Market Orientation for Agribusiness in Chhattisgarh
Dr. G. K. Deshmukh1, Dr. Sanskrity Joseph1, Ms Rashmi Dewangan2
1Institute of Management, Pt. Ravishankar Shukla University, Raipur, Chhattisgarh
2Shri Shankaracharya Mahavidalaya, Bhilai, Chhattisgarh
*Corresponding Author E-mail: gkd16@yahoo.co.in
ABSTRACT:
Famous as ‘The Rice Bowl of India’, Chhattisgarh is the 26th state of the country. It came into existence on 1st of November in the year 2000. The quality of soil, adequate climatic conditions, vast rural population and availability of hardworking labours make the state favourable for agricultural business. Government estimates show that approx. 80% people living in the state are dependent on agriculture for their livelihood. Therefore the economic development of the state primarily depends on agriculture and the socioeconomic condition of the farmers. In the early years of its foundation, the state faced many challenges viz. lack of irrigation facilities, lack of technology and training centres in the field, dependency on other states for good quality of seeds, availability of agricultural loans at higher interest rates and so on. With the constant efforts of the state government and the determination of the farmers, the sector has undergone improvement in many ways. Despite these changes, the condition of the farmers and that of the agricultural produce have yet not reached the expected level. One of the major issues in this regard is related to marketing of the agricultural produce. This paper focuses on the current problems of agriculture in the state and the possible suggestions to overcome them.
KEY WORDS: Agricultural Marketing, Krishi Upaj Mandi Adhiniyam Act 1972, minimum support price (MSP).
Agriculture in simple words is the act of cultivating land for raising crops (also known as Farming). Since this activity depends on many natural factors such as the fertility of soil, weather conditions, average rainfall etc; every type of crop cannot be grown at all the places. This emphasizes the necessity of marketing activities. Marketing has been defined as any human activity which aims at satisfying the needs and wants of the consumers through exchange process Kotler and Keller (2005). Agricultural Marketing is the marketing of agricultural produce. The variety of crops grown has to be supplied to the areas where there is its demand i.e. from the place of production to the place of consumption.
According to the National Commission on Agriculture, XII Report, (1976), agricultural marketing is a process which starts with a decision to produce a saleable farm commodity, and it involves all the aspects of market structure or system, both functional and institutional, based on technical and economic considerations, and includes pre- and post-harvest operations, assembling, grading, storage, transportation and distribution. It takes into consideration all the factors like quality of produce, place of buying and selling, price offered, profit earned by the farmers and the middleman, promotional plans and policies, so on and so forth. Since independence various policies have been framed and measures taken for the marketing of farm produce in order to improve the condition of farmers. But in a developing country like India, agriculture has yet not gained the desired status.
2. AGRICULTURAL STATUS IN CHHATTISGARH:
As per details from Census 2011, the total geographical area of Chhattisgarh state is 1,35,191 Sq. Km. The total population of the state is 2.56 Crores. Of the total population, around 76.76 percent reside in the rural areas. The main occupation of the people is agriculture. Nearly 80% of the population is engaged in cultivation. Net sown area of the state is 4.828 million hectares. The major crop grown in Chhattisgarh is paddy. Other crops grown here are oilseeds, wheat, coarse grains, groundnut, maize and pulses. The soil of the state is suitable for the cultivation of horticultural plants guava, mango, banana etc. and various types of vegetables. The state lacks in proper irrigation system and has an average rainfall of around 1400 mm. Tropical climate prevails in the state. Current Agricultural marketing system in India is the outcome of several years of Government intervention. With the increase in urbanization and disposable income, increase in the production level, changes in the pattern of demand and supply, advances in the methods of marketing and continuous intervention of the government over the years, this system has undergone several changes. Krishi Upaj Mandi Adhiniyam Act 1972 regulates the marketing of agricultural products in the state. There are 73 principal market yards and 97 sub-market yards in the state. Total capacity managed by State Warehousing Corporation is 10.45 MT - 5.11 MT is owned and rest is hired capacity. Food Corporation of India has a storage capacity of 5.12 lakh MT in the state. Markfed has 3.22 lakh MT of storage capacity and Central Warehousing Corporation that of 2.74 lakh MT in the state. Chhattisgarh has approximately 70 cold storages (with a total capacity of 3.42 lakh MT Source- NHB), which are mainly concentrated in Raipur and Bilaspur.
3. MAJOR PROBLEMS IN THE AGRICULTURAL MARKETING SYSTEM:
Following are the major problems in the agricultural marketing system identified by researchers:
1) The Supply Chain:
According to a study conducted by Global AgriSystem of Fruit and Vegetable supply chain, there are a large number of intermediaries between the producer and the consumer. This results in primary producer getting very less percentage of the consumer price.
2) Multiple Handling:
As a result of large number of intermediaries, the products undergo multiple hands. This results in wastage of huge quantities.
3) Poor quality of Products:
The farmers often use poor quality of seeds for cultivation. This produces crops which does not meet the quality standards. As a result farmers do not get good price for their produce in the market.
4) Credit Facilities:
The commercial banks are providing the credit facilities to the farmers. But still a large number of agriculturist population borrow money from private money lenders who charge a high interest rate from them.
5) Inadequate Storage Facilities:
The farmers do not have proper arrangements for storage of their harvested crops. Even the state government’s storage capacity is not adequate. A huge amount of agricultural produce lies in open under the sun. Often they are damaged and wasted due to rainfall, or due to attack by rats and other insects.
6) Lack of knowledge about the Markets:
Though the state government is spreading the agriculture related information through various media like television, radio, newspaper, posters etc, the farmers due to their illiteracy and ignorance still do not have updated information about the markets where they can sell their products. They lack information about the optimal price which they can get. The middleman derives benefit from such ignorance on the part of farmers.
7) Price Determination by the Government:
In all other sectors the price of the manufactured products are determined by the producer. But in case of agriculture business, it is not the farmer producer who fixes the price of the agricultural products but the government. The government fixes the minimum support price (MSP) for some crops like Paddy, Wheat, Jute etc. This often reduces the margin of profit earned by the farmers.
8) Dependence on Monsoon:
Majority of farmers still depend on the rainfall for irrigating their fields. This is due to lack of proper knowledge to the farmers about the modern methods of irrigation and also due to the lack of government intervention towards irrigation facilities.
4. Measures for Improvement:
Government has framed multiple policies for the improvement of agricultural produce and for the betterment of agriculturists. The state government has to take more vigorous actions to monitor that their foregoing plans and policies are implemented at the grass root level. Moreover it needs to find solutions to the current problems existing in this sector. some of the possible solutions can be:
1) Market Reform:
The government should improve and expand the markets for agricultural products in the state. The committees dealing in this sector should be reorganized. Laws related to marketing of agricultural produce should be made more strict for the benefit of the economy. Existing infrastructure of Haats and Mandis needs improvement.
2) Improving Information Access:
Today is the era of information technology. The farmers need to be updated about the latest technologies in farming, improved methods of harvesting, soil management, development of good quality seeds, about the market structure for selling of their produce, competitive price, information related to weather forecasts, and so on.
3) Training, Research and Development:
The state should give more attention for research in the field of agriculture marketing. It is only through more and more research that improved methods of farming and solutions to marketing problems can be sought. Besides academic industry linkage needs to be strengthened for the betterment of the society and the economy. Some agriculture based courses along with vocational training to the students will educate the population with modern methods of farming as well as marketing.
4) Improving Irrigation, Transportation and Storage Facilities:
Latest technologies for water harvesting should be adopted. Irrigation system should be strengthened to avoid dependency on monsoon. Each and every rural interior village of the state should be connected by proper roads. More Cold storages should be built to avoid goods from perishing. There should be optimum utilization of existing warehouses in the state. There should be timely monitoring of these storages for hygiene and sanitation.
5) Grading of Products:
There are various agencies which grade the agricultural products. These organizations should be expanded for improved marketing systems.
5. CONCLUSION:
Chhattisgarh is a fast developing state with majority of population dwelling in rural areas and depending on agriculture for their living. The forces of demand and supply operate most of the agriculture commodity market. However, with a view to protect farmer’s interest and to encourage increased production, the government also fixes minimum support price (MSP) for some crops like Paddy, Wheat, Jute etc. as public policy instruments. But only this is not sufficient. Agricultural sector contribution to national GDP is not up to the standards required. The state should try to overcome the problems faced in the current scenario and should aim to make itself a leader in this sector contributing maximum to states and then country’s GDP. This requires intervention not only from the side of the government institutions but also by raising literacy and awareness level of the farmers about the modern tools and techniques of farming and marketing.
6. REFERENCES:
1. Chhattisgarh State Profile. Accessed on December 24, 2015 from website: http://103.28.141.76/indiafoodprocessing/Portals/0/pdf/state_profiles/Chhattisgarh%20State%20Profile.pdf
2. Department of Agriculture, Government of Chhattisgarh. Accessed on December 25, 2015 from website: http://agridept.cg.gov.in/agriculture/intro_of_agri.htm
3. Department of Agriculture Government of Meghalaya, Agricultural Marketing in India. Accessed on December 25, 2015 from website: http://megagriculture.gov.in/public/marketing/ agri_marketing.aspx
4. Kotler, Philip and Keller, Kevin Lane.(2005).Marketing Management. 12th Edition, Prentice Hall, ISBN: 0131457578.
6. National Horticulture Board (NHB). As cited in: Agri-Marketing Infrastructure in the State – Chhattisgarh. Investors’ Portal of MoFPI. Accessed on December 25, 2015 from website: http:// foodprocessingindia. co.in/agri-marketing-infrastructure-in-the-state-chhattisgarh.html
7. Patnaik, Gokul. (2011). Status of Agricultural Marketing Reforms – A Review. Workshop on Policy Options And Investment Priorities For Accelerating Agricultural Productivity And Development In India November 10-11, 2011, IGIDR Proceedings/Projects Series, PP. 069-11b. Accessed on December 24, 2015 from website: http://www.igidr.ac.in/newspdf/srijit/PP-069-11b.pdf
8. Planning Commission, Government of India. Twelfth Five Year Plan (2012–2017), Volume II: Economic Sectors. SAGE Publications India Pvt. Ltd., New Delhi, India, ISBN: 978-81-321-1368-3 (PB). Accessed on December 25, 2015 from website:http://planningcommission.gov.in /plans/ planrel/12thplan/pdf/12fyp_vol2.pdf
9. Shodhganaga. Indian Agricultural Marketing System: An Analysis. Accessed on December 25, 2015 from website: http://shodhganga.inflibnet.ac.in/bitstream/10603/14594/6/chapter%20-iii.pdf
Received on 12.05.2017 Modified on 13.06.2017
Accepted on 26.06.2017 © A&V Publications all right reserved
Asian J. Management; 2017; 8(3):569-571.
DOI: 10.5958/2321-5763.2017.00091.9