1. Liberalising Domestic Agricultural Markets: Gains for India Select Indian Agricultural Markets: A Primary Survey (Work in Progress) February 10, 2006

2. Outline The issues The sample Some results

3. The Issues Small quantities to sell; urgent cash needs; poor infrastructure; Who will bring output to distant markets: cooperatives? Traders? Who will ensure fair trading? What marketing channels exist? What do the farmers say? What do the traders say? What are the marketing issues on the ground? And what are the alternatives?

4. The Sample

5. Sampling Strategy: A Spatial View of the Markets with focus on farmer-market linkage Market: in nearby town Farmers: in the village Consumers: more distant

6. Selection of the Sample Objective is to get an understanding of the working of the markets where farmers sell their produce To cover major crops grown and sold under a variety of agricultural conditions The sample covers farmers, traders and market officials

7. Selection of Sample: Crops Crops: Crops where market interventions prevail; marketing alternatives exist; –Kharif crops Paddy Cotton Tur Groundnut

8. Selection of Sample: States States: Important in production of selected crops; marketing alternatives exist –Paddy: West Bengal, UP, AP, Tami Nadu, Maharashtra –Tur/ Arhar: Maharashtra, UP –Cotton: Maharashtra, Gujarat, AP –Groundnut: Gujarat, AP

9. Selection of Sample: Paddy Markets: Important in the selected states for selected crops; contiguous with major markets in neighbouring states Paddy –AP: Guntur, Nellore –MT: Raigarh, Thane –UP: Pratapgarh, Jaunpur –WB: Burdwan, Birbhum –Tamil Nadu: Thanjavur, Thiruvallur

10. Selection of Sample: Cotton Markets: Important in the selected states for selected crops; contiguous with major markets in neighbouring states Cotton –AP: Adilabad, Guntur, Kurnool –MT:Yeotmal, Jalgaon –Gujarat: Bhavnagar, Amreli

11. Selection of Sample: Tur Markets: Important in the selected states for selected crops; contiguous with major markets in neighbouring states Tur/ Arhar –MT: Yeotmal, Wardha –UP: Pratapgarh, Jaunpur

12. Selection of Sample: Total Markets Total Markets Across States –AP: 5 –Gujarat: 2 –Maharashtra: 5 –UP: 2 –WB: 2 –Tamil Nadu: 2

13. The Sample of Markets: Total Markets Three villages per market: 3 distance ranges (0-10 kms; 11-20; >20 kms from market

14. The Sample of Farmers Paddy: 300 Tur/ Arhar: 100 Cotton: 175 Groundnut: 100 Total 675

15. The Sample Farms: Characteristics Operated Land Category Average Operated land (acres) Households % Operated land% Marginal1.7718.44.00 Small3.9434.4 16.8 Semi-medium7.7726.2 25.3 Medium16.517.0 34.9 Large38.114.0 18.9 All8.05100 100.0

16. Some Patterns Across Farm Groups, Crops, States Preliminary results: Do not quote

17. Value of Output per Farm (Thousand Rupees) StatePaddyTurGroundnutCotton AP61-2972 Gujarat--6180 MT1813-51 TN55--- UP254-- WB61--- Avg output of the largest size group is about double the average size

18. Market Dependence: % of Output Sold by the Farmers AP= Andhra Pradesh, MT=Maharashtra, TN= Tamilnadu, UP=Uttar Pradesh, WB = West Bengal

19. How Big are the Sales?: Output in Rs per acre

20. Price Realised Rs/ Qtl: Paddy Operated Land Category APTNWB Marginal 483546511 Small 593802514 Semi-medium 615530525 Medium 642629518 Large 456 All 592623519

21. Price Realised Rs/ Qtl: Cotton Operated Land Category APGujaratMT Marginal 187517562100 Small 192017882113 Semi-medium 187317682034 Medium 188617632170 Large 152517962133 All 187417722115

22. Average Market Distance for Sales (Kms): Paddy Operated Land Category APTNWB Marginal 0.000.6 Small 0.300.7 Semi-medium 1.000.3 Medium 0.800.4 Large -0- All 0.300.5

23. Average Market Distance for Sales (Kms): Tur Operated Land Category MTUP Marginal 12.70.0 Small 11.56.4 Semi-medium 12.219.0 Medium 15.120.0 Large 13.6- All 13.49.6

24. Average Market Distance for Sales (Kms): Cotton Operated Land Category APGujaratMT Marginal 12.920.38.4 Small 8.122.88.3 Semi-medium 6.716.910.8 Medium 6.918.811.5 Large 15.817.313.4 All 8.419.610.4

25. Major Marketing Problems (% of farmers): Paddy

26. Major Marketing Problems (% of farmers): Tur

27. Major Marketing Problems (% of farmers): Groundnut

28. Major Marketing Problems (% of farmers): Cotton

29. Major Reasons for not selling in APMC: Tamil Nadu

30. Satisfaction with the APMCs: Traders’ Response (No. of traders) StateYesNoTotal AP302050 MT183250 TN14620 UP21820 WB81220 No information collected in Gujarat

31. Traders in APMCs: What other alternatives may work? Out of those who felt that other channels offered a better deal –Only 9 out of 20 traders in AP said private markets would be better for the farmers

32. Traders in APMCs: Is there enough competition? When asked if there should be more traders in the market –Only in UP the traders were nearly unanimous saying no. They felt there were not many buyers in the market –In the other cases, about 50% of the traders said more traders would be fine.

33. Small lots to sell Differences in patterns of market requirements for crops like paddy and Tur vs Cotton and Groundnut (larger transactions) Smaller farms not able to bear higher marketing costs Many transactions within village or close to village Smaller farms growing better quality? Findings

34. Trader responses vary from commission agents to others Location of the markets important for traders and farmers

35. Moving forward Alternative channels of marketing for the farmers: understand reasons for choice How much do prices vary under alternative channels? What are the merits and weaknesses in APMCs?

36. Thank You

37. Major Reasons for not selling in APMC: Uttar Pradesh