Rice

Marketing

Introduction Marketing Channels

Introduction

In Tamilnadu, paddy is marketed in three different ways viz.,

    • Tamilnadu Civil Supplies Corporation (TNCSC)
    • Whole sale Dealers
    • Retail merchants

    • Every year, Government of Tamilnadu issues suitable amendment for the parallel procurement or compulsory procurement of paddy through TNCSC in the state. Paddy is mainly cultivated in Thanjavur, Nagapattinum, Thiruvarur districts and Chidambaram and Kattumanarkoil Taluks in Cuddalore district and Lalgudi Taluk in Trichy district.
    • The paddy cultivated in these areas is being procured by the TNCSC after kuruvai, thaladi and samba seasons to meet the demand in public distribution system and other government needs.
    • The procurement price of paddy for various varieties is fixed by the Government based on the Central Government minimum support price.
    • Depending upon the moisture content the procurement price may vary. But in general to help the farmers TNCSC procure the paddy even if it is affected by unexpected range at the time of harvest.
    • Government of Tamilnadu usually allow the system of parallel procurement of paddy in the above places.
    • Parallel procurement system means farmers are free to sell their paddy in the open market and TNCSC.
    • "An incidental expenses" at the rate of Rs.40/- per quintal is given to the farmers for ordinary and A grade variety of paddy over and above the Central Government minimum support price.
    • State Government minimum support price (MSP) as on 31.08.09 for the year 2009-10 is
      • MSP for common variety=Rs. 950/quintal and MSP for A grade variety=Rs. 980/quintall
    • In all other places farmers are free to sell their produce to either regional centres (Govt.) whole sale dealer or miller or retail merchants.
    • Depending upon the demand and supply the price will fluctuate from time to time for different varieties.

Top

Marketing Channels

The following are some of the important marketing channels existing in the marketing of paddy/rice.

Based on assured return to producer, transportation cost, commission charges and market margins, financial resources, length of the channel etc an efficient marketing channel should be selected.

  • Producer (farmer) - TNCSC
  • Producer - Middle men - TNCSC - Public distribution system - Consumer
  • Producer- miller- consumer (village sale)
  • Producer- miller-- retailer- consumer (local sale)
  • Producer- wholesaler- miller- retailer- consumer
  • Producer- miller-cum-wholesaler- retailer- consumer
  • Producer- village merchant- miller- retailer- consumer
  • Producer- govt. procurement- miller- retailer- consumer
  • Producer - Middle men - Whole sale dealer - Retailer - Consumer
  • Producer - Middle men/Commission agent - Miller - Other states - Consumer.
  • Producer - Middle men/Commission agent - Miller - Wholesaler - Retailer - Consumer.

Apart from these channels some alternative channels for marketing also available. They are:

Direct marketing - involves marketing of produce i.e. paddy/rice by the farmers directly to the consumers/millers without any middlemen. This ensures good profit to the producer and better quality at a reasonable price for the consumers.

Contract marketing - the commodity is marketed by farmers under a pre-agreed buy-back contract with an agency engaged in trading or processing. In contract marketing, a producer will produce and deliver to the contractor, a quantum of required quality of produce, based upon anticipated yield and contracted acreage, at a pre-agreed price. In this agreement, agency contributes input supply and renders technical guidance. The company also bears the entire cost of transaction and marketing.

Cooperative marketing - a group of producers join together and register them under respective State Cooperative Societies Act to market their produce jointly. The members also deal in a number of cooperative marketing activities i.e. processing of produce, grading, packing, storage, transport, finance, etc. The cooperative marketing means selling of the member's produce directly in the market, which fetches best prices.

Forward trading - an agreement or a contract between seller and purchaser, for a certain kind and quantity of a commodity for making delivery at a specified future time, at contracted price. The Forward Markets Commission (FMC) performs the functions of advisory, monitoring, supervision and regulation in future and forward trading. Forward trading transactions are performed through exchanges owned by the associations registered under the Act. These exchanges operate independently under the guidelines issued by the FMC.

Future contracts are usually entered under the auspices of an Exchange or Association. In the futures contracts, the quality and quantity of commodity, the time of maturity of contract, place of delivery etc. are standardised and contracting parties have to negotiate only the rate at which contract is entered into.
These methods ensure price stability and competition.

Top

Tamilnadu