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Research Article ISSN 2277–9140

A Comparative Study of Production and Marketing Practices of Vegetables in Nainital and U.S.
Nagar Districts of State Uttarakhand, India

Vinay Kumar Gunwant 1, Mustfa Hussain2 , R.C. Purohit3 , Syed Mohd. Faisal Ali4, Dr. Divya Rana5
1
Ph.D. Research Scholar, MBPG College Haldwani, Department of Commerce Kumaun University,
Nainital, Uttarakhand State, INDIA
2
Ph.D. Research Scholar, Collage of Agribusiness Management, G.B. Pant University of Agriculture &
Technology, Pantnagar, Uttarakhand State, INDIA
3
Associate Professor, MBPG College Haldwani, Department of Commerce, Kumaun University,
Nainital, Uttarakhand State, INDIA
4
Lecture, Jazan University, Jazan, Kingdom of Saudi Arabia
5
Associate Professor, King Abdul Aziz University, Kingdom of Saudi Arabia
alisyed.faisal@rediffmail.com

doi:10.6088/ijacit.12.16006

ABSTRACT

Progress in the production of horticultural products depends critically on the marketing infrastructure available to
the farmers. Efficient marketing with a dynamic supply chain is essential for the development of the horticulture
sector. The efficiency of marketing for fruits and vegetables in India has been of significant concern in the recent
years. Poor efficiency in the marketing channels and inadequate marketing infrastructure are believed to be the
cause of not only high and fluctuating consumer prices, but also too little of the consumer rupee reaching the
farmer. Indian farmers typically depend heavily on middlemen particularly in fruits and vegetable marketing. The
producers and the consumers often get a poor deal and the middlemen control the market, but do not add much
value. There is also massive wastage, deterioration in quality as well as frequent mismatch between demand and
supply both spatially and over time (Subbanarasiah, 1991; Singh et.al, 1985). The present study seeks to examine
the market environment for Tomato, Pea, Cabbage and potato crops in two districts of Uttarakhand state of the
country. It examines various aspects of vegetable marketing such as market infrastructure, marketing channels,
marketing practices, marketing costs, marketing margin, marketing efficiency etc. in the wholesale and local
markets in the selected area. The study also made an attempt to identify the prevailing value chain from the
Farmer→ Commission Agent → Wholesaler → Retailer → Consumer of costs, prices and their shares in the
selected vegetable markets. Regarding disposal of the produce channel-I (producer  village commission
agent/wholesaler  retailer  consumer) was the important one being followed 52.2 to 58.9% vegetable
producers of both of districts who could dispose more than 60 percent of the total produce.

Key Words- Supply Chain Management, Agriculture marketing, marketable and Marketed Surplus, Marketing
efficiency, Price spread and Horticulture

1. Back Ground of Study

Received on October 2012, Published on December 2012 569

 A comparative study of production and marketing practices of vegetables in Nainital and U.S. Nagar districts of state
Uttarakhand, India

It is not enough just produce the vegetables; it must be produced efficiently and marketed successfully. It is
necessary to improve the marketing system to aid development for two reasons; firstly it may work as a
disincentive to increased production; secondly, if the market does not supply consumers with produce at
reasonable prices and at the time and place needed, and then the increased production has no meaning in a welfare
society [7]
The horticulture which includes fruits, vegetable, spices, flowers, medicinal and ornamental plants has proved
beyond doubt its potentiality for gainful diversification. The emerging trend worldwide and also in the country is
indicative of paradigm shift in dietary needs of the people with the rice in the income, which demand for more
horticulture produce. In horticulture, the vegetable crops have been identified as the most remunerative crops for
replacing subsistence farming in rain fed, dry land, hills, arid and coastal agro ecosystems. Being short duration
crops and fewer requirements for capital, vegetables are also best suited in the crop rotation. Such a
diversification in favour of vegetable is sweeping across the nation. With the production of 222.9 million tonnes,
we are today the second largest producers of these crops in the world. The achievement in the development of
horticulture is laudable, as the sector is now contributes more than 30.5 per cent of GDP of agriculture and has
maintained the growth rate of more than 5 per cent during the last two decades (Indian Economy 2011)

Supply chain management plays an essential role in keeping business costs at a minimum and profitability as high
as possible. Supply chain management is defined as the design and operation of physical, management
information and financial systems needed to transfer goods and services from point of production to point of
consumption in an effective and efficient manner.

2. Problem Statement

Uttarakhand, the 27th state of India, has huge potential of seasonal and off seasonal vegetable production. The
state is blessed with conductive climate to grow a large number of vegetable with different quality attributes
round the year. Farmers are growing vegetables in a very good amount. The annual production in Uttarakhand is
1.04 million tonnes from the area of about 80580 hectare. Uttarakhand has a pleasant climate, which is a home
place of different religions, castes, occupations, cultures, speaking diverse languages and of different food
preferences.

Vegetable production in U.S. Nagar and Nainital district is mainly delt with irrigation through ponds, shallow
well and sometimes flood diversion especially towards vegetables where oversupply of harvested products is the
main characteristics. The nature of the product on the one hand and the lack of organized marketing system on the
other have resulted in low producer’s price. There are production and marketing problems challenging vegetable
development in the both of districts.

In spite of over-whelming importance of vegetables in our state no systematic attempt has been made to compare
the production and marketing problems of vegetable in any region (Hill or Plains) of Uttarakhand state.
Uttarakhand opened new fields of agricultural and agribusiness research since its formation in the year 2000. The
above problematic situation calls for a systematic investigation into problems of vegetable marketing as a whole.

3. Objectives

Study is focusing on the following three objectives:

 To evaluate the vegetable production and marketing problems.

 To identify the existing marketing channels adopting by vegetable producers & work out marketing
efficiency and marketing cost across the all channels
 To identify the factors affecting vegetable production and marketing.

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 A comparative study of production and marketing practices of vegetables in Nainital and U.S. Nagar districts of state
Uttarakhand, India

3. 1 Materials and Methods

The study was conducted in the Nainital and U.S. Nagar districts of Uttarakhand. Based on the highest production
of the acreage under vegetable, Ramgarh and Dhari blocks from Nainital and Kashipur and Bajpur blocks from
U.S. Nagar district were selected purposively. A cluster of two villages form each blocks of both of districts were
selected.

To evaluate the objective of the study multistage random sampling technique was adopted. Mainly three channels
of vegetable supply chain (VSC) were identified and selected which were commonly followed in both the districts

Figure 4.1: Existing Supply Chain Followed By Respondents In Study Area

At the initial stage farmers were selected in each chain who sold their produce in selected vegetable supply chain.
In the second stage, intermediaries involved in the supply chain, specially in supply channel of vegetable
marketing where large number of intermediaries existed. In the third stage retailers of each chain were selected.
Similarly, in the final stage the consumer who purchased the vegetables from each channel was selected. Firstly,
in the channel-I of vegetable supply chain 20 farmers, 4 intermediaries, 5 traditional retailers and 20 consumers
were selected randomly. Secondly, in channel-II of vegetable supply chain 20 farmers, 5 retailers and 20
consumers were selected at random that is from the local retailers of both of districts, Thirdly, in channel-III,
vegetable supply chain, 5 farmers/retailers and 20 consumers were selected at random from the local village and
market level. Only 5 farmers were available doing direct business with these formats hence only these all 5
farmers were selected. However the total size of the sample with respect to farmers was decided keeping in mind
the time, resources and availability of sample for the investigator. Thus, total 90 farmers, 4 intermediaries, 10
retailers and 60 consumers were selected from the each district in aggregate for all the channels of VSC. For the
homogeneity of the results four vegetables namely tomato, pea, cabbage and potato which were commonly grown
in large quantities in all the selected channels of Vegetable Supply Chain (VSC) were selected for the study. The
secondary data of vegetable production of both of the districts was collected from the District Horticulture Office
(DHO) and other government department. Simple conventional method of tabular analysis was used to study the
pricing efficiency. Averages and percentage analysis were used to examine the roles played by the intermediaries
and contracting firms, marketing efficiency, marketing cost, marketing margin, Producer’s share in consumer’s
rupee, factors affecting the production and marketing, problems and expectations of the producers, retailers and
consumers in the vegetable supply chain was worked out.

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 A comparative study of production and marketing practices of vegetables in Nainital and U.S. Nagar districts of state
Uttarakhand, India

4. Results

4.1 Major Problems at Farmers/Producer’s and Middlemen’s Level

On the basis of higher priority, the respondent of district Nainital were largely faced problems related with
production e.g. lack of irrigation, lack of information, manpower, finance/credit, inputs, production levels,
insect/pest, diseases, poor linkages with extension agencies inadequate soil testing facilities, risk aversion,
Problems related to marketing included transportation, standardisation and grading, infrastructure, unfair
deductions, storage, market-related information, bargaining and low price received by the farmers for the
produces. There were also other, less important problems. Farmers were aware about most of problems but
unfortunately they had no access by which they could overcome these constraints. While U.S. Nagar district is
much better due to easy Transportation, Infrastructure and market availability.

Maximum middlemen faced problems related to the uncertainty of the arrival of producers and consumers, the
arrival of quantities of produce, standardisation and grading, storage, information on the market prices, quality of
produce, varied mixture in produce and highly perishable nature of produce.

4.2 Existing Major Vegetable Marketing System in The Study Area

Mostly vegetable is traded through regional marketing system in both of the study area of Uttarakhand. The town
and villages in the producing area serve as assembly markets. The markets of production area feed the markets of
consumption area. Haldwani, Nainital and Ramnagar from Nainital and Rudrapur, Bajpur, khatima, Pantnagar and
Kashipur from U.S. Nagar districts are the largest vegetable consuming cities of vegetable produce in kumaon
division of Uttarakhand. A wide variety of marketing agency ie village commission agent, wholesalers, retailers,
brokers, commission agents and others operate at various stages of vegetable marketing. These markets can be
distinguished on the basis of market place and the nature of the trade activities. Five vegetable marketing channels
were identified during the study in both of district, in which three most trendy and common vegetable supply
channels (mostly used by the farmers) were as follows:

Channel (I)
ProducersVillage Commission Agent/ WholesalersRetailers Consumers

Channel (II)
Producers Cooperatives/RetailersConsumer

Channel (III)
ProducersConsumer

1- Producers to village commission agent/wholesalers to retailers to consumer. Two middlemen used this.
While 52.2% respondents from Nainital and 58.9% from U.S. Nagar districts were used it.
2- Producers to cooperative/retailers to consumer. One middleman used this. Where 32% from Nainital and
only 17.8% respondents from U.S. Nagar districts used it.

3- Producer to consumer. No middlemen used this (producers himself play the role of middleman) and only
12.2% of respondents from Nainital and 23.3% from U.S. Nagar used it.

The study revealed that vegetable was the high income generating crops grown by farmers both in Ravi and
Kharif season which collectively covered 20 to 25% of total cropped area in both of the districts. Tomato, pea,
cabbage and potato were the very important vegetables crops of the study area. Regarding disposal of the produce
channel-I (producer  village commission agent/wholesaler  retailer  consumer) was the important one being

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Uttarakhand, India
followed 52.2 to 58.9% vegetable producers of both of districts who could dispose more than 60 percent of the
total produce.

In channel-II (producers  cooperative/retailer  consumer) can play an efficient role in terms of farmer’s high
return in Nainital and U.S. Nagar district while the producers share in consumers rupee is (39.85%) and (39.28%)
respectively.

And channel III (Producers  Consumer) may be plays a good role for small farmers of both of district who
dispose there produce directly farm level to consumer and get a good amount 42.80 to 46.50% in consumers rupee
but the numbers of these farmers were very limited.

4.3 Analysis of Marketing Efficiency, Marketing Cost, Marketing Margin and Producer’s Share in
Consumer’s Rupee.

4.3.1 Marketing efficiency

The index of marketing efficiency for Nainital district was found out to be 0.76, 0.90, and 0.96 for channel I, II
and III of vegetable supply chain respectively. Whereas in U.S. Nagar district the index of marketing efficiency
was found out to be 0.78, 0.87 and 1.02 for channel I, II and III of vegetable supply chain respectively.

Hence, the index of marketing efficiency of the different formats indicated for both of districts that channel III
VSC was found to be more efficient than channel II and I VSC because of low operational costs and physical
losses in the supply chain resulted in more producers’ net price to total gross marketing margins.

It is advised to the farmers of both of the district to sell their more vegetable produce through channel III and II to
be encouraged to provide vegetables to consumers, even channel I and II of VSC required more attention to
improve their marketing efficiency.

4.3.2 Marketing cost

In Nainital district the cost incurred per kg of vegetables by channel I, II and III was found out to be Rs. 1.28, Rs.
1.99 and Rs. 1.75 respectively. The total returns per kg of vegetables found out to be Rs. 5.22, Rs. 4.55 and Rs.
4.73 in channel I, II and III respectively. The net return realized by it for one kg of vegetables was Rs. 3.94, Rs.
2.56 and Rs. 2.97 in channel I, II and III respectively.

In the same way, in U.S. Nagar district the cost incurred per kg of vegetables by channel I, II and III was found
out to be Rs. 1.21, Rs. 1.29 and Rs. 0.81 respectively. The total returns per kg of vegetables found out to be Rs.
5.01, Rs. 4.30 and Rs. 4.84, in the channel I, II and III respectively. But the net return realized by it for one kg of
vegetables was Rs. 3.80, Rs. 3.01 and Rs. 4.04 in channel I, II and III respectively. Hence, in both of districts the
highest marketing cost was incurred by channel II which followed by other channel in vegetable supply chain.

4.3.3 Marketing Margin

Marketing margins measures the gap between net price received by the cultivators and the price paid by the
consumer. In the point of view of marketing efficiency this gap has to be reduced to the bearest minimum.

In Nainital district the marketing margin as percentage of consumer price was found to be less in channel III of
VSC (1.92%) as compared to channel I (1.96%) and in channel II (1.99%) because of high gross marketing
margin in channel I and III as compared to channel II of the VSC.

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 A comparative study of production and marketing practices of vegetables in Nainital and U.S. Nagar districts of state
Uttarakhand, India
While in U.S. Nagar districts marketing margin percentage in consumer’s price was found to be less in channel II
of VSC (1.97%) as compared to channel I (1.99%) and in channel III (2.06%) because of high gross marketing
margin in channel III as compared to other formats of the VSC.

4.3.4 Producers share in consumer’s rupee

The producers share in the consumer rupee in Nainital districts was found out to be higher in channel III VSC
(42.80%) compared to channel II (39.85%) and channel I (31.85%).

On other hand in U.S. Nagar district it was found out to be higher in channel III VSC (46.50%) compared to
channel II (39.28%) and channel I (31.37%).

Thus, the above data indicating that the producers share ranged between 31.37 to 46.50% including both of the
districts and rest went to the middleman. The latter’s share need to be reduces in such a way that it provides better
remunerating to the producers without affecting the vegetable marketing business adversely.

4.4 Factors, Affecting Vegetable Production and Marketing

Through the direct observation and discussion with the farmers of both of the district’s it has been found that the
following factors are mostly affecting vegetable production and marketing:

 Household’s labours: the farmers of both of districts had difficulties to assign a member to look after the
vegetables production because there are lot of work needs to be done, such as looking after cattle,
weeding, house work, and other farm activities.

 Household’s assets/equipments: households belonging and assets such as television, radio, bicycle,
motors and farm equipment are important causes effecting to farmer’s decisions. Few programs on
television and radio showed market information or agriculture techniques, according to both of districts
farmers. So, even thought farmers have the media equipment, they still cannot get any information related
to their vegetables production improvement or marketing information.

 Household’s understanding/education: labour’ skill and education are other dynamic factors. It directly
affected two components of vegetable production managements that are inputs application and new
techniques practicing. According to key informants interviewed farmers who have good transportation but
do not access vegetables inputs market level. Lack of knowledge and skill in using for vegetable.

5. Conclusion and Policy Recommendations

On the basis of the results the study makes major recommendations over the constraints for enhancing vegetable
production and marketing in both of districts. The constraints and recommendations are categorized into seven
major aspects which are presented as follows:

Categories Constraints Recommendations

Technology/  Technology is lacking at production level.  Government /DADO /Private /NGOs
production  Cultivation practices are not well known to intervention regarding organize training to the
development the farmers, focused on the management of producer (cultivation techniques with low cost
the crop. technology approach) on vegetable production
 Lack of improved seed with large produce technology focused on management, critical
size, good quality fertilizer etc. stages (flowering stage, pod formation stage)
 Quality maintenance (poor grading and to be note down on the crop calendar for its

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packaging of vegetables) better management and post harvest
 High wilting problem. management techniques should be focused.
 Produce quality seed for growing seasonal/off-
seasonal vegetable crop by developing
community based seed producers (CBSP)
groups in the village level.
 Provide new high yielding, disease resistant
and bold produce varieties for better
yield(Local NGOs, DADOs and Village Level
Agent)
Marketing  Lack of knowledge / information regarding  Pricing system should be done scientifically
market price poor women are underpaid with the involvement of representative of
than market price. farmes’
 No price regulation  Government /Village Level Agent /NGO/
 Roads are graveled DADOs intervention regarding pricing system
and broadcasting of market information
through community radio and local newspaper,
 Pricing techniques should be developed on the
basis of parameters involved during production
period (Inputs, processing, cleaning, grading
and transportation).
 Government should construct black topped
road in rural hilly area, so that the produce can
be transported in an easy manner and in a cost
effective way.
Input supply  Unavailability of quality seed (quality  Quality assured seeds (germination>70%,
assured from government), fertilizers purity>85%) from National seed company,
(fertilizes without quality testing), Private seed company, CBSPs should provide
pesticides etc. good quality variety (high in reasonable price and in accessible manner.
yielding) is lacking. Fertilizers should be provided through the
 High price of agriculture inputs (cost of government channel not through open boarder
seeds, fertilizers etc) movement. Open boarders has forced farmers’
 Processing in receiving loan is lengthy. to use low quality fertilizers in a high rate.
After registration with application for loan, This should be controlled through government
the loan will be released lately i.e. one-two sector. Or should encourage private sector for
months. fertilizer supply. Sudden check on dealers for
 New varieties in place of old variety the quality and price of fertilizers should be
(diseased, low yielding), forced to grow this done.
variety as there are no option for this  Loan sanction process should be quick and in a
variety. simplified manner.
 Government should promote newly released
and high yielding varieties in the area, where
they are not introduced, through information
required document (IRD) or publications.
Management and  No producers/ farmers or retailers  Association of stakeholders (DADO, retailers,
organization association for advocacy. farmers), should be made for advocacy.
 Farmers’ voice is not taken seriously in the Facilitation to make association, through a
house. meeting. Initiatives can be taken by NGOs, or
Government.
 Farmers’ association should be aware and
brought into action proactively for

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 A comparative study of production and marketing practices of vegetables in Nainital and U.S. Nagar districts of state
Uttarakhand, India
Policy  Lack of policy regarding price fixation and 
crop insurance.
 Lack of subsidy provision in agriculture
inputs.
 Price fixation can be discussed in a policy
Infrastructure  Inadequate storage facilities during 
vegetable collection and off-seasons.
 Inadequate irrigation facilities.
 Lack of grading and packaging material in
farmer’s level.
 Poor quality rural road for transportation.
Finance  Deposit needed to get loan.
 Long and tedious process of loan sanction.
 High interest rate for short term loan.
 Limited access of farmers to bank for
vegetable farming.
6. Tables
Vinay Kumar Gunwant et al.,
International Journal of Advances in Computing and Information Technology
incorporating their voice. Awareness program
can be done through Farmers’ political wings.
Government should facilitate to established
agriculture insurance and provide subsidy
provision to poor farmers (in energy, fertilizer,
seed etc.)
level, so that the farmers’ are not in vain. Price
fixation committee for vegetable produce can
be done in a district level headed by DADO.
 Lobby with government department to fix the
minimum support price of the vegetable
products and compensation for crop failure due
to natural calamities.
DDC/VDC has the budget for infrastructure
building, while recently (2012) the state
government has approved FDI (Foreign Direct
Investment) for developing infrastructure in
rural areas. So they can facilitate and support
to develop storage (warehouses) and irrigation
facility those area where vegetable production
are extremely high.
 Can recommend a group/cooperative in DADO
for irrigation facilities.
 A meeting with DADO to recommend the
potential seed producers in the district for
receiving the fund from Government for
establishing POST HARVEST CENTER
through Engineering department of agriculture.
 Crete pressure group to channelize the total
government budget to rural road construction.
 Loan should be provided in a simplify manner,
for that the process can be shortened.
(Collateral and a application can release the
loan for the farmers)
 Government / Market regulatory authorities
should provide loan to the farmers in a low
interest rate (Low interest for agriculture). This
would be an attraction for poor farmers and
provide confidence and encourage cultivating
the vegetable crops.
 Community based own microfinance institute
(MFIs) should be established in block level for
easily receiving the loan to the farmers.
 Develop trust between bank and entrepreneur
through coordination, linkage and preparing
business plan to reduce risk factor of bank.
576
 A comparative study of production and marketing practices of vegetables in Nainital and U.S. Nagar districts of state
Uttarakhand, India

Table 1: Year Wise Area and Production of Vegetable in District Nainital

A= Area in Hectare P= Production in metric Tonnes

2006-07 2007-08 2008-09 2009-10 2010-11

SN Vegetables
A P A P A A A P A P
1 Tomato 1850 18170 1850 19201 1922 19987 1938 20346 2022 21249
2 Pea 1800 8765 1800 9739 1872 10481 1886 10558 1936 10938
3 Cabbage 870 13269 870 13891 903 14448 927 14832 970 15535
4 Cauliflower 200 1090 200 1206 206 1252 214 1284 216 1298
5 Brinjal 200 2470 200 2606 205 2675 208 2704 209 2720
6 Capsicum 210 630 210 906 214 932 224 1038 233 1101
7 Beans 300 2504 300 2729 308 2840 317 2926 320 2955
8 Radish 277 5263 277 5629 291 5965 310 6347 320 6557
9 Ladyfinger 250 2375 250 2503 250 2592 250 2592 252 2633
10 Onion 130 679 130 800 143 892 152 987 157 1021
11 others 2043 14301 2043 16057 2043 16563 2043 16563 2048 16704
Total 8130 69516 8130 75267 8357 78627 8469 80177 8683 82711
12 Potato 2464 55248 2471 55350 2471 55350 2498 56265 2522 56464
Source: District Horticulture office, Nainital

Table 2: Year Wise Area and Production of Vegetable in District Udham Singh Nagar
A= Area in Hectare P= Production in metric Tonnes

2006-07 2007-08 2008-09 2009-10 2010-11

SN Vegetables
A P A P A A A P A P
1 Tomato 251 8661 795 12195 871 13413 882 13582 894 13589
2 Pea 1606 10489 1807 11380 1982 12685 2179 13944 2201 14865
3 Cabbage 320 10654 317 5418 353 6177 365 6387 375 6409
4 Cauliflower 231 4199 251 4644 251 4644 262 4716 267 4786
5 Brinjal 150 4114 186 2980 352 5615 360 5615 364 5625
6 Capsicum 95 461 143 574 155 594 169 651 171 664
7 Beans 44 304 42 294 42 294 51 332 53 339
8 Radish 173 3800 173 2979 173 2979 188 3196 194 3367
9 Ladyfinger 290 1188 410 4284 460 4830 468 4915 481 4926
10 Onion 290 7238 296 3255 296 3255 315 3465 320 3500
11 others 652 10083 722 9151 736 6755 771 7092 785 7102
Total 4102 61191 5142 57154 5671 61241 6010 63895 6105 65172
12 Potato 1940 32980 2473 52265 2516 2516 2516 53338 2530 53630

Source: District Horticulture office, Udham Singh Nagar

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Uttarakhand, India
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