Session 5

Topic 3 Marketing of Agricultural Inputs

14th September, 2011.

Consumable Inputs Durable Inputs Fertilizers Agrochemicals Seeds Cattle Poultry Aqua Feeds Tractors Power Tillers Irrigation Equipments Other Farm Machinery
14/9/2011 2

1. 2.

Marketing of Agricultural Inputs is process of delivering manufactured or processed inputs or services to rural producers. Urban products has to be sold in rural market. 73% of rural population is being engaged in agricultural and allied activities. Estimation of Rs. 20,000 Crores of agro-inputs business. Agricultural inputs fall in two categoriesConsumable Inputs Durable Inputs

14/9/2011

a. b.

c.
d. e. f. g. h.

i.
j.

Plant food manures & fertilizers Soil amendments calcium & gypsum Agro-chemicals for plant protection against pests & diseases Seeds high yielding, hybrid, genetically modified seeds & improved varieties Power generation diesel, oil, petrol & electricity Feed cattle, poultry Veterinary medicines Prophylactic & curative Simple hand-held farm tools phavadas, sickle, hand hoes, crowbars Packing materials gunnies, ropes, twines Others bamboo articles like baskets etc.,

14/9/2011

a.

b.

c.

d.

e.

f.

Farm implements tractors, harvesters, threshers, power tillers Irrigation equipments motors, pump sets, sprinklers, drip irrigation systems Construction materials cement, bricks, zinc/asbestos sheets for roofing Transportation equipments bullock carts, tractors, trailers, mini trucks Farm animals bullock, goats, cows, poultry, sheep Others tyres, tubes, spare parts

14/9/2011

1. 2. 3. 4. 5.

Fertilizer consumption in year 1951-52 was 66,000 tonnes & grew up to 21 million tonnes in year 2006-07. 70% of fertilizers is consumed in irrigation areas in states of Punjab, Maharashtra, U.P., M.P., A.P. and Karnataka. About 2/3rd of fertilizers used for rice and wheat crops. Fertilizers consumption depends uponProfitability of farming Availability of irrigation facilities Rainfall Introduction of new technology Availability of fertilizers and prices of fertilizers
14/9/2011 6

Product

Fertilizers fall in three categories based upon nutrientsNitrogenous(N), Phosphates(P), Potassic (K) which are being supplied to crops. Straight fertilizers supply single nutrient E.g. ammonium sulphate, urea, calcium ammonium, nitrate, single super phosphate. Compound fertilizers which contain more than one nutrient E.g. Di-Ammonium Phosphate(DAP) complex fertilizer contains nitrogen and phosphate. NPK fertilizers which has all three nutrients. Fertilizers as per Fertilizer Control Order (FCO) marketed only by generic name and not by trade or brand name. Each bag should show proportions of 3 nutrients NPK.
14/9/2011 7

1.

2.

3. 4. 5.

Till 1991 the Govt. of India fixed the prices of different grades of fertilizers. From June 1994 except Urea fertilizer all other were decontrolled. Decontrol was to reduce burden of subsidies on the Govt. It provided subsidies on adhoc. Rate of subsidies varies across countries and types of fertilizers. Fertilizer subsidy is to provide fertilizers to the farmers at lower prices than its economic prices.

14/9/2011

2,75,000 outlets selling fertilizers in the country. 70% private sector & 30% cooperatives societies and public sector like State Agro Industries Corporations. Manufacturers store inventory in regional godowns maintained by them and then released to wholesalers and then to retailers during season. Manufacturers like Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) , Gujarat State Fertilizer & Chemicals Ltd. (GSFC), Fertilizers & Chemicals Travancore Ltd. (FACT) maintain their own outlets.

14/9/2011

Manufacturers use their own promotional measures and create brand image. Inter-personal and group contacts Fertilizer festivals and Kissan Melas TV Newspapers and Journals Special promotional measures Village Adoption Programme Wall Paintings and Hoardings

14/9/2011

10

1. 2. 3. 4. 5.

The chemicals used for control of pests, diseases, rodents, virus etc., Agrochemicals market is classified into
Insecticides Fungicides Herbicides Weedicides Rodenticides Fumigants

6.

14/9/2011

11

Agrochemicals market is dominated by insecticides which account for about 75%. A.P., Punjab, Karnataka and Tamil Nadu markets account for more than half of the demand for crop protection products. The manufacturers of agricultural chemicals can be bifurcated as: A) Manufacturers of technical grade material and B) Formulators. As of now 44 technical grade pesticides and 10 formulations are being manufactured in India by both Public & Private sector companies. Currently 25 large companies and 450 small ones exist in country. Indian Pesticide Industry is the largest in Asia and 12th largest in the World.
14/9/2011 12

Product

Products are available in 5 groups and in differ in formulations for different products. The formulators are free to manufacture combination or concentration of pesticides and insecticides from basic chemicals. They are free to use any trademark and brand name for their products. Products are available in two forms powdered and liquid form. Powder form require dusters for application and liquid is used with help of Sprayers. The big Cooperative Sector Fertilizer manufacturer, Cooperative societies & IFFCO stocks this application and sprayers for free use in their agro-kendras.
14/9/2011 13

Manufacturers fix their own prices. National players like Rallis, Ciba, Bayer are reputed firms. Govt. purchase agrochemicals & distribute to the farmers at subsidized rates.

14/9/2011

14

Distribution is carried out through state departments, cooperative societies and private dealers There are only 1,36,718 retail outlets selling agrochemicals. The power form pesticides are available in 50 kg pack size and are applied in large quantities. Liquid pesticides are available in 5 lt. pack. Requirement is small unlike fertilizers. Small local players and formulators cater to need of local farmers.

14/9/2011

15

Field Demonstrations Farmers Meetings Gifting Applicators Kissan Melas Credit facilities

14/9/2011

16

Marketing of seeds was in hands of Central and State Seeds Corporation. Few seed companies were also in operation. New varieties of high yielding seeds rested with the government agencies like agricultural research stations and agricultural universities of Central and State Govt. The Corporations distributed their seeds through cooperatives, private dealers and their own sales counters. Entry of MNCs like Monsanto, Pet Seeds of USA, Pioneer Seeds, Hoechest, Harrison Vanderhave, ITC, Indo-American Hybrid Seed Company etc.,

14/9/2011

17

Increase in food processing industry, export of fruits and vegetable products, flowers, mushrooms, prawns and cereals. Development of new seeds involves huge investment in terms of time and money.

14/9/2011

18

Milk production in the country got a big boost with the implementation of Operation Flood Programmes. Companies like Venkateshwara Hatcheries, Deejay Hatcheries and their franchises, distribute one-day-old chicks for eggs production. Farmers purchase feed for dairy and poultry from organized manufacturers to take care of balanced nutrition. Aqua farms for breeding and harvesting shrimps are increasing due to export opportunities.

14/9/2011

19

Investments have been made in coastal areas of Andhra Pradesh, Tamil Nadu, Pondicherry and Orissa to establish shrimp farms. Emu and rabbit farming are also catching up in the country as ventures. The Central Govt. provides subsidy of 50% of the premium to insure cross breed and high yielding cattle and buffaloes.

14/9/2011

20

Country produces 2 lakh tractors p.a. Tractors of various horse powers 25 HP, 35 HP and above 35 HP are manufactured and marketed by major companies like HMT, Escorts, Eicher, Massey Ferguson, International, Punjab Tractors. Power tillers were introduced for mechanization of medium and semi medium farms. Power tillers are manufactured and marketed by VST Tillers, Bangalore and Kerala Agro Machinery Corporation. Earlier were manufactured under Japanese collaboration and even now tillers carry the names like Kubota and Mitsubishi. Govt. provides 50% of the cost involved in purchase of tillers or Rs. 30,000 which ever is less.
14/9/2011 21


a)
b) c) d) e) f)

Determinants in decision to purchase tractor are:

Area of land holding Nature of land holding (irrigated/ dry) Types of crops grown and number of crops grown in a year Availability of loan Possibility of hiring out the services of the tractor to others Requirements of tractor for transport of produce to market and inputs to the farm.

14/9/2011

22


a)

Factors that count for successful sale of tractors:

Loan availability from banks Personal selling: identification of potential tractor users and approaching them Trouble free services fewer breakdowns Availability of spares for easy repairs After sales service Resale value of tractors Training on how to use tractors Fuel efficiency Most manufacturers register with the leading agencies as approved suppliers.
14/9/2011 23

b)

c) d) e) f) g)

h)

Low cost capital equipment. Include prime mover, electric motor or oil engine, pump set and accessories like pipe, couplings, etc., Loan is available and provided by lending agencies. Lending agencies prepare a list of approved suppliers of irrigation equipments. Lending agencies place orders with suppliers to install the pump set on the farms. Competition is stiff. Sophisticated irrigation system like, sprinklers and drip irrigation have come into vogue. Popular because of the economic usage of water which is fast becoming a scarce input.
14/9/2011 24

It includes board ploughs, seed drills, winnowers, threshers, harrows. Manufactured and marketed by local players either power driven or bullock driven. Easy to maintain and operate. Other tools like ploughshares, hand hoe, sickle, phavadas, etc., Other inputs like electricity, diesel, lubricants etc., under control of Central or State Govt. Some players in private sector also supplies diesel, petrol, lubricants, gas and oils.

14/9/2011

25

SWOT Analysis of Fertilizer Market SWOT Analysis of Agro-Chemicals Market

14/9/2011

26

14/9/2011

27