Per­for­mance of Reg­u­lated Agri­cul­tural Mar­ket A case study of Bhi­wani District of Haryana

Economic Challenger - - CONTENTS - - Dr. Anita Da­gar Dr. San­deep Ku­mar &Su­nita Ya­dav

AB­STRACT

Agri­cul­tural devel­op­ment de­pends not only on the mere in­crease in the pro­duc­tion of agri­cul­tural prod­ucts but also on their ef­fi­cient mar­ket­ing. An ef­fi­cient reg­u­lated mar­ket­ing sys­tem is de­sir­able for Haryana to en­able the farm­ers to get the fair price for their pro­duc­tion. So the ma­jor role of agri­cul­tural mar­ket­ing in to­tal agri­cul­tural devel­op­ment can­not be ig­nored. Keep­ing in view the sig­nif­i­cance of reg­u­lated agri­cul­tural mar­kets in agri­cul­tural devel­op­ment, the present re­search work has ex­am­ined the per­for­mance of reg­u­lated agri­cul­tural mar­ket of Bhi­wani district on the ba­sis of eco­nomic vari­ables (mar­ket ar­rivals, in­come and ex­pen­di­ture pat­tern). The re­sults of the study are based on sec­ondary time se­ries data re­lated to mar­ket ar­rivals which was col­lected for the pe­riod 2000-01 to 2010-11 from the an­nual re­ports of the reg­u­lated mar­ket's mar­ket com­mit­tee. The study con­cluded that the per­for­mance of phys­i­cal in­di­ca­tors re­veals that there has been sig­nif­i­cant in­crease in the mar­ket ar­rivals. Fur­ther­more, the study con­cluded that se­lected reg­u­lated mar­ket has not suc­ceeded much to at­tract the de­sired at­ten­tion of the pri­mary pro­duc­ers. Key words: Agri­cul­tural mar­ket­ing, Mar­ket ar­rivals, Ex­pen­di­ture pat­tern, In­come pat­tern, Reg­u­lated mar­ket, Farm­ers

IN­TRO­DUC­TION

The his­tory of devel­op­ment of mar­ket­ing started long be­fore, from barter sys­tem of mar­ket­ing in prim­i­tive age to e-com­merce in this elec­tronic era. The green rev­o­lu­tion has changed the sce­nario of agri­cul­tural pro­duc­tion in terms of qual­ity, quan­tity and va­ri­eties. But un­for­tu­nately In­dian farm­ers are the least or­gan­ised sec­tor of the econ­omy in terms of get­ting fair price for their pro­duce. They have to sell their pro­duce at an un­favourable place, at an un­favourable time and at on un­favourable terms. In or­der to safe­guard the in­ter­est of the farm­ers, the government at the cen­tre ini­ti­ated a num­ber of mea­sures and one among them was the cre­ation of Reg­u­lated Mar­kets which in­tro­duced an el­e­ment of fair trade prac­tices in the agri­cul­tural mar­ket­ing. Though sev­eral prov­inces and states en­acted leg­is­la­tion for the reg­u­la­tion of agri­cul­tural pro­duce mar­kets, not much head­way was made till in­de­pen­dence. But af­ter the in­de­pen­dence, the reg­u­la­tion pro­gramme got mo­men­tum, be­cause of con­certed ef­forts made by cen­tre and state gov­ern­ments. As a re­sult the num­ber of reg­u­lated mar­kets in­creased from 286(1950-51) to 7157(March 2010).

LIT­ER­A­TURE RE­VIEW

Keep­ing in view the sig­nif­i­cance of reg­u­lated agri­cul­tural mar­kets, th­ese were stud­ied by var­i­ous re­searchers and au­thors from time to time on the ba­sis of dif­fer­ent pa­ram­e­ters. Ma­lik and Luhach(2000) in their study ex­am­ined the pat­tern of mar­ket ar­rivals in the reg­u­lated mar­kets of Haryana. The anal­y­sis re­vealed that mar­ket ar­rivals of wheat and paddy in­creased, but the ar­rivals of gram and gur-khand­sari de­clined over the pe­riod due to low pro­duc­tiv­ity, change in con­sump­tion habits and avail­abil­ity of sugar mills etc. Pend­nekar (2003) in his study ex­am­ined the work­ing of reg­u­lated mar­kets in

Goa, on the ba­sis of trends in mar­ket ar­rivals and amounts spent on devel­op­ment ac­tiv­i­ties in the mar­ket yard. The study re­vealed that there were sig­nif­i­cant in­creases in mar­ket ar­rivals and keen in­ter­est was shown by APMCs in im­prov­ing mar­ket con­di­tions by in­vest­ing in in­fras­truc­tural fa­cil­i­ties. Singh and Dayal (2004) ex­am­ined the in­crease in amount spent on devel­op­ment of reg­u­lated mar­kets and its im­pact on mar­ket ar­rivals in Ut­tar Pradesh. The study in­di­cated that the growth in mar­ket ar­rivals be­fore the in­vest­ment pe­riod was mainly due to the growth in pro­duc­tiv­ity. But af­ter in­vest­ment it was due to the in­crease in amount spent on devel­op­ment works in reg­u­lated mar­kets. Kerur et al. (2008) have stud­ied the phys­i­cal and fi­nan­cial per­for­mance of Kar­nataka's reg­u­lated mar­kets and found that mar­ket ar­rivals reg­is­tered a neg­a­tive growth rate but in­come was higher than ex­pen­di­ture which showed bet­ter fi­nan­cial per­for­mance. Keep­ing in view the sig­nif­i­cance of reg­u­lated agri­cul­tural mar­kets, the present re­search pa­per has ex­am­ined the per­for­mance of reg­u­lated mar­ket of Bhi­wani district on the ba­sis of eco­nomic vari­ables. The spe­cific ob­jec­tives of the present re­search pa­per are:(i) To ex­am­ine the growth and per­for­mance of phys­i­cal in­di­ca­tors viz. mar­ket ar­rivals of se­lected agri­cul­tural com­modi­ties. (ii)To ex­am­ine the growth and per­for­mance of fi­nan­cial in­di­ca­tors viz. in­come and ex­pen­di­ture pat­tern of APMC.

RE­SEARCH METHOD­OL­OGY

The study was con­ducted for the prin­ci­pal mar­ket yard of Bhi­wani District (Haryana). In this pa­per, we have ba­si­cally tried to judge the per­for­mance of the reg­u­lated mar­ket on the ba­sis of eco­nomic vari­ables (mar­ket ar­rivals, in­come and ex­pen­di­ture).To ful­fil the ob­jec­tives of the present study, sec­ondary time se­ries data re­lated to mar­ket ar­rivals was col­lected for the pe­riod 2000-01 to 2010-11 from RMC's of­fice. In case of mar­ket ar­rivals, the present study is re­stricted to five crops viz. Wheat, Mus­tard, Ba­jra, Jawar and Bar­ley. Th­ese crops were se­lected on the ba­sis of ma­jor ar­rivals and avail­abil­ity of data. And we tried to check the fol­low­ing hy­poth­e­sis that the mar­ket ar­rivals of the se­lected crops have shown the pos­i­tive trend or per­for­mance in the reg­u­lated mar­ket dur­ing the study pe­riod has shown a pos­i­tive trend:- H : b=0 H : b>0

And the sec­ondary data for in­come and ex­pen­di­ture was also col­lected from the same source but for the pe­riod 2004-05 to 2009-10 be­cause of non-avail­abil­ity of data be­fore the pe­riod. The per­cent­ages, av­er­ages and com­pound growth rates and sim­ple growth rates were com­puted to as­cer­tain the growth per­for­mance in the reg­u­lated mar­ket. The com­pound growth rate of mar­ket ar­rivals, in­come and ex­pen­di­ture has been cal­cu­lated by us­ing the fol­low­ing for­mula:Y= Y (1+r) t.......................... (i) The equa­tion (i) can be rewrit­ten in the log­a­rith­mic form as fol­lows:Log Y= Log Y + t Log (1+r).......... (ii) Equa­tion (ii) can be rewrit­ten as:Y= A+Bt............................. (iii) Where Log Y = A, Log (1+r) = B

In above equa­tion; Y= Mar­ket Ar­rivals, In­come and Ex­pen­di­ture as the case may be, A= Con­stant term, B= Re­gres­sion Co­ef­fi­cient, T = Time Pe­riod. In semi- log model like re­gres­sion (iii), the slope co­ef­fi­cient "B" in present case, mea­sures the pro­por­tional or rel­a­tive change in Y for a given ab­so­lute change in the ex­plana­tory vari­able, time in the present case. If this rel­a­tive change is mul­ti­plied by 100, we ob­tain the per­cent­age change or the growth rate. So In our case, rel­a­tive change is B, so if B is mul­ti­plied by 100, it gives growth rate. The com­pound growth rate (r) has been worked by:B= Log (1+r), r = An­tilogB-1 or 'r' in per­cent­age = (An­tilogB-1) × 100

RE­SULT DIS­CUS­SION

( I) Growth Per­for­mance of Phys­i­cal In­di­ca­tors: The first im­por­tant com­po­nent for our frame­work of anal­y­sis is mar­ket ar­rivals. As the es­tab­lish­ment of reg­u­lated mar­kets is pri­mar­ily aimed at pro­vid­ing ef­fi­cient agri­cul­tural mar­ket­ing struc­ture to deal with grow­ing mar­ketable sur­plus of farm­ers, their per­for­mance can be mea­sured by tak­ing the role of in­crease in quan­tity of ar­rivals as one of the im­por­tant in­di­ca­tors. The growth/per­for­mance of mar­ket ar­rivals is an­a­lyzed in re­spect of five ma­jor crops for the pe­riod (2001-02 to 2010-11) through the ta­ble 1.

It is re­vealed from the above ta­ble 1 that although Wheat is the most prom­i­nent of the crops in the mar­ket (high­est per­cent­age share 62.42%) but its ar­rivals showed a very low growth rate of 1.7 per­cent dur­ing the study pe­riod. Stan­dard er­ror of the re­gres­sion co­ef­fi­cient is found to be 0.062. The value of co­ef­fi­cient of de­ter­mi­na­tion that is R2 be­ing 0.009 leads us to con­clude that in case of quan­tity of to­tal ar­rivals of Wheat only 0.9 per­cent vari­abil­ity in the de­pen­dent data is caused by the time fac­tor. The com­puted value of Wheat (0.274) is less than the ta­ble value of't'. There­fore we can say that the data does not pro­vide suf­fi­cient ev­i­dence against the null hy­poth­e­sis which means that Wheat has not shown the pos­i­tive per­for­mance. Fur­ther, ta­ble shows that although Mus­tard has 9.64 per­cent share in to­tal ar­rivals but it has neg­a­tive trend as in­di­cated by the neg­a­tive growth rate of 3.9 per­cent dur­ing the study pe­riod. Stan­dard er­rors of cor­re­spond­ing re­gres­sion co­ef­fi­cient are found to be 0.065 and Co­ef­fi­cient of de­ter­mi­na­tion be­ing 0.043. The com­puted ' t' value of Mus­tard (-0.603) is neg­a­tive and less then the ta­ble value which means it has also proved the neg­a­tive per­for­mance. In case of Ba­jra, the ta­ble re­veals that it has reg­is­tered high­est growth rate of 26.8 per­cent per an­num with 3.51 per­cent share in to­tal ar­rivals. Stan­dard er­ror of the re­gres­sion co­ef­fi­cient is found to be 0.109. It shows that from the cal­cu­lated means the data re­gard­ing ar­rivals in quan­ti­ties can vary on an av­er­age to the ex­tent of 0.109. Its R2 be­ing 0.433 which shows that Ba­jra's mar­ket ar­rivals are more af­fected or re­lated with time fac­tor as com­pared to Wheat and Mus­tard. The com­puted 't' value of Ba­jra (2.471) is also more than the ta­ble value of 't' which shows that Ba­jra's mar­ket ar­rival have shown the pos­i­tive per­for­mance. Fur­ther ta­ble re­veals that af­ter Ba­jra, Jawar's mar­ket ar­rivals has recorded high­est growth rate of 25.1 per­cent per an­num. It has also sec­ond high­est per­cent­age share (20.93%) in to­tal ar­rivals of ma­jor crops. Stan­dard er­ror of the re­gres­sion co­ef­fi­cient is found to be 0.058 and co­ef­fi­cient of de­ter­mi­na­tion R2 be­ing 0.702. It clearly ex­hibits that the Jawar's mar­ket ar­rivals is the most af­fected by the time fac­tor as com­pared to all other se­lected crops ar­rivals. The com­puted 't' value of Jawar (4.346) is also more than the ta­ble value which re­veals that Jawar's mar­ket ar­rivals have shown the very pos­i­tive and sig­nif­i­cant per­for­mance. Lastly in case of Bar­ley the ta­ble shows that its mar­ket ar­rivals reg­is­tered growth rate of 15.1 per­cent per an­num. Stan­dard eror of the re­gres­sion co­ef­fi­cient is found to be 0.077. It means from the cal­cu­lated mean, the data re­gard­ing Bar­ley's ar­rivals can vary on an av­er­age to the ex­tent of 0.077 re­spec­tively. Its R2 be­ing 0.323 shows that 32.3 per­cent vari­abil­ity in the de­pen­dent data is caused by the time fac­tor. Barely's't' value (1.955) is ap­prox­i­mately equal to the ta­ble value which shows mod­er­ate per­for­mance. ( II) Growth Per­for­mance of Fi­nan­cial In­di­ca­tors: - Per­for­mance anal­y­sis with­out mak­ing any ref­er­ence to in­come and ex­pen­di­ture would re­main in­com­plete. So we have con­sid­ered this im­por­tant as­pect as well. (A) In­come Pat­tern of APMC:- The in­come pat­tern of APMC (Agri­cul­tural Pro­duce Mar­ket Com­mit­tee) man­ag­ing the reg­u­lated mar­ket is pre­sented in this sub­sec­tion. The main sources of in­come of mar­ket com­mit­tees are mar­ket fees and li­cense fees. The fol­low­ing Ta­ble (2) shows the in­for­ma­tion re­gard­ing the ma­jor sources of in­come, their per­cent­age share in to­tal in­come and CGR(%) of dif­fer­ent sources of in­come as well as to­tal in­come:-

On the ba­sis of above ta­ble 2 fol­low­ing main points come out about the in­come pat­tern of APMC. Li­cense fee is one of the ma­jor sources of mar­ket com­mit­tee. This fee is re­alised from dif­fer­ent mar­ket func­tionar­ies/ mid­dle­men per­mit­ted to work in the mar­ket area. Ta­ble shows that li­cense fees recorded a neg­a­tive growth rate of 3.30 per­cent per an­num, which in­di­cates that the num­ber of com­mis­sion agents, traders and other mar­ket func­tionar­ies has not in­creased in ac­cor­dance with the in­crease in ar­rivals. The per­cent­age share of li­cense fees in to­tal in­come also shows de­clin­ing trend, in 2004-05 its share was 0.14 and in 2009-10 it be­came 0.03 per­cent. Mar­ket fee is the main source of all in­come of all APMC's. It is im­posed on the ba­sis of value of com­modi­ties sold in the mar­ket area of the re­spec­tive mar­ket com­mit­tee. And it is re­alised from buyer/pur­chaser of the pro­duce. Fur­ther­more, ta­ble in­di­cates that mar­ket fees reg­is­tered 15.53 per­cent growth rate per an­num. Mar­ket fees have recorded high­est per­cent­age share in to­tal in­come ex­cept one year 2009-10. This is be­cause dur­ing this year per­cent­age share of mis­cel­la­neous sources of in­come in­creased. An­other im­por­tant point that comes out about the mar­ket fees is that although it has high­est per­cent­age share in to­tal in­come but its per­cent­age share shows con­tin­u­ously de­creas­ing trend ex­cept one year 2006-07. An­other im­por­tant source of in­come for the mar­ket com­mit­tee is in­ter­est earn­ing on in­vest­ment. This source of in­come shows a growth rate of 41.56 per­cent per an­num. Its per­cent­age share in to­tal in­come has shown an in­creas­ing trend. Fur­ther ta­ble re­veals that mis­cel­la­neous sources of in­come shows very sig­nif­i­cant growth rate of 75.31 per­cent per an­num. Be­sides this its per­cent­age share in to­tal in­come also shows in­creas­ing trend ex­cept one year (2006-07). And the main rea­son be­hind this very pos­i­tive growth rate is the in­creas­ing in­come from the sale of plots. Over­all the to­tal in­come of APMC recorded a growth rate of 28.81 per­cent per an­num.

(B) Ex­pen­di­ture Pat­tern of APMC: - In this sub­sec­tion, we shall dis­cuss the ex­pen­di­ture pat­tern of APMC. The ma­jor ar­eas of its ex­pen­di­ture are es­tab­lish­ment, devel­op­ment of mar­ket in­fra­struc­ture and con­tri­bu­tion to the State Agri­cul­tural Mar­ket­ing Board. On the ba­sis of th­ese fac­tors ta­ble 3 shows ex­pen­di­ture pat­tern of se­lected reg­u­lated mar­ket's mar­ket com­mit­tee:- The first area of ex­pen­di­ture is the pen­sion/ salary of APMC's staff and their wel­fare. Dur­ing the study pe­riod, this ex­pen­di­ture area shows a growth rate of 21.27 per­cent per an­num. On the other hand its per­cent­age shares in to­tal ex­pen­di­ture shows de­creas­ing trend. The ta­ble fur­ther re­veals that with re­gard to ex­pen­di­ture on devel­op­ment works/ameni­ties, its per­cent­age share is con­tin­u­ously in­creas­ing. In 2004-05, its share was 45.22 per­cent which in­creased 200910 to 75.54 per­cent. It shows a sig­nif­i­cant growth rate of 45.38 per­cent dur­ing the study pe­riod. This clearly shows that APMC is con­tin­u­ously spend­ing a large por­tion of its in­come on devel­op­ment works in the reg­u­lated mar­ket. The rate of con­tri­bu­tion paid by the se­lected mar­ket com­mit­tee to HSAMB shows a growth rate of 18.12 per an­num. But its per­cent­age share in to­tal ex­pen­di­ture shows de­creas­ing trend in many years. Fur­ther the ta­ble re­veals that ex­pen­di­ture on mis­cel­la­neous sources (con­tin­gen­cies, can­cel­la­tion of bid, and in­ter­est on loan from board, de­pre­ci­a­tion and godown rent on board prop­erty) reg­is­tered a neg­a­tive growth rate of 2.90 per­cent per an­num and its per­cent­age share in to­tal ex­pen­di­ture also shows con­tin­u­ously de­creas­ing trend. And over­all ex­pen­di­ture of the reg­u­lated mar­ket's mar­ket com­mit­tee shows a growth rate of 30.57 per­cent. And lastly with the help of fol­low­ing ta­ble a com­par­a­tive anal­y­sis of in­come and ex­pen­di­ture is shown.

It is clear from the above ta­ble that ex­cept one year (2005-06) reg­u­lated mar­ket of Bhi­wani district is con­tin­u­ously fac­ing a deficit sit­u­a­tion. The ex­pen­di­ture is more than the in­come as shown through the in­come ex­pen­di­ture ra­tio which is less than one. It is in­di­cat­ing a neg­a­tive fi­nan­cial per­for­mance of the se­lected reg­u­lated mar­ket.

CON­CLU­SION AND POL­ICY IM­PLI­CA­TIONS

In a nut­shell the per­for­mance of phys­i­cal in­di­ca­tors re­veals that there has been sig­nif­i­cant in­crease in the mar­ket ar­rivals of Ba­jra, Jawar and Bar­ley both in phys­i­cal and value terms and in­crease has been high­est in case of Ba­jra's ar­rivals. But the find­ings of the study proved that se­lected reg­u­lated mar­ket has not much suc­ceeded to at­tract the de­sired at­ten­tion of the pri­mary pro­duc­ers. So it has to be sug­gested that good deal of pro­pa­ganda and pub­lic­ity works are to be made by RMC to at­tract the pro­duc­ers/ sellers to bring more pro­duce to the mar­ket. High­est growth rate (45.38%) of ex­pen­di­ture on devel­op­ment works and ameni­ties shows that keen in­ter­est has been shown by RMC to im­prove mar­ket con­di­tions. But a com­par­a­tive anal­y­sis of in­come and ex­pen­di­ture re­veals that ex­cept one year (2005-06) ex­pen­di­ture is higher than in­come which shows neg­a­tive fi­nan­cial per­for­mance.

There is still a lot of scope for bet­ter per­for­mance of se­lected reg­u­lated mar­ket both in phys­i­cal and fi­nan­cial terms.

REF­ER­ENCES

Acharya S.S. (1998), "Agri­cul­tural Mar­ket­ing in In­dia: Some Facts and Emerg­ing Is­sues" In­dian Jour­nal of Agri­cul­tural Eco­nom­ics, Vol. 53(3), P.P. 311-332. Acharya S.S (2004), "State of the In­dian Farmer: A Mil­len­nium Study" Vol. 17: Agri­cul­tural Mar­ket­ing, De­part­ment of Agri­cul­ture and Co­op­er­a­tion, Min­istry of Agri­cul­ture, Government of In­dia, Aca­demic Foun­da­tion New Delhi. Bhanu­mate, C.S. (2011), "Trend Anal­y­sis of Agri­cul­tural Com­modi­ties in APMC So­la­pur" In­dian Streams Re­search Jour­nal (ISRJ), Vol. 1(1), P.P.109-112. Government of Haryana (2010), "Sta­tis­ti­cal Ab­stract of Haryana" Eco­nomic and Sta­tis­ti­cal Ad­viser, Plan­ning De­part­ment, Chandigarh. Kerur, N.M., B. Banakar, H.S. Vi­jayku­mar, L. Man­ju­nath and H. Basavaraj (2008), "Per­for­mance Anal­y­sis of Reg­u­lated Mar­kets in Kar­nataka" Kar­nataka Jour­nal of Agri­cul­tural Sci­ence, Vol. 21(1), P.P. 74-79. Ma­lik, D.P. and Luhach M.S. (2000), "Pat­tern of Mar­ket Ar­rivals and Stor­age Ca­pac­ity of Ma­jor Com­modi­ties in Haryana" In­dian Jour­nal of Agri­cul­tural Mar­ket­ing, Con­fer­ence Spe­cial, P.P 93-94. Pend­nekar A. (2003), "Per­for­mance of Reg­u­lated Mar­kets in Goa: A case study" In­dian Jour­nal of Agri­cul­tural Mar­ket­ing, Vol.17 (1), P.P.194-203. Prasad Jagdish(2000), "En­cy­clopae­dia of Agri­cul­tural Mar­ket­ing: Mar­ket Reg­u­la­tion and Devel­op­ment" Vol.III, Mit­tal Pub­li­ca­tions New Delhi. Singh, R.B., and Dayal Rekha (2004), "Im­pact of Mar­ket in­fras­truc­tural devel­op­ment on Mar­ket Ar­rivals in Ut­tar Pradesh- An eco­nomic Anal­y­sis" In­dian Jour­nal of Agri­cul­tural Mar­ket­ing, Vol. 18(3), P.P. 25-30.

Source: APMC's of­fice Note: Fig­ure given in the paren­the­sis in­di­cates the per­cent­age share of in­di­vid­ual source of in­come in to­tal in­come in the re­spec­tive year

Ta­ble 2 In­come pat­tern of APMC of Bhi­wani District from 2004-05 to 2009-10

Source: APMC's of­fice Note: Fig­ure given in the paren­the­sis in­di­cates the per­cent­age share of in­di­vid­ual as­pect of ex­pen­di­ture in to­tal ex­pen­di­ture in the re­spec­tive year.

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