SRS INSTITUTE OF AGRICULTURE AND TECHNOLOGY

(Affiliated to Tamil Nadu Agricultural University, Coimbatore – 3)

AEC 301 AGRICULTURAL MARKETING, TRADE AND PRICES (2+1)

PRACTICAL MANUAL CUM RECORD

Mr. T. KATHIROLI., M.Sc., (Ag.)

DEPARTMENT OF AGRICULTURAL ECONOMICS

SRS INSTITUTE OF AGRICULTURE AND TECHNOLOGY
SENANKOTTAI (PO), VEDASANDUR, DINDIGUL – 624 710
2023
 SRS INSTITUTE OF AGRICULTURE AND TECHNOLOGY
(Affiliated to Tamil Nadu Agricultural University, Coimbatore – 3)

Certified that this is the bonafide record of work done by Thiru / Selvi -------------------------------
I.D. No. of Third Year B.Sc.(Hon.)
(Agriculture) for fulfilling the course AEC 301 Agricultural Marketing, Trade and Prices (2+1)
during the Fifth Semester of the year 2023.

Course Teacher External Examiner

 CONTENTS

Name of the Student: ID. No:

Ex. Date of Sign

Date Name of the Exercise Submission
No.
01 Preparation of farm survey schedule
Visit to Farm to collect information on marketing practices
02 of agricultural commodities and marketingproblems
Plotting and study of demand and supply curves and
03 calculation of elasticities
Computation of marketable and marketed
04 surplus of important commodities
Visit to a local market / weekly shandy / farmers’ market to
05 study various marketing functions performed by different
agencies
Study of relationship between market arrivals andprices
06 of some selected commodities
Identification of marketing channels for selected commodity,
collection of data regarding marketing costs, margins; price
spread estimation for major agricultural and allied
07 agricultural products to assess their marketing efficiency; and
presentation of report in the class

Visit to market committee and regulated market tostudy

08 their organization and functioning.
Visit to co-operative marketing society to study its
09 organization and functioning.
Visit to market institutions – SWC / CWC tostudy
10 their organization and functioning
Visit to AGMARK Laboratory / Grading
11 institutions
Farm input marketing: Visit to Farm input dealer to
12 study marketing of farm inputs
Visit to Commodity Boards / AEZ / Export oriented
13 units
Time Series Analysis of prices–TCSI Study of price
14 behaviour over time for some selected commodities
Construction of Index Numbers and their uses
15
Application of principles of comparative advantage of
16 international trade
 Ex. No. 01 PREPARATION OF FARM SURVEY SCHEDULE
Date:

AIM
 To introduce the students on what is interview schedule and how to prepare?
 To expose the students on the basic parameters to be considered while preparing the interview
schedule
 To develop a valid pre-tested interview schedule for conducting field survey with the farmer

INTERVIEW SCHEDULE

Interview schedule is a proforma used for collection of data. In social science research,
survey method is commonly used for collection of data. Survey can be conducted by methods
namely (i) Personal interview and (ii) Mailed questionnaire.

Personal interview method is suitable for all kind of respondents i.e. educated and illiterates
whereas mailed questionnaire method is suitable only to the educated respondents. In personal
interview method, researchers fill up the schedule whereas in the mailed questionnaire method, the
respondents fill up the schedule. This is the basic difference between the two methods.

Interview Schedule should normally incorporate with qualitative and quantitative questions.
The qualitative type of question included are of ‘Yes or No’ type. The Quantitative type of
questions are of how much seed you have used per acre for getting a desired level of output. These
questions may be asked from the farmer by discussing with them by placing the questions which are
interested to him in the first and then only the researcher should enter into the detailed questions to
be clarified or the answers to be obtained.
Criteria for a Good Interview Schedule
1. It contains questions relevant to the objectives of the research problem.
2. As far as possible, questions are to be arranged in a pre-determined manner.
3. Only that information, which is not available in records maintained by officers at village and
block level should be attempted through the schedule.
4. Tables in the schedule should be planned in such a way that the analysis and interpretation of the
data will be easier.
5. Questions should be simple, direct and without any ambiguity.
6. Delicate and embarrassing questions should be avoided.
7. Wherever possible include one or two questions for cross checking.
8. Before placing the question to the farmer, try to explain the background of asking the questions
9. Questions are to be clear and neatly presented before the farmer.

Construction of an Interview Schedule

1. Collect all the literature relevant to the study.

2. Prepare relevant questions from all angles on the basis of the literature collected, discussions and
experience.
3. Discuss with scientists, officials and leading farmers in the proposed study area.
4. Arrange the questions in a predetermined sequence or order.

Pre-testing

Before finalizing the interview schedule, it should be pre-tested. It can be done by administering
the schedule to few respondents. Usually, it is done with 5 to 10 per cent of the sample size. This
would help in including some more relevant questions and for deleting the irrelevant questions.

Layout of the schedule

1. Sufficient space should be allowed for making entries depending upon the question.
2. Wherever necessary include remarks column at the end of the table.
3. Schedule may end with signature of investigator with date.

In general, schedule should begin with the name of the institution, title of the research
project and name of the researcher. If the project is funded by some agency, it should also find a
place next to the title.
Assignment
 Learn to create interview schedule for analysing the marketing practices followed by the farmer
in case of agricultural commodities in a group for at least five different crops
 Make Group presentation in the class and refine the Schedule
 Take the Interview Schedule to the field and conduct interview with the farmer for revisiting or
updating the interview Schedule.
 Feel your confidence level and try to emulate similar schedule for value addition of the farm
produce.
 Interview Schedule

TAMIL NADU AGRICULTURAL UNIVERSITY

“Marketing of Farm Produce”
Name of the interviewer:

1. General Particulars
Name of the respondent :
Village :
Block :
Family Members: Adult :
Children :

2. Extent of land holdings (acres):

S.No. Particulars Wet Garden Dry Total
a) Owned area
b) Leased in area
c) Leased out area
d) Total operational holdings (a + b + c)
e) Rent for leased in land

3. Cropping Pattern and Marketed surplus

Productio Sold Quantity Retained (Qtl)
S.No. Crop Variety Area Season
n in Family Seeds Wage Other
(Quintal) Marke
t
1
2
3
4
5

4. Mode and method of selling the Marketed surplus

Place Agency
of to Metho Price Unit Price Weighin Commissio
Crop d of / of / g n charges Others
selling whom
& sold sale unit sale unit charges
distanc
e
4. Spell out the Reasons for selecting the mode of distribution / Sale of the farm produce
 Convenience
 Price Advantage in the preferred Market
 Others (Specify)

6. Storage of the Produce

Period Price Price
Qty Place of Storage Reasons
Crop of Cost when when
stored storage structure for storage
storage stored sold

7. Grading
Crop Method of Different Done by Cost of Reasons for
produce grading grades whom grading grading

8. Processing
Crop produce Processed products Cost of
Qty. processed Sold to
processed Name Qty processing
9. Packing

Unit qty. of Package Cost of packing

Crop Cost of labour Total cost
package material material

10. Transport, Loading and unloading

Mode of Distance Cost unit Cost of loading and
Crop / produce
transport (km) (Rs.) unloading

11. If, the produce is sold to pre-harvest contractor

 Period of contract
 Terms of contract
 payment in lump sum or instalments
 Payment before sales or after sales

12. If, the produce is sold to the commission agent

 Did you get loan from the commission agent? Yes / No
 If, yes how much?
 What is the rate of interest?
 What is the mode of payment?
13. Spell out with whom you are more flexible in delivering or transferring the produce?

14. Any special reasons or binding that prevented you to pay the produce to other agency?

15. Do you know about regulated/ co-op. market? Yes / No

 If yes, do you sell the produce through regulated/co-operative market
 Give reason for selling/not selling through regulated or co-op. market

16. Information on price of commodities (for any one commodity)

i) Are you aware of the prices and arrivals of an agricultural commodity in different markets?

ii) How do you come to know about the prices of agricultural commodities in different markets?

iii) In which month the price of the commodity is high, When is it low?

17. Do you have any other problem in marketing?

i) Storage
ii) Transport
iii) Selling
a) Malpractices
b) Prices
iv) Others including GST issues

18. Give your suggestions for improvement of marketing functions

Ex. No. 02
Date:
VISIT TO FARM TO COLLECT INFORMATION ON MARKETING PRACTICES OF
AGRICULTURAL COMMODITIES AND MARKETINGPROBLEMS

AIM
 To study the selling behaviour of the farmers in respect of major agricultural or horticultural
crops
 To quantify the input use pattern by the farmers for getting desired level of output per season or
per annum
 To document the methods of primary processing or grading practiced by the farmers and
 To study the problems faced by the farmers in marketing of different farm output

Introduction
By adopting appropriate cultivation practices, the farmer will be able to harvest maximum
yield but realisation of full benefits depends on the market price of the produce, cost involved in
marketing, storage and transport facilities, quality of the market, etc. Therefore, marketing plays a
vital role in deciding the net returns from the crop production process.
After the harvest of the crop, the produce is prepared for the market by conducting primary
processing or grading, transported and sold. In this process, some operations like grading, packing,
loading and unloading are done. Many labourers are involved in this process and the farmer has to
take decisions.
A farm level enquiry is necessary to gather information on
 What operations are done in the farm for preparing the produce for the market?
 What are the potential markets for selling the farm produce?
 Why the farmer prefers a particular agency?
 How the produce is Selling the produce – The method of selling, outright sale in the market,
or selling the produce in the doorstep, or transporting the produce to the market for personal
selling, Mode of transport used, experience in trading, etc.,?
 Do they have any problems in selling the produce?

Above information will be useful:

i) to study the farmer’s decision making behaviour with regard to marketing of the crop produce
ii) to study the marketable and marketed surplus for some cultivated crops
iii) to workout the marketing cost and marketing margin
iv) to find out the efficiency of different marketing channels
v) to identify the problems encountered by the farmers in marketing their produce.
vi) to suggest ways and means for the farmers to attain better price for their produce and increase
the profit from crop production

vii) to indicate areas where the government has to intervene through suitable pricing and
procurement policies for improving the present agricultural marketing system.
Assignment:
 Contact one farmer and collect the information relating to marketing of commodities by utilizing
the questionnaire prepared and furnished in the first exercise
 Find out the marketing channel
 Identify the selling behaviour of farmers in terms of packing, grading, through whom he sells
and compute the marketing cost and net price received by the farmer
 Analyse the problems in marketing of commodities.
Ex. No. 03 PLOTTING AND STUDY OF DEMAND AND SUPPLY CURVES AND
Date: CALCULATION OF ELASTICITIES.

Demand Schedule
The demand is the quantity of goods and services that can be desired and purchased by a person at a
particular price, place and time. The demand of one person is called individual demand and demand
of many persons is known as market demand. The demand schedule shows the relationship between
the quantity demanded of a commodity and its price.
Individual demand schedule
An individual’s demand schedule is a list of various quantities of a commodity, which an individual
consumer purchases at different (alternative) prices in the market at a given time.
YD
Individual demand schedule

5
Price in Rupees Demand in Kilograms
e 4
5 5
r
P

4 10 3
3 15 i
2 20 c 2 D

X
0 5 10 15

The curve, which shows the relationship between the price of a commodity and the amount
of that commodity the consumer wishes to purchase, is called demand curve. The individual
demand curve slopes down from left to right.
Market demand schedule
The market demand schedule means ‘quantities of given commodity which all consumers
want to buy at all possible prices at a given point of time’. The demand schedule of all individuals
can be added up to find out market demand schedule. The following table shows the market demand
schedule.
Price in Demand of Demand of Demand of Market demand
Rupees individuals ‘A’ individual ‘B’ individual ‘C’ (A+B+C)
5 20 30 50 100
4 40 60 100 200
3 60 90 150 300
2 80 120 200 400
 Y
D The market demand schedule can be presented
5
graphically. The demand curve shows the maximum
D quantities per unit of time that all consumers buy at
4 various prices. The diagram shows that when price is 5
rupees the market demand is 100 kilograms. When rice
Prices

3
is 4 rupees the demand is 200 kilograms. When
2 X price is fixed at 3 rupees the demand is 300 kilograms.
There is increase in demand to 400 kilograms when
0 price is 2 rupees. It means that there is inverse
100
200 300 400
Demand
relationship between price and quantity demanded for goods.
Measurement of Elasticity
We have studied the law of demand and seen that there is an inverse relation between quantity
demanded and price. A change (rise or fall) in price leads generally to a change (contraction or
extension) of demand. “The term elasticity expresses the responsiveness of one variable with
respect to some influence of other variable”.
Elasticity of demand is the measure of the responsiveness of quantity demanded with respect to
changes in the determinants of demand. It may be price of own commodity, related commodity,
income, etc. In general, elasticity of demand means price elasticity of demand. It is denoted as “e”.

Qd
ep P
Qd
P

The elasticity can be measured by two methods viz., point elasticity and arc elasticity.
Supply refers to the quantity of goods and services offered for sale at a particular price, place and
time.

Price in Rupees Market Supply

2 200
3 300
4 400
5 500
 As price of the product increases, the quantity of supply increases; and vice versa
 It is positively sloping
Elasticity of supply
Elasticity of supply is defined as the proportionate change in quantity supplied with respect to some
proportionate change in determinants of supply.
When a small fall in price leads to great contraction in supply, the supply is comparatively elastic.
But when a big fall in price leads to a very small contraction in supply, the supply is said to be
relatively inelastic. Conversely, a small rise in price leading to a big extension in supply shows
elastic supply, and a big rise in price leading to a small extension in supply indicates inelastic
supply.
The elasticity of supply is really the measure of the ease with which an industry can be expanded
and of the behaviour of the marginal costs.
Measurement of Elasticity of Supply
A vertical straight line will represent absolutely inelastic supply (zero-elasticity) and a horizontal
straight line an infinitely elastic supply. In between these two extremes, there will be varying
degrees of elasticity. A straight-line supply curve drawn through the origin has a unit elasticity. The
following formula is a general measurement of elasticity of supply:
Proportionate change in quantity supplied
Price Elasticity of supply
Proportionate change in price
In mathematical symbols, the price elasticity of supply can be expressed as
Q P
es
P Q
Where es is the price elasticity of supply, Qs is the quantity supplied, ΔQs is the change in the
quantity supplied, P is the price of good supplied, ΔP is the change in the price of the good.

Market Equilibrium
A system is in equilibrium when there is no tendency for change. A competitive market is in
equilibrium at the market price if the quantity supplied equals the quantity demanded. In this
equilibrium, the price and quantity have no tendency to change. At the market equilibrium, the price
is called the equilibrium price, and the quantities supplied and demanded are called the equilibrium
quantity.
 S

Price

300 Quantit

Exercise
1. Draw the individual demand curves and the market demand curve
Individual demand schedule /week
Price (Rs. per Kg)
A B C
20 0.25 0.5 0
16 0.50 1.0 0
12 0.75 1.5 0
8 1.0 2.0 1
4 1.25 2.5 2
2 1.50 3.0 3

2. Draw supply curve of rice and find out elasticity of supply for the given problem

Rice Price (thousand Rs/qtl) 5.0 4.5 4 3.5 3.0 2.5

Quantity supplied (in Quintals) 20 16 12 10 8 4

3. Draw Demand and supply curves and find out elasticity of demand and supply and market
equilibrium.
Market demand Market supply
Price (Rs/kg)
(tonnes) (tonnes)
9.00 100 1000
8.50 300 800
8.00 400 600
7.50 500 500
7.00 700 400
6.50 1000 200
Ex. No. 04 COMPUTATION OF MARKETABLE AND MARKETED SURPLUS OF
Date: IMPORTANT COMMODITIES

AIM
 To expose the students on the concepts of Marketable and Marketed surplus
 To introduce the students on the methods of estimating the marketable and marketed surplus
 To highlight the significance and the relationship between the marketable and marketed
surplus.

Producer’s Surplus of Agricultural Commodities

In any developing economy, the producer’s surplus of agricultural product plays a
significant role. This is the quantity which is actually made available to the non-producing
population of the country. From the marketing point of view, this surplus is more important than the
total production of commodities. The arrangements for marketing and the expansion of markets
have to be made only for the surplus quantity available with the farmers, and not for the total
production. The rate at which agricultural production expands determines the pace of agricultural
development, while the growth in the marketable surplus determines the pace of economic
development. An increase in production must be accompanied by an increase in the marketable
surplus for the economic development of the country. Though the marketing system is more
concerned with the surplus which enters or is likely to enter the market, the quantum of total
production is essential for this surplus. The larger the production of a commodity, the greater the
surplus of that commodity and vice versa.
Producer Surplus is the quantity which is actually made available to the non-farm population of
the country. It is of two types.
1. Marketable Surplus
It is that quantity of the produce, which can be made available to the non-farm population of
the country. In other words, marketable surplus is the residual left with the farmers after meeting his
family consumption, farm requirements, wages, seed requirement social and religions payments.
This may be expressed as;
MS = P - C
where,
MS = Marketable Surplus
P = Total Production
C = Total requirement of farm family (family consumption, farm requirements, social
and religions payments)
 2. Marketed Surplus

Marketed surplus is that quantity of the produce, which the farmer actually sells in the market,
irrespective of his requirements for family consumption, farm requirements, social and religious
payments. The marketed surplus may be more, less or equal to the marketable surplus.

Importance of Producer’s Surplus

i. Framing Sound Price Policies: Price support programmes are an integral part of agricultural
policies necessary for stimulating agricultural production. The knowledge of quantum of
marketable surplus helps in framing these policies.

ii. Developing Proper Procurement and Purchase Strategies: The procurement policy for
feeding the public distribution system has to take into account the quantum and behaviour of
marketable and marketed surplus. Similarly, the traders, processors and exporters have to decide
their purchase strategies on the basis of marketed quantities.

iii. Checking Undue Price Fluctuations: A knowledge of the magnitude and extent of the surplus
helps in the minimization of price fluctuations and to make proper arrangements for the
movement of produce from one area, where they are in surplus, to another area which is
deficient.

iv. Advanced estimates of the surpluses of such commodities which have the potential of external
trade are useful in decisions related to the export and import of the commodity. If surplus is
expected to be less than what is necessary, the country can plan for imports and if surplus is
expected to be more than what is necessary, avenues for exporting such a surplus can be
explored.

v. Development of Transport and Storage Systems: the knowledge of marketed surplus helps in
developing adequate capacity of transport and storage system of handle it.

Relationship between Marketed surplus and Marketable surplus

The marketed surplus may be more, less or equal to the marketable surplus, depending on
the condition of farmer and type of the crop.

>
Marketed surplus < Marketable surplus
=
 The marketed surplus is more than the marketable surplus when the farmer retains a smaller
quantity of crop than his actual family and farm requirements. This is true especially of small and
marginal farmers whose need for cash is immediate. The situation of selling more than marketable
surplus is termed as distress or forced sale. Such farmers generally buy the produce from the market
in a later period to meet their requirements.

The marketed surplus is less than the marketable surplus when the farmer retains some of
the surplus produce. This situation holds good under a) large farmers generally sell less than the
marketable surplus because of their better retention capacity. They retain extra produce in the hope
that they would get a higher price in the later period. Sometimes farmers retain the produce even up
to the next production season b) Farmer may substitute one crop for another crop either for family
consumption purpose or other farm requirements because of the variation in prices. With the fall in
the price of the crop relative to a competing crop, farmer may consume more of the first and less of
the second crop.

The marketed surplus may be equal to the marketable surplus when the farmer neither
retains more nor less than his requirement. This holds true for perishable commodities and
agricultural raw materials like cotton, jute etc.

Problem 1
A farmer has cultivated onion in 3 acres. He gained yield @ 30quintals/acre @Rs.40/kg. He
needs 100 kg for seed, 300 kg for kind wages and 200 kg for own consumption. But he has sold
entire quantity since he has to repay the loan immediately. Work out the marketed surplus and
marketable surplus.

Problem 2
A farmer in Naraseepuram Village, near Thondamuthur has planted Tomato in one acre and
obtained a yield of 15 tonnes per acre. He sold 95 baskets each 15 kg to the Commission Agent in
10 harvests period in Thondamuthur market. He retained 250 kgs for seed purpose, 100 kgs for
own consumption and 200 kgs for their relatives and 100 kgs for wages and remaining as waste.
Work out the marketable and marketed surplus of agricultural commodities and write your
comments.

Problem 3
Consider the following data of a case farm of Mr.Kumar for the year 2015-2016.
 Area
Productivity Seed Consumption Requirement for
Crop Under
(Qtl/Ha) requirement requirement per livestock and
Crop
(Qtl) adult Unit (Qtl) artisans (Qtl)
(Ha)
Wheat 7 20 6.0 2.00 2.00 for artisans

Barley 2 12 1.0 0.50 -

Mustard 5 3 0.4 0.10 -

Gram 5 7 2.0 0.25 1.00 for artisans

Bajra 7 6 2.0 1.00 -

Guar 5 8 2.0 - 2.50 per milk cow

There are five adult units in the family of Mr. Kumar. He also maintains two milch animals.
He sold 130 quintals of wheat, 15 quintals of barley, 11 qtls of mustard, 35 qtls of gram, 40 qtls of
bajra and 35 qtls of guar at different times between July 2015 and June 2016. Given this
information, estimate the marketable and marketed surplus of the different crops and state whether
there is any distress sale on the farm.

Problem 4
The information on area under crops cultivated, quantity requirements for different purpose
and quantity sold by the farmer Mr.Sarathy is given below.

Seed Require Require

Area Total Consumption Quantity
Crop require ment for ment for
(ac) Production requirements Sold
ment livestock artisans
(Qtls) (Qtls) (Qtls)
(Qtls) (Qtls) (Qtls)
Paddy 3 34 1 13 0 5 13
Sugarcane 3 1200 20 0 0 0 1180
Green
0.25 0.5 0.1 0.4 0 0 0
gram
Maize 1 18 0.5 0 2 0 18
Mulberry/
1 2.75 0 0 0 0 2.75
cocoon
sorghum 0.5 5 0.1 1 2 0 1.5
Given this information, estimate the marketable and marketed surplus of the different crops
and give inference.
Ex. No. 05 VISIT TO A LOCAL MARKET / WEEKLY SHANDY / FARMERS’
Date: MARKET AND TO STUDY ITS FUCTIONS

AIM
To introduce the students on the importance of farmers’ market
To highlight the services performed by the farmers’ market and
To identify the Role of Department of Agricultural Marketing and Agribusiness in Promoting the
Concept of Farmers’ Market.

Introduction
Agriculture occupies a very important role in the growth of economy of our country, which
is also the backbone of the economic system. India is primarily an agricultural country. The
prosperity of the Indian economy is dependent on the course of agricultural production. In India,
agriculture meets almost the entire food requirements of the people. Agriculture also provides
fodder to sustain livestock whose number runs to several crores.
In the field of agriculture, marketing determines the value of the agricultural product in
terms of money and delivers them to the final customer. Most of the farmers sell their produce
through village level markets, fairs, Mundies, Co-operative Societies etc. In the above process of
agricultural marketing, the middlemen exploit farmers as well as consumers. In order to eliminate
the middlemen between farmers and consumers, the Government of Tamil Nadu introduced the new
concept, namely “UZHAVAR SANTHAI” in 1999.
Generally, the middlemen and wholesalers purchase the agricultural products from the
farmers at a lower price. They also get the commission from the farmers for the transactions made.
In turn, fresh vegetables and fruits purchased at the lower price from the farmers are sold out to
retailers at higher price and the retailers sell those agricultural products further at higher price to the
consumers. As a result, the farmers get very low prices for their produces whereas the consumers
have to pay higher price for the same produce. Hence, the Government of Tamil Nadu has
introduced an alternate scheme of marketing, which is known as “UZHAVAR SANTHAI” in order
to derive more benefits to the farmers as well as consumers.
Aim:
To facilitate direct contact between the farmers and public.
To provide fresh vegetables and fruits at reasonable price daily to the consumers without any
interference of middlemen.
 To provide correct measurement to the consumers.
To give full satisfaction to the farmers and public.
To aim for providing higher price than that of wholesale price to the farmers for their
vegetables and fruits.
To provide the fresh fruits and vegetables at the lesser price than that of retail price to
consumers.
The Uzhavar Santhai also functions as a Technical Information Centre to the farmers
It also acts as a Technical Training Centre to the farmers.
Salient Features of Farmers Market
1. The prices of vegetables and fruits are daily displayed in front of each shop as well as
exhibited in big signboards of the market and it is ensured by the Department staff that the
fruits and vegetables are sold at the fixed rates.
2. Horticultural Department officials identify vegetable growing farmers in the villages and
photo identification cards are issued to those farmers.
3. Shops are allotted at free of cost to the farmers who bring their produce on first come first
served basis and shops are not permanently allotted to farmers.
4. The farmers are permitted to bring their produce without any fair for their luggage in special
trips from the villages to Uzhavar Santhais
5. Hill vegetables are sold in Uzhavar Santhais through women self help groups, Cooperative
Societies.
6. Weighing scales are provided at free of cost for the use of farmers and they are retrieved after
the sale proceedings are over.
7. Aavin, Tan tea stalls are also set up in some places.
8. Sanitation is being maintained. In some places vermin-composting of vegetable wastes is also
done.
9. Ex-Servicemen /Private security agencies have also been used for the security of the market.
10. Telephone facilities, Vehicle stand, Canteen, Toilet facilities have also been provided.
11. The Uzhavar Santhais are functioning on all the days of the week.
12. Water supply is available in the Uzhavar Santhai.
13. To sell unsold items on the next day,cold storage facilities are available.
Organization
The location of the “Uzhavar Santhai” is of utmost importance. Uzhavar Santhais are
located in an area, where the consumers can approach to the market easily. In fact, the main
intention is to ensure the urban character of the location, so that adequate number of consumers will
benefit from the market. The first Uzhavar Sandhai of the state was inaugurated on 14.11.1999 at
Madurai and 100th Uzhavar Sandhai on 14.11.2000 at Pallavaram. At Present 103 Uzhavar
Santhais are functioning with full vigor. The new concept of Uzhavar Santhai is implemented in
Tamil Nadu in massive scale. All Uzhavar Santhai are maintained by Department of Agricultural
Marketing and Agribusiness and manned by the staff of the Department of Agricultural Marketing,
Agriculture, and Horticulture. State as a whole, the scheme is implemented by the Director of
Agricultural Marketing and Agribusiness, Chennai-32.
Staffing Pattern in Farmers’ Market
Sl.No Name of the staff Grade Nos
Uzhavar Sandai Administrative
1 Agricultural Officer 1
Officer
Uzhavar Sandai Assistant
2 Assistant Agricultural Officer 3
Administrative Officer
Uzhavar Sandai Assistant Assistant Agricultural Officer
3 1
Administrative Officer (Horticulture)
Employed through private security
4 Watchman agencies with consolidated pay of 3
not more than Rs 1500/ per month.
On consolidated basis @ Rs 1500/
5 Scavenger 1
per month
On redeployment from Makkal Nala
6 Sandai Paniyalargal 2
Paniyalargal
Total 11

The duties assigned to Different Staff Members are as follows

Sl.No Name of the staff Duties
1 Uzhavar Sandai 1. Price fixation and declare the price after collecting
Administrative Officer wholesale and retail market price, discussion with
farmers’ group
2. Supervision of allotment of shops
3. Supervision of sales procedures
4. Collection of charges for vehicles
5. Checking farmers’ Identity cards.
6. To monitor and ensure the sale of vegetables and fruits
at the price fixed by the administration
7. Administration of Uzhavar Sandai and all works related
 to it.
2 Uzhavar Sandai
1. Allotment of shops to farmers after checking Identity
Assistant Administrative
cards
Officer (1)
Uzhavar Sandai 1. Issue of weighing balances, weights etc to farmers and
Assistant Administrative to collect it back
Officer (2) 2. Maintenance of registers.
Uzhavar Sandai
1. To record item wise arrivals of vegetables and
Assistant
preparation of daily reports.
AdministrativeOfficer(3)
3 Uzhavar Sandai
1. Dissemination of crop production technologies thereby
Assistant Administrative
increasing the production of vegetables
Officer (Horticulture)
4 Watchman (1) 1. Guarding the Uzhavar Sandai at night
Watchman (2) 1. Guarding the Uzhavar Sandai during day time
Watchman (3) 2. Regulating vehicles and guards vehicles
3. Regulating farmers.
5 Scavenger 1. To ensure cleanliness in Uzhavar Sandai
2. Cleaning of toilets
6 Sandai Paniyalargal 1. To assist in checking of ID cards and during
registration
2. To write the fixed prices on display boards
3. To carry balances to the shops and back from the shops

The Uzhavar Sandais are maintained by the Market Committees of the Department of
Agricultural Marketing and Agribusiness. The concerned Market Committee Secretary will be the
coordinator for the Uzhavar Sandai as additional charge to his duties. For the Uzhavar Sandai that is
not established at the committee headquarters the Assistant Director of Agriculture/ Assistant
Director of Horticulture in the jurisdiction will hold the additional charge of Coordinator of
Uzhavar Sandai. The Coordinators of Uzhavar Sandai must look after the daily functioning of
Uzhavar Sandai, price fixation etc. In addition to the Agricultural officers and Assistant Agricultural
Officers in the postharvest technology centers of the Department of Agricultural Marketing and
Agribusiness, Agricultural officers and Assistant Agricultural Officers of the Department of
Agriculture and Horticulture in the districts are also utilized.
Facilities provided at Farmer's Market
a. Photo Identity Card

Based on the recommendations made by the team, identity cards are to be issued to the
farmers, in which photo of the land owner and his nominee with the particulars of the village name
to which the farmer belongs, survey number, extent of the land owned by him, and the vegetables
grown are mentioned. The identity cards are to be renewed every six months with reference to the
vegetables grown in their fields.
b. Transport Facility
Transport facility for pick up and dropping down of the registered farmers to the Farmers
market are arranged by the market functionaries through tie-up with state transport department.
c. Allotment of stalls
Stalls are to be allotted to the farmers by following lot method or first come first basis. The
farmers are not allowed to occupy the stalls permanently. No fee is to be collected from the
farmers.
d. Prices Fixation
The market committee will every day communicate the moderate wholesale prices of
vegetables through fax between 7.30 AM and 8.00 AM. Based on the same, the prices of the
vegetables and fruits are daily fixed at the average of 20 % higher than the wholesale prices and
15% less than retail prices by the Committee consisting of the representatives of farmers and
officials.
e. Public Address System
Prices of vegetables are frequently announced through public address system to create
awareness of the rates of the vegetables among the consumers as well as farmers.
f. Supply of weighing scales
When the farmers enter into a farmers market their names along with the particulars such as
name of the village and the quantity of vegetables brought by them are entered in a register and they
are issued a token. On the basis of the token issued to them, all the farmers are provided with
weighing scales without collecting any fee. The farmers will return back the scales after completing
their sales.
g. Other facilities:
Additional facilities like Computers for effective communication, new hybrid seeds,
seedlings, organic farming methodology, vermin-composting demonstration and postharvest
management training to farmers will also be offered to those farmers visiting Uzhavar Sandhai. 25
Uzhavar Sandhais have been supplied with computers.
Collect the following information from the Farmers Market you have visited:
1. Name of the Farmer’s Market
2. Place and significance of the market
3. Area of the market and organisational structure
4. Number of stalls in the market
5. Functioning from which date
6. Objectives of farmer’s market
7. Commodities marketed
8. Method of price fixation
9. Facilities provided in the market for farmers and consumers
10. Source of finance for the market
11. Who can buy / sell in the market
12. Contact and collect the information from Managing committee, Five farmers and Five
consumers
13. Draw a sketch of the market and critically comment on the functioning of the market and
Draw the Inference
Ex. No. 06 STUDY OF RELATIONSHIP BETWEEN MARKET ARRIVALS AND
Date: PRICES OF SOME SELECTED COMMODITIES

Aim: To assess the relationship between the agricultural commodity arrivals to the market prices

Efficient marketing system depends upon the price movements over a period of time. Food
grains like paddy, can be conveniently stored, transported and sold by taking advantage of the
variations in the prices prevailing in different seasons and markets. Seasonal crops are harvested
during a relatively short period and then stored for future sales, its market arrivals and prices exhibit
a seasonal pattern. The seasonal nature of agricultural production itself leads to price fluctuations.
Prices are at the lowest when arrivals are at the peak and steadily go up with the decline of arrivals
till the end of the crop season.

Market arrival is the goods offered for sale at a particular period of time at a particular centre. It
can be calculated on the basis of year, month or fortnight.

Price may be defined as the value of product attributes expressed in monetary terms which a
consumer pays or is expected to pay in exchange and anticipation of the expected or offered utility

Relationship between market arrivals and prices: The arrivals of Agricultural commodities in
the market affect their prices to a large extent. The degree of relationship between market arrivals
and prices of Agricultural commodities will be studied by computing correlation coefficients as
well as regression coefficients.

The price elasticity of demand for agricultural commodities is not only lower but is even
less than unity in most cases. It implies that one per cent increase in supply would result in more
than one per cent decline in price and vice-versa. Agricultural commodities, have year wise and
season-wise variations. Yearly fluctuations are due to difference in supply position while seasonal
fluctuations are due to difference in the market arrivals. Due to the arrival of the new crops, the
prices get lowered and at the end of the crop season the prices go up.

In order to analyse the behaviour of market arrivals and prices over time, supply response
behaviour to the agricultural commodity price can be studied using linear or nonlinear model
relationship

Yt = a+ bPt where Y indicates the arrivals, Pt indicates the Price at time t (years)
Exponential growth form also can be applied to assess the response of arrival to the market price.
by using the following formula:

Y = abt where Y indicates the arrivals, t indicates the time (years)

Compound growth rate (CGR) is Antilog (b - 1) x 100.

Based on the above estimated linear or nonlinear supply response to price model we can estimated
the expected arrivals of different commodities for the given price.

Exercise:

1. Collect data on Arrivals and prices for various agricultural commodities and analyse the
relationship and behaviour of arrivals and prices using above method of analysis.

2. Plot the data on prices and arrivals to know the relationship using graph sheet.
Ex. No. 07 ESTIMATION OF PRICE SPREAD AND MARKETING EFFICIENCY
Date:

AIM
To expose the students on what is price spread and how to estimate the same by using the
formulae and
To introduce the students on how to estimate the marketing efficiency.
To train the students on drawing appropriate inference by utilizing the results.

A Chain of marketing activities takes place in the movement of commodities from farm to
the consumers. Some expenditure is incurred by the intermediaries towards the operations carried
out and the person involved fixes a certain amount as profit or margin that would serve as an
income for the individual concerned and enable him to continue the trade. The price paid by the
consumer and the price received by the farmer are not the same, as the crop produce passes through
marketing channel, it is re-priced several times. In the marketing of agricultural commodities, the
difference between the price paid by the consumer and the net price received by the producer for an
equivalent quantity of the crop produce, is known as price spread. Price spread is expressed as
percentage of consumers’ price. The components of price spread are:

i) Marketing Cost: The Expenditure incurred towards the operations carried out by the farmer
and intermediaries at different stages of marketing.

ii) Marketing Margin: Profits of various intermediaries involved in moving the produce from
the producer to the consumer.

Methods of Estimation of Price spread:

1) Lot method: It follows the lagged concept. A specific lot or consignment is selected and
followed. The relevant information for estimating price spread is collected as and when the
produce passes through each stage of marketing.

Limitations:
a. It takes months together for some commodities to reach the consumer.
b. The selected lot will lose it’s identify when an intermediary purchases from different farmers and
pools the produce during processing.
c. There is no assurance that the selected lot is representative of the whole lot.
2) Sum of Average Gross Margin Method: The average gross margin at each successive
level of marketing is worked out by dividing the difference in the money value of sales and
purchase by quantity of commodity transacted by an intermediary. The average margins of all the
intermediaries in the channel are then added to obtain the price spread.

n
PS = Si-Pi /Qi
i=1
Where,
PS = Price Spread in Rupees
Si = Sale value of a commodity of i th intermediary
Pi = Purchase value of a product of i th intermediary
Qi = Quantity of the commodity transacted by i th intermediary
i= 1……n(No. of intermediaries in the marketing chain)

Limitations:
a. Traders may not allow access to their account books and hence it would be difficult to obtain
complete and accurate information from them
b. A portion of the commodity is usually wasted while handling the produce. This will lead to
differences in quantity purchased and sold which has to be adjusted accordingly in the price
and inadvertently added to the price spread.

3) Comparison of price at successive stages of marketing/concurrent Method:

The price on a specific date at successive stages of marketing i.e., at production point,
wholesale centre and retail outlet is compared and the difference is taken as price spread.
Limitations:
a. Representative and comparable series of price for the same quality of the produce at
successive stages of marketing are not readily available
b. It is difficult to make adjustments for loss in quantity and quality of the produce while
handling
c. The time lag in transaction of produce is not considered.
General rule for selection of appropriate method for calculating price spread:
Commodities Method
Perishable commodities which require less time to Lot method
reach the consumer (vegetables, fruits)
Commodities that require processing before sale to Concurrent Margin
consumer(Groundnut, paddy)
Commodities which do not require processing Comparison of prices at successive
before sale to consumer(Maize, Cholam, Cumbu) stages of marketing
 Problem
A farmer in Annur block planted Tomato in one acre of his land and obtained a yield of
12.50 tonnes per acre. He sold 100 baskets each 20 kg to the wholesaler during the last harvest in
Thiyagi Kumaran Wholesale market. The farmer incurred the following expenses.
Transport : Rs. 2 per basket
Packing and loading : Rs. 1 / basket
Unloading : Rs. 0.50 / basket
Commission Charges : 10% on the value of the produce
The wholesaler purchased the same @ Rs.10/kg and spent Rs.2 per basket for transport to
his destination. Retailer purchased @ Rs.13/ kg and incurred Rs.3 per basket towards transport. The
consumer price is Rs.15 per kg.
Work out the following.
i) Trace out the Marketing channel and work out the price spread.
ii) Work out the Farmer’s share in the Consumer price and interpret the efficiency of the
channel and
iii) Find out the producers’ price per kg and his marketing costs and draw the inference.
Ex. No. 08 VISIT TO MARKET COMMITTEE AND REGULATED TO STUDY
Date: THEIR ORGANIZATION AND FUNCTIONING

AIM
To introduce the students on the activities and functions of Regulated Markets in Tamil Nadu
To learn the organizational pattern present in the Regulated Markets and to identify the
development roles.
To facilitate the interaction of Regulated Market Officials and the students of Agriculture on
their role in attracting the farmers and the traders to the Regulated Markets
Market Committees in Tamil Nadu
A market is said to be regulated when the State Government notifies a market by enacted
legislation and frames rules and regulations for marketing of notified crops. The regulated market
aims at the elimination of unhealthy and unscrupulous practices, reducing market charges, create
conditions for fair competition, thereby ensuring a better service to the buyer and a good practice
the seller. The State Government notifies the commodities to be trade under regulation and the
number of commodities varies from State to State. The activities are supervised by the officials of
Market Committee and the administrative decisions are taken by nominated elected Market
Committee. The Market Committee consists of representatives of all sections i.e. farmers, traders,
co-operative marketing societies, co-operative or commercial bank, autonomous bodies and
Government officials. The composition of the Market Committee varies with fees besides subsidy
from government. The regulated markets are provided with commercial grading facilities so that
farmers can get better price for their produce. There are about 21 Market Committees functioning at
district level. Under its control, 277 Regulated Markets, 15 check posts, 108 Rural godowns and
108 grading centres comprising 96 Commercial Grading Centres, 11 Kapas Grading Centres and
One Tobacco Grading Centres are functioning in the State.

1. Regulated Markets
Regulated Markets are established for better regulation of buying and selling of agricultural
produce. In Tamil Nadu 278 Regulated Markets are functioning under 23 Market Committees to
enforce the provisions of Tamil Nadu Agricultural Produce Marketing (Regulation) Act 1987, Rules
1991 and to ensure fair prices to farmers, to reduce marketing charges, for the protection of farmers
from the hands of traders and for the provision of better marketing facilities, basic infrastructure
etc., Each market Committee has its own notified area for the purchase and sale of notified
agricultural produce. Regulated Markets act as a common forum to farmers and traders on equal
footing for marketing of agricultural produce without middlemen. No fee is collected from farmers
for the services rendered. One percent of the sale value of the produce is collected as market fee
from Traders. Besides, license fee is also collected from traders and weigh men..
The farmers of states of Maharashtra, Karnataka and Andhra Pradesh, sell their produce only
through regulated markets as compulsory marketing is in force.

2.Services Rendered in the Regulated Markets

Regulated Markets provides facilities such as correct weighment by using electronic weigh
bridges and weighing balances, godown facilities, bank facility, immediate payment, daily price
information, rest sheds, drinking water facility, cattle sheds, free medical aid to farmers, input
shops, phone and fax facilities etc. Under "AGMARKNET" centrally sponsored scheme 93
regulated markets have been provided with computer and Internet connectivity for effective price
dissemination among farmers through AGMARKNET website. The information on commodity
prices prevailing in various markets is made available; the farmers would be able to get better price
of their produce by moving their produce to the market which pays higher.

3.Notification of produce
So far, 42 Agricultural Commodities like cereals, millets, pulses, oilseeds, cotton, turmeric,
etc. have been notified. Necessary action is being taken for Uniform notification of agricultural
commodities throughout the state during this financial year.

4. Pledge Loan Facilities to Farmers

In order to avoid distress sales by the small and marginal farmers in the peak season,
Regulated Markets are issuing pledge loan to farmers. Under this scheme, the farmers can store
their agricultural produce in the godowns of Regulated Markets for a maximum period of 6 months
and take pledge loan of 75% of the total value of the produce upto a maximum of Rs.1,00,000.
Likewise Pledge Loan facilities are extended to traders also with the rate of interest specified from
time to time. Interest at the rate 9% for traders is charged for pledge loan facilities. During the
previous financial year interest rates were reduced from 8% to 5% for the benefit of farmers.

5. Tamil Nadu Farmers Development and Welfare Scheme

Under this scheme, the farmers / tenants who sell one metric tone of paddy (or) equivalent
value of their agricultural produce through Regulated Markets every year will be enrolled under this
scheme and are eligible for a grant of a lumpsum amount up to Rs. 1,00,000, in case of death/
permanent disability occurring due to accident / death due to snake bite. In case the eligible farmer /
tenant looses both the hands or either the legs or both the eyes due to accident, is eligible for a grant
of Rs.75, 000/-. Incase of losing one hand or one leg or one eye or hip disability due to accident the
farmer / tenant is eligible for a grant of Rs.50,000/-. The farmers need not pay any premium for this
fund. The Market Committee concerned and the Tamil Nadu State Agricultural Marketing Board
will bear the premium amount of Rs.10 per individual per year equally.

6. AGMARK Grading

AGMARK grading is undertaken to protect the consumers from the ill effects of consuming
adulterated food commodities and to ensure quality food products. 30 AGMARK grading
laboratories and 1 Principal AGMARK Grading Laboratory are engaged in grading the notified
food products like vegetable oils, ghee, butter, honey, wheat flour, besan flour, ground spices, sago,
rice, pulses, ragi, jaggery, turmeric, potato etc. During the previous financial year, sophisticated
equipments has been purchased for Rs. 25.46 lakhs under Part- II Scheme for State AGMARK
grading Labs and Agricultural Marketing Centres in order to benefit the packers and consumers.

7. Construction of Drying Yards in the Villages

Out of 10% of Agricultural commodity wastage, 6% loss is due to not adhering proper post
harvest practices. In order to minimise the post harvest losses in grains, the department has taken up
construction of drying yards at village level. From the year 1997 under this scheme, 1228 drying
yards have been constructed at a total cost of Rs.23.20 crores. During the year 2007- 08
construction of 100 Drying Yards at a cost of Rs. 2.50 crores is under progress. This scheme shall
continue during 2008 – 09.

8. Other Activities

Formation of commodity groups and forward market linkages for direct purchase of
agricultural produce from farmers by traders/ entrepreneurs.

Creation and strengthening of infrastructure facilities for Marketing and Postharvest

management.
Disseminating Crop advisory and Market Price information through SMS to Registered
farmers

Collect the following information and write a report

1. Name of the Regulated market.

2. Location.
3. Area of operation
4. Year of establishment and organisational pattern
5. Notified commodities and notified area
6. Functions and Objectives of the market
7. Constitution of market committee
8. Source of funds to run the committee
9. What are the facilities provided in the regulated market to farmers in terms of storage,
grading, finance and others?
10. Is commercial grading facility provided for grading the farmer’s produce?
11. Do the farmers make use of the commercial grading facility?
12. How traders are selected to operate within the market yard.
13. Is storage facilities provided to farmers to store the produce till they get expected price.
14. What are the special schemes in operation to help the farmers.
15. What is the percentage of utilization of regulated market by the farmers in the locality?
16. What are the difficulties faced in providing facilities to serve the farmers in marketing their
produce.
17. What help do you expect from the government to help the farmers in a better way to market
their produce.
18. Contact five farmers visiting the market and elicit their response on facilities provided,
problems faced in marketing through regulated markets.
19. Any other information.
Ex. No. 09 VISIT TO CO-OPERATIVE MARKETING SOCIETY TO STUDY ITS
Date: ORGANIZATION AND FUNCTIONING
AIM
To introduce the students on the importance of Cooperative Marketing Societies in Tamil
Nadu
To highlight the activities and functions and their achievement made in respect of marketing
of Farm Produce
To document the success stories of cooperative marketing societies in Tamil Nadu dealing
with the farm produce.

Introduction

Cooperatives play an important role in the socio-economic development of the people of our
country. The cooperative movement in India, particularly in Tamil Nadu, has taken deep roots in
various sectors and is making a significant contribution towards economic development and social
progress of the people.

Tamil Nadu occupies an important place in the history of cooperatives since the first
cooperative societies for agricultural loan and consumer stores were established in Tamil Nadu. The
cooperative societies play a vital role not only in gricultural development and consumer service, but
also in sectors such as housing, textiles, dairy and fisheries which contribute significantly to the
economic development of the state. At present there are 25,768 cooperative societies functioning in
the state.

The importance that this Government attaches to the cooperatives is evident from the fact
that two out of the three sterling schemes of the government for which orders were issued by the
Hon’ble Chief Minister in the presence of public on the very same day of assuming office on
13.05.2006 relate to the cooperation department. The order of the government waiving all
cooperative farm loans and interest thereon outstanding as on 31.3.2006 amounting to Rs.6866
crores to provide debt relief to a large number of farmers who have suffered on account of
successive natural calamities is an unprecedented step that no other government has done for the
farmers. Similarly the scheme of distributing rice at Rs.2 per kg is implemented through 26,429
fair price shops run by the cooperatives. The government have entrusted the major responsibility of
the successful implementation of these two schemes to the cooperatives and this reflects the faith
that the government has on the role played by the cooperatives in the developmental process.
Cooperative Marketing

The basic aims of cooperative marketing are to arrange for the marketing of agricultural
produce of the agricultural members at a reasonable and remunerative price, to distribute farm
inputs to the agriculturists, to advance loans on the pledge of agricultural produce, to undertake
processing of the agricultural commodities and to help in better recovery of loans through linking of
credit with marketing.

These objectives are fulfilled through 113 primary co-operative marketing societies
functioning in Tamil Nadu. Tamil Nadu Cooperative Marketing Federation is the apex institution of
cooperative marketing societies in all the districts except Nilgiris, Thanjavur, Tiruvarur and
Nagapattinam. Thanjavur Cooperative Marketing Federation is functioning as apex society for the
cooperative marketing societies in Thanjavur, Tiruvarur and Nagapattinam districts.

Tamil Nadu Cooperative Marketing Federation

Tamil Nadu Cooperative Marketing Federation was started in the year 1959. Tamil Nadu
Cooperative Marketing Federation plays a vital role in the distribution of chemical fertilizers and
pesticides. The Federation has 39 godowns with a total capacity of 28140 MTs and 9 rental
godowns with a total capacity of 3450 MTs. The Tamil Nadu Cooperative Marketing Federation
operates two cold storage plants in Chennai, one at Koyambedu Wholesale Market complex with a
capacity of 2500 MTs. and another at Basin Bridge with 1350 MTs. capacity.

The Federation acts as an agent of National Agricultural Cooperative Marketing Federation

of India Ltd. (NAFED) for undertaking support price operations in Tamil Nadu. The Federation is
also operating a fertilizer plant at Pamani in Tiruvarur District.

Marketing of Agricultural Produce

The cooperative marketing societies assist the farmer members to secure reasonable prices
for marketing their agricultural produces. They function as a bridge between producers and
consumers. During the year 2007-08 the cooperative societies have marketed the agricultural
produce to the tune of Rs.1130.11 crores

The co-operative marketing society is an institutional market established by passing the Co-
operative Marketing Societies Act, 1912. The functioning of the society is guided by co-operative
principles. The individual farmers who become ordinary members can participate in the decision
making process and are entitled for dividends distributed by the society. By virtue of their
membership, the farmers are able to make use of physical and facilitative functions of the society
for a reasonable price. In most of the States three-tier co-operative marketing structure viz.,
Primary Co-operative Marketing Societies at the base level, Central Co-operative Marketing
Societies at the district level and at the State level an apex co-operative marketing society exists. In
some States, there is a two-tier structure viz., Primary Co-operative Marketing Societies at the taluk
level, and apex marketing society at State level. The Co-operative Marketing Societies may deal
with a single commodity or many commodities and may offer a variety of services (credit, input
supply etc.,) to the farmers. In Tamil Nadu under the State Marketing Federation, 113 Primary Co-
operative Marketing Societies are functioning with the total value of transaction of Rs.882 Crores
during 2006-07. Sugarcane and cotton together accounted for 83 per cent of the total value of
transaction.

Collect the following information and provide a brief report on the functioning of Cooperative
Marketing Society that you have visited and offer your remarks.
1. Name of the co-operative marketing society.
2. Year of establishment
3. Area of operation
4. Objectives of the society
5. Who can become members of the society
6. What are their rights / the share capital they have to pay to become members?
7. Present membership strength
8. Source of finance, grants and subsidy available to society.
9. How the bylaws and rules are enacted for the society.
10. What commodities are covered by the marketing society?
11. What business activities are undertaken other than agricultural produce marketing?
12. Does the society provide godown facilities? If so what is the cost charged for storing and
period of storage allowed for different commodities.
13. Does the society provide processing facilities to its members?
14. Is the election for the society held regularly if not when it was last held.
15. How do you rate your performance in terms your objectives laid down?
16. What are the problems encountered in serving the farmer members.
17. What help do you expect from the government to help farmers in a better way.
18. Contact five farmers visiting the society and elicit their response on facilities provided,
problems faced in marketing through co-operative marketing societies .
19. Any other information
Ex. No. 10 VISIT TO MARKET INSTITUTIONS – SWC / CWC TO STUDY
Date: THEIR ORGANIZATION AND FUNCTIONING
AIM
To highlight the services performed by Central Warehousing Corporation
To give an orientation to the students on how CWC is different from FCI and
To infuse ideas on the activities and functions of CWC
Introduction
CWC is a premier Warehousing Agency in India, established during 1957 providing
logistics support to the agricultural sector, is one of the biggest public warehouse operators in the
country offering logistics services to a diverse group of clients.
CWC is operating 436 Warehouses across the country with a storage capacity of 9.89
million tonnes providing warehousing services for a wide range of products ranging from
agricultural produce to sophisticated industrial products.

Warehousing activities of CWC include foodgrain warehouses, industrial warehousing,

custom bonded warehouses, container freight stations, inland clearance depots and aircargo
complexes.

Apart from storage and handling, CWC also offers services in the area of clearing &
forwarding, handling & transporation, procurement & distribution, disinfestation services,
fumigation services and other ancillary activities.

CWC also offers consultancy services/ training for the construction of warehousing
infrastructure to different agencies.

Storage of Food grains

Scientific storage and handling services for more than 400 commodities include Agricultural
produce, Industrial raw-materials, finished goods and variety of hygroscopic and perishable items.
Scientific Storage Facilities for more than 200 commodities including hygroscopic and
perishable items through network of 436 warehouses in India with its 3,631 trained personnel.
Import and Export Warehousing facilities at its 30 Container Freight Stations in ports and
inland stations.
Bonded Warehousing facilities .
Disinfestation services.
Handling, Transportation & Storage of ISO Containers.
 Export and Import Services

Exports Imports
Receipt of export cargo Movement of Import containers from the port
In-House customs examination De-stuffing of LCL and FCL containers
Export cargo aggregation and storage Customs Examination
Preshipment Disinfestation of containers as well Bonded Warehousing facilities
as of export cargo.
Cargo stuffing under custom supervision

Bonding Facility with CWC

CWC operates 66 Custom Bonded Warehouses with a total operated capacity of nearly
0.42 million Mts. The concept of custom Bonded Warehousing has been promoted with a view
to facilitate deferred payment of custom duty to encourage entrepreneurs and export oriented
units to carry out their operations with least investment.

These bonded Warehouses are located all over the country at places well - connected
with the port towns for smooth movement of goods to and from the discharge points.

AIR Cargo Complex Services

Ambitious expansion of CWC over the years has also brought CWC in the operation of
Aircargo Complexes which is a major step towards providing complete services as a multi-
modal transport operator.

Presently, CWC is operating 3 Aircargo Complexes at the International Airports of Amritsar,

Goa, Singanallur and Virugambakkam besides managing the accompanied/mishandled cargo
warehouse at Indira Gandhi International Airport at New Delhi.

Integrated Check post Terminal

CWC is operating an integrated truck terminal for providing support services to

the import/export trade with Bangladesh through land route at Petrapole (West Bengal) on
the Indo- Bangladesh border. The terminal, spread over an area of 17.08 acre, has facility for
truck parking, weighment, storage, customs examination, etc.

Disinfection and Pest Control Services

Govt. of India, vide Notification dated 23rd March 1968, entrusted additional
responsibility to CWC to undertake Disinfestation/Pest Control Services beyond its
warehouses in respect of
Agricultural produce or other notified commodities.
Over the years, CWC has developed the expertise in Pest Management in the following areas

Rodent Control
House hold Pest Management- Cockroaches, Mosquitoes, House Flies, Bed Bugs,
Spiders, Lizards, Carpet Beetles, Fleas, Crickets, Ants, Wasps, Locusts etc.
Storage Pest Management.
Anti-termite treatments (Pre & Post Construction)
Container Fumigation.
Ship Fumigation (on Board)
Pre-shipment fumigation of Export Cargo
Rail Coach Disinfestations
Aircraft disinfestations
Hospital & Nursing Homes Treatments
Disinfestations of Hotels & Restaurants
Disinfestations of Commercial Complexes & Office premises.
Disinfestations of Oil Refineries
Disinfestations of Airports & Ports
Disinfestations of Delhi Metro Rail Premises
CWC the only organization in the public sector recognized by the Directorate of Plant
Protection Quarantine and Storage, Ministry of Agriculture, Govt. of India as well as the Export
Inspection Council of India to undertake Pre-shipment fumigation Cargo Container fumigation
and Ship (on board) fumigation of exportable commodities. CWC earned a major
breakthrough in disinfestations of aircrafts of Air India using timer device. CWC has thus earned
the status of a National Pest Control Agency. CWC has taken lead in accreditation of its pest
control operators under newly introduced National Standards on Phytosanitary Measures NSPM
11 & 12 to facilitate MBr fumigation treatment of export/import cargo carrying wood packaging
material (WPM) in compliance to the FAO/IPPC guidelines issued through International
Standard on Phytosanitary Measures ISPM -15. CWC has also got its officials accredited under
NSPM-22 to undertake Aluminium Phosphide fumigation of agriculture produce and other
commodities

Farmers Extension Services

In order to educate the farmers on scientific storage of food grains and postharvest loss
minimization, CWC introduced its Farmers Extension Service Scheme in 1978-79 wherein the
technical staff posted at its warehouses visit the adjoining villages and train the farmers on Post-
Harvest Technology. The scheme is presently in operation through 305 rural based warehouses.
Further, to encourage the farmers and motivate them to avail public warehousing facilities, CWC
offers a rebate of 30% on its storage charges for the farmers’ stocks. A Warehouse Receipt,
which is a negotiable instrument, is issued to the farmers, who can obtain institutional credit on
pledge of the Warehouse Receipt and thus avoid distress sale.

Besides these, the vacant space utility services on rental basis also provided to private
as well as Government Agencies.

Production of agricultural commodities is seasonal and fluctuates every year, but the
consumer demand for agricultural products exists throughout the year. This conflicting behaviour
of supply and demand makes it imperative to store the produce for future use or sale. Thus,
storage is an important marketing function, which involves holding and preserving the
commodities for future consumption as buffer stock. Buffer stock operation helps in stabilising
the prices. The storage function therefore adds the time utility to products. Storage is done at all
stages of marketing and also by consumers. Warehousing is the process in which scientific
storage methods are effect to protect the quantity and quality of stored products.

Collect the following information and write a Report on CWC

1. Name of the Warehousing Corporation.
2. Organisational set-up.
3. Objectives
4. Functions of the corporation.
5. Lay out of the warehouse structure
6. Storage methods and commodities stored at present.
7. Capacity utilisation of the warehouse & Percentage of utilisation of the warehouse.
8. Methods of staking.
9. Storage pest control measures followed.
10. Storage loss if any; / Storage charges
11. Difficulties faced in providing warehouse facilities to farmers and agricultural input traders.
12. Warehouse management: a. Labour b Customers c. Employees d. Others
EX. NO. 11 VISIT TO AGMARK LABORATORY/ GRADING INSTITUTIONS
Date:
AI
M
 To give an exposure to the students on the importance of AGMARK Laboratories in
India
 To highlight the activities and functions of AGMARK Laboratories in Tamil
Nadu
 To provide information on the significance of AGMARK Certification to the emerging
young agripreneurs from Agricultural Sciences
Introductio
n
AGMARK is a certification mark employed on agricultural products in India, assuring
that they conform to a set of standards approved by the Directorate of Marketing and
Inspection, an agency of the Government of India. The AGMARK is legally enforced in India by
the Agricultural Produce (Grading and Marking) Act of 1937 (and amended in
1986). The present AGMARK standards cover quality guidelines for 213 different
commodities spanning a variety of pulses, cereals, essential oils, vegetable oils, fruits and
vegetables and semi-processed products like vermicelli.

The term AGMARK was coined by joining the words 'Ag' to mean agriculture and
'mark' for a certification mark. This term was introduced originally in the bill presented in the
parliament of India for the Agricultural Produce (Grading and Marking) Act. The entire system of
AGMARK, including the name, was created by Archibald Macdonald Livingstone, Agricultural
and Marketing Advisor to the Government of India, from 1934 to 1941. He was supported by a
staff of several hundred. The system was designed to benefit local growers throughout India who
were, in the absence of a certification as to quality, exposed to receiving less for their produce
from dealers than its true worth

AGMARK
Certification

The AGMARK certification is employed through fully state-owned AGMARK

laboratories located across the nation which act as testing and certifying centres.

In addition to the Central AGMARK Laboratory (CAL) in Nagpur, there are Regional
AGMARK Laboratories (RALs) in 11 nodal cities (Mumbai, New Delhi, Chennai, Kolkata, Kanpur,
Kochi, Guntur, Amritsar, Jaipur, Rajkot and Bhopal).Each of the regional laboratories is equipped
 with and specializes in the testing of products of regional significance. Hence the product
range that could be tested variesacross the centres.

Commodities and Tests

The testing done across these laboratories include chemical analysis, microbiological
analysis, pesticide residue, and aflatoxin analysis on whole spices, ground spices, ghee, butter,
vegetable oils, mustard oil, honey, foodgrains (wheat), wheat products (atta, suji, and maida), gram
flour, soyabean seed, bengal gram, ginger, oil cake, essential oil, oils and fats, animal casings, meat and
other food products.

Grading of Agricultural Commodities

Grading of agricultural commodities for internal trade is voluntary and is carried at the
request of sellers under the Agricultural Produce (Grading and Marking) Act. 1937. The agricultural
commodities are produced under different agro-climatic situations using various production
technologies. Consequently, there are quality differences in a single product with regard to size,
colour, chemical content, foreign matter etc. Segregating these products into groups or lots with
homogenous features will make marketing of these products easier and also fetch a premium price
for its quality.

The determination of the standards for different grades for different commodities is known
as standardisation. The standards are established on the basis of certain characteristics such as
weight, size, colour, appearance, texture, moisture, taste, chemical content, quantity of foreign
matter etc.,

This process of sorting out the unlike lots of the product into different lots based on pre-
determined quality standards is known as Grading.

Grading of agricultural commodities has three main purposes.

i) it protects the farmers from exploitation by the traders
ii) it serves as a means of describing quality of the produce which is accepted by the buyer
iii) it protects the consumer by ensuring the quality of the products he purchases

Collect the following information and write a special report on AGMARK Certification
1. Name of the “AGMARK” grading laboratory.
2. Location.
3. Area of operation.
4. Staff in-charge to run the laboratory and organisational pattern
5. Source of funds.
6. Products that are graded in the “AGMARK lab”
7. Fees collected for grading and labelling
8. Grade standards for different products
9. How the adulteration in agricultural produce is detected?
10. List of products labelled in this laboratory and types of label
11. Any competition for Agmark labelled commodities?
12. How the ‘Agmark’ grade-specification is established and given brand labels?
13. Performance of the centre (5 years).
14. Give your critical comments
Ex. No. 12 FARM INPUT MARKETING: VISIT TO INPUT DEALER TO STUDY
Date: MARKETING OF FARM INPUTS
AIM
To introduce the students on the concept of Dealership of Agro Inputs
To highlight the activities and functions of an Input Dealer or Producer cum Dealer following
a Case Study approach
To learn the skills of grading, standardization, packing, certification and other formalities for
seed export

A timely and adequate supply at fair prices of farm inputs -seeds, chemical fertilizers, plant
protection chemicals, farm equipment and machinery, labour, electricity, diesel oil and credit are of
great importance in the production of farm output.

The timely supply of modern farm inputs to the farmers of all categories at reasonable prices
depends on the existence of an efficient marketing system for them. The importance of an efficient
marketing system for farm inputs maybe judged by the following

1. Farm products are produced in the country side. The effect of change in production methods
can therefore be realised only if the farm inputs reach the farmers in time at the least cost.
2. The use of modern inputs by farmers largely depends upon the spread of information about
them. The marketing system has to perform this function.
3. An efficient marketing system for farm inputs is essential for the development of the inputs
manufacturing and supplying industries in the country.

Marketing of Fertilizers
Fertilizers are produced only at selected locations and imported fertilizers arrive at sea ports.
The marketing system has to carry out the functions of storage, transportations and selling to the
farmers. The flow of fertilizers from manufacturing plants and imported fertilizers from sea ports is
depicted as follows
Fertilizer plant/port Warehouse Dealers godown Farmer

The fertilizer manufactures appoint field staff for sales promotion, arrange farmers meeting and
demonstrations to guide farmers to use recommended dosages of fertilizers.

Seed Marketing: It is more complicated and specialised process as compared to marketing of other
inputs. Production of good quality seed is of no value if it does not reach the farmer in time In most
cases seeds are produced far away from the consumption centres. Further seeds produced in one
season is supplied to the farmers in the following season. Hence it requires proper storing. The
marketing of seed involves procurement, distribution, sales promotion and linking credit with sales,
effective coordination of all the related agencies is necessary to achieve the objective of making
available good quality seeds to the farmers.

Marketing of Pesticides: The manufacturers appoint distributors for each region for marketing of
pesticides. They arrange to supply the plant protection chemicals to farmers through a network of
dealers. The lack of technical knowhow on the part of the farmers or dealers and the complementary
requirement of such equipment as sprayers or dusters make the marketing of plant protection
chemicals a difficult and skilled job. Its misuse may endanger human life
Marketing channel for pesticides are depicted as follows

Government Agency Farmer

Manufacturer/ import Distributor Dealer or retailer Farmer

Cooperatives Farmer

Collect the following information about any of the input dealer. He may be dealing with seed as
inputs or fertilizer as inputs or pesticides as inputs or in combination of all. Please visit and collect
the following information and write a special report.
1. Name of the firm and address.
2. Educational qualification of the owner.
3. Years of experience in input marketing
4. Sale of major seeds (last 2 yrs) company wise and, crop wise.
5. Source of seed and retail price of different seed companies.
6. Credit facilities extended to the farmers
7. Role played by quality control inspectors in scrutinising the quality of inputs
8. Any other agricultural input dealing
9. Problems in retail marketing of seeds
10. Suggestions to improve the seeds marketing
11. Give your critical comments.
II. Retail Fertilizer Firm
Fertilizer is one of the most important inputs used to accelerate the productivity of high
yielding varieties of crops. In Tamil nadu, a total number of 12062 retail outlets effected fertilizer
distribution of which private retail outlets accounted for 78 percent and the rest being the
cooperatives. Fertilizer consumption (NPK) in the State had gone up from 10.99 lakh tonnes in
2005-06 to 12.66 lakh tonnes in 2010-11. Per hectare consumption of fertilizer in the State was 187
kgs in 2010-11. Of the total fertilizers consumption, nitrogenous fertilizers, phosphate fertilizers
and potassium fertilizers consumption was about 6.60; 2.89 and 3.17 lakk tones respectively. The
distribution of fertilizers through private firms and cooperatives sector was about 8.15 and 4.51 lakh
tones.

Collect the following information:

1. Name and address of the firm.
2. Educational qualification of the owner.
3. Years of experience in fertilizer retailing
4. No. of persons employed in the shop.
5. Average sale of fertilizers (5 yrs)
6. Any credit to farmers.
7. Credit facilities availed from Fertilizer Company.
8. Role played by fertilizer quality inspector.
9. Problems faced in retailing fertilizer.
10. Collect other inputs sales MN mix, Bio fertilizer, Gypsum (5 yrs)
11. Retail prices of different chemical and bio fertilizers
12. Give your critical comments.
III. Retail pesticide firm

Pest and diseases cause reduction in yields and sometimes responsible for total crop failure.
Weeds compete with crop plants for nutrients and sunlight. Plant protection chemicals are used to
either prevent attack or control them. Nearly 44 technical grade pesticides having 110 formulations
are manufactured in India. Another 40 types of pesticides are imported. Indiscriminate uses of
pesticides have resulted in elimination of natural enemies of pest and emergence of minor pests into
major pests. Pesticide consumption (both in dust as well as liquid form) in the State was 3507.50
tonnes and 4526180 liters in 2010-11. Per hectare consumption of fertilizer in the State was 187 kgs
in 2010-11. The distribution of dust form of pesticides through private firms and cooperatives sector
was about 3435 tones and 72.50 tones whereas in terms of liquid, it was 4464640 and 61540 litres,
respectively.

Collect the following information:

1. Name of the retail shop and address.
2. Name and educational qualification of the owner.
3. Years of experience in pesticides retail business.
4. No. of employees:
5. What are the insecticides, fungicides, weedicides and nematicides sold (last 5 yrs) and the
present prices of them?
6. Sale of pesticides only on prescription?.
7. Any training on disease and pest control.
8. Sale of sprayers (hand /power operated), dusters, insect attractants/ Pheromone traps.
9. Credit facilities extended to farmers.
10. Credit availed from Pesticide companies.
11. Precautions taken to store the pesticides.
12. Role played by pesticide quality inspectors.
13. Problems encountered in pesticide marketing and suggestions to improve.
EX.NO.13
VISIT TO COMMODITY BOARDS / AEZ / EXPORT ORIENTED UNITS
Date:
AIM
 To introduce the students on the existence of different Commodity Boards, APEDA and
MPEDA
 To introduce the students on the methods of establishing an export business
 To highlight the nature and type of the products demanded abroad from our soil
 To highlight the export of fruits and vegetable seeds as a business from the experiences of an
agribusiness firm at Coimbatore
Commodity Boards
With a view to help the organization of the industry and trade along proper lines,
particularly in the case of commodities for which constitution of an Export Promotion Council has
not been thought desirable, Commodity Boards have been set up. One of the important functions of
these boards (other than Rubber Board) is to promote export of the commodities with which they
are concerned and in this respect they conduct themselves as if they are Export Promotion Councils.
Such commodity Boards have been constituted in respect of commodities viz. Coffee Board, Tea
Board, Tobacco Board, Spices Board, Cashew Board, Rubber Board, Cardamom Board etc.
National Dairy Development Board. (NDDB).

In order to provide marketing support to milk products, a sound network of dairy

cooperatives has taken shape in the country. The network consists of milk producers' co-operative
societies at the village level, District Milk Co-operative Unions at the district level, State Co-
operative Diary Federations at the state level and National Dairy Development Board at the national
level. Apart from providing market support to the producers in rural areas, this network has been
instrumental in supplying liquid milk and dairy products to the urban consumers at reasonable
prices.

For example, The Spices Board, India (Ministry of Commerce, Government of India) is the
apex body for the export promotion of Indian Spices. Established in 1987, the Board is the catalyst
of these dramatic transitions. The Board has been with the Indian Spice industry every step of the
way. The Board plays a far reaching and influential role as a developmental, regulatory and
promotional agency for Indian Spices.
 The Board is a link between the Indian exporters and the importers abroad.
Its broad-based activities include formulation and implementation of quality improvement
systems, research and development programmes, education and training of farmers, processors,
packers and exporters on post harvest handling and registration and licensing of traders and
exporters.
It acts as a data bank and communication channel for importers and exporters and promotes
Indian Spices abroad.
The Board has close association with international agencies like International Trade Centre
(ITC) Geneva, United Nations Development Programmes (UNDP), International Pepper
Community (IPC) Jakarta, American Spice Trade Association (ASTA), European Spice
Association (ESA), All Nippon Spice Association (ANSA) Japan, International Spice Group
(ISG), Food and Agricultural Organisation (FAO), Commonwealth Secretariat (COMSEC)
London, International General Producers Association (IGPA), United Nations Industrial
Development Organisation (UNIDO).
Collect the following information:
1) Name of the commodity board
2) Organisational set-up
3) Objectives
4) Functions of the commodity board
5) Value and Quantum of commodities exported
6) Procedures involved in export of commodity
7) Difficulties faced in exporting the commodity
8) Any other remarks
Agricultural and Processed Food Products Export Development Authority (APEDA)
The Agricultural and Processed Food Products Export Development Authority (APEDA)
come into existence in 1986 to further develop our agricultural commodities and processed foods,
and to promote their exports. It aims to maximize foreign exchange earnings through increased agro
exports, to provide better income to the farmers through higher unit value realization and to create
employment opportunities in rural areas by encouraging value added exports of farm produce.
APEDA went about achieving these by identifying new markets, providing better support systems
to our exporters and manufactures, and introducing new products to the international market.
APEDA undertakes the following development programmes
Development of Data Base on Products, Markets and Services.
Publicity and information Dissemination.
Invites official and business delegations from abroad.
Organization of Product Promotions abroad and visits of official and trade delegations abroad.
Participation in International Trade Fairs in India and abroad.
Organization of Buyer-Seller Meets and other business interactions.
Information Dissemination through APEDA’s Newsletter, Feed Back Series and Library.
Distribution of Annual APEDA Awards.
Provides recommendatory, advisory and other support services to the Trade and Industry.
Problem solving in Govt. Agencies and Organizations, RBI, Customs, Import/Export
Procedures, Problems with Importers through Indian Missions abroad.
Marine Products Export Development Authority (MPEDA)
The MPEDA was established in the year 1972 and comes under the Ministry of Commerce
and Industries. It’s main objectives are to promote export of marine products through various
development and assistance programme. Marine products contribute about for 3.2 % of total export
from India. The production of seafood includes culture and capture and the 70 % of exports from India
are shrimp. Marine food export is a growing field and during every year about 200 processing units are
initiated. In India maximum of the activity is concentrated in Andhra Pradesh and in World level
Combodia and Myanmar are leading. MPEDA organizes and participates in international seafood fairs,
conducts fairs in India, gives advertisements and releases books, increases publicity abroad to promote
exports of marine products.

VISIT TO EXPORT ORIENTED UNITS

An Export Business
Fruits and vegetables export business demands an adequate knowledge about foreign
markets. If you are living in an area where fruits and vegetables production is good enough, you can
consider to initiate a fruits vegetables export business starting just from your local growers. The
export import sector is hugely organized and you will get sufficient data in your hand. The most
beneficial part of this business is, you can start this venture from your home location

Entrepreneurship demands certain set of skills and attitude. One must be ready with qualities
required to be an entrepreneur before plunging to the road ahead. We must know the following
information before taking the path of entrepreneurship.

Business Plan

In starting fruits and vegetables export business do an extensive research about the products
that are available for export and the foreign market that is ready to buy that particular product. Keep
informed yourself. Finding the right market for the specific product is important in getting success.
Also you will need to have flair amount of ideas about different currency.

Preparing a business plan is important to start fruits and vegetables export business. You can
initiate this business either concentrating only local grower or establishing a big export house with
required infrastructure. In any case plan about your focus products, market and startup budget.
Calculate the cost of shipment and other necessary activity to get the export done. Fix your pricing.
It is advisable to start as small scale. As you grow you will definitely find more ways to expand.

Principal Reasons for Having a Business Plan by the Startup Entrepreneurs

The persons whom are fresh to the export business must have the following reasons to keep
them with the Business Plan always. They are
To define a new business venture
To check the feasibility of the agribusiness
To calculate the startup investment for the business
To secure the investment and the loans needed for the business
To create effective marketing strategy
To study about the competitors and their products
To monitor the day-to-day operations
To calculate business performance
To create HR Manual
To attract Top Professionals to come
LICENSE FOR EXPORT BUSINESS

In starting fruits and vegetables export business, you will need to have several license and
permission from the Government Authority. An export license is a document issued by the
appropriate licensing agency after which an exporter is allowed to transport his product in a foreign
market. The license is only issued after a careful review of the facts surrounding the given export
transaction. For every first time exporter, it is necessary to get registered with the DGFT (Director
General of Foreign Trade), Ministry of Commerce, Government of India. DGFT provide exporter a
unique Import Export Code (IEC) Number. IEC Number is a ten digits code required for the
purpose of export as well as import. No exporter is allowed to export his good abroad without IEC
number.

Application for IEC number can be submitted to the nearest Regional Authority of DGFT.
Application form which is known as “Aayaat Niryaat Form – ANF2A” can also be submitted online
at the DGFT web-site: http://dgft.delhi.nic.in

While submitting an application form for IEC number, an applicant is required to submit his
PAN account number. Only one IEC is issued against a single PAN number. Apart from PAN
number, an applicant is also required to submit his Current Bank Account number and Bankers
Certificate.

An amount of Rs 1000/- is required to submit with the application fee. This amount can be
submitted in the form of a Demand Draft or payment through EFT (Electronic Fund Transfer by
Nominated Bank by the DGFT.

It is important to obtain a Registration Cum Membership Certificate (RCMC) from Export

Promotion Councils (EPC).

Making Connections for Fruits Vegetables Export Business

Gather information about the foreign markets. Find out the countries that import the
products that you want to export. To every possible contact, write a letter introducing your company
with the product specifications. As you continue your correspondence with foreign companies,
build up a good rapport with their representatives. Prepare for sending sample product. You may be
able to work directly with a wholesaler of an overseas importing company.
Fruits and Vegetables Export Business Operation

Agreement with the growers or suppliers is a vital document in this business. You need to
have a written and signed contract between the growers and you as the export representative.
Consult with an attorney to craft the agreement. Clearly mention there about the specific
commission quoted to the distributors on top of the price of goods. The terms of the contract should
then be stated: how many years the contract will be signed for, the terms of cancellation by either
party voluntarily or because of no sales action over a certain period of time.

Talk to your bank for having the facility of Letter of Credit. A letter of credit eliminates
financial risks for you, the fruits and vegetables growers or suppliers, and the distributor.

You’ll need the help of a freight forwarder when you make up the total price quotation to
the distributor. Not only do you include the grower’s price and your commission – usually added
together, but you need to include dock and cartage fees, the forwarder’s fees, ocean freight costs,
marine insurance, duty charges, and any consular invoice fees, packing charges, or other hidden
costs.

Promote Your Fruits and Vegetable Export Business

The profit of the fruits and vegetables export business is in the quantity of the goods traded.
The higher the cost of the merchandise, the higher the profit from your percentage. This is an high
profit making venture. Because of the low overhead, most of the money you make on commission is
yours. But building a truly profitable business requires dedication and a good knowledge of the
business.

Advertise in the print media for distributors and for goods. To get proper supply you may
establish business relationship with the local agro-input retailers. Online presence is important.
Register your business with online directories. Setup your own website to generate sales leads.

Table 1: Product Wise Market List For Fruits Vegetables Export Business

Product Major Markets

Floriculture USA, Japan, UK, Netherlands & Germany
Fruits & Vegetable Seeds Pakistan, Bangladesh, USA, Japan & Netherlands
Fresh Onions Bangladesh, Malaysia, Sri Lanka, UAE, Pakistan & Nepal
Other Fresh Vegetables UAE, Bangladesh, Pakistan, Nepal & Sri Lanka
Walnuts Spain, Egypt, Germany, UK & Netherlands
 Product Major Markets
Fresh Mangoes UAE, Bangladesh, UK, Saudi Arabia & Nepal
Fresh Grapes Netherlands, UK, UAE, Bangladesh, Belgium
Other Fresh Fruits Bangladesh, UAE, Netherlands, Nepal, Saudi Arabia
Dried & Preserved Vegetables Russia, France, USA, Germany & Spain
Mango Pulp Saudi Arabia, Netherlands, UAE, Yemen, Arab Republic & Kuwait
Pickles & Chutneys Russia, USA, Belgium, Netherlands & France
Other Processed Fruits USA, Netherlands, UK, UAE & Saudi Arabia
Buffalo Meat Malaysia, Philippines, Saudi Arabia, Jordan & Angola
Sheep / Goat Meat Saudi Arabia, UAE, Qatar, Oman & Kuwait
Poultry Products UAE, Kuwait, Oman, Germany & Japan
Dairy Products Bangladesh, Algeria, UAE, Yemen, Arab Republic & Egypt
Animal Casings Germany, Portugal, France, Spain & Italy
Processed Meat Seychelles, UAE, Hong Kong, Germany & USA
Groundnuts Indonesia, Malaysia, Philippines, UK & Singapore
Guar Gum USA, China, Germany, Italy & Netherlands
Table 1 revealed that around 20 products under the head agribusiness is being exported to
different countries including United States of America. Almost all the developed and developing
nations are showing much interest in getting the produce from India as India is currently concentrating
on the sanitary and phytosanitary issues strictly to attract the foreign consumers and customers. The case
of Export of Fruits and Vegetable Seeds to different countries and their quantity details are presented in
Table 2 to illustrate the significance of seed trade.

Table 2: Export of Fruits and Vegetable Seeds from India (2016-17)

Quantity Exported in Value of Export in
Sl. No Country
Tonnes Lacs
01 Bangladesh 7458 10704
02 Pakistan 1078 7758
03 United States of America 77.35 7330
04 Netherland 155.00 5056
05 Japan 221.34 2738
06 Kenya 157.00 2073
07 Thailand 101.11 2043
08 Singapore 105.28 1742
09 Korea 136.04 1697
10 Vietnam 136.00 947
Total 9625.12 42088

Table 2 revealed that the export of fruits and vegetable seeds was found to be maximum in
respect of Bangladesh followed by Pakistan. These two countries were receiving around 80 per cent
of the total fruits and vegetable seeds exported from India. It might be due to the quality vegetable
seeds are produced by Indian firms and hence there is demand for the seeds. The total quantity of
seeds exported is accounted for 9625 tonnes and the value of export of fruits and vegetable seeds is
arrived at Rs 42088 lakhs. It is a considerable foreign exchange earned by Indian firms out of seed
export.

Assignment
You have seen the methods and procedures in vogue with Government of India to become an
exporter
You have learnt the importance of Business Plan needed for establishing an export oriented unit
You have understood the magnitude of exporting the seeds particularly the fruits and vegetable
seeds from India
You strive hard to establish your own business unit in future and
Have an Interview with the Manufacturer cum Exporter and document the efforts taken to
produce, process, manufacture and export the value added output from any farm produce.
 TIME SERIES ANALYSIS OF PRICES
EX. NO. 14
Date:
AIM
To introduce the students on the importance of Forecasting Techniques
To train the students to analyze the time series data and to predict the trends in prices
To train the students on the skill of classifying the trends as Cyclical, Seasonal etc and
To Introduce the students on the method of forecasting of Prices for the future years
Forecasting is termed as predicting the future of a variable. There are different methods
used for forecasting. They are time series models (moving average method) and causal models.

The time series models of forecasting predict on the basis of the assumption that the future
is a function of the past. In other words, they look at what has happened over a period of time and
use a series of past data to make a forecast. If we are predicting daily sales of flowers in a market,
we use the past daily sales for flowers in making the forecast.

A causal model incorporates into the model the variables or relationships that might
influence the quantity being forecast. A causal model for production of crops might include
relationships such as price of output, labour use, input use etc.,

Time Series Forecasting:

I. Moving Average Method
A time series is based on a sequence of evenly spaced (daily, weekly, monthly, quarterly,
and so on) data points. Forecasting time series data implies that future values are predicted only
from past values.
Decomposition of a Time Series
There are four main ways of decomposing the time series:
Trend (T)
Cycles ( C )
Seasonality ( S)
Random variations or Irregular variations (I )
Two general forms of time series models are used in statistics. The most widely used is a
multiplicative model, which assumes that demand is the product of the four components:
Demand = T X C X S X I
Where, T denotes Trend; C denotes Cycles; S denotes Season; and I denotes Irregular variations
An additive model provides an estimate by adding the components together. It is stated as:
Demand = T + C + S + I
Moving Average Method
Moving averages are useful if we can assume that market demands will stay fairly steady
over time. Moving average can be defined as the summation of demands of total periods divided by
the total number of periods.
Mathematically,
Moving average = ∑ Demand in previous n periods / n
where n is the number of periods in the moving average – for example, four, five, or six months,
respectively, for a four -, five -, or six – period moving average.

Estimation of Seasonal Index

Seasonality: The process of decomposition starts with identifying and removing the seasonal factor
from our series of numbers in order to calculate the trend. We will use the moving average method
to isolate seasonal fluctuations.
Column 1: This column simply represents months for the year numbered sequentially.
Column 2: All the monthly sales data are listed here.
Column 3: The first step in the deseasonalizing process is to calculate a 12 month moving total for
the first year (i.e., the first 12 months). So this number is placed in between to June and July in this
column (even number). The next number is obtained by moving down one another 12 months. The
first month dropped, the 13th month is added, and the average of month 2 to 13 months. This
number is placed next to July and august. The same procedure is then followed for the rest of the
months. Because of averaging, the data for the first six months and the last six months are lost. This
computation is made in column 3.
Column 4: A 2 month total for column 3 is calculated and placed between middle point i.e. july and
august and must be placed in column 4. This process is repeated you get 2 months total. With this
procedure, the next to the last number is now lost.
Column 5: To make centered 12 month moving average, the values in column 4 is divided by 24
and is placed in column 5. By this process, the values will be centered. This value will have the
component of trend and cyclical variations. To isolate the seasonal factors in a series we have to
move to column 6.
Column 6: Divide the column 2 by column 5 and multiplied by 100 which gives you the values
which contains only the seasonal and irregular variations. To obtain a monthly seasonal index, we
must average the ratios obtained by months in column 6. This is done in Table 2. The monthly
patterns are quite obvious. The 12 averages should add to 12 or 1200; they do not because for
rounding. A minor adjustment must now be made. The results are then transferred to column 6 of
Table 2.
Table 2: Find Modified mean (take average for all the months. Find the modified mean total. It
does not equal to 1200. Hence we must find the adjustment factor. Then the modified mean must
me divided by the adjustment factor which gives you the seasonal index.
Adjustment factor = Modified mean total / 1200 (one month = 100)
Both the actual and the deseasonalized data ( ratio ) have been plotted in Graph. The latter
series, as should be expected, is much smoother than the former.
Model Exercise:
The monthly price of Cotton (RCH) collected from Avinashi Taluk for the year 2010 and
2011 is furnished below. Find out the seasonal Index using the above time series data and comment
on the results.

1 2 3 4 5 6
12 month 2 month Centered 12 month Ratio
Months/ Actual
moving moving moving Average =
year Value
total total (CMA) Actual / CMA
Jan 3520
Feb 3350
Mar 3371
Apr 3290
May 3143
June 3205
July 3289
Aug 3500
Sep 3560
Oct 4500
Nov 4800
 1 2 3 4 5 6
12 month 2 month Centered 12 month Ratio
Months/ Actual
moving moving moving Average =
year Value
total total (CMA) Actual / CMA
Dec 4900
Jan 5300
Feb 5650
Mar 6281
Apr 5600
May 4200
June 4500
July 4300
Aug 4280
Sep 4350
Oct 4300
Nov 4250
Dec 4250

Seasonal Index
Seasonal Index =
Months 2010 2011 Modified mean
Modified mean / Adj. factor
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Modified mean total

II. CASUAL MODEL APPRAOCH – LINEAR TRENDS

The most widely used method of fitting trend lines to time series data is the method of least
squares. The problem of fitting a least squares line Y’ = a + bo X is essentially that of b for a given
set of data and make (y y')2 as small as possible and the problem either by solving the twonormal
equations.
y na b( x)

xy a( x) b ( x)2
Alternatively, the values of a x and b can be determined by.

( y)( x2) ( x)( xy)

a=
n ( x2) ( x)2
n ( xy) ( x)( y)
b=
n ( x2) ( x)2
In a time series, however, the x’ s practically always refer to successive periods (usually
years). In this case, the problem of fitting a trend line by the method of least squares can be
simplified considerably by performing the following change of scale (coding).
Letting x be the variable which measures time and taking the origin (the zero) of the new
scale at the middle of series that is, at the middle of x’ s, we number of years (or other periods) so
that in new scale x . If the series has an odd number of years,, we assign x = 0 to the middle year
and number of years ……, -5, -4, -3, -2, -1, 0, 1, 2, 3, 4, 5, ..................................... If the series has
an even number of years, there is no middle year, and we assign successive years the numbers …. -
7, -6, -5, -4, -3, -2, -1, 1, 2, 3, 4, 5, 6, 7, ......... , with -1 and 1 assigned to the two middle of years.

This kind of coding makes x 0 and substituting this into the formula given earlier, the a and b
can be estimated as given below.

y xy
a = ---------- and b = -----------
n x2

This makes the advantage of the coding evident.

Example 1: Fit a least squares trend line to the annual revenues (in thousands of Rupees) a
agricultural input sales (pesticides) of retailer for the year 2003 to 2011.
Year Total annual sales, (y) in ‘000 of Rupees)
2003 789
2004 542
2005 769
2006 1093
2007 1175
2008 1067
2009 1166
2010 1426
2011 1692

Since we have figures for nine years (an odd number of years), we label them -4, -3, -2, -1, 0, 1, 2,
3, 4 and the sum needed for substitution into the formula for a and b are obtained the following
table
Year x y xy x2
2003 -4 789 -3156 16
2004 -3 542 -1626 9
2005 -2 769 -1538 4
2006 -1 1093 1093 1
2007 0 1175 0 0
2008 1 1067 1067 1
2009 2 1166 2332 4
2010 3 1426 4278 9
2011 4 1692 6768 16
0 9719 7032 60

Substituting n = 9, y 9719, xy 7032and x2 60

y 9719
a = -------- = --------- = 1079.9
n 9
xy 7032
b = ---------- = ------- = 117.2
x2 60

y’ = 1079.9 + 117.2 x for equation of trend line. To avoid confusion, it is advisable to add legend
stating precisely the origin of x and units of both and x and y.
In our example we write,
y’ = 1079 + 117.2x
(origin = 2000; x unit = 1 year and y= total annual sales in ‘000 of rupees)

This makes it clear that 1079 is the trend value for 2000 and that the annual trend
increment (the year to year growth) in the retail sales is estimated as Rs. 117.2 thousand rupees for
the given period.
Using the equation we have obtained we can now determine the trend value for any year by
substituting the corresponding values of x. for example, for 2003, we substitute x = -4 and get a
trend value of y’ = 1074.9 + 117.2(-4) x = -4 = 611.1 and for 2011 we substitute x = 4 and get x a
trend of y’ = 1079.7 + 117.2(4) = 1548.7
Plotting these two trend values and joining them by a straight line we obtain least squares
trend line shown through the original data.
Problem:
i) Fit a least square trend line to the annual production (tonnes) of Turmeric in Tamil Nadu for
the year 1990 to 2003 as given below.
ii) Plot the actual and trend values of production and give comments on the trend
iii) Forecast the production for the year 2014 -2015

Production
Year Year Production (tonnes)
(tonnes)
1990 74050 1997 92050
1991 38420 1998 110680
1992 47020 1999 126010
1993 83220 2000 167380
1994 136640 2001 158640
1995 124040 2002 118260
1996 79650 2003 64540
EX. NO: 15
Date: CONSTRUCTION OF INDEX NUMBERS

AIM: to understand the concept of index numbers and calculate the simple and weighted index
numbers

The prices of agricultural commodities are frequently changing and it will be difficult to use
raw price data for drawing suitable policy implications. In this context, constructing the index
numbers is a convenient way to study the extent and direction of change in price of a commodity or
a group of commodities at regular intervals over a period of time.
The value of a variable expressed as a percentage of its value at some base period is known
as Index Number. A Price Index Number for a commodity (or a group of commodities) at a given
point of time is expressed as percentage of its price in some base period.

Advantages:
a) It directly depicts the magnitude of price change in relation to the base period.
b) It is useful to study the change in price level of a group of commodities.
c) It simultaneously reveals the differential changes in price of more than one commodity.
d) It is useful to compare the change in price level of commodities that are expressed in different
units.
Selection of base year:
The index number for the base period is usually 100.
The base year should:
a) Represent at least one complete production process to avoid seasonal price variation
b) Be a normal period in terms of area and yield.
c) Represent condition in the economy without incidents such as oil crisis, a prolonged strike in
transport sector etc., that externally affect price of commodities.
A base year once selected may be used for construction of price index numbers for 10 to 15
years. The desirability of continuing the same base period for long duration must be reviewed
regularly due to changes in the tastes and preferences, standard of living of the consumer, etc.,
1. Estimation of Price Index Numbers:
The Price Index for an individual commodity is calculated by using the formula
Pt
It = ---- X 100
Po
 Where,
It = Price Index for year ‘t’
Pt = Price of the commodity at time ‘t’
Po = Price of the commodity at base year
2. Simple Average of Price index Numbers:
In this method each commodity is assigned equal weight. The price index of a commodity is
constructed by
1) Calculating the price index for each commodity in the group with the base year and compute the
simple average for each year (For commodities where prices are expressed in different units).
2) Calculating the sum of prices of commodities in the group for each year and compute the index
number using these sums (for commodities whose prices are expressed in same units).
The limitation with this method is that each commodity is implicitly assigned equal weights in the
process of averaging which is not reasonable.
3. Weighted method of Construction of Index Numbers of Prices of Commodity Groups:
In this method, appropriate weights are assigned to each commodity in the group such that
the price of each commodity reasonably influences the aggregate price index.

Selection of weights:
Index Numbers Appropriate weight

Farm Harvest or Wholesale Price Share of Marketed Surplus or commodities transacted

Input prices paid by farmers Share of purchased inputs in the total cost of
production or cost of cultivation

Cost of living Proportion of expenditure on individual items to total

consumption expenditure of the target group

The other aspect that should be considered while selecting weights is the period to which
these weights pertain i.e. base year, current year or an average of these two.

Methods of estimation:
1.Laspeyre’s Method: In this method, base year quantities of production or transaction are used as
weights.
 n
PitX Qio
i=1
Laspeyre’s price index = -------------------- X 100
n
PioX Qi o
i=1

Where, Pit = Price of ‘i’ commodity at ‘t’ year

Qit = Quality of ‘i’ commodity at ‘t’ year
Pio = Price of ‘i’ commodity at base year
Qio = Quantity of ‘i’ at base year
This method is appropriate under the assumption that the quantities of individual commodities in
the group have not charged significantly over time.

1. Paasche’s Method: In this method, current period quantities are used as weights.
n
PitX Qit
i=1
Paasche Price Index = ------------------ x 100
n
PioX Qit
i=1

The weights are selected afresh for every period. Thus the quantity of commodities keeps
changing every year and the price change between two periods is not comparable.
3) Fisher’s Method: Two index numbers for each year are constructed using base year and
current year quantities of commodities as weights and a geometric mean of the two is considered as
the price index number.

Fishers Price Index = Laspeyre's Index Paasche's Index

Assignment:
Problem 1

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Price
510 530 550 560 570 580 850 870 950 1000
(Rs./ Qtl)

Using given data, compute the Price Index Number by considering the first year as a base
year period and write your comments
EX. NO: 16 APPLICATION OF PRINCIPLES OF COMPARATIVE ADVANTAGE
Date: OF INTERNATIONAL TRADE

In economics, the law of comparative advantage says that two countries (or individuals or
firms) can both gain from trade if, in the absence of trade, they have different relative costs for
producing the same goods. Even if one country is more efficient in the production of all goods
(absolute advantage), it can still gain by trading with a less-efficient country, as long as they have
different relative efficiencies.

The law or principle of comparative advantage holds that under free trade, an agent will
produce more of and consume less of a good for which they have a comparative
advantage. Comparative advantage is the economic reality describing the work gains from trade for
individuals, firms, or nations, which arise from differences in their factor
endowments or technological progress. In an economic model, agents have a comparative
advantage over others in producing a particular good if they can produce that good at a lower
relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. One
does not compare the monetary costs of production or even the resource costs (labour needed per
unit of output) of production. Instead, one must compare the opportunity costs of producing goods
across countries.

David Ricardo developed the classical theory of comparative advantage in 1817 to explain why
countries engage in international trade even when one country's workers are more efficient at
producing every single good than workers in other countries. He demonstrated that if two countries
capable of producing two commodities engage in the free market, then each country will increase its
overall consumption by exporting the good for which it has a comparative advantage while
importing the other good, provided that there exist differences in labor productivity between both
countries. Widely regarded as one of the most powerful yet counter-intuitive insights in economics,
Ricardo's theory implies that comparative advantage rather than absolute advantage is responsible
for much of international trade.

Ricardo considered what goods and services countries should produce, and suggested that
they should specialise by allocating their scarce resources to produce goods and services for which
they have a comparative cost advantage. There are two types of cost advantage – absolute, and
comparative.
Absolute advantage means being more productive or cost-efficient than another country
whereas comparative advantage relates to how much productive or cost efficient one country is than
another.
To define absolute advantage it is useful to define (resources) labor productivity first. To
define comparative advantage it is useful to first define opportunity cost. Each of these are defined
formally below using the notation of the Ricardian model. The concepts are presented in the
following order with an example.
Labour Productivity
Labour productivity is defined as the quantity of output that can be produced with a unit of
labour. Since aLC represents hours of labour needed to produce one pound of cheese, its

reciprocal, , represents the labour productivity of cheese production in the US. Similarly

represents the labour productivity of wine production in the US.

Absolute Advantage
A country has an absolute advantage in the production of a good relative to another country
if it can produce the good at lower cost or with higher productivity. Absolute advantage compares
industry productivities across countries. In this model we would say the U.S. has an absolute
advantage in cheese production relative to France if

Opportunity Cost
Opportunity cost is defined generally as the value of the next best opportunity. In the context
of national production, the nation has opportunities to produce wine and cheese. If the nation wishes
to produce more cheese, then because labour resources are scarce and fully employed, it is
necessary to move labor out of wine production in order to increase cheese production. The loss in
wine production necessary to produce more cheese represents the opportunity cost to the economy
Comparative Advantage
A country has a comparative advantage in the production of a good if it can produce that
good at a lower opportunity cost relative to another country. Thus the US has a comparative
advantage in cheese production relative to France if:

This means that the US must give up less wine to produce another pound of cheese than
France must give up to produce another pound. It also means that the slope of the US PPF is flatter
than the slope of France's PPF.
Starting with the inequality above, cross multiplication implies the following,

This means that France can produce wine at a lower opportunity cost than the US. In other
words France has a comparative advantage in wine production. This also means that if the US has a
comparative advantage in one of the two goods, France must have the comparative advantage in the
other good. It is not possible for one country to have the comparative advantage in both of the
goods produced.
Thus Absolute advantage describes a situation in which an individual, country can produce
more of a good or service than any other producer with the same quantity of resources.
Comparative advantage describes a situation in which an individual country can produce a good or
service at a lower opportunity cost than another producer.
Exercise
1. India can produce 4 tonnes of wheat or 8 tonnes of maize.
USA can produce 3 tonnes of wheat or 9 tonnes of maize.

Wheat Maize
India 4 8
USA 3 9

(i) What is the oppourtunity cost for producing one of each product?
(ii) Who has comparative advantage in Wheat?
(iii) Who has comparative advantage in Maize?
(iv) What is the terms of trade for both the countries?
One unit of Wheat for unit of Maize.

2. India takes 4 hrs to make bread and 12 hours to prepare jam.

China takes one hour to make bread and 5 hours to prepare jam.

Bread Jam
India 4hrs 12 hrs
China 1 hr 5 hrs

(i) What is the opportunity cost for producing one of each product?
(ii) Who has comparative advantage in Bread?
(iii) Who has comparative advantage in Jam?
(iv) What is the terms of trade for both the countries?
One unit of Bread for unit of Jam.

3. Consider the production efficiency for the two countries – India and the UK –let us assume, 100
units of each of the factors of production. These 100 units need to be employed in the production of
either rice or tea. The following are the production units required to produce 1 tonne of rice and tea.
Tea Rice
India 5 10
Uk 10 4

(i) What is the opportunity cost for producing one of each product?
(ii) Who has comparative advantage in tea?
(iii) Who has comparative advantage in Rice?
(iv) What is the terms of trade for both the countries?