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A Study on Market Coverage of the Agri- Commodity
Business (With Special Reference to SACML and NCML Companies in Bikaner) |
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| Paper Id :
18705 Submission Date :
2024-03-14 Acceptance Date :
2024-03-23 Publication Date :
2024-03-25
This is an open-access research paper/article distributed under the terms of the Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. DOI:10.5281/zenodo.10886688 For verification of this paper, please visit on
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| 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. |
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| 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. |
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| Objective of study | 1. To study the
stages of warehouse Management.
2. To find out
the market coverage of the Agri- Commodity Business. |
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| 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.” |
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| 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. |
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| Analysis | Table- Market
Coverage of the Agri- Commodity Business
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. |
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| 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. |
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| 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. |
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| 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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| References | 1. S. S.
Acharya and N. L. Agarwal. Agricultural Marketing in India. 4th Reprint. Ed. New Delhi 110 001: Oxford & IBH Pub. Co. Pvt. Ltd., 66 Jan Path, 2007. 2.John R. Moore, Sardar S. Johl and Ali M. Khusro. Indian Foodgrain Marketing. New Delhi: Prentice Hall
of India Pvt. Ltd., 1973. 3. Ian Brace. Questionnaire Design – How to Plan, Structure and Write Survey Material for Effective Market Research. London: Kogan Page Ltd. 120 Pentoville Road, N19JN, 2005. ISBN 0-7494-4181-X.
Vol. 49, No. 20, Feb. 15, 2011 4. K.N. Selvaraj & K. R. Sundaravaradarajan ((Deptt. of Agricultural Economics) Tamil Nadu Agricultural University, Coimbatore, & Annamalai University, Annamalainagar, Tamil Nadu. “Challenges in Marketing of Agricultural Produce under Free Trade Regime”. 121-122. Vol. 18, No. 3, Oct.-Nov. 2004, Conference Special (Session I). 5. N. M. Kerur, Gaddi & Vilas Kulkarni (Deptt. of Agribusiness Management) University of Agricultural Sciences, Dharwad. “Respondents Attitude towards Policy Reforms in Regulated Markets of Karnataka -A Cluster Analysis Approach”. Karnataka Journal of Agriculture Science. 24 (2): 2011. 177-183. 6. Adigal V S
Shradda Singh 2015. Agricultural Marketing vis-à-vis warehousing
facility. The business & Management Review, Volume 5(4):43-50. |
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