Marketing of Agri Products

Every thing can wait But not the Agriculture

Pt. Jawaharlal Nehru
Janakiraman M Head APC, Chennai June 1, 2011

Marketing
Concept 1. It is more than selling 2. It induces the customer to buy the products. 3. It attracts the customer to try for the product. 4. Marketing strategies should be always innovative / changing to attract the customer & to retain him with us

Why Marketing ?
 It helps to understand customer needs  It helps to find out ways & means to satisfy customer needs  It helps to innovate our products.  It helps to face competition  It helps to maximize profits & to ensure Business Development

Essentials of Marketing 7 Ps
1. 2. 3. 4. 5. 6. 7. Product Price Place Practice / Procedure Promotion Performance People

Marketing Corporate Clients

Preappointment Punctuality Checklist TAT Credit delayed is credit denied Saying No & continuous touch Personal grooming

Marketing Retail Clients

Market Study Economic Agri Activities Data Market share, Major activities financed & Recovery Percentage activity wise, historic data (Source PLP) New Business Ventures Feedback from existing customers Creating visibility (Extn activities) Data Base Farmers Club Check List with application

Farmers` Club
Credit must be used in accordance with the most suitable methods of Science and Technology Terms & Conditions of Credit must be fully respected A part of additional income created by credit must be saved Loan instalments must be repaid regularly so as to recycle credit

Farmers` Club - Benefits

Deposit mobilisation Credit flow & Diversification New business avenues Improvement in Recovery and NPA position Reduction in transaction costs Enhances bargaining power Socio-economic development

Extended Arm of the Bank

Requirements
 Have the knowledge about the products  Discuss with officials working in respective vertical and give leads to them.  Get reference from the customer to have credit worthy customer.  Read the products /Circulars whether it has relevance or not at once.  Know current ROI , PC ie BBR , BPLR etc.,  Find the requirements of the customer by discussion.

Identifying the clients

 Background of the customer  CIBIL, RBI Defaulter list: Willful, Defaulting borrowers and Caution Advice  Present Loan portfolio: Sanction letters, account statement  Need for Finance all the depositor may not be credit worthy customer)  Observe the unit operations  IT Returns/ Financials of last 3 yrs  Observe the transactions in the account

Due Diligence
 KYC Compliance  Details of Family members  Details of Agriculture Land  Infrastructure facility: Irrigation/ Assets owned  Income Details: Main source, from allied activities  Present Banking arrangements: Bank, branch, amount, RoI, Credit history  Security verification

General Guidelines
Parameters:  CR: 1.25 , TOL:TNW: 3 to 3.5:1,ICR: 2, DSCR: 1.5  Profit making for the past 2/3 years  Investible Grade/above cut off score  Satisfactory Credit history  Margin: 25% on stock, 25-50% on book debt, for TL: 15-25 % PC: 0.50 to 1.00 % of the loan amount.

Change of Agriculture into Agri Business

    

Hitech cultivation- Floriculture, Vegetable cultivation Horticulture Mushroom Cultivation Seed Production- Processing plants Agriculture allied activities becoming industrial activity like;
 Integrated Poultry farming  Commercial Dairy farming  Fish & Prawn/ Shrimp farming

Agro processing

Credit Flow to Agri.

Storage facility & WHR Term Loan, WC Loan

Production

Storage

Processing

Storage

Marketing

All kinds of Direct Agri lending

Contract Farming, Base Dose, H&T, LACR-JLG

Term Loan, WC Loan

Cold Chain

Product wise-Key factors KCCS

Big Farmers list, Farmers club KCC`s requirement for entire year WC maintenance + Consumption also Crop Insurance Annual Review- operations in the account Subvention

Poultry
Layer Parent Breeding Broiler

Commercial Farming

Own production
Minimum Economic Size Feed Manufacturing Pledge Loans NPA Norms

Contract Farming

System of Rearing Layer : 1+1+3 Broiler : All in all out 1+1+5

Dairying
Rearing of Animals
Individual Farmers Dairy Tie-up

Commercial Dairy-Liquid Milk

Contract Arrangements

Lactation Schedule Disbursement in batches NPA Norms

Farm Mechanization
Big Farmers, Scope for own use Close Monitoring as yearly installments End use verification

Horticulture Development
Long Gestation period- Suitable Moratorium Recovery of Interest First Subsidy Alternate Source of Income Stage wise Disbursement Ground water Norms Soil Profile Study Suitability of Varieties NHB cost Norms

Thank You