ISSN: 2456–5474 RNI No.  UPBIL/2016/68367 VOL.- IX , ISSUE- II March  - 2024
Innovation The Research Concept

A Study on Market Coverage of the Agri- Commodity Business (With special reference to SACML and NCML Companies in Bikaner)

Paper Id :  18705   Submission Date :  14/03/2024   Acceptance Date :  23/03/2024   Publication Date :  25/03/2024
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DOI:10.5281/zenodo.10886688
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Teena Soni

Business Administration
Jai Narain Vyas University,
Jodhpur,Rajasthan, India
Abstract

Storing items to be sold or dispersed later is known as warehousing. Crops generated from agricultural land for human use are channeled via the process of warehousing, either in dry storage or cold storage warehouses. This process is known as agri-commodity warehousing. In general, India is becoming a major market for agricultural products, and warehouses are important for storing agricultural commodities for as long as possible.

Numerous public and private organizations and businesses concentrate either directly or indirectly on grading, storing, preserving, purchasing, warehousing, collateral, laboratory testing, and the distribution of agricultural commodities.

Keywords Study, Market, Agri- Commodity, Business, Agricultural Products, Warehouses.
Introduction

According to this report, Rajasthan is the main state where a wide range of agricultural products are produced in large quantities. Additionally, we focused on the Bikaner district, where there is a consistent increase in agri-commodity warehousing. Additionally, significant government and commercial enterprises are performing this deed of service. Here, we're concentrating on two private agri-commodity warehousing businesses to learn about their adoption of procurement and marketing strategies, as well as other services they provide in a highly competitive market to expand and survive and increase the amount of agri-commodity storage. 

Large-scale, well planned storage is referred to as "warehousing." Modern scientific approach warehouses have started to sprout up all across the nation since agri-commodity warehousing is crucial to the development of the area.

The goal of agri-commodity warehousing is to help farmers store their produced grains and pulses and obtain bank and financial institution credit facilities in a way that will benefit them financially.

The country's recent rise in the commodities industry has not been able to benefit the warehousing sector, which is still mostly disorganized due to a lack of development laws. Only 35–37% of warehousing facilities are in the private sector, compared to roughly 63% in the public sector.

Warehouse Functions with Respect to Agricultural Commodities

1. Storage of Surplus items: One of the main purposes of warehousing is to give businesspeople—farmers, dealers, industrialists, and stockists—the ability to store items that they have in excess. The entrepreneurs make the products in advance of consumer demand. They keep the excess items in storage and preserve them. When there is comparatively little supply of the items, they put them on the market.

2. Price Stabilization: Warehouses are crucial to the process of keeping prices stable. It is accomplished by warehousing in order to create temporal utility. It is best to avoid price increases during the lean season and price decreases when supply is plentiful. Thus, the warehouses support price stability and protect business owners.

3. Risk bearing: Storing products in warehouses exposes them to many dangers, such as fire, degradation, theft, and exploration. The construction of warehouses is done to reduce these kinds of threats. It is the responsibility of a warehouse manager to handle items with reasonable care and protect them from potential hazards.

4. Financing/Collateral Management: Using the items kept in the warehouses as collateral, the businessman can get short-term financing from lenders. The warehouse keeper may raise loans against the products the owner has stored. Products serve as the warehouse owner's security. In a similar vein, loans are also advanced by banks and other financial organizations against storage or warehouse receipts. In this way, warehousing helps business owners satisfy their financial needs for operating expenses.

Aim of study

1. To study the stages of warehouse Management

2. To find out the market coverage of the Agri- Commodity Business.

Review of Literature

Srivastava (2006)[1] in his research, "Agricultural Markets and Transport Network", emphasis was placed on the connection between the markets for agricultural products and the transportation network. According to him, controlled markets for agricultural produce play a unique role in the growth of a nation's agro-economy. However, since only transportation can give access to and from the markets for marketable products, regulated marketplaces are meaningless in the absence of a strong transport network. Moreover, marketing and transportation have a lot of facets. In the current study, an attempt has been made to conduct an integrated analysis of the different pertinent elements and aspects and identify remedial ways to boost the efficiency of the various regulated markets, primarily through the development and enhancement of the transportation network. The book makes an effort to examine the spatiotemporal characteristics of the controlled marketplaces and transportation system in the northwest Rajasthani canal irrigation region. Additionally, it makes an effort to establish an opinion about how the regulated markets operate based on an empirical investigation to assess the effectiveness and performance of marketing. Additionally, an attempt has been made to establish the hierarchy of the region's regulated marketplaces as well as their trade zones. Lastly, it suggests a few techniques that might be used to establish benchmarks for realistic goals for agricultural marketing transport networks in order to anticipate future developments.

Singh & Dhaka (2006)[2] started a research named "Role of Rural Marketing in  Rajasthan with Special Reference to Agricultural Produce Marketing", to calculate the quantity and arrival percentages of agricultural products in Rajasthan's rural markets. The research is focused on the years 2005–2006. Four main crop groups were chosen for analysis in this study: cereals, pulses, oilseeds, and spices. According to the study's findings, 43.07% of the state's total marketed excess of cereals was brought and sold in rural markets, with the remaining portion going to urban markets. at terms of pulses, 62.32% were sold at rural markets; similarly, 58.16% of oilseeds and 36.38% of spices were sold there. The report also lists the names of the cities with the highest and lowest percentage of arrivals that are commodities.

Pant & Bajrolia (2002)[3] had brought attention to the topic of "Constraints in the Development of Primary Regulated Markets in Rajasthan," examining issues that farmers and market officials in Rajasthan's Primary Regulated Market in Kuchanamcity's Nagaur District faced as well as limitations in using infrastructure. The findings disclosed the following deficiencies: retailers and godowns were inadequate; farmers were not aware of the Regulated Market's existence or the procedures and facilities in the yard; dealers encountered issues with the canteen, inadequate communication with other markets, a lack of a grading laboratory, challenges in obtaining licenses, a lack of frequent and regular public transportation service, etc.; The state of public facilities was either inadequate or limited to business hours; farmers encountered issues with animal sheds, bullock cart parking, unclean and dry platforms, veterinary stores and dispensaries, credit institutions, inadequate retail input facilities, irregular information dissemination through the Board, and other issues reported by the Hammals included the absence of rest sheds, first aid stations, refreshment centers, and internal uneven and cracked roads.

Rangaswami N. (2013)[4], Performance of Agri-Warehousing in Maharashtra and Market Potential for Negotiable Warehouse Receipt Finance in India, Indian Journal of Marketing- Volume 43, December. Wrote the following:

Using the tabular analysis method, the current study has critically examined the Maharashtra State Warehousing Corporation's financial performance. According to the study, throughout the previous six years (2005-2010), net profit before tax climbed steadily from Rs. 1754.20 lakhs to Rs. 3526.03 lakhs (50.24% increases). The percentage of capacity utilized varied from 74% to 79%. The financial analysis ratios were as follows: return on capital employed was 10.32%, gross profit to turnover was 32.63%, net profit to total turnover was 27.99 %, and net profit after tax was 18.46 %. All of these ratios were positive. The remarkable financial ratios and economic performance indicators of Maharashtra's agri-warehousing sector attest to its robust growth. However, the warehouses continue to face a many limitations in their operations for storing. It was anticipated that the Indian market for warehouse receipt finance might be worth Rs. 19,000 crores. However, there are certain obstacles that must be overcome before this financing option can become viable. Therefore, the current study has recommended that farmers, warehouse managers, and support staff participate in training and awareness programs; that modern warehouses are imperative; that warehouses complete accreditation, registration, and certification; and that farmers and other depositors may be eligible for a reduction in high margins and stamp duty on warehouse receipt financing. Additionally, through different public-private partnership initiatives, the private sector may be encouraged to participate, potentially creating an extra 35 million MT of storage capacity across all of India.”

Methodology

Population and Sample for the Study

The current study focused on Agri Commodity traders in the Bikaner district. Initially, a comprehensive list of Agri Commodity traders residing in Bikaner was compiled. The total number of Agri Commodity traders in the Bikaner district amounted to 500.

Subsequently, a random selection process was employed to choose 250 traders from the district who were actively engaged in the Agri commodity business. These selected traders constituted the final sample for the study. Throughout the research, a concerted effort was made to ensure representation from all traders in Bikaner who were part of the study, ensuring a well-rounded selection of cases for examination.

Data Collection Process

The data collection process for this study was conducted with meticulous attention to detail. The primary tool employed for gathering information was a structured survey administered to merchants operating within the target market. This survey was meticulously designed to elicit relevant insights and perspectives from the participants, ensuring the acquisition of high-quality data essential for the study's objectives. Traders were directly contacted, with regular in-person visits whenever necessary, to ensure the questionnaire was effectively administered. Clear instructions related to the questionnaire were provided to traders, emphasizing the importance of their cooperation in the study.

Respondents were assured of the confidentiality of their identities, explicitly stated in the questionnaire, to uphold response uniformity and minimize bias. A data file was meticulously constructed for the filled questionnaires, and analytical tools such as frequencies and cross-tabulations were applied to identify and rectify any entry or coding errors.

Analysis

Table- Market Coverage of the Agri- Commodity Business

Name of the Company

SACML

NCML

Yes

No

Yes

No

Locally

224

26

202

48

Nationally

230

20

226

24

 

Graph 5.11Market Coverage of the Agri- Commodity Business

Interpretation: Above Table provides valuable insights into the market coverage strategies employed by both Agri-Commodity businesses. The findings underscore a shared strategic orientation, with both companies demonstrating a predominant inclination towards expanding their market presence both locally and nationally. This strategic approach aligns with their objective to enhance accessibility and reach a broader segment of the population.

Findings Both companies demonstrate a predominant inclination towards expanding their market presence, focusing on both local and national fronts. This strategic approach aligns with their overarching objective to enhance accessibility and reach a broader segment of the population. The concerted efforts of Star Agri Warehousing and Collateral Management Limited (SACML) and National Collateral Management Services Limited (NCML/NCMSL) underscore their commitment to not only fortify their local market influence but also to establish a significant footprint on a national scale. This strategic orientation reflects a comprehensive vision to cater to diverse market segments, contributing to the sustained growth and prominence of both companies in the Agri-Commodity sector.
Conclusion

Drawing upon the comprehensive analysis conducted in the preceding chapters and integrating the valuable suggestions provided, it becomes unmistakably clear that both Star Agri Warehousing and Collateral Management Limited (SACML) and National Collateral Management Services Limited (NCML/NCMSL) exhibit commendable proficiency within their respective realms of operation. However, SACML emerges as the frontrunner, boasting distinct advantages over NCML/NCMSL, particularly in pivotal areas such as warehousing and collateral management. The warehousing industry demands a multifaceted and adaptable strategy that effectively balances regulatory compliance, operational efficiency, and customer satisfaction. Both NCML and SACML operate within the structured framework of WDRA norms, ensuring unwavering adherence to industry regulations and standards. SACML's operational prowess is further fortified by its adept management of Turn Around Time (TAT), a cornerstone in meeting and surpassing client expectations.

Limitation of the Study The primary objective of this study was to scrutinize the Marketing and Procurement strategies employed by Agri-Commodity Businesses, specifically focusing on Star Agri Warehousing and Collateral Management Limited (SACML) and National Collateral Management Services Limited (NCML/NCMSL). Nonetheless, it is imperative to approach the interpretation of the results with a nuanced consideration of the inherent limitations associated with this study. The limitations of the present study are discussed here:
1. One notable limitation of this study pertains to the sample size. The study involved 250 traders from Agri-Commodity Businesses in the Bikaner district of Rajasthan. While this sample size provided valuable insights, it may not be sufficiently representative of the entire population of traders nationwide.
2. Consequently, the findings might lack generalizability to traders across the entire country.
3. Furthermore, constraints related to time and financial resources posed challenges in conducting a more extensive study. The limited time period and available funds may have restricted the scope and depth of the investigation, potentially influencing the comprehensiveness of the results obtained in the present study.
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