nabard proposal(final)

8/11/2019 Nabard Proposal(Final)

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Project Proposal

1. Title of the Research Project / Study

An Analysis of Potato Value Chain in Tamil Nadu

2. Name of the Agency and Address

Department of Agricultural and Rural Management

Centre for Agricultural and Rural Development Studies,

Tamil Nadu Agricultural niversity, Coim!atore " #$% &&'

Phone( &$)) * ##%%)+

3. Status of the Applicant

Professor -or.ing in Tamil Nadu Agricultural niversity

. !etails of Principal "n#estigator

Dr/ R/ Ven.atram, Professor,

Department of Agricultural and rural Management,

Centre for Agricultural and Rural Development Studies 0CARDS1,

Tamil Nadu Agricultural niversity, Coim!atore"#$% &&'

2mail(dr/ven.atrengan3rediffmail/com

$. !etails of important research projects/schemes %eing carried out %y the P" and the

sponsoring agency &ith financial support from #arious agencies/organisation' especially

from NA(AR!.

). Name/designation of other research staff to %e associated &ith the project' person &ise.

Dr/ N/ A44an, Professor and Dr/ S/ D/ Siva.umar, Professor and 5ead

Department of Agricultural and Rural Management

Centre for Agricultural and Rural Development Studies 0CARDS1,

Tamil Nadu Agricultural niversity, Coim!atore"#$% &&'

6/A#aila%ility of technical staff and infrastructure in the agency to underta*e the proposed

project

The Department of Agricultural and Rural Management is one of the units under

Directorate of Centre for Agricultural and Rural Development Studies 0CARDS1/ The

department has the mandate to undergo teaching, research and e7tension activities/

Conse8uently, the department is offering many ndergraduate, Post 9raduate and Doctoral

degree courses and engaged in various thrust areas of research and e7tension activities for the

!enefit of the farming and rural community/ The technical staffs are thus 8ualified to

underta.e the proposed pro4ect -ith the availa!le infrastructure/


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+. Proposal details

Potato 0Solanum tuberosum:/1 is one of the starchy edi!le tu!er crops -ith high nutritive

value/ Potato produces more edi!le protein per unit of land and time than crops li.e -heat/

A!out ;+< of the potato plant is edi!le compared to only +&< in cereals 0=A>, )&%&1/ ?t is

the fourth most important food and cash crop in ?ndia/ >n the glo!al map, ?ndia is the second

largest producer of potato after China 0=A>, )&%'1/ At present, ?ndia stands third in area

0%/;' million ha1 and second in production 0'$/' million tonnes1 in the -orld ran.ing/ ?n

Tamil Nadu, the crop is gro-n in $;#& hectares -ith a production of 6,)&& tonnes 0National

5orticultural Research and Development =oundation, ?ndia1/ The crop is gro-n in the hilly

regions of Dindigul, Nilgiris and also in the plains of @rishnagiri and 2rode districts/ @ufri

yoti and @ufri 9iridhari are the ma4or varieties gro-n in the state/

The area under potato is found to !e gradually declining/ The area during %;&";% -as

around %&,++& ha and declined to $;#& ha/ ?t is important to analyse the reasons for such

decline area and -hether a !etter production * mar.eting lin.age could increase the area

under the crop, as the demand for potato is gro-ing/ Besides, potato gro-n is consumed

directly as food 0+


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encourages loo.ing at the production process from the consumers end/

Secondly, the metaphor of the chain emphasiEes the fact that most goods are produced !y a

se8uence of interlin.ed actors and activities/ The approach focuses on the analysis of the

institutional arrangements that lin. the various economic players, -hich areF trust, vertical

and horiEontal integration and organiEation, and contracts/

Thirdly, it highlights the importance of private sector development/ =or the purpose of

fostering agricultural gro-th and aligning the agricultural sector development -ith ur!an and

other trends in society, it provides a fairly holistic frame-or., -hich can encompass a

num!er of different development activities/

The starting point for value chain analysis is usually a participatory chain mapping -or.shop,

in -hich representatives from all groups involved in the process develop a 4oint

understanding of the respective chain/ This e7ercise reveals strengths and -ea.nesses of the

value chain and serves as a starting point for mutual trust"!uilding/ Discussions evolving

around input 8uality, logistic arrangements or product standards often help producers to

understand the real demand for their ra-"product/ :istening to processors and consumers can

!e an eye"opener for producers and traders -hen it comes to consumers needs, the right

8uality, and the right 8uantities at the right time in the right place/

The Process of such Value Chain Analysis involves the following steps:

Chain Delimitation( This includes defining the !oundaries of the analysis in terms of the

product to !e trac.ed, activities to !e included along the chain and setting a geographic

!oundary for the chain/

Chain Mapping( This involves listing the various activities in a chain in a se8uential order/

Information Gathering( This involves collecting all the relevant information re8uired for a

thorough mapping of the chain/

Performance evaluation( This step includes the analysis of the information gathered in

terms of cost and value addition at each level of o-nership

+.1 ,%jecti#es of the Project

The preliminary o!servations !ased on past studies as -ell as interaction -ith the farmers and

other channel participants indicated that ma4or issue in the potato value chain is that

producers are not ma.ing efficient use of e7isting technology/ The production and post


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harvest value chain activities for potato have not pic.ed up commensurate -ith the level of

production/ =urther, supportive mechanism in the form of agricultural inputs, farmers

association and post harvest infrastructure set up, such as cold storages, mar.eting systems

and institutional credit are not matching -ith potentials for development of production and

post harvest value chain activities/ ?t is estimated that a!out )+< of potatoes -ere spoiled and

can !e avoided !y processing and preservations/

Another ma4or issue is seasonality in production follo-ed !y poor post"harvest practices

leading to loss in such su!"standardiEed supply system thus reducing further availa!ility of

potato for consumption, value addition and e7port/ There are also issues li.e -ea.

institutional arrangement, limited mar.eting facilities, lac. of coordination among the various

institutions -hich act as hindrance to the gro-th of potato sector/ The Potato 9ro-ers

Association is una!le to plan, organiEe production and to reduce the length of mar.eting

channels leading to increasing margins to the middle men and thus influencing mar.eting

efficiency/


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5ence this study focuses on the a!ove issues in the potato gro-ing areas of Tamil Nadu and

come out -ith scientific method of improving the production"mar.eting*consumption

lin.ages in the crop/

Thespecific o!4ectives of the study are as follo-s

to e7amine the current practices in the value chain of potato in Tamil Nadu, and

measure the efficiencies at various levels, production and mar.eting

to identify the potentials for value addition and investment needed

to perform value chain analysis and to suggest suita!le strategies for improvement

+.2 !esign of Study' -ethodology to %e follo&ed and Sample Sie

election of the tu!y Area

The .ey aspect of the present study -ill !e to measure the price spread, study the

value chain, efficiency in the resource use of individual farmers, post"harvest losses in the

chain, and e7port performance of potato/ Among the ') districts of Tamil Nadu, Nilgiris and

Dindigul districts are the ma4or potato producing districts -ith vast area under potato

cultivation 09oT, )&%)1/ 5ence, Nilgiris and Dindigul district are purposivelyselected for the

detailed study"

ampling Design

Dindigul district has eight talu.s and Nilgiris district has si7 talu.s of -hich @odai.anal talu.

in Dindigul district and >oty and @otagiri talu.s in Nilgiris district -ill !e purposively

selected/ ?n each talu., $& potato farmers -ill !e selected randomly, thus a total of %)&

sample farmers -ill !e identified for field level information/ The mem!ers involved in


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mar.eting of potato namely as local traders, commission agents, -holesalers, retailers,

processors and e7porters -ill !e selected randomly in each district/ Thus a total of %;&

intermediaries -ill !e identified/

Metho! of !ata collection

Primary data -ill !e collected from the sample farmers, mem!ers in the chain and consumers

!y personal intervie- using -ell"structured intervie- schedules/ ?nformation from secondary

sources li.e government institutes, government pu!licationsF other pu!lications and annual

reports -ill also !e used/

Tools of analysis

tochastic #rontier Pro!uction #unctionMeeusen and Broec. 0%661 and Aigner et al. 0%661 proposed stochastic frontier

production function initially to estimate efficiency 0Coelli et al.,%;1/Aigner et al. 0%661

applied this estimation techni8ue in the analysis of the S agricultural data/ By e7tending the

model of the stochastic frontier production function for this study -ill !e specified as

follo-s(

yi G = 0xi, 1 e HiIII/ 0$1

i G %, ), I,N

Jhere,

yiG output of the ithfarm

xiG vector of inputs

G vector of . un.no-n parameters

iG error term

The follo-ing model -ill !e specified for the estimation under S=A(

ln Yi G&K%ln 0LAB1 K)0LFERT1 K'0LFY1 K$0NRR?1 K+0CPP1 K !i* ui 0;1

Jhere,

i G >utput of potato 0tonnesha1

:AB G :a!our 0man daysha1

L=2RT G Luantity of fertiliEer 0@gha1

L=M G Luantity of farmyard manure 0Tonnesha1

CPP G Cost of plant protection 0Rsha1


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%,)I+ G Coefficients to !e estimated/

The technical inefficiency component "i included(

uiG #&K #%0A$E1 K #)02D1 K #'0E%&1

Jhere,

A92 G Age 0ears1

2D G 2ducation 0ears1

2OP G 27perience 0ears1

#%, #'and#'G Coefficients to !e estimated/

Price prea! Analysis an! mar$eting efficiency

?nformation -ill !e collected from the individual farmers, local traders, commission

agents, -holesalers, retailers, e7porters and consumers/ The costs included the production,

sorting, grading, transportation, -eighing, loading and unloading, pac.aging, spoilage and

other e7penses/ ?n the process of mar.eting of potato, the difference !et-een price paid !y

the consumer and that received !y the producer for an e8uivalent 8uantity of commodity -ill

!e defined as Price SpreadQ/ Post production losses and mar.eting margin of various mar.et

functionaries involved in moving the produce from the initial point of production till it

reached the ultimate consumer -ill !e 8uantified/

Mar.eting efficiency is a measure of mar.et performance/ The movement of goods

from producers to the ultimate consumers at the lo-est possi!le cost consistent -ith the

provision of service desired !y the consumers is termed as efficient mar.eting/

a% hepher!&s #ormula

2fficiency of mar.eting channel is calculated -ith the help of the follo-ing formula/ The

higher this ratio, higher -ould !e the efficiency and vice versa/ This can !e e7pressed in the

follo-ing form(

2MC G 0V?1"%

-here,

2MC G ?nde7 of 2fficiency of Mar.et Channel

V G Value of goods sold

? G Total mar.eting cost

'% Cal$in&s In!e(

The Cal.ins inde7 of mar.eting efficiency is estimated using the follo-ing formula/


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Mar.eting efficiency G %K

The lo-er the value of the inde7, higher -ould !e the efficiency/c% Acharya&s Approach

According to Acharya 0)&&$1, an ideal measure of mar.eting efficiency, particularly for

comparing the efficiency of alternate mar.ets channels should ta.e into account all of the

follo-ing(

a1 Total mar.eting costs 0MC1

!1 Net mar.eting margin 0MM1

c1 Prices received !y the farmer 0=P1

d1 Prices paid !y the consumer 0RP1

=urther, the measure should reflect the follo-ing relationship !et-een each of these

varia!les and the mar.eting efficiency/

i1 5igher the 0MC1, the lo-er the efficiency

ii1 5igher the 0MM1, the lo-er the efficiency

iii1 5igher the 0=P1, the higher the efficiency

iv1 5igher the 0RP1, the lo-er the efficiency

As there is an e7act relationship among four varia!les, i/e/ MC K MM K =P G RP, any

three of these could !e used to arrive at a measure for comparing the mar.eting efficiency/

The follo-ing measure is suggested !y Acharya,

M2 G =P 0MC K MM1

)(port Performance an! Competitiveness

27port performance and e7port competitiveness of potato in ?ndia -ill !e calculated

!y using the follo-ing indices

*i% Coppoc$&s Insta'ility In!e(

?nsta!ility in e7port is e7pected to hamper the process of economic development/ To

study the e7port insta!ility of potato and Coppoc.s insta!ility inde7 -ill !e used to estimate

the variation and sta!ility in ?ndian potato e7ports -hich -ill !e alge!raically e7pressed as

the follo-ing estima!le form(

Sum of profit or margin

Sum of mar.eting cost


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2stima!le form

% O tK% )

V G II/ log """"""""" " m

N"% O t

The insta!ility inde7 -ill !e G 0antilog V * %1 7 %&&

Jhere,

OtG Value or volume of e7ports in year t

n G Num!er of years

N G n * %

% n " %

m G II// 0log O t" % log Ot1

N t G %

Coppoc.s insta!ility inde7 -ill !e estimated for potato e7port 08uantity and value and unit

value1 realiEed for the period ? 0%;6")&&&1, period ?? 0)&&&"%)1 and the overall period 0%;6"

%)1/

ii" Mar$ov Chain Analysis

The structural change in potato e7ports -ill !e used to Mar.ov chain model/ Central

to the Mar.ov model is the transitional pro!a!ility matri7 P/ The elements P i4of this matri7

indicate the pro!a!ility that e7ports of potato -ill s-itch from country i to country 4 over

time/ The diagonal element Pi4-here i G 4, measures the pro!a!ility of a country retaining its

mar.et share/ ?n other -ords, as e7amination of the diagonal elements of the transitional

pro!a!ility matri7 indicates the loyalty of an importing country to a particular countrys

e7ports/ The data for the study of e7port of potato -ill !e for the period of %;6")&%)/ The

study period -ill !e classified into t-o distinct time periods 0Period ? " %;6")&&& and Period

?? ")&&%")&%)1 to understand the dynamic changes in the potato e7port/ The proportion of

year to year change -ill !e the result of different factors such as competition from other

countries, 8uality etc/ Alge!raically the e7port performance of potato -ill !e estimated using

the follo-ing formula/

)jt + )it,-Pij. ejt

Jhere,

24tG 27ports of potato from ?ndia during the year t to 4thcountry,

2it"%G 27ports to ithcountry during the year t"%,

Pi4G The pro!a!ility that e7ports -ill shift from i

th

country to 4

th

country,e4tG The error"term -hich is statistically independent of 2 it"%


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the potato is treated as glo!ally more competitive/

+.3 Arrangements for analying and processing the data.

The data collected !y the field investigators, to !e engaged e7clusively for the pro4ect,

-ill !e ta!ulated !y the data entry operators and the analysis -ill !e done using the availa!le

soft-are in the institute/ The pro4ect scientists -ill !e closely monitoring the process of data

collection, ta!ulation and analysis/

1" 2or$ plan

r" /o" Items of wor$ Month

- 3 4 5 6 7

% Recruitment of field staff

) =inaliEation of sample frame-or. and

preparation of intervie- schedule

' Data collection in Dindigul district

$ Data Collection in Nilgiris district

+ Ta!ulation of data and analysis

# Sta.eholders meeting

6 Report -riting

; =inaliEation and -rap up

-8" #inancial aspects

-8"-/on recurring e(pen!iture

r"

/o

Particulars Amount *9s"%

% Des.top computers 0) Nos/1 %,&+,&&&

) :aser printer -ith scanner facility %&,&&&

' 27ternal hard dis. 0+&& 9B1 for data storage

and final report

+,&&&

$ Camera for shooting field o!servations %&,&&&

Total %,'&,&&&


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-8"3 9ecurring *9upees%

/o" Particulars Month

- 3 4 5 6 7 Total

% Salary for =ield

?nvestigators and Data entry

operators 0Contractual

services1

+',&&& +',&&& +',&&& +',&&& +',&&& +',&&& ',%;,&&&

) Travel and logistics )&,&&& )&,&&& )&,&&& )&,&&& %&,&&& %&,&&& %,&&,&&&

' Stationery, printing etc/ )+,&&& " " )+,&&& )+,&&& )+,&&& %,&&,&&&

$/ Contingencies

A Documentation and data

analysis charges

" " " )+,&&& " " )+,&&&

B 5onorarium to pro4ect

scientists and e7perts

" " " " " +&,&&& +&,&&&

C Conduct of sta.eholder

meeting

" " " " )+,&&& " )+,&&&

D Miscellaneous " " " " " )&,&&& )&,&&&

Total ;,&&& 6',&&& 6',&&& %,)',&&& %,%',&&& %,+;,&&& #,';,&&&

+/ >thers

A ?nstitutional charges 0%+


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9eferences

Acharya, S/S and N/:/ Agar-al, 0)&&$1, Agricultural Mar.eting in ?ndiaQ, 0Ne- Delhi(

>7ford [ ?B5 Pu!lishing Co/Pvt/:td,1, p/), ', %&, %'#, %;6,%%,'#/

Aigner, D//, :ovell, C/A/@/ and Schmidt,P/ 0%661, =ormulation and 2stimation of

Stochastic =rontier Production =unction ModelsQ, ournal of 2conometrics, #, )%"

'6/

Meeusen, J/ and Van Den Broec., / 0%661, 2fficiency 2stimation from Co!!" Douglas

Production =unctions -ith Composed 2rror(, ?nternational 2conomic Revie-, %;,

$'+"$$$/

Coelli, T// 0%'1, =inite Sample Properties of Stochastic =rontier 2stimators and

Associated Test StatisticsQ, )or*ing &a+ers in Eonometris an- A++lie- Statistis,

No/6&, Department of 2conometrics, niversity of Ne- 2ngland, Armidale/

Singh, S/@ and R/P/ Rai 0)&%%1, The Potato Crop in Bihar( Status [ =uture challenges, Patna(

?nternational Potash ?nstitute/

2e'sites

Country ran. in the -orld, !y commodity/ =ood and Agricultural >rganiEation of the nited

Nations/ Accessed on une %%, )&%% at http(faostat/fao/orgsite''default/asp7/

---/faostat /fao/org'/0

---/apeda/gov/in

---/glo!alagri"com

---/nh! /org/in

---/nhfdf/com
http://www.faostat.fao.org/http://www.apeda.gov.in/http://www.globalagri.com/http://www.globalagri.com/http://www.globalagri.com/http://www.nhb.org.in/http://www.nhb.org.in/http://www.nhb.org.in/http://www.nhfdf.com/http://www.faostat.fao.org/http://www.apeda.gov.in/http://www.globalagri.com/http://www.nhb.org.in/http://www.nhfdf.com/

nabard proposal(final)

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