Indian Streams Research Journal

ISSN:-2230-7850

A STUDY OF AGRICULTURAL INPUTS MARKETING IN INDIA

ORIGINAL ARTICLE

Parthasarathi Senapati
Asst.Professor,
Kushagra Institute of Information and management science(KIIMS),Cuttack .

Abstract:-Agriculture has been the backbone of the India' economic system. It is the main source of
economic livelihood for the majority of population of our country .The focus of the current agricultural
policy of the country is to increase agricultural productivity. This will help in alleviating poverty in the
country and sustaining employment in the sector. Agricultural inputs and related services are the basic
requirements for agricultural sector. Raising the productivity of the crops, vegetables, and livestock
depends on the quality farm inputs and services. Agribusiness is expected to be booming sector in the next
decades. Agribusiness sector consists of businesses that supply farm inputs such as fertilizers, pesticides,
farm machineries, etc. as well as sales and distribution of farm produces and related services. An efficient
delivery system for agricultural inputs and services can play a pivotal role in the agricultural productivity.
Farmers and Agri-input dealers are experiencing difficulties in accessing and supplying the agricultural
inputs. The constraint faced by farmers in accessing the farm inputs are mainly due poor distribution
system in country. The timely availability of farm inputs and service is very much required if we want
higher agricultural growth and welfare of farming community. The study tries to explore the existing
marketing distribution network of farm inputs in the country. The paper also highlighted the recent
changes that are happening in the Agri-input marketing. It also intends to suggest strategies and
recommendations that can help in developing an efficient inputs and service delivery system for the
farming communities.
Keywords:Agricultural inputs, Input delivery system, Marketing channels and Agribusiness

www.isrj.net

A
ORGANISATIONS
STUDY OF AGRICULTURAL
OF DEPRESSED
INPUTS
CLASSES
MARKETING
IN LATE COLONIAL
IN INDIA TAMIL NADU

INTRODUCTION:
Agricultural marketing concerned with two aspects that is the marketing of the farm produces and
marketing of farm inputs that are consumed by the farms to produce Agricultural produces. Agriculture and
allied sector contributes 24% of the total GDP and provide employment to around 67% Indian population
(Planning Commission, 2002). Use of chemical fertilizers and pesticides and higher farm mechanization
have played a positive role in increasing agricultural productivity and in making India self-sufficient in
food grain production. In the 21 st century, the challenges in Indian agricultural sector are quite different
from the last decades. The higher emphasis to produce more food from less land with declining natural
resources is a difficult task for the farmers. To keep up the steady of growth farm output a careful economic
evaluation of inputs like seeds, fertilisers, irrigation sources etc are of considerable importance. The
impressive growth in agricultural production since independence has been generated by higher input use,
particularly purchased inputs as well as technology induced productivity improvement. The key inputs
which changed the face of agriculture in India include HYV (High Yielding Variety) seeds, chemical
fertilizers, irrigation, pesticides, farm machineries and equipment, credit and labor.
A specialized marketing effort is required to reach the farmers who are spread across the nooks and
corners of the country. The paper tries to reveal the existing marketing and distribution network for the
inputs that are used in the agricultural production.
LITERATURE REVIEW AND OBJECTIVE:
Agricultural marketing is a dominant topic in the Indian marketing literature. The main focus is on
marketing of agricultural produce and that of agricultural inputs like fertilizers, pesticides, seeds and farm
machineries (Jha, 1998) [10].
According to Varshney(1997, p.251) [11], the importance of an efficient marketing system for farm inputs
may be judged by the following:
i.Farm products are produced in the country side. The effect of change in production method can , therefore,
be realized only if the farm inputs reach the farmers in time at the least cost.
ii.The use of modern inputs by farmers largely depends upon the spread of information about them. The
marketing system has to perform this function.
iii.An efficient marketing system for farm inputs is essential for the development of the inputs
manufacturing and supplying industries in the country.
Prof. Sukhpal Singh (2004) [4] stresses that agricultural inputs are at the heart of rural marketing
and rural development. They support farm production which is the source of income for a very large part of
rural population and create market for other consumable and durable products in rural areas.
Objectives and Methodology: The general objective of the study is to evaluate the marketing agricultural
inputs in country and to reveal the current structure of agricultural inputs marketing system and
distribution. Further, the study also focuses on the difficulties and challenges faced by farmers, input dealer
in the farm inputs and service sector. This study is relies on the information and data collected from most of
the secondary sources and from different research papers ,books, documents etc. for to make this study
more useful and relevant.
General aspects of Agricultural inputs marketing:Agricultural marketing has two aspects that is 1)
Marketing of inputs 2) Marketing of outputs. For production in large varieties of inputs are required .A
steady supply of these inputs is necessary for higher agricultural productivity. As it is evident from the fig-1
that the agricultural marketing is part of the Agribusiness .Marketing is needed to supply and distribute right
quality of seeds, fertilizers, pesticides, etc. at right time and right place, at an affordable price, Similarly at
the time of production various farm consultancy services and supports are required. The marketing of
output is as important as the marketing of inputs. The paper tries to focus on the existing system of
Agricultural input marketing.

Indian Streams Research Journal | Volume 43 | Issue 512| June

| Jan 2014
2014

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ORGANISATIONS
STUDY OF AGRICULTURAL
OF DEPRESSED
INPUTS
CLASSES
MARKETING
IN LATE COLONIAL
IN INDIA TAMIL NADU

Fig-1, Source: www.fao.org

The Agricultural inputs can be classified into Consumables and Durables/Capital inputs. The
consumable Inputs can be seeds, fertilizers, pesticides, etc. On the other hand the durable capital inputs can
be tractors, harvesters, threshers, pump sets, etc.
Classification of Agri-inputs
Consumables

Durables

Seeds

Tractors

Oil and lubricants

Harvesters

Fertilizers

Threshers

Agrochemicals,etc

Tools(levers, cultivators, etc)

Fig-2,[source: Based on Singh(2001,p.7)]

Agricultural marketing involves the process of developing, pricing, promoting, and distributing
of farm specific product & service leading to exchange between farmers and intermediaries and urban
market which satisfies consumer demand and also achieves organizational objectives. It is a two-way
marketing process where any of the following transactions may take place: (1). Urban to Rural farmers: It
involves selling of products & services by urban markets in rural farming areas areas. These include
Pesticides, farm machineries products, Durables etc. It is major part of agri-input marketing. (2). Rural to
Urban : This is basically agricultural marketing where a rural producer seeks to sell his products in Urban
Market seeds, fruits & vegetables, milk and related products, forest produce , spices etc. Rural to Rural : It
involves selling between two villages close to each other relating to farm inputs like seeds and related
produces like agricultural tools, cattle, carts etc. Rural marketing scientists term this rural to rural
transaction as Developmental marketing as it involves concern for profit along with the concern for society.
Participants include-- input manufacturers, dealers, farmers, opinion makers, govt. agencies and traders.
EVOLUTION OF AGRICULTURAL INPUT MARKETING:
It consists of following phases:
Phase I(From Independence to the middle of sixties)[3]: Agricultural Produces like Food grains,
Industrial inputs, cotton, oilseeds, sugarcanes etc. are the main focus. The marketing focus for the firms
supplying agricultural inputs was on fertilizers, seeds & pesticides etc. The artisans like blacksmiths,
carpenters, cobblers & pot makers in rural areas who are supplying bamboo baskets, ropes, window & door
frames, tools like ploughs, etc. received secondary consideration. Market for Tractors, harvesters,
threshers, pump sets etc. was insignificant.
Phase II(From middle of 1960s(Green Revolution) to mid-nineties): During the period of green
revolution the introduction of scientific farming practices have transformed villages into booming centers
of business opportunities .The demand for agricultural inputs increases. Better irrigation facilities, soil
testing, use of high yield variety of seeds, fertilizers, pesticides, and employment of machinery like power
tills, harvesters, threshers etc. transformed the rural picture. Marketing of agricultural inputs attends higher

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ORGANISATIONS
STUDY OF AGRICULTURAL
OF DEPRESSED
INPUTS
CLASSES
MARKETING
IN LATE COLONIAL
IN INDIA TAMIL NADU

significance. Two separate areas of events developed that is the traditional agricultural Marketing & the
marketing of agricultural inputs from Urban areas to rural farmers. Marketing of produces from rural
received extensive attention.
The establishments of agencies like Khadi & Village Industries Commission (KVIC), Girijan CoOperative Societies and special attention of govt. to promote these products. Village industries thrived and
products like Handicrafts, soaps, safety matches, crackers, handloom textiles etc. were sold in urban
markets on large scale.
Phase III (Middle of 1990s to 20th century): The marketing of household consumables and durables
which was not the focus during the earlier phases was now attends greater significance. Earlier the rural
market for the products from the urban areas was not large enough. These markets were remote, spread
across distant areas. Small villages were far and wide making it difficult & expensive.
Phase IV(21st century the era of Developmental marketing):The objective of present rural
agricultural marketing is to enhancement of quality of life by satisfying the needs and wants of customers. It
tries to offer a broad and integrated solution which involves a set of interconnected products & services.
Faster development in Rural India, tied with increase in purchasing power because of scientific farming,
changing lifestyle and consumption patterns, increase in education, social mobility, improved means of
transportation & communications and other infiltrations of mass media like TV and its various satellite
channels have exposed rural India to outside world and hence their outlook to life has changed. The focus is
to integrate the rural population to the national mainstream and growth.
The 4 P's in Agri-input marketing [3]:
The 4 Ps of marketing have to be altered as per the requirements and expectations of the rural farming
population.
PRODUCT STRATEGY
The farmer consumers are more interested to know the technical details or the performance of the
agricultural inputs. There is higher importance of product knowledge and advisory services provided by the
technicians. The rural farmers markets generally show their liking for simple and easy to use products. The
packaging of the product should give lot of pictorial demonstration and guides for convenience and easy to
use. Spending too much unnecessary additional packaging increases the cost and does not add any
convenience. The product literature on the cover packaging and in the user manuals should be expressed in
simple and easy to understand local language. The information on the product should provide the clear
functional benefits and in an unambiguous manner. The products should be able to stand up to the expected
needs rural farmers and provide them value for money they spent.
PRICING STRATEGY
Agricultural inputs and industrial products share similar response patterns from the farmer users.
It is being found that buyers of agricultural inputs products are more quality conscious than price conscious.
Response to the different offering is likely to be influenced by the price factors. The rural customer is price
sensitive and expects value for money. Therefore, the pricing has to be in accordance with their expectation.
Marketing companies have to develop strategies that can make their products cheap for rural customers.
Moreover the concept of value analysis should be applied to rural markets to make the products affordable.
The technique value analysis involves replacing costly raw materials with inexpensive ones, without
sacrificing quality and functionality. If the product belongs to an expensive category , then the positioning
has to be done in a way that the product is perceived as a bundle of utilities by the rural customer, which still
provides value for money in this category.
Place Strategy: The levels of channel and the network intensity required for agricultural inputs are
relatively higher than that required for industrial products. The channel act as a dispenser of agricultural
inputs. The channel plays the role of both Pulling as well as pushing function. It is supported by
advertisement, demonstrations, personal contacts and other extension means. All possible efforts should be
made to make the products available near the target audience. Direct contact with the local suppliers and
retailers needs to be established. Cooperative societies, public distribution system, feeder markets, village
weekly markets fairs and festivals can be utilized to ensure adequate distribution of agri-inputs products.

Indian Streams Research Journal | Volume 43 | Issue 512| June

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ORGANISATIONS
STUDY OF AGRICULTURAL
OF DEPRESSED
INPUTS
CLASSES
MARKETING
IN LATE COLONIAL
IN INDIA TAMIL NADU

Formulating an integrated and efficient channel of distribution will always remain remains a challenge for
the agri-input marketers. Several companies in this sector have established distribution system that able to
cater to the rural farming people efficiently.
Promotion Strategy: The agri-input consumers share many similarities with the consumer goods
customers. For example the number of prospects to be reached is large, diverse and spread across different
regions similarly the product groups requires elaborate market segmentation. The promotional activities
should be undertaken through media that are comfortable and appropriate for the rural areas. Positive wordof-mouth through local reference groups and opinion leaders is considered as the key to success in the rural
markets. Traditional art forms such as puppet shows and street plays or creating awareness through village
panchayat members can prove to be fruitful. Other methods like distribution of pamphlets, use of mobile
vans for publicity and advertising through wall posters can also assist in establishing a relationship with the
rural consumers.
POTENTIAL OF AGRI-INPUTS INDUSTRIES:
1. Large Population in rural areas which creates opportunities for the Agri-input industries
2. Rising Rural Prosperity that improves modern farming practices and use of durable farm equipments.
3. Growth in Consumption which show rise in purchase of inputs.
4. Changing Lifestyle to adopt modern farming practices.
5. Market Growth Rate is high due to awareness
FACTORS INFLUENCING AGRI-INPUT MARKETING :
1. Socio-cultural factors that influence the purchase decision adoption of modern farming practices and
equipment
2. Migration of rural population to urban areas which shows less dependence on agriculture for livelihood
or/and increase farm mechanization that require less dependence on laborers.
3. Occupational pattern with higher education
4. Literacy is required to understand the modern farming practice and products
5. Land distribution and use also increases or decreases the input consumption
6. Development Programmes carried out by govt. and semi-govt. agencies
7. Communication Media which has been spreading it's network gives newer opportunity for agri-input
industries
8. Credit availability through banks and co-operative system has made easier for the farmers to modernize
their farming
Problems and Limitations of Agri-inputs Marketing:
Main Limitations are ,
1. Vastness of the rural farming areas with different type of cropping patterns makes it difficult for agriinput industries to push their efforts.
2. The demand for agri-inputs are uneven a making it difficult for sustain effort from the industry side.
3. Transport Problem with lack of all-season roads in rural areas for making available the pesticides,
fertilizers at the time of need.
4. Communication infrastructure consisting of posts, telephones, internet etc. are largely inadequate.
5. The problem of storage of essential inputs .The Central Warehousing Corporation(CWC) and State
Warehousing Corporation(SWC) don't extend their services to the rural areas. The co-operative societies
managed the warehouses at mandi level .They provide services to members only.
6. The number of language and dialects vary widely from state to state, region to region and even from
district to district. The difficulties is in developing print advertisement and pictorial depiction to achieve
greater acceptance
7. Rural agricultural input marketing requires large marketing organization and staff .
8. It is not possible to have direct outlets in each rural market; firms need to have service of dealers, which is
not easily available.
9. Rural farmers have identified market locations for different items of their requirements. Thus depending
upon the purchase habit of the farmers, the distribution network of different commodities has to be
different.

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ORGANISATIONS
STUDY OF AGRICULTURAL
OF DEPRESSED
INPUTS
CLASSES
MARKETING
IN LATE COLONIAL
IN INDIA TAMIL NADU

RECENT DEVELOPMENT IN AGRI-INPUTS MARKETING:

In recent times retailing in rural areas with big stores is becoming a tends. Big corporate houses are
making rural forays with wide variety of solutions for farmers and consumers. For example corporate
houses and entrepreneurs like ITC's Choupal Sagar, HLL's project Shakthi and Mahamaza are some of the
models which are in news. There is no definite evidence of a successful rural retail formats which solve all
the problems of agriculture and farmers. However, corporate ventures into rural retail are expected to bring
more research and innovation. The Godrej Adhaar, the rural retail initiative of Godrej Agrovet Ltd operates
a chain of 18 stores providing a host of services to farmers .The other formats operating successfully in the
rural area are, Choupal Sagar, DSCL Haryali Stores,M & M Shubh Labh stores, Escorts rural stores, Tata
Kisan Sansar,and Warna bazaar in Maharashtra,etc.
CONCLUSION:
An efficient agricultural marketing is essential for the development of the agricultural sector. The
initiative of the govt. much on giving incentives for increased production in farming sectors but the
development of marketing system provides greatly to the commercialization of subsistence farmers. The
liberalization of agricultural markets is becoming worldwide trend. The policy and programmes of
Government have to address the issues of marketing liberalization and overcoming the limitations faced by
various Government and private organisation involved in agricultural marketing.Liberalization of world
trade in agriculture has provided new opportunities to the farm sectors to access markets of agricultural
commodities worldwide. However, to actualize these market access opportunities, reforms have to be
brought in agriculture sector to remove all barriers,which introduce inefficiencies and monopoly trends in
the functioning of agricultural markets.
REFERENCES
1. Gopalaswamy, T.P, (2008) Rural Marketing Environment, Problems and Strategies, Vikas Publishing
house, New Delhi.
2. Badi, R.V and N.V Badi (2006), Rural Marketing, Hhimalaya Publishing House, New Delhi
3. Dogra, Balaram and Shuman, Karminder, (2008) Rural Marketing: Concepts and practices, TATA
McGraw- Hill Publishing house, New Delhi.
4. Singh, Sukhpal Rural Marketing: Focus on Agricultural inputs, (2008) Vikas Publishing House, New
Delhi.
5. Kashyap, Pradeep and Raut, Siddartha (2007), The Rural Marketing Book, Biztantra, New Delhi.
6. Velayudhan, Sanal Kumar (2007), Rural Marketing: targeting the noon urban consumer, Sage
Publication, New Delhi.
7. Krishnamoorty, R (2008), Introduction to Rural Marketing, Himalaya Publishing House.
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(Delhi). 1988.
10.Jha,Mithileshwar(1998),Rural marketing:some conceptual issues,Economic and political
weekly,Vol.13(9),1998
11.Varshney,J.C.(1997),Rural marketing-A study with refrence to Farm inputs,National publishing
House,Jaipur,pp.251-255.
12. Agricultural Price Policy in India by Raj Kumar Singh., Published by Print well Publishers (Jaipur).
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(New Delhi). 1992.
14. Development of Agricultural Marketing in India by Dr. Rajagopal Published by Print well (Jaipur).
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16.Awadhesh Kumar Singh, Satyaprakash Pandey,Rural marketing,New Age International,2007.

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