delay in the payment of the price or their produce. They are not able to

get the payment for their produce immediately after sale.


In most of the regulated markets, the market committees are

dominated by traders, and not by the grower-sellers. This works against

the interests of the farmers.

In some the regulated markets, the market committees are faction-

ridden. They do not very often, function properly. This works to the

detriment of the grower-sellers.

The organization and supervision of the regulated markets lie in

the hands of different departments in different states. This leads to a

certain amount of confusion.

There is a discrepancy in the notification of commodities to be

included in the regulated markets. This discrepancy helps several

manipulators to escape from the clutches of the regulated markets.

It is said that speculative transactions in the form of forward

contracts are under taken in some regulated markets. The deal is settled

between the parties out side the market and only fictitious sales and

mock auctions are undertaken inside the markets. This defeats the very

purpose of regulated marketing.

Measures for the improvement of Regulated Markets:

It is true that regulated markets in the country suffer from a

number of limitations. But certainly they have helped to remove the

malpractices in the markets and have ensured fair deal to the farmers.

So, regulated markets are a must for the successful agricultural

marketing in the country.

For the promotion and development of regulated markets

measures or steps have to be taken:


1. As the number of regulated markets in the country is not adequate,

steps should be taken to increase the number of regulated markets.

2. As there is a substantial increase in the arrivals in the regulated

markets, the market yards in the regulated markets should be

expanded considerably to cope with the increase in the arrivals.

3. There should be more representation of the grower-sellers in the

market committees.

4. Through proper supervision and control, the market committees must

be made to discharge their duties properly to the advantage of the

farmers.

5. For effective supervision and co-ordination of the activities of the

regulated market committees, a state agricultural marketing board

should be set up in every state.

6. There should be close co-ordination between the Government and the

regulated markets so as to strength the administrative system of the

regulated markets.

7. To break the monopoly of the trades in the regulated markets there

should be co-operative marketing society in every regulated market.

8. The resources of the market committees should be augmented.

9. All the types of transactions in respect of regulated commodities

should be brought under control.

10.Arrangements must be made for speedy weighment of produce.

11.Steps should be taken for prompt payment to grower-sellers.


CHAPTER – V

PROFILE OF THE SOCIETY (MAMCOS)

Introduction

Organization Structure

Management

Membership

Area of Operation

Grading of areca nut by MAMCOS

Profit distribution

Loan advancement and repayment

Role of MAMCOS in price stabilization

Profile of the Society (MAMCOS)


Introduction

The Malnad areca nut marketing co-operative society, ltd.

Shimoga, popularly known as MAMCOS is the leading areca nut

processing and marketing agencies in the Malnad region. It is a co-

operative society which was established in the year 1939. It has been

providing various facilities to the farmer like procurement of areca nut

providing loans to farmers etc.

The MAMCOS was established under the President ship of

Sri. Punnuraj , Deputy Commissioner of Shimoga. It celebrated its

Diamond Jubilee in the year 2000 AD. At the time of beginning it is to

establish a common place for them on their own, so as to meet the needs

of the growers of areca nut.

The cultivator had no contact with the distant consuming and

distributing centers as such a major portion of the price paid by the

consumers was pocketed by the middlemen to come out with these

drawbacks, a full pledge co-operative society become inevitable. The

MAMCOS came into shoulder with the responsibility as marketing

intermediary and it acts as a commission agent.


Organization Structure of MAMCOS, Shimoga

BOARD OF DIRECTOR

PRESIDENT

VICE PRESIDENT

MANAGING DIRECTOR

JOINT SECRETARY

ASSISTANT SECRETARY

CHIEF ACCOUNTANT

RECOVERY MANAGER

BRANCH MANAGER

GO DOWN MANGER


Management

Executive Committee of MAMCOS consists of the President, The

Vice President, Secretary and the 17 Directors. The Deputy

Commissioner of Shimoga district is the Ex-officio President of the

MAMCOS. The Vice President is to be elected by the directors from

among them. The Secretary is appointed by the Government of

Karnataka. The total numbers of directors are from Shimoga,

Bhadravathi, Thirthahalli, Channagiri, Honnali and other 5 directors

from Sagar, Shikaripura, Hosanagara and other 5 directors from the

entire taluks of Chikmagalur district. It has also reserved one

directorship for Women candidate and another for S.C. candidate and

also from Shimoga co-operative Bank which provides financial

assistance to MAMCOS, a representative nominated by government.

Election for directors is held once in 5 years.

Membership

It was started with 659 members with a share capital of Rs.

16031.00. At present the society have 14816 members and the share

capital of Rs. 2,59,23,718.

Liability of members

The liability of members of MAMCOS is to the extent of full

value of shares held by them. His private property is not involved for

payment of debts and obligations of the society.

Area of operation

MAMCOS has administrative area, which includes Shimoga,

Chikmagalur, Honnali and Channagiri Taluk of Davanagere Districts. It


has branches at: SAGAR, THIRTHAHALLI, HOSANAGAR,

BHADRAVATHI, KOPPA, SHRINGERI, BIRUR, CHANNAGIRI,

SHIMOGA.

And its have its agencies at: Jaipura, Kalloni, Basavani,

Megravalli, Nagara, Kadur, Kalasa, Kammaradi, Humcha, Kattehakkalu,

Trinevi, Uttameshwara, Hariharapura, Sampekatte, Konandur, Tumari,

Alagari Mandi, Nittur, Bidargoda.


Objectives of MAMCOS

1. Make arrangement to dispose plantation such as areca, pepper and

soap nut to the best.

2. To grant produce loans on areca, pepper and on other plantation to

the members.

3. To let out go downs, shops and to arrange trade fair and exhibitions

4. To make up processing activities, with the permission of the register

5. To take up exporting of areca nut, pepper and other process products

6. To arrange for distribution of Chemical which are required to prevent

fruit not diseases (Kole Roga) on cash or credit basis

7. To propagate measurer such as economy in production and self help

8. To supply nitrogen fertilizers and cattle feeds on cash basis.

9. Encouraging the members to produce pure plantation crops such as

areca, pepper etc.

10.To take up manufacturing processing storage sale etc., of chemical

and fertilizers useful to areca growers and also to take up all

necessary activities in this connection.

11.To establish branches, trade centers and sales centers and exhibition

if required.

12.The society to work on an agent of the Central Areca marketing co-

operative society limited. Mangalore.

13.To take up all such activities as directed by the government

connected with the main objectives of the society.

14.To supply ammunition to protect crops from wild animals.

15.If necessary include in business of supplying spare parts of pump

sets.


16.To take up all necessary activities which are required to improve the

above objectives.

Grading of areca nut by MAMCOS

In India very few agricultural commodities consists of multiple

commercial varieties. Areca nut is one such commodity it is said that

there are about 160 commercial varieties of areca nut though the crop

harvested belongs to the same types of areca. In addition to this in

certain assembling markets, traders sometimes, deliberately introduce

hair splitting the difference in quality in the existing types and thus

increasing the multiplicity. Future, grading of areca nut is of multiple

dimensional importance. Once cannot overlook this. Both traders and

growers have unique advantage by grading price of different grade

varies from state to state depending on the quality, demand and other

factors of graded areca nut.

"AGMARK" for areca nut

Areca nut is one of the commodities included in the schedule of

agricultural produce grading and marketing act 1937, grading under

"AGMARK" in yet to gain importance. But AGMARK grade standards

have already been prescribed under the provision of the act for sun dried

whole areca nut.

The member of the society can avail the facility of grading.

Grading of areca nut will be done according to the instruction of the

members. To get their areca graded, they should inform before to the

hand. Earlier the members grade their areca depending upon the


availability of labour with the society. The members have to pay

nominal charges for the quantity of areca nut graded.

Profit Distribution

Profit will be distributed in the annual general body meeting in the

following way.

1. Not less than 25% of the profit shall be transferred to reserve.

2. Not less than 25% of the profit shall be paid as dividend to the

share holders.

3. In accordance with the statutory provision a certain amount of

profit shall be given to the company education fund.

4. The remaining profits will be distributed in the following ways.

a) Not less than 12% for the state government share capital reduction

fund.

b) Not more than 5% to the areca nut research and deplmnt fund.

c) Not less than 20% for building construction fund.

d) 20% for the welfare of the areca nut growers.

e) 3% for the welfare of the laborers.

f) 10% for the staff welfare.

g) And the remaining is transferred to the common good fund.

Loan advancement and repayment

Short-term loans:

The MAMCOS Shimoga is satisfying the short term requirement

of the areca growers. The credit facility is of 3 types.

1. Crop loan

2. Produce loan

3. Fruit root disease loan


Crop loan

First the MAMCOS Shimoga receives applications for loans in the

month of May every year. The needy members will apply for the loan.

The board of directors will sanction the crop loans without any favorism.

Produce loan

The produce loan is given to the member against the pledge of

areca nut. The growers will pledge the processed areca nut and take the

loan. The growers can keep the processed areca nut under pledge. The

percentage of produce loan is at rate of 60% of the market value of the

areca nut.

Fruit root disease loan

It is popularly called ' Kole Roga' in Malnad tract. The fruit root

diseases will be distributed in the form of Bordeaux mixture of time

copper sulphete, gum etc. The loan will be given to the areca grower in

the month of August. The MAMCOS Shimoga will supply these above

material.

Repayment

However for smooth running of the process, the growers should

be very honest in their loan repayment. Otherwise they will not get loans

until they clear the balance. The repayment is done for the sake of

produce. The necessary adjustment is done and the remaining is only

credited to their account

Role of MAMCOS in price stabilization

The price of the areca nut is not stable. In recent days the price is

declining. Definite reasons cannot be given for the fall in the price, but


some of the important causes attributed to the fall in areca nut price are

as follows:

1. Lack of alternative use of areca nut

2. Fall in consumption

3. Increased production of areca nut.

4. Intermediaries function in the field of marketing.

5. Lack of export potential.

6. Market manipulations.

The society purchases areca nut for the Central Areca nut marketing Co-

operative society ltd., Mangalore as an authorized agent. In other

organization also, purchases of areca according to the needs. Certainly

the price stabilization can be achieved up to some extent.

Details of Areca received from members at various place in 2009-10

Table: 1

Place Received in

bags

Weight in

Quintals

Sales in

bags

Weight in

Quintals

Shimoga 32,156 22.31.833 27904 1932634

Sagar 28,811 1676154 26077 1518979

Thirthahalli 15,175 865934 14268 909241

Koppa 6591 310614 6309 296012

Sringeri 6,119 309542 5597 279894

Birur 17, 076 1,32,970 15763 1040485

Shimoga 17,186 1292120 14710 1,101041

Bhadravathi 31,854 2323710 25639 1868013

Channagiri 13,370 938321 13025 914740


Hosanagara 15,105 1034336 13727 937224

Total 183.443 12115534 163019 10798263

Areca nut collected from agencies:

(In Gunny Bags)


Table: 2

Details about – Share Capital of MAMCOS, Shimoga

SRS First Grade College, Chitradurga

Sl. No Places In Bags (65Kgs)

1. Basavani 1668

2. Megravalli 1833

3. Kmmaradi 2463

4. Ganapathi

Katte

3031

5. Bidargodu 1127

6. Jaipura 4119

7. Hariharapura 1155

8. Konandur 782

9. Vltameshwara 1014

10 Kulaso 2928

11 Nittcer 861

12 Nagara 2140

13 Humgha 1877

14 Kalloni 1256

15 Trineve 268

16 Sanpekatte 784

17 Kadur 639

18 Thumuri 87

19 Purappenane 91

60

Table: 3

Sl. No PARTICULARS in Rs

1.

2.

3.

4.

Share Capital at the beginning of the year as on (1-4- 2009)

Share Capital from the members in the year 2009-2010

Repayment of share capital to the members in the year

(2009-2010)

Share capital as on 31-3-10

27691710

2497850

479220

29710340

BRANCH OFFICES

Shivamogga Post Box. No. 13, APMC YARD

Sagar Road

SHIVAMOGGA

Phone 08182 250175

08182 250920

Mobile 9449863266

Sagara APMC YARD

Sagar,

Shivamogga Dist.

Phone 08183 226047,228007

Mobile 9449863265

Hosanagara Behind Bus stand

Hosanagara

Shivamogga Dist.

Phone 08185 221376

Mobile 9449863264

Thirthahalli APMC YARD

Thirthahalli

Shivamogga Dist.

Phone 08181 228447

Mobile 9449863267

Koppa Main Road

Koppa

Chickmaglur Dist.

Phone 08265 221043

Mobile 9449863259

Sringeri Bharathi Beedi

Sringeri

Chickmaglur Dist

Phone 08265 250206

Mobile 9449863260

Birur Margada Camp

Birur

Chickmaglur Dist

Phone 08267 255613

Mobile 9449863258

Bhadravathi APMC YARD

Channagiri Road

Bhadravathi

Shivamogga Dist.

Phone 08282 266239

Mobile 9449863263

Channagiri APMC YARD

Channagiri

Davanageri Dist.

Phone 08189 228227

Mobile 9449863262

Tarikere Opp. To Bus stand

Tarikere

Chickmaglur Dist

Phone 08261 222368

Mobile 9449863261


http://mamcos.info/Tharikeri_br.htm

http://mamcos.info/Channagiri_br.htm

http://mamcos.info/Bhadravathi_br.htm

http://mamcos.info/Berur_br.htm

http://mamcos.info/srigenri_br.htm

http://mamcos.info/koppa_br.htm

http://mamcos.info/Thirthahalli_br.htm

http://mamcos.info/Thirthahalli_br.htm

http://mamcos.info/Hosanagar_br.htm

http://mamcos.info/Sagara_br.htm

http://mamcos.info/shivmogga_br.htm

CHAPTER – VI

ANALYSIS OF SURVEY

Analysis and Interpretation of Data

Summary of observation


Analysis of Survey

Survey was conducted to know growers preference towards sales

through co-operative societies.

The question asked to the respondents, can be classified as

questions on Agricultural practice and questions on selling practices.

A copy of the Questioner is given in Annexure.

Table 4: Distribution of growers according to their annual income

Income group No. of persons Percentage

Below 100000 10 20

100000 – 400000 8 16

400000 – 600000 12 24

600000 & above 20 40

Total 50 100

Source: Survey

Analysis:

The above table shows that 20% of the respondents are below

Rs.100000. Income per year.

16% of the respondents are Rs.100000-400000 per year and 24%

of the respondents are Rs. 400000 – 600000 per year and 40% of the

respondents earn Rs. 600000 and above.

The above income groups also number of respondents who

preferred arecanut cultivation under their income group.


Figure-1

Graph shows distribution of growers according to their

annual income


Table 5: Areca nut yield per acre in quintals

Quintals No. of persons Percentage

Below 5 23 46

5 – 10 12 24

10 and above 15 30

Total 50 100

Source: Survey

Analysis:

This sows that 46% of the growers expected to grow around 5

quintals per acre and above that were 24% and 30%. This varied yield

per acre shows that there is a lack of scientific approach in agricultural

practices.

Figure-2


Table 6: Number of persons cultivating types of arecanut

Types No. of persons Percentage

Raw or Green 10 20

Sun dried 19 38

Boiled 21 42

Total 50 100

Source: Survey

Analysis:

More than 50% of the cultivators were asked making boiled areca

nut and 38% of the cultivators asked making sun dried and reaming

cultivators asked green nuts.

Figure-3


Table 7: Mode of transport used

Transport No. of persons Percentage

Bullock cart 5 10

Bus 8 16

Lorry 25 50

Others 12 24

Total 50 100

Source: Survey

Analysis:

Mode of transport used by the growers show that, many

cultivators preferred transport like lorry and vans to transport their

produce. Accordingly 16% cultivators preferred private transport

facilities and other 24%.

Figure-4


Table 8: Selling centers opted by respondent

Respondent No. of persons Percentage

Mandi 11 22

Agent 9 18

Direct 4 8

Co-operative

society

26 52

Total 50 100

Source: Survey

Analysis:

This shows that many people i.e., 52% of the cultivators sell their

produce through cooperative society and others i.e., 8% of direct sales

and 22% sell to Mandi and the remaining sale to agent.

Figure-5


Table 9: Problems faced by growers


Selling 15 30

Storage 12 24

Advance 11 22

Transport 12 24

Total 50 100

Source: Survey

Analysis:

This shows that there are some defects in co-operative marketing

in suiting itself to the needs of the cultivators.

When they talk about problems in selling its about lack of price

stability and market assistance/ problem of advance refers to the hard

and fast rule followed by society in sanctioning advance facility many

were not bringing the area nut to the market yard due to high transport

cost. The growers felt satisfied with storage facilities many expressed

their fears about inefficiency among society officials.

Figure-6


Table 10: Payment on sales made to the growers immediately


Yes 34 68

No 16 32

Total 50 100

Source: Survey

Analysis: Immediate payment on sales is made to growers, 32% of the

respondents told that if sales about 3 months or 6 months in receiving

payment, many explained that sales proceeds adjusted directly to the advance

taken by them previously.

There is a need to expand that facility to carry out the practice of direct

sales at villages to merchants.

Method of sales adopted is tender methods in MAMCOS Shimoga. The

question of market rate expected was asked to know the grower’s expectation

and reality. The running rate for that month was Rs.13500 per quintal of area

nut.

About 60% of the respondents expected in the line of prevailing market

rate and 40% were either below the market price or above it. This explains the

need to increase the market intelligence awareness among growers.

Figure-7

Graph: Payment on sales made to the growers immediately


Summary of Observations

The study into marketing practices of areca nut cultivators

revealed that areca is not considered as much as important commercial

crop as it was earlier. But areca is gaining its commercial importance in

primary market. On the basis of survey following conclusions can be

drawn.

Cultivator is not aware of new improved arecanut veins capable or

withstanding the disease. He is neglecting the commercial marketing or

green areca nut which enjoys fair returns in foreign market.

Owing to uneconomical marketing practices,· grading and quality

control in arecanut produce has been neglected, In order to Capture

international market the primary necessity is to provide better returns to

the cultivator and encouraging him to practice more arecanut of superior

quality.

To provide better returns to the cultivators, I believe co-operative

marketing has a major role to play. Certainly it is the only marketing

intermediaries working for the betterment of areca nut cultivator

To sell, a cultivator has three option namely Mandi, Co-operative

society, directly to the village trader. His decision to sell through these

marketing intermediaries may be influenced by

1) Advance 2) Interest 3) Transport and other practices

Advance is a major factor influencing the cultivator. Mandies

provide advance on their personnel relationship even for unproductive

purposes, but societies provides advance only to productive purpose on

sound security from growers. This is an important factor in keeping the


growers tied with Mandi operators, and 50% of the respondent expressed

the problems of advance in co-operative marketing society, Interest rate,

is an accompanying factor of advance, astonishingly it does not play a

major role more than 26% of the respondents was charged exorbitant

rate of interest. Respondents appreciated the rate of interest charged by

the society. Transport is also an influencing factor in marketing. These

agencies do not provide any transport facilities to grower, nearly 50% of

the growers rely on lorries and van transport facilities, this shows a clear

need to develop areca nut transport facilities.

Here APMC is practicing an appreciating works. It has collecting

the agencies located interior parts to collect the areca nut produce and

avoid direct sale for lack of transport facility. But there is need to expand

this facility.

SWOT Analysis of MAMCOS Ltd., Shimoga

1. Strength

(a) Financial Base:

MAMCOS has more 14,861 members constitute more than 11

crores paid up shares. It is financially strong.

(b) Goodwill:

MAMCOS was established in 1939 including 659 members with a

share capital of Rs. 16,031. But now the membership has grown to has

very large number. It shows its goodwill.

(c) Administration:

The Administration of MAMCOS is best. As a proof it has prompt

tax payer award to its credit by the state government.

(d) Network


A unique feature is the network of society. It has 10 branches and

19 agencies all over Malnad. It helps in linking up of farmers very easily

e). Diversification:

Recently the society has opened the scented areca nut

manufacturing unit. It has open a good opportunity for growth in the

market where there are only few player.

2. Weakness

a) Lack of Social Capital

Influence of Mandies has show the growth of capital Mamcos.

b) No advertisement

Now a days advertisement plays very popular role in making

people to know about something. But Mamcos is lacking in it. There is

no media advertisement for Mamcos

c) MAMCOS has no control over price fluctuation

d) MAMCOS is asking in taking active part in the research and

development to open new dimensions for areca.

3. Opportunities

a). Diversification: There is tremendous scope can be used for

diversification. As arecanut can be used for many purposes.

b) Demand: MAMCOS can increase the demand for arecanut by

exporting the same to foreign market.

4. Threats

1. Mushrooming of commission agents in rural areas is a big threat for

the society.

2. Govt. may give license for importing or arecanut which may cause

price decrease,


3. Decrease in the export or ;mica nut to foreign counties is a greater

threat to the society

4. Banning of Gutka: - Recently several State Govt. have banned the use

of Gutka, for which areca nut is the main input. It has caused a

serious decrease and in demand for areca nut.

Current Scenario of Arecanut

Now a days every field is liberalized welcoming other country.

But there is great drawback of this we can see in now a days. The

agricultural field is also one among them. Areca price compare to few

year ago has decreased by Rs. 7000/- quintal.

In the season of areca in large volume the areca was sold but still

the middle class people in small amount, and rich in large amount were

kept there stock waiting for good price for their stock. But this yei1d is

no as such good price for areca.

In the areca there are mainly 2 types.

1) Chali Areca which is in white color

2) Red areca

The producing of chali areca was simple compared to red areca.

So the production of chali areca was high in these years.

India was exporting areca to Pakistan and Maldives country. But

after Kargil war India stopped exporting areca to Pakistan.

Reasons for the short fall in areca price:

The only main question, which arises in the minds of farmers, is

the reason for the decrease in areca price. They were may be because of:


1) The liberalization towards the rate of import on areca by the

government.

2) The decrease in the rate of import duty from 100% to 35%.

3) The draught in the place where there is a purchase of areca.

4) Financial liberalization.

These were some of the reasons for the shortfall in areca price.

According to new import policies the rate for importing areca was not

yet fixed. So there is no control of government for importing areca. Last

year India has imported areca from Sri Lanka in abundance and it has

made problem for domestic areca growers.

In the last few year areca growers got a good price for their

product because of Gutka, Panmasala and other areca products. In some

of the states Gutka was banned, as it is injurious to health. This is also

one of the reasons for decrease in areca price.

Some of the farmer feels that by charging import duty this can be

solved. But this will not going to do any thing because of SAPTA (South

Asia Preferential Trade Arrangement) treaty.

As per this SAPTA treats, the areca which is imported from Sri

Lanka and Bangladesh with a discount of 50% in import duty. This was

another main reason to fall in the price of areca.

According to "State Marketing Board Surveys” the revenue to the

state from Areca dealings is Rs. 1500 crores. About 50 Lakh people

were depend on areca and about 2 crores people were involved in

various activities concerned with areca as estimated.


CHAPTER – VII

CONCLUSIONS AND SUGGESTIONS

Introduction

Conclusions

Suggestions

Other suggestions


Conclusions and Suggestions

Introduction

The last question regarding market rate expected worked out as a

line dividing the grower expectation and reality. 60% of the respondents

are not being on the line prevailing market rate showed a need to

improve market awareness and to improve rate of the market return to

growers.

Conclusions

Large amount of areca nut is given by small land holders. But to

improve productivity, they have problems like financial assistance, high

wages and high rate of fertilizers etc. To overcome these problems, small

land holders should be provided with the long term loans and

Government should provide supporting prices for the fertilizers and their

products. National and Rural development banks must activate in this

direction.

Steps must be taken to attract more consumers for the areca nut.

Popularization about the betel nut must be increased by advertisements

and researching is needed about the other uses of areca nut.

Suitable scientific methods are needed for the effective production

and storing. Research can also be made in this field. When areca nut

palm is broken by wind or destroyed by other means, it needs at least 5

years to get the crop. In that case, producers financial position was down

so ‘insurance’ facility must be provided for the crop.

In the areca nut market, there are much more mediators therefore

growers get only 65% of money of what consumer paid. Another

problem is that of unauthorized purchasers, who purchase the products


by not paying the taxes, which is a heavy loss for the Government and

they are also responsible for price fluctuation.

It is observed that the current “good value” of the areca nut is due to

‘Gutka’. The care must be taken so that areca nut market should be

independent of such commercial items.

It is necessary for the management to suit its marketing

infrastructure to the needs of growers with in its marketing, managerial

and financial setup. The marketing of MAMCOS has analyzed

considering opinions of respondents in satisfactory at present however it

can impress its marketing program with better marketing infrastructure


Suggestions

In order to introduce reforms one should know the defects and

short comings of the prevailing system. This calls for and justifies the

necessities of intensive research and investigation of primary market.

Marketing is a multistage process for the improvement and development

of marketing structure. A Co-ordinate approach arriving at removing all

the weak links of the marketing channel is essential.

Since one of the common feature of business in 21st century is

change. The MAMCOS should term towards more professionalization in

management and try to build a social relationship with the members

besides this.

Society should provide advance facility on a more flexible basis to

save cultivators from traps of Mandi Operator.

Society should arrange for some sort of transportation facilities to

growers to bring their produce to market yard.

Collection centers should be expanded into more interior and rural

parts.

Growers should be made aware of proper quality control and

grading practices to earn better returns.

Society should provide proper market intelligence to growers.


In conclusion MAMCOS should achieve a better share to the producer in

the price paid by the consumer

The success of cooperative society depends upon the effective

involvement of members. The slogan of a cooperative society is "each

for all and all for each". A producers co-operative society requires for its

development proper co-ordination between growers and management.

The management of the society should have a clear idea of growers

needs and marketing environment.

Other Suggestions

1. Most of the cultivators have not adopted modern technology for

production of areca nuts. The technology can be used in husking,

drying, coloring, slicing, boiling and packaging of areca nut.

2. Irrigation and labor problems can also be reduced by using modern

technology.

3. Growers are suggested to take proper care of areca nut plantation

apart from measures to protect the main crop.

4. Proper measures to control the disease will give better yield of areca

nut. They should replace the old and diseased vines with new and

improved breeds of vines.

5. The cultivation should give importance for the growth of mixed

crops.

6. Growers should assemble their produce in one place and processing

and grading should be carried out collectively to earn better returns

for their produce. They should arrange for collective transportation of

areca nut produce in their area. This lowers transportation cost.


7. The unsatisfactory marketing arrangements have been the base of the

problem. The large number of the intermediaries functioning in the

field of marketing has brought down the producer’s share in the

consumer’s rupee. This exploitation the producer could be topped

only by reducing the number of intermediaries and creating a

situation where by the grower will have to say in the matter of

regulation of prices.

8. It is necessary to under take suitable propaganda work amongst the

growers to make proper processing and grading more popular. So

that it fetches higher prices for their produce.

9. The availability of marketing facilities should be within easy reach

for the producers.

10.Creation of areca nut board.

11.Co-operative marketing organization like, MAMCOS, CAMPCOS

and APSCOS have an important role to play both in providing credit

facilities and arranging for orderly marketing.

12.The Government should continue to grant interest loans on the

subsidiary.

13.The increased rate on tax should be decreased.

14.The Government should fix a minimum price for the areca nut.

15.By increasing a licensing method, the government should prevent the

growth of areca nut.

16.The scope for expanding the export trade is limited. It should be

encouraged.

17.Few alternate uses are worth pursuing. Areca nut can be beneficially

used in the manufacturing both paste and chewing-gum. It would not


only increase in the consumption of areca nut within the country but

would also lead to export trade in these products.

18.The growers should be aware of price fluctuation associated with

Gutka and other commercial products of areca nut, so that future

problem is effectively handled.

ANNEXURE

Questionnaire

Bibliography


CULTIVATORS QUESTIONNAIRE

I am Venkatesh K.S student of SRS First Grade College, Chitradurga studying in Final Year B.B.M. for the partial fulfillment of my course. I am conducting the survey on the “A STUDY OF PRODUCTION AND MARKETING OF ARECANUT IN SHIMOGA-MAMCOS, to prepare a project report. Therefore, I request you to spend for me a few minutes to answer the questions in the questionnaire.

Name and Address:

1. Major Occupation:

2. Land holding: Irrigated

Non-irrigated

3. Area in Acres: a) Below 1 b) 1 to 3

c) 3 to 6 d) 6 to 10

e) Above 10

4. Areca nut yield in quintals

Per acre: a) Below 5 b) 5 to 10 c) Above 10

5. Annual Income (in Rs.)a) Below 100000 b) 200000-400000

c) 400000-600000 d) Above 600000

6. Method of cultivation used:

7. State any special features of areca nut cultivation,

if any, adopted in your garden .

8. What are the disease and pests affecting the crop?

a) Koleroga b) But rot

c) Anaberoga d) Nut Splittinge) Leaf Spot f) Stem Splittingg) Hidimundige rogah) Any other (please specify)

9. Which type of areca nut you produce for market ?

a) Raw or Green


b) Sun dried

c) Boiled

10.Method of disposal of nuts

a) Through Co-Operative societies

b) Through Commission Agents

c) Through regulating markets

d) Local merchants

11.What is the distance from land to Mandi (in Kms)?

a) Below 10

b) 10-15

c) Above 15

12.What is the mode of Transportation used?

a) Lorry or Van

b) Bullock cart

c) Others

13.What is the method of sale adopted?

a) Auction

b) Tender

c) Direct

14.Do you get immediate Payment on sale? Y/N.

If no, what is the period?

15.Any problems in selling through mandi (commission agents) Y/N.

(If yes please mention)

16.If need, from which of the Banks following sources you take loans

a) Commercial /Agricultural

b) Co-Operative societies/ Regulated markets


c) Mandis

d) Others.

17.Do you think present prices are

Economical, if not, what is the price you expect for your produce?

Y/N.

18.Any problems in selling the through co-operative society

Y/N Mention them

a) Selling b) Storage

c) Advance d) Transport

e) Others

19.Do you get immediate payment on sale

a) Yes b) No

20.What is the market rate expected? (In Rs)

a) 10000 to 15000

b) 15000 & above

21.Service Provided by MAMCOS

a) Excellent

b) Good

c) Poor

22. Give suggestions, if any, for,

Improving the existing market arrangements.

Getting higher prices for the produce.

23.Your opinion towards

MAMCOS ____________________________________

Place: Signature

Date:


BIBLIOGRAPHY

1. By- laws : MAMCOS

2. Annual Report : MAMCOS

3. Indian Economics : K.K Deweyy J.D Varma

M.L SHARMA

4. Survey of Arecanut crop in Indian Union

5. A study of marketing in India: SAXENA

6. Marketing Management : SHERLAKAR

7. Adike Pathrike : A manual for Areca nut growers

8. Adike Krishi : B. NARAYANA BHAT

Website

www.mamcos.com

www.google.com

www.shimoga.net


http://www.shimoga.net/

http://www.google.com/

http://www.mamcos.com/

Documents

Mamcos