Presentation on theme: "Welcome to the Experience Sharing Session on Delisting F&Vs from APMCs: Uttarakhand Perspective Ashutosh Singh MBA, Ph.D. College of Agribusiness Management."— Presentation transcript:
1Welcome to the Experience Sharing Session on Delisting F&Vs from APMCs: Uttarakhand Perspective Ashutosh Singh MBA, Ph.D. College of Agribusiness Management GBPUA&T, Pantnagar India
2India …….. A land of opportunities 52% cultivable land as against 11% world wideUnsurpassed Natural AdvantagesAll the 15 major climates of the world46 out of the 60 soil types17% animal, 12% plant and 10% fish genetic resource of the worldSecond largest producer of fruits and vegetablesAims to double its horticulture production to 350 million tonnes by 2015Horticulture contributes nearly 28 per cent of GDP and 54 per cent of export share in Agriculture from the cultivated area share of 8.5% onlyTremendous scope of increasing production and exports in HorticultureThe marketing of F&V in India is changing drasticallyChange from the traditional markets to modern formatsEntry of Reliance Fresh, Choupal Fresh, Namdhari’s Fresh, Premium Farm Fresh etc.TN-Land of opportunities
3Ground Reality- A Contrast The largest grower of fruits – 15% of world outputLow share of global Exports at 0.5%The second largest grower of vegetables – 11 % of world outputLow share of global exports at 1.7%High Cost of Production fruits, vegetables & flowersLow farmer incomeCold storage facility available for only 10% of produceFarmer sells immediately due to perishability & absence of proper infrastructure to keep it for longer periodPost Harvest wastage of fruits & vegetables – 18 to 30% valued at over Rs 45,000 croresLosses as above in India is more than consumption of same in UKFarm gate price 25% of domestic consumer retail price against 50% in developed countries.TN-Land of opportunities
4What a Farmer Thinks ?Agrees that a lot is being done for ‘Reviving Agriculture’But of what use if he can not be facilitated to sell his produce?Wish to have ………A Remunerative Price for his blood and sweatDecide over his BuyersAt a Place and Time Convenient to himEscape the fleecing of multiple intermediaries
5Agricultural Markets in India No. of Regulated Markets – 7246No. of Principal Market YardsNo. of Sub Market YardsNo. of Rural Primary MarketsNo. of Wholesale Markets ,539Availability of MarketsArea ServedAverage area Served by a Market115 sq. kmAv. Area Served by a Regulated Market454 sq. kmArea served per Regulated MarketVaries from 103 sq km in Punjab to 11,215 sq km in MeghalayaRecommendations by National Farmers Commission - Availability of Markets within 5 km radiusAverage approx. 80 KmAs on CSO, Govt. of India
7Uttarakhand: Snap shots StatisticsGeographical Area Sq. Km.Population CroreDecadal Growth Rate – %Density of Population- 189/Sq. Km.Urban to Total Population %Sex Ratio (Females/ 1000 Males)- 963 against 940Literacy Rate against 74% NAPer Capita Income-Rs (FY ) against Rs NA4.6 million ha (86%) is hilly area and 0.74 million ha (14%) is plain area.Only about 14 percent of the geographical area is cultivableAgriculture contributes 23.4% in State Domestic ProductThe average size of land holding in the state is 0.95 ha against NA of 1.57 ha.
8APMC set up in Uttarakhand 25 PMYs, 31 SMYs, 27 WMsRevenue generated Cr in and Cr. in 12-133 WSM under Mini Mission-III at Dehradun, Haldwani, HaridwarEstablished Uttarakhand Horticulture Marketing BoardFCI has 02 Lakh MT storage capacity in the state with utilization level of 82%Total 15 cold storages (1 in Co-operative, 2 in Public and 12 in Private sector)One CA storage of 1000 MT for Apples in Naugaon, Uttarkashi
9APMC Journey So Far….To ensure selling of agricultural produce only in the government regulated marketsAPMC Act has helped mainly the medium and small farmers to access orderly market placesFarmers have to transport their produce over long distancesMost of these markets have limited facilities — only 9 per cent offer cold storage, and only 33 percent have grading facilities.Private Sector is willing to invest in agriculture sector but regulations such as the APMC Act pose a major hurdleAs a consequence, private investment in agriculture and allied sectors has remained negligibleMany of the APMCs don’t have adequate infrastructure to support efficient trading
10Has the APMC been able to serve the purpose ? Limited interest have been served of small farmersIn many states, the regulated markets are non-functional.Out of 35 states and UTs only 17 has amended it by November 2012.The catchment area of regulated markets also varies drastically ranging between the plain, hilly and NE statesImpose substantial taxes on buyers over and above the commissions and feesOnly registered traders/commission agents can transact in the marketsWithout amending APMC Act, the entry of private players is restricted, No Contract farming, No Farmer-Consumer Market
11Focal Points for Today… Will it enable farmers to sell directly to consumers/buyers and avoid traders/commission agents?Does the farmer sell at the APMC market even today?Will the buyers get F&V at a cheaper price?Revenue generated by Mandi Board?Is there any threat from corporate buyers to procure directly from the farmers?How will they reach farmers immediately?What happened in Bihar and Andhra Pradesh ?
12F&V Supply Chain Constraints Predominantly marginal or small farmers – Hence small marketable surpluses and limited bargaining powerPoor availability of markets & monopolistic tendencies of APMCsInadequate infrastructure in wholesale markets/ rural primary marketsLack of fair price discovery mechanismMultiple and exploitative intermediaries – low returnsFragmented supply chain, poor cold chain & high post-harvest lossesLack of cleaning, grading, standardization, packaging & quality certification facilitiesLimited access to market information and marketing opportunities availableLeading into:Low Exportable ProduceFarmers getting very less share in consumers’ rupee
19F&V supply chain: India v/s Developed countries ConsumerTraderRetailerCommissionagentWholesalerConsolidatorFarmerHigh wastage and low marginsConsumerDeveloped countriesWholesaler/RetailersFarmerHigh investments – Low wastage - better marginsTN-Land of opportunities
20F&V production scenario in Uttarakhand YearFruitsVegetableArea (000’ha)Production (000’MT)Productivity(MT/ha)Productivity (MT/ha)171.71725.274.2281.8213.16193.80723.603.7382.60997.2012.07197.62752.563.8086.8711.78200.73802.124.0089.2912.00200.85805.674.0188.0312.03Source: NHB, 2012
21Fruit production scenario in Uttarakhand (000'MT) Fruits% growth over previous yearMango120.8135.312.00147.799.23Citrus126.6134.56.2138.452.93Apple114.0135.919.21122.65-9.74Pear102.78105.452.59108.102.51Peach47.3448.562.5749.682.30Plum40.0140.561.3741.221.62Khumani30.6731.342.1832.26Wallnut20.5621.193.0621.822.97Litchi15.718.719.1019.011.65Source: Directorate of Horticulture, Uttarakhand
22Vegetable production scenario in Uttarakhand (000'MT) Growth over previous year (%)Tomato95.6097.11.56102.395.44Pea71.086.922.3978.05-10.18Cabbage188.8.131.5272.703.12Reddish55.3456.452.0057.962.51Frenchbean38.4539.542.8340.052.56Onion40.5038.0-6.1739.273.34Cauliflower34.634.0-1.7336.677.85Okra24.627.110.1627.902.95Brinjal25.95.2827.044.40Source: Directorate of Horticulture, Uttarakhand
23Post harvest losses in fruits and vegetables ActivityLosses (in kg.) per quintalMaltaTomatoPeaS and MLargePhysical losses at the level of farmersHarvesting184.108.40.206.233.462.87Sorting and Grading0.140.060.210.190.11Packaging0.240.120.840.780.35Loading0.080.590.560.450.43Transportation12.787.7819.5815.879.786.43Unloading0.981.281.871.090.89Weighing and losses at wholesale level0.670.091.340.91Total loss17.2310.1228.9623.4816.2311.75
25Pune Experience National Initiative for Vegetables in Urban Clusters Maharashtra State Agricultural Marketing Board (MSAMB) was to help the farmers’ groups market their products directly in Pune, Mumbai and Nagpur.MSAMB’s role was to help groups identify potential markets and provide subsidies in setting up kiosks, refrigerated vans and logistic support68 farmers’ groups are directly selling their products at 226 locations in Pune and Pimpri-ChinchwadLack of proper marketing and awareness is making it difficult
26Apni MandisAfter studying the concept of “Saturday Market” prevalent in U.K and U.S.A, the Punjab Mandi Board decided to organize “Apni Mandis” 1987 at S.A.S Nagar, Mohali (Punjab)The number of farmers participated - 10,278 (1988) which has been increased to 4,14,610 (2012).Sale of produce - Rs. 2,96,24,761/- (1988) which has been increased to Rs. 82,13,49,474/- (2012)
27Rythu bazaarRythu bazaar is run by Government of Andhra Pradesh for small farmers with small landholdings.No market fees is collected from the Farmers of Rythu Bazars.All facilities are provided to Farmers with free of costRents are being collected from Self-Help Groups & Govt. Agencies onlyThe Rythu Bazars were established in the year The concept of Rythu Bazar was developed to facilitate direct marketing between consumers and farmers.Rythu Bazars are planned for direct interface between the farmers and the consumers eliminating middlemen. Rythu Bazars will operate outside the purview of Markets Act 1966.Rythu Bazars are located on Government land convenient to both the farmers and consumers. Across the state 107 Rythu Bazars are functioning in Andhra Pradesh.Besides above 14 mobile Rythu Bazars and two outlets in twin cities are working. Rythu Bazars are exempted from payment of market fees, service charges on the farmers and users respectively. 7 more Rythubazars are also workingPrices of the vegetable are fixed through a committee of farmers and the departmental officer. The prices of vegetable of Rythu Bazars are generally 25% above the wholesale prices and 25% less than the local retail price, thus reducing the gap between farm gate prices and retail price.
28Samriddhii: MBA sabziwallas strike green gold Samriddhii (Jan,2008) is capable of creating livelihood opportunities to ensure economic empowerment of hitherto marginal farmers.Touched the lives of more than 7,000 farmer families and 500 vendors.Samriddhii Rs. 7,50,000 ( ) - Rs crore ( )
29Interventions: AC carts Keeps vegetables fresh for longer periodMaintain the temperature of 5 to 15 degree Celsius depending on the surrounding temperatureLight weight ( only 70 Kg)Carry more weights ( can carry upto 200 kg vegetables)Better display of vegetables ( 10 different compartment)Easy to pull & pushSpace for advertisement – helps vendors in earning more income per month
30Case of Apple Growers of Himachal Pradesh To assess the awareness and perception level of apple growers towards amended APMC ActTo analyze the impact of amended APMC Act on production practices, post harvest management practices and marketing practices of producers andTo evaluate the efficiency of traditional and modern supply chain.
32Marketing Cost and Net Return under Different Marketing Channels in Group 1
33Marketing Cost and Net Return under Different Marketing Channels in Group 2
34Grower’s Share in Consumer’s Rupee and Price Spread traditional ChannelCorporate Channel
35Uttarakhand’s initiative Opening 50 Apnu BazarOne is operating at NanurkheraThree more are planned at Danda Lakore, Maziri Grant and GarudaShed, Godown and Electronic WeighingNo other retail outlet within the 100 metersNo Marketing Fee as against 2% Marketing fee and .5% Development cess charged in APMCsDelisting of 93 agriculture produces (fruits and vegetables)Mandis at least in seven places in hilly areasLoss of Rs 8-9 crores on the revenue generated
36Apple Service project of uttarkashi Pilot basis in April 2007 in Syuri-Nogoan and Dhari-Kafnol village of UttarkashiConsortium partners Fresh Food Technology (FFT), Agriculture & Organic Farming Group (AOFG) and Shri Jagdamba Samiti (SJS) under the financial assistance of SHGW (A Private Dutch foundation)Initially 880 apple growers were covered under social business modelEliminate well organized intermediaries who controlled the entire process from credit supply for farm inputs, transportation to the marketing of the produceEngaged small and marginal farmers in the apple value addition business chainFour collection centers and five grading centres (2 in Naugaon, 1 in Purola, 1 in Chakrata)Farmer organizations become equal business partners with the private sector parties and a social investorResulted in creating more employment, income, technical skill and local capacity for the apple growing farmersApple from Harsil, Taknor, Tyuni, Parola and Naugaon is now being sold in cities like Delhi, Varanasi, Kanpur and Lucknow
37Business prepositionDuring the apple season of participating farmers got prices of Rs 40 to Rs 55 per kg from the collection point companies. A total of 430 MT of apples were procured and these apples were sold to the storage company at the rate of Rs 55 to Rs 65 per kg. FFT Himalayan Fresh Fruit sold these apples between February and April 2012 in the markets of Varanasi, Delhi, Dehradun and Jaipur at the rate of Rs 75 to Rs 85 per kg. A net profit of Rs 7 lakh (Rs 1.80 per kg) was earned in this regard by the company. The collection centres also earned a net profit of Rs 5 lakh (Rs 1 per kg)Out of Rs 1, the collection point joint venture distributed a premium of Rs per kg in cash on August 15, 2012, with a shareholding of Rs 0.25 per kg. The remaining Rs 0.50 went to the collection point company for capitalizationOut of the total profit of Rs 7 lakh earned by the FFT Himalayan, a premium of Rs 0.50 per kg was given to the farmers. Besides, a shareholding of Rs 1 per kg was given to the 880 participating farmers. The farmers got Rs 2 per kg as added price as additional payment for their apples, besides other benefits like immediate cash payments, training support, saving of time and risk in selling apples to the middlemen
38Reactions on the move ……….. “APMC is needed for all classes of farmers. While arhatiyas provide finance and assurance of a fair price for agriculture produce, they also provide funds to farmers in dire need. Small farmers cannot afford to hire a vehicle and bring their produce for direct selling; arhatiyas bring these to APMC.”Sanjay Bhujbal, Arhatiya for vegetables at the Vashi APMC in Navi Mumbai“An APMC yard is an important place for small vendors to sell their produce. However, the Act must allow free flow of goods across the country. The farmer must have the right to decide the buyer of his produce. The APMC yard must be made modern, with excellent handing facility, ripening and cold chambers”K Radhakrishnan, Director, Freskins Retail Chain“Waiving of market fee and cess will put an additional burden of Rs 7.25 crore on the state exchequer. We expect the prices of vegetables and fruit to fall by 10 per cent. The government is yet to implement the Act in its spirit, which seeks to promote contract farming, bring reforms in agriculture, provides for better regulation of marketing agricultural produce and establish a more efficient marketing system.”Harak Singh Rawat, Agriculture Minister , Govt of Uttarakhand
44EXPECTED IMPACT OF DELISTING OF F&V Access of Farmers to ConsumersFacility for Loans and AdvancesTime Consumed in TransactionFARMERSGrading and SortingPackaging CostTransportation CostPrice Awareness before SaleFair Price RealizationRejection RateFluctuating Demand due to SeasonalityINTERMEDIARIESSqueezed Commission
45MARKETING BOARD PRIVATE PLAYERS CONSUMERS Loss of Revenue Role in Private YardsMARKETING BOARDLack of Consistent SupplyLack of Post Harvest Handling InfrastructureAvailability of Quality Raw MaterialPRIVATE PLAYERSConsistent SupplyJust in TimeLogistic IssuesEconomy in ProcurementPrivate CartelsAvailability of E&V at Cheaper PriceCONSUMERSPoint of Purchase
46Road Map for Future …. Challenges Strategies Developing linkages with farmersRestricting Marketing CartelsLinking small farmers to the modern food retail chainsPromoting multi mutually independent playersFarmer’s training in pre and post harvest management practicesEconomical packaging technology for F&VIntegrated cold chain & logistics infrastructureMIS Support at Village Panchayat levelEnabling regulationsEnsuring Direct Contact between Farmer and ConsumerLimiting the role of IntermediariesAvoiding Distress saleContinuous Supply to ProcessorsMarket IntelligenceContract FarmingTN-Land of opportunities