Government

Schemes/Policies
for marketing-Rice

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 Out line
• Introduction

• Government schemes for Rice

• Government policies for marketing Rice

• Marketing organization

• References

• Questions and conclusion

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 INTRODUCTION
 Rice is the seed of the monocot plants Oryz sativa
(Asian rice) or Oryza glaberrima (African rice).
 As a cereal grain, it is the most important staple
food for a large part of the world's human
population, especially in East Asia, Southeast Asia,
South Asia, the Middle East and the West Indie
 India is one of the world's largest producer of
white rice accounting for 20% of all world rice
production.
 Rice is India's preeminent crop, and is the staple
food of the people of the eastern and southern
parts of the country

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 Economic, Market And Institutional Integration
Developing countries are the main players in the
world rice trade, accounting for 83 percent of exports
and 85 percent of imports.
The concentration is particularly high on the export
side, since five countries (Thailand, Viet Nam,
China, the United States and India) cover about
three-quarters of world trade

This situation is in contrast to the fragmentation of

import markets and the wide year-to-year fluctuations
in individual countries’ purchases, resulting from the
fact that importers do not rely consistently on the
international market for rice supplies, but only as a last
resort to fill the gap caused by a production shortfall.

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GENERAL THRUST OF RICE GOVERNMENT POLICIES
Government support to producers in developing countries
concentrates mainly on research in improved or hybrid rice
varieties, investments in irrigation, preferential credits,
extension and distribution of improved seed. Intervention to
influence prices is also common - through procurement
purchases or releases from stocks, or through changes in trade
policies.
In developed countries, much assistance to the sector is
conveyed through direct payments and through price
support. Government often plays an important role in
the first phase of the marketing cycle, by
procuring paddy at minimum producer
prices.

Cont..

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Some governments oblige millers to purchase paddy
at a predetermined price and to charge fixed mark-
ups at each stage of the marketing process, while
others distribute rice at fixed retail prices.
It is common practice to manage rice stocks
or to adopt trade policy measures in order
to stabilize domestic market prices.
Trade measures, especially tariffs, are widely
used to protect domestic rice markets. Despite the
relatively high WTO (World Trade
Organization)-bound tariffs, rice imports are
often subject to “Special Safeguards” in country
schedules.
The role of state companies in managing
international rice flows is also important,
although such companies do not usually have
monopoly privileges and they share their trade
functions with the private sector.
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REVIEW OF RICE POLICIES FROM AWTO PERSPECTIVE
Bound tariffs
Bound tariff rates for rice are generally high, often over 100
percent.
Some countries (India, the Dominican Republic and Panama)
recently renegotiated tariff bindings to higher than the originally
agreed levels, alleging that the latter provided insufficient
protection for their domestic sectors.
Applied tariffs
Applied tariff rates are often set equal to bound
tariffs when international prices are low.
However, their level tends to change frequently,
depending on the domestic and international
market situations, contributing a high level of
Cont…
uncertainty to the world rice economy.

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Tariff escalation

Tariff escalation is less important for rice than for other

commodities, because of the relatively small volume of trade of
paddy or unhusked rice.

Nonetheless it should be noted that tariffs increase according to

the processing stage and are much lower for paddy or husked rice
than for milled rice.
Special Safeguards (SSG)

Several countries have reserved the right to use the Special

Safeguard (SSG) provisions; however, only rarely have they been
invoked for rice.

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 Non-tariff barriers

Phytosanitary barriers are less

important for rice than for other
commodities.

Certain restrictions on rice imports from

Viet Nam and Thailand are in force in
several Latin American and Caribbean
countries on phytosanitary grounds,
influencing the pattern of trade flows into
the region.

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 Export subsidies
Export subsidy reduction commitments have
been made under the Uruguay Round
Agreement on Agriculture (URAA) by
Colombia, Indonesia, Uruguay, the EC and
the United States.
Proposals for further reduction commitments are
likely to meet opposition from the EC.
Other issues have arisen in relation to export
competition in rice, in particular the granting of
export credits by the United States of America.
It should be noted, however, that export
credits are also commonly used in
government-to-government adeals,
although there is little information
available in connection with such
practices
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 Government Schemes -Rice

Government of Tamil Nadu is

implementing various schemes

An aim to uplift the status of farmers

and sustain their livelihood

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 Cereals Development Programme
This programme is implemented in
all the districts except Chennai and
Nilgiris
NFSM – Rice operating districts of Pudukottai,
Tiruvarur, Nagapattinam, Ramanathapuram and
Sivagangai.
It has been programmed to
distribute quality seeds to increase
the rice production.

This scheme will be implemented

during 2011-2012 with an outlay of
657.50 lakhs.

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 National Food Security Mission
National Food Security Mission aims to
ensure food and nutritional security for
all.
This scheme was introduced in the
year 2007-2008.

An objective of the scheme is to

increase the production and
productivity of Rice and Pulses.

National Food Security Mission for Rice is

implemented in 5 districts viz., Pudukottai,
Tiruvarur, Nagapattinam, Ramanathapuram
and Sivagangai,
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 Market Complex for paddy

A Market Complex has been

established exclusively for paddy at
Mattuthavani in Madurai district

In an extent of 9.85 acres at a total

cost of 17.06 crores.

In this complex, 314 shops have

been allotted for the traders of
paddy, agricultural inputs and
flowers

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 PUBLIC DISTRIBUTION SYSTEM
RICE :

Price : Free of cost

SCALE OF SUPPLY :
Regular rice card:

4 Kgs per adult per month and 2 Kgs per child

per month, districts except The Nilgris subject to
minimum 12 kg. and maximum 20 kg. per card per
month.

AAY cards : 35 Kg per month per card

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 PROCUREMENT OF PADDY UNDER DECENTRALISED
PROCUREMENT SYSTEM
Procurement of paddy
Decentralised procurement system
is in force in this State with effect
from 01.10.2002.
Tamil Nadu Civil Supplies Corporation
is procuring paddy on behalf of Food
Corporation of India.
Paddy procured is processed through
modern rice mills owned by Tamil Nadu
Civil Supplies Corporation and through
private hulling agents.
Converted rice is adjusted against
central Pool allotment of
Government of India and utilised in
the public distribution system.
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 MARKETING RELATED SCHEMES OF
GOVERNMENT AND PUBLIC SECTOR
Agricultural Marketing Information Network
To establish a nationwide information
network for speedy collection and
dissemination of market data for its
efficient and timely utilization.
To ensure flow of regular and
reliable data to the producers
Traders and consumers to derive
maximum advantage out of their
sales and purchases.
To increase efficiency in
marketing by effective
improvement in the existing
market information system.
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 GRAMIN BHANDARAN YOJANA
(RURAL GODOWNS SCHEME)
It is a capital investment subsidy scheme for
construction/renovation/expansion of rural godowns.
The scheme is implemented by DMI in
collaboration with NABARD and NCDC.

The objectives of the scheme are

 To create scientific storage capacity
with allied facilities in rural areas

 To meet the requirements of farmers for

storing farm produce, processed farm produce,
consumer articles and agricultural inputs

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 AGMARK GRADING AND STANDARDISATION

Promotion of grading of agricultural and

allied commodities under Agricultural
Produce (Grading & Marking) Act.1937.

Agmark specifications for agricultural commodities

have been framed, based on their intrinsic quality.

Food safety factors are being

incorporated in the standards to
compete in world trade.

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 CO-OPERATIVE MARKETING, PROCESSING,
STORAGE ETC. PROGRAMMES IN COMPARATIVELY
UNDER/LEAST DEVELOPED STATES.

To correct regional imbalances and to

provide needed momentum to the pace of
development of various programmes of
cooperative agricultural marketing,
processing, storage

In under/least developed states/UTs by

providing financial assistance on liberal
terms to augment the income of farmers
and weaker sections of the community

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 PRICE SUPPORT SCHEME ( PSS )

Nodal agency of Government of

India to undertake procurement of
paddy under price support scheme.

Provides regular marketing support

to the farmers to sustain and
improve the production of paddy

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 POLICIES FOR MARKETING-RICE
AGRICULTURAL PRICES

Agricultural prices cover prices of agricultural

products (output prices) and prices of requisites for
agricultural production (input prices) at various
stages of marketing.

AGRICULTURAL MARKETING

Agricultural marketing is defined as the study of

entire gamut activities that direct the flow of goods
and services from the primary producer to ultimate
consumer

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 OBJECTIVE OF SCHEME
The broader objective here is to prepare a Manual on
Agricultural Prices and Marketing highlighting the importance
of the sector, significance and measurement needs, performance
indicators, statistical standards adopted at National and
International level and examining the deviations, if any, survey
methodologies and data sources, sampling consideration.

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 NEED OF AGRICULTURAL PRICE DATA

Agricultural prices are important

economic variables in a market
economy.

Price relationships have a

significant influence on decisions
relating to the type and volume or
agricultural production activity.

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 USES OF AGRICULTURAL PRICE DATA

BY INDIVIDUAL FARMERS

In the short run, an individual farmer needs output

prices to determine the pace and volume of his
sales so as to optimize the return from his farm
production

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 BY PRIVATE AND COOPERATIVE
BUSINESS ORGANIZATIONS

 Business organizations use agricultural prices data in a number

of ways such as planning the character.
 Location and size of their agricultural business enterprises
 Determining the time and place for purchasing agricultural
production requisites.
 Deciding on inventory expansion or contraction and hedging
 Selecting the markets and time of sale or their produce so as to
reap the best advantage
 Formulating credit policies.

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 BY PUBLIC AGENCIES

Public agencies use price data in

planning agricultural programmes
and ensuring that the allocation of
available resources to different uses
is consistent with the price system.

Profit expectations from alternative

agricultural development plans depend on
the structure and behaviour of both output
and input prices.

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 AGRICULTURAL SECTOR ACCOUNTS
Price data are used in constructing
economic accounts for agriculture
within the general framework of
national accounts.
This involves the estimation of the
value of agricultural output.

Expenditure on goods and services

purchased by farmers and total
agricultural income.

The data so computed enable the

trend in Agricultural income and
the share of agriculture in total
national income to be properly
studied
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 TERMS OF TRADE

Raw price data, when properly processed,

can yield index numbers

Index numbers of prices received

by farmers

studied over time indicate the extent

to which changes in the value of
output or farm disposals are
attributable to changes in prices

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 PROCUREMENT POLICY      
The Central Government extends
price support to paddy, coarse
grains and wheat through the FCI
and  State Agencies
All the food grains conforming to
the prescribed specifications
offered for sale at specified centers
are bought by the public
procurement agencies at the
Minimum Support Price (MSP)
The producers have the option to sell their
produce to FCI/State Agencies at MSP or in
the open market as is advantageous to them
Food grains procured by the State
Governments and their agencies are
ultimately taken over by the FCI for
distribution through out the country
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 PROCUREMENT OF RICE UNDER LEVY
SYSTEM
Rice is also procured by the
Government  through statutory levy
on rice millers and rice dealers
The percentage of levy rice is fixed
by State Governments with the
approval of Central Government
taking into account requirements
for the Central Pool
Domestic consumption and
marketable surplus
Prices of levy rice are fixed by the
Government of India before
commencement of every Kharif
Marketing Season
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 MARKET INFORMATION

MARKET INTELLIGENCE

This includes information relating

to such facts as the prices that
prevailed in the past and market
arrivals over time.
It is historical nature.

An analysis of the past helps to

take decision about the future.

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 MARKET INFORMATION
Market News

This term refers to current information

about prices, arrival and changes in the
market conditions.

The availability of market news in time

and with speed is of utmost value.

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Marketing Information System

Marketing Information System is defined as a set of

procedures and methods for the regular and planned
analysis and presentation of information for the use of
marketing decisions

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 ORGANISATIONS PROVIDING MARKETING
SERVICES
Directorate of Marketing and Inspection (DMI) :
To integrate development of
marketing of agricultural and allied
produce in the country.
Promotion of grading of agricultural and
allied produce.
Market development through
regulation, planning and designing
of physical markets.
Administration of Meat Food
Products Order (1973)
Promotion of cold storage

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 FOOD CORPORATION OF INDIA (FCI)

Procurement of food grains for effective

price support operations for safeguarding the
interests of the farmers.

Distribution of food grains

throughout the country for Public
Distribution System.

Maintaining satisfactory level of

operational/buffer stocks of food
grains to ensure National Food
Security.

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 CENTRAL WAREHOUSING CORPORATION
(CWC)
Provides scientific storage and
handling facilities

Offers consultancy services/

training for the construction of
warehousing infrastructure to
different agencies.

Import and export warehousing facilities.

Provides disinfestations services.

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 AGRICULTURAL AND PROCESSED FOOD
PRODUCTS EXPORT DEVELOPMENT
AUTHORITY (APEDA)

 Development of scheduled agriculture products related

industries for export.
 Provides financial assistance to these industries for conducting
surveys, sensibility studies, relief and subsidy schemes.
 Registration of exporters for scheduled products.
 Adapting standards and specifications for the purpose of
export of scheduled products.
 Carrying out inspection of meat and meat products for
ensuring the quality of such products.
 Improving the packaging of the scheduled products.

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 NATIONAL CO-OPERATIVE DEVELOPMENT
CORPORATION (NCDC)

Planning, promoting and financing programmes for

production, processing, marketing, storage, export and import
of agricultural produce.

Financial support to primary, regional, State and National

level co-operative marketing societies is provided towards:
• Margin money and working capital finance to augment
business operations of agricultural produce.
• Strengthening the share capital base and
• Purchase of transport vehicles.

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 DIRECTOR GENERAL OF FOREIGN
TRADE(DGFT)

 Provides guidelines / procedure of export and

import of various commodities.

 Allot import-export code number (IEC No) to

the exporter of agricultural commodities.

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STATE AGRICULTURAL MARKETING
BOARDS
• Implementation of the regulation of marketing in the state.
• Provide infra-structural facilities for the marketing of notified
agricultural produce.
• Provide grading of agricultural produce in the markets.
• To co-ordinate all the market committees for information
services.
• Provide aid to financially weak or needy market committees in
the form of loans and grants.
• Eliminate malpractices in the marketing system

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Regulated Markets
Regulated markets are functioning
under market committees.
At present 21 Market committees are
functioning in Tamil Nadu at district Level.
There are 268 Regulated Markets, 15 Check
Posts, 108 Rural Godowns and 108 grading
centres functioning under the Market
Committees.
Competitive and remunerative prices are
ensured for the produce sold by the
farmers through closed tender system in
the Regulated Markets.
Free grading facilities for agricultural
commodities and issuing pledge
loan during distress sale are also
available in the Regulated Markets.
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cont...
Regulated Markets provides facilities such as correct measurement by
using electronic weigh bridges and weighing balances, godown
facilities, bank facility, immediate payment, daily price information,
rest sheds, drinking water facility, cattle sheds, free medical aid to
farmers, input shops, phone and fax facilities etc.
Under "AGMARKNET" centrally sponsored scheme 93
regulated markets have been provided with computer
and Internet connectivity for effective price
dissemination among farmers through AGMARKNET
website.
The information on commodity prices prevailing
in various markets is made available; the farmers
would be able to get better price of their produce
by moving their produce to the market which pays
higher. During the year 2007-08
100 Regulated markets were computerized
through AGMARKNET.

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 Pledge loan scheme

During distress sale in glut season, famers can

store their produce in the godowns of the
Regulated Markets and avail pledge loan for a
period of six months without any charge.

Pledge loan is provided up to a maximum of

1,00,000.

The rate of interest for pledge loan

is 5% for farmers and 9% for
traders.

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