1

COMPARATIVE EVALUATION OF PARTICIPANTS

SATISFACTION AND PERCEPTION IN CASTOR TRADE:

NSEL VIZ A VIZ APMC

PROJECT SUBMITTED TO THE

INSTITUTE OF AGRIBUSINESS MANAGEMENT

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF

THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

(AGRIBUSINESS MANAGEMENT)

2009-10

INSTITUTE OF AGRIBUSINESS MANAGEMENT

NAVSARI AGRICULTURAL UNIVERSITY

NAVSARI – 396 450

BY:

KARKAR HITESHKUMAR KALUBHAI

(04-0409-2008)

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DECLARATION BY STUDENT

I hereby declare that the project entitled

“COMPARATIVE EVALUATION OF PARTICIPANTS

SATISFACTION AND PERCEPTION IN CASTOR

TRADE: NSEL VIZ A VIZ APMC FOR NATIONAL SPOT

EXCHANGE LTD.” submitted for the

M.B.A.(Agribusiness) Degree is my original work and the

dissertation has not formed the basis for the award of any

degree, associate ship, fellowship or any other similar

titles.

Place: IABM, Navsari

Date: 10th

June, 2010

Karkar Hiteshkumar Kalubhai

Rg. No. 04-0409-2008

3

INSTITUTE OF AGRIBUSINESS MANAGEMENT

NAVSARI AGRICULTURAL UNIVERSITY

NAVSARI-396 450

CERTIFICATE

This is to certify that the project entitled “COMPARATIVE

EVALUATION OF PARTICIPANTS SATISFACTION AND

PERCEPTION IN CASTOR TRADE: NSEL VIZ A VIZ APMC FOR

NATIONAL SPOT EXCHANGE LTD.” is the bonafide research work

carried out by Karkar Hiteshkumar Kalubhai (04-0409-2008) student of

M.B.A.(Agribusiness) during the year 2009 -2010, in partial fulfillment of

the requirements for the award of the Degree of Master of Business

Administration(Agribusiness) under my guidance and supervision and that

the project has not formed the basis for the award previously of any degree,

diploma, associate ship, fellowship or any other similar title.

Place: Navsari

Date: 10th

June, 2010

Prof. Rahul Thakkar

Asst. Professor

IABM, Navsari

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CERTIFICATE

This is certify that

Mr. Karkar Hiteshkumar Kalubhai,

Student of MBA (Agribusiness management)

4th semester in the

Institute Of Agribusiness Management,

Navsari Agricultural University, Navsari

has successfully completed his

PROJECT WORK

on

“COMPARATIVE EVALUATION OF PARTICIPANTS SATISFACTION AND PERCEPTION IN CASTOR TRADE: NSEL VIZ A VIZ APMC”

in

National Spot Exchange Limited

Mumbai,

during February-April, 2010.

Anjani Sinha

MD & CEO (NSEL)

National Spot Exchange Limited

102 A, Landmark, Suren Road, Chakala, Andheri(East), Mumbai 400 093, India.

Tel:+91-22-6761 9900, Fax:+91-22-6761 9931

Email:info@nationalspotexchange.com www.nationalspotexchange.com

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ACKNOWLEDGEMENT

A good project work requires sound knowledge of the subject

concerned and skilled to make proper use of this knowledge. I am very

grateful to all who equipped me with the right frame of mind to make me

still more receptive to such knowledge and skill.

I am grateful to Mr. Amit Mukherjee, Asst. Manager, Business

Development, National Spot Exchange Ltd. for giving me permission to

undertake my summer project. I express my sincere thanks to Mr. Kiran

Patel, Business Development, National Spot Exchange Ltd, Palanpur who

helped me throughout my summer training period and instruct me

regarding the methodology of carrying out the training. I am also thankful

to staff of NSEL at Palanpur for their kind support during the entire period

of my training.

I am thankful to Dr. R. R. Shah, Dean, IABM, Navsari for his

guidance, continuous support and cooperation throughout my training,

without which the present work would not have been possible.

I am greatly indebted to Mr. Rahul Thakkar, my institutional

project guide for availing me of his competent guidance under which I was

able to accomplish my project work successfully. I am also Thankful to

faculty of my institute Dr. Ruchira Shukla and Dr. Alpesh Leua for their

wholehearted support for the completion of the project.

I am grateful to all the respondents (Farmers) without their kind

cooperation it would not be possible for me to complete my project work.

Also, I would like to thank to all my Friends.

And my beloved Parents

Karkar Hiteshkumar Kalubhai

(04-0409-2008)

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PREFACE

MBA (Agribusiness) is the stepping stone to management career. In

order to achieve practical, positive and concrete result, the classroom

learning has to be effectively supplemented to relation of the situation

existing outside the classroom for developing healthy managerial and

administrative skills in a potential manager. It is necessary that the

theoretical knowledge must be supplemented with exposure to the real

environment.

The report comprises all the important aspects of my training and all

the aspects have been presented under different headings in the

forthcoming pages. An attempt had been made to present a report covering

different aspects of my training.

This report would not have been possible in present form without the

support and guidance that I received from various people at different stages

of the project.

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CONTENTS

Sr. No. Particulars Page No.

Chapter 1 Industry Profile 1

Company Profile 15

Chapter 2 The Project 30

Introduction 31

Objectives of the Study 40

Literature review 42

Chapter 3 Research Methodology 43

Chapter 4 Data Processing and Analysis 47

Farmers analysis 48

Chapter 5 Findings and Recommendations 80

Findings 81

Recommendations 84

Conclusion 88

Bibliography 89

Annexure 91

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List of Tables

Table No. Particulars Page No.

4.1 Age group of Farmers 48

4.2 Education Level of Farmers 49

4.3 Income source of farmers 50

4.4 Farming as major Income source 51

4.5 Annual Income of the farmers 52

4.6 Distribution of Farmers as per Land holding size 53

4.7 Irrigation Pattern 54

4.8 Crops cultivated by the farmers 55

4.9 Farmers group as per cropping pattern 56

4.10 Market preference by farmers for sale of produce 57

4.11 Crop wise Market Preference by Farmers 58

4.12 Factors considered for Market Preference by farmers 59

4.13 Sources of Price Information 61

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4.14 Farmers Awareness about NSEL 62

4.15 Farmers awareness for Promotional Activity by NSEL 63

4.16 Sources of Awareness about NSEL 64

4.17 Farmers ever Deal with NSEL 65

4.18 Reasons for why Farmers prefer to deal with NSEL 66

4.19 Reasons for why Farmers not deal with NSEL 67

4.20 Satisfaction Level of Farmers when dealt with NSEL 68

4.21 Farmers ready to deal with NSEL again in Future 69

4.22 Farmers who used other services of NSEL 70

4.23 Farmers Perception about NSEL 71

4.24 Impact of NSEL on the income of farmers linked with

NSEL

72

4.25 Does NSEL really follow what it said in marketing

campaign?

73

4.26 Farmer’s opinion about need for improvement in the

System of NSEL

74

4.27 Areas for Improvement in the system of NSEL 75

4.28 Effects of NSEL to Farmers 76

10

4.29 Business Opportunity available for NSEL as perceived

by farmers

77

4.30 Are there any competitors for NSEL 78

4.31 Competitors of NSEL 79

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LIST OF FIGURES

Fig. No. Particulars Page No.

2.1 World castor seed Producers 35

2.2 Castor seed production Trend in India 35

2.3 Castor seed production (India & Gujarat) 36

2.4 Estimated area under castor seed crop, India (2009-10) 37

2.5 Estimated castor seed production, India (2009-10) 37

2.6 Estimated castor seed yield, India (2009-10) 38

2.7 Estimated castor seed production, Gujarat (2009-10) 38

2.8 Estimated area under castor seed crop, Gujarat (2009-10) 39

2.9 Estimated castor seed yield, Gujarat (2009-10) 39

4.1 Age group of Farmers 48

4.2 Education Level of Farmers 49

4.3 Income source of farmers 50

4.4 Farming as major Income source 51

4.5 Annual Income of the farmers 52

4.6 Distribution of Farmers as per Land holding size 53

4.7 Irrigation Pattern 54

4.8 Crops cultivated by the farmers 55

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4.9 Farmers group as per cropping pattern 56

4.10 Market preference by farmers for sale of produce 57

4.11 Crop wise Market Preference by Farmers 58

4.12 Factors considered for Market Preference by farmers 60

4.13 Sources of Price Information 61

4.14 Farmers Awareness about NSEL 62

4.15 Farmers awareness for Promotional Activity by NSEL 63

4.16 Sources of Awareness about NSEL 64

4.17 Farmers ever Deal with NSEL 65

4.18 Reasons for why Farmers prefer to deal with NSEL 66

4.19 Reasons for why Farmers not deal with NSEL 67

4.20 Satisfaction Level of Farmers when dealt with NSEL 68

4.21 Farmers ready to deal with NSEL again in Future 69

4.22 Farmers who used other services of NSEL 70

4.23 Farmers Perception about NSEL 71

4.24 Impact of NSEL on the income of farmers linked with

NSEL

72

4.25 Does NSEL really follow what it said in marketing

campaign?

73

4.26 Farmer’s opinion about need for improvement in the

System of NSEL

74

13

4.27 Areas for Improvement in the system of NSEL 75

4.28 Effects of NSEL to Farmers 76

4.29 Business Opportunity available for NSEL as perceived by

farmers

77

4.30 Are there any competitors for NSEL 78

4.31 Competitors of NSEL 79

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EXECUTIVE SUMMARY

National Spot Exchange Ltd is electronic spot market. The foundation

stone for National Spot Exchange was laid on 10th February, 2005 in New

Delhi in a function presided over by Shri Sharad Pawar, Honorable Union

Minister for Agriculture and Consumer Affairs, Food and Public

Distribution.

The project work on “A Study on the Comparative evaluation of

Participants Satisfaction and Perception in Castor trade: NSEL viz a viz

APMC” was carried out under the guidance of Project Guide Mr.Amit

Mukherjee , Asstt. Manager NSEL, Palanpur, Gujarat and Faculty Guide

Prof. Rahul Thakkar, IABM, Navsari.

The objectives of the project were to study the satisfaction and

perception of participants in castor trade and market share of NSEL in

castor trade and the effectiveness of marketing strategies of NSEL. The

Project also aimed to conduct strength, weakness, opportunity and Threats

analysis for NSEL.

A survey of 600 farmers was carried out to study the objectives stated

above. For the collection of primary data questionnaire was used. Recent

secondary data from internet, magazine, and internal record of NSEL was

collected.

The major finding which came out of my study are in Palanpur taluka

majority of the farmers is highly satisfied with NSEL and perceive it as

Government-Private partnership. Close competitor of NSEL are traders and

APMC.

Based on the above analysis NSEL should increase their promotional

activities to create mass awareness among farmers in the other villages of

Palanpur taluka. Also it should start multi-commodity trading in order to

expand its operations in the North Gujarat.

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CHAPTER- 1

PROFILE OF COMMODITY

MARKET

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INDUSTRY PROFILE

Agriculture is key sector occupying an important position in the

Indian Economy. The agriculture sector contributes almost 17% of India’s

Gross Domestic Product (GDP). The effective contribution of agriculture to

the national economy is far greater on account of its backward and forward

linkage with other sectors.

MICROSTRUCTURE OF PHYSICAL COMMODITY

MARKETS

All agricultural commodities in India trade in wholesale markets or

mandis where the price of the commodity is set. If it is a principal

commodity and the market determined price is below a threshold (MSP),

the trader has to take delivery at the MSP. In return, the trader is

compensated by the mandi which is in turn, compensated by the

government. Some of the principal crops are rice, wheat, pulses, oilseeds,

cotton and sugarcane. Today, there are approximately 25 agricultural

commodities for which the government of India still sets a “minimum

support price” (MSP).

Agricultural commodity markets in India started as areas specific to

limited geographical locations where producers and buyers collected to

trade their goods. APMC or Mandis are official markets set up at a specific

location to trade a set of agricultural commodities. They are sanctioned and

“governed” by a mandi board which can be a committee or a trust. These

are, in turn, governed by a state government state mandi board. Most

mandis trade at least one primary commodity. The physical infrastructure

of the mandi consists of a yard with platforms or open sheds where farmers

bring their crops to sell to traders.

Mandis are set up only with the permission of state governments.

Each state has a state agriculture marketing boards (SAMB). These, in turn,

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set up mandi boards at the level of a district. It is the mandi board that

evaluates proposals to set up new mandis and permits the creation of a

mandi.

Initially, mandis were set up only at the level of a specific district.

But their numbers have been rapidly increasing to allow trading at a more

micro-level. Today there are several mandis to a district, with around 750

mandis that facilitate the trade of 140 crops and their different varieties, all

across India. Most mandis in the same district trade a very similar set of

commodities in the same district. This makes for a very fragmented market

for any single agricultural commodities across the vast geographical reach

of India

India exports castor seed, oil and also meal. However the oil export

has the largest share as it is a value added product from castor seed. There

is a large scope for improving India’s earning from castor by converting the

castor oil in various derivatives. However, India has confined itself to

exporting only castor oil with little efforts to explore the possibilities of

producing and exporting its derivatives. But in countries like Brazil and

China, its derivatives are being produced and exported though to a limited

quantity. Lately in view of high price volatility and stagnant world output

of castor oil, its substitutes have been developed.

India is the world’s largest Castor grower country dominating the

global trade with a share of more than80%. Despite the dominance in the

global trade platform, India does not enjoy role of a price-setter, but merely

a price-taker. India has limited domestic consumption with less than 10%

production going for a value addition. The main consuming segments are

Paints (45%), Soaps (30%) and Lubricants (20%).

In India castor seed is grown mainly in Mehsana, Banaskantha and

Saurashtra-Kutch region of Gujarat and Nalgonda and Mahboobnagar

districts of Andhra Pradesh. India exports around 3 lakhs tonne of

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commercial castor oil mainly to USA, Europe and Japan. Though the

production of castor seed is concentrated in Gujarat and Andhra Pradesh,

its consumption is spread across the country. The major castor seed

markets in Gujarat are Rajkot, Ahmedabad, Gondal, Gadwal, Bhabar, Disa

and Kadi while in Andhra Pradesh they are Jedcheria and Yemignoor.

REGULATORY FRAMEWORK OF PHYSICAL

COMMODITY (SPOT) MARKETS

Agriculture continues to be the mainstay of life for a majority of the Indian

population even though its contribution as a percentage of the GDP has

decreased to 17%. The agricultural sector employs more than 60% of the

country's workforce. Significant strides have been made in agriculture

production since Independence. The subject of agriculture and agricultural

marketing is dealt with both by the states as well as the central government.

Starting from 1951, the different Five-Year Plans laid stress on the

development of physical markets, farm and off-farm storage structures,

facilities for standardization and grading, packaging, transportation, etc. The

development of horticulture marketing attracted attention of policy makers

during the 3rd Five-Year Plan. In 1965, Central Warehousing Corporation,

Food Corporation of India, Agricultural Prices Commission (later renamed

as Commission for Agricultural Costs and Prices) and several other

organizations came into existence. Besides, a number of organizations were

set up in the form of commodity boards, cooperative federations, and export

promotion councils for monitoring and boosting the production,

consumption, marketing, and export of various agricultural commodities.

The prominent among them included Cotton Corporation of India Ltd (CCI),

Jute Corporation of India Ltd (JCI), National Cooperative Development

Corporation Ltd (NCDC), National Agricultural Cooperative Marketing

Federation ltd (NAFED), National Tobacco Growers Federation ltd (NTGF),

Tribal Cooperative Marketing Development Federation ltd (TRIFED),

National Consumers Cooperative Federation ltd (NCCF), etc for

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procurement and distribution of commodities; and Tea Board, Coffee Board,

Coir Board, Rubber Board, Tobacco Board, Spices Board, Coconut Board,

Central Silk Board, National Dairy Development Board (NDDB), National

Horticulture Board (NHB), State Trading Corporation (STC), Agricultural &

Processed Foods Export Development Authority (APEDA), Marine Products

Export Development Authority (MPEDA), Indian Silk Export Promotion

Council, Cashew nuts Export Promotion Council of India (CEPC), etc. for

promotion of production and export of specific commodities.

Most agricultural commodity markets generally operate under the

normal forces of demand and supply. However, as discussed earlier, with a

view to protecting farmers' interest and to encourage them to increase

production, the government also fixes minimum support/statutory prices for

some crops and makes arrangements for their purchase on state account

whenever their price falls below the support level. The role of the

government normally is limited to protecting the interests of producers and

consumers only in respect of wage goods, mass consumption goods, and

essential goods. The role of the government is to promote organized

marketing of agricultural commodities in the country through a network of

regulated markets. To achieve an efficient system of buying and selling of

agricultural commodities, most of the state governments and union

territories have enacted legislations (Agriculture Produce Marketing

Committee Act) to provide for regulation of agricultural-produce markets.

The basic objective of setting up a network of physical markets is to ensure

a reasonable gain for the farmers by creating a favourable environment for

fair play of supply and demand forces, regulation of market practices, and

transparency in transactions. With a view to coping with the increasing

agricultural production, the number of regulated markets has also been

increasing in the country. While by the end of 1950 there were 286

regulated markets in the country, today the number stands at 7521. The

central government advised all the state governments to enact a marketing

legislation to promote competitive and transparent transactional methods to

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protect the interests of farmers. Barring a few, most of the states and union

territories have embarked upon a massive programme of regulation of

markets after enacting the legislation. Most of these regulated markets are

wholesale markets. Besides, the country has 27,294 rural periodical

markets, about 15% of which function under the ambit of the regulation.

The advent of regulated markets has helped mitigate e market handicaps of

producers/sellers at the wholesale assembling level. But, the rural periodic

markets in general, and the tribal markets in particular, remained out of its

developmental ambit. The area served by each market across the states

reveals large variations. The area served per regulated market varies from

74 in Punjab to 2257 in Assam. On an average, a regulated market serves

459 in the country, which is quite high. Farmers have to travel long

distances with their produce to avail the facility of regulated markets. The

National Commission on Agriculture (1976) had recommended that the

facility of a regulated market should be available to the farmers within a

radius of 5 km and if this is considered a benchmark, the command area of

a market should not exceed 80. However, in the existing scenario, except

Delhi, Punjab, Chandigarh and Pondicherry, in no state is the density of

regulated markets close to the norm. Auction platforms are needed in the

market for price settlement of the produce in a congenial atmosphere

between buyers and sellers. Both covered and open auction platforms exist

in only two-thirds of the regulated markets. When some commodities that

are brought for sale contain higher moisture than the desired level, there

should be a space for drying. Present only one-fourth of the markets have

common drying yards. Trader modules viz. shop go-down and platform in

front of shop exist in 63% of the markets. Cold storage units are needed in

the market where perishable commodities are brought for sale. They are

brought for sale only in a few markets. The cold storage units exist only in

9% of the markets and grading facilities exist in less than one-third of the

markets. The basic facilities such as internal roads, boundary walls, electric

lights, loading-unloading facilities, and weighing equipment are available

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in more than 80% of the markets. Farmers’ rest houses exist in more than

half of the regulated markets. All this shows that there is considerable gap

in the facilities available in the market yards.

As mentioned earlier, agricultural markets in most parts of the

country are established and regulated under the State APMC (Agriculture

Produce Marketing Committee) Act. The whole geographical area in each

state is divided and declared as a market area wherein the markets are

managed by Market Committees constituted by the state government. Once

a particular area is declared a ma _ area and falls under the jurisdiction of a

Market Committee, no person or agency is allowed to free carry on

wholesale marketing activities. The monopoly of government regulated

wholesale market has prevented the development of a competitive

marketing system in the country, providing no help to farmers in direct

marketing, organizing retailing, smooth supply of raw materials to agro-

process industries, and adoption of innovative marketing system and

technologies.

Efficient agricultural marketing is essential for the development of

the agriculture sector as it provide outlets and incentives for increased

production; the marketing system contributes significantly to the

commercialization of subsistence farmers.

Worldwide, governments have recognized the importance of

liberalized agricultural markets. Ta Force on Agricultural Marketing

Reforms, set up by the Ministry of Agriculture, has suggested promotion of

new and competitive agricultural markets in private and cooperative sectors

to encourage dire marketing and contract farming programme, facilitate

industries and large trading companies undertake procurement of

agricultural commodities directly from the farmer's fields, and establish

effective linkages between the farm production and retail chains. There is a

necessity to integrate farm production with national and international

8

markets to enable farmers to undertake a market-driven production plan

and adopt modern marketing practices.

If agricultural markets are to be developed in private and cooperative

sectors and provided competitive environment as compared to regulated

markets, the existing framework of the APMC will have to undergo a

change. The state has to facilitate varying models of ownership of markets

accelerate investment in the area and enable private investment in owning,

establishing, and opera markets. Working of existing government regulated

markets also needs to be professionalized promoting public-private

partnership in their management. An appropriate legal framework is a

required to promote direct marketing and contract farming arrangements as

alternative marketing mechanism. Therefore, there is a need to formulate a

new model law for the agricultural market.

THE COMMODITY MARKETS ECOSYSTEM INCLUDES

THE FOLLOWING COMPONENTS:

1. Buyers/Sellers or Consumers/Producers: Farmers, manufacturers,

wholesalers, distributors, farmers’ co-operatives, APMC mandis, traders,

state civil supplies corporations, importers, exporters, merchandisers, oil

refining companies, oil producing companies, etc.

2. Logistics Companies: Storage and transport companies/operators, quality

testing and certifying companies, valuers, etc.

3. Markets and Exchanges: Spot markets (mandis, bazaars, etc.) and

commodity exchanges (national level and regional level)

4. Support agencies: Depositories/de-materializing agencies, central and state

warehousing corporations, and private sector warehousing companies

5. Lending Agencies: Banks, financial institutions

9

CURRENT STATUS OF AGRICULTURAL

MARKETING

Consequent upon Green Revolution, production has increased; India

has become largest producer or exporter in a number of commodities, but

still farmers were committing suicide. APMC laws were created to ensure

good prices for the farmers through open auction system, but on contrary, it

has created monopolistic scenario i.e. only Government can create APMCs,

private mandis are not allowed. Only APMC license-holders can buy from

farmers, end users cannot buy from the farmers directly. Markets were

designed to be regionalized and fragmented which is against the basics of a

structured market place. There is a need to create a national level electronic

10

transparent spot market, which can lead to development of structured

mechanism for marketing of agriculture produce.

WHY ELECTRONIC SPOT EXCHANGE?

Economic liberalization and emphasis on Public Private Partnership

are already revolutionizing agriculture market and agriculture marketing.

India is looking forward to having a double digit growth rate which can

only be achieved if the income disparity between farmers and other sectors

of the economy is narrowed through a market centric approach. There is a

need to improve purchasing power of farmers through income from their

farm and non-farm economic activities. Currently, farmers sell their

produce through mandies (agricultural markets) which are controlled and

regulated by respective state governments. Out of 28090 rural markets

(Whole sale 6359; Rural Primary 21731) only 7557 markets (Principal

2428; Sub markets 5129) are regulated by Agriculture Produce Marketing

Regulation Acts of various states. In regulated markets, produce can only

be sold in government recognized locations and only to authorized agents.

It is a known fact that the farmer gets only a small fraction of what

ultimate consumer pays for agriculture commodities and 8-20% of their

income is consumed in servicing intermediaries in the form of commission,

interest burden, transportation and warehousing charges etc. The chain of

intermediaries in Indian agriculture market is one of the longest in the

world. A major portion of the loss in value of commodities due to

wastages, pest attack, transportation, storage, handling etc. is again borne

by the farmer. Despite efforts made by the governments these mandies are

marred by inefficiencies, dominance of commission agents etc. Therefore,

the focus of growth in rural economy has to shift from production to

processing and marketing of agriculture produce. Although, some of the

governments have given permission to agencies (e.g. ITC, Cargill etc,) to

operate as private mandies, problems related to transparency and fair price

11

discovery persist. Therefore, NCEL has taken up an initiative to launch a

National Spot Market. Such a national level platform would help transcend

regional and state boundaries and pave the way for participation by

concerned entities irrespective of geographical locations. The farmer would

stand empowered by virtue of the electronic platform which would extend

the reach to buyers across the length and breadth of the country.

A mandi typically serves 100 to 1000 square kilometer area. Mandi is

the delivery point where farmers bring their produce directly or through

village agents for sale to traders. Trading in mandies is conducted and

controlled by commission agents called Adatiyas who have extensive

personal network and financial influence on farmers.

ADATIYAS ARE OF TWO TYPES:

• Kachha Adatiya: They are purchasing agents who buy only on behalf of

others.

• Pakka Adatiyas: They finance trade as representatives of distant buyers

or procure crop on their own account for trading.

Farmers sell their agriculture produce in primary sale through an open

outcry auction which is fraught with the following inadequacies /

shortcomings;

• The clientele for purchase (Adatiyas) is restricted to local traders.

• Cartelization among local traders is an often observed phenomenon

working to disadvantage of farmers.

• The end users of the commodity are very often not in a position to

participate directly in the auction owing to geographical distance.

The primary sale attracts mandi tax which is paid by the buyer. Tax paid

goods can then be freely traded within the state with no further liability

12

towards the mandi tax. Secondary sales take place on the basis of bilateral

negotiations between known parties having an established relationship.

Although transactions in the secondary market are very often based on

informed decisions, and result in smooth delivery and settlement, extended

chain of intermediaries precludes possibility of a higher price realization

for the seller and lower acquisition price for the end users.

Another feature observed in the current system is the financial

assistance extended by commission agents. These agents also provide

storage facilities to the farmers and offer to dispose off the produce at an

appropriate time, ostensibly with the objective of realizing a better price for

the farmers’ produce. The commission agents, are by law, (as per the

respective State APMC act) entitled to charge a commission ranging from

1-2% of the sale proceeds.

Given the high cost of intermediation, there is scope for a more efficient

platform with better price dissemination capability at lower costs. The

solution lies in the establishment of an electronic exchange for spot market.

The national spot markets can be established with following objectives:

a) To empower farmers by enhancing their decision making capabilities

b) To ensure fair price realization by farmers

c) To address inefficiencies of current spot commodity markets

d) To provide an effective alternative to current delivery systems by

bringing in cutting edge technology, efficiency, transparency and

modernization benefiting larger number of market participants

Electronic spot markets can be established for standard and non-

standard products and can conduct auctions or continuous day trading with

trade to trade settlements. Spot exchanges, with the permission of the State

Governments can function as private mandies and/or provide electronic

auction platform to existing mandi participants. Buyer and sellers would

13

participate in the spot exchanges only through members. Members in turn

may seek license from respective mandi Samities of the state or get license

through exchanges for handling agricultural produce in the state. Electronic

spot exchanges need to be accompanied with sufficient warehousing and

assaying facilities as conduct of auction and trading for standard products

would require pre-assaying and storage at accredited warehouses.

Introduction of electronic spot markets would bring transparency of

operations and price discovery in physical commodities market and would

benefit farmers who can be assured that there has been no manipulation in

the sale procedure. Market access to large number of buyers and sellers

would enhance liquidity in the market and enable participation by entities

located away from the physical markets. These entities can be assured of

the quality of produce by standardized grading, storage and handling

systems. Assurance of delivery of quality produce will also attract large

industrial players who may pass on the benefits from quality assurance to

farmers through reverse auctions. Electronic exchange can maintain

flexibility of current market systems besides complementing futures market

where farmer, traders and mill owners can benefit from arbitrage

possibilities in the futures and spot markets. Futures market will also

benefit from availability of online and accurate information on spot market

which would substitute for polling of prices required for arriving at final

settlement price. Electronic spot markets would enhance employment

opportunities for existing participants through diversification of economic

activities and value addition. While Pakka Adatiyas can become members

of the spot exchange Kachha Adatiyas can work as promotion agents of

exchanges, operate information kiosks, organize farmer clubs, bring

synergies in rural institution such as NGOs, SHGs, KVKs etc. and function

as aggregators. While exporters will be able to take deliveries over the

electronic spot exchanges, Government will benefit from better collection

of mandi taxes. Reduced number of intermediaries and intermediary

14

margins will benefit farmers who can use both futures and spot platform to

avoid distress sales.

Thus, commodity exchanges can bring about substantial qualitative and

positive changes in current spot markets through use of their technological

and institutional resources.

15

COMPANY PROFILE

16

NATIONAL SPOT EXCHANGE LTD

MUMBAI

BACKGROUND

National Spot Exchange is poised to set up a delivery based e-market (a

national level institutionalized, electronic, transparent spot Exchange).

National Spot Exchange is a state-of the-art unique market place providing

customized solutions to various problems faced by the farmers, traders,

processors, exporters, importers, arbitrageurs, investors and the general

mass. The foundation stone for National Spot Exchange was laid on 10th

February, 2005 in New Delhi in a function presided over by Shri Sharad

Pawar, Honorable Union Minister for Agriculture and Consumer Affairs,

Food and Public Distribution.

NSEL provides a place, where farmers can sell at the best possible rate,

end users can buy at the most competitive rate and NSEL provides counter

party guarantee in respect of all trades. NSEL also provides services like

Quality certification, storage of goods and other customized value added

services. It also strengthens the future market by creating a delivery

platform, which can be used by the buyers-sellers to procure/dispose of

deliveries. After the launch of NSEL, the canvass of commodity trading

would be complete. India has now both spot and future market available on

electronic platform with national reach.

PROMOTORS

FTIL (Financial Technologies India Limited) is among the very few

companies globally that offers exhaustive solutions library for Exchanges,

provides technology solutions to financial markets and facilitates expansion

of stock broking terminals.

17

NAFED (National Agricultural Cooperative Marketing Federation of India

Limited), the leading Government agency, engages in food procurement,

distribution and storage activities.

MISSION

“To develop a pan India, institutionalized, electronic, transparent Common

Indian Market offering compulsory delivery based spot contracts in

various agricultural and non-agricultural commodities, with a view to

reduce the cost of intermediation by improving marketing efficiency and

thereby improving producers’ realization coupled with reduction in

consumer paid price.”

OBJECTIVES

To provide an effective method of spot price discovery in various

commodities, in a transparent manner from across the country.

To create a market where farmers can sell their produce and realize sale

proceeds at the best prevailing price.

To create a market where the processors, end users, exporters, corporates

(both private and government) and other upcountry traders can procure

agricultural produces at the most competitive price, without any counter

party and quality risk.

To create a transparent market where financiers, investors and

arbitrageurs can invest money in buying various commodities across the

country without going through the hassles of physical market.

To provide authentic spot price of various commodities that can be used

by the futures market as the benchmark price for settlement of their

contracts on the date of expiry.

To help the futures exchanges, Forward Markets Commission (FMC) and

the Government in achieving the target of compulsory delivery in all

agricultural produces by way of creating a structured and standardized

spot market.

18

To promote grading and standardization of agricultural produces and

create a market, where banks and money lending agencies can provide

warehouse receipt financing to farmers and traders.

BOARD OF DIRECTORS

Shri Shankarlal Guru – Chairman

Noted Agriculture activist.

Chairman of Guru Committee formed by Govt of India, which

drafted Model APMC Act.

Shri Jignesh Shah – Vice Chairman

Founder, CMD of Financial Technologies Group.

Over 17 years of experience in the Securities and Commodities

Exchange Industry.

Shri Anjani Sinha – Managing Director and Chief Executive Officer

Director of MCX.

18 years of experience of Stock and Commodity Exchanges.

Shri B.D Pawar – Director

Editor of CITA.

40 years’ experience in Agriculture Marketing.

Shri Joseph Massey – Director

Managing Director and Chief Executive Officer of MCX.

18 years of experience with LIC, RBI, SHCIL and Stock Exchanges.

Shri V. Hariharan – Director

Director-Technology of FTIL and Director of MCX.

25 years of experience in Business Enterprise Technology Solutions

and Strategy.

19

OPERATING SYSTEM OF NSEL

20

TRADING SYSTEM

National Spot Exchange is providing an online screen based trading

system, which can be accessed through VSAT, leased line or internet.

Exchange has launched daily expiry contracts for various agri-

commodities, which can be traded from 10 am to 4 pm for farmer’s

contract and 6 pm for trader contract. The positions outstanding at the end

of the day will result into compulsory delivery. But during the day, the

transactions of offsetting nature will be netted off and delivery will be

executed only with respect to the net quantity outstanding at the end of the

day. All the terms relating to quality specifications, place of delivery, date

of delivery and other conditions will be specified by the Exchange in

advance and all contracts executed on the system would be on the basis of

such terms only. The price band is 2% up or down on a daily price for a 20

kg, set by the FMC, and are said to be rarely binding.

The exchange charges Rs.500 per one lacks transaction in farmer

contract, out of which Rs.75 is brokerage that has to be paid to the trading

member at the end of the month and Rs.500 per lot (150 bags x 75kg) &Rs.

20 per lacks for transaction charge and warehouse receipts transfer in trader

contract and member charge their brokerage as per their policy.

DELIVERY, CLEARING AND SETTLEMENT

All trades executed on a day will be netted off at the end of the day

as per the weighted average price of last 30 minutes. The profit / loss

arising would be settled on the basis of MTM on the next day. The net

sellers have to give delivery by way of depositing goods in the Exchange

designated warehouses / storage tanks as specified in the Circular. The

buyer's account will be debited by the Exchange and delivery order will be

handed over to them after ensuring that payment is through and Payout will

be credited to the seller's account.

21

In case the seller fails to give delivery, the position will be

auctioned/closed out at the risk and cost of the seller separately. In case the

buyer fails to make payment, the buying position would be auctioned by

the Exchange at the risk and cost of the buyer.

RISK MANAGEMENT, MARGINING AND

SURVEILLANCE

The Exchange is using various tools for risk management, margining

and surveillance to ensure market integrity. All positions outstanding in the

market would be subject to margin payable by both buyers and sellers.

However, if the sellers have deposited goods in the Exchange designated

warehouses, margin will not be applicable on such positions.

SETTLEMENT GUARANTEE FUND

The Exchange will guarantee performance of all contracts executed

on the Exchange platform. For this purpose, the Exchange will maintain a

settlement guarantee fund. Notwithstanding default of any member, the

payout will be declared as per the Exchange schedule.

GOVERNANCE

The exchange is governed by a board of directors, SAMB and FMC.

The board is in charge of taking important decisions like how a bankruptcy

is to be “dealt with”.

The day to day management of the exchange operations is carried out

by the exchange staff, partner firm and members. None of the management

staff can take positions or trade themselves.

There are several trading member committees to deal with specific

problems at the exchange, such as:

1. Clearing house committee: decisions on disputes at the clearing house.

22

2. Daily rates committee: decides the daily opening, high, low and close of

the day.

3. Survey committee: certify the quality of the goods transferred from

buyers to sellers.

4. Arbitrators: Every dispute is handled by two designated arbitrators, one

appointed by each of the two conflicting parties.

5. Vigilance committee: investigates any violation of the exchange bye-

laws, rules, regulations and the FCRA, 1952.

REGULATION

The Forwards Markets Commission (FMC) is the regulatory body

for commodity spot markets. Daily reports of the prices, positions and

margins of each of the trading members are passed onto the FMC at the end

of every trading day. Position limits, margin rules, fees and charges have

also to be approved by the FMC.

The FMC and SAMB or mandis both plays an important regulatory

role in the running of the electronic spot markets.

SERVICES OFFERED BY NATIONAL SPOT EXCHANGE

Common National level platform for buying selling commodities with

efficient price discovery.

Integrate the fragmented market electronically.

Electronic spot trading facility in multiple commodities with specific

delivery centres.

Grading, quality certification and standardization of commodities.

Efficient spot price discovery, price dissemination small producers and

traders get equated with large consumers or traders.

23

Facilitating collateral financing and borrowing against warehouse

receipts.

Customized services relating to storage, transportation, logistics handling

and shipment

Trade and payment guarantee.

Procurement and disposal of commodities through online trading system.

Market Intelligence Reports.

NSEL NETWORK PLATFORM:

24

THE DIFFERENCE BETWEEN OPEN OUTCRY

AUCTION AND ONLINE TRADING

OPEN-OUTCRY ONLINE TRADING

Participants congregate in a “ring” to

discover prices

Participants put orders on-line to discover

prices

Physical presence in exchange premises

required

Orders routed through electronic networks

Price quotations/ traded prices not

transparent

Quotations and traded prices available on-line

Cannot facilitate on-line real time price

dissemination

Real time price dissemination possible

Monitoring of member’s positions and risk

management practices cumbersome

On-line monitoring of member positions

25

COMPARISION OF DIFFERENT MARKETS

PARTICULARS SPOT

MARKETS

(MANDI)

FUTURE

MARKET

ELECTRONIC

SPOT EXCHANGE

OPERATES

THROUGH

More than 9000

APMCs

3 national online

exchanges (MCX,

NCDEX, NMCE), 24

regional exchanges

NSEL & NCDEX

Spot

REACH Confined to

particular

market place

Across the country

through online trade

Across the country

through online trade

DELIVERY Immediate At expiry 2-8 Days

LEVERAGE No Yes Partial

RISK Less High Average

RETURNS Less High Average

TRANSPORTATION Required Required Required

TRADING

THROUGH

Mandis/physical

market

Electronic platform Electronic platform

QUALITY Varied Standardized Standardized

REGULATION State APMC

Acts

FMC FMC & State APMC

Acts

WHY OF NSEL PLATFORM

Lesser dependency on commission Agents.

Negligible Brokerage/commission.

Efficient Warehousing and Logistics support.

Time saving.

Complete end to end solution.

26

Guaranteed trade with weighment/Quality assurance.

A new distribution channel with trade guarantee.

A complimentary market to derivative traders.

Timely disbursement of commodities and funds.

Transparency in transaction and settlement.

ADVANTAGES TO THE FARMERS

Current prices available on real time basis.

Loan against warehouse receipt.

Increase in holding and bargaining capacity.

Access to a national level market.

Counter party guarantee provided by the Exchange.

It will educate the farmers about grading at the farm level and it will help

market led production and consumers will be able to get standardized

quality produce.

It can help in realizing the better prices for harvested crop during off

season.

Since the end users would be connected to the NSEL trading system and

the highest buy price offered by lacs of buyers would be visible on the

trading screen, he will get the best possible price available at the moment.

27

ADVANTAGES TO TRADERS

Traders would get a bigger and liquid market, where they can sell huge

quantity.

Elimination of counter party risk, credit risk, rejection at buyer’s go-

down at the time of delivery. Once they sell on NSEL and deliver in

NSEL warehouse, they are free from all post trade risks.

Since large number of investors from all across the country would be

available at NSEL platform, they can realise better price for their

product.

Access to bank finance against warehouse receipts.

They can expand their activities to multiple commodities, because of

operational ease, availability of finance and absence of counter party risk

under NSEL system.

ADVANTAGES TO STATE GOVERNMENT & APMCs

Better price realization of cess, because all derivatives can be tracked.

National spot exchange will provide a statement of all physical deliveries

along with name of traders every month.

It promotes economic activity in the state.

Better realization for the farmers, which accelerates the pace of economic

development in the state.

It promotes industrial activity, processing and export due to assurance of

uninterrupted supply of raw materials through National Spot Exchange.

Various centres in the state emerge as important trading hubs, which

generates lot of direct and indirect employment.

28

All these objectives are achieved without any load on the exchequer- no

subsidy, no grant, no tax, no investment, no land allotment, no loss of

revenue, no loss of APMC cess.

SIGNIFICANT MILESTONES FOR NSEL

Feb-05 MoU signed between NAFED, Financial Technologies and MCX

May-05 Company Incorporated on 18th

May, 2005

Jun-07 Gazette Notification issued by Government of India

Ministry of Agriculture, Govt. of India recommended NSEL

Project.

Oct-07 Gujarat Government issued E-Trading License.

Nov-07 Signed MoU with Govt. of Rajasthan

Signed MoU with IL % FS for common service centers being

set-up under National E-Government Project to be connected to

NSEL Project.

Jan-08 Maharashtra Government issued E-Trading License.

May-08 Karnataka Government issued license.

Jun-08 NSEL signed MoU with the Gujarat Agro-Industries

Corporation Ltd (GAIC) to create strategic alliance for

development of agri-business and, providing an electronic market

platform in the state.

NSEL starts its Membership drive.

Jul-08 Commencement of Mock operations.

Oct-08 Commencement of Live Operations on 15th

October, 2008.

Dec-08 NAFED Board approves sale of cotton through NSEL and contract

was launched by NSEL as approved by NAFED Board to help

exporters, mills and merchants across the country.

Jan-09 Commenced cotton procurement in AP under PSS on behalf of

NAFED

Jul-09 CCI follows the steps of NAFED and becomes member of NSEL to

29

sell cotton bales on NSEL platform on the same terms.

Nov-09 Government of Orissa granted license. Commencement of

operation in Orissa.

Dec-09 Government of Rajasthan granted license.

30

CHAPTER - 2

THE PROJECT

31

A STUDY

ON

“COMPARATIVE EVALUTION OF

PARTICIPANTS SATISFACTION AND

PERCEPTION IN CASTOR TRADE:

NSEL viz a viz APMC”

INTRODUCTION

CASTOR SEED

Castor (Ricinuscommunis L.) is cultivated around the world because

of the commercial importance of its oil. India is the largest producer of

castor seed in the world while Gujarat is the largest castor seed producing

state in India. Because of its unlimited industrial applications, castor oil

enjoys tremendous demand world-wide. Castor is an important non-edible

oilseed crop and is grown especially in arid and semi-arid region. It is

originated in the tropical belt of both India and Africa. The Indian variety

of castor seed has 48% oil content of which 42% can be extracted. India’s

castor seed production fluctuates between 6 to 9 lakhs tonne per annum.

Castor seed is produced mainly in 3 states in India - Gujarat, Rajasthan and

Andhra Pradesh. Gujarat accounts for more than 80% of castor seed

production followed by Andhra Pradesh, Karnataka and Rajasthan. In

common trading parlance, the most commonly traded Castor varieties are

the Gujarat small seed and Andhra big seed.

32

Gujarat

Apart from the Southern areas, castor seed is produced in all parts of

Gujarat. During 2006-07, around 4.90 lakhs ton castor seed was produced

here which increased to 6.50 lakhs ton in 2007-08. As per latest estimates,

production is expected to remain higher than this figure (at ~ 8 lakhs tons)

as farmers are getting remunerative price for their produce. This

encouraged them to take more interest for its cultivation. Castor seed is

cultivated in July to August and arrivals start during December. However,

its arrival continues the whole year as its cycle is of nearly 8 months

period.

Rajasthan

Rajasthan is the second largest castor seed producing state in India.

During 2006-07, nearly 1.40 lakhs ton castor was produced here which

remained same during 2007-08. However, the sowing area has moved up

this year as per reports. The production this year is expected higher at 1.70

lakhs tons. Castor seed is cultivated in July to August and arrivals start

during December.

Andhra Pradesh

Andhra Pradesh is the third largest castor seed producing state in

India. During 2006-07, around 1.10 lakhs ton castor seed was produced

here which reduced to nearly 90 thousand ton in 2007-08. In 2008-09,

production figure is expected to decrease (to ~70000 tons). This is mainly

attributed to insufficient rains. Here, arrival starts in September. And the

sowing time is May – June. It is an 8 month cycle crop.

Other States

Around 30,000 tons castor seed is also produced in Maharashtra and

some other states. India is the only exporter of castor oil. However, some

33

other countries are also produces it but that fulfils only their domestic

demand.

Total production in India was 7.80 lakhs ton during 2006-07 which

increased to nearly 9.10 lakhs ton during 2007-08. As per sources, total

Indian production in 2008-09 is expected to touch 10.70 lakhs ton.

Moreover, export figure is also likely to remain high this year. Trading

activities are expected to increase in castor oil in the near future. The

export demand is expected to pick up.

CROP CALENDAR OF CASTOR SEED

Traditionally, castor is a kharif season crop. Sowing of castor with

onset of monsoon is found most beneficial in rained condition. Castor

grows under tropical conditions. It loves heat and humidity and does best in

regions where both are ample. India is gifted with an ideal climatic

condition for castor seed.

34

APPLICATIONS OF CASTOR SEED

INDUSTRIES APPLICATION

Agriculture Organic Manure

Paper Water proofing Additive

Cosmetic Emulsifier and Deodorant

Paint, Ink and Adhesive Wetting and Dispersing Additive

Food Viscosity reducing additive

Plastic & Rubber Coupling agent

Electronics & Telecommunication Capacitor fluid

Lubricant Corrosion inhibitor

Textile Pigment wetting agent

Pharmaceutical Castor oil

35

WORLD CASTOR SEED PRODUCERS

Fig. 2.1

CASTOR SEED PRODUCTION TREND IN INDIA

Fig. 2.2

India64%

China21%

Brazil8%

Others7%

World Castor seed Producer

0

100

200

300

400

500

600

700

800

900

1000

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

910850

590655

780

855 880

Pro

du

ctio

n (i

n '0

00 t

on

nes

)

Year

Castor seed Production Trend in India

36

CASTOR SEED PRODUCTION (INDIA & GUJARAT)

Fig. 2.3

Total area under Castor crop in India for the year 2009-10 is 7.40

lakhs hectares. It has decreased by 10% as compared to previous year.

Estimated total production of Castor Seeds in India for the year 2009-10 is

9.34 lakhs tonnes. It has decreased by 4% as compared to previous year.

Average yield for the year 2009-10 is 1261 kg/hectare as against 1180

kg/hectare during the year 2008-09. It has increased by 7% as compared to

previous year.

Total area under Castor crop in Gujarat for the year 2009-10 is 4.37

lakh hectares. It has decreased by 3% as compared to previous year. Area

under Castor crop has increased in all the major castor growing districts

except Ahmedabad, Patan, Rajkot, Surendranagar and Vadodara. Estimated

total production of Castor Seeds in Gujarat for the year 2009-10 is 7.34

lakhs tonnes, it has increased by merely 1% as compared to previous year.

However this growth is mainly in the districts such as Vadodara (28%),

Ahmedabad (24%), Rajkot (19%), Patan (16%) and Sabarkantha (8%).

0

200

400

600

800

1000

1200

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

465.1

283.1

541.1 563.3

665

533

680652.7

427.5

796.7 793.4

990.7

762.3

1011

Pro

du

ctio

n ('

000

To

nn

es)

Year

Castor seed Production (India & Gujarat)

Gujarat

India

37

Average yield for the year 2009-10 is 1679 kg/hectare as against 1608

kg/hectare during the year 2008-09.

ESTIMATED AREA UNDER CASTOR SEED CROP,

INDIA (2009-10)

Fig. 2.4

ESTIMATED CASTOR SEED PRODUCTION, INDIA

(2009-10)

Fig. 2.5

0

50

100

150

200

250

300

350

400

450

500

Gujarat Rajasthan Andhra Pradesh Other States

Cas

tor

see

d A

rea

('0

00 H

a)

States

Estimated Castor seed crop Area ('000 Ha), India

2008-09

2009-10

0

100

200

300

400

500

600

700

800

Gujarat Rajasthan Andhra Pradesh Other States

Pro

du

ctio

n ('

000

to

nn

es)

States

Estimated Castor seed Production ('000 tonnes), India

2008-09

2009-10

38

ESTIMATED CASTOR SEED YIELD, INDIA (2009-10)

Fig. 2.6

ESTIMATED CASTOR SEED PRODUCTION, GUJARAT

(2009-10)

Fig. 2.7

0

200

400

600

800

1000

1200

1400

1600

1800

Gujarat Rajasthan Andhra Pradesh Other States

Esti

mat

ed

Yie

ld (

Kg\

Ha)

States

Estimated Castor seed yield (Kg/Ha), India

2008-09

2009-10

020406080

100120140160180200

Cas

tor s

eed

pro

du

ctio

n ('

000

to

nn

es)

District

Estimated Castor seed Production (in '000 tonnes), Gujarat

2008-09

2009-10

39

ESTIMATED AREA UNDER CASTOR SEED CROP,

GUJARAT (2009-10)

Fig. 2.8

ESTIMATED CASTOR SEED YIELD (KG/HA), GUJARAT

(2009-10)

Fig.2.9

0

20

40

60

80

100

120

Are

a U

nd

er

Cro

p (

in '0

00 h

a)

District

Estimated Castor seed crop area ('000 Ha), Gujarat

2008-09

2009-10

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Yie

ld (

Kg/

Ha)

District

Estimated Yield (Kg/Ha)

2008-09

2009-10

40

THE MAJOR FACTORS INFLUENCING CASTOR SEED

MARKETS ARE…

Variation in castor seed domestic acreage based on yield and price

realization.

Crop development based on progress of monsoon in key growing areas.

Chinese and Brazilian crop size.

Comparative price of other vegetable oils in domestic market.

Carryover stocks.

Development of new applications and substitutes of castor oil.

OBJECTIVES OF THE STUDY

To study the Perception & Satisfaction level of Participants of NSEL.

To know the market share of NSEL in castor trade.

To do the comparative evaluation of NSEL viz a viz APMC.

To assess the effectiveness of marketing strategies of NSEL in castor

trade.

To assess the opportunities, strengths, weaknesses and threats of NSEL.

PURPOSE AND SCOPE OF STUDY

This study will help to formulate the suitable strategies for more

effective penetration in the castor trade for NSEL. As the study involves

the measuring satisfaction level and perception of participants in castor

trade at NSEL as compare to APMC so it will help to study the preference

to NSEL/APMC by participants. Majority of farmers prefer to deal with

known traders and to this is affected by certain factors while decision

41

making by participants. This study also focus to find out such criteria of

decision making by participants so as to base on this effective action plan

can be prepared which may help to increase the customer base and also

strengthen the relationship with participants.

42

LITERATURE REVIEW

Vandeveer (2006) in his study “Learning outcomes- Perception”

It is the way people organize and interpret the world around them in

order to give meaning to their surroundings. People’s behaviour is based

on how they interpret reality, not reality itself. Perceptions affect awareness

of problems, analysis of problems, interpretations of data, judgment of

potential outcomes.

Susan Thomas (2003) in his report Agricultural commodity markets in

India: Policy for Growth

Every mandi becomes a monopoly to the local producers, especially

once they come to the market. Farmers typically face a short period

between the time that they harvest and the time that they can sell the crop.

In addition, the cost of transportation of commodities is typically

significant, given the lack of good transportation alternatives. If they do not

have access to reliable sources of price information, they become hostage

to the closest source, i.e. the local mandi. Farmers should have access to

prices not just at the local, but also the national level.

Patel Kirankumar K. (2009) in his report Building Up Of An Efficient

Marketing System To Obviate The Need For Better Agricultural

Market Option In Palanpur, Gujarat: A Case Of Castor Seed

In day-to-day reality of the business, Supply chain formation, value

addition and efficient market are creating equality between trade partners.

The sustainable and professional relationships between them play a vital

role. The government as well as private sectors is having two fold

responsibilities in cross border trading. On one hand a good climate in

Agri-value chain and market is required to develop and on other hand to

create better environment for small and marginal farmers by proving them

a holistic platform.

43

CHAPTER - 3

RESEARCH METHODOLOGY

44

SOURCES OF INFORMATION

SOURCES OF PRIMARY DATA

Data was collected using survey method by conducting personal

interviews with Castor seed growers in the villages of Palanpur taluka of

Gujarat.

Questionnaire was used for collection of primary data for the study.

SOURCES OF SECONDARY DATA

Secondary data was collected through various sources like company

website, magazines, internet, company leaflet and other sources. Various

reports and article from the internet provides the information regarding the

Castor seed trade and data about area, production, productivity of Castor

seed in Gujarat state.

INSTRUMENT OF DATA COLLECTION

Questionnaire was used for the collection of primary data. Both open

ended question and multiple choice questions were involved in

questionnaire. In open ended questions respondents were free to answer as

per their perception and in multiple choice questions respondents were

offered various options to choose from.

SAMPLE DESIGN FOR SURVEY

LOCATION OF THE SURVEY

In Palanpur taluka, six villages namely Changwada, Tokriya, Bhagal,

Jagana, Malan and Sundha were selected for the Study.

SAMPLING METHOD

Stratified sampling method. Under this method six villages were

selected and farmers were stratified in two (1) farmers traded with NSEL

45

and, (2) Farmers not traded with NSEL. From these strata farmers were

selected by convenience sampling.

SAMPLE UNIT: - Castor seed growing farmers.

SR. NO. NAME OF

VILLAGES

FARMERS

TRADED

WITH NSEL

FARMERS

NOT TRADED

WITH NSEL

TOTAL

FARMERS

1 Changwada 91 9 100

2 Tokriya 88 12 100

3 Bhagal 89 11 100

4 Jagana 84 16 100

5 Malan 90 10 100

6 Sundha 86 14 100

Total 528 72 600

DATA ANALYSIS TECHNIQUES

Simple tools of analysis were used for study. Quantitative method such as

Percentage, Averages, Weighted Average method was used to analyse data.

Scaling technique that is ranking scale was used to study attitude and

perception of respondents.

THE TECHNIQUES THAT ARE USED FOR ANALYSIS OF

DATA ARE

1. Tabulation of data.

2. Pie charts

3. Bar graphs

46

LIMITATIONS OF PROJECT STUDY

Following limitations may come while conducting the project.

This survey is totally dependent on response of farmers.

Limited time was available for survey.

47

CHAPTER - 4

DATA PROCESSING & ANALYSIS

48

FARMER’SANALYSIS

1. Age Groups of Farmers

Table 4.1: Age Group of Farmers

Sr. No. Age (Yrs.) No. of Farmers Percentage

1 26-30 25 4

2 31-35 140 23

3 36-40 144 24

4 41-45 177 30

5 46-50 58 10

6 51-55 36 6

7 56-60 20 3

Fig: 4.1

26-304% 31-35

23%

36-4024%

41-4530%

46-5010%

51-556%

56-603%

Age Group (Years)

49

2. Education level of Farmers.

Table 4.2: Educational Level of Farmers

Sr. No. Education No. of Farmers Percentage

1 Illiterate 35 6

2 Below SSC 277 46

3 SSC 188 31

4 HSC 82 14

5 Graduate 18 3

Fig. 4.2

35, Illiterate6%

227, Below SSC46%

188, SSC31%

82, HSC14%

18, Graduate3%

Education Level of Farmers

50

3. Income Source of Farmers

Table 4.3: Income sources of Farmers

Sr. No. Income Source No. of Farmers

1 Only Farming 562

2 Farming and Alternative

Occupation

38

Fig. 4.3

562

38

0

100

200

300

400

500

600

Only Farming Alternative occupation

Farm

ers

Income Source

Income Source

51

4. Farming as major Income source (Based on 562 Farmers)

Table 4.4 Farming as Income source

Sr. No. Farming No. of Farmers

1 Only Agriculture 490

2 Agriculture + Poultry 0

3 Agriculture + Dairy 72

Fig. 4.4

490

072

0

100

200

300

400

500

600

Agriculture Poultry Dairy

Farm

ers

Income Source

Income source: Farming

52

5. Annual Income of the Farmers

Table: 4.5 Annual Income

Sr. No Income Range Farmers Percentage

1 Upto 50,000 16 3

2 50,000 -100,000 90 15

3 100,000-200,000 184 31

4 200,000-500,000 240 40

5 Above 500,000 70 11

Fig. 4.5

Upto 50. 0003%

50, 000 - 100, 00015%

100, 000 - 200, 00031%

200, 000 - 500. 00040%

Above 500, 00011%

Annual Income

53

6. Distribution of Farmers as per Land Holding Size

Table No. 4.6 Distribution of farmer as per land holding size

Sr. No Particulars Farmers Percentage

1 Marginal farmer (Up to 1 ha) 80 13

2 Small farmer (1-2 ha) 323 54

3 Medium farmer (2-5 ha) 110 18

4 Large farmer (more than 5 ha) 87 15

Fig. 4.6

Marginal Farmer13%

Small Farmers54%

Medium Farmers18%

Large Farmers15%

Land Holding Size

54

7. Irrigation pattern

Table: 4.7 Irrigation pattern

Sr. No Land Holding (Ha.) Total area (Ha.) Percentage

1 Irrigated 1147.89 46

2 Rainfed 1342.11 54

Total Land 2490.00 100

Fig. 4.7

Irrigated46%

Rainfed54%

Irrigation pattern

55

8. Crops Cultivated by Farmers

Table 4.8 crops cultivated by Farmers

Sr. No Crops Farmers

1 Castor seed 600

2 Bajra 287

3 Funnel 173

4 Cumin 448

5 Til 78

6 Mustard 578

7 Mung 209

Fig. 4.8

Castor seed Bajra Funnel Cumin Til Mustard Mung

600

287

173

448

78

578

209

Crops cultivated by Farmers

Farmers

56

9. Cropping pattern followed by farmers

Table 4.9 Cropping pattern followed by farmers

Sr. No Crops Farmers Percentage

1 Castor seed, Mustard, Bajra 264 34

2 Castor seed & Funnel 138 66

Fig. 4.9

Castor seed, Mustard, Bajra

66%

Castor seed, Funnel34%

Cropping Pattern

57

10. Market Preference by Farmers

Table 4.10 Markets preferred by the farmers for sell of produce

Sr. No Preferred Market Farmers Percentage

1 Cooperatives 12 2

2 Wholesalers 77 13

3 Commission Agent 90 15

4 APMC 121 25

5 NSEL 290 48

6 Millers 10 2

7 Consumers 0 0

Fig. 4.10

Co-operative2%

Wholesaler13%

Commission Agent15%

APMC20%

NSEL48%

Millers2%

Consumers0%

Market Preference by Farmers

58

11. Crop wise market preference by Farmers

Table 4.11 Crop wise Market Preference by Farmers

Sr. No Crops Preferred Market

1 Castor seed NSEL & APMC

2 Bajra APMC

3 Funnel Commission Agent

4 Cumin Co-operatives

5 Til Wholesalers

6 Mustard APMC & Millers

7 Mung APMC & Commission Agent

Fig. 4.11

59

12. Factors considered for Market Preference by farmers

Table 4.12 Factors considered by farmers for Market Preference

Note: 1= Never, 2=Rarely, 3= Often, 4= Mostly, 5=Always

Note:-Max. Rating: (Maximum scale 5x600 farmer) = 3000 (Max.)

Particulars

Individual scores and No. of farmers

Always Mostly Often Rarely Never

Cumulative

score

(based on

600

farmers)

Mean

score

Higher

Price

566

(2830)

30

(120)

4

(12) --

2962 4.93

--

Familiar

Traders

120

(600)

126

(504)

123

(369)

71

(142)

160

(160)

1775 2.95

Less

Quality

Deduction

570

(2850)

30

(120)

2970 4.95

-- -- --

Past

Experience

70

(350)

100

(400)

11

(345)

172

(344)

137

(137)

1576 2.62

Promotional

Strategy

86

(340)

92

(368)

70

(120)

112

(224)

258

(258)

1400 2.33

Company

Reputation

56

(280)

40

(160)

116

(348)

196

(392)

192

(192)

1372 2.28

Good

Employee

relations

80

(400)

79

(316)

120

(2360)

177

(354)

144

(144)

1574 2.62

No Fear of

Cheating

434

(2170)

112

(448)

34

(102)

20

(44)

1716

2.86

--

Timely

Payment

488

(2440)

112

(448)

2888

4.81

-- -- --

60

Fig.4.12

Figures in parenthesis suggest individual score.

4.93

2.95

4.95

2.62

2.33 2.28

2.622.86

4.81

Factors considered by Farmers for Market preference

Mean score

61

13. Sources of Price Information for the farmers for various

commodities at different market.

Table 4.13 Sources of Price Information

Sr. No Source Farmers Percentage

1 Other Farmers 115 19

2 Discussion at Choupal 30 5

3 Sarpanch 0 0

4 Middlemen 80 14

5 Radio 80 13

6 Television 140 23

7 NEWS Paper 155 26

Fig. 4.13

Other Farmers19%

Discussion at Choupal5%

Sarpanch0%

Middlemen14%

Radio13%

Television23%

News Paper26%

Sources of Price Information

62

14. Farmers awareness regarding NSEL

Table 4.14 Farmers Awareness about NSEL

Sr. No. Awareness Farmers Percentage

1 Yes 545 91

2 No 55 9

Fig. 4.14

Yes91%

No9%

Percentage of Farmers aware of NSEL

63

15. Farmers awareness for Promotional Activity by NSEL

Table 4.15 Farmers awareness for Promotional Activity by

NSEL

Sr. No. Particulars No. of Farmers Percentage

1 Yes 523 87

2 No 77 13

Fig.4.15

Yes87%

No13%

Farmers awareness for Promotional Activity by NSEL

64

16. Sources of Awareness about NSEL (Based on 545

Farmers)

Table 4.16 Sources of Awareness about NSEL

Sr. No. Source No. of Farmers Percentage

1 Friends/Relatives 75 14

2 Traders 90 16

3 NEWS Paper 70 13

4 Hoardings 86 16

5 Television 30 5

6 Co. Representative 20 4

7 Leaflets Distributed by NSEL 54 10

8 Campaigning through Auto rickshaw 120 22

Fig. 6.16

Friends/Relatives14%

Traders16%

News Paper13%

Hoardings16%

Television5%

Co. 's Representative4%

Leaflets Distributed by NSEL

10%

Campaigning through Auto rickshaw

22%

Source of Awareness about NSEL

65

17. Farmers ever Deal with NSEL?

Table 4.17 Farmers ever Deal with NSEL

Sr. No. Ever Deal with NSEL No. of Farmers Percentage

1 Yes 528 88

2 No 72 12

Fig. 4.17

Yes88%

No12%

Farmers ever Deal with NSEL

66

18. Why farmers prefer to deal with NSEL? (Based on 528

Farmers)

Table 4.18 Reasons for why Farmers prefer to deal with NSEL

Sr. No. Factors No. of Farmers Percentage

1 Better Price 300 57

2 Less Quality Deduction 20 4

3 No Fear of Cheating 8 1

4 Cash Payment 200 38

Fig. 4.18

Better Price57%

Less Quality Deduction

4%

No Fear of Cheating1%

Cash Payment38%

Why Farmers prefer to deal with NSEL

67

19. Why farmers not ready to deal with NSEL? (Based on 72

Farmers)

Table 4.19 Reasons for why Farmers not deal with NSEL

Sr. No. Factors No. of Farmers Percentage

1 Not Aware 42 58

2 Fear of Private Company 10 14

3 Others Experience 0 0

4 Relation with Private Traders 20 28

Fig. 4.19

Not Aware58%

Fear of Private company

14%Others Experience

0%

Relations with Private Traders

28%

Why farmers not ready to deal with NSEL

68

20. Satisfaction Level of farmers when dealt with NSEL

(Based on 528 Farmers).

Table 4.20 Satisfaction Level of Farmers when dealt with NSEL

Sr. No. Scale No. of Farmers Percentage

1 Highly Satisfied 396 75

2 Satisfied 103 20

3 Moderately Satisfied 13 2

4 Unsatisfied 10 2

5 Highly Unsatisfied 6 1

Fig. 4.20

Highly Satisfied75%

Satisfied20%

Moderately Satisfied2%

Unsatisfied2%

Highly Unsatisfied1%

Satisfaction Level of Farmers when dealt with NSEL

69

21. Farmers ready to deal with NSEL again in Future(Based on 528

Farmers)

Table 4.21 Farmers ready to deal with NSEL again in Future

Sr. No. Again Deal in Future No. of Farmers Percentage

1 Yes 505 96

2 No 23 4

Fig. 4.21

Yes96%

No4%

Farmers ready to deal with NSEL again in Future

70

22. Farmers who used other services of NSEL

Table 4.22 Farmers who used other services of NSEL

Sr. No. Particulars No. of Farmers Percentage

1 Yes 7 1

2 No 538 99

Fig. 4.22

Yes1%

No99%

Farmers who used other services of NSEL

71

23. Farmers Perception about NSEL

Table 4.23 Farmers Perception about NSEL

Sr. No. Perception No. of Farmers Percentage

1 It is a Private Company 185 31

2 Commission Agent & Merchant 40 7

3 Government Organization 37 6

4 Government-Private Partnership 268 44

5 Farmer friendly Private

Organization

70 12

Fig. 4.23

It is a Private company

31%

Commission Agent&

Merchant 7%

Government organization

6%

Government-Private Partnership

44%

Farmer friendly Private Organization.

12%

Farmers Perception about NSEL

72

24. Impact of NSEL on the income of farmers linked with

NSEL

Table 4.24 Impact of NSEL on the income of farmers linked with

NSEL

Sr. No. Particulars No. of Farmers Percentage

1 No Improvement 70

2 Some Extent improved 158 30

3 Greater Improvement 300 57

Fig. 4.23

No Improvement13%

Some extent Improved

30%

Greater Improvement57%

Impact of NSEL on the income of farmers linked with NSEL

73

25. Does NSEL really follow what it said in marketing

campaign?

Table 4.25 Does NSEL really follow what it said in marketing

campaign?

Sr. No. Particulars No. of Farmers Percentage

1 Yes 506 96

2 No 22 4

Fig. 4.25

Yes96%

No4%

Does NSEL Realy follows what it said in Marketing Campaign

74

26. Farmer’s opinion about need for improvement in the

system of NSEL

Table 4.26 Farmer’s opinion about need for improvement in the

System of NSEL

Sr. No. Particulars No. of Farmers Percentage

1 Yes 20 4

2 No 508 96

Fig. 4.26

Yes4%

No96%

Farmer’s opinion about need for improvement in the System of NSEL

75

27. Areas for Improvement in the System of NSEL

Table 4.27 Areas for Improvement in the system of NSEL

Sr. No. Areas No. of Farmers Percentage

1 Finance 15 75

2 Marketing 0 0

3 Purchasing 2 10

4 Quality Parameters 3 15

Fig. 4.27

Finance75%

Marketing0%

Purchasing10%

Quality Parameters15%

Areas for Improvement in the system of NSEL

76

28. Effects of NSEL to farmers

Table 4.28 Effects of NSEL to Farmers

Sr. No. Particulars No. of Farmers Percentage

1 Increased Income 314 69

2 Increased area under castor seed

cultivation

90 20

3 Purchase more land 28 6

4 Purchase new home appliances 16 3

5 Higher Education to children 10 2

Fig. 4.28

Increased Income69%

Increased area Under castor seed cultivation

20%

Purchase more land6%

Purchase new Home Appliances

3%

Higher Education to Children

2%

Effects of NSEL to Farmers

77

29. Business Opportunity Available for NSEL as perceived

by farmers

Table 4.29 Business Opportunity available for NSEL as perceived by

farmers

Sr. No. Particulars No. of Farmers Percentage

1 Multi-commodity trading 427 71

2 Warehouse receipt finance 69 12

3 Co-operatives managed by NSEL 104 17

Fig.4.29

Multi-commodity trading

71%

warehouse receipt finance

12%

Co-operatives managed by NSEL

17%

Business Opportunity available for NSEL as perceived by farmers

78

30. Are there any Competitors for NSEL?

Table 4.30 Are there any competitors for NSEL

Sr. No. Particulars Farmers Percentage

1 Yes 109 18

2 No 491 82

Fig. 4.30

Yes18%

No82%

Are there any Competitors for NSEL?

79

31. Competitors of NSEL suggested by farmers (Based on

109 Farmers).

Table 4.31 Competitors of NSEL

Sr. No. Competitors No. of Farmers Percentage

1 Private Traders 58 54

2 APMC 19 17

3 Warehouse Owners 15 14

4 Commission Agent 16 15

Fig. 4.31

Private Traders54%

APMC17%

Warehouse Owners14%

Commission Agent15%

Competitors of NSEL

80

CHAPTER - 5

FINDINGS

&

RECOMMENDATIONS

81

FINDINGS

Farming (Agriculture & Dairy) is the major source of income for the

farmers of the palanpur taluka besides this there are some farmers those

having alternative occupation apart from farming.

Majority of the Farmers are small land holders i.e. 1-2 ha. Many farmers

have land holdings of 2-5 ha i.e. medium farmers. Land is mainly rainfed

irrigated; also there are other irrigation facilities available to farmers.

Cropping pattern is diverse with many crops taken in the region by the

farmers.

There are some farmers who follows particular cropping pattern. The

crops cultivated by most farmers have good market demand.

Large no. of alternatives available for farmers to sell their produce.

Farmers prefer specific market for the sale of particular crops but it is not

as so in case of all the farmers.

While selecting market for sale of their produce farmers consider certain

criteria and the most considered criteria (Less Quality deduction, Higher

Price and Timely payment) indicates that the farmers are not loyal to any

particular market they quickly switch to other market if particular market

is not favorable to them.

To know the prices of the various agricultural produce in the different

markets of the palanpur taluka various sources like news paper,

Television, Radio, Middlemen, other farmers, etc. are available but

farmers mostly prefers Newspaper and Television.

Almost majority of the farmers are aware of NSEL in the palanpur taluka

but still among all these farmers many are not well aware about activities

of NSEL.

82

To generate awareness among farmers so they can better understand

NSEL various marketing activities were undertaken by NSEL such as

campaigning through auto-rickshaw, hoardings placed at public places,

news paper advertisement, talk with co, representatives. Awareness of

farmers shows the effectiveness of marketing strategies adopted by

NSEL.

Farmers prefer NSEL because it offers better price as compare to prices

prevailing in the other markets. The payment is made in cash to the

farmers and it is the major attraction for the farmers. The farmers who

have not deal with NSEL many of them are not well aware they only

know that NSEL operates here nothing else about it.

Those who have deal with NSEL most of the farmers are highly satisfied

as compare to APMC because they are getting better returns for their

produce and also there are no/very less intermediaries involved in the

entire chain, so the farmers are not exploited also they don’t feel cheated.

The farmers who are not satisfied with NSEL are very less.

Farmer once deal with NSEL will definitely like to deal again with NSEL

in the future. It shows that the NSEL has made its position in the castor

trade and also it has created image in the mind of majority of the farmers.

Very less farmers are aware about other services offered by NSEL to the

farmers which may be very beneficial for them.

Farmers perceive NSEL as Government-Private partnership still many

farmers perceive it as private company and some farmers have very bad

experience in the past with private traders.

NSEL has greater impact on incomes of the farmers in the villages of

Palanpur taluka because NSEL offers higher price so farmers earns more

profit with NSEL as compare to NSEL.

83

Farmers agree that NSEL follows what it had said in the marketing

campaigns in their village.

Farmers are happy with the current system of NSEL and they don’t think

for the improvement at present. Very less farmers think for improvement

in the system followed by NSEL.

Farmers those who think for improvement in the system of NSEL said to

improve financial aspects i.e. payment should not be delayed in any case.

The concept of NSEL and APMCs is quite different also there are no

other entities with such concept so it is the advantage for the NSEL as

compare to APMC as well as private traders and commission agents.

Because private traders are the main competitors of NSEL as perceived

by farmers

There are many business opportunities available for the NSEL as

perceived by the farmers majority of farmers believe that NSEL should

start multi-commodity trading rather than single commodity trading

which it does at present and also it can form farmers co-operatives.

84

RECOMMENDATIONS

Many Farmers follows the particular cropping pattern so NSEL can

purchase other commodities produced by such farmers and in such a way

it may become easy for NSEL to expand its operation. Apart from that

many other commodities are produced by farmers have good market

demand thus it should start multi-commodity trading.

Farmers prefer specific market for particular crop so based on the

characteristic of such market NSEL should develop contracts for farmers

for different commodities.

Many Farmers still prefers APMC auction to sale castor seed these

farmers need to make aware of NSEL and for this Co. representatives has

to arrange meetings with villagers and also actively participate in the

local celebrations like village melas etc.

To avoid delay of payment to farmers NSEL should make tie-up with

sound financial institutions and also strengthen the relations with existing

financial institutions.

NSEL need to undertake promotional activity at vast scale for more

awareness among the farmers i.e. Demo van, weekly campaign on

specific pocket, appoint local responsible person who is able to create

right image and awareness about working system.

Help and guide Farmers to formulate Farmers Co-operatives and in such

a way it can create win-win situation and generate large pool of farmers

as client.

It can place large hoarding at the entrance of APMC as well small

hoardings in the entire APMC to create large scale awareness among

farmers. It will be more effective.

85

It can distribute leaflets (printed in local language) individually direct to

farmers as well as along with local news papers.

It should provide price of castor seed to the farmers on the daily basis

before auction at APMC or in the morning when farmers prepares for

visit to other market.

Prices should be published in local news paper and also it can place

board at the entrance of the APMCs. Price should be clearly

differentiated between price at APMC platform and NSEL platform.

Though marketing strategies are effective and works well, it requires

more efforts on the NSEL end to acquire large share in the castor seed.

86

SWOT ANALYSIS

STRENGTHS OF NSEL

Huge capital available.

Availability of skilled human resources.

Support of Government organization like NAFED.

It is promoted by reputed companies like FTIL & NAFED.

Experts are available to provide market Intelligence to farmer.

Collaboration with different financial institute e.g. IFMR, SEWA, etc.

Provides national level direct platform to buyers and sellers.

Complete end to end solution.

Counter party guarantee provide by the exchange.

Enriched portfolio of various services for farmers.

Operationally different from APMC.

Positive response from the farmers.

WEAKNESS OF NSEL

Mostly NSEL deals in single commodity at each center where as APMCs

deals with many commodities.

The main weakness of NSEL is they use only one system to link up the

buyers & sellers it increase competition with existing traders.

NSEL is less flexible than Traders, commission agent.

87

NSEL largely depends upon volume / demand of exchange of

commodity.

OPPORTUNITIES OF NSEL

Huge potential as no other strong competitors with such concept.

They easily enter in different Mandis and utilize their strength.

Network of branches working with farmers can allow for other product

and Services to be sold (E.g. Multi-commodities, farmers co-operatives)

Farmers easily attract towards the Spot Exchange due to high prices to

farmers.

THREATS FOR NSEL

Existing traders are main competitors for NSEL

ITC, CARGIL, NBHC, NSPOT, also the main player to compete with

NSEL.

Government rules & regulations.

NSEL may be fail due to his single commodity trading

Strong relation of farmers & traders.

Farmers are habitual with present marketing condition.

88

CONCLUSION

Farmers are highly satisfied with NSEL as it has positive impact on the

income as well living standards of farmers. It has captured good market

share in the castor trade within a short period of commencement of

operation in the Palanpur taluka. Farmers found NSEL more convenient

platform for sale of castor seed as compare to APMC. Farmers perceive

NSEL as only organization with completely new concept in the castor

trade.

NSEL’s Marketing strategies are very effective to attract farmers but still

there are more efforts required to create mass awareness among farmers.

There are vast opportunities available for the NSEL to expand its

operations. It has also eliminated the entire chain of intermediaries, which

were exploiting farmers so now they are getting better returns for their

produce.

89

BIBLIOGRAPHY

Acharya, S.S. (2000), Domestic Agricultural Marketing Policies,

Incentives and Integration. In S.S. Acharya& D.P. Chaudhuri (eds.).

Indian Agricultural Policy at the Crossroadss. New Delhi: Rawat

Publications.

Board John,SandmannGleb, Sutcliffe Charles (September 2001), The

effect of futures market volume on spot market volatility, Journal of

Business Finance & Accounting 28(7) 799–819.

Byres, Terence J. (1997), The State Development and Liberalisation in

India. New Delhi: Oxford University Press.

Datta-Chaudhuri, Mrinal (1990), Market failure and Government

Failure, Journal of Economic Perspectives, 4 (3): 25-39.

Deshpande, R. S. (1996), Demand and Supply of Agricultural

Commodities – A Review, Indian Journal of Agricultural Economics,

15(1 and 2): 270.

Mr. Patel Amit et al.,Public Private Partnership (PPP) Approach – for

sustainable development of APMCs in Gujarat, Conference on Global

Competition & Competitiveness of

ICFAI Press Journal, 2009

Report drafted by MCX, 2008-09

Report of Palanpur APMC.

Sahadevan, K. G. (2002), Sagging agricultural commodity exchanges:

growth constraints and revival policy options. Economic and Political

Weekly, XXXVII(30).

90

Websites

www.nationalspotexchange.com

www.agmarknet.nic.in

www.castoroil.in

www.ikisan.com

www.oilworld.biz

www.seaofindia.com

91

ANNEXURE

QUESTIONNAIRE FOR FARMERS

1. Name of Respondent:

2. Occupation:

3. Age:

4. Address:

5. Education:

Illiterate

Below SSC

S.S.C.

H.S.C.

Graduate

Post Graduate

6. Income source:

Farming

Business:

Agriculture

Government

Poultry

Private

Dairy

Own Business

7. Annual Income:

Upto 50,000

50, 000 to 100, 000

100, 000 to 200, 000

200, 000 to 500,000

Above 500, 000

92

8. Land Holdings:

Irrigated

Non-irrigated

9. Crops cultivated in this area:

Season Crops

10. Crops cultivated by respondent:

Season Crops

11. Where do you go to sale you produce?

Co-operatives

Wholesaler

Commission Agent

APMC

Millers

NSEL

Consumers

93

12. Which factors do you consider while selecting specific market to sale

your produce?

Particulars Always Mostly Often Rarely Never

Higher Price

Familiar Traders

Less quality Deduction

Past Experience

Promotional Strategy

Company Reputation

13. From where did you get the information regarding price of your

produce?

Other farmers

Discussion at choupal

Sarpanch

Middlemen

Radio

Television

News paper

14. Are you aware about the NSEL? If Yes than by whom?

YES

NO

Friends/Relatives

Hoardings

Traders

Co.’s Representative

News paper

Leaflets distributed by NSEL

Television

Ad Campaign

94

15. Have you ever deal with NSEL?

YES

NO

16. If Yes why did you switch to NSEL?

Better price

Experience of other farmers

No fear of Cheating

Cash payment

17. If No than Why?

Not aware

Fear of Private Company

Others Experience

Relations with Private Traders

18. How would you rate your satisfaction level when dealt with NSEL?

Highly Satisfied

Satisfied

Moderately satisfied

Satisfied but have complaint

Unsatisfied

Highly Unsatisfied

19. Would you like to participate in NSEL in future too?

YES

NO

95

20. Do you know the other services offered by NSEL?

YES

NO

21. What is your perception regarding NSEL?

It is a Private company

Commission Agent & Merchant

Government organization

Government-Private Partnership

Farmer friendly Private

Organization.

22. What is the impact of NSEL on the incomes of Farmers linked with

NSEL?

No improvement

Some extent improved

Greater improvement.

23. Does NSEL have undertaken any marketing/promotional activities in

your village?

YES

NO

24. Does NSEL really follows what it said in marketing campaign in your

village?

YES

NO

96

25. Is there need for improvement in the system followed by NSEL?

YES

NO

26. If Yes , Specify the subject area.

27. How NSEL has benefited to you and your Family/Business?

Improved living standard

Increase income

Increase area under castor seed cultivation

Purchase more land

Purchased new home appliances

Higher education to children

Any other specify……

28. What are other business opportunities available for the NSEL in your

region?

29. Are there any competitors for NSEL in your region? If Yes list out.

YES NO If Yes list below

97