Marketing Channels for Ag.

Produce

The route(s) through

which the goods move
from the producer to
the consumer or
industrial user
 Marketing Channels Theory
Already Covered in Marketing paper:
• Channel Participants & their tasks
• Channel functions and flows
• Channel levels (0, 1, 2, 3, . . .)
• Ch. cooperation, competition & Conflict
 Why a repetition here?
 Distinct nature of Agricultural produce
(perishability, seasonality and nature’s gift)
 Marketing Channels
May Vary:
• product wise
• Region wise
• Time wise
• Customer-type wise
 Same Product covers the market by
different channels
 different agencies and functionaries
(private/ public) are used in the channels
 Factors affecting channels
 Perishable nature of produce .e.g.
fruits, vegetables, flowers, milk, meat,
etc.
 Bulk and weight–cotton, fodders are
bulky but light in weight
 Storage facilities
 Weak or strong marketing agency
 Distance between producer and
consumer
 Kinds of Channels for Agricultural Produce
1. Direct: From Producer to Consumer
2. Through Wholesalers and Retailers (Open Market)
3. Through Public agencies/ Cooperatives
4. Through Processors

A number of alternative channels cover the market

Each commodity has its own channel combinations

 Channels of Wheat
1. Farmer – consumers
2. Farmer – retailer or village trader – consumer
3. Farmer – wholesaler – retailer – consumer
4. Farmer – village trader – wholesaler – retailer –
consumer
5. Farmer – co-operative marketing society –
retailer – consumer
6. Farmer – Govt. agency (FCI, etc.) – fair price
shop – consumer
7. Farmer – wholesaler – flour miller – retailer –
consumer
 Channels of Rice
1. Producer–miller–consumer (village sale)
2. Producer–miller–retailer–consumer (local sale)
3. Producer–wholesaler–miller–retailer–consumer
4. Producer–miller-cum-wholesaler–retailer–
consumer
5. Producer–village merchant–miller–retailer–
consumer
6. Producer–govt. procurement–miller–retailer–
consumer
 Channels of other Foodgrains
1. Producer – consumer (village sale)
2. Producer–village merchant–consumer (local sale)
3. Producer–wholesaler-cum-commission agent
retailer–consumer
4. Producer–primary wholesaler–secondary
wholesaler– retailer– Consumer
5. Producer–Primary wholesaler–miller–consumer
(Bakers)
6. Producer–govt. procurement–retailer–consumer
7. Producer–govt. agency–miller–retailer–consumer
 Channels of Cotton
1. Producer–village merchant–wholesaler or ginning
factory– wholesaler in lint–textile mill (consumer)
2. Producer–Primary wholesaler–ginning factory–
secondary wholesaler–consumer (Textile mill)
3. Producer– Trader– ginning factory– wholesaler in
lint–  consumer    (Textile mill)
4. Producer–govt. agency–ginning factory–consumer
(Textile mill)
5. Producer–Trader–ginning factory–wholesaler–
retailer– consumer (non-textile use)
 Channels of Vegetables
1. Producers–consumer (village sale)
2. Producer–retailer–consumer (local sale)
3. Producer–Trader–commission agent–
retailer–consumer
4. Producer–commission agent–retailer–
consumer
5. Producer–primary wholesaler–secondary
wholesaler–  retailer– consumer (distant
market)
 Channels of Fruits
1. Producer–consumer (village sale)
2. Producer–Trader–consumer (local sale)
3. Producer–pre-harvest contractor–retailer–
consumer
4. Producer–commission agent–retailer–
consumer.
5. Producer–pre-harvest contractor–commission
agent– retailer–consumer
6. Producer–commission agent–secondary
wholesaler–  retailer–consumer (distant market)
 Channels of Oilseeds
1. Producer – consumer (who either directly
consumes the oilseeds or gets it processed on
custom basis)
2. Producer – village trader – processor – oil
retailer – consumer
3. Producer – oilseed wholesaler – processor – oil
wholesaler – oil retailer – oil consumer
4. Producer – village trader – processor – oil
consumer
5. Producer – Govt. agency – processor – oil
wholesaler – oil retailer – oil consumer
 Channels of Eggs
1. Producer – consumer
2. Producer – retailer – consumer
3. Producer – wholesaler – retailer –
consumer
4. Producer – co-operative marketing
society – wholesalers – Retailers –
consumers
5. Producers – egg powder factory
 A Channel affects:
• Time taken to reach the user
• Quality/ Freshness of the produce
• Value addition/ Form utility
• Costs and Margins charged
• Handling and Loss in transit
• Proportion of MRP to farmer
• Marketing Efficiency
 Role of Channel Members
• Buying and/or Selling
 For profit motive
 For Public welfare
• Charging Commission on value
• Preservation/ Grading
• Unit Packaging/ Adding Value
• Connecting with user
• Facilitators/ service providers
 Good Channel Properties
• Which takes the least time
• Which causes the minimum loss
• Which retains the quality and
freshness
• Which adds the form utility
• Which adds the least cost
• Which gives the maximum share to
farmers
 Innovative Channels
Direct Marketing for Speed & Efficiency:
 Apni Mandi/ Kisan Mandi (Punjab)
 Rythu Bazar (Andhra)
 Uzhavar Sandies (TN)
 Shetkari Bazar (MS)
 Mother Dairy Booths (Delhi)
 eNAM (Electronic Trading Portal)
 Farmers Producers Organization (FPOs)
 Cooperatives
 Gate Sales
 Contract Farming
 Conclusion
The Best Channel
is one which gives
‘Highest Efficiency’
&
minimizes the losses