Role of ICT in Agricultural Marketing and Extension

Satyaveer Singh*, Dr Krishna Gupta** Introduction In India Agriculture was practiced formerly on a subsistence basis; the villages were self sufficient, people exchanged their goods, and services within the village on a barter basis. With the development of means of transport and storage facilities, agriculture has become commercial in character; the farmer raises those crops that fetch a better price. Marketing of agricultural produce is considered as an integral part of agriculture, since an agriculturist is encouraged to make more investment and to increase production. Thus there is an increasing awareness that it is not enough to produce a crop or animal product; it must be marketed as well. Agricultural marketing involves in its rudimentary form the buying and selling of agricultural produce. This definition of agricultural marketing may be accepted in age old days, when the village economy was more or less self-sufficient, when the marketing of agricultural produce presented no difficulty, as the farmer sold his produce directly to the consumer on a cash or barter basis. But, in modem times, marketing of agricultural produce is different from that of olden days. In modern marketing, agricultural produce has to undergo a series of transfers or exchanges from one hand to another before it finally reaches the consumer. In light of the situation, the Government of India (GoI) has placed inclusive growth as its overriding goal in its 11th Five Year Plan (2008-2012). It prioritizes reduction of regional and rural-urban disparity as well as chronic poverty through inclusive growth. GoI highlights private sector-led agricultural growth through greater crop diversification, higher value addition, and improved farmer-market linkage, as an important driver for poverty reduction and rural economic growth. In doing so, Government emphasizes the need to ensure that small and marginal farmers also get benefitted. It lists out the development of agribusiness and contract farming as a means to integrate these small land holders into the agricultural value chain while specifically stating the importance of giving the poor adequate bargaining power through group formation. It aims at increasing private sector investment in agribusiness and enhances the integration of small farmers, including female farmers, into the agricultural value chains for high value crops (fruit and vegetables) by improving physical and institutional linkages between various stakeholders. It does so through the following four
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components: (i) agribusiness market infrastructure development; (ii) support infrastructure (e.g.- road, transport, packaging, power, water supply etc ) development; (iii) market intelligence improvement; and (iv) capacity building and value chain linkages strengthening. More specifically, the integration of the value chain and key constraints to agribusiness development by establishing (i) Collection Centres (CC) in producing areas to provide basic infrastructure including mechanical harvesting and post harvest treatment equipment, storage, grading, sorting, packaging, and primary processing; (ii) agribusiness centres (ABC); providing competitive trading facilities; marketing intelligence; storage including pre-cooling and cold store facilities; sorting, grading and agro-processing facilities; and (iii) perishable cargo centers (PCC) at airports and railways, promoting end to end value chain linkage and providing cold chain facilities linked to the value chain. Importance and Objectives of Agriculture Marketing The farmer has realized the importance of adopting new techniques of production and he is making all out efforts for more income and higher standards of living. As a consequence, the cropping pattern is no longer dictated by what he needs for his own personal consumption but what is responsive to the market in terms of prices received by him. While the trade is organised the farmers are not conversant with the complexities of the marketing system which is becoming more and more complicated. The cultivator is handicapped by several disabilities as a seller. He sells his produce at an unfavorable place, time and price. Many times rather more than often he is a passive onlooker to the exploitative practices of his own produce. The major objectives of the agricultural marketing areas under: to enable the primary producers to get the best possible returns i.e price information ( When, Where and How Much Quantity) to provide facilities for lifting all produce, the farmers are willing, to sell at an incentive price, to reduce the price difference between the primary producer and ultimate consumers at reasonable price without impairing on the quality of the produce (MIS) and; to provide a transparent platform for auctioning system in Mandi Yard (EAuctions) to provide storage facilities, charges and availability of godowns etc to provide adequate information on transport facilities which could enable him to take his surplus produce to the mandi rather than dispose it of in the village itself to the village money-lender-cum-merchant at low prices to information on good agricultural practices

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to endeavour for a Agriculture extension and farmer outreach programmes face three major challenges Cost effective outreach, solutions tailored to needs of individual farmers and an image that is farmer friendly

Thrust Area of Information Communication Tool in Agriculture Marketing In order to achieve this objective, a number of thrust areas have been identified where Information Technology (IT) can play a crucial role in leveraging traditional methods of agricultural marketing. Some of these are: 1. 2. 3. 4. 5. Agricultural Market Intelligence System (AMIS) Electronic Auctioning System Electronic Display Boards (Rural Connectivity) Agricultural Extension through ICT Virtual Markets

1.

Agricultural Market Intelligence System (AMIS)

Agricultural marketing essentially deals with post harvest management of produce and finding competitive markets for getting best available returns. In order to reduce the risk of marginalisation and vulnerability of small farmers, who constitute about 76.3% of total farmers of the country, it is necessary to develop an Agricultural Market Information System that is accessible to the resource poor farming community. Internet technology based applications on agricultural resources are expected to facilitate agriculture-based development of rural and economically backward areas in the country. Design of agricultural market information system is crucial for the support of various management systems at the national, state, district and village levels.

The Agricultural Marketing Information System (AMIS) model will be an informatics model aimed towards developing a reliable and integrated system, wherein all the
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information associated with marketing is readily available. This informatics model is based on multi-database information system; knowledge based expert system; geographical information system; and on-line distributed query capabilities. Informatics for agricultural marketing information system requires coordinated inter sectoral approach and application of appropriate information technology tools in the area of agricultural marketing (involving storage, packaging, infrastructure), agricultural extension and transfer of technology, agro-meteorology, agri-business, quality assurance and agricultural inputs (viz. seeds, fertilizers, manures). The AIMS also play an important role in creating awareness for wholesale and retail price information among the stake holders. A cost and margin study for each major commodity is to be conducted in the country. At each municipal/consumer market, Government should mandatory place an electronic display board and flash out the Maximum Price and Minimum Price of the commodities. The maximum and minimum price can be calculated on the finding of cost and margin study and other expenses as under :Max Price (Commodity) = Cost Margin Study + Variation Factor + Marketing Cost 15% Cost Margin = Input Cost + Pesticide + Labour + Sorting/Grading + Packaging + Transportation + Market Charges + Losses (PHM) Variation Factor = Variation factor based on market escalation in all above items Marketing Cost = Middlemens share from wholesale to consumer market and losses

Marketing cost will differ from place to place and commodity to commodity. It is depends on the location, distance, and transportation etc. The Market Intelligence division take care all the factors before disseminate the information. A distributed database is to be developed and connected with the concerned Electronic Display Boards in the markets. The internet and mobile network have the potential to provide agro-information services that are i) affordable, ii) relevant (timely & Customised), iii) searchable and iv) Upto date. Large sections of the farming community, particularly the rural folk do not have the access to the huge knowledge base acquired by agriculture universities, extension centres and businesses. While tele-centres are beginning to dot the Indian rural landscape, one of the big barriers remains the lack of agro content that is i) in the language of farmers, ii) relevant to their needs and iii) delivered in a form that is of immediate use. In the beginning it creates awareness among the farmers & consumer and gradually concerned state government fixe up the price just like a industrial product. It would be a transparent system and everybody knows who much farmers share in consumer rupee. 2. Mobile Electronic Auctioning System (MEAS) In the Mandi there is hundreds of Traders/Commission Agent, who performs bidding. At the peak time 3 to 4 hours, these traders perform the bid 3 to 5 lots in a minute. Some
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time farmer does not know that what price his produce fetches. At the same time APMC staff also not updated the quantity of the produce. It takes at least one day the find out the how much quantity of a particular commodity arrives in the market yard and also the same situation of the commodities maximum, modal and minimum price of the bidding. In the existing Market Information System instant or online information of the commodity arrival and price information is not available in the State/Central Portals. To overcome the above problem and make available real time online market information IT can pay an important role. The Mobile Electronic Auction System can be put in place in each market. The benefit of the mobile electronic auction systems is to reduce the capital investment (Big Auction Hall, Display Hall and Hardware cost of Computers etc). In the Mobile Auction System a central Server is to be placed in the Market Yard and through Wi-fi or wireless and connect with the mobile van. In the mobile van a Big Size Electronic Display Board is to be installed and through remote key pad bidding information to be updated in the server. One or more Mobile Van can serve the whole bidding process of the market yard in a transparent manner and also provide real time auctioning information in the market yard. The real time information will also flash out at the national or state as per the need. To install the electronic auctioning system in the market yard certain changes are required in the APMC functioning. Enforcement for total auction on E-platform, prior auction produce to be graded in lots and information of farmers, commission agents, quantity etc to be fed in the computer. The complete process of auction will be automated and real time database is maintained. Benefit of MEAS Introducing the Electronic Auctioning System for the Mandi Organizations is beneficial in many aspects i) Transparency: The first and important objective of the system is to increase the transparency. Normally and traditionally traders use their own ways to auction and there is not any standard or single system for all the traders. By this approach the new buyer feel hesitate to buy and due to this approach, the cash transaction increases instead of credit. The buyer will be able to see the price from even the 60 meters distance from the Fad and according to his need he can come forward for bid. ii) Standardize the Processing: At the moment the system is on the testing state and with practical feedback and improvements, this system will become a standardized system. All traders will come under one roof and they themselves realize that they have got a systematic and easy working. iii) Strong Database: The real time database will be immense use in flash out the online price trends at the State/National Importance markets. The historical database will be maintained and APMC can have information of the years back which can be useful for future analysis in price trends and other analysis.
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iv)

SMS Bidding: Registered buyers can also participate in the bidding through their mobile phones.

Disadvantages of (MEAS) Mobile Electronic auctions have two main disadvantages. The first is that all information needs to be keyed into the system in the form of numbers and text. It is difficult, however, to describe some products this way. EAS intends partly to eliminate this disadvantage by transmitting visual information, for example video pictures, using ISDN (Integrated Services Digital Network) lines, once such services become economical. The second major disadvantage is that a large number of farmers and traders consider the social contact at traditional auctions highly important. EASE, however, sees its role as a provider of additional or complementary services. The company aims to replace traditional auctions by electronic auctions, or to introduce them in new areas, where social contact has little or no importance or where the advantages of an electronic auction outweigh those of the more traditional system. Traditional auctions can still be held parallel to the electronic auctions, if this is desired. 3 Rural Connectivity for Agricultural Market Information

Every change, including agriculture in developing countries farmers is facing old and new problems, including the impact of increasing global trade. The primary objective of a market information service is to increase the degree of knowledge of market participants (Framers, traders and consumers) about the market. Improved access to information leads to an improved understanding of the working of the market. This means that the decisions made by the participants should be more informed and profitability of their operations should be enhances. Through Electronic Display Boards at a Village which is a junction point of 7-8 villages by which produces goes to different markets to be installed. Display board to be installed on roadside as per the guidelines of Supreme Court and visibility to the viewers. Information will be updated by GSM, CDMA technology. The existing system will equipped with power supply on regular basis at least 4-5 hours through battery back up. Normal working hours of systems will be 6-10 AM and if power comes then it will work for 6 AM to 6 PM.

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Marketing Models Within the MIS there has to be the means of interpreting information in order to give direction to decision. These models may be computerized or may not. Typical tools are: Time series sales modes. Brand switching models. Linear programming. Elasticity models (price, incomes, demand, supply, etc.). Regression and correlation models. Analysis of Variance (ANOVA) models. Sensitivity analysis. Discounted cash flow. Spreadsheet 'what if models.

These and similar mathematical, statistical, econometric and financial models are the analytical subsystem of the MIS. A relatively modest investment in a desktop computer is enough to allow an enterprise to automate the analysis of its data. Some of the models used are stochastic, i.e. those containing a probabilistic element whereas others are deterministic models where chance plays no part. Brand switching models are stochastic since these express brand choices in probabilities whereas linear programming is deterministic in that the relationships between variables are expressed in exact mathematical terms. The role of Information Systems in devising Marketing strategies has been increasing over the years. 4. Extension through ICT Application

Based on the results from Kisan Survey the coverage of Radio as a potent mechanism of entertainment are upto 75% farmers. Hence entertainment programme of Radio should be broadcasts after dovetailing with agricultural marketing information. Such coverage
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can effectively utilize FM technology and agriculture related information can also be transmitted along with entertainment preferable on regional basis. One of the facts that emerged out of Survey is that about 41 % farmers are dependent on Market Yard for obtaining information. This establishes the need to open an Information Centre in each APMC and dissemination of such information through Electronic Format, Cable TV, after updating it at an appropriate time. Today knowledge management has made rapid strides. Though it is obviously not possible to trickle down the same at the grassroots so quickly as desired, however the objective can be achieved putting small electronic stickers at Panchyat Level. These stickers should be potentially used for diffusing market prices and social messages across the faming community. The survey under reference clearly indicates the vulnerability of 17% farmers and middle level standard of 65% farmers. All these farmers face sever difficulties in taking credit from banks and other financial institutions. Therefore, a complete package containing essential information for getting loan from banking system can be prepared and peculate to the farming community through APMCs, Kissan Call Centres and Gram Sewak, Websites, Village Serice Centres. Farmers are completely devoid of the information about taxes and other charges on commodities. This issue can be easily addressed by arranging one day workshop/training at APMC level for the farmers within their area of operation and also through portal. A complete regional database (Agri-Rural Development Scheme, Marketing of milk, health & Education) or effective linkage with the already available database at district or state level for diffusing the information at market level be ensured. Each Mandi should be projected as a Hub and micro information centre and it should also be backed up with minimum 128 kbps bandwidth. In the context of changing economic environment a self contained programme may be organized at Panchayat or Mandi level for the farmers so as to enable then to cope with the emerging challenges (being equipped with information and knowledge). Similarly, programmes for agriculture & agricultural marketing related information may be organised to impart necessary training to farmers so that they may be aware of modern technology and agricultural marketing. These farmers in train will act as TOT for other farmer brethren. Such a self-driven training is a must in the preventing circumstances. Post Harvest Management training is an another area where a lot remain to be done. Such programme will unable farmers to take right decision at the right time and simultaneously equip themselves with the modern trends of marketing system.

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5.

Virtual Markets (Farmers Market)

There are unexplored potential for electronic media in domestic as well as international agricultural marketing. A agricultural producer is facing unrelenting pressure for efficiency, myriad choices and marketing volatility, brought on by discerning consumers, qualityconscious buyers and a global market place. In order to compete and thrive in an era of constant changes, there is a requirement of a pro-active mindset, an intimate knowledge of production costs and a detailed knowledge of the quality of the commodities produced. Intenet levels the playing field in agriculture. It allows the disadvantages to compete with advantages, the small to stand on equal footing with the large, those who live in the rural hinterlands to access the same information and worldwide markets as those who live in the cities. The creation of the Internet is ushering in a new era of agricultural marketing using 1) Website electronic store fronts or profit centers, or 2) Database marketing, including Internet Commodity (Virtual Markets) In the use of Information Technology Virtual Agricultural Markets can be created. A group of famers registered the farmer markets in the net and upload the available agricultural commodities on the virtual markets on daily basis. Buyers can viewed the farmer market portal and as per the need he can quote the price of commodities. With a mutual consent they can sell and buy their produces. Govt should provide a platform for easy and transparent B2B business rules. Govt should also provide litigation redressal system in this process so that poor farmer can be cheated.
Advantages of Farmer Markets

The main advantages of Farmers Market (FM) when we compared to traditional markets, as perceived by the users of FM are that costs are reduced, the operation of the auction is more transparent and prices are less likely to be influenced by specific and local circumstances. These points are elaborated below: 1. Transportation costs are directly related to stock sold. There is no need to transport the products to the traditional market places any more. Thus the products are only moved when sold, and because the buyers are able to schedule the routes of their vans and lorries more effectively with the information from the electronic catalogue, costs are minimised. 2. The fees for participating in FM are less than those associated with traditional markets, and travel and accommodation expenses are also saved. Furthermore, the bidders tend to stay for the period of an electronic auction, whereas the attendance of buyers at traditional auction places tended to be erratic. A further advantage is the ability of FM to offer additional, previously unavailable services. Data on past and current auctions is stored in an electronic format, allowing FM to perform analysis of trends in supply and demand comparatively easily. Such information is not only more up-to- date than was previously available from traditional auctions, but it can also be supplied relatively cheaply.

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