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Agriculture Marketing Reforms in Bihar, India: A Paradigm Shift Needed

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Presentation on theme: "Agriculture Marketing Reforms in Bihar, India: A Paradigm Shift Needed"— Presentation transcript:

1 Agriculture Marketing Reforms in Bihar, India: A Paradigm Shift Needed
Dr.K.M.Singh, Director, Bihar Agricultural Management & Extension Training Institute, Patna 6th June 2007 Presentation in Meeting of the Steering Group on Agriculture, State Planning Board, Soochana Bhawan, Patna, Bihar, India

2 Changing Scenario: Agriculture vis-à-vis Market
Effects of globalization and liberalization changing the face of the market Changing consumer interest & preferences Diversification of food basket Increased demand for good quality, value added and processed food products Competitive market conditions Raising and stabilizing consumer incomes Food security improving Improving sustainable farming systems

3 Need for a new Approach to Marketing
Shift from staples to high value crops From narrow agricultural focus to broader policy context – including global impacts From focus on crop yields to market demands and incomes From primary production to entire food chain From agriculture to overall rural space From purely public to public-private partnerships, including community driven development

4 Ploughing ahead …..times have changed
Domestic International Market Consumer Consumer Distributor/Retailer Exporters Processors Brand Marketers Imports Aggregators Mandis Farmers Inadequate information with farmers to plan production– Little or no linkages with the market Research system with limited connect with the market Public actions focused on crisis resolution, not at systemic solution Private sector focus on articulating problem only a few initiatives to show for.

5 Trends in Agricultural Marketing
Recent trends include: Specialized & localized production Market - led Production Diversification Use of improved inputs Uniform quality Contract and Organic farming

6 Marketing of Agricultural Products
Driven by market forces / consumers/ retail Globalized through international trade Influenced by new technologies Subject to stricter regulatory scrutiny Subject to greater ethical scrutiny But peoples’ ability to respond to this changing context differs greatly between regions, nations and communities

7 New Initiatives in Bihar Agriculture
Repeal of APMC Act provides opportunities for: Establishment of Market Yards in private sector. Establishment of specialty market. Contract farming Value addition and Processing

8 New Initiatives in Bihar Agriculture
Other initiatives include: National Horticulture Mission for Fruits, Vegetables, Spices, Flowers & Medicinal & Aromatic plants Macro Management for cereals ISOPOM for pulses, oilseeds & Maize Establishment of ATMA in all the districts to bring all stakeholders on one platform and to promote PPP.

9 Bihar’s Strength in Agricultural Sector
Rice, Wheat and Maize Sugarcane Fruits and vegetables Makhana Litchi Honey Dairy products Select spices Aromatic oils and Herbs

10 Some success stories and opportunities to build in Bihar’s agriculture include:
Makhana processing Organic rice Litchi Exotic vegetables like snow peas Honey Tea in Eastern Bihar Aromatic oils- mentha & lemon grass

11 Constraints and challenges
Low productivity, due to low level of technology; Poor infrastructure in the rural areas; Unstable production and generally with low quality standards for export. Problems in the post-harvesting handling, storage, packaging and high transaction costs. Lack of market information systems in the rural areas. Lack of previous experience in dealing with developed markets and export procedures. Limited access to credit for farmers due to high interest rates at commercial banks; and No attractive business for commercial banks due to high risk in agriculture

12 Solution? Moving towards Action on Public-Private Partnerships in Agricultural Marketing

13 Key factors for partnerships
Each partner must bring something to the table Common objective Value creation for both Complimentary roles

14 The way forward …….. Stop depending too much on the government…
Stop thinking the private sector as greedy and unreasonable Combine the efforts of the public, private sectors and community (civil society) together to get the best benefits

15 Opportunities for Partnership Exist
Partnerships can improve access to: New technologies, and tools New research expertise and infrastructure Private equity markets; donor funding New product markets and new customers New marketing and distribution networks Synergies through knowledge sharing, Joint learning, Economies of Scale, Resource pooling, and Cost sharing

16 But there is a confusion on roles!
With changes in the global agri-food system, the roles of the state, industry, and society remain contested: Controversy over ownership of new knowledge Issues over distribution of benefits and risks Concerns over lack of pro-poor emphasis Unease over environmental, social sustainability Learning from other sectors e.g. the health and ICT sectors

17 Practical Options Working together on “how to”
Delivery mechanisms and marketing Management tools of research and innovation Technology collaboration and related issues Collaboration which could impact rights on knowledge in public domain

18 Government’s role: Policy environment
Change in mindset From Regulator to Facilitator Engage in Partnerships for Skills development & complementation Legal Framework Move to a single window dispensation in spirit & practice New legislations be made facilitative rather than regulatory Effective IP protection and enforcement across the board Multiplicity between centre and states in regulation is discouraging

19 Industry’s Perspective
Partnerships are taking place Industry wants to focus on national goal of increasing food production in a sustainable manner. Enhanced private R & D investment is feasible under correct policy environment An enabling environment is a must Several examples of partnership already exist and can be built upon

20 Benefits of P-P-P to Private Sector
More competitive locally Expand market for private sector Allows exports in foreign markets

21 Benefits form public private consortia
Public sector stronger More money Research more relevant for industry and farmers Private knowledge of market Private germplasm and technology Private sector benefits from Technology Access to knowledge

22 Concept of Corporate involvement
The Corporates should ensure forward and backward linkages with the farmers to co-ordinate and promote production and marketing of agriculture produce Farmer Corporate Produce quantity and quality as per requirements of Corporate Provide support in terms of extension services, agri-inputs, credits, farm practices, markets and fixed price

23 Corporate involvement
Concept of Corporate involvement…… The corporate extension agencies should ensure supply of quality seeds, extension services, better yields, market access and buy back price support. Quality seeds Corporate involvement Accessible market Extension Services Higher yields Price support

24 Warehouses / Cold storage chain
Typically contract farming will need corporate involvement to address... Identificación of high yielding alternatives which give better returns than paddy-wheat rotation Marketing security and technical assistance in a multi-crop programme Removal of infrastructural bottle-necks and enabling regulatory framework Warehouses / Cold storage chain Dryers Transportation

Important Aspects Most Critical Missing Links Potential Consortium Partners Consumption (Safety & Quality) Identification and estimation of pesticide residues Packaging of the products Central & State Institutes Demand & supply (domestic & global) analysis Market intelligence Policy Research bodies like NCAP, NCAER Marketing Proper grading & Standardization Lack of Uniform production Technology by growers Private Sector, Research Institutes Processing Research on plant protection Research on GAP SAU, Private Partners Production KVKs, E-Chaupal, ATMAs, FOs, PRIs, KVKs, SHGs Farmers Processors Traders/Exporters Consumers Government

26 Opportunities for Private Sector Investments Corn Oil /Starch Industry
Crop Processing Cool Chain Export Contract Farming Ethanol/ Corn Oil /Starch Industry Modern Rice Mill Litchi Honey Makhana Banana Mango Maize Vegetable Aromatic Rice Fish

27 Final Words There’s high potential for Partnerships here in Bihar due to: Political stability Favorable conditions to produce a variety range of products, Access to preferential markets Constraints are being appropriately addressed. Public-Private Partnerships crucial for success. Agriculture development, agro-industrialization, creation of a proper business environment to investment are priorities to the Governmental program.


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