Developing Agricultural Value Chains & Commercialization of Agriculture Marketing in India

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Developing Agricultural Value Chains &

Commercialization of Agriculture Marketing in India

Maharashtra Experience

Ramesh ShingteNodal Officer

Project Implementation Unit- Agri. MktgMaharashtra Agricultural Competitiveness Project , PUNE

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Agriculture in Maharashtra

First State to adopt Dry Land Farming Technology

Pioneer in Horticulture Development through EGS

2nd largest producer of fruits in India (95 lakhs MT/annum)

Leading producer of grapes, pomegranate and orange

Second highest producer of banana and sugarcane

Highest producer of coarse cereals and cotton

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Agriculture in Maharashtra (Contd.)

Particulars Maharashtra % with Country

Geographical Area 307713 Sq. Km 9.36%

Population 100 Million 9.43%

Total Cultivable land 30.76 Million Ha. 16.85%

Per Capita Income Rs. 41,331/- National Average Rs. 33,131/-

Gross Cultivated Area 225.57 Lakh Ha. 11.83%

Gross Irrigated Area 39.58 Lakh Ha. 5.15%

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Agriculture in Maharashtra (Contd.)

Production (Million MTs)

% with Country

Food Grain 10.93 5.12

Oilseeds 0.61 3.59

Pulses 2.03 13.57

Cotton 3.08 22.21

Sugarcane 26.98 11.37

Sugar 9.10 32.12

Fruits 11.04 17.40

Vegetables 6.45 5.13

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Maharashtra’s Strengths in Horticulture

Diverse agro-climatic conditions

Strong research support – Four agricultural universities

National Research Centers for: Grapes - Pune, Citrus - Nagpur, Onion & Garlic – Rajgurunagar (Dist.Pune),

and, Pomegranate - Solapur

Strong co-operative network

Proximity to international airport & sea port provide the logistic advantages

Strong crop based farmers organizations

Innovative farmers

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Status of fruit crops in Maharashtra Area before 1990 : 2.42 Lakh ha. New plantations : 13.32 Lakh ha. Total area : 15.74 Lakh ha.

Number of villages : 39,411 Productive area : 9.14 lakh ha. Production : 103.2 lakh MT Number of growers : 17.51 lakhs

Expenditure : Rs. 1,234 Crores Gross annual turnover : Rs. 6,300 Crores Man days generated : 3,300 lakh

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Export of Fresh Fruits and Vegetables from Maharashtra

Sr. Crop % share of exportin India

1 Grape 98

2 Mango 65

3 Onion 90

4 Vegetables 68

Maharashtra is leading state in export of fresh fruit & vegetables

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Farmers Organizations / NGOs1. Grape Growers Association

2. Mango Growers Association

3. Pomegranate Growers Asso.

4. Banana Growers Association

5. Sapota Growers Association

6. Orange Growers Association

7. Sweet Orange Growers

Association

8. Kagzi Lime Growers Asso.

9. Guava Growers Association

10. Aonla, Fig, Custard-apple

Growers Association

11. Vegetable Growers Association

12. Flower Growers Association

13. WIFA (Western India Floriculturist

Association)

14. Medicinal & Aromatic Plants

Growers Association

15. Associations for Organic Spices

cultivation

16. Nursery Owners Association

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Status of GAP in Maharashtra GAP integrates the application of new production

system such as IPM, ICM & INM for commercial production of agricultural products

Quality certification in agriculture

Sr.No.

CropEUREPPGAP

Certified Farms

1 Grape 20002 Mango 2003 Pomegranate 50

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Q 1: What are issues in Agricultural Production?

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Small land holdings Subdivision and fragmentation of land Presence of % of small and marginal farmer Only 35 % of area under irrigation Heavy dependence on rainfall Low farm mechanization Low adoption of technology

W h a t i s t h e r e s u l t ?• Results- Low productivity- Low shelf life

Issues in Agricultural Production

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Q 2: What are issues in

Agricultural Marketing?

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Too many intermediaries Lack of professionalism Unhygienic conditions Inadequate transparency in auctioning Lack of standardization and gradation Lack of facilities - grading, packing, cold storage, processing Market Information & Intelligence Long and fragmented value chain (perishables)

Post harvest losses (around 20%) Lack of Pvt. Sector participation Increased Marketing Expenses Low bargaining power of farmers

W h a t i s t h e r e s u l t ?

Results - Distress sale- Low share of producer in consumer rupee

Issues in Agricultural Marketing

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Q 2: What are issues in

Agricultural Processing?

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• Only 2% of perishables processed

• Lack of private sector participation

• Weak backward linkages

• Un-assured forward linkages

• Absence of contract farming

W h a t i s t h e r e s u l t ?

Results

- No value addition / Very little VA.

- Self life not increased / Very low SL.

Issues in Agricultural Processing

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Measures?

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Measures for Improving Agri. Marketing

Providing Transparent Auction System

Providing better Infrastructural Facilities

Providing Risk Mitigation measures

Providing Alternative Marketing Channels

Warehouse Receipt Programme

Market Information & Intelligence

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Externally Aided Projects

• Maharashtra Agricultural Competitiveness Project (MACP)

• Convergence of Agricultural Interventions in Maharashtra (CAIM)

• Agribusiness Infrastructure Development Investment Program (AIDIP)

Amendments in Agricultural Marketing Act • Private Markets• Farmer Consumer Market• Direct Marketing• Special Commodity Market• Single License System• APMC Secretary Panel • Planning for Infrastructure Development

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Maharashtra Agricultural Competitiveness Project (MACP)

World Bank funded Objective – to increase productivity, profitability and market

access and make farmer competitive Agriculture, AHD and Agriculture Marketing – line Depts. Interventions - Extension measures by Agriculture & AHD

Strengthening existing markets providing alternative marketing channels by Agri. Marketing

Period – 6 yrs Outlay – Rs. 703.00 Crores

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International Fund for Agricultural Development (IFAD) aided

Objective: To improve household incomes from diversified

farming and from off-farm activities

Coverage: 1200 villages from suicide prone districts (Akola,

Amravati, Buldhana, Washim, Yawatmal & Wardha)

Interventions: Institutional Partnership Development & Capacity

Building , Sustainable Agriculture & Mktg. Linkages, SHG &

CMRC Development , Micro-Enterprises & SMEs

Period : 8 yrs

Outlay: Rs. 593 Crores

Convergence of Agricultural Interventions in Maharashtra (CAIM)

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Objectives - To attract private sector investment for agricultural

infrastructure development. Basic agricultural infrastructures as per needs of farmers,

traders and entrepreneurs. Farmers capacity building and formation of farmers

groups and producer Companies . Crop diversification. Value addition for perishable crop

Agribusiness Infrastructure Development Investment Program (AIDIP)

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Project Components – 1. Establishment of Integrated Value Chain (IVCs) on PPP

basis, Hub – Spoke model 2. Strengthening and establishing of IVC backward linkage

under JFPR 3. Institutional Development and Program management

Financing Plan – (Multi-tranche Financing Facility )ADB - $ 85 million (32 %), GoM - $ 21 million (8 %) and

Private Investors - $ 159 million (60 %)

Establishment of Integrated Value Chains (IVCs) – In 1st Tranche – Nashik & Aurangabad – Amrawati IVCs Rest of Maharashtra – 15- 20 IVCs will be established in

next 6-7 years. The project is expected to complete by year 2017

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Private markets

Farmer – Consumer markets

Direct Marketing

Special commodity markets

Regional / Divisional APMC

Single license system

Cadre for the secretaries of APMC

Contract Farming.

Amendments in Maharashtra Agricultural Produce Marketing (Dev. & Reg.) Act 1963

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Individuals, Co-op. Societies, companies can establish Private Market

License will be required

Collection & utilization of market fee for the development of market

Facilities like Pre-cooling, Cold storage, Packing centers, Washing centers, Electronic auction, Immediate payment etc. to be provided by private market operators.

Private Market license issued – 23

Turnover 2012-13 – Rs. 2058.00 Cr.

Private Markets

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Direct selling of Agricultural produce from farmer to

consumers.

Farmer & Consumer both will be benefited as middlemen

are deleted.

Minimum facilities to be created.

License from Director Marketing is necessary.

Operators can charge necessary service charges.

Farmer Consumer Market

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License from Director of Marketing, Maharashtra State

License holder can purchase Agricultural produce from

farmer at village level.

Market fee to be paid to APMC

Pressure on APMCs will reduce

Income of APMC will increase

Direct Marketing license issued – 78

Turnover 2012-13 – Rs. 915.11 Cr.

Direct Marketing

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Modern facilities for the Sale, Purchase, Store, Grading,

Packing of Agricultural produce will be created.

Infrastructure development & can avail the subsidy facilities

of State / Central Govt.

Onion, Potato, Orange, Banana etc. Govt. can establish

Special Commodity Market.

Special Commodity Markets to be established by State

Govt. only.

Special Commodity Market

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Regional – Arrival of agricultural produce from more than

one Tahasil.

Divisional – Arrival of agricultural produce from more than

one District.

Govt. can declare the APMC as Regional / Divisional.

Representatives of Farmers, Hamals, Merchants, Traders,

Local Authorities, MSAMB, Govt. on APMC Board of

Director.

Regional / Divisional APMC

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License holder can purchase agricultural produce from more

than one APMC area.

Traders can purchase agricultural produce in a whole state

Time & Money of traders will be saved.

Transparency in License issuing system.

Single License issued - 28

Single License System

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For the efficient & commercial operations of APMC

Working Secretaries & Highly Qualified Professional /

Personals will be included in the Panel.

Recruitment of Secretary from Panel.

Control etc. are the rights of APMC.

Panel to be maintained by the MSAMB.

APMC Secretary Panel

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Contract Farming Sponsor shall apply for registration in

FORM “G” to SDAO.

Registration fee is Rupees 500.

SDAO to dispose of application within 60 days.

Prohibition for creation of right, title, interest or ownership

in the land under Contract Farming Agreement.

Prohibition for sale of land under contract farming

agreement by sponsor.

Total area under Contract farming 1.00 Lakh Ha.

Contract Farming

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Activities carried out by M.S.A.M.B.

in Marketing & Risk Management

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Construction cost - Rs. 6000/- per MTs Subsidy for - 5, 10, 15, 20, 25 & 50 MTs Subsidy Amount - Rs. 1500/- per MTs or 25% Construction

cost whichever less. Total Capacity Created - 7.00 Lac MTs Farmer beneficiaries – 28516 Subsidy given Rs. 72.44 Cr.

SCIENTIFIC ONION STORAGE INFRASTRUCTURE

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Agriculture Pledge Loan Scheme Scheme started: Year 1990-91 Crops covered: Tur, Mug, Udad, Safflower,

Paddy, Soya bean, Chana, Sunflower, Jawar, Bajara, Wheat, Maize, Cashew, Seeds, Raisins, Turmeric etc.

Rate of Interest : 6-8% Period of 180 days APMC involved – 60 Loan disbursed – Rs. 35 Cr. Every year.

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AEZs in MaharashtraNo

AEZ Districts Implementation Agency

Alphonso mango Thane, Raigad, Ratnagiri, Sindhudurg MSAMB

Kesar Mango Aurangabad, Jalna, Beed, Latur, Ahmednagar, Nasik MSAMB

Pomegranate Nasik, Ahmednagar, Pune, Solapur, Sangli, Latur, Osmanabad

MSAMB

Onion Nasik, Pune, Jalgaon, Ahmednagar, Satara,Solapur MSAMB

Mandarins Nagpur, Amravati MSAMB

Banana Jalgaon, Dhule, Nandurbar, Parbhani, Hingoli, Nanded, Buldana, Wardha

MSAMB

Grapes & Grape Wine Pune, Nasik, Sangli, Satara, Ahmednagar, Solapur MIDC

Floriculture Pune, Nasik, Sangli MIDC

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Training & Demonstration Programs (Market Led Extension)

MSAMB with help from State Agriculture Department

and Agriculture Universities regularly carry out

training programs for farmers in “Quality Production,

Post Harvest Handling & Marketing Aspects”.

Total No. of Farmers Trained – 56,000.

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Location NachneDist:

Ratnagiri

Jamsande Tal: Deogad

Dist: Sindhudurg

JalanaDist: Jalana

Indapur Dist: Pune

Baramati Dist: Pune

Commodity Alphonso Mango

Alphonso Mango

Kesar Mango Agril. produce Pomegranate

Project Cost (lakhs)

220.82 208.22 230.00 389.00 238

Capacity

Precooling 5 MTs/ Batch 5 MTs/ Batch 5 MTs/ Batch -- 5 MTs/ Batch

Coldstorage/Storage

25 MTs/day 25 MTs/day 50 MTs/day Storage (500 MTs)

50 MTs/day

Ripening Chamber

5 MTs/Batch 5 MTs/Batch 5 MTs/Batch -- --

HandlingGrading Packing Line

1.5 MTs/Hr 1.5 MTs/Hr 1.5 MTs/Hr 10 MTs/Hr 1.5 MTs/Hr

Export Facility Centers under AEZ

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Location Raver Dist: Jalgaon

Basamatnagar Dist: Hingoli

Karanja Dist: Wardha

Latur Dist: latur

Commodity Banana Banana Mandarins Pomegranate & Kesar mango

Project Cost (lakhs)

400 400 470 333

Capacity

Precooling 5 MTs/ Batch 5 MTs/ Batch 5 MTs/ Batch 5 Mts/Batch

Coldstorage 25 MTs/day 25 MTs/day 25 MTs/day 50 MTs/Day

Ripening Chamber

25 MTs/Batch 25 MTs/Batch -- 5 MTs/Batch

HandlingGrading Packing Line

2 MTs/Hr 2 MTs/Hr 2 MTs/Hr 5 MTs/Hr

Export Facility Centers under AEZ

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Vapor Heat Treatment PlantLocation : Exporters Building, Vashi, New Mumbai

Facilities available : VHT Machine - Imported from Japan

Pre-cooling

Cold Storage

Grading & Packing Line

APEDA Certified Pack House Facilities

Establishment of another VHT machine in the near future.

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Mango Export to Japan Market opened in June-2006

Participated in Mango Promotion Program, Japan

High Value market

Exported around 25 MTs+ mangoes after processing in VHT.

Occurrences of residues in mangoes (Chloro-pyriphos)

Successful Trials for use of Thermo-col boxes

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Planning for Infrastructure Development

Erection of Irradiation Facility Centre at Vashi, Navi

Mumbai is in progress

Promotion of export of Agril. produce to US &

Europe.

Planning to develop Quarantine and Phyto-sanitary

facilities for promoting export of fresh fruits and

vegetables.

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Quality Consciousness Guidance to the Growers for GLOBALGAP Certification.

- 63 Alphonso mango growers, 76 Kesar Mango grower, 53

Pomegranate growers received the certificate.

Announced 50% subsidy for certification (Mango &

Pomegranate)

Undertaking Awareness Programme for the growers to

understand the need of changing scenario w.r.t. WTO, Food

Safety etc.

MSAMB giving 50% subsidy to farmers.

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Market Led Extension – N.I.P.H.T.(Horticulture Training Center)

State-of-art Practical Training Centre set up with the help of FMO-The Netherlands & PTC Netherlands

First of its kind in India & 2nd in Asia.

Equipped with : Classrooms, Demonstration Halls, Library, Hostel, Restaurant, Glass/Poly Houses, Meteorological Station

Soil & Water Testing Laboratory.

Fully Computerized Controlled to Low Cost Poly-houses (Total 12)

Total No of Trainees Trained - 17000

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MSAMB has entered into MoU with REUTERS (UK based) for dissemination of

Market rates, Weather forecast, Pesticide & Fertilizer application guidance

through SMS via mobile phones (REUTERS has enrolled @ 1,00,000+ members)

“MARKNET” - Computerized 291 main markets & 54 sub markets and connected

through internet with MSAMB’s portal (www.msamb.com).

Installation of projection TV systems at 69 APMCs in the state for dissemination

of arrival, prices and agricultural information.

MSAMB has signed MOU with NOKIA to disseminate Market Rates, Weather,

Forecast & Other Agril. information.

Ticker Boards with NCDEX assistance – 106 APMCs

Display Boards – In 140 APMCs

Market Intelligence

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Creation of Growers’ Apex Cooperative Societies

Sr. No. Name of the Organization Commodity Date of Establishment

1 Mahagrapes Grapes Jan. 1991

2 Mahamango Mango Mar. 1991

3 Mahabanana Banana Jan. 2002

4 Mahaanar Pomegranate Aug. 2005

5 Mahaorange Mandarins Mar. 2008

6 Mahacashew Cashew Sept. 2010

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Fruit Festival Scheme To reduce the intermediaries. Availability of commodities to consumers at reasonable

price Better returns to farmers Assistance of Rs. 1000/- per stall & Rs. 10,000/- for

advertisement in Corporation areas. Assistance of Rs. 700/- per stall & Rs. 5000/- for

advertisement in other cities / towns.

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Other Activities undertaken by MSAMB

Chanalising Agency for Onion Export since 1999.

Nodal Agency for setting up of Terminal Markets

(Mumbai, Nashik, Nagpur)

Initiated the process to set up: Modern Markets at Aurangabad & Basamatnagar on BOT thru’ PPP

Modern Markets at 20 different locations

Computerised Auction System in 100 APMCs

Provides subsidy for: Cost of sea freight for export of onion to Europe.

Purchase of Crates by farmers.

Global GAP certification

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