RAPID MARKET APPRAISAL FOR FOOD GRAINS (MAIZE ANDstyle Click to edit Master subtitle SORGHUM)

By: Anuj Jaiswal Anusha Chapa Lokesh Kumar Agarwal 11

4/15/12

Flow of content
Introduction Objective Methodology Mandis and Layout Maize Sorghum Deficiencies Suggestions

4/15/12

22

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

.
4/15/12 33

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

4/15/12 The market

44

Objective of the study

To understand and identify :
the market participants. the marketing channels and . Pricing strategies of food grains market.

4/15/12

55

Methodology
Rapid 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.

4/15/12 Tools used Venn diagram, flowcharts, pie diagram.

66

Mandis
Mandis agricultural markets set up by state governments to

procure agricultural produce

Total Mandis 6,800 Most agricultural areas with population more than 10,000 have

Mandis
Average population catered to each Mandi 1.36 lakhs

4/15/12

77

Sardarnagar Grain Mandi Layout

VEGETABLE MARKET
VE HC ILE

E X I T s t o r a g e

VE HC ILE

Weighin g machine

auctioning

C.A C.A Main commissi on agent C.A C.A

C.A

W. M

s t o r a g e

storage
4/15/12

ENT RY

storage
88

MAIZE

4/15/12

99

Structure
Market Participants Farmers Village Representative (20) Commission Agents (12) Traders

4/15/12

1010

Structure
Marketing Channel -

VILL. REPRE

VILL. REPRE

4/15/12

1111

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. 4/15/12 1212

 Pricing Strategies
Price formation was done by a group of CAs 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).

4/15/12

1313

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 CAs , it depends on the

relations and trust between the farmer and the CAs to whom they (farmers) want to sell. logistics, the farmer is himself responsible for it.

There is no facility provided by the CA to the farmer in terms of

4/15/12

1414

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.

4/15/12 Environmental Parameters

1515

SORGHUM
4/15/12 1616

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

4/15/12

1717

Structure
Marketing Channel -

4/15/12

1818

Structure
Market Share The commission agent were the most influential participants

of the market . Among the 30 CAs 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 :
1919

4/15/12 Yellow sorghum

 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 CAs charge 10% for the same. seasonality in production.

The supply and demand of sorghum is variable as per the

Regulations And Stimulations

There is no political control in the fixing of prices and the

demand and supply , all is done by the CA.

4/15/12
The CA gives immediate cash after the transaction has

2020

4/15/12

2121

Conduct
Buying And Selling Strategies
It is a weekly market , on Tuesday the market is

established. All types of commodities are sold and bought. sorghum..

200 kg -300 q is the range of volume of transaction of The price fixed by the bigger CA is the benchmark for

other CAs , it depends on the willingness and trust between the farmer and the CAs to whom they (farmers) want to sell.
The farmers bring there produce by there own vehicles or

rented vehicles.
4/15/12 CA financial support to the farmers as and when 2222 The

Performance
Economic Parameters
The market margin is high as it is an interstate market

and also export quality produce is available. in the market.

The number of sellers are less than the number of buyers

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.

4/15/12

2323

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.

4/15/12

2424

Recommendations And Concerns Recommendations Concerns

Development of integrated infrastructure such as proper warehouse facilities. Participation of professional traders and buyers Huge investment, lack of aggregated supply , lack of graded produce Interested in quality produce.

Modernization of weighing method and Investment and acceptance of change logistic support to farmers

Promotion of export Access to the market information

Stringent international quality parameters, High transportation cost Lack of communication platform and Illiteracy of farmers

4/15/12

2525

Designing the effective chain CommissionIntermediary

Input Planning agent APMC YARD Farmers

Retailers (unorganized)

Organized Retailers distribution outlets

Extension Commission Processor agent APMC YARD

Ultima te consu mers

Middleman is not a villain. He is actually making up for the weak infrastructure. He has become a villain by blocking information 4/15/12 2626 flow & market signals

Lets look beyond immediate gains to ensure a more stable market for our farmers future generations

4/15/12

2727