GOVERNMENT SCHEMES AND POLICIES FOR MARKETING POTATO

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OUTLINE

Potato – IntroductionUses of potatoProduction scenario at international and national levelGovernment policy towards potato post harvest managementStorage facilities for potatoAgri export zones Marketing and information services Infra structure for direct marketing

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INTRODUCTION

Potato is the world's fourth important food crop after wheat, rice and maize because of its great yield potential and high nutritive value. It constitutes nearly half of the worlds annual output of all root and tuber crops.

With an annual global production of about 300 million tonnes, potato is an economically important staple crop in both developed and developing countries

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SEASON

In India, more than 80% of the potato crop is raised in the winter season (Rabi) under assured irrigation during short winter days from October to March. About 8% area lies in the hills during long summer days from April to October.

Rainy season (Kharif) potato production is taken in Karnataka, Maharashtra, HP, J&K and Uttranchal.

Summer crop- March- April-August-September Autumn crop- August-September-December- January Spring crop- January - February- May-June

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USES OF POTATO

Potato flour Potato chips French Fries Frozen potato Potato starch Tapioca of potato

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INTERNATIONAL SCENARIO

Potatoes are grown in about 150 countries throughout the world and more than a billion people worldwide eat potato.

About 328.87 million tonnes of potato are produced in the world over an area of about 19.13 million hectare

The top ten producers in the world are China, Russia, USA, Ukraine, Poland, Germany, Belarus, Netherlands and France.

These together contribute about 70% of the total production.

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NATIONAL SCENARIO

India's production of potato is about 224 lakh MT.

The production is largely concentrated in the northern part of the country

It is estimated that about 25 % of the potatoes, which are spoiled due to several reasons, may be saved by processing and preservation of various types of processed products.

The potatoes can be processed for preservation and value addition in the form of wafers/ chips, powder, flakes, granules, canned slices

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GOVERNMENT POLICY TOWARDS POTATO POST HARVEST MANAGEMENT

The Government will continue to provide institutional support, infrastructure and incentives to encourage the private sector to venture into large scale commercial production.

New processed products such as minimally processed vegetables.

The practice of storage helps to stabilize the prices in the market. Storing potatoes for longer period in normal temperature is not possible as it is a living material and through respiration, the changes occurs due to heat, resulting in loss of dry matter and ultimate deterioration of quality of tubers.

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SCHEMES DESIGNED FOR POST HARVEST MANAGEMENT FOR POTATO

Currently suitable infrastructure for postharvest management of perishable commodities had created

1. National Horticulture Board

2. Agricultural and Processed Food Products Export Development Authority

3. National Cooperative Development Corporation

4. Ministry of Food Processing Industries

5. Indian Council for Agricultural Research

6. National Bank for Agriculture and Rural Development

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DIRECT FINANCE BY NABARD ON CONCESSIONAL TERMS FOR MARKETING

Project funding for capital investment relating to post harvest management, processing, storage and transportation

Export credit/packing credit

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SANITARY AND PHYTOSANITARY REQUIREMENTS FOR EXPORT MARKETING OF POTATO

The Agreement on the application of the Sanitary and Phytosanitary measures is an integral part of export trade, GATT (1994). Under SPS Agreement, the standards should be such that the minimum level of protection required by an importing country may be attained.

With this view, the agreement to set up international standards and guidelines under the aegis of Codex Alimentarius Commission which was set up in 1963 by Food and Agriculture Organization and World Health Organization to develop food standards, lay down guidelines and related texts such as codes of practice under the Joint FAO / WHO Food Standards Programme

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STORAGE FACILITIES

Farmer’s storage:Farmers generally use indigenous in-situ storage system of without harvesting the tubers and to allow them remaining in the soil and also the ex-situ system where the farmers used to store potatoes in pits, baskets, wooden structures or in heaps or layers in room.

Private / Co-operative / Public StorageIn Private / Co-operative / Public Storage sectors, potatoes are stored in cold storages at low temperature situated throughout the country. The state-wise distributions of Potato cold storage in above sectors are furnished as under.

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CO-OPERATIVE STORAGE GODOWN

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PLEDGE FINANCE SYSTEM SCHEME

The Indian farming community mostly consists of small and marginal

farmers. They do not have the economic strength to retain the surplus produce till favorable market price and often compelled to sell their produce immediately after harvest when the prices are low.

The solution to this problem lies in providing safe and scientific storage of their produce and availing easy marketing credit against the stored produce. Hence, the systems of pledge finance have emerged as an unique avenue of finance to farmer.

As per guidelines of Reserve Bank of India, loan/advances can be given against hypothecation/pledge of agricultural produce including Potato.

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Persons can avail this facility of pledge loan by storing their produce in cold storage.

Participating Banks - Commercial Banks , Cooperative Banks, Regional Rural Banks

Rate of interest is determined by respective Bank

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AGRI EXPORT ZONES FOR POTATO

The policy for setting up of Agri Export Zones was announced by the Ministry of Commerce, Govt. of India on the 31st March, 2001 with the primary objective of boosting agri exports from the country

The Agricultural and Processed Food Export Development Authority (APEDA) under Ministry of Commerce, Govt. of India was appointed as the nodal agency to promote the setting up of such zones.

The zones are a block / group of blocks or a district / group of districts. Agri export zones are specific geographical areas that have their own competitive advantages in production, processing or marketing of a specific agricultural produce including potato

In an AEZ (Agri Export Zone), there is no physical demarcation of boundaries and it provides a focused approach on agricultural export completely. It is primarily based on the principles of 'convergence', 'partnership' and 'focus'.

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AGRI EXPORT ZONES FOR POTATO

S.NO STATE NO OF ZONES

1 Punjab 1

2 Uttar Pradesh 2

3 West Bengal 1

4 Madhya Pradesh 1

5 Total 5

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BENEFITS OF AGRI EXPORT ZONES

Strengthening of backward linkages with a market oriented approach.

Product acceptability and its competitiveness abroad as well as in the domestic markets.

Value addition to basic agricultural produce

Reduction of the cost of production through economy of scale.

Better price for agricultural produce.

improvement of product quality and it's packaging.

Promotion of trade related research and development.

increase of employment opportunities

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MARKETING INFORMATION AND EXTENSION SERVICE SCHEME

Marketing Information Agricultural Marketing Information comprises of collection, analysis and compilation of agricultural marketing related information as well as dissemination of right information to the people in need, at right place, at right time and in right form.

In a marketing system, market information is an important function which facilitates the marketing decisions and regulates the competitive market processes and mechanisms.

It is helpful to the farmers for planning, production and marketing of their commodities

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Marketing extension

Marketing extension is a tool to educate the farmers, traders, consumers and other beneficiaries regarding the latest knowledge on post harvest management, marketing, value addition, and exploring new market opportunities. It aims to bring desired changes in their skill, attitude and behaviour towards post harvest management and marketing practices

In the present context of globalization of agricultural trade, it is essential to grow awareness among the producers and other beneficiaries regarding proper harvesting, grading, packaging, transportation, storage, maintaining proper quality standards and Sanitary-Phytosanitary requirements

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BENEFITS

To provide up-to-date information on the prices and arrivals.

To orient producers/traders about price trends, demand and supply position.

To guide the producers/farmers about when, where and how to market the produce.

To educate farmers about different aspects of post harvest management / operations.

To guide the farmers about benefits of direct / contract marketing and future trading.

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GOVERNMENT AND SEMI GOVT. ORGANIZATIONS PROVIDING THE SERVICES

ON MARKETING INFORMATION AND EXTENSION

National Horticulture Board Collection, compilation and dissemination of market intelligence, market related information / data on horticultural commodities including potatoAgricultural Produce Market Committees .

Providing market information on arrivals, prevailing prices at different markets through display boards, public address system.

Providing information of other markets.

Organizing training programs, tours, exhibitions for farmers and other beneficiaries

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STATE AGRICULTURAL MARKETING DEPARTMENTS/DIRECTORATES

Provide agricultural marketing related information.

Arranging publicity program through demonstration, farmers’ meetings

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NAFED

NAFED is the apex Cooperative Marketing Organization dealing in procurement, distribution, export and import of selected agricultural commodities.

NAFED is a central nodal agency of the Government for undertaking price support operations for nonperishable commodities such as pulses, oilseeds and for Market Intervention in perishable horticultural items like - Potato, onion, grapes, kinno, oranges, eggs, apples, chillies, black pepper .

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CONTRACT MARKETING ARRANGEMENTS

Himalaya International Ltd. (HIL) has made backward linkage through contract farming in potatoes with farmers of Ponta Sahib in Himachal Pradesh.

In this system, company is providing seeds, organic manure and total technology to 150 farmers during 2005, the company has introduced baby potato skin stuffed with cheese for rapidly growing market involving constant innovation and diversity of cuisine.

Being potato content low starch and high fibre content, these potatoes are better for health than large potatoes. The HCL is exporting IQF frozen potatoes to U.S.A and U.K.

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West Bengal, a similar system to contract marketing started. The Dept. of Food Processing Industries & Horticulture, Govt. of West Bengal has made an experiment through an arrangement between Frito-lay India Ltd and a few co-operative societies for supply of chip quality potato to the processing units since 2003-04.

Frito-lay India Ltd supplied G-2 micro tubers to some Co-operative Societies in Hoogly and Burdwan Dists at a fixed price.Co-operatives in turn supplies seeds to its growers. Initial results has been reported encouraging. Frito-lay buys a sizeable quantity of the chip grade potato so produced at a fixed price and also pay service charge to the societies on final procurement

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CO-OPERATIVE MARKETING

The Co-operative marketing is the system by which a group of farmers join together to carry on some or all the processes involved in bringing goods from producer to consumer..

Functions The members of an potato co-operative society sell their surplus produce to the society.

Member farmers sell their produce to the society and they get an advance.

After collecting the potato from the member, the society either processes it or sells it in the mandies or to the processors.

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FORWARD AND FUTURE MARKETS

In terms of price discovery and risk management the forward and future markets have been identified as an important tool for price stabilization. Presently, forward and future market system is followed in certain agricultural commodities including potato.Forward market The forward market supports two economic functions namely price discovery and price risk management which enables the traders and stockiest to protect against the risk of adverse fluctuation of prices. It is governed under the Forward Contract Regulation Act 1952.Future market The future market facilitates the trading of potato for the purchase or sale of the commodity for future delivery where contracts are made on a future exchange on the basis of standard quality, quantity, delivery time, locations and the price. This makes the supply chain efficient and provide better price to the farmers

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FUTURE CONTRACT COMPANIES

National Commodity and Derivative Exchange (NCDEX)

Multi Commodity Exchange of India Limited (MCX)

Recognized by the central government started the online trading of potatoes from September 16, 2006 to benefit farmers who often resort to distress salesn

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MULTI COMMODITY EXCHANGE OF INDIA LIMITED

The potatoes are sold under the brand name Tarakeswar Alu though the crop would be procured from Hooghly as well as Burdwan, Howrah and other districts of the West Bengal.

The Tarakeshwar brand potato is popular for Kufri Jyoti variety grown in West Bengal. Online trading brings parity in prices across the country and benefit both for the farmers and the traders.

According to a study by MCX, there is scope for a big turnover in potato trade annually.

MCX is a joint venture of the Financial Technologies (I) Ltd., State Bank of India and its associates, National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India Ltd. (NSE), Fid Fund (Mauritius) Ltd. Etc.

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BENEFITS OF FUTURE TRADING

Management of price risk an agricultural commodity.

Facilitates production, as per recognized quality standards of produce.

Acts as a price barometer to farmers and other trade functionaries.

It facilitate indirectly to the exporters / farmers through better information.

It gives an idea of prices to the consumer which enables them to enter forward contract markets

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CAPITAL INVESTMENT SUBSIDY FOR CONSTRUCTION / MODERNIZATION EXPANSION OF COLD STORAGE AND

STORAGE'S FOR HORTICULTURE PRODUCE

Facilities of scheme

To promote setting up of cold storages / storages in the country for reducing post harvest losses.

Creation of Cold chain infrastructure for farm to the consumers and modernization/rehabilitation of cold storages.

Agmark grading and standardization scheme

Grading of agricultural commodities including Potato

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SCHEME FOR DEVELOPMENT/ STRENGTHENING OF AGRICULTURAL MARKETING INFRASTRUCTURE, GRADING &

STANDARDISATION

FACILITIES OF THE SCHEME To promote competitive alternatives in agricultural marketing infrastructure by inducement of private and cooperative sector investments that sustain incentives for quality and enhanced productivity thereby improving farmers’ income.

To strengthen existing agricultural marketing infrastructure to enhance efficiency. To promote direct marketing so as to increase market efficiency through reduction in intermediaries and handling channels, thus enhancing farmers’ income. To provide infrastructure facilities for grading, standardization and quality certification of agricultural produce so as to ensure price to the farmers commensurate with the quality of the produce.

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GRADING POTATO

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MARKET DEVELOPMENT SCHEMES

Provide development of packaging, standards and design.

Assistance to exporters for use of packaging material as per standards and specifications developed or adopted by APEDA.

Assistance finance to Exporters, Producers, Growers, service providers, Co-operative Organizations and finance assistant purchase of "Intermediate Packaging Material” for domestic transportation of produce.

Assistance to exporters, growers organizations, trade associations for conducting surveys, feasibility studies

Publicity & promotion through preparation of product literature, Publicity material, advertisement, film etc by APEDA.Brand publicity through advertisement

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SCHEME FOR INFRASTRUCTUREDEVELOPMENT

Food Park Packaging Centre Modernized Abattoirs Integrated Cold Chain Facilitie Value Added Centre Irradiation Facilities

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INFRASTRUCTURE FOR DIRECT MARKETING

Rythu Bazaar – Started in Andra Pradesh To avoid the exploitation of both the farmers and the consumers by the middlemen As of now, there are 96RaythuBazaars operating in the state.

Apni Mandi - First started in Punjab

This system does away with the middlemen.-‘Apni Mandis’are similar to the Saturday markets of UK and USA.

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Cond…

Rushakbazars-Established in the state of Orissa

The purpose is to empower farmer-producer to compete effectively in the open market to get a remunerative price and ensure products at affordable prices to the consumer

Hardaspar Vegetable Market

Hadaspar vegetable market is a model market for direct marketing of vegetables in Pune city

This is one of the ideal markets in the country for marketing of

vegetables-The market has modern weighing machines

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UZHAVAR SANDHAIGAL IN TAMILNADU

Uzhavar Sandhais are functioning in the state in Municipality and Town Panchayat areas for direct selling of fruits and vegetables including potato by farmers to consumers without any hindrance of middlemen.

The main object of Uzhavar Sandhai are to ensure farmers to get a better price for their produce and to enable the consumers to get fresh fruits and vegetables at a lesser price than the retail market price.

During the year 2007- 08, action is being taken to establish 50 more Uzhavar Sandhais at a cost of Rs. 11.25 crores.

Cold storage rooms of 2.0 M.T. capacities are to be installed in 22 top performing Uzhavar Sandhais at a cost of Rs.133.10 lakhs

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To facilitate direct contact between the farmers and public.

To provide fresh vegetables and fruits at reasonable price daily without any interference of middlemen.

To provide correct measurement to the consumers.

To give full satisfaction to the farmers and public.To aim for providing higher price than that of wholesale price to the farmers for their vegetables and fruits.To provide the fresh fruits and vegetables at the lesser price than that of retail price to consumers.

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FACILITIES TO BE PROVIDED

 Photo Identity Card Identity cards are to be issued to the farmers, in which photo of the land owner and his nominee with the particulars of the village name to which the farmer belongs, survey number, extent of the land owned by him, and the vegetables grown are mentioned.

  Transport Facility

Transport facility for pick up and dropping down of the registered farmers to the Farmers market  are arranged by the market functionaries through tie-up with state transport department.

   Allotment of stalls

Stalls are to be allotted to the farmers by following lot method or first come first basis. The farmers are not allowed to occupy the stalls permanently. No fee is to be collected from the farmers.  

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Prices FixationThe market committee will every day communicate the moderate

wholesale prices of vegetables through fax between 7.30 AM and 8.00 AM. Based on the same, the prices of vegetable are fixed in consultation with the farmers committee, which may be 20% -25%     higher than the whole sale price and lower than the local retail market prices in the area.  

Public Address System Prices of vegetables are frequently announced through public address system to create awareness of the rates of the vegetables among the consumers as well as farmers.

Supply of weighing scalesWhen the farmers enter into a Farmers market their names along with the particulars such as name of the village and the quantity of vegetables brought by them are entered in a register and they are issued a token. On the basis of the token issued to them, all the farmers are provided with weighing scales without collecting any fee. The farmers will return back the scales after completing their sales.  

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