Government Schemes/Policies

for marketing-Rice

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Out line• Introduction

• Government schemes for Rice

• Government policies for marketing Rice

• Marketing organization

• References

• Questions and conclusion

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INTRODUCTION Rice is the seed of the monocot plants Oryz

sativa (Asian rice) or Oryza glaberrima (African rice).

As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East and the West Indie

India is one of the world's largest producer of white rice accounting for 20% of all world rice production.

Rice is India's preeminent crop, and is the staple food of the people of the eastern and southern parts of the countryNext Previous End

Economic, Market And Institutional Integration

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Developing countries are the main players in the world rice trade, accounting for 83 percent of exports and 85 percent of imports.

The concentration is particularly high on the export side, since five countries (Thailand, Viet Nam, China, the United States and India) cover about three-quarters of world trade

This situation is in contrast to the fragmentation of import markets and the wide year-to-year fluctuations in individual countries’ purchases, resulting from the fact that importers do not rely consistently on the international market for rice supplies, but only as a last resort to fill the gap caused by a production shortfall.

GENERAL THRUST OF RICE GOVERNMENT POLICIES

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Government support to producers in developing countries concentrates mainly on research in improved or hybrid rice varieties, investments in irrigation, preferential credits, extension and distribution of improved seed. Intervention to influence prices is also common - through procurement purchases or releases from stocks, or through changes in trade policies. In developed countries, much assistance to the sector is

conveyed through direct payments and through price support. Government often plays an important role in

the first phase of the marketing cycle, by procuring paddy at minimum producer prices.

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Some governments oblige millers to purchase paddy at a predetermined price and to charge fixed mark-ups at each stage of the marketing process, while others distribute rice at fixed retail prices.

It is common practice to manage rice stocks or to adopt trade policy measures in order to stabilize domestic market prices.

Trade measures, especially tariffs, are widely used to protect domestic rice markets. Despite the relatively high WTO (World Trade Organization)-bound tariffs, rice imports are often subject to “Special Safeguards” in country schedules. The role of state companies in managing

international rice flows is also important, although such companies do not usually have monopoly privileges and they share their trade functions with the private sector.

REVIEW OF RICE POLICIES FROM AWTO PERSPECTIVE

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Bound tariffs

Bound tariff rates for rice are generally high, often over 100 percent. Some countries (India, the Dominican Republic and Panama) recently renegotiated tariff bindings to higher than the originally agreed levels, alleging that the latter provided insufficient protection for their domestic sectors.

Applied tariffs

Applied tariff rates are often set equal to bound tariffs when international prices are low. However, their level tends to change frequently, depending on the domestic and international market situations, contributing a high level of uncertainty to the world rice economy. Cont…

Several countries have reserved the right to use the Special Safeguard (SSG) provisions; however, only rarely have they been invoked for rice.

Tariff escalation

Tariff escalation is less important for rice than for other commodities, because of the relatively small volume of trade of paddy or unhusked rice.

Nonetheless it should be noted that tariffs increase according to the processing stage and are much lower for paddy or husked rice than for milled rice.

Special Safeguards (SSG)

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Non-tariff barriers

Certain restrictions on rice imports from Viet Nam and Thailand are in force in several Latin American and Caribbean countries on phytosanitary grounds, influencing the pattern of trade flows into the region.

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Phytosanitary barriers are less important for rice than for other commodities.

Export subsidies

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Export subsidy reduction commitments have been made under the Uruguay Round Agreement on Agriculture (URAA) by Colombia, Indonesia, Uruguay, the EC and the United States.

Other issues have arisen in relation to export competition in rice, in particular the granting of export credits by the United States of America.

Proposals for further reduction commitments are likely to meet opposition from the EC.

It should be noted, however, that export credits are also commonly used in government-to-government adeals, although there is little information available in connection with such practices

Government Schemes -Rice

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Government of Tamil Nadu is implementing various schemes

An aim to uplift the status of farmers and sustain their livelihood

Cereals Development Programme

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This programme is implemented in all the districts except Chennai and Nilgiris

NFSM – Rice operating districts of Pudukottai, Tiruvarur, Nagapattinam, Ramanathapuram and Sivagangai.

It has been programmed to distribute quality seeds to increase the rice production.

This scheme will be implemented during 2011-2012 with an outlay of 657.50 lakhs.

National Food Security Mission

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National Food Security Mission aims to ensure food and nutritional security for all.

An objective of the scheme is to increase the production and productivity of Rice and Pulses.

National Food Security Mission for Rice is implemented in 5 districts viz., Pudukottai, Tiruvarur, Nagapattinam, Ramanathapuram and Sivagangai,

This scheme was introduced in the year 2007-2008.

Market Complex for paddy

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A Market Complex has been established exclusively for paddy at Mattuthavani in Madurai district

In an extent of 9.85 acres at a total cost of 17.06 crores.

In this complex, 314 shops have been allotted for the traders of paddy, agricultural inputs and flowers

PUBLIC DISTRIBUTION SYSTEM

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RICE :

Price : Free of cost

SCALE OF SUPPLY :

Regular rice card:

4 Kgs per adult per month and 2 Kgs per childper month, districts except The Nilgris subject to minimum 12 kg. and maximum 20 kg. per card per month.

AAY cards : 35 Kg per month per card

PROCUREMENT OF PADDY UNDER DECENTRALISEDPROCUREMENT SYSTEM

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Procurement of paddy

Decentralised procurement system is in force in this State with effect from 01.10.2002.

Tamil Nadu Civil Supplies Corporation is procuring paddy on behalf of Food Corporation of India.

Paddy procured is processed through modern rice mills owned by Tamil Nadu Civil Supplies Corporation and through private hulling agents.

Converted rice is adjusted against central Pool allotment of Government of India and utilised in the public distribution system.

MARKETING RELATED SCHEMES OF GOVERNMENT AND PUBLIC SECTOR

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Agricultural Marketing Information Network

To establish a nationwide information network for speedy collection and dissemination of market data for its efficient and timely utilization.

To ensure flow of regular and reliable data to the producers

Traders and consumers to derive maximum advantage out of their sales and purchases.

To increase efficiency in marketing by effective improvement in the existing market information system.

GRAMIN BHANDARAN YOJANA (RURAL GODOWNS SCHEME)

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It is a capital investment subsidy scheme for construction/renovation/expansion of rural godowns.

The scheme is implemented by DMI in collaboration with NABARD and NCDC.

The objectives of the scheme are

To create scientific storage capacity with allied facilities in rural areas

To meet the requirements of farmers for storing farm produce, processed farm produce, consumer articles and agricultural inputs

AGMARK GRADING AND STANDARDISATION

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Promotion of grading of agricultural and allied commodities under Agricultural Produce (Grading & Marking) Act.1937.

Agmark specifications for agricultural commodities have been framed, based on their intrinsic quality.

Food safety factors are being incorporated in the standards to compete in world trade.

CO-OPERATIVE MARKETING, PROCESSING, STORAGE ETC. PROGRAMMES IN COMPARATIVELY UNDER/LEAST DEVELOPED STATES.

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To correct regional imbalances and to provide needed momentum to the pace of development of various programmes of cooperative agricultural marketing, processing, storage

In under/least developed states/UTs by providing financial assistance on liberal terms to augment the income of farmers and weaker sections of the community

PRICE SUPPORT SCHEME ( PSS )

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Nodal agency of Government of India to undertake procurement of paddy under price support scheme.

Provides regular marketing support to the farmers to sustain and improve the production of paddy

POLICIES FOR MARKETING-RICE

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AGRICULTURAL PRICES

Agricultural prices cover prices of agricultural products (output prices) and prices of requisites for agricultural production (input prices) at various stages of marketing.

AGRICULTURAL MARKETING

Agricultural marketing is defined as the study of entire gamut activities that direct the flow of goods and services from the primary producer to ultimate consumer

OBJECTIVE OF SCHEME

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The broader objective here is to prepare a Manual on Agricultural Prices and Marketing highlighting the importance of the sector, significance and measurement needs, performance indicators, statistical standards adopted at National and International level and examining the deviations, if any, survey methodologies and data sources, sampling consideration.

NEED OF AGRICULTURAL PRICE DATA

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Agricultural prices are important economic variables in a market economy.

Price relationships have a significant influence on decisions relating to the type and volume or agricultural production activity.

USES OF AGRICULTURAL PRICE DATA

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BY INDIVIDUAL FARMERS

In the short run, an individual farmer needs output prices to determine the pace and volume of his sales so as to optimize the return from his farm production

BY PRIVATE AND COOPERATIVE BUSINESS ORGANIZATIONS

Business organizations use agricultural prices data in a number of ways such as planning the character.

Location and size of their agricultural business enterprises Determining the time and place for purchasing agricultural

production requisites. Deciding on inventory expansion or contraction and hedging Selecting the markets and time of sale or their produce so as to

reap the best advantage Formulating credit policies.

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BY PUBLIC AGENCIES

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Public agencies use price data in planning agricultural programmes and ensuring that the allocation of available resources to different uses is consistent with the price system.

Profit expectations from alternative agricultural development plans depend on the structure and behaviour of both output and input prices.

AGRICULTURAL SECTOR ACCOUNTS

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Price data are used in constructing economic accounts for agriculture within the general framework of national accounts.

This involves the estimation of the value of agricultural output.

Expenditure on goods and services purchased by farmers and total agricultural income.

The data so computed enable the trend in Agricultural income and the share of agriculture in total national income to be properly studied

TERMS OF TRADE

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Raw price data, when properly processed, can yield index numbers

Index numbers of prices received by farmers

studied over time indicate the extent to which changes in the value of output or farm disposals are attributable to changes in prices

PROCUREMENT POLICY      

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The Central Government extends price support to paddy, coarse grains and wheat through the FCI and  State Agencies

All the food grains conforming to the prescribed specifications offered for sale at specified centers are bought by the public procurement agencies at the Minimum Support Price (MSP)

The producers have the option to sell their produce to FCI/State Agencies at MSP or in the open market as is advantageous to themFood grains procured by the State Governments and their agencies are ultimately taken over by the FCI for distribution through out the country

PROCUREMENT OF RICE UNDER LEVY SYSTEM

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Rice is also procured by the Government  through statutory levy on rice millers and rice dealers

The percentage of levy rice is fixed by State Governments with the approval of Central Government taking into account requirements for the Central Pool

Domestic consumption and marketable surplus

Prices of levy rice are fixed by the Government of India before commencement of every Kharif Marketing Season

MARKET INFORMATION

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MARKET INTELLIGENCE

This includes information relating to such facts as the prices that prevailed in the past and market arrivals over time. It is historical nature.

An analysis of the past helps to take decision about the future.

MARKET INFORMATION

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Market News

This term refers to current information about prices, arrival and changes in the market conditions.

The availability of market news in time and with speed is of utmost value.

Marketing Information System

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Marketing Information System is defined as a set of procedures and methods for the regular and planned analysis and presentation of information for the use of marketing decisions

ORGANISATIONS PROVIDING MARKETING SERVICES

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Directorate of Marketing and Inspection (DMI) :

To integrate development of marketing of agricultural and allied produce in the country.

Promotion of grading of agricultural and allied produce.

Market development through regulation, planning and designing of physical markets.

Administration of Meat Food Products Order (1973)

Promotion of cold storage

FOOD CORPORATION OF INDIA (FCI)

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Procurement of food grains for effective price support operations for safeguarding the interests of the farmers.

Distribution of food grains throughout the country for Public Distribution System.

Maintaining satisfactory level of operational/buffer stocks of food grains to ensure National Food Security.

CENTRAL WAREHOUSING CORPORATION (CWC)

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Provides scientific storage and handling facilities

Offers consultancy services/ training for the construction of warehousing infrastructure to different agencies.

Import and export warehousing facilities.

Provides disinfestations services.

AGRICULTURAL AND PROCESSED FOOD PRODUCTS EXPORT DEVELOPMENT

AUTHORITY (APEDA)

Development of scheduled agriculture products related industries for export.

Provides financial assistance to these industries for conducting surveys, sensibility studies, relief and subsidy schemes.

Registration of exporters for scheduled products. Adapting standards and specifications for the purpose of

export of scheduled products. Carrying out inspection of meat and meat products for

ensuring the quality of such products. Improving the packaging of the scheduled products.

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NATIONAL CO-OPERATIVE DEVELOPMENT CORPORATION (NCDC)

Planning, promoting and financing programmes for production, processing, marketing, storage, export and import of agricultural produce.

Financial support to primary, regional, State and National level co-operative marketing societies is provided towards:

• Margin money and working capital finance to augment business operations of agricultural produce.

• Strengthening the share capital base and

• Purchase of transport vehicles.

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DIRECTOR GENERAL OF FOREIGN TRADE(DGFT)

Provides guidelines / procedure of export and import of various commodities.

Allot import-export code number (IEC No) to the exporter of agricultural commodities.

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STATE AGRICULTURAL MARKETING BOARDS

• Implementation of the regulation of marketing in the state.

• Provide infra-structural facilities for the marketing of notified agricultural produce.

• Provide grading of agricultural produce in the markets.

• To co-ordinate all the market committees for information services.

• Provide aid to financially weak or needy market committees in the form of loans and grants.

• Eliminate malpractices in the marketing system

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Regulated Markets

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Regulated markets are functioning under market committees.

At present 21 Market committees are functioning in Tamil Nadu at district Level.

There are 268 Regulated Markets, 15 Check Posts, 108 Rural Godowns and 108 grading centres functioning under the Market Committees.

Competitive and remunerative prices are ensured for the produce sold by the farmers through closed tender system in the Regulated Markets.

Free grading facilities for agricultural commodities and issuing pledge loan during distress sale are also available in the Regulated Markets.

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Regulated Markets provides facilities such as correct measurement by using electronic weigh bridges and weighing balances, godown facilities, bank facility, immediate payment, daily price information, rest sheds, drinking water facility, cattle sheds, free medical aid to farmers, input shops, phone and fax facilities etc.

Under "AGMARKNET" centrally sponsored scheme 93 regulated markets have been provided with computer and Internet connectivity for effective price dissemination among farmers through AGMARKNET website.

The information on commodity prices prevailing in various markets is made available; the farmers would be able to get better price of their produce by moving their produce to the market which pays higher. During the year 2007-08

100 Regulated markets were computerized through AGMARKNET.

Pledge loan scheme

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During distress sale in glut season, famers can store their produce in the godowns of the Regulated Markets and avail pledge loan for a period of six months without any charge.

Pledge loan is provided up to a maximum of 1,00,000.

The rate of interest for pledge loan is 5% for farmers and 9% for traders.