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Synchronizing Demand and Supply of Agricultural Produce in India

BY: Dr. Shiv Kumar | Category: Agriculture | Submitted: 2014-06-06 04:39:13
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Article Summary: "Market led extension to bridge gap between structure of demand and supply of agricultural produce in India. The article talks about market led extension in Indian agriculture. The debate is on how to synchronize the structure of demand with supply of agriculture produce. The onus of doing this lies on state agricultural extensi.."


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Market Led Extension to Bridge Gap between Structure of Demand and Supply of Agricultural Produce in India

Authors: Shiv Kumar 1, Shiv Datt2 and Vikram Singh3
1 Principal Scientist, 2 Senior Scientist and 3Scientist
Intellectual Property and Technology Management Unit (IPTM Unit), ICAR, Pusa, New Delhi-10012


The envisaged growth in excess of 4% in the agriculture sector during 12th Plan is possible only if the farm incomes improve substantially. Recent agricultural policy lays focus on establishment and strengthening of forward and backward linkages with all the concerned stakeholders. Several far-reaching changes are occurring in domestic and global markets. These changes are posing formidable challenges and at the same time creating opportunities for farmers and agribusiness entrepreneurs. Such dynamism in agriculture emanates from vibrant demand of consumers in the economy. The demand is driven by rising incomes, faster urbanization, changes in consumer tastes and other socio-economic-legal advancements. Demand of high value commodities (HVCs) in domestic and overseas markets have grown much faster than traditional agricultural commodities. Structural rigidity in supply of agricultural commodities is attributed due to slow advances in agricultural technology breakthrough and a bit advances in transportation and supply chain technologies. To match the structure of demand and supply of agricultural commodities, whatever is demand by consumers in market must be reflected at farmer's production level. But new markets demand quality, timely deliveries, and economies of scale, posing special challenges for the farming community.

Farmers have increasingly begun to perceive marketing rather than production as the major constraint to enhancing farm incomes. With major thrust of extension agencies on production techniques, market led extension so far has not received the attention it deserves. The multi-agency extension service will need to address these issues through strengthening the capacity of the public extension, supportive private sector in marketing extension and making extensive use of media and IT in information and technology dissemination. Market led extension needs to be brought to centre-stage. Indeed, production now needs to be significantly dictated by market requirements. The youth should be given an opportunity to practice precision farming and high tech agriculture as per the market demands. This calls for special skills to the extension functionaries to motivate younger generation to agriculture. Under the given context, where inputs for agriculture like labour, fertilizers, water etc. have become scarce and expensive, the extension functionaries need to think and advocate cost saving technologies and inputs which reduce cost of cultivation and increase net returns. This calls for technical and engineering skills to convince the farmers to take to cost reduction technologies and high remunerative farming. The government can help farmers and producers to expand and upgrade their range of assets and practices to meet the new requirements of supermarkets, agro-industries and other coordinated supply chains. The options include public good investments to increase farmers' productivity and connectivity to markets, policy changes to facilitate trade and market development, public-private efforts to promote collective action and build the technical capacity of farmers to meet the new standards.

The paradigm shift from production oriented to market oriented agriculture has taken place in the development of markets, changing consumption patterns, quality conscience etc are not fully reflected in the functioning of the state departments. To materialize enhanced farm incomes from the emerging market opportunities such as retail chain, agro-industries and increased export, the agriculture and allied departments need to re-orient farmers to the new formats. Market orientation is the key for the farmers to harness the growing opportunities. The extension machinery of departments need to train and handhold the farmers and thus play the transformational role of transforming agriculture into a commercial enterprise. And for this, the agricultural extension officers need to be first reorient themselves to the changing requirements. To fill up this gap, a clarion call is to strengthen the public extension system, by organising training programs for the field officers to impart knowledge on latest technological, regulatory and market related advancements that are globally taking place in agriculture. The overarching goal is to reach out to farmers with a new extension strategy that is market relevant and is aimed at building a value chain in agriculture that directly connects to emerging high value markets, shares his risk and enhance farm incomes. The new emerging areas in which the departments are to be equipped so as to meet the challenges of the sector and also to transform the sector into an agribusiness enterprise. This could be possible by :(a), training agricultural and allied sector officers directly connected with the agriculture and allied sectors to equip them with the new emerging challenges; (b), to re-orient them as agri-business managers for efficient delivery and results oriented approach; and (c), to transform states agriculture and allied sectors from " a way of life into viable agri-enterprises".

Several education societies of various groups of industries as part of their Corporate Social Responsibility (CSR) programs are actively involved in developing IT educational facilities and providing health and education services in rural areas. The cutting edge workforce of the state agricultural and allied departments manpower is to be trained towards market led extension. The program of some defined period can be run by expert agri-business academic experts from various reputed institutes. Such programs would impart training to manpower that will modernize the agriculture and allied activities into market driven and profit oriented activity and improve the livelihoods of the farmers and those depend on agriculture besides making up managerial deficit in transforming traditional agriculture into viable business enterprise.

Educational Society of group of several reputed Industries may execute the project under overall guidance and supervision of State Agricultural Universities. Designated SAU may function as nodal agency and coordinate with the various departments for deputing the officers for the training. The training funds can be sought from Krishi Vikas Yojana, Government of India. Private sector has the expertise in specific management area and has adequate infrastructural paraphernalia to support and sustain such training program. The corporate sector as a part of CSR, if possible may contribute some amount in meeting the cost of training of farmers/producers under such program.


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Scientists working in IPR and Agricultural Policy related issues.

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