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Production Know How
  • RKMP serves the generic information related to rice cultivation in more than 2500 Reusable Learning Objects (RLOs).In other words this information is not context specific and may be useful to extension workers cutting across the states (For example - principles of land levelling).
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Rice is a staple food and used by many ways as under.

1. Staple food: Rice is used as a staple food by more than 60 percent of World population. Cooking of rice is a most popular way of eating. There are many ways of domestic use like khichdi, pulav, kheer, zeera rice, idli, dosa etc.

2. Starch: Rice starch is used in making ice-cream, custard powder, puddings, gel, distillation of potable alcohol, etc.

3. Rice bran: It is used in confectionery products like bread, snacks, cookies and biscuits. The defatted bran is also used as cattle feed, organic fertilizer (compost), medicinal purpose and in wax making.

4. Rice bran oil: Rice bran oil is used as edible oil, in soap and fatty acids manufacturing. It is also used in cosmetics, synthetic fibres, plasticisers, detergents and emulsifiers.

5. Flaked rice: It is made from parboiled rice and used in many preparations.

6. Puffed rice: It is made from paddy and used as whole for eating.

7. Parched rice: It is made from parboiled rice and is easily digestible. In India, about 4-5 percent of total supplies of rice are used as parched rice.

8. Rice husk: It is used as a fuel, in board and paper manufacturing, packing and building materials and as an insulator. It is also used for compost making and chemical derivatives.


Organisations / agencies providing marketing services

1. Directorate of Marketing and Inspection (DMI).

2. Food Corporation of India (FCI).

3. Central Warehousing Corporation (CWC).

4. Agricultural and Processed Food Products Export Development Authority (APEDA).

5. National Co-operative Development Corporation (NCDC).

6. Director General of Foreign Trade, (DGFT).

7. State Agricultural Marketing Boards (SAMBs).


Institutional credit facilities

1. Institutional credit is the vital factor in agricultural development.

2. The National Agriculture Policy targeted annual growth rate of 4 percent over the 10th plan period.

3. The Task Force on Agricultural Credit has estimated a credit flow of Rs. 736570 crore for five years during the 10th Five year plan. During 1996-97, the total institutional credit for agriculture was 26,411 crore against Rs. 82,073 crore (target) during the year 2002-03.

4. The main emphasis was laid down on adequate and timely credit support to the farmers, particularly small and marginal farmers for adoption of modern technology and improved agricultural practices.

5. The institutional credit disbursed through co-operatives, with targeted 43 percent share in rural credit flow in Agriculture during 2002-2003 was shared by Commercial Banks (50 percent) and Regional Rural Banks (7 percent).

6. The institutional credit to Agriculture is offered in the form of short term, medium term and long term credit facilities.


Forward and futures markets

1. Forward trading means an agreement or a contract between seller and purchaser, for a certain kind and quantity of a commodity for making delivery at a specified future time, at contracted price.

2. It is a type of trading, which provides protection against the price fluctuations of agricultural produce. Producers, traders and millers utilize the future contracts to transfer the price risk.

3. Presently, future markets in the country are regulated through Forward Contracts (Regulation) Act, 1952.

4. The Forward Markets Commission (FMC) performs the functions of advisory, monitoring, supervision and regulation in future and forward trading.

5. Forward trading transactions are performed through exchanges owned by the associations registered under the Act. These exchanges operate independently under the guidelines issued by the FMC.

6. After the recent decision during February 2003 of the Cabinet Committee on Economic Affairs (CCEA), Government of India, future trading has been allowed for 148 commodities including rice, under section 15 of the Forward Contracts (Regulation) Act of 1952. Earlier, rice was not allowed for future trading.


Co-operative marketing

1. “Cooperative marketing” is the system of marketing in which a group of producers join together and register them under respective State Cooperative Societies Act to market their produce jointly.

2.The members also deal in a number of cooperative marketing activities i.e. processing of produce, grading, packing, storage, transport, finance, etc.

3.The cooperative marketing means selling of the member’s produce directly in the market, which fetches best prices.

4. It helps the member to produce better quality of paddy/rice, which has good demand in the market. It also provides clean handling, fair trade practices and protect against manipulations / malpractices.

5.The main objectives of cooperative marketing are to ensure remunerative prices to the producers, reduction in the cost of marketing, reduces the monopoly of traders and improve the marketing system.


Contract marketing

Contract marketing:

1.“Contract marketing” is a system of marketing in which the commodity is marketed by farmers under a pre-agreed buy-back contract with an agency engaged in trading or processing.

2. In contract marketing, a producer will produce and deliver to the contractor, a quantum of required quality of produce, based upon anticipated yield and contracted acreage, at a pre-agreed price.

3. In this agreement, agency contributes input supply and renders technical guidance. The company also bears the entire cost of transaction and marketing.

4. By entering in to contract, farmer’s risk of price reduces and the agency reduces the risk of non-availability of raw material. The inputs and extension services provided by the agency include improved seed, credit, fertilizers, pesticides, farm machinery, technical guidance, extension, marketing of produce etc.

5. In present scenario, contract marketing is one of the ways by which producers, especially small farmers, can participate in the production of good quality paddy/rice to get higher return.

6. Contract marketing enables producers to adopt new technologies to ensure maximum value addition and access to new global markets. It also ensures efficient post harvest handling and meeting specific needs of customers.


Direct marketing

Direct marketing:

1.Direct marketing is an innovative concept, which involves marketing of produce i.e. paddy/rice by the farmers directly to the consumers/millers without any middlemen.

2. Direct marketing enables producers and millers and other bulk buyers to economise on transportation cost and improve price realization.

3. It also provides incentive to large scale marketing companies i.e. millers and exporters to purchase directly from producing areas.

4. Direct marketing by farmers to the consumers has been experimented in the country through Apni Mandis in Punjab and Haryana.

5. The concept with certain improvements has been popularised in Andhra Pradesh through Rythu Bazars. At present, these markets are being run at the expense of the state exchequer, as a promotional measure, to encourage marketing by small and marginal producers without the involvement of the middlemen.

6. In these markets, many commodities are marketed along with fruits and vegetables.


Alternative systems of marketing

Alternative systems of marketing include

1. direct marketing

2. contract marketing

3. co-operative marketing


Marketing information and extension

Marketing information :

1. Marketing Information is essential for producers in planning production and market led production.

2. It is equally important for other market participants for trading.

Marketing extension:

1.Market extension is a vital factor enlightening the farmers about proper marketing and removal of marketing constraints and improves their awareness in various modern post harvest measures for efficient and cost effective marketability.

2. Marketability: Provides the up-to-date information on the arrivals and prices of agricultural commodities in different markets. Recently, Govt. of India has launched Agricultural Marketing Information Network Scheme through Directorate of Marketing & Information (DMI) to bring out improvement in the present market information scenario by linking all Agricultural produce wholesale markets in the States and Union Territories.


Marketing costs and margins

Marketing costs:
1.Marketing costs are the actual expenses incurred in bringing goods and services from the producer to the consumers.
2. The marketing costs normally include;
        handling charges at local points
        assembling charges
        transport and storage costs
        handling charges by wholesaler and retailer
       profit margins taken by different agencies.

3. Marketing margins:
(i) The absolute value of the total marketing margin varies from market to market, channel to channel and time to time.
ii) Commission: The charges are usually made in cash and vary from market to market. These charge were observed to be nil in the states of Assam, Kerala, Madhya Pradesh, Goa, Arunachal Pradesh.
iii) Taxes: Different taxes are charged in different markets such as toll tax, terminal tax, sales tax, octroi etc. These taxes leviable on paddy/rice differ from market to market in the same state as also from state to state. These taxes are usually payable by the seller.

iv) Miscellaneous charges: In addition, some other charges are also levied. These include handling, weighing, loading, unloading, cleaning, charity contribution in cash and kind, etc. These charges may be payable either by the seller or by the buyers. 

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