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Developing Supply Chain of Maize

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17 views4 pages

Developing Supply Chain of Maize

Uploaded by

yourradhika3
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Developing Supply Chain of Maize in Eastern Uttar Pradesh

Uttar Pradesh contributes substantially to the country’s overall maize production.


In Uttar Pradesh major maize producing districts are Bahraich, Bulandshar, Etah,
Jaunpur, Kannauj , Kasiram Nagar and Mainpuri. Currently the supply chain of
maize is in a very fragmented. Tata Trust (a development organization) is
interested to develop a robust value chain of maize in these areas. It conducted a
field survey. A brief description of role and involvement of each stakeholder in the
maize production and marketing is highlighted below:
Farmers
A majority of the maize farmers are small and marginal farmers. The large farmers
grow the crop alongside wheat in kharif season whereas smallholders grow it as main
crop.
Input Suppliers
Input suppliers are the one that are involved in the production stage of the chain. For
inputs, farmers rely on stores located in nearby central villages.
Aggregator
Aggregators are the first commercial buyer and one of the most important
stakeholders in the marketing chain. They are also farmers who have graduated to
the next stage in the chain by aggregating produce from neighbouring farmers. Their
role is to collect produce from farmers at farm gate, aggregate, transport and sell it in
mandi to a wholesaler. They also provide credit to farmers for both agricultural and
household expenses during cultivation seasons. The farmers pay off the debt by
selling produce immediately after the harvest to aggregator and retain surplus
income. They sell produce at a mark-up of Rs. 150-200 over purchase price. The
mark-up includes at least 40-50 per cent expenses such transportation, labour and
mandi fee leaving a margin of 50-60 per cent.
Wholesalers
These traders buy maize from surplus areas (usually from aggregator), sort, pack and
transport produce to maize deficit areas (For e.g. from Bharaich to Rudrapur in
Uttarakhand or to Nepal). They sell it to counterpart wholesalers or millers. Most
wholesalers are also vertically integrated in the chain, as most of the volumes they
purchase in the post-harvest months are direct from aggregators or large farmers.
They do not trade with small holder farmers as they prefer bulk purchase. They sell
the produce to wholesalers or industries at Rs. 1,300 to Rs. 1,400 per quintal.
Industries
These are the end links in the value chain of maize. They buy maize from
wholesalers. They use it as an input for their industry produce. In case of maize, the
industries are mainly –
(i) Poultry Feed production (mainly in Uttarakhand and Gorakhpur),
(ii) Corn flakes producing units (Very minimal purchase as they have high
quality norms), and

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(iii) Wholesale dealers in Nepal who acts as aggregators for beer producing
companies in China (one of the most profitable markets).
Maize production involves various processes starting from sowing, cultivation,
irrigation, harvesting and post-harvest activities. The deviation between standard
and actual practices at each of these processes for small farmers has been presented
below:

Stage 1 – Land Preparation


Standard and Actual Agronomic Practices at Land Preparation Stage
Activities Standard Actual

Ploughing One deep summer ploughing just Farmers follow traditional and
after rabi crop harvesting prevalent practices

Repeated Maize responds well to minimum Farmers do not invest much time
harrowing and tillage and energy in it as they are
ploughing Single ploughing or zero tillage unaware of these practices
coupled with parquet spray at 1
lit/ha before sowing

Soil testing Soil testing to confirm best suited Farmer do not find it useful as
variety, fertilizer or micro nutrient they are not aware and used to
requirements following this practice

Stage 2 - Seed Sowing

Standard and Actual Agronomic Practices at Sowing Stage


Activities Standard Actual

Purchase Seeds Purchase certified seed varities Farmers have shifted from local
varieties to High Yield Varieties

Seed Treatment Soak seeds in 2% Panchagavya Do not have information about


(20 ml of Panchagavya in 980 ml such requirements
of water) for 2 hours before
sowing
Sowing Spacing of 75 cm or 60 cm The farmers follow practices that
between the rows and 20-25 cm they have learnt from peers.
between the plants.

Stage 4 - Post-Harvest
Drying and shelling

Maize drying is another critical step in reducing the moisture content, thus
preventing fungal growth, and consequent contamination. The farmers reiterated

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that maize is dried in the field before cobs are removed. It is further dried in store
before shelling. The aggregator checks maize for moisture content and size and
provide a mark-up price for purchase of the produce.

Storage
In good conditions, Maize grain can be stored for up to 2 years without any
significant reduction in quantity and quality. However, the majority of farmers sells
off their maize grains cheaply soon after harvesting due to lack of improved storage
structures and need of quick cash. On an average maize prices rice by another Rs.
200-300 (based on demand) in 2-3 months after harvest.

Sale in Mandi
Maize is further dried in Mandi before it is packaged for sale. Mandi traders grade
maize based on moisture content and grain size. They prefer maize with 14 per cent
moisture content and they discount it with 2 kg maize per quintal for every
incremental rise in moisture content above 14 per cent. In mandi, maize is dried on
the ground on canvas thus preventing contact with the soil. In many instances,
farmers or aggregators also dry their produce in the market/mandi area.

Pricing of maize at different levels in the marketing chain

Assuming average yield of 24 quintals per acre (in rabi) and average selling price of
Rs.900-1,000 per quintal, the average gross income that farmer fetches is
approximately Rs.24, 000 per acre. The maximum income of farmer comes to
approximately Rs.14, 000 per acre. For small farmers the expenditure per acre is too
much to bear. Usually, small farmers are not able to meet the input demands of soil
properly. Hence, their yield per acre is relatively low (19 quintals as compared to 26
quintals per acre for medium and large farmers) and subsequently, also the margins.

Questions:

1. Diagnose the chain map.


2. Identify bottlenecks in the chain and the interventions needed to remove
those constraints.

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