Topic 3. Mktg.of Agri. Inputs

8/3/2019 Topic 3. Mktg.of Agri. Inputs

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Session 5

Topic 3Marketing of Agricultural Inputs

14th

September, 2011.


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Consumable Inputs

Durable Inputs

Fertilizers

Agrochemicals

Seeds

Cattle

Poultry

Aqua Feeds

Tractors

Power Tillers

Irrigation Equipments

Other Farm Machinery

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Marketing of Agricultural Inputs is process of delivering

manufactured or processed inputs or services to rural

producers.

Urban products has to be sold in rural market.

73% of rural population is being engaged in agricultural andallied activities.

Estimation of Rs. 20,000 Crores of agro-inputs business.

Agricultural inputs fall in two categories-

1. Consumable Inputs

2. Durable Inputs

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a. Plant foodmanures & fertilizersb. Soil amendmentscalcium & gypsumc. Agro-chemicals for plant protectionagainst pests &

diseasesd. Seedshigh yielding, hybrid, genetically modified seeds &

improved varietiese. Power generationdiesel, oil, petrol & electricityf. Feedcattle, poultryg. Veterinary medicinesProphylactic & curativeh. Simple hand-held farm toolsphavadas, sickle, hand hoes,

crowbarsi. Packing materialsgunnies, ropes, twines

j. Othersbamboo articles like baskets etc.,

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a. Farm implementstractors, harvesters, threshers, power

tillers

b. Irrigation equipmentsmotors, pump sets, sprinklers, drip

irrigation systems

c. Construction materialscement, bricks, zinc/asbestos sheetsfor roofing

d. Transportation equipmentsbullock carts, tractors, trailers,

mini trucks

e. Farm animalsbullock, goats, cows, poultry, sheepf. Otherstyres, tubes, spare parts

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Fertilizer consumption in year 1951-52 was 66,000 tonnes &

grew up to 21 million tonnes in year 2006-07.

70% of fertilizers is consumed in irrigation areas in states of

Punjab, Maharashtra, U.P., M.P., A.P. and Karnataka.

About 2/3rd of fertilizers used for rice and wheat crops.

Fertilizers consumption depends upon-

1. Profitability of farming

2. Availability of irrigation facilities

3. Rainfall

4. Introduction of new technology

5. Availability of fertilizers and prices of fertilizers

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Product

Fertilizers fall in three categories based upon nutrients-Nitrogenous(N), Phosphates(P), Potassic (K) which are beingsupplied to crops.

1. Straight fertilizerssupply single nutrientE.g.ammonium sulphate, urea, calcium ammonium,nitrate, single super phosphate.

2. Compound fertilizerswhich contain more than one nutrientE.g.Di-Ammonium Phosphate(DAP) complex fertilizercontains nitrogen and phosphate.

3. NPK fertilizers which has all three nutrients.4. Fertilizers as per Fertilizer Control Order (FCO) marketed

only by generic name and not by trade or brand name.5. Each bag should show proportions of 3 nutrients NPK.

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Till 1991 the Govt. of India fixed the prices of different grades

of fertilizers.

From June 1994 except Urea fertilizer all other were

decontrolled.

Decontrol was to reduce burden of subsidies on the Govt. Itprovided subsidies on adhoc.

Rate of subsidies varies across countries and types of

fertilizers.

Fertilizer subsidy is to provide fertilizers to the farmers atlower prices than its economic prices.

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2,75,000 outlets selling fertilizers in the country.

70% private sector & 30% cooperatives societies and public

sector like State Agro Industries Corporations.

Manufacturers store inventory in regional godowns maintained

by them and then released to wholesalers and then to retailersduring season.

Manufacturers like Indian Farmers Fertilizer Cooperative Ltd.

(IFFCO) , Gujarat State Fertilizer & Chemicals Ltd. (GSFC),

Fertilizers & Chemicals Travancore Ltd. (FACT) maintaintheir own outlets.

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Manufacturers use their own promotional measures and create

brand image.

Inter-personal and group contacts

Fertilizer festivals and Kissan Melas

TV

Newspapers and Journals

Special promotional measures

Village Adoption Programme

Wall Paintings and Hoardings

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The chemicals used for control of pests, diseases,

rodents, virus etc.,

Agrochemicals market is classified into

1. Insecticides2. Fungicides

3. Herbicides

4. Weedicides

5. Rodenticides6. Fumigants

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Agrochemicals market is dominated by insecticides which

account for about 75%.

A.P., Punjab, Karnataka and Tamil Nadu markets account for

more than half of the demand for crop protection products.

The manufacturers of agricultural chemicals can be bifurcated

as: A) Manufacturers of technical grade material and B)Formulators.

As of now 44 technical grade pesticides and 10 formulations

are being manufactured in India by both Public & Private

sector companies. Currently 25 large companies and 450 small ones exist in

country.

Indian Pesticide Industry is the largest in Asia and 12th largest

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Product

Products are available in 5 groups and in differ in formulationsfor different products.

The formulators are free to manufacture combination orconcentration of pesticides and insecticides from basicchemicals.

They are free to use any trademark and brand name for theirproducts.

Products are available in two formspowdered and liquidform.

Powder form require dusters for application and liquid is usedwith help of Sprayers.

The big Cooperative Sector Fertilizer manufacturer,Cooperative societies & IFFCO stocks this application andsprayers for free use in their agro-kendras.

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Manufacturers fix their own prices.

National players like Rallis, Ciba, Bayer are reputed

firms.

Govt. purchase agrochemicals & distribute to thefarmers at subsidized rates.

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Distribution is carried out through state departments,cooperative societies and private dealers

There are only 1,36,718 retail outlets selling agrochemicals.

The power form pesticides are available in 50 kg pack size and

are applied in large quantities.

Liquid pesticides are available in 5 lt. pack.

Requirement is small unlike fertilizers.

Small local players and formulators cater to need of local

farmers.

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Field Demonstrations

Farmers Meetings

Gifting Applicators

Kissan Melas Credit facilities

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Marketing of seeds was in hands of Central and State SeedsCorporation.

Few seed companies were also in operation.

New varieties of high yielding seeds rested with the

government agencies like agricultural research stations andagricultural universities of Central and State Govt.

The Corporations distributed their seeds through cooperatives,

private dealers and their own sales counters.

Entry of MNCs like Monsanto, Pet Seeds of USA, PioneerSeeds, Hoechest, Harrison Vanderhave, ITC, Indo-American

Hybrid Seed Company etc.,

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Increase in food processing industry, export of fruits andvegetable products, flowers, mushrooms, prawns and cereals.

Development of new seeds involves huge investment in terms

of time and money.

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Milk production in the country got a big boost with theimplementation of Operation Flood Programmes.

Companies like Venkateshwara Hatcheries, Deejay Hatcheries

and their franchises, distribute one-day-old chicks for eggs

production. Farmers purchase feed for dairy and poultry from organized

manufacturers to take care of balanced nutrition.

Aqua farms for breeding and harvesting shrimps are

increasing due to export opportunities.

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Investments have been made in coastal areas of AndhraPradesh, Tamil Nadu, Pondicherry and Orissa to establish

shrimp farms.

Emu and rabbit farming are also catching up in the country as

ventures. The Central Govt. provides subsidy of 50% of the premium to

insure cross breed and high yielding cattle and buffaloes.

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Country produces 2 lakh tractors p.a. Tractors of various horse powers25 HP, 35 HP and above 35

HP are manufactured and marketed by major companies like

HMT, Escorts, Eicher, Massey Ferguson, International, Punjab

Tractors.

Power tillers were introduced for mechanization of medium

and semi medium farms.

Power tillers are manufactured and marketed by VST Tillers,

Bangalore and Kerala Agro Machinery Corporation.

Earlier were manufactured under Japanese collaboration and

even now tillers carry the names like Kubota and Mitsubishi.

Govt. provides 50% of the cost involved in purchase of tillers

or Rs. 30,000 which ever is less.

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Determinants in decision to purchase tractor are:

a) Area of land holding

b) Nature of land holding (irrigated/ dry)

c) Types of crops grown and number of crops grown in a year

d) Availability of loan

e) Possibility of hiring out the services of the tractor to others

f) Requirements of tractor for transport of produce to market

and inputs to the farm.

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Factors that count for successful sale of tractors:a) Loan availability from banks

b) Personal selling: identification of potential tractor users and

approaching them

c) Trouble free servicesfewer breakdownsd) Availability of spares for easy repairs

e) After sales service

f) Resale value of tractors

g) Training on how to use tractorsh) Fuel efficiency

Most manufacturers register with the leading agencies as

approved suppliers.

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Low cost capital equipment. Include prime mover, electric motor or oil engine, pump set

and accessories like pipe, couplings, etc.,

Loan is available and provided by lending agencies.

Lending agencies prepare a list of approved suppliers ofirrigation equipments.

Lending agencies place orders with suppliers to install thepump set on the farms.

Competition is stiff.

Sophisticated irrigation system like, sprinklers and dripirrigation have come into vogue.

Popular because of the economic usage of water which is fastbecoming a scarce input.

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It includes board ploughs, seed drills, winnowers, threshers,harrows.

Manufactured and marketed by local players either power

driven or bullock driven.

Easy to maintain and operate. Other tools like ploughshares, hand hoe, sickle, phavadas, etc.,

Other inputs like electricity, diesel, lubricants etc., under

control of Central or State Govt.

Some players in private sector also supplies diesel, petrol,lubricants, gas and oils.

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SWOT Analysis of Fertilizer Market

SWOT Analysis of Agro-Chemicals Market

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Topic 3. Mktg.of Agri. Inputs

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