2017- 2018

POST HARVEST MANAGEMENT

SUBMITTED BY
GROUP – 2

Marketing practices, constraints, 11. Deepak Ekka

channels, costs & margin, 12. Deepali Kumari
information & alternative systems of 13. Deepika
marketing of cotton 14. Dobbala Uday Kumar
15. Elisha Tigga
16. Gajendra
17. Harshita Singh
18. Jatin Mahajan
19. Jikku Mary John
20. K. S. Devi Priya
CONSTRAINTS

Major constraints for exploitation of yield potential are lack of technical guidance, pest
incidence, lack of owned capital, high cost of inputs and non-remunerative, lack of owned
capital, high cost of inputs and non-remunerative prices. The details are as follows:

1. Rising cost of production of seeds, fertilizers, Labour i.e. input costs is an issue. The
Minimum Support Price (MSP) offered to cotton is far below the one required to optimally
cover the high input costs. GM companies sell expensive cotton seeds and fertilizers. These
have been major causes for unmanageable debts on farmers leading to suicides.
2. There is decreasing and stagnant yields with deteriorating quality and productivity of
soil due to incessant use of pesticides and pests that are becoming increasingly resistant
to chemical dosage.
3. Inability to manage water resources effectively and depleting groundwater resources. 
More than 35% of the areas under cotton cultivation is rain-fed with poor irrigation
facilities, exposing production to monsoon fluctuations.
4. Absence of modern technology in cultivation as well as ginning has affected the yield
which is not only low but also contaminated. Cotton is vulnerable to contamination at the
harvesting, marketing and ginning stages, if proper care is not taken.
Due to deterioration in genetic purity of cotton varieties and hybrid seeds and with
inconsistencies in the admixtures of the cotton fiber, it becomes difficult to assess the
quality of cotton, especially by export firms who focus heavily on the quality consistency.
There is also competition from artificial fibers, which have a lower cost of production
and display higher consistency.
5. Fluctuating market prices for cotton and inability to compete in global markets that
reflect low prices due to significantly large subsidy to cotton farmers by western countries.
Also, it has been difficult to develop a globally-competitive cotton industry in India because
of the average quality of cotton that is produced.
6. Among nations growing cotton, cotton picking is completely manual in India. Not
many varieties of cotton produced are available for mechanized plucking. Mechanized
picking is better than hand-picking since the latter can lead to contamination. However, the
most important thing to be done before mechanized picking is to defoliate the plant. No
appropriate defoliant is available in India. Cost of picking cotton from the farm has
increased. When manually plucked, farmers do it twice/thrice. But, mechanized plucking
can be done only once. Will our farmers forego the extra picking, ergo the extra money they
earn on picking for quality?
7. Lack of participation of the Cotton Corporation of India (CCI) in the procurement has
affected the interests of cotton growers. Farmers are in distress because of lack of bulk
purchase and procurement by unregistered traders. This is impacting on both the APMC
and the farmers. The lack of demand for cotton yarn has been mainly due to changes in
Chinese government’s insistence that local mills use more of home-grown cotton. The
government’s decision to do away with cotton yarn export benefits under the focus market
scheme, to reduce our dependence on China and explore new markets, has also hit exports.
Domestically, cotton faces competition from synthetic yarn which is much cheaper and can
be imported at lower prices.
8. Compliance problems on quality and delivery while selling to mills.

WHAT IS THE APPROACH OF THE GOVERNMENT?

Government policy with regard to cotton is reflected in the following:

1. Technology Mission on Cotton (2000), with the primary objective of improving
production, productivity and quality of cotton in India.
2. National Textile Policy (2000) which aims to increase cotton productivity and upgrade
its quality to international standards, through effective implementation of the Technology
Mission on Cotton, liberalize and encourage export of cotton yarn
3. Technology Upgradation Fund Scheme- TUFS (launched in 1999 extended up to 2012,
pending for further renewal) through financial assistance sought to modernize the textile
industry and to increase its competitiveness in domestic as well as international markets.
They can avail loans at concessional rates.
4. Draft National Fiber Policy has the objective of enhancing production, competitiveness,
improving irrigation facilities etc.
4. By increasing the Minimum Support Price, government has ensured that the farmer
gets minimal returns at least due to depressed market conditions.
5. This year, the Centre has directed the Cotton Corporation of India (CCI) to start
procuring cotton if prices fall below the MSP. CCI has opened 300 centers for market
intervention and also started organizing storage capacities. The Gujarat government has
recently announced a Rs. 1,100 crore to waive half of the power bills and interest on
agriculture loans. The Karnataka government is planning to introduce a Karnataka Cotton
Bill which makes seed companies liable for compensation in case of crop failure or supply
of spurious Bt-cotton seeds.
WHAT ARE THE STEPS THAT NEED TO BE TAKEN TO IMPROVE?
1. Improving irrigation facilities and water harnessing was considered imperative for
enhancing production and lowering its dependence on monsoon. Drip irrigation system
could be adopted for better water management.
2. Initiatives should be taken to increase awareness among farmers for adoption of rain
water harvesting, soil moisture conservation techniques, suitable agronomic practices in
order to increase the utilization of rain water. New farming practices like precision farming
should also be encouraged to increase productivity.
3. Steps could be taken to improve logistics for transporting cotton, so that cotton fiber
can be supplied from surplus to deficient areas in a clean manner, and it does not get
contaminated.
4. Returns on cotton fiber can be enhanced through backward integration of the cotton
value chain. The cotton industry can adopt the example of the sugar industry through such
activities as de-linting and use of cotton stalks, which present great opportunity with
minimal investments.
5. Higher trade tariffs on import on synthetic yarn may also be implemented as well as
ensuring that easier lines of credit from banks are available for farmers.
MARKETING CHANNELS

Marketing of Cotton is open type in the Country except in Maharashtra, where there is State
Monopoly Purchase. There is also a Semi-Govt. agency operating in cotton marketing along with
private traders. The important states growing cotton are Gujarat, Maharashtra, Andhra Pradesh,
Karnataka, etc.

Marketing Channels: There are following seven marketing channels for cotton

Commissio
Channel 1 Producer Consumer
n Agent

Village Commissio
Channel 2 Producer Consumer
Merchant n Agent

Channel 3 Producer Trader Miller Consumer

Channel 4 Producer Trader CCI Miller Consumer

Channel 5 Producer CCI Miller Consumer

Channel 6 Prducer Miller Consumer

Village
Channel 7 Producer Miller Consumer
Merchant

Thus five intermediaries viz. Village merchant, traders, commission agent, CCI (Cotton
Corporation of India) and Miller are operating in cotton marketing in different channels.

 Channels I to IV are commonly used by the majority of cotton growers and producer’s
shares are around 85 to 87%
 In Channel IV, although CCI is involved, the produce is sold to it by traders and not be
farmers. Therefore, producer’s share in this channel is quite low
  In channel V, producer’s deliver their cotton directly to CCI and hence they get the
highest price and also the highest share
 In channel VI, since the producers supply their cotton directly to the Miller eliminating
the intermediaries, they get better price and greater share
 CCI is a Public Corporation established for the benefit of farmers. Therefore, selling
cotton to CCI directly is definitely beneficial to cotton growers

Market Costs : It is seen that, on an average, the total marketing cost is around Rs.52.75 per
quintal. Among various components, transportation cost is usually the highest (Rs. 28.00)
followed by commission (Rs.14.00) and the market fee (Rs. 11.82)

Marketing Charges

 The sellers and buyers of cotton have to pay a number of charges and deductions while
selling or buying in an assembling market.
 These include commission, brokerage, charges of handling and weighing, storage
charges, rent for containers, besides the municipal tolls and taxes and the market fee.
 Unwarranted trade allowances for quality are also deducted.
 There is no uniformity in regard to rate and levy of various market charges, which not
only vary from region to region, but also, from market to market in the same region.
 Producers who are preferring regulated markets and co-operative marketing societies are
benefitted as they need not pay all these charges and even if they pay for some, the
charges are only nominal.

These channels have great influence on marketing costs such as transport, commission charges,
etc. and market margins received by the intermediaries such as trader, commission agent,
wholesaler and retailer. Finally this decides the price to be paid by the consumer and share of it
received by the farmer producer. That channel is considered as good or efficient which makes the
produce available to the consumer at the cheapest price also ensures the highest share to the
producer.
MARKETING INFORMATION AND EXTENSION SERVICES:

Agricultural Marketing Information comprises of collection, analysis, compilation and

dissemination of agricultural marketing related information to the farmers for modern market
oriented farming by improving the quality and productivity of the produce. To improve this
entire system Directorate of Marketing and Inspection under Ministry of Agriculture and
Farmers Welfare, Government of India. Govt. of India has started supplying of information on
the website namely www.agmarknet.gov.in.
Services provided on Agmarknet website:
 Price and arrivals: Commodity wise, market wise reports are available for each
commodity state wise and district wise
 Price Trend: Daily and weekly price trends are available with comparisons between
prices of previous periods.
 Commodity Profile: This tab gives information about agricultural marketing practices
and post-harvest profile of commodities
 Marketing Boards: The website directs the users to state agricultural board websites of
different states which can give the commodity profile in different states
 Market Profile: Mandi profile of different mandis across districts and markets
Fig: Cotton prices state wise monthly analysis for August, 2017
Govt. and semi govt. organizations providing services on marketing information and extension

S. No. Organization and Website Services Provided

1 Directorate of Marketing and  To promote grading of agricultural
Inspection (DMI) produce under the Agricultural Produce
Website:www.agmarknet.nic.in (Grading & Marking) Act, 1937.
 To facilitate the construction of
marketing infrastructure of agricultural
produce.
 To render advice on statutory
regulation, development and
management of agricultural markets by
states/U.Ts.
 Marketing research, surveys and
planning.
 To train personnel in agricultural
marketing
2 Agricultural and Processed Food  Promote export of agricultural
Export Development Authority commodities and it’s products to foreign
(APEDA) countries.
Website :www.apeda.com  Adopting standards and specifications
for the purpose of export of schedule
products.
3 National Horticulture Board  To develop post harvest infrastructural
Website:www.hortibizindia.nic.in facilities for horticultural commodities
4 Ministry of Food Processing  Grant and support for food park
Industries (MOFPI) component which in turn also help in
Website : www.mofpi.nic.in setting up of Agri Export Zone.
5 National Agricultural  To act as a nodal agency for
Cooperative Marketing implementing the market intervention
Federation of India Ltd.(NAFED) scheme.
Website : www.nafed-india.com
6 Agricultural Produce Market  For better marketing of agricultural
Committees (APMCs) produce the APMC provide the
following facilities
 Facilitates drying of produce. Providing
grading, weighing and storage facilities
of produce, brought to APMC
complexes

Alternative Marketing Systems:

 Cotton Marketing

 It is axiomatic that from the point of view of the farmer, marketing of the produce is
equally important as his efforts to produce more by efficient use of the resources per unit time
and unit area.
 Marketing, thus, occupies a pivotal place in the scheme of things relating to any
commodity, because it is the process by which the commodity acquires its monetised value.
 Cotton is par excellence one of the most important commercial crops and occupies a
significant place in the agro-industrial economy of the country.

I. Exports
India exports medium-to-long staple cotton (25 to 32 mm length) to China, Bangladesh
and several Southeast Asian countries. India likely will continue to import extra-long
staple (ELS) and quality long staple cotton (28-34 mm) with occasional imports of
medium or short-staple cotton (below 22 mm) when international prices are favourable.
The United States is the leading supplier of cotton to India over the past few years. Indian
mills importing U.S. Pima and upland cotton recognize its quality and consistency and
are ready to pay a premium over competing origins. However, U.S. cotton faces
competition from suppliers like Egypt and Australia due to occasional freight advantages
and shorter delivery periods. Due to warm weather conditions and cultural traditions,
cotton is typically the preferred fiber in India. However, poly-cotton blends are popular
due to their durability and ease of maintenance.
The Cotton Textiles Export Promotion Council (Texprocil)
Since its inception in 1954 as an autonomous, non-profit export promotion body,
TEXPROCIL has become the international face of Indian Cotton Textiles successfully
facilitating exports. For the foreign buyer, it has opened the entire range of Indian cotton
yarns, fabrics and made-ups and has become the one-stop source for it.
II. Direct Marketing

Direct marketing involves sale of cotton by producer to the consumer / miller directly
without any middleman. It enables producers and millers and other bulk buyers to
economize transportation cost and improve price realization. The Direct Marketing
system enables the farmers to meet specific demands of wholesalers or traders from the
farmer’s inventory of graded and certify produce on one hand and of consumer according
to consumer’s preference on the other hand helps the farmers to take advantage of
favourable prices.
 Benefits

 It increases price realization of the producer.

 It minimizes marketing cost, transportation cost.

 It encourages distributional efficiency.

 It satisfies the consumer through better quality of produce at reasonable price.

 It encourages direct interaction between producers and consumers.

 It encourages the farmers for retail sale of their produce, thus their involvement in
marketing process and help in discovering the demand of markets for future
market oriented planning.

III. Contract Farming

Contract farming is an agreement between buyer and producer for the purchase of
produce at mutually agreed price under forward agreement. In such arrangement, the
purchaser, may be exporter or processing unit, generally provides inputs, technical
knowhow and financial support. Thus sharing the risk by both the, buyers and sellers.
“It is an approach that can contribute to increased income to farmers, avoidance of risk
of adverse price fluctuation, and higher profitability to sponsors”.

IV. Cooperative Marketing

Cooperative marketing is any agreement to combine marketing efforts, and thus it can
appear in many forms. Complementary companies, as well as direct competitors, can
create effective and mutually beneficial cooperative marketing campaigns. 

At present, the cooperative marketing structure comprises 2,633 general purpose

primary cooperative marketing societies at the Mandi level, covering all the
important mandies in the country, 3,290 specialised primary marketing societies for
oilseeds, etc., 172 district Central Federations and the National Agricultural
Cooperative Marketing Federation of India Ltd., (NAFED) at the national level.
NAFED is the apex cooperative marketing organisation dealing in procurement,
distribution, export and import of selected agricultural commodities.
 Benefits

 Increases bargaining strength of the farmers

 Direct dealings with final buyers

 Provision of credit

 Easier and cheaper transport

 Market intelligence

 Influencing market prices

 Provision of inputs and consumer goods

V. Forwards and Futures Market

Forward and future markets are important tools of price stabilization and risk
management. Extension of future markets to all major agro-commodities was reflected
in the National Agricultural Policy of Government of India.

The Forward Markets Commission (FMC) was the chief regulator of commodity

futures markets in India. As of July 2014, it regulated Rs 17 trillion worth of
commodity trades in India. It is headquartered in Mumbai and this financial regulatory
agency is overseen by the Ministry of Finance.
Benefits

 Protect against price fluctuations

 They enable the buyer or seller to make proper arrangements for finance
 Investors can plan their future investments
 Cash crunch does not arise owing to these markets
 Forward and futures markets helps in large transactions
 Forward and Futures markets reduce risks for financial companies

VI. CCI to directly procure cotton from farmers in Rajasthan (Source: Economic

Times, Aug 13 2018)
The Cotton Corporation of India (CCI) will procure the fibre directly from farmers in
Rajasthan at the minimum support price (MSP) and make the payment to their accounts in the
upcoming cotton season. Rajasthan is the first cotton-growing state in the northern region to
make direct transaction compulsory for procurement at MSP. 
The central government had recently raised the MSP on medium-staple fibre cotton by
28% to Rs 5,150 per quintal and long-staple by 26% to Rs 5,450.