Indian Agricultural marketing linkage system -ICT

What is market intelligence?

Market intelligence is the process of external data collection of the market and analysis of this information. It helps a company take business decisions so as to penetrate the market or capture it.

Agricultural marketing comprises all the activities involved in the supply of farm inputs and output – including all those operations which are related to the procurement, collecting, grading, storing, food and agro-processing, transportation, financing and selling of the agricultural produce. In effect, marketing includes all overarching aspects of agribusiness, while it excludes the core activity of cultivation.

The agricultural marketing system also relates to economic growth of the agriculture sector and ensuring safe and affordable food to consumers, both of which are directly linked to the food security of the country.

A BIT OF INTRO INTO MARKETING:

1. Kohls and Uhl (1990) have classified various marketing functions into three categories namely, exchange functions, physical functions and facilitating functions. Under exchange functions we have buying and selling. As already mentioned, while discussing agricultural marketing we confine ourselves to only buying and selling but it is much beyond that covering physical (storage, transportation and processing) and facilitating functions (standardization, financing, risk bearing and market intelligence).

2. Categorization of functions is important as it will help in better understanding of other concepts like National Agricultural Market (which is explained separately) dealing with integration of functions like storage, transportation, grading and assaying and market information.

3. In the process of taking the produce from point of production to the place of consumption, there is a network of distribution/ channels that will be influenced by the existing regulations and policies of the government.

BACKGROUND OF AGRI-MARKETING:

1. Regulation and development of agricultural produce markets was taken-up as an institutional innovation and construction of well laid-out market yards was considered essential for regulating the practices followed in wholesale markets. The regulated marketing system revolves primality around wholesale physical markets to facilitate mainly buying and selling of Agri-commodities. In some of the markets we may observe other functions also being performed like storage, but it is confined to only a limited number of markets. Despite significant progress in production of various Agri-commodities, the farmers’ income remains subdued owing to market imperfections and deficiency of infrastructure in agricultural supply chains.

2. Government has introduced a number of policy initiatives to help evolve an integrated marketing system not only in-terms of physical markets but also in terms of various marketing functions like storage, banking and assaying.

3. The major concern of the government policies related to agricultural marketing was to keep the price of food for the consumers and agro raw material for the industry in check. The Karanjia Cotton Market was the first regulated market established in 1886 under Hyderabad Residency order. The first legislation was the Berar Cotton and Grain Market Act of 1897 which became model act for legislation in other parts of the country.

4. To safeguard the interest of farmers by overcoming the defects of the system, Royal Commission on Agriculture in 1928 and Central Banking Enquiry Committee in 1931 suggested the introduction of regulations in agricultural marketing.

5. Directorate of Marketing and Inspection (DMI) was established in 1935 and it was DMI only which prepared a Model Bill on regulations in agricultural marketing in 1938. DMI advised state governments to regulate markets to safeguard the interest of the producers by overcoming the prevailing malpractices in agricultural markets. The role of DMI operating under central government was only advisory in nature for agriculture being state subject.

6. Efficient and effective agricultural marketing system ensuring remunerative price to farmers for their produce and delivery of goods to consumer at affordable price.

7. Physical markets are regulated in terms of implementation of the provisions of the APMC Acts as stipulated therein for orderly marketing of agricultural produce. Only state government is empowered to set-up physical markets through the institutional arrangement as defined under respective APMC Act.

8. The market functionaries are required to obtain permission/ license from the concerned state authorities before performing any market function. The regulations also defined the ways in which different marketing functions will be performed like price discovery has to be through methods like open auction or tender to ensure transparent and competitive price being discovered.

9. . Under reform process, agricultural marketing has seen many policy initiatives taken by the Government like circulation of Model Act, 2003 & 2017, introduction of eNAM and ordinances like the Farmers' Produce Trade and Commerce (Promotion & Facilitation) Ordinance, 2020 and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020.

10. To push the agricultural marketing system in the country to the next level of development through transparency, competition, market efficiency, participation of private players and to take advantage of changing trade environment world over, market reforms were introduced in agricultural marketing during 2003. Expert Committee (2001) made several recommendations which were examined by the Inter – Ministerial Task Force (2002) set-up by the Ministry of Agriculture and Farmers Welfare (GoI) to bring in reforms in agricultural marketing. The Task Force identified nine areas to work out a road map for strengthening agricultural marketing system in the country. In addition to legal reforms in the existing APMC Act, these areas included direct marketing, market infrastructure, pledge financing, warehousing receipts system, forward and futures markets, price support policy, information technology in agricultural marketing and marketing extension training and research.

LINKAGE OF FARMERS TO MARKET:

Whatever strategy is adopted, awareness of the markets and marketing condition among farmers is essential for successful market linkage development. Linkage of farmers to markets needs either the “top-down” strategy, which involves identifying demand in the market and then seeking farmers or farmers group to satisfy it or the “bottom-up” strategy involving identification of farmers/ farmers group to work with and then finding suitable market that they can be linked to for supplying the produce.

• Availability of markets may not be the sufficient condition to ensure success, they need to be in a state to facilitate the farmers and other stakeholders in realizing the profit who are linked with entrepreneurs or farmers, respectively participants also need to be ensured of greater net incomes from entering into a new linkage than they obtain through their existing activities.

• Identification of market is important, and this should be followed by brining farmers in a position to bring the quality produce at right time, which will inevitably accrue more investments to them, and farm profitability must be accounted for by making realistic assumption of production and distribution.

• The establishment of these linkages and their information need can by supported by the application of information technology. The entire process of “Linking” farmers with market can be facilitated with the application of ICT.

It is important to understand Information and Communication Technology (ICT) as application of technology may help farmers in better participation in the emerging marketing channels. ICT is the technology used to communicate information. There are a variety of digital ICT tools, including radio, television, cellular phones, computers, networks, hardware, software and satellite-linked systems and their associated services and applications, such as video conferencing, community radio and distance learning systems. India’s first online learning happened when the country launched a program called Educational Research Network (ERNET) in 1986.

• The ICT can deliver fast, reliable and accurate information in a user-friendly manner for practical utilization by the end user. The information disseminated facilitates the farmers to decide what and when to plan, how to cultivate, when and how to harvest, what post-harvest management practices to follow, when and where to market the produce.

Need of ICT tools in agriculture:

1. Inadequate information on agricultural inputs such as seeds, fertilizers and pesticides.

2. Poor linkage with cities and information sources.

3. Lack of market information such as commodity prices, Mandi information and information on alternative market channels, and consumer behaviors.

4. Lack of extension facilities.

5. Unavailability of online marketing platform.

6. Low level of awareness on soil and water testing .

7. Deficiency of knowledge on modern technologies and market prevailing prices.

8. Inability to compete with modern farmers.

9. Low level of education among farmers.

10. Lack of knowledge about credit creation.

11. Lag between traditional and modern technology.

Application of ICT for dissemination of information to farmers:

• – m-Kisan is a mobile based agro advisory for farmers with actionable information. The information is delivered through mobile channels like voice, text messages, on-demand videos and farmer’s helpline. This app gives appropriate advice to farmers on the relevant crop, livestock issues and provide platform for exchange of knowledge.

• A digital application created by IIT Kanpur and BSNL, which aims to provide present market rate of agricultural commodities to farmers. This help farmers in making market related decision like selection of market and appropriate time to sell their commodities to maximum return.

• National Agriculture Market (eNAM) is a pan-India electronic trading portal which networks the existing APMC Mandis to create a unified national market for agricultural commodities.

• Kisan Call Centers are exclusively designed as a phone helpline for the farmers in the regional languages. Kisan call centers are located in every state to manage enquiries without congestion from every location of each state. Solutions to queries related to agricultural and allied activities are offered through these call centers by the exports. By using toll free number 1551 or 1800-180-1551 farmers can share their issues associated with their crops with the Kisan Call Centre.

• Farmers Portal website is ventured to make one stop shop for meeting all information needs on production, sales and storage of farmers relating to agriculture, animal husbandry and fisheries sectors.

• Agricultural Marketing Information Network (AGMARKNET) by connecting vital regulated markets located throughout the country and state agriculture marketing boards and directorates. AGMARKNET provides interface among farmers and other beneficiaries and share market related information.

• An initiative by ITC e-Choupal provides alternative marketing channel and provide information to help farmers overcome various challenges faced by them in practicing agriculture. Under the initiative, a kiosk equipped with computer with internet access and managed by trained sanchalak is established at village level. The sanchalaks using the village internet kiosks provide access to information on parameters like weather forecast, Mandi prices, share good agricultural practices and risk aversion strategies. It also facilitates the sale of farm inputs and purchase farm produce from the farmers' doorsteps. e-Choupal provide information on market related aspects on real time basis and farmer specific customized knowledge. This enables farmers to decide at right time matching the requirements of farm produce in the local market.