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Marketing Agencies.docx

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University of Manitoba
International Business
INTB 2200
Luming Wang

Marketing Agencies The Next important aspect relates to the functionaries operating in the Indian agricultural markets. A very large number of intermediaries have come to exist between producer and consumers of these the major ones are: 1. Village Beopari is by far the most usual purchaser of the produce, who deals in his individual capacity. He usually collects the produce from the villages and hats and brings it to the wholesale markets and from there it reaches the consumers. Beoparies generally purchase when prices are low and sell it when they are high. 2. Itinerant Beopari wanders from village to village, collects the produce and takes it to the nearest market. He purchases at cheaper rates owing to the lack of competition from other beoparies. 3. Tola or Weigh men also to some extent function as intermediaries. Technically speaking they are supposed to only weigh the produce and charge a commission for certifying its weight. But it is more than often seen that these tola also arrange the sale of the producer by carrying samples to dealers in towns. They obliviously charge a commission for this and also „Tolai‟. 4. Local landlords and cultivators, especially the medium size holders also sell the produce directly to the village beoparies or town dealers visiting the village markets. 5. Arhatiyas or Brokers: They usually occupy a very important position among all the intermediaries. They are of 2 types: a. Kutcha arhatiya mainly concentrates on the work of collecting and assembling the produce. b. Pucca arhatiya on the other hand arranges for the sale and distribution of the produce. Both work together in tandem as master and apprentice. They also advance loans to the village merchants and traders on the condition that the produce will be sold to them or through them. Although the seller is free to sell his produce in the market directly to the buyer, he in actual practice does it through a commission agent. The intricacies involved in the market transactions have compelled him to adopt this costly agency. Broadly speaking, 70% of the produce is handled by the producers themselves and the balance is handled by trade comprising commission agents, wholesalers, retailers, co-operatives and the governments. Marketable surplus and marketed surplus India is the world‟s largest producer in approx. 9 different agricultural commodities. However it is not the largest exporter in even a single segment. This is because of 2 basic reasons viz. 1. Indian consumers are more in number hence they do not leave any surplus and 2. Indian products that are surplus are non marketable in nature. Indian agricultural marketers have the tough task of making non-marketable Indian offers attractive. Unlike the case of manufactured products where the entire produce is set aside for the market, in agriculture all produce is not sold. The actual amount of crop sold is dependant on a large number of factors. One of the major factors in this case is “Marketable Surplus” the other factors being need for cash, price trends, availability of storage facilities etc. The marketable surplus, in turn depends upon the production on one hand and the growers household and farm requirements on the other. In agricultural marketing is involved the putting up of the surplus in the market through a definite channel. The surplus may be marketable surplus and marketed surplus. The former indicates the residential quantity left with the producer after meeting his requirements for family consumption, farm needs, and payments-in-kind to casual and permanent labour, the landlord, artisans and seed and stock to cover the future exigencies including wastage. The latter term refers to the quantity of produce that is actually sold in the market by the producer irrespective of his home consumption and other requirements. A farmer's marketed surplus can be either more, less or equal to his marketable surplus. If the farmer retains less of the produce than is needed for the consumption at home, the surplus is more. This usually happens when cash is needed immediately after the harvest to meet certain urgent needs. It is less, when a farmer holds some of his surplus produce on the farm or consumes more than normal amounts of it. It is worth noting that marketed surplus of small subsistence farmer‟s increases with a price fall because more quantity has to be sold to meet the minimum cash needs. Large farmers market little when prices are low and hold stocks in anticipation or future higher prices. The size of the marketed surplus thus depends upon the relative share of small and large cultivators in the marketing, and may thus vary considerably from one year to another. Marketable surplus will always be less than the actual production. But it can be higher or lower than the level of marketed surplus during a period depending on the extent of hoarding from the current production or dehoarding of the accumulated stock by the producers. This means the “theoretical surplus available for disposal with the producer, left after his genuine requirements of family consumption, payme
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