1

RAPID MARKET APPRAISAL FOR FOOD GRAINS

(MAIZE AND SORGHUM)

By:Anuj JaiswalAnusha ChapaLokesh Kumar AgarwalShushrita MallikSurbhi KatochVinodsingh Salunkhe

2

Flow of content IntroductionObjectiveMethodologyMandis and LayoutMaizeSorghumDeficiencies Suggestions

3

Introduction

Rapid growth and expansion in sectors such as Information technology Software development Business process outsourcing Mobile telephony Banking and financial services Manufacturing

… But not agriculture .

4

Drivers of Indian Agriculture

Farmers who are Small-scale producers with fragmented land holdings Subject to significant weather and price risk

Firms that Develop, commercialize seed-based technologies Pursue innovative product development/delivery strategies

The market Low level of knowledge and information Barriers to entry, Regulatory uncertainty and malpractices Commission agent with own interest Long supply chain with high intermediaries

5

Objective of the studyTo understand and identify :

the market participants. the marketing channels and .Pricing strategies of food grains market.

6

MethodologyRapid Market Appraisal - Structure, Conduct and

Performance (S>C>P) Approach followed to get a reconnaissance about the food grain (maize and sorghum)market.

Consumer marketing research done in the form of applied sociology that concentrates on understanding the attitudes and behaviours of participants in market, and it aims to understand the effects and comparative success of each participant

Study area – Panna market and Sardarnagar market.

Tools used – Venn diagram, flowcharts, pie diagram.

Mandis Mandis – agricultural markets set up by state governments to

procure agricultural produceTotal Mandis – 6,800Most agricultural areas with population more than 10,000

have MandisAverage population catered to each Mandi – 1.36 lakhs

7

8

Sardarnagar Grain Mandi LayoutVEGETABLE MARKET

ENTRY

Main commission

agent

auctioning

C.A

C.AWei

ghin

g m

achi

neC.

A

C.A

C.A

storage storage

W.M

VEHCILE

VEHCILE

EXIT

storage

storage

9

MAIZE

10

Structure Market Participants -

Farmers Village Representative (20) Commission Agents (12) Traders

MANDI

FARMERS

TRADERS

COMISSION AGENT

VILLAGE REPRESEN

TATIVE

11

Structure Marketing Channel -

FARMER

COMMISSION AGENT

FARMER

FARMER COMMISSION AGENT FARMER

VILL. REPRE

VILL. REPRE

12

Structure

Market Share The commission agent was the most influential participant of the

market and had the maximum share in terms of power. He was the one who decides the price for the commodity base on some standards.

Product Differentiation And Quality Standard For maize there was no processing facility i.e. no value addition

was done. The CA divided the maize in 4 grades on the basis of kernel size and moisture content.

13

Pricing Strategies Price formation was done by a group of CA’s and also by

auction as per the grades of the maize kernel. Usually price fixed is more than the MSP (>Rs.1100/q)

The CA takes 2%-4% margin from the farmers. The supply and demand of maize is variable as per the

seasonality in production. Regulations And Stimulations

There is no political control in the fixing of prices and the demand and supply.

The CA gives immediate cash after the transaction has happened OR as and when required by the farmers (based on trust).

14

Conduct Buying And Selling Strategies

It is a weekly market , on Thursday the grains market is established.

50 kg -10 q is the range of volume of transaction. Once the price is fixed there can be no bargaining. The price fixed is uniform from all the CA’s , it depends on the

relations and trust between the farmer and the CA’s to whom they (farmers) want to sell.

There is no facility provided by the CA to the farmer in terms of logistics, the farmer is himself responsible for it.

15

Performance Economic Parameters

The market margin is quite less as compared to fruits and vegetables market.

Since there is always a supply followed by demand so as such there is no price risk.

Social Parameters Many labourers for loading. Unloading, packaging, brooming

are employed apart from the main market players. The ratio of men : women is 90:10 in the market.

Environmental Parameters The waste material is collected and is fed to the poultry birds.

16

SORGHUM

17

Structure Market Participants

Farmers (A.P, Karnataka, Maharashtra) Commission agents (30) Dealers Traders

COMMISSION AGENTS

FARMER

S

DEALERS

TRADER

S

18

Structure Marketing Channel -

FARMER

COMMISSION AGENT

DEALERS

CONSUMERS

FARMER

COMMISSIO

N AGEN

T

TRADERS

EXPORTERS

FARMER COMMISSION AGENT FARMER

19

Structure Market Share The commission agent were the most influential participants

of the market . Among the 30 CA’s only 6 were the most influential. Above all one CA ( Mr. Jadishwar ) had the control of the whole market and had the maximum share in terms of power. He was the one who decides the price for the commodities.

Product Differentiation And Quality Standard For sorghum there was no processing done. There were two

types of sorghum : Yellow sorghum White sorghum

20

Pricing Strategies – Price formation was done by one CA . Auction was done for the

sale to the traders and dealers. The CA takes 3% margin from the farmers. If the farmers store

there produce for long then they charge 4% margin . Whereas the large CA’s charge 10% for the same.

The supply and demand of sorghum is variable as per the seasonality in production.

Regulations And Stimulations – There is no political control in the fixing of prices and the

demand and supply , all is done by the CA. The CA gives immediate cash after the transaction has

happened or on the same day.

21

22

Conduct Buying And Selling Strategies –

It is a weekly market , on Tuesday the market is established. All types of commodities are sold and bought.

200 kg -300 q is the range of volume of transaction of sorghum..

The price fixed by the bigger CA is the benchmark for other CA’s , it depends on the willingness and trust between the farmer and the CA’s to whom they (farmers) want to sell.

The farmers bring there produce by there own vehicles or rented vehicles.

The CA financial support to the farmers as and when required.

Storage facility is available with every CA.

23

Performance Economic Parameters –

The market margin is high as it is an interstate market and also export quality produce is available.

The number of sellers are less than the number of buyers in the market.

Social Parameters – Many labourers for loading. Unloading, packaging weighing,

brooming are employed apart from the main market players. The ratio of men : women was 80:20 in the market.

Environmental Parameters – The waste material is collected ,sieved and taken by the

workers present . The wastage is quite low.

24

Deficiencies Information flow to the farmers. Lack of modern weighing machines. No separate platform for different commodities. No authentic grading of the produce. No role of APMC body. No facilities for transport. Storage houses were not in a good condition. No direct access to the main road.

25

Recommendations Concerns

Development of integrated infrastructure such as proper warehouse facilities.

Huge investment, lack of aggregated supply , lack of graded produce

Participation of professional traders and buyers

Interested in quality produce.

Modernization of weighing method and logistic support to farmers

Investment and acceptance of change

Promotion of export Stringent international quality parameters, High transportation cost

Access to the market information Lack of communication platform and Illiteracy of farmers

Recommendations And Concerns

26

Retailers

Organized

distribution

outlets

Commission agent

APMC YARD

Processor

Extension

Planning

Input

Farmers

Retailers(unorganize

d)

Ultimate

consumers

Commission agent APMC YARD

Intermediary

Designing the effective chain

• Middleman is not a villain. He is actually making up for the weak infrastructure. He has become a villain by blocking information flow & market signals

27

Let’s look beyond immediate gains to ensure a more stable market for our farmers future generations