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CHAPTER 1
INTRODUCTION
1. The agricultural sector has been one of the most important components of the
economy. The increasing trend of agricultural production has brought new challenges in
terms of finding market for the surplus. There is also a need to respond to the challenges
and opportunities, that the global markets offer in the liberalised trade. To benefit the
farming community from the new global market access opportunities, the internal
agricultural marketing system in the country needs to be integrated and strengthened.
Agriculture and agricultural marketing need to be re-oriented to respond to the market
needs and consumer preferences.
2. Marketing. Marketing means working with markets, which in turn means
attempting to actualize potential echanges for the satisfying human needs and wants.
Thus we return to our definition of marketing as human acti!ity directed at satisfying
needs and wants through echange processes.
". Farms marketing. Acti!ities related to the marketing and production of
agricultural products produced by an organization or indi!idual farmer. #uch acti!ities in
the process of farm$s marketing include packaging, selection of brands name,
promotional strategies, price policies, marketing channels and other policies.
%. Agricultural marketing. Agricultural marketing generally means the marketing
of agricultural products to the first handler. &n macro 'social( perspecti!e, is the
performance of all business acti!ities in!ol!ed in the forward flow of food and fiber from
farm producers to consumers. &t includes all the acti!ities associated with agricultural
production and with food, feed, and fiber assembl! "r#cessing! an$ $istributi#n t#
%inal c#nsumers, including analyses of consumer$s needs, moti!ations, and purchasing
and consumption beha!ior.
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). Agricultural marketing circle. &t consists of*
).1 First circle. +efers to the final consumer or targeted customer.
).2 &ec#n$ circle. ,actors that can be controlled known as marketing mi
'product, price, place, and promotion(.
)." T'ir$ circle. -n!ironmental factors that cannot be controlled 'political
and legal, economic, law and regulation, social . culture, technologies, .
demographic(.
/. Agribusiness marketing. Agribusiness marketing has come to mean the
marketing operations from the first handler to the final consumer-beginning with
suppliers to farmers and co!ering producing, processing, and marketing to the final
consumer.
0. Marketing utilit. 1tility will refers to the !alue of marketing which adds to
goods and ser!ices. The marketing function will allow to create utility. There are fi!e
types of utilities, namely*
0.1 F#rm utilit. To change the raw materials to a finished products.
-ample, palm oil bunch to edible cooking oil.
0.2 Time utilit. Making the products be a!ailable during the con!enient
hours.
0." Place utilit. Making the products and ser!ices a!ailable in con!enience
location and place.
0.% P#ssessi#n utilit. Making the echange of goods and ser!ices between
the buyers and sellers.
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0.) In%#rmati#n utilit. To informs the buyers that the products eists, how
to use it, the price and other related information of the products a!ailability.
2. Marketing c#nce"t. This concept has dominated the marketing strategies for the
past %3 years ago*
2.1 T'e Pr#$ucti#n C#nce"t. 4otler '155/( has defined the production
concept as a philosophy that holds consumers who will fa!or those products that
are a!ailable and highly affordable and therefore management should concentrate
on impro!ing production and distribution efficiency.
2.2 T'e Pr#$uct C#nce"t. The product concept as defined by 4otler '155/(
holds that the consumer will fa!or those products that offer the most 6uality,
performance and features and therefore the organization should de!ote its strategy
to making continuous product impro!ement.
2." T'e &elling C#nce"t. 4otler '155/( has defined the selling concept,
which says that the consumer will not buy enough of the organization$s product
unless the organization undertakes substantial selling and promotion efforts.
2.% T'e Marketing C#nce"t (1)*+s , 1)-+s.. The marketing concept as
defined by 4otler '155/( is that the key to achie!ing organizational goal is for the
organization to determine the needs and wants of the target market and to adapt
itself to deli!ering the desired satisfaction more effecti!ely than its competitors.
The product concept and the selling concept ha!e gi!en way in many successful
firms to the marketing concept.
2.) T'e &#cietal Marketing C#nce"t (1)-+s "resent.. 4otler '155/( has
defined that the societal marketing concept holds that the organization$s task is to
determine the needs, wants, and interest of target markets and to deli!er the
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desired satisfaction more effecti!ely and efficiently than competitors in a way that
preser!es or enhances the consumer$s and society$s well-being.
5. Im"#rtance #% marketing. There are se!eral important reasons to study
marketing* marketing plays an important role in society, marketing is important to
business, marketing offers outstanding career opportunities, and marketing affects our life
e!ery day.
5.1 Marketing "las an im"#rtant r#le in s#ciet. The total population of
Malaysian eceeds 22 million people. Think about how many transactions are
needed each day to feed, cloth, and shelter a population of this size. The number
is huge. And yet it all works 6uite well, partly because the well-de!eloped
Malaysian economic system efficiently distributes the output of farms and
factories. Marketing makes food a!ailable when we want it, in desired 6uantities,
at accessible locations and in sanitary and con!enient packages and forms 'such
as instant and frozen foods(.
5.2 Marketing is im"#rtant t# business. The fundamental ob7ecti!es of most
business are sur!i!al, profits, and growth. Marketing contributes directly to
achie!ing these ob7ecti!es. Marketing includes the following acti!ities, which are
!ital to business organizations8 assessing the wants and satisfactions of present
and potential customers, designing and managing product offerings, determining
prices and pricing policies, de!eloping distribution strategies, and communicating
with present and potential customers.
5." Marketing #%%ers #utstan$ing career #""#rtunities. Marketing offers
great career opportunities in such areas as professional selling, marketing
research, ad!ertising, retail buying, distribution management, product
management, product de!elopment, and wholesaling. Marketing career
opportunities also eist in a !ariety of non-business organizations, including
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hospitals, museums, uni!ersities, the armed forces, and !arious go!ernment and
social ser!ice agencies.
5.% Marketing a%%ects #ur li%e e/er $a. Marketing plays a ma7or role in
our e!eryday life. 9e participate in the marketing process as a consumer of goods
and ser!ices. About half of e!ery dollar we spend pays for marketing costs, such
as marketing research, product de!elopment, packaging, transportation, storage,
ad!ertising, and sales epenses. :y de!eloping a better understanding of
marketing, we will become a better-informed consumer. 9e will better
understand the buying process and be able to negotiate more effecti!ely with
sellers.
13. T'e im"#rtance an$ inter$e"en$ence #% t'e %##$ an$ %iber sstem. The
!arious foods and fibers are the commodities included in agricultural marketing tets
although food usually recei!es the most attention. &t may be helpful to think of food and
fibers as mo!ing to the world consumers through three sectors*
13.1 ,ood and fiber originate in a %arm sect#r where li!estock, poultry, fruits,
!egetables, cotton, tobacco, fla, corn, wheat, other grains, and specialty crops are
produced.
13.2 More than 23; of the gross farm income is typically spent in the in"ut
sect#r on items such as feed, fuel, and fertilizer. These production epenses ha!e
risen from time to time.
13." ,ood and fiber than mo!e through a marketing sect#r in!ol!ing many
marketing functions, such as transportation, processing, and storage, which are
more epensi!e than the production costs in the farm sector.
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11. The marketing bill 'the costs in the marketing sector( costs much more to market
most agricultural products than it costs farmers to produce them. Modern farming is
dependent on the market sector. There is no way that farmers in our highly industrialized
and urbanized society could supply world consumers without the facilities, efforts, and
epertise of the market sector.
12. The input sector reminds us that modern farming is highly dependent on industrial
inputs such as tractors, combines, petroleum, pesticides, and fertilizer. &n fact, the
purchased inputs of non-farm origin are larger in costs than the inputs 'feed, seed, and
li!estock( supplied by other farmers. Agricultural marketing focuses on the market
sector, which is a !ery important part of the entire food and fiber system. &t is also a !ery
interdependent part.
1". T'e $e/el#"ment #% agricultural marketing. Marketing is related to the
business acti!ities for the purposes of the consumer satisfaction in echanges of goods
and monetary !alue between the producer and the consumer. #cope of marketing is not
only focused to the buying and selling but it also includes acti!ities such as
transportation, storage, grading, financing, risks in!ol!ements, products design, price
determination, promotions, distribution and de!eloping the marketing channels. A brief
history of agricultural marketing begins with*
1".1 Tra$e am#ng tribes. Marketing begin in tribal nomadic cultures.
<ifferent tribes li!ed in areas that held different fruits, game, and fish* from these
differences came products that could be traded. #upplies beyond a tribe$s own
needs had a low marginal !alue but were of higher !alue when traded for other
goods.
1".2 A""earance #% market s0uares. 9ith the ad!ent of !illage life,
following the de!elopment of agriculture, specialized !illage craftspeople
appeared. -!entually a block of land in each !illage came to be designed as the
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market s6uare. =ere farmers brought products for display and sale to the !illagers,
and craftspeople showed their wares for farmers or others to buy.
1"." Regi#nal an$ nati#nal market centers. The modern counterpart of the
market s6uare is the regional mall shopping center, housing a wide array of
dealers and products under one !ast roof. At a wholesale market, suppliers gather
so that retailers may see, in one place, the kinds of merchandise offered and their
prices.
1%. T'e r#le #% marketing in t'e ec#n#m. &n any economic system there are always
barriers that pre!ent producers from efficiently satisfying consumer needs. These barriers
include separations of space, time, information, !alue, and ownership. The role of the
marketing system is to bridge this gap between producers and consumers needs and
increase the efficiency of the marketing system.
1%.1 The most familiar marketing functions to most of us are the buing
%uncti#n and the selling %uncti#n. They must be performed in the marketing
system if any product echanges are going to occur. They in!ol!e o!ercoming
separations of ownership by transferring legal title of the product from the seller
to the buyer.
1%.2 T'e st#rage %uncti#n o!ercomes the separation of time by maintaining
the product in good condition between production and final sale.
1%." T'e trans"#rtati#n %uncti#n o!ercomes the separation of space by
mo!ing the product from where it is produced to where the consumer is willing to
purchase it.
1%.% T'e "r#cessing %uncti#n in!ol!es the transformation of a commodity to a
form that has greater !alue to consumer. >rocessing is included since what is
produced in a free market economy should be determined by the needs of
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consumers. ?ne of the purposes of the marketing system is to transmit consumer
desires to producers so they can pro!ide the products that consumers want. =ow
the products are produced is a technical matter, but what to produce is a function
of marketing.
1%.) T'e gra$es an$ stan$ar$s %uncti#n in!ol!es the de!elopment of uniform
descriptions of commodities and products. &t means that buyers do not ha!e to
physically inspect each shipment of product before they purchase it. A buyer can
be assured that when he orders a certain 6uantity of a @rade A product o!er the
telephone, he knows eactly the physical specifications of the product he will
recei!e.
1%./ T'e %inancing %uncti#n in!ol!es pro!iding the funds necessary to pay for
the production and marketing of a product before the money is recei!ed from its
sale.
1%.0 T'e risk taking %uncti#n in!ol!es assuming the risk of loss between the
time of purchase and sale. Aarious forms of insurance are a!ailable to guard
against ad!erse changes in price as well as physical losses arising from such
things as fire, flood, theft, and spoilage. The efficiency of the marketing system is
also greatly enhanced if there is wide dissemination of information on prices,
in!entory le!els, embargoes, or anything else that could influence the buying and
selling of products.
1%.2 T'e market in%#rmati#n %uncti#n in!ol!es the de!elopment of any
means to disseminate this type of information.
1). T'e structure #% "r#$uct in agricultural "r#$ucti#n. The traditional structure
of farm production and farm market can each be described in terms of a single identifying
characteristic* product and production.
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1).1 C'aracteristics #% t'e "r#$ucts.
a. A ra1 material. The output of agriculture is largely a raw material
that will be used for further processing. This processing may be limited, as
in con!erting li!estock into meat. &t may be highly comple, as in
con!erting wheat into wheaties. +egardless of the compleity, howe!er,
the product sold by the farmer soon loses its identity as a farm product
becomes simply food.
b. 2ulk an$ "eris'able "r#$ucts. Bompared to most other
products, agricultural products are both bulkier and more perishable. :ulk
affects the marketing functions concerned with physical handling.
>roducts that occupy a lot of space in relation to their !alue almost
automatically raise unit transportation and storage costs. A truckload of
drugs would be considerably more !aluable than a truckload of wheat. &n
this sense, fruits, !egetables, grain, and meats are all 6uite bulky.
>erishable, too, can be measured only in relation to other products. All
products ultimately deteriorate. #ome agricultural products, like fresh
strawberries or fresh peaches, must mo!e into consumption !ery 6uickly
or they completely lose their !alue. #uch products as cattle or poultry
continue to grow and change if storage in the form of withholding them
from market is attempted. 9heat, on the other hand, can be stored for a
considerable length of time without much deterioration. -!en the most
storable agricultural products, howe!er, are usually more perishable than
other industrial products. >erishable products re6uire speedy handling and
often special refrigeration. Cuality control often becomes a real and costly
problem. Cuality control often becomes a real and costly problem. ,rom
the farmer$s !iewpoint, withholding from the market is etremely difficult*
when the products are ready, they must mo!e.
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c. 3ualit /ariati#n4 The general 6uality as well as the total
production of agricultural commodities !aries from year to year and from
season to season. <uring some years the growing conditions are such that
the crop in general is of high 6uality. &n other years, unfa!orable
conditions pre!ail and the crop is of much lower 6uality. #uch !ariations
in the 6uantity of production make it !ery hard to apply uniform standards
for grades from year to year. &f the 6uality of the apple crop is uniformly
high, the standards for top-grade apples may be strictly adhered to. ?n the
other hand, if the 6uality of the apple crop is poor, grading standards may
be relaed somewhat to permit some apples to be marketed as top 6uality.
Aariations in the 6uality may also change marketing patterns. ,or
eample, during a year in which corn does not mature properly, large
amounts of Dsoft$ corn are har!ested. The corn will spoil if it is not used
before the following years. ,armers may then buy additional feeder stock
in order to utilize this corn. The marketing pattern of these feeders,
howe!er, will be different from the usual pattern because the feeding
period is ad7usted to the condition of the corn.
1).2 C'aracteristics #% "r#$ucti#n.
a. T#tal #ut"ut. The long run trend in food production is upward.
The rising food supply per capita has been a mied blessing for farmers.
?n the one hand, it is dramatic proof of the efficiency of agriculture and its
contribution to the rising standard of li!ing. ?n the other hand, this
tremendous producti!e capacity of agriculture has fre6uently depressed
farm prices and incomes. Maintaining an acceptable balance of rising food
supplies and fair farm prices has been a difficult task for food policy.
b. Annual /ariabilit in "r#$ucti#n. There are years where the
situation of increasing, decreasing, and stable farm output. These are
caused by farmer responses to prices and other uncontrollable factors such
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as weather and disease. #uch changes in farm output influence the food
marketing process and the use of the food marketing system$s capacity.
Eear to year changes in farm supplies ha!e a significant impact on the
purchase prices, need for storage facilities, and plant utilization rates of
food marketing firms. The desire to reduce the risks and uncertainties of
fluctuating farm supplies is one of the forces creating closer contractual
ties between marketing agencies and farmers.
c. &eas#nal /ariabilit in "r#$ucti#n. &n addition to the annual
production !ariability, much of agricultural production is highly seasonal.
Fi!estock receipts may !ary substantially throughout the year. The har!est
of such crops as paddy, fruits, and !egetables is crowded into a relati!ely
short period. -gg and poultry production is larger in seasonal fest and
remain stable after the period. To the etent that the product is storable,
storage facilities must be furnished to hold the product until it is
consumed. This means that during part of the year, storage will be used at
near capacity, at other times it will be almost empty. &f the product cannot
be stored it must either be processed or consumed immediately. This may
result in processing plants running at capacity for some periods and well
below capacity, or e!en shut down, for other periods. &f the product must
mo!e directly into consumption, transportation and refrigeration facilities
must be a!ailable immediately. These situations affect the costs of the
marketing process.
d. 5e#gra"'ic c#ncentrati#n #% "r#$ucti#n. Although a !ariety of
farm products is produced in all states, there is increasing geographic
specialization of farm production. ,or eample in Malaysia, north area
tends to specialize in the production of commodities for which its resource
base is best suited8 paddy, fruits, e.t.c. The marketing system, of course,
must ad7ust to these changing geographic production patterns.
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e. 6aring c#sts #% "r#$ucti#n. There is no single cost of
production for all farmers. ,armers cost of production are affected by
climate, technology, farm size, and indi!idual managerial skills.
Bonse6uently, the cost of producing a farm commodity !aries widely by
regions and among farmers. Most studies ha!e found that the a!erage cost
of farm production falls as small farms grow larger, but there is a point at
which a!erage cost do not fall further as farm size increase.
f. T'e %arm su""l in$ustr. The farm supply industry pro!ides
such agricultural inputs as chemicals, seeds, machinery, feeds, capital,
labor, land, and so on. These may be supplied by the farm or purchased
from the industrial or farm supply sectors. The growth and importance of
the farm input sector affects farmers in se!eral ways. &t has added another
market for the farmer to operate in. The farm input markets ha!e also been
responsible for much of the dramatic gain in agricultural efficiency in
recent years, especially the chemical and machinery markets.
1/. To ensure the effecti!e of the product and production structure, thus marketer
need to ha!e a proper management practices, proper timing applications of insecticides,
the need of storage facilities, the a!ailability of transportation, and credit facilities.
10. &trategies #% Nati#nal Agricultural P#lic 1))787+1+. &n 152%, GA> introduced
by Malaysian go!ernment because of recession, but agriculture still plays an important
role in the @G> growth of the country e!en-though it has decline in its production due to
industrialization and urbanization.
12. Pr#blems %ace$ b agriculture*
12.1 @ross domestic product has declined in the contribution e!en-though the
!alue-added has increased.
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12.2 Fand epansion has been hindrance because some of the arable land has
been allocated for industrialization, urbanization and housing pro7ects.
12." Market protection less has been taken into consideration as compared to
automobile industries.
12.% ,iscal incenti!es did not fa!or in agriculture so that$s why large
companies did not en7oy as compared to manufacturing industries.
15. Ob9ecti/es #% t'e NAP (1))787+1+.*
15.1 To achie!ed a balanced de!elopment between agriculture and other
sectors such hunting . forestry, fishing, mining . 6uarrying, electricity, gas .
water supply, construction, wholesale . retail trade, hotel and restaurants,
transport, communication, education, financial, public administration, health and
social work in the country.
15.2 To enhance the economics sectors and structural integration in particular
with the manufacturing sectors.
15." To achie!e a higher le!el of epansion and de!elopment of the food
industry sectors.
15.% To achie!e a wider and effecti!e participation of the :umiputra
participation in support ser!ices in the fields of commercial agricultural,
agribusiness, trade, distribution, selling, etension, institutional de!elopment and
marketing.
15.) To ensure a sustainable de!elopment in agriculture.
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15./ To maimize income through efficient utilization of resources and
re!italization of sectors for economic de!elopment.
15.0 To de!eloped new land and to enable for farm unit de!elopment, efficient
managerial practices for new crops growing.
15.2 To enable de!elopment of in-situ land will be carried out to resol!e
unproducti!e, inefficient and low le!el of producti!ity of land to be de!eloped.
-ample* ,-FB+A, +&#<A, 4-#-<A+ e.t.c.
23. &trategies %#r ac'ie/ing t'e NAP #b9ecti/es*
23.1 O"timi:ing t'e res#urces uses. Fand, labor, capital and management has
to be use effecti!ely. I$le lan$ should be de!elop, di!ision of lab#r should be
analyzed and gi!en the priority for de!elopment and usage, managing farm
management through skills, and increased farm sizes and mechanism while
ca"ital such land owned by farmers has to bring together and fully utilized, thus
will reduced the cost of maintenance.
23.2 Human res#urces $e/el#"ment. The use of technologies in the
agricultural sector such as mechanism in planting and har!esting will impro!ed
efficiency in used of labor. Manpower training is re6uired to handle such cases,
efficient agribusiness in marketing, and agro-based processing should also be
included in the de!elopment of human resources.
23." En'ancement #% researc' ; $e/el#"ment! an$ tec'n#l#gical $i%%usi#n.
This would maintain the competiti!eness of the agricultural sectors especially in
research and de!elopment. ,or eample* rubber, palm oil and rice, and other
product. &t must be market dri!en, commercially oriented and en!ironment
friendly.
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23.% 5reater r#le #% t'e "ri/ate sect#rs. The greater role of the pri!ate sectors
in the land de!elopment for agricultural purposes, support by financial strength
and in!estment, incenti!es, promotion and packages will enhance the sale of
products for eport purposes.
23.) Re%#rme$ marketing strategies. The need of reformed in the marketing
strategies of the producers. Gow the products should be !iew as commodity and
plays it role in the eport of the products to !arious countries like Middle -ast,
African, Fatin America and Bhina and other countries. Gew product de!elopment
should be !enture into the market and credit facilities can be etended and
pro!ided to the buyers.
23./ E<"an$e$ %##$ "r#$ucti#n. >roducer will look into the epansion of
food products to the needs of the locals and for eport purposes. The finished
products should be first caters for the demand of the domestic populations. The
products produced must be competiti!e in nature.
23.0 De/el#"ment #% /iable an$ sel%8reliant %armer instituti#n. The
de!elopment of institution which caters into the needs of the farmers especially
when supplying the products to the consumers is considers. #ome farmers are
unable of doing so because lack of facilities such as financial strength, marketing,
storage and transportation purposes. The need of this institution is highly re6uired
so as to less the burden of the farmers.
21. =
r$
Nati#nal Agricultural P#lic ( NAP = .. The new GA>" will focus on new
policy trust, strategies, and implementing mechanisms will be emphasized to national
concern on agricultural de!elopment an economy as a whole.
22. Ob9ecti/e #% t'e "#lic*
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22.1 -nhance food security.
22.2 &ncrease producti!ity and competiti!eness of the agricultural sector.
22." Finkages with other sectors.
22.% Breate new sources of growth for the sector.
22.) Bonser!e and utilized natural resources on a sustainable basis.
2". &trategies #% t'e NAP=. This strategy will be focused on the upstream primary
agriculture to enhance the production and marketing of the agricultural and forestry
products. The strategies are*
2".1 Agr#8%#restr a""r#ac'e$. Agriculture and forestry are mutually
compatible and complementary for 7oint de!elopment. This approached will
addressed the increasing scare resources and raw material a!ailability.
2".2 Pr#$uct base$ a""r#ac'. >roduct based approach address on key
products and market identified based on demand and supply, preferences, and
potential consumers.
2%. T'e instituti#nal b#$ies c#m"rise t'e %#ll#1ing*
2%.1 The establishment of public-pri!ate sector c##r$inating council
comprises of federal agencies state go!ernment and pri!ate sectors. The council
will steer guide and re!iew the progress of the policy.
2%.2 The establishment of a high le!el "lanning and implementation
committee and comprises of representati!es from state go!ernment, federal
agencies and pri!ate sectors.
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2%." The committee will undertake a close relati#ns'i" for the implementation
process.
2%.% A re!iew and rationalization of go!ernment institutions to enhance the
e%%ecti/eness of de!elopment programs.
2%.) An allocation of res#urces, funds and manpower for the realization of the
policy.
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CHAPTER 7
PRO2>EM& AND CHARACTERI&TIC& OF A5RICU>TURA> MAR?ETIN5
1. Di%%erences bet1een t'e agriculture an$ in$ustr "r#$ucts.
C'aracteristics In$ustr Agriculture
Financial Strength Many. A!erage.
Point of production ,actories. >lantation.
Storage of raw materials A!ailability of raw
materials, if others wise will
upset the operations.
A!ailability of inputs such
as fertilizer, seeds,
pesticides, e.t.c. to a!oid
production delay.
Management efficiencies -fficient of the staffs and
there must be a di!isions of
labor.
-fficient of staffs is not
necessary and compulsory
as long as there is a di!ision
of labor.
Promotion &t$s necessary so that the
customer buy the products.
Got hea!ily necessary
because it is a necessity
product.
Acceptance of customers The producer intends to
reach to the
customerHcustomer loyalty.
:ecause the product is a
necessity, it is being
accepted by the consumer
according to taste.
Volatile The production is !olatile as
long as there is a constant
supply of raw materials.
The production is more
!olatile because it depends
on en!ironmental factors.
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2. Pr#blems #% agricultural marketing. The farm problem is usually associated
with unstable and relati!ely low farm prices and incomes. A related set of farmer$s
problem can be termed the farm marketing problem. There are se!eral dimension of this
problem*
2.1 A$9usting $eman$ an$ "r#$ucti#n #% agriculture. ,armers find it
difficult to ad7ust precisely their production schedules to meet changing market
conditions. The production of agricultural products such as fruit is seasonal in
nature. Annual crops take eight months to har!est where as crops like palm oil,
rubber and cocoa takes "-% years to har!est. The consumer demand on these
products change from time to time and it is difficult to forecast. The production is
to a great etent dependent on weather and biological patterns of reproduction.
<ue to these different in !ariations will be a hindrance in demand and supply of
agricultural products.
2.2 Orientati#n t#1ar$s cust#mer@buer #r $eman$ #% t'e c#nsumer
t#1ar$s t'e "r#$ucer. &f the producer directly sells their products to the
consumer at certain price le!el it is for sure they will know how much cost of the
products that the consumer willing to pay. >rice of products will reflect the
demand of certain agricultural products. As a producer, they will get feedback
directly how much price, what types of products does the consumer needs. The
producer will also know eactly the 6uantities to produce in the market. <irect
selling does happen most of the times because in most cases agricultural products
are sold through middle-men who has the epertise and financial strength when
dealing with the producer. A tomato canner must estimate how much of his
product he can sell at a price estimated nearly a year in ad!ance. ?!erestimates of
yield will find him without enough tomatoes to meet his pro7ected needs.
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2." T# minimi:e c#st #% marketing. Bost of distribution is high because cost
of transportation, storage, and processing is part of the ma7or distribution cost.
The percentage of spoilage is high during the transportation process from one
location to the other location because of lack of efficiencies in handling. Fack of
planning will increase the administration cost in an organization and this reflect
the inefficiencies of planning the manpower as re6uired.
". To o!ercome the problem of agricultural marketing, thus the efficiencies in
transportation, storage facilities, management efficiencies and impro!ing the technology
should be consider.
%. C#mm#n "r#blems in t'e marketing #% %arm "r#$ucts.
%.1 ,armers do not ha!e any control o!er the output of their production
acti!ities. #upply of output is greater than demand. This might cause ma7or
problems to the producer. Geed of comprehensi!e information about products
demand in market.
%.2 A related component of the farm marketing problem is the difficulty
farmer face in impro!ing their prices through independent or group acti!ities.
,armers are, for the most part, price takers-they cannot, indi!idually, influence
the price of their products through their output decisions. &n order to raise prices
through the control of supplies or ad!ertising programs, farmers must act as a
group. =owe!er, the large numbers of farmers, and their differing economic
circumstances fre6uently frustrate farmers in their attempts to organize and to act
7ointly.
%." The cost-price s6ueeze is another component of the farm marketing
problem. The competiti!e conditions of agriculture tend to keep farm prices close
to the cost of production. ,alling farm prices would not be so critical if they were
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accompanied by falling farm costs, or if the farmer could ad7ust input costs as
prices fell.
%.% The superior bargaining powers of buyers. :argaining power such as
opponent pain and opponent gains differs at le!els of the marketing channels. The
buyers consider themsel!es as king hence their bargaining power is more on
opponent gains.
%.) Bhanging food market pricing efficiencies. <ifferent processors are
willing to price their products at !arying price. The changing of food marketing
from one food market to another food market will allow a gap in pricing. The
pricing will depend on location, customers, e.t.c. and this will create pricing
efficiencies between the marketing food agencies.
%./ &ncreasing gulf between the farmers sectors and food marketing sectors.
). C#nsumer an$ market $eman$.
).1 Bonsumer demand is defined as the !arious 6uantities of a particular
commodity which a consumer is willing and able to buy as the price of that
commodity !aries, with all other factors affecting demand held constant.
).2 Market demand is defined in terms of the alternati!es 6uantities of a
commodity which all consumers in a particular market are willing and able to buy
as price !aries and as all other factors are held constant.
/. H#1 agricultural marketing res"#n$s t# c#nsumers g#als. #ince all of us are
consumers, it is appropriate to begin by eamining the consumer$s !iew of agricultural
marketing8 that is, the consumer$s goals or ob7ecti!es. Marketing affects the food we eat,
the clothes we wear, the things we use for personal grooming, and the content of our
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homes. ?ur lifestyle is therefore influenced by how well or poorly marketing is done.
Agricultural marketing responds to consumers goals through se!eral ways*
/.1 Un$erstan$ing c#nsumers tastes an$ "re%erences. &tems in the
shopper$s cart do not get there by chance. Bhoices are influenced by conscious
and subconscious epectations, tastes, and preferences which are de!eloped, or
learned, in !arious ways8 from those about us, from what we read, and from
ad!ertising. #uch preferences affect not only what products can be sold in
different regions but also how, and in what 6uantities, they can be packed.
/.2 Pr#/i$ing /ariet. 9hy is !ariety in food products importantI &n almost
any household, someone is likely to say, or think, J& am getting tired of eating
thisK or J& want something else, but & am not sure what it is.K Marketing of food at
stores is, therefore, designed so that shoppers will encounter a large !ariety of
products. Marketing sur!eys here noted that one-third to two-thirds of shoppers$
buying decisions are made in the store and not at home. This means that point-of-
sale ad!ertising and suggestions are important in marketing.
/." O"en $ating. ,reshness and two related concerns, safety and a!oidance of
waste are important to consumers. Accordingly, we ha!e Jopen datingK of food
products. The concern for freshness lay behind the de!elopment and growth of the
frozen foods industry and the increased use or air transportation for marketing
domestic and imported fresh fruits and !egetables. Bhain store warehouses ship
fresh meats, fruits, and !egetables to retail stores se!eral times a week* such
closely timed marketing steps are !ery costly and were de!eloped only because of
demand.
/.% Ensuring "r#$uct sa%et. Fabeling has become more and more important
to consumers. ,ood safety and ingredients are important to e!eryone, particularly
to people with special dietary needs or allergies. ?f course, companies do not
want to make public their formulations and processing methods, but listing
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ingredients seldom creates a conflict of interest. ,ederal marketing regulations
re6uire processors to list food ingredients on labels according to their relati!e
weight in the final product. &n addition to pro!iding consumers with accurate
information about ingredients, labeling deters processors from using possibly
in7urious substance, such as carcinogen.
/.) Pr#/i$ing nutriti#nal in%#rmati#n. Bonsumers$ awareness of nutrition
continues to grow. J=ealth foods,K Jnatural foods,K and !itamin supplements are a
response to this. '=ealth food stores, for eample, ha!e become commonplace in
shopping centers(. There may be some degree of faddishness in!ol!ed here, as in
the current emphasis on roughage in the diet 'breakfast cereal processors in
particular ha!e reacted to this concern(. :ut e!en so, nutritional labeling 'like
ingredient labeling( helps consumers to 7udge competing products, and this can
increase pricing efficiency.
/./ &"ecial $is"las an$ "r#m#ti#ns. There ha!e been !arious responses to
consumers$ need for information about product a!ailable and their desire to be
entertained. #pecial in-store displays include meal-planning ideas suggested by
eye-catching arrangements place in the shopper$s path. >oint-of-purchase displays
are de!eloped by agricultural commodity groups as well as food processors.
-perience has shown that ad!ertising on tele!ision, on radio, and in magazines is
much more successful if shoppers are reminded of it by point-of-purchase
displays. To pro!ide and entertaining atmosphere, many supermarkets ha!e music
and public-ser!ice announcements, demonstrations, contests, and so on.
/.0 Time8sa/ing s'#""ing ser/ices. +educing shopping time was the last
goal we listed. This goal was one factor in the de!elopment of self-ser!ice
supermarkets and more recently in the de!elopment of dri!e-in 6uick-stop
con!enience stores, which emphasize fast ser!ice rather than low prices. #e!eral
regional chains of con!enience stores appeared* which is one of them is 0-11
stores. #upermarkets ha!e responded with epress lanes at checkout stands for
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shoppers who buy few items and pay with cash instead of checks. #ome firms are
eploring the concept of shopping by means of !ideo aids.
>rologue
&n the pre!ious two articles on L,ood >rocessingM, we saw
1. &ntro to food processing industry8 Awesomeness and ?bstacles
2. Truckload of @o!ernment #chemes and bodies
&n this third article, we see the A>MB, ,##A& Act and few other topics.
Although 1>#B #yllabus nowhere mentions A>MB Act but it needs to be
prepared with respect to
1. @#"8 Marketing of agricultural produce and issues and related
constraints '@#"(
2. @#"8 ,ood processing #upply chain management '#BM(8 upstream
issues ':ecause outdated A>MB Acts permit commission agentsNlengthen
and fragment the supply chainNincrease raw material cost.(
". -!en for food inflation, ,<& in Multibrand retailN A>MB angle needs to
be discussed.
A>MB Acts8 9hat and 9hyI
&n news columns, and TA <ebates surrounding food inflation and ,<& in
multibrand retail, you$!e often heard eperts talking about A>MB acts. #o,
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what are these A>MB Acts and how did they led to proliferationHnuisance of
middlemenHintermediaries in food supply chainI
&n old :ollywood !illages, there is always one Lala / Muneem type
character. =e lends money to farmers for seedsHcattleHmarriage epenses,
then arbitrarily purchases his wheatHrice Othrowaway prices P compound
interest rate P illiteracy NQfarmers in perpetual debt.
To fi abo!e problem, #tate go!ernments started enacting Agricultural
>roduce Market Bommittee 'A>MB( acts since )3s.
A>MB acts run on two principles8
1. -nsure that intermediaries 'and money lenders( do not compel farmers to
sell their produce at the farm gate Othrowaway pricesNfarmer is not
eploited
2. All food produce should first be brought to the market yardNQ sell
through auctionNfarmers gets good money.
Un$er APMC ActsA
A #tate is geographically di!ided and Market 'Mandis( are established at
different places within the states.
,armers ha!e to sell their produce through the auction Omandi.
To operate in Mandi, a trader has to get license.
9holesale, retail traders 'e.g. shopping mall owner( or food processing
company etc cannot buy farm output directly from farmer. They$!e to get it
through the Mandi.
?ld A>MB Acts8 >roblemsI
Members'i" #tate A>MB Market Bommittees ha!e 13-10 members
-ither elected or nominated by @o!ernment in accordance with pro!isions of the respecti!e #tate A>MB Act.
:ut in se!eral #tates, regular elections of A>MBs N not held.
2)
g
A>MB board are administrated by bureaucrats. As a result
1. A>MB bodies ha!e lost democratic nature.
2. bureaucrats run the showN red tapes P bribery
Farmers C'eate$
Most Mandi traders do following8
-!en after recei!ing the fruitH!eggiesHgrains, they delay payment to farmers for weeks and months.
&f payment is done on spot, then trader would arbitrarily deduct some amount, on ecuse that he has not recei!ed payments from the other
parties.
To a!oid taHcess, the traders don$t gi!e sale slips to farmersNQFater it is difficult for farmer to pro!e his Dincome$ to get loans from banks.
on an a!erage basis the farmer is able to recei!e barely 1H%th to 1H"
rd
of the final retail prices
D#uble
C#mmissi#n
Middlemen OMandi charge commission on both seller 'farmer( P buyer 'the urban retailer H food processor(
Ndouble commissionNfinal consumer has to pay e!en moreR
Hurting 2#t'
&i$es
Middlemen donot pass the benefit to either side
1. during peak season, when they buy from farmer Olow prices, they don$t drastically reduce the prices to final consumer.
2. during lean season, when consumers prices are high, the farmers do not get higher returns on their produce.
Resistance T#
Re%#rm
Middlemen ha!e rent-seekers mentality.
They resist anything that$ll increase transparency or reduce transaction cost and time.
-!en when electronic auction centres were established like the #afal Gational -change in :angalore, the eisting markets did not allow the
transition to a transparent system.
N# 6alue A$$iti#n
Middlemen ha!e no facilities to do gradingHsorting, all they do is pass the produce from farmer to final consumer and charge truckload of
commission in between.
Thus, post-har!est losses continue to be in the range of 12 to %3 per cent for se!eral commodities
Price Disc#/er
,or cereal, pulses and oilseeds, go!ernment announces Minimum support prices 'M#>(. #o farmers know in ad!ance, what the price of their
produce.
:ut for most perishables fruitsH!eggies, go!ernment doesn$t declare M#>.
thus, farmers are completely dependent for price disco!ery and on intermediaries
<uring peak production of seasonal crops, prices drop so drastically, the farmers can$t e!en co!er the cash epenses of transportation to
markets, lea!e alone the cost of production.
N# aucti#n
The licensee traders and commission agents ha!e formed informal cartels Omandis.
these traders keep low bidding so farmer ne!er benefits.
Cess BessN ta on ta
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&n e!ery Mandi, e!ery transaction is sub7ected to market ta P market cess.
This Bess money is to be used for further de!elopment of Mandi infrastructure- sorting grading storage facilities etc.
:ut money is not used for that purpose '+a7aH4almadi-type elements omnipresent.(
As a result, fruits and !eggies often get rotten due to lack of processing, storage facilities at the Mandi. -!en the good produce gets
contaminated due to flies and lar!aeNQgastrointestinal diseases.
Ficense ra7NLootera-ra7
To operate in an A>MB Market 'Mandi(, you need to get a license. This license
ra7 leads to following problems8
1. &n most Mandis, the pre-condition to get licenseNQ you must own a shop
or warehouse in the Mandi. :ut #hops H warehouses are limited n numberN
etremely high prices.
2. &f you can$t find a shopHwarehouse, then you$ll ha!e to find an old man
who has license but lea!ing business due to ageHhealth problems and his
sons not keen to 7oin this profession. Then you buy his shopHlicense
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Oetremely high price 'because there will be other buyers too outbidding
each other to buy his licenseR(
". &n any business where license is re6uiredNQ:ribes ha!e to be paid. :e it
Telecom or mining or A>MB mandi. #o again, you must eploit the
farmers to reco!er your 'bribe( in!estment.
:ecause 1P2P"NQ Bommission agentHmiddlemanHtrader has to make hea!y
in!estment to start his business in A>MB. #o, he decides to eploit the farmers
to reco!er that big investment.
&n Mandi, e!en weighmen, >addlers, =amals ha!e to get license NQ they also
need to pay huge bribesNQ they also o!ercharge the farmers to reco!er their
'bribe( in!estment.
=oarding
?!er the years, &ndia$s Agro-production has increased but number of
intermediaries in A>MB remained constantN their cartel controls the supplyN
hoarding, opportunistic profiteering. :ut howI Fet$s understand that with
potato eample8
>otato8 peak supply <ecember to March
>otato demand Throughout the year.
:ig traders, agents8 they buy potatoes from farmers Othrowaway prices
in the Mandi.
They rent large cold storage houses across different states for storing
potatos only. 'Ma7ority of cold storage facilities in 1ttar >radesh and 9est
:engal only de!oted to >otato-storage(
Thus these traders JcontrolK the potato supply across &ndia. And
whoe!er can control the supply, can control the prices.
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Thanks to this hoarding and cartelismNQ in peak and lean season of
potato, you$ll find price difference up to 1)3 per cent or e!en more. #imilar
case for onions, tomatoes, daal and e!erything else.
A>MB <efinition !s M#>
&n A>MB Acts, the definition of JagricultureKN!ery wide and !ogue.
Although main focus was on cereals, pulses and oil-seeds, e!en
horticulture produce 'fruits and !eggies( also came within the broad
definition of agriculture.
And o!er the last fi!e decades, the share of perishable produce in the
A>MB market is increasing ,or eample, the Azadpur Mandi in <elhi
principally caters to perishable crops rather than cereal or oilseeds.
?k so what$s the problemI
>roblemN go!ernment declares minimum support prices 'M#>( for many
cereal, pulses and oilseeds cropsNQ middleman OA>MB cannot eploit the
farmers beyond a le!el 'otherwise he can sell it to the ,B&(
but for fruits and !eggies, go!ernment doesn$t declare minimum support
prices 'M#>(NQ gi!es plenty of opportunity for the middleman to eploit
farmer 'as well as end consumer(.
Model A>MB Act
#o far we saw that original A>MB Acts enacted by !arious statesNbogus,
inefficient, useless, ridiculous.
233
"
After years of badass thuggary and inefficiency, suddenly 1nion agriculture ministry woke up, drafted a new Model A>MB act, and asked the #tate go!ernments to
adopt it. '9hyI :ecause Agriculture is a state sub7ect. #o it is upto the #tates to reform their laws..(
233
/
:ihar repealed its state A>MB act altogether.
231
2
#o far only 1/ states ha!e adopted the model A>MB act. 'as per the reply gi!en by Sharad >awar in Foksabha(
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This newHreformedHmodel A>MB Act of 233" has following features
Model A>MB Act8 #alient ,eatures
Ne1 M#$el Act
,armer doesn$t need to bring his produce to A>MB Mandi. =e can directly sell it to whome!er he wants. 'Although, if he doesn$t
bring his produce to Mandi, then he cant run for election in that A>MB marketing committee.(
,armers >rocessors, eporters, graders, packers, etc. can buy agricultural produce directly from farmers.
>ermits >ri!ate market yards, <irect >urchase Benters, farmers$ market for doing trade in agriculture produce. 'monopoly of
MandisNdestroyed(
>ublic >ri!ate >artnership in the management and de!elopment of agricultural markets in the country for post-har!est handling,
cold storage, pre-cooling facilities, pack houses etc.
A separate Bhapter to regulate and promote contract-farming arrangements in the country.
<ispute resolution mechanism for contract farming.
>rohibits commission agents in any transection.
establish #tate Agricultural >roduce Marketing #tandards :ureau
for @rading, #tandardization and Cuality Bertification of agricultural produce 'so they can fetch higher prices in desi-
foreign markets(
&ncreased the responsibilities of A>MB committee. They ha!e to8
1. ensure complete transparency in pricing system and transactions taking place in market area*
2. ensure payment for agricultural produce sold by farmers on the same day*
". promote agricultural processing P !alue addition
%. >ublish data on arri!als and rates of agricultural produce brought into the market area for sale.
). #etup and promote public pri!ate partnership in Mandi Management.
?k this new Model A>MB act sounds all well and good. :ut here are the
problems
Model A>MB Act8 FimitationsH>roblems
1. #o far, ?nly 1/ states adopted the Model A>MB Act 'as of 2312(. 9hyI
:ecause MiddlemanHtrader lobby made truckload of cash from eploiting
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farmers and consumers. >art of that money gi!en in election funding to
ruling parties in #tatesNQreforms stalled.
2. Model A>MB act is not Duniformly$ adopted, states ha!e made their own
modifications. ,or eample
Andhra
Andhra >radesh permitted pri!ate markets but they$!e to pay a license fee of +s )3,333 and pro7ect must be min.13 crores Ndiscourages small farmerHtrader
associations from setting up their own pri!ate markets.
?disha ?rissa has not permitted pri!ate markets for paddyHrice
=aryana ?nly adopted Bontract farming related pro!isions.
#ome states -!en the pri!ate markets are sub7ected to Mandi ta and Mandi cess.
commission
agent
Madhya >radesh abolished commission agent system but some other states didn$t adopt this pro!ision of model A>MB.
:ihar
+epealed its A>MB act in 233/.
Gow, #<M is in-charge of the unregulated markets
Go market fee are charged from the farmers :ut other charges for loadingHunloadingH=amal charges are !ogueHuncontrolled.
9:
Eet to amend its A>MB Act.
Mamata opposing the concept of contract farming on the premise that it could eopardise
Additional suggestions to reform A>MB
'These were made by committees of planning commission, inter-ministerial
groups etc.(
Rem#/e
'#rticulture
=orticulture should be specifically ecluded from definitions of A>MB. :ecause these Mandis are main culprits for inflation and wastage of
fruits and !eggies.
E8Aucti#n All A>MBs Mandis should introduce electronic auction platform
Members'i" ?pen membership of A>MB$s by encouraging wholesalers and retailers to enter into transactions with the growers.
N# >icense
Anyone should be allowed to trade in A>MB market. Ficensing system should be abolished.
The A>MB Market Bommittee should only fi the transaction fee and keep a :ank @uarantee from traders to ensure that the farmers$ payment
is not affected.
N# Cess@Ta< all the taesHcess le!ied in A>MB Mandis should be abolished.
Bontract farming
"1
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Bontract farming is a forward agreement between farmers and buyers
buyer
Agrees to buy produce from farmer Opredetermined price.
1sually pro!ides inputs '#eeds, fertilizers, pesticides(, technology and production practices so that final produce meets his desired 6uality.
farmer Agrees to grow and supply the produce to the buyer O predetermined 6uality, 6uantity and prices.
Bontract farming is pre!alent only in those states, 1'ere t'e APMC acts are
%a/#rable for pri!ate player e.g. Andhra >radesh, =imachal >radesh, Madhya
>radesh, Maharashtra who adopted the model A>MB Act.
#tate ,arm produce Area under contract farming 'acres(
>un7ab
>otato, Tomato, Bhilli /333
:asmati, Maize %33
#oyabean 1233
4arnataka Ashwagandha 033
Madhya >radesh 9heat 1),333
Bontract ,arming also done for eport oriented cropping of :asmati, Bhilli,
@herkins and soybean.
:elow A>MB-Mandi market
:elow the Mandi markets, there are primary assembly markets such as
!illage-bazaar, weekly haat in tribal areas etc.
There is wide !ariation in their go!ernance. #ome states run them under
>anchayati +a7 institutions, some states put them under super!ision of
district administration.
Bondition of cattle markets and fish markets are e!en worse. Most of
them do not ha!e e!en basic amenities like sheds, sanitation or drinking
water.
&mmediate reformsHupgrades necessary in all these markets.
<irect #ale H Booperati!e markets
"2
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Fong before the circulation of Model Act '233"(, se!eral #tates had promoted
,armer$s Market. -ample
+ythu :azar
:y Andhra go!ernment in D55
to eliminate middlemen
to help farmers directly sell their produce to customers
-!ery farmer in the +ythu bazaar sells his produce as a retailer.
Burrent scenario8
+ythu :azar in Andhra
!illages co!ered
farmers co!ered
similarl direct marketing iniati!es in other states8
>un7ab and =aryana A"ni Man$i
+a7asthan ?isan Man$i
Tamil Gadu U:'a/ar &'ant'igal
Maharashtra &'etkari ba:aar
Pr#blemA ?!er the years, small traders ha!e taken o!er the place of farmers in
many of these marketsN again problem of middlemen and commission agents.
&n #outh 4orea, with direct marketing of agricultural productsN middlemen
were remo!ed and as a result8
consumer prices declined by
farmers$ income rose by
Airtual Markets
-ample of such !irtual marketsN ,uture echange, #pot -change,
9arehouse +eceipt #ystem and 9eb Marketing.
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&n &ndia, the Multi Bommodity -change 'MBT( and the Gational
Bommodity <eri!ati!es -change 'GB<-T( are the two biggest players in
the agro-futures market.
NCDEB
#etup an e-mandi 'online wholesale market(.
,armer will first deposit his produce to a GB<-T nominated warehouse, gets receipt.
This receipt can be traded by the participant on the e-mandi across the country.
MCB
9orking on similar pro7ect like abo!e, with help of Ees bank.
MBT online portal for commodity trading also a!ailable in regional languages to help non--nglish speaking farmers.
an allied topic is negotiable warehouse receipts, but we$ll see it in the net
article under finance-taation-,<&-eports.
&TB e-Bhoupal
&n 2331, &TB '&ndia Tobacco Bompany Fimited( started small internet kiosks at
the !illage le!el. >ro!ides following8
1. direct procurement framework
2. +eal time market information related to prices
". A!ailability of inputs8 seeds H fertilizers, their prices
%. scientific farm practices
). weather, monsoon data
/. <ispute resolution between the company and the farmers.
Bo!erage more than
,armers % million
Aillages %3,333
4iosks /333
Thanks to &TB$s e-Bhoupal, farmers$ income increased by 13-1); 'compared
to earlier when they relied on middlemen Omandi(
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Anyways we$ll see more about these intermediate market, supply chains in
indi!idual articles for fruit-!eggies etc. Gow mo!ing to the net law topic
#ingle ,ood +egulator
1#A #ingle regulator8 ,ood and <rug Administration ',<A(.
14 ,ood standard agency ',#A( is the single authority for formulating all food laws.
AusPGU Australia and Gew Uealand ha!e a common single regulator known as J,ood #tandards V Australia Gew Uealand ',#AGU(K
&ndia
Totally awesome8 7ust check the list of o!erlapping and outdated laws
1. >re!ention of ,ood Adulteration Act 15)% '>,A(
2. -ssential Bommodities Act 15)) '-BA(
". Aegetable oils, <e-oiled meal and edible flour control order, 15/0 ' A>?(
%. ,ruit >roduct ?rder, 15)) ',>?(
). Meat ,ood >roducts ?rder, 150" 'M,>?(,
/. Milk and Milk >roducts ?rder, 1552 'MM>?(
0. Agricultural >roduce '@rading and Marketing( Act 15"0
2. :ureau of &ndian #tandards, 152/
5. #tandards and 9eights Measure Act, 150/
13. -port 'Cuality Bontrol and &nspection( Act, 15/"
&n 233/, After sleeping for decades, @o!ernment enacted ,ood #afety and
#tandards Authority of &ndia ',##A&( Act to pro!ide for a single food law
regulator, and repealed those outdated acts. :ut until then, for so many years,
those old laws did not allow &ndian food processing industry to grow. =owI
>roblem with o!erlapping laws
1. Many ministries deal with food laws N multiple bodies which set food
standards N ambiguity, confusion for consumers, traders and
manufacturers.
2. Aery few standards de!eloped for raw agricultural produce.
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". They dealt only with physical parameters of size, colour and farm
impurities. :ut not on microbiological and toicological characteristics
'which are necessary for eport to 1#H-1(.
%. ,ood laws are often inconsistent and contradicting each other. e.g.
-mulsifiers and #tabilisers are permitted for use in Wams, Marmalade .
,ruit Bhutney under >,A but not under ,>?.
). &n many cases, where one standard is more stringent than the other. Then
food-entrepreneur would adopt the more stringent standard in order to
pre!ent potential penalization and bribe harassment by food inspectors.
,or eample, ,>? allows use of artificial sweeteners in certain fruit
products whereas >,A does not. =ence, the industry a!oids using artificial
sweeteners altogether.
,##A& Act 233/8 ,eatures
-stablished a statutory body The ,ood #afety and #tandards Authority of
&ndia ',##A&( O<elhi 1nder the Administrati!e control of Ministry of
=ealth . ,amily 9elfare
+epealed !arious outdated central Acts !iz.
Pre/enti#n #% F##$ A$ulterati#n Act (PFA.
Aarious J?rdersK by Bentral Ministries e.g. ,ruit >roduct ?rder
',>?(, Meat ,ood >roducts ?rder. Milk and Milk >roducts ?rder,
Aegetable oil, -dible flour ?rder etc.
,A##A& made responsible for8
5ui$elines
#cientific ,ood standards8 frame them, enforce them
+egulate the manufacture, import, processing, distribution, and sale of food.
Make @uidelines for accreditation of food laboratories, food safety management bodies.
&nternational technical standards for food, sanitary and phyto-sanitary standards '#>#(
A$/is#r #cientific ad!ice and technical support to Bentral @o!ernment and #tate @o!ernments food safety and nutrition related policies and rules.
&ur/e Bollect <ata on food consumption, food contamination, biological risk etc.
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Net1#rking
Breate information network across the country to connect public, consumers, >anchayats etc.
>ro!ide them rapid, reliable and ob7ecti!e information about food safety
+apid alert system for food contamination and biological risk
>romote general awareness about food safety and food standards.
HRD Training to people in!ol!ed in food business
&n the net article, we see the finance-taation-,<&-eport matters related to
food processing industry. Then we$ll dig into #upply chain management,
upstream-downstream re6uirements for indi!idual sectors8 dairy, confectionary,
fruit-!eggies meat-fish, etc.
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