Mustard

Marketing

Agricultural Market Activities

• The product being marketed undergoes these activities to reach from the producer to the consumer.
• The three activities are:
  1. Collection
  2. Classification and Standardization
  3. Storage
  4. Transportation
  5. Distribution
  6. Finance arrangement
  7. Risk factor involved

Collection

• Local buyers, bullock cart owners or any other mediators collect the crop from the farmer to send it to either to wholesale dealers or consumer centers.
• Small quantities of the produce is collected from different farmers and collected at one place which helps in selling and process of the product.

Classification and standardization

• If the agricultural product is not uniform and clear its price reduces and the farmer bears a great loss.
• The product is classified according to variety, size and quality products according to the set norms and standards.

Advantages

• The producer gets a good price for his product.
• The consumer is satisfied about the quality of the product he is getting.
• Produce can be sold and can be purchased on the basis of pre examination and physical appearance.
• Products of similar grade can be stored in big quantities at one place.
• Prices of the product are the same at all the markets.
• Classified and standardized product can be sold easily.

Storage:

• The keeping of the product from the time of harvest till the consumer acquires it is called storage.
• Storage increases time utilization and opportunity to fetch a good price.
• Most of the agricultural products are stored at some time or the other before being marketed.

Advantages of storage:

• Storage maintains the balance between the supply and demand as supply is seasonal and demand is all through the year.
• Stored product can be sold at a higher price.
• It enables the consumer in bulk buying and cuts out on transportation costs.

Transportation:

• Transportation is the process of reaching the product from the place of production to the consumer.
• In India the common means of transportation for agricultural produce is Bullock carts, truck, tractor, goods train etc.
• Transportation costs vary according to the distance covered, quantity of the product and size of the product.
• Transportation costs can be reduced by improving the road conditions, processing the farm products on co-operative basis and by arranging a good mode of transportation.

Distribution:

• Distribution involves the activities that take place at the collection point to reach the products to the final customer.
• Agricultural products are consumed in small quantities but produced in large amounts so distribution is very necessary.
• Distribution fills the gap between the collection place and the consumer.

Finance Arrangement

• The finance and credit required to reach the product from the farm to the consumer is called Finance Arrangement.
• The farmer needs cash in lieu of their products but the product takes a long time to reach the consumer.
• In India the middleman organizes most of the finance.
• The consumer organizes the final finance of the market.
• The amount realized as the price of the product gets distributed between the middlemen and the farmer.

Risk Factor involved:

• The greatest risk in marketing is during the transportation of the produce.
• There is a risk of the produce being stolen, burnt, attacked by disease or pests etc.
• Precautions taken account for the maximum expenses in the market.

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Market Structure

Selling in villages:

• Most of the farmers sell a major portion of their produce in the village itself to the local merchants, vendors or in weekly or biweekly Haths.

Selling in the local fairs:

• There are around 1700 fairs based on agricultural products and animals in India every year.
• Farmers from nearby villages come to sell their ware.

Selling in Agricultural markets (Mandi)

• In Mandi the agricultural produce is sold or purchased in bulk they are wholesale markets.
• They are more prevalent in cities and urban areas.
• They can be in the form of either regular or irregular markets.

Selling through Co - operative societies:

• Co operative societies are on the rise in India now. They basically collect the product from their members and sell in big markets for better prices.

Government Purchase:

• The Government opens centers all over for the farmer to come and sell to the government agencies their products at the rates fixed by the Government.
• Government purchase is done through the government workers, co-operative societies and the Food Cooperation of India.

Selling through retailers:

• In cities retailers of agricultural products are found every where at times the farmer sells his products directly to them.
• Workers involved in Agricultural markets.
• To reach the agricultural produce to the consumer the produce is handled by different workers.

Village Merchant :

• Village merchants are known as Barriya or Mahajan. They are of two types,
  1. One who opens a shop in a particular village and buys the produce from the farmer.
  2. One who goes to different markets and buys the product from the farmer.

Commission Agents:

• They are also known as Aadatiya. They are of two types:
  1. Kaccha Aaditya: One who generally always favors or represents the farmer or the seller of the produce.
  2. Pakka Aaditya: one who generally favors or represents the buyer.
• These agents usually take commission from buyers and sellers for their services.

Shipper:

• This person keeps the information about different market trends etc. Hebuys products from one market and sells them in another one.

Dalal or Middleman:

• The Dalal is the person who introduces the buyer and seller to each other for which he gets rewards.

Weigher or Tola:

• This person does the weighing of the product that is sold or bought and in return he gets either a share of the product or cash.

Pallaydar:

• The handling of the bags of product is done by Pallaydars.He carries the bags in and out of the godown, loading and unloading the truck etc.

Wholesale Merchant:

• A wholesaler buys and sells products in bulk quantities. He has very good knowledge of the commodities being sold or bought.

Retailer:

• In the marketingchain the last link of the middleman is the retailer.
• He sells the product directly to the consumer.
• He buys and sells the products according to demand in small quantities.

Market Expense :

• The farmer and the buyer both have to bear many expenses in the market before they can sell or buy the product.Few of the expenses they have to bear are as follows:
• Aadalat expenses, Dalali (commission), Tulai (weighingcharges), Pallaydari (Bag carrying charges), Dharamda (Religious contributions), Cows barn charges etc. Other than these expenses the seller and the buyer have to pay many more charges:
  1. Chidai (Sample charge): To gauge the quality of the product many samples are taken from the bags which eventually reduces the weight of the product. The buyer cuts some percentage. Known as chidai. This varies in different markets.
  2. Fanki (Cleaning charges): In order to get the products cleaned the farmer has to pay some part of the product or money to the buyer. This is known as Faunki.
  3. Karda (Foreign material charges): The agricultural product has some foreign particles in the form of soil particles, weed seeds etc. A certain percentage of the product is reduced in lei of their presence. This is known as Karda.
  4. Muddat (Interest): The Aaditya mostly cannot sell the bought product immediately but has to pay the farmer for the product at hand. He usually borrows this money either from a bank or other sources on interest. This Amount is cut in the form of a portion of the product known as Muddat.

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Marketing Channel Of Mustard Oil

• The small part of Mustard oil routed through refineries mainly goes through brokers.
• The channel is refineries-Whole-salers-retailers-consumers.
• The bulk of the oil, which is only filtered, goes through the brokers-wholesalers-retailers-consumers for sale within the state.
• For outstation sales, the channel is broker-commission agent-wholesalers-retailers-consumers.

Brokers:

• Brokers arrange the business between buyers and sellers either through commission agents or on their own.

Commission agent:

• The major portion of oil is sold through the commission agent. Mostly all business outside the state is done through the commission agent.
• Commission agents purchase oil from the millers.
• The marketing costs including commission, sales tax, packing, etc., are borne by the miller.
• The commission agents arrange transport and other facilities for delivering the oil to a wholesaler (outstation) either by rail or by road.

Wholesaler:

• The wholesaler buys mustard oil either directly from the miller or through a commission agent or a broker, and in turn sells to another intermediary or to the final user.
• Most of the wholesalers have their own retail outlets and do multiple functions, that is, wholesaling as well as retailing.
• In wholesaling as well as bulk retailing business, they arrange delivery to the consumers door at their cost.
• Normally, a wholesaler never keeps stock for a long time because in the oil business rotation of money is more remunerative than stocking.

Retailers:

• The retailers usually deal with a variety of household and consumer goods.
• They buy a small quantity .
• They keep the stock of not only one brand but also many brands, and in large number of cases.
• Oil is sold in loose form. Maximum sales of oil are between December and March.

Marketing channel of Mustard Oilcake and Deoiled cake:

• After oil is extracted, the oil cake goes to a solvent extraction unit either directly or through a broker.
• The major portion is handled by brokers.
• A major portion of deoiled cake is exported.
• Two channels operate in the domestic market for deoiled cake.


• Producer to final user through broker.
• Producer through broker to wholesaler to retailer to the final user.

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Processing of Mustard

• Mustard is processed by the organised and unorganised traditional sectors. It is estimated that about one-seventh of the output is crushed by the unorganised sector.

Village Ghanies

• The ghanies are driven by bullocks and these are mostly used in rural areas.
• They vary in size and detail of construction but in all cases the principle of operation is the same:a pestle rotating in a mortar.
• Oil is extracted within the mortar as a result of friction caused by the revolving pestle.
• The capacity varies from 8kg to 25 kg per charge depending on the size of the mortar.
• It takes two to three hours to crush a charge and three to five charges can be handled in a day.
• Some of the imporved ghanies can crush a charge in less than one hour.
• Oil yield from ghanies is generally five percent less than that from expellers.

Oil Mills

• Oil Mills are very similar to ghanies but are operated by power. The usual capacity of a mill is 10 to 15 kg per charge which is crushed in 20 to 30 minutes.
• An expeller consists of a flight of steel worms on a shaft revolving inside a steel cage.
• The worms are so arranged as to produce a gradually increasing pressure on seeds.
• Oil is expelled through perforation in the steel cage and the cake comes out from the opposite end.
• The expeller cake has an oil content of about 7 percent.

Solvent Extraction plants:

• In a solvent extraction plant oil bearing material is brought into contact with a solvent (hexane) to release the entrapped oil.
• To achieve complete extraction, the solvent is percolated several times.
• This process is extremely useful for oil cakes having very low oil content which cannot be extracted otherwise.

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Bottleneck Of Present Agricultural Markets:

• Producers are not united : The producers of the agricultural products are not united but the buyers are very well united .This results in the farmer selling their product at a fairly low price in order to get rid of the product.
• Forced selling: Due to the shortage of storage place at the farmers place he is forced to sell off his product. He also sells the product in order to clear the debts and fulfill other expenses.
• Insufficient and non scientific storage: Insufficient and non scientific methods that are adopted by the farmer to store his agricultural produce results in decay of the agricultural produce or infection by insect pests. So the farmer sells off his product as soon as possible.
• Lack of transportation and outdated modes : Due to the problems in transportation during the rainy season the farmer tends to sell off his product early or in the village market itself at lower prices.
• Lack of knowledge about price of the product: Being unaware of the present market trends the farmer sells off his product at whatever price is offered to him at the village market itself.
• Large number of middlemen: According to a survey done by the Government of India it was found that in each rupee paid by the consumer the farmer gets 52 paise for rice, 61paiase for wheat, 62 paise for linseed 50 paise for potato and 47 paise for groundnut.
• Lack of grading and certification: Grading and certification of the agricultural products enables the farmer to get the exact amount his product is worth.
• Lack of financial facilities to the producer: The government or the cooperative societies have not come up with any concrete steps to offer credit to the farmer. As a result the farmer is forced to take credit on very high rates from moneylenders and middlemen.
• Lack of resting places in the city markets: Due to lack of resting places the farmer cannot stay in the city overnight and has to sell his product and go home at whatever price he gets.
• Loot at the markets:There are no standard weights or balances. A large portion of the product is taken as sample. Mediator and consumer settle the price secretly and the farmer is not aware of the current rates. The dalal although supposed to be represent of the farmer favors the commission agent due familiarity of being in the same market.The buyer has the upper hand in the market and there is no one to support the cause of the farmer. A lot of the earnings are forcefully taken from the farmers meager earnings in the form of contributions towards religious places and social activities.

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