5 Market Led Extension

Hello friends. In our previous discussion, we discussed about various challenges in integrating ICT’s in agricultural extension services. I hope now you are sure about the problems that we are going to face if at all we want to make use of ICT as an instrument for agricultural extension services. In the context in this discussion we will be talking on the Market Led Extension.

If you look at the population which is coming under middle class between 1990 to 2030. The data reveals that the phase of 2015 to 2020 is very crucial and after that it is going to increase like anything. It means the income levels of the people are increasing. And at the same time the food demand is also increasing in a similar way. But the major issue with the professionals related to agriculture and allied sciences is, so of the cost what the consumer is paying. So what is that the farmer or the primary producer is getting.

In case of developed nations, whatever the consumer pays for a particular agricultural product, 50% is going to the farmers; but in the Indian context what the consumer is paying, only 25% is going to the farmer. So this particular issue is one of the dominant issue, because of the lack of marketable surplus specially with the farmers. Then inconsistencies in the yield of the farmers. And inconsistency in product quality is another issue. Because of the small landholdings, every farmer is going for the different varieties. And that is how the quality cannot be ensured in the similar way.

These are some of the issues. So it means, now we are trying to analyze the market, market demands and the problems at the farmer’s level, so that we can take care of them. So this is what is the core issue in case of market led extension. With the globalization, the process which started in the 1990’s; so there is need for paradigm shift in the behavior of the farmers. From mere producer to seller to now the farmer should translate himself to the producer-cum-seller in a wider market. It is not that he is totally dependent on the local market. Maybe at his working place or the nearby district of the town; he has to think of the wider market, so that he can realize the better returns on the investments and the risks.

The issues in marketing of agricultural produce include

• The adequate and quality supply of cost effective delivery of input supply is still an issue for the farmer. We are talking of the marketing of the produce. In case of getting the inputs also he is having lot of problems.
• The sale of marketable surplus is not remunerative. Reasons that we have already observed.
• Plenty of distress sale that is going on in the market, because he is not producing as per the demands of the market. So that is where the role of market led extension comes into the picture.

Need

• The need is to translate or to convert the production led extension into the market led extension.
• Orientation of extension system, with the knowledge and skill related to the market. It means the extension professionals, who are talking more of production related issues; now should talk more on market related issues also, but there is a need for training these extension professionals also.
• Minimization of the production cost, by using the latest production technologies is another issue.
• Introduction of export oriented products. It means we are studying the market, we are observing the market and accordingly we are trying to design our production plans, so that we can realize the best possible remuneration.
• Modernization of wholesale market or the new markets with the new agricultural policy. The government has already launched a number of initiatives in this regard. Maybe in the form of introduction of Agmarknet or in the form of introduction of e-NAM, then Seed Portal; number of such initiatives are initiated, but the issue is, how end-users are responding to these initiatives.

Objectives

The objectives of this market led extension include.

• Conversion of the agricultural sector into profit oriented business. So this is what is the basic objective, with which the concept of market led extension has been introduced.
• In addition to that strengthening of the research- extension- farmer linkages, between various departments at various levels. The moment we emphasize on these relations, it means there is more interaction between the source as well as the receiver. The scientific system, the extension system and the receiving system or the farming community. As there is more interaction, so there will be more changes.
  • Strengthening of the market linkages with the farmers. So this was never an objective
  prior to this. But with introduction of concepts like market led extension. The role of
  information technology application in agricultural marketing is increasing number of such
  efforts that are coming in this direction.
• Wider use of electronic mass media for agricultural extension. I am sure you might be aware of the number of TV channels, including Doordarshan, ETV and number of other channels are displaying the products of market trends as well as the prices of various agricultural commodities that are being sold in that particular day. What is the variety and what was the arrival and what is the price that was quoted for that. Number of such things are appearing in the TV. And in the radio also they are broadcasting the information. and newspaper invariably contain these information.

With use of these things, the farmer, the primary producer can easily analyze the market situation, how the products are moving in different markets and where the prices are being quoted, and where the prices are maximum and where the prices are less. So that is how he can plan his marketing strategy.

Required Information to Extension System and Farmers

The required information to the extension systems and the farmers. There is a huge list. So until and unless we get this information, we cannot develop the appropriate strategy. So which include like the market price of the crops, this is what we have already said, and availability of inputs, usage of inputs, credit facilities. So number of informations need to be collected by the extension mechanism. And once these informations are collected, this is what the another challenge, and that has to be put into appropriate direction so that we can come out with the marketing strategy.

Roles of Agricultural Extension in Light of Market Led Extension

The role of agricultural extension in the light of market led extension is

• Conducting the SWOT analysis. What are the strengths, weaknesses, opportunities and threats, specially related to the market.
• Organization of farmers into Interest Groups. So this is the biggest role the extension worker has to play in organizing the farmers.

Just I would like to recall the success story of the AMUL, which you are already aware of. Where if the success we can harvest in case of the product like milk. Why not in other commodities? So the success that has or there is already a role model. So now there is need only replication, modus-operandi is already there. It needs to be replicated by organizing farmers into groups.

• Capacity building of local groups. As we are talking of training the extension professionals as well as researchers. Similar efforts have to be taken up in case of the farming community also.
• Enhancing communication skills of the farmers so that they can become the better negotiators in the market.
• Establishing marketing and agro-processing linkages between the farmers groups, markets and the private processors. So once these three actors come on a common platform. So obviously they will get the benefits of that.
• Advice on product planning. The farmer should think of the direct marketing, instead of going through various established channels, wherein intermediaries are harvesting the benefits of the efforts of the farmer, as we have seen in the beginning of this discussion. That more than 75% of the cost that is paid by the consumer is going to the marketing channels or the people who are involved in the market. So this 75% the farmer should target with an idea of direct marketing.
• Regular usage of Internet facility can give them the appropriate information, which is needed by the farmers.

These are the different roles which are to be played by the extension agencies.

Problems

The problems in this market led extension include.

The problems related to production is

1. seasonality of production—because agriculture being a biological system. It has its definite gestation period. And the primary producer as well as the marketer has to bear with that.
2. Perishability of the produce. There are many produce specially the vegetables, the milk, the fish. So the perishability is an issue. And before it is spoilt, it has to be marketed.
3. Bulkiness of the production. So these are some of the problems associated with the agricultural commodities.

The market related problems include.

1. Non availability of the market intelligence, which is one of the important issue. What is this market intelligence. Appropriate information regarding the market prices, the trends, the demands that are happening in a particular market. In a particular market there maybe lot of demand but there is no supply. But there are people maybe staying nearby, maybe cultivating nearby. They are not having that right information, so that is why they are not able to market their produce. So this is what is the issue of market intelligence.
2. Existence of many middlemen is one of important problem. So that we are already aware of.
3. The inferior quality of produce is another issue in the market.

Problems related to extension include.

1. Lack of communication skills of the farmers, who are the primary producers. That is why they are not able to bargain in the market.
2. Lack of credibility of the farmer. They may commit something but they may not keep those words in due course of time.
3. Insufficient information related to the market is another issue related to the extension related problems.

Paradigm Shift from Production Led Extension to Market Led Extension

Now let us look into the paradigm shift from production led extension to market led extension, where exactly the differences lie. In case of the purpose if you look at the production led extension is emphasizing on transfer of technologies. Traditionally the extension agencies are involved in these activities. But in case of market led extension the emphasis or the primary objective is optimum returns. It is not the transfer of technology, whatever the technology that you are using, but it should give you optimum returns.

The expected result is the adoption of package of practices in case of the production led extension. But in case of market led extension we say that it should, the production process should end with high returns. Then only we can say that a market led extension has happened.

Farmers are seen as progressive farmers in case of production led extension. As an method of extension we try to identify a number of farmers as a progressive farmers. And we try to provide them all possible supports. But in case of market led extension, the same farmer has been identified as the entrepreneur or an agripreneur (agricultural entrepreneur). The basic difference between the entrepreneur and the progressive farmer is, number one,

1. He is going to adopt a number of innovations. He is going to bear some amount of risk and he is going to create number of opportunities. He may be in the production, in the processing as well as in the marketing. So these are some of the basic differences when we try to identify an individual as an agripreneur or an entrepreneur.

The focus in case of production led extension is seed to seed. We have given you the seed and you should produce the seed or ultimately the grain. But in case of market led extension, what is your investment and what is your return. If you have invested rupees 1, so what is the thing that you are getting back. It is 1 or 1.5 or 2 whatever it is.

The technology in case of production led extension is a fixed package of practices for every agro-climatic zone. But in case of market led extension it is totally depending on the demand of the farmers. So as the farmers are demanding something. It means if I want to satisfy that demand, I should have the basket of technologies, I should have more number of options. Then only I can satisfy the needs of the farmer.

The extensionist’s interaction is limited to the training or motivation of the farmers in case of production led extension. But in case of market led extension it is the joint analysis. The joint analysis leads the issue that; once the farmer is becoming the part of the planning process, part of the decision making process automatically, he adopts the innovation that he is planning with.

The linkage in case of production led extension are limited to the research-extension- and the farmer, but in case of market led we are adding the element of market also to strengthen the farmers.

The role of extension is only delivery of information and getting the feedback. But in case of market led extension it is establishing the market linkages as well as the processing related linkages.

In case of production led extension record keeping is not given much importance. But in case of market led extension it is very important, because we need to calculate the cost-benefit ratio. Until and unless the farmer cannot understand the relationship between these two.

The information technology in support in case of production led extension is emphasizing on the production of the technologies or how to provide appropriate information. But in case of market led extension the market intelligence is playing the dominant role which is going to provide us the information related to the price trend, then demand position, current prices, market prices etc. So these things are going to strengthen the decision making ability of the famers.
There are certain efforts that the government has already taken up to promote the concept of market led extension, which includes the e-National Agricultural Market. Then the Farmer’s Portal, developed by the Ministry of Agriculture, Agmarknet. This is especially for the tribal farmers. The Tribal Cooperative Marketing Development Federation of India Ltd. Then another effort Seed India Portal, developed by the Ministry of Agriculture(Govt of India). Then Farmer’s Portal by the Ministry of Agriculture, and M-Kisan, another effort by the government. So these efforts are indicating towards the government’s involvement in promoting the concept of market led extension.

MLE — Challenges

There are certain challenges the market led extension is facing.

• That includes the rapid change in the information technology and need for collection of relevant information. So whatever things that we are planning. It is not going to last for longer, because of rapid changes in the technologies. And accordingly the extension mechanism has to adjust itself to the changed situation. This is what is the biggest challenge.
• The generation of data and the market intelligence is another challenge before the extension professionals. How to gather the data related to the market. Then the interlinking the market with the line departments.
• Reorganization of extension system is very essential to suit to the market led extension and to suit to the changes in the market.
• Strong communication skills with the credibility of an extension professional is another challenging factor in case of market led extension.

Conclusion

To conclude we can say that the focuses of extension functionaries need to be extended beyond production, which traditionally we used to have. Now it should focus on the market needs, the farmer’s needs and with an objective of enhancing the income levels of the farmers, which is the focus of the established governments also.

Thank You