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Awareness and Use of Agricultural Market Intelligence

The history of agricultural development in India shows that Indian Agriculture was unable to feed the 45 crores of its population during late 1960 necessitating huge imports of food grains. Now in the 21st Century, India is able to feed its population of more than 100 crores, besides, providing raw materials for clothing and industrial purposes after a reasonable amount of export. Thus there is a very huge increase in the production side in many agricultural commodities but there is not more positive reflection of this in the level of living of farmers. The main reason behind this is that we have not given due attention to marketing of agricultural produce raised by farmers. Neither the Governments at Central   and State levels, nor the farmers gave due importance to agricultural marketing. As on date, Indian farmers are well versed with production technologies but they are not so in marketing. In a country like India with 70 percent of its population living in about 6.25 lakhs villages and depending on agriculture as their main occupation, accurate and timely market intelligence about the market prices of the agricultural commodities is of extreme significance.

Market information and intelligence are crucial to enable farmers and traders to make informed decisions about what to grow, when to harvest, to which markets produce should be sent, and whether to store it or not. The most important marketing intelligence need of the farmer is price intelligence. Most of the farmers today still lack a good understanding and capacity to use market intelligence in guiding their production and marketing decisions. All the Indian states depend on interstate trade for major agricultural and horticultural commodities. Hence dissemination of market information (demand, production and prices) plays a vital role in the functioning of the whole market, by harmonizing the competitive marketing process. By helping ensure that produce goes to markets where there is a demand for it, it shortens marketing channels and cuts down on transport costs. It helps to ensure that each marketing transaction is a fair one, and that all participants share the risks and benefits.

Recent advances in information technology are making it more feasible to provide farmers with the marketing information they need. However, farmers may not benefit from sophisticated facilities, if the system is poorly managed or not designed for their needs. It is not enough for marketing information to be collected; it must also be disseminated in a form accessible to farmers and adopted to their needs. In India existing agricultural market information services frequently fall short in one or more areas. Though farm related information has been provided by the Radio, TV and Newspapers, there was no mechanism to analyze, interpret and convert this vast volume of information into simple, comprehensible trade intelligence. This calls for a farmer friendly, easily accessible market intelligence system. At present AGMARKNET is the largest network in India to provide real time information by connecting major regulated markets across the country.

Market Information vs Market Intelligence

Market Intelligence is a process of giving you insights into what might happen in the near future. This process requires that we go from market data to information and then to market intelligence.Here is a basic example:

• Data - Prices for our products have dropped by 5 percent.

• Information - New offshore facilities have lower labor costs.

• Intelligence - Our key competitor is about to acquire a facility in India that will increase storage facility for future sale in the market that will cater higher profits.

Intelligence differs from information since it requires some form of analysis. The purpose of this analysis is to derive some meaning from the piles of data and information. Market Information and intelligence are crucial to enable farmers and traders to make informed decisions about

  •   What to grow
  •   When to harvest
  • Where to markets the produce
  •   Whether to store it or not

Market Intelligence should not simply present the facts, declaring what we found; but instead make a statement with confidence that what is about to happen in near future. Market Intelligence allows us to remain competitive by improving our strategic decisions and this leads to better performance against our competitors. Market Intelligence does not chase down all the facts, but gets enough information to draw a reasonable conclusion for immediate action. The most important marketing intelligence need of the farmer is price intelligence. As farmer become more market oriented, extension workers need to be in a position to advice them not only on how to grow crops but also on how to market them. Knowledge of produce handling, storage and packaging is also essential. Many of the programmes of state and central governments do not have a component of Market Intelligence which finally leads to realization of lower net prices by farmers. The poor understanding and use of market intelligence is the result of various factors including:

        i)            Limited availability of market intelligence.

      ii)            Poor access to relevant market information.

    iii)            Limited dissemination of existing information to farmers and entrepreneurs.

    iv)            Lack of price forecasting system.

      v)            Limited capacity to understand and use market intelligence.

The main purpose of Agricultural Marketing Information System (AMIS) is to disseminate accurate and timely marketing information so as to support in marketing decision making and marketing efforts of entrepreneurs, farmers, government, development organizations, academicians, and researchers. Agricultural Market Information System (AMIS) helps in ensuring that produce goes to markets where there is a demand for it. It shortens marketing channels and cuts down on transport costs, and helps ensure that each marketing transaction is a fair one, and that all participants share the risks and benefits. However, this does not happen if marketing information is distributed unequally, as is generally the case when many small-scale farmers in India are selling to a relatively few large-scale dealers. The farmers then end up bearing the greater part of the risk, while the dealers end up with the greater part of the profits. Farmers must be able to seek out and compare the information available for different outlets if they are to sell to best advantage. Price information is less useful if there is only a single market outlet, or if farmers are price takers rather than price seekers. Where there is a very wide gap between the farm gate price and the price paid in wholesale markets and by consumers, marketing information can help narrow the gap.

The Ideal Agricultural Marketing Information System (AMIS) should be Responsible for

  • • sourcing all the market data/information being collected by various agencies;
  • • processing and analyzing such data/information to turn it into useable knowledge; and
  • •developing mechanisms/systems for information/knowledge dissemination through various media such as radio, TV, newsletters, bulletins, and websites. 
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Please note that this is the opinion of the author and is Not Certified by ICAR or any of its authorised agents.