action research report

Ravi Shanker& Ashok.M July 2003

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Acknowledgements: AWAM sincerely extends its thanks to NM Sadguru Water & Development Foundation and UTTHAN for their cooperation in conducting the study. We also acknowledge the inputs provided farmers, traders and officials of Dahod Market Yard, wholesalers and retailers. AWAM July 2003 Sustainable Small farm Livelihood Support Initiatives & Markets Action research report. July 2003.

Ravi Shanker & Ashok.

Private Circulation.

AWAM a not for profit organization (regd. public Trust) supports the cause of sustainable livelihoods among women and small producers in western India. It supports various groups to develop business intelligence, understand markets, change, and establish linkages. Post: D/104, Shrinanadnagar-II Vejalpur, Ahmedabad. 380051. Phone:079+ 6820 344

Dahod: AWAM Dahod P.Box 85, Dahod Gujarat. 389151.

Email: awamindia@yahoo.com

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Sustainable small farm livelihood

support initiatives & markets

Background:

In India, during 90s voluntary efforts in poverty alleviation increasingly focused on NRM and group formation. Of late sustainable livelihoods (DFID & Others) approaches has gained momentum to reduce the incidence of poverty. Efforts were made to improve the physical resource condition of poor and they were also organized as care takers of these resources. Various user groups, associations and self-help groups were formed under wide spread watershed program. Other developmental schemes such as IFAD funded SWASAKTI project, Government of India sponsored SGSY schemes aimed at increasing opportunities and income for poor and marginalized. Though the programs meant to reduce poverty and improve livelihoods, its impact probably less sustained unless the ‘livelihood support cycle’ is thoroughly addressed. Improved natural resource condition, greater access to resources and income generating opportunities lead to sustainable livelihoods. But increased productivity as a result of these interventions at a point is-highly influenced by markets. Higher productivity could benefit if only markets are developed and connected. On the other hand, social processes do enable poor to address their immediate social concerns. Social organization by poor in the form of various groups, cooperatives, societies and federations enhanced their status in society. Though succeeded, the empowerment process however has had lesser influence on economic sphere of individual family. Many SHGs forged ahead in social processes but failed to generate enough cash to sustain. The groups and associations formed to improve economic status of poor and marginalized still tend to struggle for survival. The simple reason is that they could not sell their commodity in local markets. Local markets are generally monopolized and linkage patterns are well established. Little efforts were made by development initiatives to pave ways for poor to sell their commodities. For example, in the agriculture sector, non-agriculturists-mainly traders dominate the local area market cooperatives. A small vegetable grower tends to gain less and loose more when s/he tries to sell her/his produce in market yards. Market services such as transportation, storage, and access to information are not in place to support small producers. In this environment, poor and marginalized not adequately equipped and are less likely to survive. Though their asset base improved through various schemes and programs.

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In progressive countries farming is planned. Harvesting operations are carried in such a way that produce is picked each day where fruits or vegetables allowed maturing in sequence. This solves the hurdles of refrigeration and transportation. Pick-ups are organized at right schedules, and transportation is well organized and planned. It is not left to the availability of casual labor or trucks. Currently our fruits exported have lesser standards in international markets. Philippines, Malaysia, Indonesia are ahead of us. However, our farmers associations, women groups could take lead and gear up for postproduction operations. If this could work out, it would mean another green revolution in India. Going by the food grain production in India and its reserves, this shift is inevitable. Sooner or later markets would be clogged with vegetables, fruits and flowers. Only those farmers who adapted to changing scenario will survive.

Study:

To understand the existing needs of poor farmers and available options to improve livelihoods beyond production a study was conducted. The study focused on understanding existing markets and trade related to small producers. Dahod, tribal district was selected to look into and understand various practices in postproduction scenario. Nearest potential markets were also studied to suggest possible development linkages and services. Rationale for selected Dahod district: Dahod is a newly formed tribal district in Gujarat. Per capita land holding in Dhaod is around 1 acre. Population density is higher than Gujarat average at 449 persons per square kilometer. The district is one of the most marginalized in development having literacy levels far lower at 45.65% and female literacy further down at 31%. More than 80% of the district population is agriculture laborers and cultivators. Of late, the district came into picture for its shift in value added agriculture. With the active role of NGOs, DRDA line departments actively persuading tribal farmers to shift from subsistence agriculture to value added agriculture such as horticulture. According to a rough estimate more than 15 thousand families in the district shifted to value added agriculture.

Objectives:

1. To understand the status of vegetable, fruit and flower growers in Dahod district.

2. To assess the condition and potential of local markets 3. To understand the need for new and sustained market linkages

Approach:

The study was initiated on 1st May 2003 and completed on 30th June. Farmers, traders and market yards were contacted to study production, transaction and market related issues. Various personnel viz., vegetable,

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fruits and flower growers, vendors, wholesalers, retailers and market yard personnel were interviewed and data was collected.

Findings:

Status of vegetable, fruit and flower growers in Dahod district

• Most of the farmers contacted were poor and marginalized having less than 2 acres per capita land holding.

• They have shifted from subsistence maize cultivation and Eucalyptus cultivation to value added vegetables, fruits and flowers cultivation.

• Fifty percent farmers were having dug-wells and irrigated their fields.

• Average earnings per family varied from Rs.1600 to Rs.10,000 in value added agriculture. (Refer table)

• Most of the farmers cultivate in ½ acre land area under value added cultivation.

• The farmers who are associated with NGOs received agriculture extension input services (seeds, pesticides and fertilizers and irrigation).

• Farmers carry the produce by local buses or other passenger vehicles to sell in the market.

• Transportation cost varies from 5-20% per farmer. Especially when quantity of produce is small at beginning and tail end of the season.

• Grading and sorting operations are not known and followed

• Market awareness (in terms of product specifications) is less and depends on consensus.

• Majority of the farmers expressed need for marketing support and linkages.

• Lack of planning in production in many cases lead to lower returns

• Unplanned cultivation (in some cases) lead to termination of activity due to low returns and high input costs (Exp: tomatoes)

Capacity and potential of local markets

• Vegetables, fruits and flowers sold in Dahod towns’ local market. In Dahod market yard alone 6500 tons of vegetables sold every year.

• Small quantities (2 to 20 kgs per day on alternative days) of fruits, vegetables and flowers sold by farmers in open market on regular basis.

• Fruits, vegetables and flowers retailed mainly by women

• Market prices and sale volume vary every day

• Goods traded in market yard attract taxes and commissions.

• Cash payment is however made immediately and receipt is issued.

• It is difficult sell higher volumes of vegetables/fruits/flowers (more than 100 Kgs.) in local markets.

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• In season the product attracts lesser value due to supply/demand equation. (Refer table)

Scope for new & sustained market linkages

• Traders in local markets have not geared up to absorb local supplies.

• Traders attribute supply/demand problem for lesser price of vegetables, fruits and flowers in harvesting season.

• Traders say that the local markets are getting saturated. While selling the material in far off markets, wholesale price dips further to cover contingences.

• Ahmedabad and Baroda are nearest potential markets for vegetables, fruits and flowers from Dahod.

• Planned and systematic approach to vegetable, fruit and flowers cultivation could result in higher returns.

• There is need for input supply in small farm management techniques, methods.

• There is need for developing market linkages and support systems for sale of value added produce.

Ahmedabad and Baroda Markets:

Vegetables: Good market potential exist. [ rating: 8] There are specific wholesalers for each variety of vegetables. Goods need to be put up at market in the early morning around 4 am. Samples need to be made available in advance. Commodity price varies every 12 hours. Prices on the spot would apply for the goods based on its quality, standards and parameters specific to its sale value. Flowers: Market potential exist to some extent. [ rating: 6] Roses have good turnover. There is high turnover for local varieties during season. Gladiolus flower also has good market, but the price is far lower than roses. Flowers are weighed and prices are decided on quality, freshness and fragrance. Commodity price varies every 12 hours. Prices on the spot would apply for the goods based on its quality, standards and parameters. Samples need to be made available in advance. Fruits: Market potential exist to some extent. [rating: 6] Samples need to be made available and based on that the value is fixed. Mangos and Papaya have good market potential.

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Per capita fruit consumption of fruits is around 23 kgs. /year. In fruit market yard the recorded turn over of mangos is around 750 tons per day in season. Milk and Others Amul alone sells 800 000 liters of milk every day in Ahmedabad. There are other players together add up another 500 000 liters. Sweets consumption is at 200 to 300 grams per person in regular days and in festivals it raise to 1200 grams. Ice-cream consumption is around 400 grams in Ahmedabad.

Discussion with farmers in Dahod and Limkheda blocks:

Farmers in Chosala village said, “every alternative day we harvest 10 to 20 kg of vegetables though we can harvest 100 kgs. Some times we even bring back the produce when not sold”. One person from each family spends the whole day selling the commodity in Dahod local market. When the goods not sold, they even fail to fetch the transportation cost. Hence some of the farmers try to sell in near by villages. Women said, “When goods are not sold, we also loose our daily wage that otherwise we could earn by agriculture labor”. Other farmers told to the researcher that they were not producing more, because they found it hard to sell. Higher production of vegetables, fruits or flowers would mean selling it in far off towns. Farmers expressed their inability to sell in bigger towns and bearing transportation and other costs. In many cases this lead to production in less than ¼ acre land in monsoon. Traders in Dahod are reluctant to buy more than what they could sell locally. In rare cases, they sell vegetables in nearby markets like Santrampur, Godhra and Lunawada. But this quantity remained less than 1-2 quintals. “Who will buy from us?” is the standard question posed by every trader. Farmers in Pandadi village said that not all farmers are cultivating vegetables due to marketing issues. “Most of my neighbors said that why should we grow vegetables when there is no market. It is better not to grow” said one farmer. In monsoon vegetables seeds are sown but in last monsoon they have sown in lesser area. As vegetables and flowers are perishable goods and there is not storage facility available in the district, farmers are not willing to grow in higher quantities. Sadguru Foundation is developing collection centers in 3 blocks of the district. It has organized women horticulture cooperative societies. These societies are currently managing input supply to value added agriculture. A farmer who is regularly cultivating ginger in Limkheda region said he is cultivating regularly in ½ acre land. He had sown 140 kg of ginger and

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expects to get 840kg yield under rain fed condition. He harvests small quantities of ginger 3 times a week. As much he could sell in local market. It amounts to 20 to 30 kg per day. At times he comes back without any sale. He said he could not sell ginger if he harvests the entire plot at single time. “Why should I harvest 100 to 200 kg when I could sell only 20 kilograms a day? In that case have to sell it for very low price” said the farmer. With this kind of harvesting pattern, farmers loose on quality of ginger and finally they earn less than the market price. This situation could be avoided if market tie-ups are developed. UTTHAN in past tried to promote semi-processing methods like ‘dried-ginger’. But it did not succeed further. In Ghodajar village farmers said, they did not cultivate vegetables as water source dried up. These families cultivated vegetables in previous years. They said if there is enough water then they could cultivate more vegetables. However they felt marketing the goods becomes problematic. Farmers are increasingly shifting to vegetable cultivation. With this there are more producers and less customers in local markets. In Nalu village about 150 farmers are cultivating ginger. About half of them have dug-wells and remaining are rainfed cultivators. Farmers having irrigation facility are currently connected to wholesalers in Dahod. But they felt they were not getting good price. These farmers were looking for market support.

Conclusion:

With improved resource condition, access and extension services, poor farmers are shifting from subsistence agriculture to value added agriculture. Irrigation cooperatives, women horticulture cooperatives, watershed user groups and self-help groups have emerged as strong interest groups. These groups are progressive and need market extension support for sustained income levels. With this there is clear need for planned growth in value added farming (in both rainfed as well as irrigated farming) and marketing.

Unplanned growth could clog markets. As a result local commodity prices fall drastically. Eventually farmers either get exploited or roll back to subsistence farming. Hence there is need for forecasting, market intelligence, and other support services to sustain livelihoods.

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Market based sustainable on-farm livelihood support systems

Improvement in resource base & increased income generating opportunities

Training & demonstration for value added farming.

Shift from subsistence based farming to value added farming

High returns from value added farming practices

Re-investment in value added farming for S. livelihoods.

Investment in non-productive activities

Role back to subsistence based farming

Increase in commodity supply of similar variants

Proportionately lower demand and reduced prices

Lower returns from value added farming

Absence of Market support

Increase in marketable commodity with variance

Higher demand & sustained market

Sustainable on-farm market linkages and support services

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Sustainable on-farm livelihood support cycle

1. Help farmers to plan in advance

2. Collect & Provide market intelligence

3. Promote collective farming practices

4. Support input supply mechanism

5.Ensure uniformity in commodity, operations & supply

6. Plan collective sowing & harvesting operations

7. Establish market linkages & support services

8. Develop on-farm pick-up services

9. Undertake sorting & grading operations

10. Work out payment mechanism & schedules

11. Facilitate reinvestment planning among farmers

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Value added crops: Current scenario in Dahod.

Sr.no Product name Max.exp/ Rs./acre

Production max./kg/ harvest

Production min./kg/ harvest

Max. Rate / Qt.s

Min. Rate/ Qt.s

Yield Period

Vegetables:

1Brinjal 450 120 100 400 300 Jun-Aug

2Green Brinjal 450 120 100 400 700 Jun-Aug

3Cabbage 364

4Cauliflower 795

5French bean 200 800 700 2000 1000 Jan-Feb

6Gourd 450 200 180 500 200

7Tomato 450 200 180 600 400 Jan-Jul

8Lady Finger 600 100 90 1000 700 Apr-Jun

9Cucumber 714

10Bitter gourd 841

11Cluster bean 450 120 100 500 300 Apr-Jun

12Chori* 1977

13Parval* 1287

14Tindola* 786

15Chilly - 200 160 1500 400 Jun-Aug

16Lemon - 2400 2000 2500 1000 Jun-Aug

17Ginger - 1800 1600 3500 3000 Feb-April

18Garlic

19Peas

20Turmeric

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Value addition to small farms and potential

Product name

Current Prod. per acre (Tons.)

Current prod. per 1/2 acre (Tons)

Potential prod. per acre (Tons)

Potential prod. per 1/2 acre (Tons)

Current Gross income per acre Rs.

Current Gross income per 1/2 acre Rs.

Potential income per 1/2 acre Rs.

Vegetables

Brinjal 4.5 2.25 16 8 13500 6750 24000

Ravaya* 4.5 2.25 5.48 2.7 31500 15750 19180

Cabbage 0 24 12 0 43680

Cauliflower 0 12 6 0 47700

French bn. 0 2.8 1.4 0 14000

Gourd 0 4 2 0 4000

Tomato 5.4 2.7 12 6 21600 10800 24000

Lady Fing. 0 6.4 3.2 0 22400

Cucumber 0 0 0 0

Bitter.Gr. 0 3.2 1.6 0 13456

Cluster.b 3 1.5 2.4 1.2 9000 4500 3600

Chori* 0 3.2 1.6 0 31632

Parval* 0 0 0 0

Tindola* 0 0 0 0

Chilly 0 4.0 2 0 8000

Lemon 0 4.4 2.2 0 22160

Ginger 0 10.4 5.2 0 156000

Garlic 2.8 1.4 0

Peas 0 0

Turmeric 8.8 4.4 0

* Predominantly local varieties

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Variation of prices in vegetables and spices at Dahod Marketyard

Name of vegetable Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Brinjal 230 755 Green Brinjal

Cabbage 265 850

Cauliflower 1840 350 French bean.

Gourd 755 260

Tomato 995 270

Lady Fig. 1615 365

Cucumber 1235 500

Bitter .Gr. 1625 420 Cluster bean.

Chori*

Parval* 2185 1155

Tindola*

Chilly 1510 415

Lemon 1075 2370

Ginger 905 1480

Garlic 4930 1930

Others * Predominantly local varieties

POTENTIAL OF DAHOD TO ABSORB LOCAL PRODUCTION

Production in Kgs.

Urban Population

Per capita availability

Per capita vegetable availability 6338400 112087 0.15kgs

Per capita fruits availability 416500 112087 0.01kgs

Per capita flowers availability

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Market scenario in agriculture: Dahod Trader Response Sheet

Sr.no Product

name

Main vegetables

traded Maximum Rate Qt.s Month

Minimum Rate Qt.s Month

Total quantity in Qt.s

Vegetables

1 Brinjal Brinjal 755 August 230 February 11270

2 Green Brinjal

3 Cabbage Cabbage 850 July 265 February 4497

4 Cauliflower Cauliflower 1840 February 350 December 7200

5 French bean.

6 Gourd Gourd 755 March 260 September 3538

7 Tomato Tomato 995 January 270 July 17258

8 Lady

Finger. Lady Fig. 1615 March 365 September 4216

9 Cucumber Cucumber 1235 July 500 November 587

10 Bitter Gr. Bitter Gr. 1625 March 420 September 937

11 Cluster bean.

12 Chori*

13 Parval* Parval 2185 March 1155 September 139

14 Tindola*

15 Chilly Chilly 1510 June 415 September 8152

16 Lemon Lemon 2370 April 1075 February 987

17 Ginger Ginger 1480 August 905 April 2804

18 Garlic Garlic 4930 January 1930 April 1799

Total qts. 63384 Fruits Varieties

1 Mango 850/qt July 740/qt May 4165qt

2 Papaya

3 Sapota Flowers

1 Roses

2 Gladiolus

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External markets and potential earnings under established

market linkage regime.

Vegetables and Spices

Optimum Production

Returns per half acre land Rs.

Average gross returns Rs.

Name 1/2 acre

plots At lowest

rates At highest

rates Per ½ acre of

land

Brinjal 8 10571 35714 23143

Green Brinjal 8 22286 56571 39429

Cabbage 12 20571 66857 43714

Cauliflower 6 30214 65143 47679

French beans 1 18415 23692 21054

Gourd 2 6143 16143 11143

Tomato 6 25071 57000 41036

Lady finger 3 27771 56229 42000

Cucumber 2 7029 15829 11429

Bitter Gr. 2 8571 18343 13457

Cluster bean 1 6129 12343 9236

Chori* 2 22743 40514 31629

Parval* 0 0 0

Tindola* 0 0 0

Chilly 2 7786 16786 12286

Lemon 3 26654 45692 36173

Ginger 5 78867 95550 87208 * local varieties