Performance of Regulated Agricultural Market A case study of Bhiwani District of Haryana
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
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).
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.
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
( 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.
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Table 2 Income pattern of APMC of Bhiwani District from 2004-05 to 2009-10