MARKETING INFRASTRUCTURE & AGRICULTURAL MARKETING REFORMS

MARKET YARDS 1. INTRODUCTION

Market Yards are a long felt need of the farming community of our country as it goes a long way in ensuring higher remuneration to them through proper weighing, cleaning, grading and better price realisation of their produce. The farmers look forward to a regulated market yard as a dependable infrastructure for furtherance of their economic goal. The advantages of a regulated market yard system are immense and wherever such a system exists, it has been widely appreciated. Today the farmers consider it as a boon to them where they can confidently sell their produce and get an appropriate return for the quantity and quality they produce year after year. However, the development of regulated market yard infrastructure in our country is very lop sided and its progress is satisfactory only in a few states like Rajasthan, Gujarat, Maharashtra, Karnataka and Punjab. In all other states it is quite inadequate. The inadequacy of agricultural marketing infrastructure in other states need urgent attention. Even in states where such an infrastructure exists much more needs to be done to provide suitable facilities to the farmers and arrange for a proper information dissemination system to prevent their exploitation. There is a need for coordination among all the developmental agencies responsible for creation of market yard infrastructure in a state for drawing a programme and a time bound action plan for creation of regulated market yard systems. At present , market yards can be established as regulated market yards under Agricultural Produce Marketing Committee (APMC) Act of individual states. As and when state governments amend the Act for participation of the private sector and cooperatives in market yard development , financial assistance can be made available for individuals / private companies / corporate bodies and cooperatives for undertaking the activity. A few states have already taken the lead in this direction. 2. MARKET YARD REQUIREMENTS

Market yard can be classified into three categories according to the mode of sellers i.e. primary, secondary and terminal. Sellers of a primary market yard are mainly farmers of the command area ; in case of secondary market yard, farmers and traders beyond the command area bring their commodities for sale and in the terminal market yard mainly the traders bring in their commodities for marketing. A primary market yard should be suitably located for easy accessibility and have provisions to sell produces grown by farmers in the command area and have sundry shops to meet the immediate requirements of a farmer when he

comes there to sell his produce. It should also have facilities for the traders, commission agents and other market functionaries to facilitate easy trading and smooth price realisation to the farmers. The facilities should match to the functional requirements of the commodities to be traded and also to the surrounding locality where the market yard is to function. Secondary and terminal market yards are located in semi urban and urban areas and the facilities are planned for the commodities to be traded. Considering all these aspects the requirements of a market yard are elaborated in the following paragraphs. 2.1 i) Location : Market yard should be located on raised, well drained site, safe from damage by surface water or seepage

water and not subjected to floods or inundation. ii) It should preferably be in an area away from the residential localities, factories and other industrial

establishments, dairy and poultry farms, kilns, other sources of fire, garbage dumping grounds, slaughter houses, hide curing centers etc.; the close vicinity of which is deleterious to the qualities and safe storage of agricultural commodities. The structure shall be 150 m away from factories and other sources of fire, 300 m away from kilns, slaughter houses etc. iii) Market Yard should be located in an operationally advantageous position taking into account the

infrastructural facilities like network of roads, railways, river navigation, banking, post office and other communication facilities available or likely to be developed in the area by the time the market yard gets ready. The location should be situated near a transport head or a main road. Sufficient parking and maneuvering space for vehicles should be available. There should be scope for future expansion and adequate free land available in the adjacent areas. It should also have scope to access adequate dependable source of water, electricity and public transport system and the site should be free from all legal hurdles to take up proposed constructions. 2.2 Facilities to be provided in a market yard 2.2.1 Layout Plan The layout of a market yard should be such that easy movement of vehicles and persons is ensured. Each shop-cumgodown should face the auction platform and have equal opportunity for the business development. The roads and parking spaces should be constructed to withstand the traffic of bullock carts/ lorries/ trucks according to the requirements. Drainage arrangements for rain, waste and sewerage water should be made by means of covered surface or underground drains according to site conditions. Minimum provision for: (a) shops and small godowns, (b) platforms for growers to dry, clean, display and auction, (c) auction halls, (d) parking places for carts and trucks, (e) storage godowns, (f) market office, (g) bank and post office, (h) gate check post, (i) fire fighting arrangements

will have to be made. The estimates provided should be examined to see whether they are reasonable and whether all the items of development are covered. 2.2.2 Road The market yard should have adequate access roads for transport of commodities into the market and from the market to the important business centres. The internal main roads should be atleast 20 m wide. The roads should be all-weather roads permitting transportation throughout the year. For movement of goods within the market area, internal roads, parking areas and walkways should exist or should be developed. The roads should be hard-surfaced and should have minimum standards necessary to withstand the wear and tear due to the projected traffic. Further, hard-surfacing is necessary to minimise the cleaning and maintenance cost of roads, to avoid dust in the dry seasons and accumulation of mud and water in the rainy season. The roads developed should withstand the impact of the steel rimmed bullock carts, heavy duty trucks, tractors and trailers and should be sufficiently wide to avoid congestion. 2.2.3 Drying and Auction Platform The area required for this is worked out at 4 sq.m. per ton of daily arrival. The platform surface should be constructed about 0.3 m to 1 m above the ground level. The recommended size of each platform is 60m x 6m and accordingly number of platforms should be decided at suitable locations of the market yard for better material management. 2.2.4 Auction Hall

For every 50 tonnes of auctioning material of a day, a covered auction hall of size 30m x 13m shall be provided. 2.2.5 Godowns and Shop-cum-godowns

Each godown attached to a shop should have a capacity matching to the trading pattern of the commodity. Since shop cum godowns are owned by traders, common storage facility should be created for exclusive use of farmers. The total common storage capacity should be calculated at 30 days of effective storage less capacity of storage available with shop-cum-godowns. Storage godowns should be made termite proof, moisture proof, rodent proof and bird proof. Steps should be taken to carry out periodical treatment with fumigation of stacks of grains to render it insect proof. The dimensions of the stack may be followed as per the details given in IS:607-1971. The clear heights of road - fed and rail-fed godowns shall be 5.6 m and 6.35 m respectively. 2.2.6 Cold Storage

This may be constructed in the market yards where perishable items are required to be traded. The guidelines issued under capital investment subsidy scheme will be applicable for it. 2.2.7 Market Office, Bank and Post Office

The areas will be provided as indicated in Annexure I. 2.2.8 Residential Accommodation Residential accommodation for head guard or other security staff of the market yard should be provided. 2.2.9 Refuse Bins

The number of refuse bins shall not be less than one for every 10 carts or 50 tonnes of daily arrival. The dimensions of each bin should be one meter diameter and one meter height with no bottom and placed on a platform 15 cm high above the ground. 2.2.10 Urinals

Two nos. for every 50 persons. 2.2.11 Latrines Minimum of 2 nos. and one for every 50 persons. 2.2.12 Taps

Minimum of 2 nos. and one for every 50 persons. 2.2.13 Washing place

One for every 50 persons. 2.2.14 Lighting

There should be sufficient lighting arrangement in the market yard. 2.2.15 Drinking water

Suitable arrangements for drinking water both for men and animals are to be made.

2.2.16

First aid

A box containing first aid equipment shall be kept in the market yard. 2.2.17 Veterinary dispensary This shall be provided in the market yards where the trading of animals also takes place. 2.2.18 Market information

Loudspeaker arrangement and display board for display of rates shall be provided. 2.2.19 Filling stations

Care may be taken for locating a filling stations adjacent to a regulated market yard.

3.

BRIEF CONSTRUCTION SPECIFICATIONS FOR MARKET YARD AND GODOWN STRUCTURES

3.1 Foundation Suitable type and size of foundation at adequate depth (a minimum depth of one meter is to be provided except in hard rock areas) depending upon the nature of subsoil material and depending upon the safe load bearing capacities of the soils. 3.2 Plinth

This shall be generally kept 80 cm above the finished ground levels. The plinth shall be filled with good and selected earth and properly consolidated and compacted in layers. 3.3 Termite Treatment Wherever termite infestation is noticed, proper pre-construction anti-termite treatment should be carried out. 3.4 Rodent Control Arrangement

A Cement Concrete or RCC or stone slab projection at plinth level may be provided so that rats will not be able to enter the godowns. Movable steps are to be provided so that they can be pulled away from the godowns entrances when not required. 3.5 Materials used for Foundation and Plinth Normally lean cement concrete of 1:5:10 ratio mix is put below the foundation walls and cement concrete of 1:2:4 ratio mix is provided for column footings above the lean concrete. The plinth will be provided with a damp proof course of well graded concrete of 40 to 50 mm thick with water proofing compound. The materials normally used for foundation and plinth are stone masonry in cement mortar or reinforced cement concrete. 3.6 Superstructure The materials normally used for super structure are stone masonry or brick masonry in cement mortar in proportion of 1:6. The thickness of walls shall conform to IS:1905-1969. RCC columns at adequate intervals are provided when necessary. 3.7 Doors, Windows and Ventilators Adequate doors, windows and ventilators shall be provided. Doors shall normally be of steel rolling shutters. Windows and ventilators can be either of good quality wood or of steel and may be glazed. Windows and ventilators should be provided with suitable mesh or grill so that when the shutters are closed, birds cannot enter the godown. 3.8 Roof

For big span godowns and auction halls, the roof support shall be of single span structural steel or tubular trusses. The trusses shall be fixed on RCC or stone masonry or brick masonry pillars. The roof of the platform in front or/ and back side of the godown shall be of cantilever type structural steel or tubular trusses fixed to the pillars. For smaller spans, either timber trusses or RCC flat roof would be preferable. The roofing will be either of galvanised and corrugated iron, aluminium or asbestos cement sheets. 3.9 Flooring The flooring should be damp proof, rigid and durable. Normally flooring provided will be 50 mm thick cement concrete 1:2:4 ratio mix over a base course layer of lean cement concrete of 1:5:10 ratio mix. A layer of bitumen asphalt of 80/ 100 or equivalent grade is spread uniformly at the rate of 1.67 kg/ sq.m between the two layers of

cement concrete to make the flooring damp proof. Where stone slabs are available at cheaper cost, the flooring may be of this material. 3.10 Finishing

The internal faces of the walls shall be cement plastered. If the walls are of stone masonry, the external faces may be merely cement pointed. The internal surfaces of walls shall be white washed and the external surfaces colour washed. All steel or wooden members of trusses, doors, windows and ventilators shall be provided with a primer coat and two coats of enamel paint of superior quality.

4.

ELECTRICITY

Closeness of the electricity supply line to the site is advantageous. Electricity is necessary for illumination of market yard, energizing the fans, motors, water pumps and other uses. Adequate supply of power should be ensured from the state electric supply agency in the area. The total horse power requirement for various purposes such as lighting, electrical machinery equipment, fans, pump motors etc. has to be suitably calculated. For requirement larger than 100 HP, generally high tension connection is required. A step down transformer and low tension pannel of suitable capacity is required to be installed when the demand is low. Electrical installation works viz., HT/LT switchgears, cabling, wiring, street lighting, earthing etc. should be carried out as per Indian Electricity Rules, the Indian Standards and the rules laid down by the electrical inspector and the local supply authorities. For the levels of illumination in different areas, a reference may be made to the relevant Indian Standards. Wherever it is warranted, a generator set may be provided for the essential loads as an alternative source of power to meet the exigencies.

5.

WATER SUPPLY

The market yard should have a dependable source of potable water. When the market yard is located close to a town where municipal water supply is available the same may be availed; otherwise suitable tubewell/borewell arrangements should be made for the provision of water. An overhead storage tank which can provide water, at desired pressures in the distribution pipes should be constructed. The pipeline should be underground to avoid damage.

6.

SEWAGE SYSTEM/ GARBAGE DISPOSAL

Arrangements should be made for the market yard for collection of garbage/agricultural waste and disposal of sewage.

7.

EQUIPMENT

7.1 Communication facilities Efficient functioning of market yard depends very much on the communication facilities in the market area. This should include telephone, fax, Internet, post and telegram facilities at convenient points in the market yard. 7.2 Office Equipment These include items like computer with printer, calculator, furniture, filing cabinets, ventilation fans etc. 7.3 Laboratory Equipment Equipment necessary for primary quality assessment of the commodities to be traded in a market yard should be provided. 7.4 Cleaning, and Drying Equipment Cleaning and drying equipment may also be provided. Their number should be assessed keeping in mind the type of produce and the quantum of market arrivals. 7.5 Weighing Equipment Platform needs. scales and weigh bridge may be provided keeping in view the market

7.6 Fire fighting Equipment Fire fighting equipment provision and water hydrants should be provided at suitable locations to meet the exigencies.

8. PHASING The construction and developmental activities should be properly phased taking into consideration the time required for the acquisition of land, availability of technical staff, availability of construction materials like cement and steel, availability of skilled and unskilled labourers in the area etc.. The phasing should be as realistic as possible. Arrangements should be made for supervision at the time of construction. Construction and

implementation schedule of the scheme should be indicated in the project report.

9. i.

IMPORTANT DESIGN AND CONSTRUCTION ASPECTS While designing the foundations of buildings, due consideration will have to be given to the safe bearing

capacities of the soil. Trial pits and bores should be made before designing the foundation and even before preparing the estimates for the building. Wherever necessary, soil tests and soil load tests would have to be conducted. ii. iii. For design of the structures, the wind loads and earthquake (in seismic zones) forces have to be considered. Proper supervision of the quality of construction materials and workmanship is a very important point. For

cement concrete and reinforced cement items, it is necessary to test the cement for strength before commencement of the work and periodically thereafter during construction. Precautions should be taken for proper storage of cement inorder to ensure that loss of strength of cement due to absorption of moisture is minimised. A long period of storage of cement should be avoided. iv. Proper phasing in construction schedule is very important. Delay in construction should be minimised to avoid

escalation of costs and disputes with contractors and building agencies. The agreements / tender documents should be prepared to cover all exigencies and suitable clauses are incorporated for liquidating damages and penalties for delays. Steel and cement supplies should be arranged at appropriate stages and in time to avoid delay in construction.

10.

IMPORTANT MAINTENANCE ASPECTS

After the construction is over the maintenance of buildings and roads is very important. All the steel components of the buildings should be periodically painted for increasing the length of their life. Proper cleaning of wall surfaces and proper upkeep of the equipment are very essential. 11. PHYSICAL AND FINANCIAL OUTLAY

With all the provisions indicated above, the economics of fruit market yards having average annual market arrival of 4000 MT, 50,000 MT and 5 Lakh MT have been worked out. The project outlays of the fruit market yards are given in Annexures III (A), III (B) and III (C) respectively. On a similar pattern the economics of vegetable market yards having average annual market arrival of 4000 MT, 20,000 MT and 50,000 MT have been worked out. The project outlays of the vegetable market yards are given in Annexures III (D), III (E) and III (F) respectively. However, the project cost will change as per the site conditions and the nature of market operations.

12.

FINANCIAL ANALYSIS

The techno-economic parameters adopted for working out the economics of the fruit market yards of 4,000 MT, 50,000 MT and 5 Lakh MT average annual arrival are given at Annexures IV(A), IV(B) and IV(C) respectively. The income and expenditure statements for the fruit market yards for different capacities as stated above are given at Annexures V(A), V(B) and V(C) respectively. The profitability statements are given at Annexures VI(A), VI(B) and VI(C) respectively. The repayment schedules are given at Annexures VII(A), VII(B) and VII(C) respectively. The repayment schedule has been worked out for three different scenarios; (i) without subsidy; (ii) with subsidy @ 25% of the TFO for govt. agencies and (iii) with subsidy restricted to Rs. 50 Lakh for normal borrowers as per the operational guidelines. On a similar pattern the techno-economic parameters adopted for working out the economics of the vegetable market yards of 4,000 MT, 20,000 MT and 50,000 MT average annual arrival are given at Annexures IV(D), IV(E) and IV(F) respectively. The income and expenditure statements for the vegetable market yards for different capacities as stated above are given at Annexures V(D), V(E) and V(F) respectively. The profitability statements are given at Annexures VI(D), VI(E) and VI(F) respectively. The repayment schedules are given at Annexures VII(D), VII(E) and VII(F) respectively. The repayment schedule has been worked out for two different scenarios; (i) without subsidy and (ii) with subsidy @ 25% of the TFO for vegetable market yards of 4,000 MT and 20,000 MT average annual arrivals. This is because the quantum of eligible subsidy worked out on the basis of the TFO is less than Rs. 50 Lakh; being the upper ceiling limit for normal borrowers as per the operational guidelines of the scheme. However, while working out the repayment schedule for vegetable market yard of 50,000 MT average

annual arrivals, three different scenarios have been considered. They are (i) without subsidy; (ii) with subsidy @ 25% of the TFO for govt. agencies and (iii) with subsidy restricted to Rs. 50 Lakh for normal borrowers as per the operational guidelines. For all the market yard models, a provision of 30% sundry shops have been made so that commodities required by the farmers in his day to day needs can be sold in the market premises and the farmers donot have to travel to long distances to buy his requirements. Provision of sundry shops will also ensure availability of consumable to the farmers at reasonable rates as the market authorities can enforce display of their approved prices. The financial indicators for the investment are as under: Fruit Market Yards (Rs. in Lakh) Parameters Average annual arrival at the market yard Total Financial Outlay (TFO) Net Present Worth (NPW) at 15% discounting factor Benefit Cost Ratio (BCR) at 15% discounting factor Internal Rate of Return (IRR) Average Debt Service Coverage Ratio (DSCR) with subsidy restricted to Rs. 50 Lakh as per the operational guidelines for normal borrowers Vegetable (Rs. in Lakh) Parameters Average annual arrival at the market yard Total Financial Outlay (TFO) Net Present Worth (NPW) at 15% discounting factor Benefit Cost Ratio (BCR) at 15% discounting factor Internal Rate of Return (IRR) 4000 MT 20,000 MT 50,000 MT 4000 MT 50,000 MT 5,00,000 MT

224.690 16.310 1.08:1 18.51% 2.239:1

647.920 143.640 1.24:1 21.79% 2.117:1

1905.850 1121.950 1.28:1 27.66% 2.065 :1

Market

Yards

69.280 10.821 1.157:1 20.620%

153.808 29.785 1.163:1 23.105%

378.850 88.537 1.193:1 25.393%

Average Debt Service Coverage Ratio (DSCR) with subsidy restricted to Rs. 50 Lakh as per the operational guidelines for normal borrowers

2.673:1

2.275:1

2.047:1

The tenure of the bank loan has been restricted to 11 years inclusive of a grace period of 2 years in all the cases as prescribed in the operational guidelines. 13. INSURANCE

The market yard along with the ancillary structures etc. should be insured. 14. DOS AND DONTS

In order to safeguard the interest of bankers and borrowers, it is necessary to take certain precautionary measures. As a ready reckoner, some of the important aspects are shown in the form of Dos and Donts in Annexure II (A) and Annexure II (B) respectively.

15.

ROLE OF NABARD

NABARD is the apex financial institution of the country for agriculture and rural development and plays a vital role in coordinating all financial banks, state agencies etc. to develop the countryside. As a pro active role it formulates broad strategies and fixes technical specifications, disseminates information and extend financial assistance to the agencies for development of various infrastructure to tap the potential and protect the interest of the rural community in general and farming community in particular. As market yard plays an important role in the economic developmental process of the farming community, this bulletin is prepared as a reference document for bankers, farmers and other developmental agencies. NABARD provides refinance and co-finanace support to various eligible financing banks for financing market yards under its normal refinance programme. This bulletin can be utilised in identifying the potential market yards and formulating schemes for the development of the infrastructure with NABARD refinance support. ANNEXURE-I MINIMUM AREA REQUIREMENT FOR ANCILLARY STRUCTURES S.No Structure Market arrival more than 250 MT/ day Market arrival upto 250 MT/ day Remarks

Market office

Total area

requirement to be calculated 2 3 4 Bank Post Dormitory/ rest house for farmers/ cartmen 55 sq. m 55 sq. m 40 sq. m 40 sq. m Will depend upon the command area and nearby stay arrangements Total area requirement to be calculated. There shall be one canteen for every 250 persons.

Canteen

Cattleshed Area to be provided to cater to one fourth of the visiting cattle and at a rate of 3 m x 2 m per pair of cattle 7 m x 3 m to be provided for every 100 carts 1 m x 1m for every 20 animals 4m x 4m size enclosure to be provided near the entrance Not less than 2 sq.m ANNEXURE DOS AND DONTS - II (A)

7 8 9 10

Veterinary shoe maker's enclosure Water trough for animals Gate checkpost Notice board

DOS 1. 2. 3. 4. Locate the market yard on a well raised drained site. Locate it near to a transport head. Locate it away from pollution sources such as dairy, poultry, slaughter houses etc. Locate it away from sources of fire such as kilns, factories etc.

5. Provide suitable access, approach, internal roads and maneuvering and parking spaces for vehicles. 6. Take necessary permission for construction of the market yard from the local bodies.

7. Take permission for the use of land for the nonagricultural purpose from the competent authority. 8. Provide ancillary structures such as office and chaukidars quarters etc. as indicated in the model scheme and services such as water supply, sanitary acilities and electricity.

9. Provide sufficient plinth height for the auction platforms and storage structures to avoid flooding of stocks in times of heavy rains. 10. 11. 12. 13. 14. 15. 16. Provide adequate fire fighting equipment. Maintain the buildings, roads and equipment properly. Maintain cleanliness and arrange for waste disposal to prevent pollution. Avoid unauthorized constructions. Notify all the commodities to be traded. Ensure proper weighing cleaning and grading facilities. Ensure proper display of prices.

ANNEXURE DONTS 1. 2.

- II (B)

Do not allow poor specification for constructions. Do not allow the animal and vegetable waste to accumulate or rot in and around the market yard.

3. Do not allow the unauthorized persons to operate in the market yard to prevent congestion and slippage of revenue.