PROPOSAL FOR STRENGTHENING OF

 INSTITUTE FOR AGRICULTURAL MARKETING AND

 AGRI BUSINESS MANAGEMENT

Preamble

Karnataka is typically an agrarian state. About 66 per cent of the total population lives in rural areas and the main source of income is from farming alone. Out of ten agro-climatic zones, five fall under dry zones. A large track of areas falls under semi arid conditions facing severe agro-climatic and resource constraints.

 Karnataka is one of the few States with lowest proportion of area under irrigation and second only to Rajasthan in the share of drought prone area. Seventy five per cent of the farming community is small and marginal farmers with a land holding size of 1.6 ha.  Despite severe climatic and strong resource constraints faced by the State, agricultural sector is growing at the rate of two percent per annum. The productivity achieved in several crops is relatively higher than other States.  Karnataka stands first in Maize productivity, second in sugarcane, third in Jowar, Soybean and Tobacco and fifth in  Rice.   Karnataka is one of the horticulturally progressive States in India. It stands third in production of fruits and sixth in production of vegetables.  The total value of horticulture produce in Karnataka is estimated at Rs 6000 crores per annum.  The plantation crops like coffee, tea, rubber, arecanut and coconut are also grown extensively.   The state contributes about seventy percent of coffee, thirty percent of commercial flowers, more than 10 per cent of fruits and vegetables to the national production.  State has potential to emerge as one of the leading states in the sector. 

Policy initiatives

Karnataka has always taken a lead ahead of other States in India in many respects as far as agricultural policy initiatives are concerned. It became the first State in the country to have its own agricultural policy as early as 1995.  The state Government appointed a High Power Committee under the chairmanship of Sri. T.R. Satischandran to analyze the stagnation in agricultural productivity experienced by the state during eighties. The State has taken initiative in preparing a document assessing the situation emerging out of Agreement on Agriculture under the WTO.  The State government appointed Agricultural Commission under the chairmanship of Dr. R. Dwarakinath to examine the problems confronting the sector.  State has also set up Agricultural Price Commission to advise state government on agricultural prices. Further, it also became the first state to take a serious note of the distress confronting the agricultural sector that culminated in a spate of farmers’ suicides. An expert committee was appointed under the Chairmanship of Dr. G. K. Veeresh that recommended steps to remedy   the situations, and State could arrest the pace of farmer’s suicides considerably. State has recently brought out Agriculture Policy of Karnataka 2006 which has addressed the main issues related to Karnataka agriculture.

Shift towards Agri-Business 

Over the years, farming system has changed considerably and there has been a shift towards Agribusiness Of late farmers who are taking up commercial farming have increased in number where the farming is viewed as business enterprise. But these changes occurring in farming sector has benefited only a few elite farmers and the bulk of the farmers are yet to reap these benefits. This is because small & marginal farmers lack entrepreneurial business management skills and do not have access to modern technology as well as commercial marketing outlets. Developmental efforts, therefore need to be designed in such a way that the benefits would reach all the farmers of the state.

Retail Marketing Boom

The retail marketing has witnessed a   structural change through the entry of corporate giants such as Metro, Reliance, Bharti, Food World, Fab Mal, Spencer’s, ITC, Trinetra, Pantaloons, Subhiksha etc. Karnataka is in forefront in retail marketing revolution. Many of these are in the process of strengthening their supply chain through backward linkages. Farmers will benefit by supplying value produce to retail market chain.

Agrarian crisis

Commercial agriculture is associated with high level of risk and uncertainty. Market related risks which arise mainly on account of price cash. Farmers’ suicide is mainly due to the lack of withstanding power. Thus, preparing farmers to the market driven production process assumes critical importance at this juncture.

Need for strengthening Agriculture Marketing

Agricultural sectoral being the largest livelihood sector and also the supplier of raw materials to industry need to be supported and strengthened.  Agro-processing sector is critical to India’s development, for it establishes a vital linkage and synergy between the two pillars of the economy – industry and agriculture. Post WTO era has witnessed structural change in domestic and export market. Consequent to the APMC Act amendment there will be increased activities. Entry of private sector, contract farming, organized retail marketing, processing and value addition and exports will reshape the Indian agriculture into robust and dynamic one globally. The nine per cent growth in the Indian economy envisages during the XI plan period can be achieved only when agriculture grows at four per cent. Hence, the focus is on agricultural Marketing.

In this context there is a need for strengthening the Institute of Agricultural Marketing and Agri-Business Management at UAS Bangalore. The institute will act as a catalyst and link among farmers- processors- Agri business companies - NGOs – exporters and Government. The institute’s approach will be multidisciplinary and focus on preparing the farming community to be a partner in Agri –Business.

The Institute of Agricultural Marketing and Agri. Business Management will have the following components.

1. Human resource development

2. Agri export and WTO Knowledge centre

3. Market Information and Intelligence Cell

4. Quality Control and Food testing facilities

5. Agro processing for value addition

6. Strengthening Market-Led Extension

AGRI - EXPORT AND WTO KNOWLEDGE CELL

The liberalization and globalization of the economy has widened the opportunities for agri-business both domestically and globally. However, the opening up of the world market has also posed new challenges in terms of quality and price to meet the global competitiveness. In Order to meet these challenges, there is a need for a professionally manned cell for promoting agri exports and also a knowledge center to impart knowledge on WTO. The proposed cell will focus on the following issues.

§      Dissemination of good agricultural practices for export quality production

§      Dissemination of post harvest practices for agricultural and horticultural products

§      Developing linkages between farmers , exporters,  processors and retail chains 

§      Create data base on all aspects related to agri -  import and export  trade 

§      Train farmers on WTO regulations- Codex-SPS standards, non technical trade barriers, quality standards, sanitary and phyto sanitary measures and consumer preference of the importing countries          .

§      Liaisoning among farmers, processors, exporters and export promoting agencies   like APEDA,  KAPPEC, NHB and Commodity boards

Activities proposed

1       a) Follow a  co-ordinated approach for quality production and appraise farmers on the export potential crops by involving scientists from inter- disciplinary areas from UAS(B), technical  staff of the departments of agriculture and horticulture and scientists from research oriented institutions like IIHR and disseminate/demonstrate knowledge pertaining to quality production  by  identifying  and farming association of progressive farmers , self help groups, NGOs, at the field level, KVK level and at the head quarters on agri -business

b) Organize field visits to farmers, self help groups, NGOs for model farms to have demonstration effect on quality production

c) Training programs of three days duration on quality production for export at the head quarters.

d) To develop and provide good agricultural practices in local languages to the members of farmers associations, self help groups, NGOs, representatives from local level institutions

  2.       a) Follow a co-ordinated approach to disseminate /demonstrate commodity specific post harvest practices at the farm level , KVK level and at the centre of agri -business at the head quarters to members of the  farmers associations, self help groups, NGOs.

b) Organize field visits to concerned post harvest technology institutes for the members of farmers associations, self help groups, NGOs, to provide visual exposure and practical experience

c) Organize and conduct training regarding good post harvest practices like harvesting, pooling, grading, labeling, packing, modes of transportation to the members of farmers associations, self help  groups, NGOs,

d) Under take research studies on various issues related to post harvest technology in order to update the knowledge particularly for the post harvest handling of exportable produce.

3.  

 a) The interaction sessions and business meets will be organized for   each exportable commodity by bringing producers, processors, export promoting agencies and exporters  on the same platform at KVK level and at the headquarters of the agri - business center

 b)Encourage and develop business contracts between farmers, retail formats, commodity exchanges and exporters on one to one negotiations

c) Arrange field visits of progressive farmers, SHGs and NGOs to commodity specific processing units to develop business contacts

4.       

a) To create, maintain and update data base on volume  of   trade  for  different agricultural commodities, export destinations, competitive countries, their supply and demand conditions, export procedures, prescribe international quality   standards, codex and sanitary and phytosanitary measures , export credit, insurance, consumer preference of importing country , forecast of  international commodity prices and exchange  rates and certification procedures.

5.    

a)  To organize educational and training programs on codex and Sanitary and phytosanitary   measures, quality standards, export incentives, export procedures, export credit, insurance, consumer preference of the importing countries at the KVK level and at the head quarters.

 b) To develop, print , distribute technical information pertaining to quality production , post  harvest practices and WTO regulations in  the local language in the form of  leaf lets, broachers, booklets, posters, banners to farmers, SHGs , NGOs and other stake holders.

OUTCOME

The direct outcome of the proposed unit will enable increased agri exports from the state. Required number of growers associations and SHGs for Mango,  Pomogranate, Onion, flowers, plantation crops and other commodities will facilitate trade related activities. Linking growers with processors and exporters will enable trade by eliminating unnecessary middlemen. Data base related to quality production, post harvest practices and WTO regulations under one roof provide timely and easy access to the stake holders. Required number of trainings and field visits will be conducted to provide practical knowledge and demonstration effect to the farmers, SHG’S and NGO’s.

IMPACT

Farms with export competitiveness are better prepared to meet the quality challenges.

Linkages and training will equip farmers, self help groups and NGO’s to meet the challenges of quality and price competitiveness of the agri -produce in the post- WTO  regime.

Readily available information in the local language on agri- exports and WTO regulations will build confidence and competitiveness among the stake holders and meet the challenges efficiently.

                  MARKET INFORMATION & INTELLIGENCE CELL

The state of Karnataka is well known for the quality and diversity of the crops grown. About Sixty-six percent of the population of Karnataka resides in rural areas where the main occupation is agriculture and allied activities. The estimated value from agriculture sector is Rs.30, 000 Crores with a growth rate of 2.05% during the ninth five year plan and the target is to achieve 4-4.5 percent growth in the agriculture sector in the 11^th plan. Hence, the sector remains as one of the top priority areas for development.

Data Source: www.agricoop.nic.in

Karnataka stands 3^rd in area under production of fruits and 1^st in flower production in the country. The value from horticulture produce amounts to Rs.8500 crores, which accounts to about 30% of the total income from agriculture sector.

As we are aware that farming as an enterprise is exposed to various risks and uncertainties, which can be broadly classified into two compartments viz. Production/Product related risks and Market related Risks. The production/product related risks, which bring an uncertainty in the quantum of produce, arise on account of weather, pest and diseases, area, non-market quality etc. and could be combated to some extent using Crop insurance. However, the price related risks, which arise on account of price crashes as a result of mismatch in demand and supply lead to uncontrollable situations of glut in the markets with piles of produce being wasted. The situation to some extent can be controlled with a proper market intelligence system in place, which would track the area coverage and crop situations of sensitive crops of Karnataka and make predictions about the temporal pattern of supplies and prices. The information on one hand could be used by the actual growers for their own disposal mechanism or for putting a regulation on their own area expansion while on the other hand it could give adequate direction and time to the various departments for developing a disposal mechanism to get a remunerative price for the farmers and prevent distress sale.

This project proposal wishes to develop a system of market intelligence to bring about a reduction in the price risk exposure of the farmers of Karnataka for important crops.

Important Crops to consider

Major crops of Karnataka in terms of their value contribution were short-listed and have been presented below:

In terms of value of produce, Rice tops the list of all major crops of Karnataka followed by Ragi, Maize, Mango and Banana. Though crops like Soybean, Groundnut and Tur have lower relative value yet, they are important crops and means of livelihood for farmers in selected districts of Karnataka. The Market Intelligence Cell is going to concentrate on the following crops of Karnataka:

1.      Paddy

2.      Ragi

3.      Maize

4.      Potato

5.      Onion

6.      Tomato

7.      Chilly

8.      Groundnut

9.      Soybean

10.  Mango

11.  Banana

12.  Jowar

Plantation crops like Coconut, Coffee and Spices have been excluded from the list since they have their own commodity boards, which could take initiatives in the direction. It is also assumed that all the 29 districts of Karnataka would be covered for one or more crops except predominantly urban districts like Bangalore urban.

Objectives:

§         To generate information on area coverage and crop status of the short listed crops in the major growing areas (covering 70% of the total average production) in different growing seasons so that early signals could be given for controlled area expansion.

§         To estimate the output and prices of these commodities in the major markets in Karnataka and the markets in other states that influence the prices in Karnataka markets during the time of peak arrivals.

§         To work out disposal options for the farmers: Storage options, selling in distant markets, Processing options

Rationale:

The average farmer of Karnataka is always in a state of confusion regarding various decisions from choice of crops till methods of disposal. The farmers equate farming (especially farming of horticultural crops) with gambling as in the case of gambling one can not predict the degree of income or loss at the time of taking a call. In the absence of informed knowledge on the future demand and supply, the farmers take decisions based on rumors or un-informed sources and land up in debt trap. It is in this context that more than 12000 farmer’s suicide cases have been reported in Karnataka since the year 2000-01-which is the highest in India.

Modern science has tools to predict the resulting effect on the probable prices and other variables affecting the farmers’ returns. However, the same is not being done and transmitted to the farmers who could use it for decision making right from the cropping decisions to timing of marketing.  Also, there are technologies available to absorb the excessive supplies at certain times and a need to understand the applicability of such technologies in the appropriate context. As a whole the system would be able to create balances in supply and demand through creation and dissemination of appropriate knowledge.

Though there are efforts in the direction of organized collection of prices information and their display through the Krishi Marata Vahini, yet the system does not address the need of predicting the supplies and providing the probable market direction to the farmers. Moreover, these prices are past prices, which give not much direction to the farmers in terms of ability to plan for future. The Marata vahini data is also not accessible to the majority of the farmers as the data is transmitted through web and the media is un-accessible to majority of the farmers in the countryside. The intelligence disseminated through the proposed system would be adequate to enable decision-making by farmers and policy makers and would lead to effective balancing of supply in the event of being implemented.        

The proposed system also lays stress on pinpointed dissemination of intelligence to the farmers though appropriate channels such as newspapers and radio so that maximum utilization of the intelligence is achieved. Beyond this, the system addresses the need of identification of appropriate and feasible technologies to absorb the excessive supplies at times. 

Mechanism of information collection

The data and information collected for the exercise has to be independently done and should not be bundled with the existing system of data collection by the APMCs due to the following two reasons:

1.      The requirement of generating intelligence on market movements in the future requires more than the past data in terms of sentiments, feelings and expectations of the market participants, stock levels and likely changes in stocking positions etc. These have to be collected on a real-time basis along with the price and arrival points.

2.      There is a need to collect unbiased information by an independent agency since market participants may provide skewed information to the APMC authorities in expectation of a favorable market situation for them.

The Domestic and Export Market Intelligence Cell (DEMIC) were established by Centre for Agricultural and Rural Development Studies (CARDS) in the Tamil Nadu Agricultural University (TNAU) and NIC for the farming community. The prime objectives of the cell are to forecast the supply and demand of important agricultural commodities in Tamil Nadu; to forecast future prices of major agricultural commodities; to study the state and national market situation related to important commodities; to disseminate the market and price information on to the farmers for planning, production and holding stocks; and to suggest policy measures to the Government of Tamil Nadu.    The Market Intelligence Cell is displaying data on arrival and transaction of important agricultural commodities in the Regulated Markets in Tamil Nadu through the website AGMARKNET. The main activities of DEMIC are forecasting prices for agricultural commodities such as cotton, banana, chilies, turmeric, maize, small onion and ginger based on the past price data collected from various major markets of Tamil Nadu and also based on the traders survey; maintaining a website www.tnagmark.tn.nic.in; developing and maintaining database on commodity prices, area, production and productivity details; running a E-newsletter ie., DEMIC info Series; dissemination of agricultural commodity prices to farmers through newspapers and website; and offering export related information to traders. They are using standard, state-of-the-art price forecasting models for prediction. Besides this, the web site is giving information on export standards for various commodities and it is also hyper linked to various other relevant websites for more information. The information disseminated is useful for the farmers in getting better prices for their crops, planning cropping pattern and the right time of sale of their crop output.

Agricultural Market Research and Intelligence Cell was established by marketing wing of Department of Agriculture, Kerala. The cell is collecting information from various sources and adding value to it by processing with modern tools. The prime objectives of the cell are given below.

1. Act as knowledge base for Agriculture Marketing in Kerala State
2. To provide appropriate and timely information to farming community, extension workers, traders, processing industries, planners and Government.
3. To collect information about Market international markets,
4. Linkage with various knowledge base in the state, national and international like INARIS, Agmark Net, Kissan Kerala net etc.
5. To provide latest information in association with various Research stations, institutions and other academic institutions
6. Dissemination of information to various agencies
7. To establish a network for collecting data related to agriculture using facilities available with the Department of Agriculture.

The information is disseminated through free and paid services. While simple data on prices, arrivals and general trends are given free of cost, intelligence on price, fluctuations, trends, forecast and analyses are priced services.

Clearly the proposed system in Karnataka is having enhanced scope and improvement over the existing systems in other states due to the following unique characteristics:

1.      Completely independent data collection mechanism

2.      Real time and continuous interaction with the stakeholders

3.      The system does not lay stress on dissemination of information on appropriate cultivation technologies or solving the production problems. It purely looks at the marketing aspects of price sensitive crop products.

Deliverables of the proposed system

• Mapping of the major growing seasons of the specified crops in the various districts of Karnataka. Districts contributing 70% of the average production of the crop would be considered.
• Mapping area coverage, regular monitoring of the crop condition and estimate the likely output of the crop during different seasons in these districts.
• Identification of major markets for the short listed crops based on arrivals.
• Making marketwise price predictions during peak arrival seasons for these designated markets.
• Recommending proper disposal options for the farmers

·        Storage

·        Feasibility of Local processing

·        Economics of Selling in other markets factoring in prevailing prices and additional costs involved such as transportation

§         Channel evaluation for intelligence dissemination and developing appropriate channel mix for dissemination of intelligence. The following matrix indicates the various channels and their evaluation criteria.

• Enable Periodic Intelligence dissemination though the chosen channel/channels. The system would consider enabling a toll free number for Interactive Voice Response System, which would help the farmers to access the required information on phone by just calling up without having to pay any telephone charges. Also opinion leaders would be targeted so that maximum flow of information is registered. Interactive TV shows would be arranged in the months of June-July and September-October where experts would talk about likely supply situations and prices during harvesting months. Such interaction would enable farmers to take a view on crops as well as decide the time of sowing.

System Development Phase

 Information Collection System

Implementation of the Project

The project implementation would involve two phases

• System Development Phase
• System Maintenance Phase

The first point in developing the market intelligence system would be to develop a mechanism to collect authentic market data. This would involve short listing of    major markets for each of the crops and establishing linkages with the market participants (such as traders, brokers and commission agents) to collect data on prices, arrivals and market sentiments on a regular basis.

Simultaneously, data would be collected on area increase, varieties and crop status and other variables affecting timing, quality and quantity of output. The data collection sources would be diversified and would consist of local market representatives as well as the already established government machinery. Also the data collection would be through wireless handheld devices such as Black Berry by stationing one representative in each district.

Information Processing System

The second stage of developing the market intelligence system would be to develop a system to process the market data collected on a real time basis.

This would involve data cleaning and usage of techniques like econometric modeling, fundamental and technical analyses to obtain useful information like predictions on output and prices. The step would involve rigorous model building and testing of the results to develop a perfect or near perfect solution. The results of the same would be then converted to reports that would be tailored according to the intended user of the information (farmers and policy makers).

Information Dissemination System

A system is to be developed to transmit the developed intelligence in objective 1.2 to transmit the same to the target audience. The dissemination system has to ensure that the intelligence disseminated is complete, useful and most importantly timely and also reach the right audience.

As discussed, the information would be targeted to two major groups of audience viz: the farmers and the policy makers. In case of farmers also, such channels would be used so that maximum dissemination of information takes place to the opinion leaders. This phase would also carry out the implementation of an Interactive Voice Response System for the farmers/their opinion leaders to access free information conveniently.

System Maintenance Phase

The system of information collection, processing and dissemination would have to be maintained on a continuous basis by regular monitoring of the area increases, prices at important markets, emerging value addition opportunities etc. Periodic reports on emerging crop and price scenarios would have to be generated and disseminated to the target groups (farmers and policy makers) along with clear recommendations and associated benefits of these recommendations through appropriate channels.

Timelines:

Clearly the system development phase would be completed within 6 months of the start of the project and the first reports would be rolled out in the 6^th month after the start of the project. The work on developing the information dissemination mix along with the testing and enabling of IVRS would be executed in parallel and would be completed before the 5^th month.

Mode of operation

The project would be operated on PPP mode with Foretell with distinct roles and responsibilities to shared across.

Role of Foretell                                                                                                                     

Foretell will take up the Exploratory Study, Establishing contacts with market participants and consultancy for data modeling. In other activities Foretell will play a supportive role and share costs in the component

Role of UAS (B)                                                                                            

The Department of Agricultural Marketing, Cooperation and business Management, UAS (B) would act as Project Executing Agency and responsible for the functioning of the cell.

AGRO-PROCESSING CENTER FOR VALUE ADDITION AND QUALITY CONTROL LAB

India produces about 210 MT of food grains with total agricultural and allied production of over 600 MT.  Losses of food grains vary between 10–12 per cent and about 25-40 per cent in fruits and vegetables. Primary processing of food raw materials in the production catchments to match conventional product range and food habits can be one of the effective solutions for minimizing post harvest losses.  The two major goals of post harvest processing are loss prevention and value addition to the raw food commodities through preservation and processing. In India, the food industry is already a Rs. 2.5 lakh-crores industry.  Value added foods are expected to grow at a much faster rate, i.e., from Rs. 80,000 crore to Rs. 2.5 lakh-crore.  The study conducted by Mckinsey & Company says, some 20 crore people will move from subsistence foods like cereals and pulses to basic products demanding more processing.

The food processing industry is a high labour intensive and offers a major employment opportunity. Presently, it employs 18 to 20 per cent of country’s labour force and contributes around 50 per cent to industrial production.  The employment generation potential of food processing sector is much higher than other sectors, i.e., 3,24,000 persons get direct employment per Rs. 1,000 crores of investment in the food sector compared to 48,000 in textiles and 25,000 in paper industry.  There is also a four-fold generation of indirect employment in the ancillary and other downstream rural cottage agro-industry activities on account of the investment in the food sector.

Rationale

Value addition to farm produce through processing is gaining importance and if properly shaped can transform into a dynamic agri-business community.  There is a need to understand that ‘growing’ is futile without ‘processing’.  It is important to appreciate that ‘growing’ and ‘processing’ are complementary and need to be promoted together.  Therefore, primary processing of agro-produce preferably at rural production sites can ensure realization of full potential in agriculture sector and can generate employment to rural youth thereby restricting the migration to urban areas.  Processing facilities established in the production catchments will thus render enhanced availability of raw materials at reduced cost and increased employment for local people. With the above facts in view, it is necessary to develop a network of cottage to small-scale enterprises in rural areas for processing of agricultural produce to provide:

§         Opportunities of employment and income generation

§         Good quality food raw material to local / rural population at relatively lower rates

§         Primarily processed raw material to large industry in cities

In Karnataka, post harvest and value addition to farm produce, at farm level, through processing is almost minimal if commercial view is considered.  However, value addition to the produce is being carried out at farm level in the form of drying, primary cleaning, flour milling, etc., although few progressive farmers are exploring to enter into processing activities.              The unit operations may include cleaning, grading, milling, packaging, etc.  The manufacturers of Food Processing machinery are both in the organized as well as unorganized sector. Variety of processing equipment suitable for tiny/cottage/small scale processing units is under manufacturing range of different firms. The commonly used primary processing equipments include: cleaner-grader, burr mill, hammer mill, grain peeler, flour separator / sifter, dhal mill, etc.  Cereal and pulse based ready to eat food mixes, puffed cereals, etc, can also be prepared after using simple set of equipment.  Processing of horticultural crops into value added products needs to be initiated in the predominantly fruits and vegetable growing areas of the region.

Strengths of UAS in Agro-Processing and Value Addition

The University of Agricultural Sciences, Bangalore, has been a pioneering institution in the country to establish a large number of agro-processing centres for income and employment generation in rural areas.  So far fifteen agro-processing centres have been established in different agro-climatic zones taking into consideration the crops grown in each cluster and the corresponding value added activities. One important aspect of the integrated watershed approach should have been the processing and value addition to products right at the production catchments itself.  This approach completes the cycle of farming operations.  Realising the importance of this concept, the University of Agricultural Sciences, Bangalore, worked towards establishing Agro-processing Centres in its watersheds falling under different agro-climatic of southern Karnataka.  As a result, five agro-processing centres were established in different watershed villages. The University has developed many value added products from finger millet, maize, fruits, etc. 

For establishing a Pilot Scale Agro-Processing Centre for processing and value addition for the agro-climatic zone No. 5 covering Bangalore Urban, Bangalore Rural and Kolar districts of Karnataka, the following points have been visualized :

§         Potential demand for produce processing

§         Availability of raw material for processing

§         Processes/technologies to be employed

§         Quantity of processed produce in demand

§         Selection of suitable machinery for processing and value addition

§         Training facility for operation of machineries, preparation of value added products, packaging, marketing, etc., and

§         Facilities for short-term storage and marketing

In the context of the above, it is foregone conclusion that the University of Agricultural Sciences, Bangalore has been doing a pioneering working relentlessly in taking the concept of agro-processing centres for income and employment generation to the rural masses. Further, the University has been the eye opener in this field, and still a lot has to be done to popularise this concept and it is timely that a large number of processing centres should see the light of the day in all the clusters and villages in the region.  Towards this goal, establishing a State-of-the-Art Pilot Scale Agro-Processing Centre is an urgent necessity at GKVK, University of Agricultural Sciences, Bangalore.  The proposed Pilot Scale Agro-Processing Centre for Value Addition and Quality Control will work towards the following objectives:

Objectives

1. To establish a State-of-the-Art Pilot Scale Agro-Processing Centre for Value Addition at GKVK, University of Agricultural Sciences, Bangalore
2. To develop infrastructure facility for  processing of  cereals, pulses and horticultural crops
3. To take up processing and value addition of agricultural/horticultural crops, packaging and marketing of the processed products from farmers, entrepreneurs, and Self Help Groups of women.
4. Human Resource Development, i.e., training to field staff, farmers, entrepreneurs and Self Help Groups of women, in Karnataka and neighbouring southern States for entrepreneurship development in food processing and value addition.
5. To sensitize entrepreneurs regarding food safety issues of processed products.
6. To sensitize and enforce the component of nutrition labelling for processed product among the entrepreneurs.

Infrastructure

Infrastructure is the key to the establishment of the Agro-Processing Centre and Quality Control & Food Testing Laboratory at the University. The University has sufficient land for this purpose at its Gandhi Krishi Vignana Kendra (GKVK), Bangalore, which is the Main Campus of the University.  Keeping futuristic expansion of the project, the University will be requested to allocate three acres of land for this activity. The infrastructure will be used for housing of processing and quality control machinery and equipments, packaging and storage and office. 

Installation of processing machineries

The procurement and installation of identified key processing machineries/equipments is advocated in the first year of the project.  Most of the machineries would be selected to have multipurpose features to accommodate more than one operation / activity and would permit processing of different raw materials.  Selection of equipment will be such that they are not very inferior on account of product recovery, energy requirement and noise and pollution aspects and they would be the best to meet the requirement of the project.

Product Profile

The processing activity and product profile will be selected keeping in the regional availability of raw materials, their demand and market potential for value added products.  Typically, they include:

§         Cleaned and graded food raw material supply

§         Flour and grits of ragi, wheat, maize, etc.

§         Pulse milling technology for all kind of pulses in the region

§         Fried and puffed products like: puffed rice, corn, small millets, etc.

§         Conventional ready to eat products such as vermicelli, etc.

§         Protein rich fortified food products, and

§         Horticultural based value added products, ex: sauces, pickles, RTS, concentrates, etc.

Combining processing activities for variety of raw materials will make the processing centre to operate round the year.

Activities

i. Value added products for Commerce - Food Crops

Among the cereals, maize will be a good raw material for taking up value added activities as it is one of the major growing food crops in the region.  The University of Agricultural Sciences, Bangalore has developed many value added products out of maize and hence could be converted into marketable value added products. The University has developed more than 30 value added products out of this cereal, and the technology is already put on for popularization, particularly, among entrepreneurs and the self help groups of women, in the rural areas.  A few hands-on training programmes were also organised for these groups, to take up preparation of marketable products.  Similarly, pulses are also grown in large areas these years in rainfed farming.  However, processing of grain into dhal is still a traditional method in the southern region of Karnataka, as there are no commercial dhal milling industries established in the region.   Dhal making activity can be one of the value added activities in the proposed agro-processing centre.  This centre should process all kinds of pulses into dhal.

ii.   Value added products for commerce - Fruits and Vegetables

The infrastructure facility to be created is planned for a wide variety of value added products from fruits and vegetables (Table 1).  The choice of the value added products is restricted to the largely grown fruits and vegetables in and around Bangalore Urban and Rural districts.  Some of the crops that fall under this category are listed below for value addition activities.          Table 1      Value added products from fruits and vegetables

The above are some of the examples of value added products.  However, over the time, there is flexibility to take up other value added products based on the market demand for the products. Quality aspects are of prime importance in the development of the products and necessary certificates will be obtained from the appropriate authorities in this regard.  Further, the products will be developed following HACCP approach and concept strictly.

Marketing of Products

The UAS, Bangalore has well qualified and experienced faculty with more than two decades of experience in marketing intelligence.  The profile of consumers for the processed products include, super markets in urban areas, rural co-operative societies, traders of processed foods in urban areas, institutional markets in nearby towns, who are expected to provide direct market support for the sustainability of processing activity.  The products will be marketed on a Brand Name to be decided by the University.

Human Resource Development

One of the major activities of the proposed Agro-Processing Centre will be to provide hands-on training to farmers, entrepreneurs and Self Help Groups in Karnataka and neighbouring southern States, who would be interested in taking up processing, value addition, packaging and marketing of produce.  The University of Agricultural Sciences, Bangalore has a unique Extension System, which works very closely with farmers and Self-Help Groups in its jurisdictional area.   Taking advantage of this system, it is justified to take up Human Resource Development activities round the year.

Management of Agro-Processing Centre

It is intended that the agro-processing and value addition activities will be part of the activities of the proposed ‘Institute of Agricultural Marketing and Business Management’.  The centre will be monitored by a faculty in the Assistant Professor Cadre.  He is assisted by technicians, and skilled contractual workers.  The financial accounting will be assisted by an Assistant.  The over-seeing of technical input will be by scientists of Post Harvest Technology Scheme of the University.  The overall management of the processing centre will rest with the Institute of Agricultural Marketing and Business Management. 

Project outcome

The proposed processing centre for value addition will serve as a unique centre in developing entrepreneurship among the unemployed youth, particularly, rural youths besides helping other interested groups such as farmers, Self Help Groups, entrepreneurs in urban areas, educational institutions, etc.  Besides, the centre will also serve as a value added technology centre for the visiting farmers to the University from time to time. 

The pilot scale processing centre can also serve as a custom service processing centre (mini processing park) for the interested farmers to get their products processed into packaged value added products on cost basis.

The quality control lab will assist in the process of improving the confidence of consumers by maintaining safety and quality of processed products. It also enables the food processors to have the nutrition labelling as per the new food laws.

Processing/Packaging Machineries for Agro-Processing Centre

The following is the list of equipments (Table 2) needed for the proposed agro-processing centre for value addition, which will have processing lines for cereals/pulses and horticultural crops.   About Rs. 200 lakh is needed, under Non Recurring Contingencies towards purchase of processing machinery and equipment.

Table 2   List of Processing Machineries and Equipment

HUMAN RESOURCES DEVELOPMENT CENTRE

Human resources development (HRD) is the most crucial element to be considered in agribusiness and entrepreneurship development. This is because human resources are not merely factor of production, but most importantly, the immediate participants of development.

§      To develop the capacity for acquiring knowledge on  science and technology in the direction as required  in  agribusiness system;

§      To develop entrepreneurship to become a reliable agribusiness stakeholders,

§      To enhance the capacity to develop teamwork in agribusiness management. His includes all those engaged in direct farm production activity as well as various stages of supply chain management. This also includes human resource development in related service sectors, such as government, banking and finance many other agribusiness services. The teamwork ensures a synergic relation among the categories of human resource, within agribusiness system.

characteristics of agribusiness sector are the strong interdependency between agriculture and industry. Agricultural production being biological activity, the profitability and the success demands judicious decision making employing high quality human resource. Various problems of inefficiency and the slow growth of the agribusiness sector in the past were due to the lack of well-equipped man power and harmonious teamwork. Economic participants in the upstream agribusiness system acting on their own interests, unwilling to notice the consequences of their action on the farm at primary level. Therefore, frequent economic conflicts prevailed within the agribusiness, hampering the growth and efficiency of the system. This was true even at the primary level agribusiness enterprises, which pursued their business   disregarding their e impact on the other sectors of the system, particularly the on the farming system. The condition was further worsened by the lack of integration of appropriate policy and application of the services demanded by agribusiness system.

With poor formal educational background, poor skills and multi-faceted agribusiness resources, it is not easy to develop a harmonious teamwork. In the past, the government and private sector normally provided job training after recruitment of employees. Nevertheless, it could meet the job necessities but not enough to build a harmonious and efficient work force to meet the complex challenges of the present day agribusiness. To develop efficient team-work the work force must develop knowledge and understanding on all micro and macro dynamics of agribusiness by involving at different levels of managerial decisions. To have such empowered human resources they shall be equipped with sound knowledge and skills including hands on training. . The essence of the on the job training is to develop expertise in different dimensions of business management. To achieve this, a well equipped training institute is necessary to offer the state of art agribusiness education and training in Karnataka.

In view of this it is contemplated to strengthen the existing department of Agricultural Marketing, Cooperation and Business Management of the University of Agricultural Sciences Bengaluru, by providing adequate infrastructural facilities and faculty improvement programmes. This will facilitate in providing quality education and training on agribusiness not only the stakeholders from Karnataka but also from across the country.

The quality and capacity of the university faculty is important to improve the creativity of the human resources, the participants of the agribusiness enterprises. The progress of the agribusiness system depends on the professionalism acquired by the agribusiness stakeholders. Therefore, various policies should be designed to make the agribusiness education and training functional effective having a specific target to develop agribusiness and agribusiness enterprises system. The agribusiness education must be addressed not only to farmers but also to the other agribusiness stakeholders. .

 Emerging Trend: Why Agriculture to Agri-business?

1.        Increasing demand for organic/quality food both in India as well as Abroad. Market growth of around 15-25 percent per year.

2.        Competitive advantages for many primary production activities in agriculture. Rain-fed farming, tropical fruits and vegetables, livestock, animal husbandry, aquaculture, wild craft, etc. are produced through real low cost production methods.

3.        Private sector is willing to enter into agri-businesses at all levels of operations. Changing consumer demand and retail revolution have open the doors for investments by private sector in agri-agribusinesses like Reliance, Bharti, Pantaloon, Carrefour, Food world, Spencer’s, Fab Mall etc.

Key Issues: Agriculture to Agri-business

1.        Policy issues: From absolute control and management of agriculture by Government, today it is being opened to public-private partnerships.

2.        Production technology issues: From input/s oriented technology development for increasing production, today practice based value addition is being promoted.

3.        Quality and certification issues: Demands from consumer/s for better quality has forced Government/s to establish regulatory mechanisms for quality certification.

4.        Logistics and supply chain issues: Modern retail formats requires efficient and dedicated supply chain management facilities.

5.        Human resource issues: Lack of appropriately trained human resource is today considered as the biggest constraint in conversion of agriculture to agri-business.

Key Challenges for HR Skill Development in Transforming Agriculture to Agri-business

1.        Agriculture to agri-business potential has neither been recognized by the academic/s nor is being promoted as a career making opportunity among practitioners.

2.        Region-location specific agri-business opportunities needs to be identified and accordingly suitable human resource training programs should be launched.

3.        Learning processes for human resource to be engaged in agri-business enterprises should be designed to suit the candidates as per the job requirements.

4.        The focus to upgrade the skills of conventional practitioners of agriculture into agri-business human resource will provide the missing links.

Status of Present Day Education in Agriculture

• Education is based on scientific developments carried out during 1950s to till date. Mostly candidates are trained in input based technologies and extension works.
• Focus on external inputs for increasing productivity. The skills for enabling value addition in agriculture are not imparted.
• Focus on government jobs (extension and research). Managerial skills are not included in the curriculum/s.
• Absence of value addition and supply chain management subjects. Even trained candidates do not learn the skills to manage agri-business enterprises.
• Accessible to careerists. For very long candidates joining these courses have mainly been attracted because of government jobs with total exclusion of practitioners wanting to create their own agri-business enterprises.

Agriculture to Agri-business Initiatives

• To develop implementable models for conversion of agriculture to agri-businesses covering complete value chain for different types of agri-business enterprises.
• To evolve methodologies for entrepreneurial initiatives for agri-business enterprises.
• To establish linkages for resource mobilization with banks and marketing channels.
• To transform conventionally educated human resource into agri-business managers. Through structured and unstructured learning methods.
• Innovative human resource skill development programs for HR needs in agri-businesses.

Components of HR Course/s: Agriculture to Agri-business

1. Basic Courses

• Organic/Quality Agriculture Practices
• Agriculture Product Marketing
• Food Quality Management
• Agri-Finance & Accounting
• International Marketing
• Export procedures, documentation and Management
• Technologies for Organic/Quality Production
• Value Addition in Agriculture
• Agri-entrepreneurship Development and Management
• Logistics and Supply Chain Management
• Organic/Quality Standards and Certification

2. Business Skill Courses

• Basic Language Skills
• Effective Communication
• Personality Development
• Business Soft Skills
• IT-ICT Applications

OBJECTIVES

Ř      Objective -1
To create institutional arrangements for outreach (extension), linkages and delivery of services by independent rural agribusiness entrepreneurs for a new collaborative farming model.

Activities:

1. Identification, Motivation and Counseling of prospective entrepreneurs.
2. Training, Capacity Building and Resource Mobilization for entrepreneurs.
3. Establishment of business linkages between the entrepreneurs and other      stakeholders.

Outputs

Ř       Farm families from villages of southern Karnataka will get covered.

Ř      Master Trainers will become Counselors cum Extension Agents i.e. the grass-root level interface.

Ř      Counselors, entrepreneurial units will deliver back-end program management services.

Ř      Entrepreneurial units will deliver both back-ends as well as front-end services.

Ř      Best practices would get documented and shared.

Outcomes (Short- and Long-Term)
• New and improved structure for grass-root level service delivery will be available to small holders.
• Innovative and strategic multi party partnerships managed by  entrepreneurs will come into existence.
• A sustainable and replicable model would be created.

Objective -2
To create IT-ICT backbone for convergence of technologies, stakeholders and services by information sharing.

Activities

Ř      An IT Service centre would develop, operate and manage user friendly IT-ICT Services Platform for data sharing between different stakeholders.

Ř      Affordable Telecom Services would be linked with this collaborative model for communication between stakeholders.

Outputs
• A Agribusiness entrepreneurs owned, managed and revenue earning IT-ICT service platform would be created.
• A decentralized and distributed network of  independent entrepreneurs as outreach workers would be available in  villages.
• Best practices would get documented and shared.

Outcomes (Short- and Long-Term)
• IT-ICT platform will improve the efficiencies of operations in Agri-business Value Chain.
• IT-ICT platform will expand other formal markets, e.g. financial services, banking, credit, etc.
• IT-ICT platform would find many more users of new services, making them to become standard services.

Objective -3
To introduce quality management, certification and marketing linkages.

Activities

Ř       A user-friendly quality control and operations management system would be created.

Ř       Linkage will be established with internationally accepted organic certification agencies for quality certification.

Ř      Marketing linkages under collaborative farming model will be established.
Outputs
• Quality oriented precision management practices would get adopted by the farmers.
• Cost of production will come down by 20-30 percent through better management of resource at farm level.
• Complete records acceptable to international certification agencies would get maintained.
• Organic farms deliver certified organic produce as a value added product.
• The complete output will find ready markets.
• All stakeholders i.e. producers, entrepreneurs and service providers will earn enough to sustain and grow.

Outcomes (Short- and Long-Term)
• Increased small holder access to information and knowledge.
• New and improved functioning of output markets.
• Improved access to market information and fair sharing arrangements.

Objective -4
To introduce technologies and practices for productivity improvement and sustainable outputs.
Activities

Ř       Low cost technologies (vermiculture technology and probiotics) will be introduced to meet 100 percent requirements of inputs and recycling of resources.

Ř      Gender sensitive practices would be introduced for social acceptable quality of life of the workers.

Outputs
• 100 % inputs for production will get produced on-farm.
• Fuel wood and animal dung used for household requirements will get replaced   by renewable biomass.
• Energy efficient methods of cooking will get adopted.
• Land degradation will get prevented.
• Sources of income from farm units will get diversified.
• Women will participate in decision-making.
• Better nutrition for the poor.
• Additional income will lead to better quality of life.

Outcomes (Short- and Long-Term)
• Increased farm level incomes.
• Diversity of incomes.
• Reduced risks from external factors and stabilized farm output prices.
• Improved productivity of inputs and reduction in cost of production.
• Improved capacities to organize and manage complex operations for certified organic production.
• Socially acceptable and better quality of life will be achieved.

HUMAN RESOURCE AND DEVELOPMENT TRAINING

     1. MBA (Agri Business management)

     2. PG Diploma in Retail Management

     3. PG Diploma in Commodity Trading

     4. PG Diploma in Import Export management

    5. Certificate course in Food testing certification

6. Certificate course in Supply chain management

7. Certificate course in retailing management

8. Certificate course in Value Addition

9. Certificate course in Food Processing

MARKET-LED EXTENSION UNIT

During last five and half decades, the main emphasis was on Production-led Extension resulting increased food and agricultural production. The extension system in India is essentially rural based and agriculture oriented. It provides closest link between the research and farmers through transfer of appropriate technologies for production.  Extension efforts are concentrated on production through productivity improvement and now there is shift towards marketing. Further, there is weak research –extension – farmer – market linkages

Agricultural Marketing in India has been undergoing structural changes owing to economic liberalization and globalization. Market driven economy has necessitated, reorienting of Government policies in order to strengthen agricultural marketing system in the country. Market is the focal point and price is the central theme of all marketing policies, aiming at improving agricultural marketing efficiency. In commercial agriculture, it is necessary for identification of markets and supply chain for high value crops before production begins. Market information is considered to be the key input based on which farmers plan for production, marketing and trading decisions. Dissemination of complete, accurate and up to date marketing information is essential to the farmers, market intermediaries, processors, exporters etc. that will enable them to plan and develop their own strategies. Hither to the Indian agriculture

The University of Agricultural Sciences, Bangalore in general and the Department of Agricultural Marketing, Co-operation and Business Management in particular, have its current marketing efforts through extension.  Further, various programmes concerned with market led extension was planned and implemented. The Department has highly qualified and motivated staff for disseminating market information through its extension network. Diversification triggered by the adequate market support provides greater opportunities for farmers both in domestic as well as international markets. It indicates the strong commercial sense of the farmers in marketing. The market-led extension is concerned with the following important areas to improve agri-business efficiency providing up to date market sensitive information.

§         Market - oriented production planning – contract farming- globalization of Indian Agriculture has resulted in the need for the production of export-oriented quality products having competitive advantage.

§         Direct marketing – motivating farmers to market their produce directly to processor, exporter, retail chain operator and wholesaler

§         Post harvest Management – through advanced technology for storage, processing, value addition, grading, and packaging of horticultural produce and eliminate losses.

§         Market Information Systems – print and electronic media are used to educate farmers on new marketing techniques, market news, radio, television, E-trading Agmarknet and ICT.

§         Farm Radio lecture series on Agri-business to enlighten farmers and to create linkage between farmers, business entrepreneurs and UAS in local language.

§         Audio and Video Cassette lessons – farmers can hear and see during leisure time.

§         Future Markets - considerable institutional and educational developments need to be undertaken for wider use.

§         Sanitary and phyto-sanitary regulation

Objectives

1. To educate on market oriented production technology to farmers,
2. To motivate farmers for diversification towards high value crops,
3. To educate farmers on recent marketing system and market intelligence to take decisions well in advance to produce appropriate crop,
4. To encourage farmers to take  up direct marketing with retail outlets and wholesalers,
5. To promote grading, standardization and quality certification of agricultural produce at farm / market level and
6. To follow appropriate post harvest practices and use of equipments.

Activities

A. Extension activities

1. Capacity building of farmers on market oriented production technology
2. Training on market oriented production planning
3. Training  on marketing  information system and market intelligence
4. Training on direct  marketing with retail outlets and wholesalers
5. Training on  grading, standardization and quality certification
6. Training on post harvest technologies including value addition
7. Exposure visits and farmer to farmer interaction session, awareness campaigns on efficient marketing practices.
8. Formation of Farmers’ interest groups, farmers’ organizations and SHGs.

B. Research activities

1.      Studies on training need assessment of farmers

2.      Research - Extension - Farmers linkage system for effective co-ordination

3.      Studies on post harvest technologies and  value addition methods

4.      Studies on changing consumer demand

5.      Studies on price forecasting

6.      Conducting case studies

C. Target groups

1. Farmers and farmers’ organizations

2. Local institutions

3. APMC secretaries

4. Market intermediaries

5. Krishik samaj

6. Self help groups

7. Non-governmental organizations

D. Outcome

1)      Establishing marketing and agro-processing linkages between farmers’ groups, markets and private processors.

2)      Educating the farming community to treat agri-business as an entrepreneurial activity and accordingly plan various phases of crop production and marketing.

3)      Market-led extension establishes its position by helping the farmers realize high returns for the produce, minimize the production costs, and improve the product value and marketability.

4)      Supporting and enhancing the capacities of locally established groups under various schemes / programmes like watershed committees, users groups, SHGs, water users’ associations and credit groups.

BUDGET

BUDGET SUMMARY