Agribusiness

1. PGDM-ABM-611
Agriculture and Food Systems
Topic: Agricultural Marketing
Presented by:
Bijender
ICAR-NAARM
1

2. Table of content
● Introduction
● Brief History
● Reform Attempts
● eNAM
● Farm Laws, 2020
● Need for Reforms
● Commodity Market
● AGMARK
● Risks and Constraints
● Way Ahead
2

3. Agricultural marketing
Agricultural marketing is a process which starts
with a decision to produce a saleable farm
commodity, involves all the aspects of market
structure or system, both financial and
institutional, based on technical and economic
considerations, and includes pre and post-harvest
operations, assembling, grading, storage,
transportation and distribution.
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4. Indian Scenario
• The Indian agriculture market attained a value of INR 55,994 billion
in 2020
• The market is expected to witness a growth in the forecast period of
2021-2026, growing at a CAGR of 12%
• By 2026, the market is estimated to reach a value of almost INR
111,916 billion.
• The major drivers of the industry are rising disposable incomes,
increasing population, increasing technological advancements, rising
food demand.
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5. Stages of Agricultural Marketing
Assembly: Commodity buyers specializing in agricultural products, such
commodities as grain, cattle, beef, oil palm, cotton, poultry and eggs.
Transportation: Independence truckers, trucking companies, railroads, airlines etc.
Storage: Public refrigerated warehouses, controlled-atmosphere warehouses, freezer
warehouses.
Grading and Classification: Commodity merchants or government grading officials.
Processing: Food and fiber processing plants such as flour mills, oil mills, rice mills,
cotton mills.
Packaging: Makers of tin cans, cardboard boxes, and bottles for food packaging or
fiber products.
Distribution and Retailing: Independent wholesalers marketing products for various
processing plants to retailers.
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6. Brief Background
 Organised Agricultural Marketing saw its Genesis post-Independence.
 Pre-Independence, policy focused on keeping prices for consumers and end industry low.
 Post Independence augmenting production incentivising farmers through
remunerative prices
 Low price realisation, high costs of marketing and considerable post harvest losses
necessitated the development of regulated primary wholesale markets.
 The Royal Commission on Agriculture, 1928 called for regulation of marketing practices
and establishment of regulated markets.
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7.  States enacted Agriculture Produce Markets Regulation (APMR) Acts during the 60s and
70s, bringing all primary wholesale markets under their ambit.
 For each market area, an Agricultural Produce Market Committee (APMC) was constituted
to frame and enforce rules.
 The objective behind setting up of regulated markets was to ensure a fair and transparent
environment for agricultural trade and commerce.
7

8. Expert
committee
report, Ministry
of Agriculture
Model
Agriculture
produce
marketing
committee act
Report of the
Inter-Ministerial
taskforce on
agriculture
marketing reforms
National
Commission on
Farmers
Model APMC
rules, 2007
published
Report of
committee of
state Ministers,
In-charge of
agriculture
marketing to
promote
reforms
eNAM
Launched
NITI Aayog
taskforce on
agriculture
development
Doubling
farmers
income
committee
report,
Model APLM
act, 2017
Model
contract
farming act,
2018,
Operational
Guidelines
for GrAMs
High
powdered
committee of
Chief
Ministers
3 Historic bills
introduced in
parliament to
reform
agriculture
marketing
2001
2002
2003
2004-2006
2007
2013
2015
2016
2017
2018
2019
2020
Reform Attempts
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9.  Shankarlal Guru Expert Committee, 2000- Report in 2001
 Agriculture Ministry constituted an Inter-Ministerial Task Force in July 2001
The steps recommended by this task force included:
 Removal of restrictive provisions hindering a competitive marketing system
 Promotion of direct marketing
 Encouragement of contract farming
 Rationalization of Market fee and tax structure
 Facilitate National Integrated Market
 Model APMC Act, 2003 encouraged state governments to amend their individual state acts
in accordance with this model act.
9

10.  2010- Empowered Committee of State Ministers- persuade various states to implement
reforms through adoption of Model APMC Act.
 Model Act suggests-
A barrier free national market.
Measures to effectively disseminate market information and to promote grading, standardization,
packaging and quality certification of agricultural produce.
 The Committee in its report (2011) recommended for
- Coherence of State APMC Acts and rules in line with Model Act and Rule.
- Provision of multiple and competitive marketing channels to farmers.
- Integration of mandies with electronic spot exchange.
- Private investment in agricultural markets.
- Infrastructure project status for agricultural markets.
- Promotion of direct marketing as well as contract farming.
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11. e-NAM
• Founded on 14th April 2016
• By ministry of agriculture and farmers welfare,
government of India.
• Small farmers agribusiness consortium (sfac) lead
operating agency.
• It offers a plug in to any market yard existing in
state whether regulated or private.
• Over 90 commodities including grains, fruits,
vegetables are listed for trade.
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12. Source:
https://enam.gov.in/web/mandis-
online
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13. Commodity category Number of commodity
Cereals 26
Oilseeds 14
Fruits 31
Vegetables 50
Spices 16
Miscellaneous 38
Commodities traded under e-NAM
Source: eNAM.gov.in
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14. Process of e-NAM
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15. 15

16. Challenges in implementation of e-NAM – 3 I’s
• Infrastructure
• Institution
• Information
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17. Way Ahead for e-NAM
• Institutions and infrastructure
• Strengthen scientific storage and warehousing facilities,
development of rural roads and logistics network
• Quality certification
• Proper synergy between marketing organization service
providers
• Awareness programs are needed
• Mandatory hands on training
17

18. NITI Aayog taskforce on agriculture development
• To coordinate and develop synergy with Central Ministries and State
Government task forces
• To recommend strategies for reinvigorating agriculture in all its aspects
• To formulate strategies for reforms, innovation and technology diffusion
• To identify successful experiments and programmes from States and Uts.
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19. Model APLM act, 2017
• Abolition of fragmentation of market within the state/UT by
removing the concept of notified market area
• Disintermediation of food supply chain by integration of
farmers with processors, exporters, bulk retailers and
consumers
• Promotion of direct interface between farmers and
processors/ exporters/ bulk buyers/ end users so as to reduce
the price spread bringing advantage to both the producers &
the consumers.
• Wholesale market at every 80 km.
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20. Model Contract Farming act, 2018
With a view to integrate farmers with bulk
purchasers including exporters, agro
industries etc. For better price realization
through mitigation of market and price risks
to the farmers and ensuring smooth agro raw
material supply to the agroindustries
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21. Services contracts all along the value chain including pre-production,
production and post-production have been included.
 Contracted produce is to be covered under crop / livestock insurance
in operation.
 Contract framing to be outside the ambit of APMC Act.
 No permanent structure can be developed on farmers’ land/premises
 No right, title of interest of the land shall vest in the sponsor.
 Promotion of Farmer Producer Organization (FPOs) / Farmer
Producer Companies (FPCs) to mobilize small and marginal farmers
has been provided.
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22. The Farm Laws
1. Farmer's Produce Trade and Commerce (Promotion
and facilitation) Act, 2020
2. Farmers (Empowerment and Protection) Agreement
on Price Assurance and Farm Services Act, 2020
3. Essential Commodities (Amendment) Act, 2020
22

23. Farmer's
Produce Trade
and Commerce
(Promotion and
facilitation) Act,
2020
This act allows farmers to engage in trade
of their agricultural produce outside the
physical markets notified under various
state Agricultural Produce Marketing
Committee laws (APMC acts).
Objectives: -
• To promote barrier-free inter-state and
intra-state trade of farmers' produce.
• To reduce marketing/transportation
costs and help farmers in getting better
prices.
• To provide a facilitative framework for
electronic trading.
23

24. Farmers
(Empowerment
and Protection)
Agreement on
Price
Assurance and
Farm Services
Act, 2020
The acts has provision to setup a
framework for contract farming.
Objectives: -
• To transfer the risk of market
unpredictability from farmers to
sponsors.
• To enable farmers to access modern
tech and get better inputs.
• To reduce cost of marketing and boost
farmer's income.
• Effective dispute resolution mechanism
with redressal timelines.
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25. Essential
Commodities
(Amendment)
Act, 2020
The act removes commodities like cereals,
pulses, oilseeds, edible oils, onion, and potatoes
from the list of essential commodities and
government will only regulate the supply and
prices only under extra ordinary conditions like
war, calamities and very high price rise.
Objectives: -
• To bring investment for farm infrastructure
like cold storages, and modernizing food
supply chain.
• To help both farmers and consumers by
bringing in price stability.
• To create competitive market environment and
cut wastage of farm produce.
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26. The Need for Reforms
Fragmented Markets
Insufficient Markets
Market Fees & Charges
Inadequate Infrastructure
Post Harvest Losses
Restriction in Licensing
High Intermediation Costs
Information Asymmetry
Inadequate Credit Facilities
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27. Agricultural Marketing and Farmer Friendly Reforms Index (AMFFRI)
 Ranking states and UTs in terms of marketing and farmer friendly reforms.
 The index is based on actions taken by each state and UT to
(i) Reform the system of agricultural marketing
(ii) Facilitate and liberalise lease in and lease out of agricultural land.
(iii) Liberalization of regulation on felling and transit of trees grown on private land.
The information on these aspects was taken from the concerned ministries of Government of
India.
27

28. 0
10
20
30
40
50
60
70
80
90
Maharashtra
Gujarat
Rajasthan
Madhya
Pradesh
Haryana
Himachal
Pradesh
Andhra
Pradesh
Karnataka
Telangana
Goa
Chhatisgarh
Jharkhand
Uttar
Pradesh
Punjab
Assam
Mizoram
Nagaland
Sikkim
West
Bengal
Tripura
Odisha
Uttarakhand
Arunachal
Pradesh
Chandigarh
Tamil
Nadu
Meghalaya
Lakshadweep
Jammu
&
Kashmir
Delhi
UT
Puducherry
States’ score in terms of Agri Marketing and Framers
Friendly Reforms
Source: Report of expert Committee on Land leasing, NITI Aayog,
GOI, March 2016 28

29. Commodity Market
The most direct and popular form of trading in commodity market- futures
contracts.
A futures contract is
- derivative financial contract
- to transact an asset
- at a predetermined future date and price
29

30. Major Commodity Exchanges In India
Multi Commodity Exchange of India (MCX), Mumbai.
- India's largest commodity derivatives exchange
- ₹32,424 crores, during FY2019-20
National Commodity and Derivatives Exchange of India (NCDEX), Mumbai.
National Multi Commodity Exchange (NMCE), Ahmedabad.
Indian Commodity Exchange (ICEX), New Delhi.
ACE Derivatives & Commodity Exchange Limited, Mumbai.
Universal Commodity Exchange Limited, Navi Mumbai.
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31. AGMARK
Established under Agricultural Produce(Grading and Marking ) Act, 1937. It is
a certification mark to assure the quality of agricultural products in India.
Standards for AGMARK are framed based on the Food Safety and Standards
Act, 2006.
Quality Grading and Certification for Export and Domestic Trade.
Till date, grade standards for 224 agricultural commodities have been notified.
The application processes are done online.
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32. Advantages of AGMARK
Helps trader/farmers to get the value as per the quality produce
Consumer get the quality product in term of money spent.
Boosts marketing of product.
Ensures that agricultural commodities move through the market faster, without
obstructions.
Facilitates the implementation of contract farming.
Facilitates inter-state and International trading.
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33. Labelling requirements on AGMARK certified products
All certified products should have Agmark insignia and following details printed on them:
Name and address of the authorised player
Name of the commodity
Grade
Lot/Batch No.
Date of Packing
Best before date
Net weight/Volume
Maximum retail price
List of ingredients in descending order of their wt.
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34. Risks in Agricultural Marketing
1. Physical Risk
Loss in quantity and quality of the product like pest, disease attack, fire accident and
improper packing.
2. Price Risk
Price volatility of agricultural products.
3. Institutional Risk
Change in government budget policy, import export policy
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35. Constraints of Agricultural Marketing in India
 Too many intermediates
 Lack of financial Resources
 Lack of organised marketing system
 Lack of transport facilities
 Lack of proper storage facilities
 Lack of Standardization
 Lack of Awareness of the Market
 Distress Sale
 Lack of Market Intelligence
 Lack of Organization
 Problem of produce collection
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36. Way Ahead!
- Role of private players
- Strengthening Co-operatives for agricultural marketing
- Potentials of e-trading
- Institutions and institutional support
- Adequate Transport Facility
- Access to correct market information
36

37. Our Food Pvt. Ltd.
• Its objective is to create value
to the farmers by disrupting
the entire value chain by
gaining a control over the
entire post-harvest value chain
through its 1800+ Farmer
Franchise.
• Provides Ware-housing
services to farmers.
• Connects agri-input
companies to farmers.
• It aims to setup 1 million
farmer franchise by 2025.
37

38. Farmer Franchise of Our Food Pvt. Ltd.
A local farmer
entrepreneur is
responsible for
processing raw
material at farm level.
The farmer
entrepreneur are
trained for processing
raw materials.
It reduces the cost of
transportation by
procuring raw
materials from nearby
villages.
The location of farmer
franchise is decided
based on parameters
such as accessibility to
the roadway and
availability of water.
Our food facilitates
loan to farmer
franchise for setup of
mini food processing
plant with the help of
local banks.
The post-harvest
losses are reduced due
to value addition at
farm level.
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