SEMINAR SCRIPT

ON
MARKETING STRATEGIES FOR SMALL SCALE FARMERS

COURSE CODE: ABM 591

MASTER’S SEMINAR

SUBMITTED BY
M.DHARINI
(2072123022)

MAJOR ADVISOR
DR.N.M.THAKER
ASSO. PROFESSOR
PG INSTITUTE OF ABM

SUBMITTED TO
DR. H.Y.MAHETA
(SEMINAR CO-ORDINATOR)
PG INSTITUTE OF ABM

POST GRADUATE INSTITUTE OF AGRI-BUSINESS MANAGEMENT

JUNAGADH AGRICULTURAL UNIVERSITY,
JUNAGADH–362001
JULY– 2024
 TABLE OF CONTENTS
Sr. No. Title Page No.

1 Introduction 3
1.1 Retailing 3
1.2 Food retailing 3
1.3 Drivers of food retail market in India 4
1.4 Challenges of food retail market in India 5
2 Traditional food retail formats 5
3 Modern food retail formats 6
3.1 Key players of modern food retailing in India 7
4 Revolutionzing the plate 11
4.1 Factors paving the way for revolutionizing food retailing 11
in India
5 Production of food 12
5.1 India as organic market 13
6 Distribution of food 14
6.1 Online grocery market 14
6.2 Factors affecting the online grocery market 14
6.3 Problems faced by the customers during online grocery 19
shopping
6.4 Problems faced by the retailers in the online grocery 19
shopping in India

7 Consumption of food 20
7.1 Ready to eat and processed foods 20
8 Reasons for success of modern food retail formats 25
9 Applications of modern food retailing 25
10 Key challenges in modern food retailing 26
11 Future of grocery retail 26
12 Conclusion 27
13 References 27
 LIST OF FIGURES
Sr. No. Title Page No.

1 Retail market size 3

2 Countries which spend the most on groceries online in the 16
year 2019
3 Grocery items bought online 17
4 Satisfaction levels of online grocery shopping 18
5 Advantages of online shopping 18
6 The drawback of online shopping 19
7 Challenges faced by Indian E-Commerce 20
8 Size of the RTE food market in India 21
9 Factors influencing purchase of RTE products 21
10 Preference for buying RTE products 22
11 Favorite ready to eat food 22
12 Reasons for not purchasing RTE/RTC foods 23
13 Satisfaction over RTC meals 24
14 Food and grocery market overview 24

LIST OF TABLES
Sr. No. Title Page No.
1 Global position of India’s grocery retail 4
2 Consumer awareness about organic food products 13
3 Brand preferences of consumers for online grocery 16
shopping
INTRODUCTION
1.1 Small farms
In the “India Rural Development Report 2012-13” prepared by the IDFC Rural Development
Network, it has been observed that Small farms are more efficient, especially in cultivating
labour- intensive crops or tending livestock, but land holdings are too small to generate
sufficient household income.
Source: PIB, 2019

1.2 Small Scale Farmers

Small-scale farmers are the one who manage areas varying from less than one hectare to 10
hectares. Smallholders are characterized by family-focused motives such as favouring the
stability of the farm household system, using mainly family labour for production and using
part of the produce for family consumption.
Source: FAO, 2013

1.3 Farming and livelihood category

Small-commercial
Farmers < 20 ha well connected to domestic or international value chains using productivity,
increasing technologies and management practices. Farming is an economically viable
livelihood strategy enabling households to have an income well above the poverty line and
approaching or above a living income. Farming is the dominant livelihood strategy.
Semi-commercial
Farmers selling a significant surplus of production but loosely connected to markets with less
than optimal use of productivity, increasing technologies and management practices. Mostly
poor to very poor, may still be below poverty line, and struggle to approach a living income.
May have diverse livelihood strategies.
Semi-/subsistence
Farmers who sell none or only a small proportion of surplus (usually to local markets) and who
tend to have low productivity. Poor to very poor with many below poverty line. Depend on
production for own food. May have diverse livelihood strategies.
Landless farm workers
The landless poor who depend on low paid labour to survive. Mostly very poor, below or just at
poverty line.
Chronically poor
Extremely poor and marginalised groups landless or with largely unproductive land, who are
often food insecure and highly vulnerable. Well below poverty line.
 FIG.1 Number of Operational holdings as per different Agriculture Censuses
Source: Agriculture Census, 2015-16

Fig.1 shows the number of operational holdings. It can be seen that Close to half
of India’s agricultural land is with India’s SMF.About 47.3 percent of
operational land is with India’s small and marginal.this was about 21 percent in
1970-71. Almost 50 per cent of India’s total population consists of small farmers
and their families, and 85 per cent of all farms are less than two hectares. Plainly
the situation of small farms is of enormous importance to the overall social
wellbeing of India.
 FIG.2 Average Size of Operational Holdings
Fig.2 shows the average size of operational holdings for all farmers. For all farmers put
together, the size of average land holding declined from 1.15 hectares in 2010-11 to 1.08
hectares in 2015-16. “The rise in the number of small and marginal farmers signifies that the
rest of the economy is unable to absorb the surplus. India has to live with its small-sized farms
for the next two decades and the way out is to provide them access to the best technology and
markets.

FIG.3 Area operated by operational holdings

Fig.3 shows area operated by operational holdings. The area operated by small farmers are
comparatively higher than large farmers as Small farmers often operate multiple small plots of
land rather than one large plot. This can be due to factors such as limited access to land,
economic constraints preventing them from investing in larger holdings, or traditional land
tenure systems resulting in the subdivision of land over generations.
Table.1 State-wise percentage distribution of operational holdings of Small Farmers

Source: Agriculture Census, 2015-16

Table.1 shows that Manipur has a lot of small farmers because the land is mostly hilly and
small, making it better suited for small farms. Also, farming has been a family tradition for a
long time, and it's easier for people to start small farms because it doesn't need a lot of money
upfront. The government helps small farmers with things like money and advice, which
encourages more people to farm on a small scale. Also Kerala has lower number of small
farmers as Kerala has a high population density often results in smaller landholdings per
household, making it difficult for small farmers to maintain economically viable agricultural
operations.
Table.2 Farmers contribution to Food Production

SCALE FOOD PRODUCTION%

SMALL 51

MEDIUM 8

LARGE 39

Farms of smaller than two hectares produce around one-third of the world’s food on just one-
quarter of the world’s agricultural land. Small-scale farms have been found to have higher land
productivity – the farm’s output per unit of land area – than larger farms. On
average, smallholder farms dedicate a larger share of their land to food crops rather than animal
feed or fuel compared to larger farms. Around 70% of the calories produced on smallholder
farms of less than five hectares are available as food, compared to 55% for the global
agricultural system. Another reason smallholder farms are able to achieve high productivity is
their high labour intensity. Employing family members allows for a higher number of labourers
per hectare and keeps labour transaction costs low. As smallholder farmers need to optimize
production on small tracts of land, they also tend to use more inputs, such as fertilizer and
seeds, than larger farms.

1.4 Significance of Small Scale Farming

Food Security:

Small-scale farmers produce a diverse range of crops, ensuring a variety of food sources and
reducing dependence on a few staple crops. Their local focus often means that they prioritize
crops suited to their region's climate and soil conditions, contributing to a more resilient food
system.

Local Economy Support:

Small-scale farmers play a vital role in local economies by creating jobs, generating income,
and circulating money within the community. They often sell their produce locally, whether
through farmers' markets, community-supported agriculture (CSA) programs, or direct sales to
restaurants and consumers, thereby stimulating economic activity and supporting other local
businesses.

Preservation of Traditional Knowledge:

Small-scale farmers often rely on traditional farming methods and indigenous knowledge
passed down through generations. This knowledge includes crop rotation, seed saving,
agroforestry techniques, and natural pest control methods. By preserving and promoting these
traditional practices, small-scale farmers contribute to agricultural biodiversity and resilience,
while also safeguarding cultural heritage.

Cultural Heritage:

Small-scale farming is deeply rooted in cultural traditions and practices around the world. Many
small-scale farmers grow heirloom varieties of crops, use traditional tools and techniques, and
celebrate agricultural festivals and rituals that reflect their cultural heritage. Supporting small-
scale farming helps preserve these cultural traditions and promote cultural diversity in
agriculture.

Community Cohesion:

Small-scale farming fosters strong community ties and social cohesion by bringing people
together around shared food experiences. Farmers' markets, community gardens, and
agricultural cooperatives provide opportunities for interaction, cooperation, and mutual support
among farmers and consumers, strengthening community bonds and promoting a sense of
belonging.

Access to Fresh, Nutritious Food:

Small-scale farmers contribute to improving access to fresh, nutritious food, particularly in

underserved communities where access to supermarkets or grocery stores is limited. By selling
locally grown produce, they provide consumers with a direct source of healthy food options,
often at affordable prices, thereby addressing issues of food deserts and promoting public
health and nutrition.

1.5 Challenges faced by Small scale farmers

Erratic climate change and lack of suitable technologies to cope with changing environment,
thereby affecting crop yields.

Poor irrigation facilities due to inefficient distribution of available water resources and slower
progress of new irrigation projects. Interrupted supply of electricity further posed a hindrance in
use of the available water resources for irrigation.
Rising cost of inputs, small and fragmented land holdings and increasing labour costs have
resulted in high cost of production and lower crop yields.

In the Absence of decentralized storage and processing facilities, small and marginal farmers
could neither hold their produce till the realization of higher price nor process for value addition

Poor agricultural extension and information services about selection of suitable crops,
improved technologies, weather forecasts, types of pests and disease prevailing in the region,
information on demand and price for various farm produce, etc. could not empower the farmers
to take suitable corrective measures on time.

Lack of required credit to procure various inputs well in time, high premium for crop
insurance, and delay in settling the claims of farmers, created a cash crunch, beyond their
ability to tide over the crisis.

2. Agricultural Livelihood in Gujarat

As per the report of the Technical Group by the National Commission, the population of
Gujarat is projected to be 72,653,000, or 72.65 million, or 7.27 crore, as of July 1, 2024.
Gujarat is the Eighth most populous state in India.

The agriculture sector is largely dominated by small and marginal farmers. In 2015–16, small
and marginal farmers (with a holding size of less than 2 hectares) accounted for 68 percent of
the total number of farmers in the state, and they operated on 34 percent of the total state’s
operated area. The average landholding size declined from 2.62 ha in 1995–96 to 1.88 ha in
2015–16.

The average monthly income per agricultural household stood at Rs.7926 in 2012–13, which is
higher than the all-India average of Rs.6426. But the growth rate of income (3.4%) is
marginally lower than that achieved at the all-India level (3.5%) (NSSO, 2002–03 and 2012–
13). This is somewhat puzzling as Gujarat’s agricultural GDP growth during this period was
more than the all-India average (almost 5.7% per annum). One possible reason could be that the
year 2012–13 was an outlier, when Gujarat experienced extremely low rainfall, more than 30%
below normal (in Saurashtra, it is was more than 38% below normal), leading to a sharp decline
in the profitability of most crops. Since income growth is calculated as CAGR between two
points (2002–03 and 2012–13), and not as an annual average of all the years in between, this
slow growth in income may be due to this statistical glitch. According to NABARD’s All India
Rural Financial Inclusion Survey 2015–16 (NAFIS), Gujarat farmers’ income was Rs.11,899
per month. This was the fourth highest among all states (after Punjab, Haryana, and Kerala). In
the longer period of 2002–03 to 2015– 16, the state achieved an average annual farmer income
growth rate of 4.2%, which is marginally higher than the all-India average growth of 3.7%.
 Area Number Size of Area Numbe Size of Area Numbe Size of
(%) (%) holding (%) r holdin (%) r holding

2015-16)
(%) (%) g (%) (%)
(%)

Marginal 5.68 27.34 0.54 8.94 37.16 0.49 10.75 37.93 0.53

Source: A.Gulati et al.,2021

Small 15.6 27.97 1.47 20.96 29.25 1.45 23.43 30.37 1.45
7

Semi- 27.3 25.55 2.80 30.19 22.10 2.77 31.79 21.62 2.76
medium 5

Medium 37.7 16.73 5.90 29.60 10.49 5.72 28.11 9.32 5.66
1

Large 13.5 2.40 14.81 10.30 1.00 20.91 5.91 0.75 14.79
9

All 100. 100.00 2.62 100.00 100.00 2.03 100.00 100.00 1.88
00
Table.3 Percentage Distribution of operational holdings in Gujarat (1995-96, 2010-11 and
2.1 Factors affecting the vegetable farmers in marketing the produce

Factors % Farmers

Access to Credit 98

Access to Labour 76

Access to Storage 92
Access to Transportation 76

Keep of marketing records 94

Access to Marketing Information 96

Product Market Place

Farm gate 21

Local Village Market 15

Organized retailer 10

Distance from farm to market place

1-2km 4

3-4km 32

>4km 64

Marketing system adopted

Individual marketing 71

Contract marketing 5

Group or cooperative marketing 14

Source: Sharma et al.,2023