Study No. 133 Publication No. 180 Impact of Emerging Marketing Channels in Agricultural Marketing in Uttar Pradesh Benefit to Producers Sellers and Marketing Costs and Margins of Potato and Aonla Prof. Ramendu Roy Sri. D.K. Singh & Hasib Ahmad 2011 Agro-Economic Research Centre University of Allahabad Allahabad-211002 Page 1(cid:1) Preface In the era of globalization and liberalization, the marketing of agricultural produces and its processed products have huge potential to earn the foreign exchange. At present the export of agricultural produces and its processed products from India has a very meager share in comparison to other developing countries. The share of India was about 1 per cent of total export quantity of agricultural produces and its processed products of the world. After advent of green revolution, the production of wheat and paddy has increased manifold in the country. It has created tremendous problems of its storage. The farmers are still bound to sell their agricultural produces just after its harvesting at un-remunerative prices. The prices of inputs of crops have been increasing year by year more than market prices of commodities in corresponding period and on account of this the farmers are getting undue returns. Prior to independence, the farmers were very much exploited by intermediaries. Since all the markets were unorganized, so the farmers were exploited by different type of traders to pay unreasonable price of commodities to producers. In spite of this a number of unauthorized deductions in different names were also common from the sold quantity of commodities. The defective measure was also applied during the weighing of commodities. In order to elimination of foul activities and operations of intermediaries in unorganized market the Government of India had framed out a legislation namely “Agricultural Produce Market Act in 1960s” with a view to regulate the marketing of agricultural produces in the interest of producers. This Agricultural Produce Marketing Act was enforced in 1963 across the country to safeguard the interest of farmers. The sale through auction method, reliable weighing, standardized charges, availabilities of amenities in market yard are basic ingredients to protect the farmers from exploitation of market functionaries in the regulated market. In spite of these benefit, there were a number of drawbacks prevailing in the regulated markets which were against the interest of farmers. The Government of India had appointed and constituted committees and commissions to the study the condition of agricultural regulated markets across the country and had invited the suggestions from them for improving the efficiency of these markets. The Inter Ministerial Task force had recommended the formulation of a Model APMC Act 2003. The aim of a Model APMC Act 2003 was to complete transformation of agricultural marketing in the country to make growth oriented market. The Model APMC Act was finalized in 2003 by Government of India and asked all the State Page 2(cid:1) Governments to implement this act in their respective states. A Model APMC Act 2003 has been implemented in almost all the states and union territories of country but U.P. is exceptional where the Model APMC Act 2003 has not been implemented yet. This study on “Impact of Emerging Marketing Channels in Agricultural Marketing in Uttar Pradesh” Benefit to Producers and sellers and Marketing Costs and Margins of Major Agricultural Commodities was allotted to this centre along with other ARECs of the country by the Ministry of Agriculture, Government of India. Institute of Economic Growth, New Delhi is the coordinator of the study. As per guidance of coordinator of the study, two horticultural crops namely, potato and aonla have been selected from Agra and Pratapgarh districts respectively. Pepsico and Satkar Food Products for potato and aonla were selected respectively as Emerging Marketing Channel. These two processing units had purchased potato and aonla directly from producers. The main finding of this study is that the producers had gained better prices from Pepsico and Satakar Food Products than that sold through Traditional Marketing Channels. The marketing costs were also not paid by producers under EMC in regulated markets. This study had been planned and conducted by Sri Hasib Ahmad and Late Sri G.Q. Abid of the centre under overall guidance of Prof. P.N. Mehrotra Ex. Hony. Director of the Centre. The draft of report of this study has been done by Sri. D.K. Singh Ex. Research Officer and Sri Hasib Ahmad of the Centre under my supervision. Smt. N. Nigam and Sri. Ovesh Ahmad of the Centre have also given full support in the completion of the study. I am thankful to all of them. I am also grateful to Dr. Ananada Vadivelu and Dr. Nilabja Ghosh, Institute of Economic Growth, New Delhi for their valuable guidance to carry the study in scientific way. I am extremely thankful to all the government officials for their valuable help and cooperation during the collection of data for the study. I would like to record my sincere thanks to sample farmers, traders, retailers and consumers who had given correct data for the study without any hesitation and ambition. I am also very much thankful to secretary of APMC Agra, Hathrash and Pratapgarh districts for their full cooperation during the visit of research staff of the centre in regulated markets. Page 3(cid:1) I would like pay my sincere thanks to Sri Pawan Gupta, Area manager of Pepsico and Sri Hausla Prashad Singh owner of Satkar Food Products of Pratapgarh for their invaluable support. Comments and suggestions for improvement of the study are most welcome and will be thankful by acknowledged. Agro-Economic Research Centre University of Allahabad Allahabad (Ramendu Roy) Prof. & Hony. Director Page 4(cid:1) Credit Prof. Ramendu Roy Project Director Prof. P.N. Mehrotra Project Planning and Guidance Ex. Hony. Director Shri D.K. Singh Drafting of the Report Shri Hasib Ahmad -Do- Shri Hasib Ahmad Field Survey, Tabulation & Analysis of Data Late Shri G.Q. Abid -Do- Smt. N. Nigan Data Entry Shri Ovesh Ahmad -Do- Shri Ovesh Ahmad Typing of the Report Smt M. R. Kesarwani Secretarial Services Shri S.D. Singh -Do- Shri H.C. Upadhyay Photocopy of the Report Sri. Raju Kumar Support Service Smt. Ramsanwari -Do- Page 5(cid:1) Contents Preface 2 - 4 Credit 5 Contents 6 List of Table 7 – 9 List of Boxes 10 List of Maps 10 List of Abbreviations 11 Chapter – 1 Introduction 12 – 22 Chapter – 2 Agricultural Marketing Reforms Traditional 23 – 38 and Emerging Marketing Methods Chapter – 3 Sampling, Methodology and Socio-Economic 39 – 91 Profile Chapter – 4 Comparison of Benefits and Constraints for 92 – 124 Agents Trading in Traditional Marketing Channel and Emerging Marketing Channel Chapter – 5 Summary and Conclusion and Policy 125 – 137 Implication References 138 Page 6(cid:1) LIST OF TABLES Table No. Title of Tables Chapter-2 Table-2.1 Division –wise break-up of APMC in Uttar Pradesh Table-2.2 Classification of APMCs during (2009-10) Table-2.3 Details of Different type of development Activities in U.P. Chapter-3 Table-3.1 Share of Uttar Pradesh in Area and Production of Potato and Aonla (2008-09) Table-3.2 Selected Socio-Economic Indicators: Agra, Hathrash, Pratapgarh and Uttar Pradesh Table-3.3 Economic Classification of workers of Agra District in U.P. as per Population Census Table-3.3 A Economic Classification of Workers of Hathrash District in U.P. as per Population Table-3.3 B Economic Classification of Workers of Pratapgarh District in U.P. as per Population Census 2001 Table-3.4 Land use Pattern: Agra (2006-07) Table-3.5 Block-wise number and area of operational holding in Agra district (2000-01) Table-3.6 Block Source-wise Area Irrigated in Agra district (2006-07) Table-3.7 Block-wise Cropping Patter of Agra District, Uttar Pradesh Table-3.8 Number of towns and villages Electrified in Agra district of U.P. 2009. Table-3.9 Sector-wise Use of Electricity in Agra District of U.P. 2008-09 Table-3.10 Road Length by Type of Road in Agra, districts (2006-07) Table-3.11 Sector-wise Total and per capita District Income (at Constant 1999- 2000 Prices): Agra Table-3.12 Sector-wise Total and per capita District Income (at Current Prices): Agra Table-3.13 Number of Rural Families under Poverty line in Agra district Table-3.14 Profile of selected Block Khandauli, District Agra, U.P. Table-3.4A Land use Pattern: Hathras (2006-07) Table-3.5 A Block-wise number and area of operational holding in Hathras district (2000-01) Table-3.6 A Talukawise Source-wise Area Irrigated in Hathras district (2006-07) Table-3.7A Block-wise Cropping Pattern of Hathrash District, Uttar Pradesh Table-3.8A Number of towns and villages Electrified in Hathras district of U.P. 2009. Table-3.9 A Sector-wise Use of Electricity in Hathrash District of U.P. 2008-09 Page 7(cid:1) Table-3.10 A Road Length by Type of Road in Hathras districts (2006-07) Table-3.11A Sector-wise Total and per capita District Income (at Current Prices): Hathrash Table-3.12A Sector-wise Total and per capita District Income (at Current Prices): Hathrash Table-3.13A Number of Rural Families below Poverty line: Hathrash Table-3.14A Profile of selected Sadabad Block of Hathrash (Mahamaya Nagar) District U.P. Table-3.4 B Land Use Pattern district Pratapgarh 2006-07 Table-3.5B Block-wise number and area of operational holdings in Pratapgarh (2000-01) Table-3.6 B Taluka-wise Source-wise Area Irrigated in Pratapgarh district (2006- 07) Table-3.7B Block-wise Cropping Pattern of Pratapgarh District, Uttar Pradesh Table-3.8 B Number of towns and villages Electrified in Pratapgarh district of U.P. 2009. Table-3.9 B Sector-wise Use of Electricity in Pratapgarh District of U.P. 2008-09 Table-3.10 B Road Length by Type of Road in Pratapgarh districts (2006-07) Table-3.11B Sector-wise Total and per capita District Income (at Constant Prices): Pratapgarh Table-3.12B Sector-wise Total and per capita District Income (at Current Prices): Pratapgarh Table-3.13B Number of Rural Families below Poverty line: Pratapgarh Table-3.14B Profile of selected Block Magroora and Sadar District Pratapgarh, U.P. Table-3.15 Selected Sample district Households from Khandauli Block of Agra District, Sadabad Block from Hathrash, Sadar and Mangroora Blocks from Pratapgarh District. Table 3.16 Socio-Economic Characteristics of Sample Table 3.17 Socio-Economic Characteristics of Sample Table-3.18 Devices Used for Storage and Processing of Produce Table-3.19 Land Holdings and Irrigated Area of Selected Households Table-3.20 Cropping Pattern of the Selected Households (Area in ha.) Table-3.21 Major Potato Growing (Area) District in U.P. Table-3.22 Major Potato Producing (Production) districts in U.P. Table-3.23 Index Number of Wholesale Prices of Potato (Monthly Average: Base 1994-95) Table-3.24 District-wise area (Hectares) under Potato 2008-09 Table-3.21 A Major Aonla Growing (Area) District in U.P. Table-3.22 A Major Aonla Producing (Production) districts in U.P. Table-3.23A Index Number of Wholesale Price of Aonla (Monthly average base 1994-95) Table-3.24 A District-wise area (Hectares) under Aonla 2008-09 Table-3.25 Area, Production and Productivity of Potato Table-3.25 A Area, Production and Productivity of Aonla Page 8(cid:1) Table-3.26 Average Domestic Price of Potato (2006-09) in major APMCs in U.P. Table-3.26A Average Domestic Price of aONLA (2006-09) in major APMCs in U.P. Chapter-4 Table-4.1 Distribution of operational Land Holdings (Net Operated Area %) Table-4.2 Characteristics of Selected Households as per Land Holding Classification Table-4.3 Modern Practices and Methods of Cultivation of Selected Households Table-4.4 Comparison of Labour Hiring and Labour Cost Table-4.5 Economics of Cost of Cultivation of Potato and Aonla (Rs/ha) Table-4.6 Technology Used for Crop Cultivation Table-4.7 Details of Production of Potato and Aonla Table-4.8 Details of cost of Production Net return (Potato and Aonla) Table-4.9 Price Spread and Marketing Cost for Potato (2009) Table-4.10 Price Spread and Marketing Cost for Aonla (2009) Table-4.11 Benefit Cost Ratio for Potato and Aonla Table-4.12 Reasons for Preferring the Marketing Channel Table-4.13 Per Quintal Post harvest Losses Table-4.14 Reasons for post harvest loss (Percentage of multiple responses) Table-4.15 Reason for Preferring the Marketing Channel Table-4.16 Transaction Cost-Enforcement Costs Table-4.17 Perception on services provided by different agencies Table-4.18 Access to Inputs from the Buyer Table-4.19 Perception of the Market Infrastructure Table-4.20 Perception of the Farmer on other Market Intermediaries, Price Spread and Constraints in Agricultural Marketing Table-4.21 Marketing Rabi Potato in APMC, Agra (2009) Table-4.22 Details of arrival pattern of aonla in the market Table-4.23 Marketing of Aonla in APMC Pratapgarh (2009-10) Chapter-5 Table-5.1 Price Spread and Marketing Cost for Potato (2009) Table-5.2 Price Spread and Marketing Cost for Aonla (2009) Table-5.3 Benefit Cost Ratio for Potato and Aonla Page 9(cid:1) List of Boxes Boxes No. Title of Boxes Box. 4.1 Perception about farmers on Marketing of Potato in Khandauli Block, Agra Box. 4.1A Perception about farmers on Marketing of Aonla in Sadar Block, Pratapgarh Box. 4.2 Perception about the traders operating in APMC, Navcen, Fruits and Vegetables Markets, Sikandra, Agra for purchase of potato. Box. 4.2A Perception about the traders operating in APMC, Pratapgarh for purchase of Aonla Box. 4.3 APMC Naveen Fruits and Vegetables Market, Agra Box. 4.3A APMC, Krishi Utpadan Mandi Pratapgarh Box. 4.4 Potato Marketing Through Pepsico Box. 4.4A Perception about a Processing Unit of Aonla, Selected as Emerging Marketing Channel Box. 4.5 Retailers in Traditional Marketing Channel Box. 4.6 Prefence of Consumer on Retail Outlets List of Maps Maps No. Title of Maps 1 Uttar Pradesh 2 Agra District 3 Hathras District 4 Pratapgarh District Page 10(cid:1)