CHAPTER 4

Status of marketing of fruits and vegetables and marketing setup prevalent in

the area prior to farmer markets

The fruit and marketing scenario in the area under survey prior to the initiation of the farmer
markets was studied in detail. The marketing practices adopted by the farmers, the
constraints faced by them in perishable agriculture produce marketing, the expenses incurred
and other lacunas experienced in fruit and vegetable marketing were assessed.
4.1. Marketing practices adopted by the farmers in the area

The marketing practices adopted by the farmers were studied. It was found that 39% of the
farmers surveyed depended on nearby public markets for the marketing of their produce,
while 36% depend on farm gate traders. A minority of 15% farmers depend on collection
agents. Forward trading practices were also prevalent but limited to an extent of 10%.
Dependence on farm gate trader was highest in the geographically remote and spread out
areas like Thankamani, Adimali etc in Idukki district.
Marketing practices

Farm Farmer Forward

collection trading
Direct to gate
market trader agent
Production
area - %

39

36

15

10%
15%

39%

10
36%
Direct to market

Farm gate trader

Farmer collection agent

Forward trading

136

4.2. Comparative marketing practices adopted in the different districts

The marketing practices adopted by the farmers in the different districts were studied. While
analysing district wise marketing setup, it was found that 53% of the farmers surveyed in
Palakkad and 65% of the farmers under survey in Idukki depended on farm gate traders. The
reason may be the non accessibility of the farmers in these areas to public markets. In
Trivandrum, Kottayam and Thrissur districts, 63% of the farmers were found to depend on
nearby markets.
Marketing practices in districts
100%

80%

50%

26

Thrissur

62

32

10

20%

Kottayam

63

23

20

10%

Idukki

15

65

13

33

26
23

60%

53

33

10
20

70%

30

63

10

32

Palakkad

Trivandrum

10

10

90%

Marketing practices

Marketing practices adopted by

farmers under survey in %
Farm Farmer Forward
collection trading
Direct to gate
market trader agent

53

65

40%

62

30%

63

63

30
15

0%
Palakkad

13

Thrissur

10

Kottayam Trivandrum

Idukki

District

Direct to market

Farm gate trader

Farmer collection agent

Forward trading

4.3. Marketing channels available to the producer

The market channels available to the farmer were studied. The produce from the production
area are mainly moving to the transit and wholesale markets. 42% of the farmers depend on
wholesale and transit type market and 26% depend on wholesale market in the nearby places.
Types of markets catering

Marketing channels to farmers under survey in %

Production
area - %

Transit
market

Whole
sale
market

Transit
+
whole
sale

Whole
sale
+
retail

Transit
+
Whole
sale +
retail

17

26

42

10

10%

5%

17%

26%
42%

Transit

Whlesale

Transit+wholesale

Wholesale +retail

Transit+wholesale+retail

137

4.4. Marketing chain operating in the different districts

The marketing chain that operated

in different districts consisted mainly of farmer,

commission agent, wholesaler, retailer and consumer. While analysing the marketing chain
and the role of wholesaler and commission agent, it was found that dependence on
commission agent was more in Palakkad, Thrissur and Idukki districts while farmers in
Trivandrum and Kottayam depended more on wholesalers. The amazing observation is that
in Idukki district 100% of the farmers depend on farm gate traders / commission agent for
selling their produce.
Marketing chain operated in %
FarmerFarmer- commission
wholesaleragent-wholesalerRetailerRetailerConsumer
Consumer%
Palakkad
Thrissur
Kottayam
Trivandrum
Idukki

44
50
80
75
0

Marketing chain

56%

56
50
20
25
100

20%

25%

80%

75%

Kottayam

Trivandrum

50%

44%

50%

Palakkad

Thrissur

100%

Idukki

District
Wholesaler

Commission agent

4.5. Distance to market and market timings

The average distance to the markets and the market timings were studied. The markets were
generally found to be situated at an average distance of 27-30 km from the production areas.
On an average the farmers had to spent more than 5 hrs in the market in order to sell off their
produce. The farmers, in general, lost one manday of work for selling their products. The
study reveals that predominantly open market functions were in the morning hours on the
convenience of traders.

Average distance to the market

27 km

Market time
Mornings

138

4.6. General marketing expenses involved in trade

The expenses incurred by the farmers in marketing their produce were assessed. The various
expenses were categorized and the per kg expenditure was found to be 49 paise in the case of
banana and for vegetable it was found to be 61 paise. The various expenses involved in frut
and vegetable trade include transportation cost, loading unloading charges, market toll,
weight loss, loss due to blemishes and breakages, handling losses and the cost of time spent
by the farmer in the market. Average market toll in the public markets was found to be
around Rs. 13/-. Average weight loss for perishables was in the range of 1.6%. About 2.6%
of the produce was lost by way of breakages and handling losses.
Per kg marketing cost in market

Average marketing expenses (Rs./kg)

Vegetable
Banana

0.61

0.49

0.7

0.61

0.6

0.49

0.5
0.4
0.3
0.2
0.1
0
veg

banana

4.7. Major marketing problems in fruit and vegetable trade

The farmer marketing problems were assessed in a scale of 1-3, the gravity of the problem
indicated by the score with 1 for problem with least gravity and 3 for problem with highest
gravity. The grave problem (35% of the farmers under survey) faced by the fruit and
vegetables were the unstable prices and the trader curtails, due to the lack of bargaining
power. This is because the unorganized farmers as individuals deal with an established group
of traders in the market and the organized group always holds an upper hand over farmers.
Other marketing problems included high marketing costs incurred(15% of the farmers
surveyed), ignorance on prevailing market price data in the near by markets(13%), the time
and efforts involved(14%) and the lack of adequate product range available with the farmers
(8%).

139

Major marketing problems in fruit and

vegetable trade

No bargaining power leading to

unilateral pricing by the trader
Unstable prices due to market glut and
trader curtails
High marketing cost
More time and huge effort
No product range
Distant market and market timings
No information on distant market
prices

Average index
worked out by
giving maximum
of 3 for the most
grave problem
2.8

Marketing problems
15%

17%

13%
18%
8%
14%

2.8

15%

No bargaining power leading to unilateral pricing by the trader

2.4
2.2
1.2
2.1
2.4

Unstable prices due to market glut and trader curtails

High marketing cost
More time and huge effort
No product range
Distant market and market timings
No information of distant market prices

4.8. Major marketing problems defined in different districts by fruit and vegetable
farmers

The farmer marketing problems in the different districts were compared. Lack of bargaining
power was enumerated as the major problem by 20% of the farmers surveyed in Thrissur and
Palakkad while at Trivandrum, 21% of the farmers were bothered about high marketing cost.
In general, farmers in all districts felt that lack of bargaining power, trader curtails and high
marketing expenses involved in trade are the major limiting factors in fruit and vegetable
marketing.
Major marketing problems in fruit
and vegetable trade

Marketing problems expressed by farmers in %

Palakkad Thrissur Kottayam
Trivandrum Idukki
%
%
%
%
%

No bargaining power leading to

unilateral pricing by the trader
Unstable prices due to market glut
and trader curtails
High marketing cost
More time and huge effort
No product range
Distant market and market
timings
No information on distant market
prices

20

20

15

16

18

17

19

16

19

18

16
12
7
13

16
12
10
10

14
15
8
16

21
10
7
14

12
14
6
12

15

12

16

13

18

140

Marketing problems in districts

25%
20%
15%
10%
5%
0%
Palakkad

Thrissur

Kottayam

Trivandrum

Idukki

No bargaining power leading to unilateral pricing by the trader

Unstable prices due to market glut and trader curtails
High marketing cost
More time and huge effort
No product range
Distant market and market timings
No information of distant market prices

4.9. Marketing weaknesses determined specific product wise

The marketing problem was studied in relation to the product dealt by the farmer. Lack of
bargaining power due to market glut arising from over production and dumping of produce
was the major marketing problem in banana while lack of bargaining power due to
perishability was identified as the major constraint in vegetables followed by trader curtails .
Marketing problems

No bargaining power
leading to unilateral
pricing by the trader
Unstable prices due to
market glut and trader
curtails
High marketing cost
More time and huge
effort
No product range
Distant market and
market timings
No information on
distant market prices

Marketing problems
expressed by farmers in %
Vegetable
Banana
17
19

16

19

Product vs marketing problems

No bargaining power
leading to unilateral pricing
by the trader
Unstable prices due to
market glut and trader
curtails
High marketing cost

20%
18%
16%
14%
12%

15
13

15
14

7
15

8
11

More time and huge effort

No product range

10%
8%
6%

16

15

Distant market and market

timings

4%

No information of distant
market prices

0%

2%
veg

banana

141

4.10. Average credit period in fruit and vegetable trade

The clearance of payment to the farmers by traders was studied. It was found that the credit
period generally was in the range of 1-2 weeks extending upto a month. At times there was
no settlement of dues leaving the farmers at a loss.
Mode of payment

Average credit period expressed in %

%
Mode of payment
Advance
20
Credit > 1 week
33
Credit > 2 weeks
27
Credit > 1 month
17
Unsettled
3

3%

17%

27%

20%

33%

Advance

Crdt>1 wk

Crdt>1mnth

Unsetld

Crdt>2 wk

4.11. Credit period availed by traders

The credit period availed by fruit and vegetable traders to clear the farmers payments across
the districts were compared. 40% of the farmers surveyed in Thrissur and 50% of the farmers
under survey in Kottayam got their dues in a weeks time. For 67% of the farmers in
Trivandrum and 42 % of the farmers in Palakkad, the credit period was found to be extended
upto 2 weeks. In Idukki, the farmers had to wait for almost a months time to get their money.
It seems that the geographical peculiarity of the region acts as a handicap to fruit and
vegetable traders as there is very little scope for identifying alternative marketing channels.
Credit period availed by traders expressed in %
Mode of
payment

Palakkad

Thrissur

Kottayam

Trivandrum

Advance
Credit > 1 week
Credit > 2 weeks
Credit > 1 month
Unsettled

29
29
42

40
40
10
10

50
33

33
67

Idukki

100
17

142

District vs credit period

120%
100%

Advance

80%

Crdt>1 wk

60%

Crdt>2 wk

40%

Crdt>1mnth

20%

Unsetld

Id
uk
ki

ru
m
an
d
iv

Tr

Ko
tta
ya
m

r is
su
r
Th

Pa
la

kk
ad

0%

4.12. Credit strategy of traders product wise

The mode of payment in different product category was studied. It was found that credit
period was extended up to one month for banana, while credit period was less in vegetables,
mostly 2 weeks time. But often non settlement of credit happens in

vegetables. The

perishability of vegetables provided ground for traders to raise issues of losses.

Credit strategy in different products in %
Mode of payment
Vegetable Banana
Advance
8
28
Credit > 1 week
41
28
Credit > 2 weeks
33
22
Credit > 1 month
8
22
Unsettled
8

Product vs credit period

50%
Advance

40%

Crdt>1 wk

30%

Crdt>2 wk

20%

Crdt>1mnth

10%

Unsetld

0%
Veg

Banana

4.13. Reasons for price fall in fruits and vegetables

The reasons for price fall of produce was assessed in a scale of 1-3 with the score of 3 for the
reason with most impact on price and 1 for the reason with least impact on price. In general,
27% of the farmers under survey opined that the price fall was mainly due to over supply and
market glut while 23% attributed exploitation of the farmers by traders as the reason for price
fall. The other reasons attributed for price fall were quality of product and substitution
buying.

143

Reasons attributed to price

fall

Average index worked

out by giving maximum
of 3 for the most grave
problem

Over supply or market glut

Product quality
Substitution buying
Trader curtails
Farmer exploited

3
1.9
1.3
2.3
2.5

Reason for price fall

23%

Ovr supply or glut

27%

pdt qlty
subsitutn buyng
trdr curtls

21%

17%

farmer xploitd

12%

4.14. Reasons for price fall - product wise

When the reasons for price fall was analysed separately for banana and vegetable, it was
found that 27% of the respondents had the opinion that main reason for price fall was market
glut in case of vegetables and farmer exploitation as the major cause in banana trade.
Reasons attributed to price
fall

Reason
Over supply or market glut
Product quality
Substitution buying
Trader curtails
Farmer exploited

Average index
worked out by
giving maximum of
3 for the most grave
problem
Vegetable Banana

27
17
12
22
23

17
16
12
20
25

Product vs price fall attribute

30%
25%

Ovr supply or glut

20%

pdt qlty

15%

subsitutn buyng

10%

trdr curtls
farmer xploitd

5%
0%
veg

banana

4.15. Seasonal availability of fruits and vegetables in different production centers

The availability of produce was studied and it was found that produce was generally
available round the year, only the quantity vary according to different seasons.

144

Seasonality of produce

Availability
of produce
in a year
expressed
in %

Round
the year
73

2
seasons
27

1 season

1 seasn
0%

2 seasns
27%

0
round the yr
73%

round the yr
2 seasns
1 seasn

4.16. Seasonal availability product wise

The seasonal nature of the products was assessed. 83% of the banana farmers under survey
undertook banana cultivation in a more scattered manner ie., the produce was available
throughout the year. Only 60% of the vegetable farmers surveyed could ensure round the
year availability of their produce. Vegetables were more confined to seasons.

The

agroclimatic conditions of the state influence the production decision of different vegetables
in different seasons.
Availability of produce in a year expressed in %
Product
Round
2 seasons
1 season
the year
Vegetable 60
40
0
Fruit
83
17
0

Seasonality of Products
100%
80%
60%

83%
60%

round the yr
40%

2 seasns

40%

1 seasn

17%

20%

0%
veg

frt

4.17. Quality specifications practised in trade

The quality specifications practised in trade was studied in terms of the adoption of grading
practices by the farmers. 82% of the respondents opined that the produce was not generally
graded.

145

% of adoption of grading
Graded
Not
graded
Fruits and 18
82
vegetables

Quality specifications practised

18%
graded
ungraded
82%

4.18. Awareness on quality specifications

The awareness among farmers on the quality specifications practiced in fruit and vegetable
trade was assessed. It was found that 76% of the farmers surveyed were unaware of grading.

Farmer awareness on quality specifications in %

Aware and do Aware, but
Unaware
accordingly
dont do
0
24
76

Awareness on quality specifications %

0%

24%

aware,do
aware, dont do
unawar
76%

4.19. Awareness on quality specifications product wise

The awareness of quality specification among farmers was assessed in relation to vegetables
and banana. The farmers were generally not conscious and aware of product quality in
vegetable. In banana the farmers were found more conscious but generally it is not widely
practised.
Farmer awareness on quality specifications in
different products in %
Unaware
Aware and Aware,
but dont
do
accordingly do
Vegetable
100
Banana
42
58

Product vs Awareness
1.2
1
0.8
0.6
0.4
0.2
0

100%
58%
42%

aware,do
aware, dont do
unawar

veg

banana

146

4.20. Packing Specifications

The packaging practices adopted by the farmers were studied. 60% of the farmers opined that
the produce was not packed and was dumped in vehicle.

Packaging specifications practiced by farmers in %

Bulk packs
Need based
Unpacked
16
24
60

Packing specifications practised

16%
60%

bulk pack

24%

need based

not packed

4.21. Packing materials used by fruit and vegetable farmers

The packing materials used by farmers was studied. Generally packing materials are rarely
used by fruit and vegetable farmers, still for transporting the products to definite distant
markets, if packing materials are used, natural materials were used mostly in 27% of the
cases. Banana is sold off as bunches and hence packing at farmer level is not done

Packing materials used by farmers expressed in %

Natural
Baskets
Crates
Dumped in
materials Sacks
vehicle
27
24
49

Packing materials %

27%
49%

0%

Naturl matrl

Bskt, sacks

24%

Crates

dumpd

4.22. Packing materials used in vegetables

The packing materials used in vegetables were assessed. Generally, it was noticed that
vegetables are dumped in the vehicle. If packed, locally available materials like bamboo
baskets or sacks were used depending on the nature of the products to be packed.

147

Packing materials used by farmers expressed in %

Natural
Baskets Crates Dumped
materials Sacks
in
vehicle
Vegetables 27
33
0
40

Vegetable vs packing material

27%

Naturl matrl

40%

Bskt, sacks
Crates
dumpd

0%

33%

4.23. Pricing policies practiced by farm gate traders

The pricing policies practiced by the farm gate traders were assessed. Only 21% of the farm
gate traders were found to fix the price on the spot and the same was communicated to the
farmers there itself.
Pricing policy by trader expressed in %
Price fixed on the
Price not fixed on the
spot
spot

21

Price fixation by farm gate

trader
21%

79

79%
fixed on spot

not fixed on spot

4.24. Pricing decisions in farm gate

The decision making role in pricing was studied. In 85% of the cases, the price decisions was
taken by the farm gate trader unilaterally and the farmer is not having any say in fixing the
price of their products.

Pricing decisions in farm gate expressed in %

Price decided by
Price decided by farmer
trader

85

15

Price decision by
farm gate trader
15%

85%
Price decided by trader

Price not decided by trader

148

4.25. Pricing at farm gate market parity

The basis for price fixation by the farm gate trader was studied. The decision on prices by
the farm gate traders were not based on market prices in 60% of the cases, but just a value
told on the spot by the trader most of the time. It will not be having any direct correlation
with the open market prices and may vary accordingly from farmer to farmer.
Pricing at farm gate market parity expressed in %
Price decision based
Price decision not based
on market price
on market price

40

Basis of pricing by
farm gate trader

60
40%
60%

based on market price

not based on market price

4.26. Scope of negotiation and price fixation in farm gate trade

The role of farmer and farm gate trader in negotiation and price fixation was assessed. 74%
of the respondents agree that the farm gate trader had more say in price fixation than the
farmer. As there is no alternative marketing channel available with the farmer, the trader
capitalizes the farmer.
Scope of negotiation and price fixation expressed in %
50:50 say to
60:40 say to
40:60 say to trader
trader and
trader and
and farmer
farmer
farmer

22

74

Negotiation and price fixation by

farm gate trader
80%
70%
60%
50%
40%
30%
20%
10%
0%

74%

22%
4%
trader farmer
50 : 50

Trader farmer
60:40

Trader farmer
40:60

149

4.27. Trading practices in public market

The trading practices in different public markets were assessed. Generally traders adopted the
practice of bargaining and fixing prices in the open market. In 30% cases, auction is
practiced where the commission rate falls in the range of 10% of the total cost of product
sold.

Trading practice in public markets in %

Auction
Bargain
30
70

Trading practice of market trader

30%

70%

Auction

Bargain

4.28. Price fixation in open market

Price fixation in markets was found to be on the spot only in 40% of sales as opined by the
respondents. The trader negotiates the prices with the farmer and he is having the upper hand
and the prices were not fixed on the spot mostly.

Price fixation in open market (%)

Price fixed on
Price not fixed on
the spot
the spot

40

Price fixation in bargain

40%

60

fixed on spot
not fixed on spot

60%

4. 29. Price decisions in public markets

The role of farmer and market trader in price decision making was studied. 79% of the
farmers opined that the prices was decided by the trader himself and there is a very little say
to the producer.

150

Price decision by market trader in

bargain
21%

Price decisions in public markets %

Price decided Price not decided
by trader
by trader

79

21
79%
Price decided by trader

Price not decided by trader

4.30. Pricing policies practiced by market traders

The basis for price fixation by the market trader was studied. In 67% of the cases, the trader
decisions on price were not based on market wholesale prices in case of bargaining and
fixing prices. Trader adds a fair amount to the farmer prices and fixes the wholesale prices.
Pricing policy of market trader in %
Price decision
Price decision not
based on market based on market
price
price

33

Basis of pricing by market trader

33%

67
67%

based on market price

not based on market price

4.31. Scope of negotiation and price fixation in public market

The role of farmer and market trader in negotiation and price fixation was studied. It is
realized that 78% of the respondents are of the opinion that the trader monopolises pricing
decision and the farmer is at his mercy.

Scope of negotiation and price fixation in %

50:50 say
60:40 say
40:60 say to
to trader
to trader
trader and
and farmer and farmer
farmer

22

78

Negotiation and price fixation by

market trader
100%
80%
60%
40%
20%
0%

78%

22%
4%
Trader farmer Trader farmer Trader farmer
50 : 50
60:40
40:60

151

4.32. Selection of marketing channels by the farmer

The basis for the selection of the marketing channel by the farmer was studied. 41% of the
farmers surveyed depended on the nearest market even though prices prevailing there were
low. It is amazing to notice that fruit and vegetable farmers are reluctant to take marketing
responsibility for maximizing their income.

Selectin of marketing channel in %

Sold in nearest
market, price
is low

Sold at farm
gate, price is
low

Sold in far
market, price
is high

41

28

31

Selection of marketing channel

31%

41%

28%
nearest market though low price
farm gate though low price
far market high price

4.33. Selection of marketing channels product wise

The selection of marketing in relation to the nature of product was studied. Only 30-35% of
the total respondents were very conscious of realizing of better returns by selling off their
products in distant markets.
Product vs marketing channels

Selection of marketing channel in %

Sold in nearest
market, price
is low

Vegetable 44
Banana
44

Sold at farm
gate, price is
low

Sold in far
market, price
is high

31
26

30
35

50
40

44

44
35

31 30

26

30
20
10
0
veg

banana

nearest market though low price

farm gate though low price

far market high price

152

4.34. Packing Practices adopted by farmers

The packing practices adopted by the farmers for the sale of produce in public market was
studied. 81% of the farmers confessed to adoption of unhealthy practices like packing good
quality produce in periphery and stuffing poor quality inside, in order to get temporary
benefits
Farmer practices
19%

Packing practices adopted by farmers in %

Produce graded and
packed separately

Packed with good quality

produce in the periphery and non
graded filled inside

19

81

81%

Produce graded and packed separately

Packed with good quality produce in the periphery and non
graded filled inside

4.35. Unhealthy cultivation practices adopted

The use of plant protection chemicals by the farmers was studied. 78% of the respondent
farmers were found to use plant protection chemicals at their liberty rather than standard or
label recommendations.

Unhealthy cultivation practices adopted in %

Plant protection chemicals
used as per label and
considering the residual
effects

Plant protection chemicals

used at farmer's liberty to
maximise yield

22

78

Use of plant protection chemicals

22%

78%
Plant protection chemicals used as per label and considering
the residual effects
Plant protection chemicals used at farmer's liberty to
maximise yield

4.36. Factors governing selection of marketing alternatives

The various factors affecting the selection of marketing alternatives were studied. A variety
of factors were found to contribute to the selection of marketing alternatives by the farmer
153

for taking decision on the point of sale of his produce. These included the availability of
alternatives, past experiences, knowledge on the market, cost of the alternatives and the
attitude of the farmer to risk and market losses. In fruit and vegetable trading, it was found
that almost all these marketing attributes equally qualifies in the selection of marketing
alternative.
Selection of marketing alternative expressed in %
Availability of
alternatives - nearby
market, trader

Past experience
in market

Knowledge about
market conditions

Cost of
alternatives

Attitude towards risk and

market losses

22

22

19

17

20

Selection of marketing alternatives

20%
17%

22%

22%
19%

Availability of alternatives - nearby market, trader

Past experience in market
Knowledge about market conditions
Cost of alternatives
Attitude towards risk and market losses

154