ISSN : 23 30-9519 (O nline) | IS S N : 2 2 3 1 -2 4 6 3 ( Pri n t )

IJMBs Vol. 1, Issue 3, septeMBer 2011

Rural Products & its market in India: A literature Review

1 1,2

Dept. of Management, United Institute of Management, Allahabad, UP, India

products and non agri products, due to revolution in two decades, there is rapid development for non-agri cultural products like handicrafts and fisheries. Government had given lot of promotional scheme to promote pottery and handicraft which enhances rural employment.
PRODUCTION OF RICE (KHARIF & RABI) IN INDIA
(million tonnes) Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11(Targets) Kharif 78.27 80.17 82.66 84.91 75.91 87.00 Rabi 13.52 13.18 14.03 14.27 13.22 15.00 Total 91.79 93.35 96.69 99.18 89.13 102.00

Dr. Vishnu Prakash Mishra, 2Manmohan Mishra

Abstract Indian Economy is mixed economy dominated by both public & private sector.villegers have great influence on market Around 90% of the rural population is concentrated in villages with a population of less than 2000. Rural market is as old as the civilization. Surplus of agro - products are exchanged in earlier days in the barter system. Products in local use are also not marketed horizontally; they often first travel down to market through a long chain of intermediaries and then up to more difficult locations in the rural areas. The basic scope of this novel initiative will be the mutual benefits of the rural entrepreneurs and industries. The involvement of the private /industry sector at the rural product and market development can also provide opportunities for the development of new services and values to the customers, which will find application in the developed markets. Only consistent performance can convince the skeptics. Therefore, the industries must play a catalytic role to cope with this challenge and should also train the entrepreneurs to develop their managerial and it skills. Fundamental & analytical research methodology has been used during research. Keywrods Rural Products, Indian Market, SHGs I. Introduction Rural products of India are unique, innovative and have good utility and values. Large number of these rural products (like handicraft items, food products, embroidery, clothes & other products) sustains a significant segment of the population in the rural areas. Several attributes of rural products can be identified, for which, it has a demand in the market. Out of the lots, ethnic origin and indigenous design & appearance are two traits of rural products, attracting a premium in the market. In the process, the people in rural areas suffer from both low prices as producers and high prices as consumers. In this conflict, rural products loss its equilibrium and the supply side becomes exponentially high. Because of this hazard, rural entrepreneurs face acute economic loss and rural markets become stagnant.
CLASSIFICATION OF RURAL PRODUCT
AGRI PRODUCTS INPUTS
-Seeds -Fertilizers -Machine & Equipments -Pesticides -Farm Animals -Human Labour

Fig. 2 : India is second largest producer in the world. It is the staple food of the people living in the part of west Bengal,u.p.,gujrat,Andhra Pradesh are some of major producer of rice .Last few decades rice production has been increasing consistently. From the above table it is evident that overall rice production in the country has been increases.
LAL QUILA RICE

PRODUCTION AND
Year 2005-06 2006-07 2007-08 2008-09 2009-10

YIELD OF WHEAT IN INDIA

Yield (Kg./hectare) 2,619 2,708 2,802 2,907 2,830 --

Production (Million Tonne) 69.35 75.81 78.57 80.68 80.71 82.00

NON AGRI PRODUCTS

-Fisheries

2010-11(Targets)

OUTPUTS

-Poultry Farm -Pottery

-Handy Crafts
FOOD GRAIN
-Rice -Wheat -Pulses -Maize -Barley -Bazra -Corn

CASH CROPS
-Tobacco -Sugarcane -Cocoa -Cashew nuts -Tea -Rubber -Species -Oil Seeds -Jute & Cotton

-Dairy Products -Agro Forestry Products

Fig. 3 : India is second largest producer of wheat with over 70 millions tones produce every year. It is mostly produced in Punjab, Rajasthan, U.P., Haryana, Bihar & Gujrat. During the initial year of independent production was quite low but due to green revolution 1960 and government initiative there has been increase in production & yield of wheat in India.

Fig. 1 : We can classify rural product in two broad categories agri

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PILLSBURRY ATTA

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help group et al) as an alternative procurement and distribution chain and vise versa.
IMPORTANCE OF MARKET ACCESS

Fig. 4 :

COTTON
Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

PRODUCTION IN INDIA
Production in lakh bales of 170kg. 244.00 280.00 307.00 290.00 295.00 325.00 86.77 91.44 94.14 94.06 103.29 110.00

Area in lakh hectares

Fig. 7 : Smallstock are capable of producing good returns on investment at low production levels, but require a minimum efficient scale of production that may be beyond the means of poorer members of the community that lack adequate financing. Poor market access creates prohibitive costs to market participation. This provides larger producers having better market access with overall net price advantages. Poorer producers in areas of weak market access may opt out of markets in favor of low-return self-sufficiency or subsistence-only production. Poorer households lacking access to capital to finance productive investments may be unable to undertake the necessary investments, regardless of their potential returns. III. Industrys role in building market linkages: To make an effective market linkage, industries have to play as an engine of market, which can generate a brand image of the rural products. This initiative of industries will also strengthen the backward and forward linkages of the rural market, besides, accelerating the innovations of the rural products. Definitely, this strategy will also give a remarkable dividend to the industries & profit making companies. In micro level, it is observed that to create a sustainable market linkage for rural products, industries can develop an ecosystem of Self Help Groups (SHGs) by involving the local communities through village level empowerment. It is nothing less than the next phase in the democratization of commerce. Under this paradigm, industries can create a network with viable marketing channels covering all the linkages from villages to the global level. This architecture provides the right value of procurement through the village procurement centres and rural entrepreneurs can sell their products faster with better price realization. This model is also capable of generating a consumer business and an output business in a win-win scenario, where rural producers can get a wide marketing horizon and the industries shall get a new, lower cost sales force.

Fig. 5 : After independence india were largely dependent on imports of cotton from different foreign market, due to 5 years plans & incentive plan incorporated by Indian government becoming second cotton producer in the world market. E.g. gujrat, Andhra Pradesh, Madhya Pradesh, Punjab, Haryana, are the major cotton producing in India.

Fig. 6 : II. Market linkages for rural products There are, broadly speaking, three ways in which they can be connected to the markets. They can do it on their own through cooperatives. Or, the state can do it for them through its procurement engines. Stages one and two, in a manner of speaking. Today, developmental thinking on market linkages has reached stage three linkages through companies or industries. Rural markets are regarded as organizations for marketing non-farm products in a traditional setting. Developing rural markets is one of the major concerns of government and Non-governmental organization in India. Across India, previous attempts to create such linkages have floundered. Take Assam and other eastern states itself. Around the Eighties, the state government here decided that cooperatives were a great way to consolidate its political base. Loans went to the undeserving. Debts were written off. The institutions slowly got corrupted. As for the linkages provided by the state, these offer uncertain sustainability. Given this context, one can conclude that profit-oriented industry linkages are a more sustainable, more scalable alternative. In this scenario, companies can use the social infrastructure (the self

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ISSN : 23 30-9519 (O nline) | IS S N : 2 2 3 1 -2 4 6 3 ( Pri n t )

SCOPE OF CHANNEL OF DISTRIBUTION FOR RURAL PRODUCTS

IJMBs Vol. 1, Issue 3, septeMBer 2011

necessity. Moreover, the low volumes of rural products, high operating cost, high attrition, and absence of local know how and relationships may also create problem in the process. Henceforth, it is essential to make a way out to cope with these odds. VI. Conclusion The core of a scientific approach is to understand the market opportunities for rural products along with the country's development priorities and to chalk out a strategy where rural industries have an important role to play. While rural products are forced to increasingly become part of global supply chains, these products need to adapt themselves, not only according to the changing tastes of the national market, but also according to changes in tastes in the international market. Therefore, a process is essential to explore the market linkages and capacity building for SHGs through a bottom up approach and continuous dialogue with stakeholders of rural enterprise. This process should ensure the participation of rural people as consumers and producers in the globalization mechanism, with better livelihoods and global access to markets. The real challenge of building a sustainable market linkage starts here. References [1] Ellis, F. Rural livelihood diversity in developing countries: Evidence and policy implications. Natural Resource Perspectives. Overseas Development Institute, 1999. [2] Ellis, F., Rural livelihoods and diversity in developing countries. Oxford University Press, 2000. [3] FAO. Egg Marketing: A guide for the production and sale of eggs. FAO Agricultural Services Bulletin 150, Rome, 2003. [4] FAO, Publications on Agricultural Marketing [Online] Available : http://www.fao.org/waicent/faoinfo/ agricult/ags/AGSM/markpubs.htm [5] Herren, U., Cash from Camel Milk. Nomadic Peoples 30, 1992. [6] IFAD., Livestock Services and the Poor. International Fund for Agricultural Development, 2004. [7] Livestock In Development. Livestock In Poverty-Focused Development. Crewkerne: Livestock In Development, 1999.

FARMER

AGENT/ BROKERS

COMPANY

CONSUMERS

RETAILERS

WHOLESELLERS

Fig. 8 : IV. Scope & opportunities The basic scope of this novel initiative will be the mutual benefits of the rural entrepreneurs and industries. The entrepreneurs primary beneficiaries, SHGs bridge with the community, participating companies/industries and rural consumers have befitted through a robust commercial relationship. These models of marketing linkages demonstrate a large corporation which can play a major role in reorganizing markets and increasing the efficiency of a rural product generation system. Because of this sustainable market linkages, rural producers can participate in the benefits of globalization and will also develop their capacity to maintain global quality standard. Nonetheless, it creates new stakeholders for the industry sector. And subsequently, they become part of the firms core businesses. The involvement of the private /industry sector at the rural product and market development can also provide opportunities for the development of new services and values to the customers, which will find application in the developed markets. It will be worth mentioning that building a sustainable market linkage through industrys intervention will also empower the rural mass (producers, farmers & entrepreneurs) to cope with socio-economic problems in the rural society and will ensure economic self reliance.

LEVEL
Company

OF CHANNEL OF DISTRIBUTION

Company

Company

Company

C/F Agent

Wholeseller

V. Challenges Only consistent performance can convince the skeptics. Therefore, the industries must play a catalytic role to cope with this challenge and should also train the entrepreneurs to develop their managerial and IT skills. On the other hand, the products of the existing and popular brand also stand as threat to the rural products. These global giants (brand) may try to suppress the rural products in the markets with its communication hype. Therefore, developing alternative and additional market linkages for these products is an absolute
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