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Marketing Pattern and Price Spread of Green Fodder in Punjab
Article in Indian Journal of Economics and Development · January 2018
DOI: 10.5958/2322-0430.2018.00129.4
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Indian Journal of Economics and Development (2018) 14(2), 267-273
DOI: 10.5958/2322-0430.2018.00129.4
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Marketing Pattern and Price Spread of Green Fodder in Punjab
*
Harparteet Singh, Varinder Pal Singh and Inderpreet Kaur
College of Dairy Science & Technology, Guru Angad Dev Veterinary & Animal Sciences University, Ludhiana
*
Corresponding author's email: dhindsavp@gmail.com
Received: August 29, 2017
Manuscript Number: MS-17169
Revision Accepted: April 10, 2018
ABSTRACT
The study was conducted in three agro-climatic zones of Punjab state viz. Sub mountainous zone, Central zone and South Western
zone for examining the marketing pattern, price spread and marketing efficiency of various marketing channels and marketing
problems being faced by the fodder growers. It was observed that out of the total sample size of 120 farmers, only 20 farmers were
involved in marketing of fodder. Majority of them were selling fodder occasionally, criteria of payment was daily cash basis and
maximum distance covered by majority of the fodder growers for marketing of green fodder was between 5-10 kilometers. The major
reason for sale of fodder was fodder production being economical followed by surplus fodder production. For the maize crop, there
was only one marketing channel (Channel-I) which was not so popular channel. For sorghum crop, there were two marketing
channels (Channel-II and III). For the bajra crop, there existed three channels (Channel-I, II and III) and for berseem crop, there
were two marketing channels i.e. Channel-II and III. The marketing efficiency was highest in Channel-III for all the crops. The
important marketing problems being faced by the fodder growers were lack of proper market followed by price fluctuations, low
output prices and distant market.
Keywords
Marketing channel, marketing cost, marketing efficiency, price spread.
JEL Codes
Q12, Q13.
INTRODUCTION
Livestock have been an integral component of India's
agricultural and rural economy since time immemorial.
Livestock is an important asset for them which provides
employment to millions of rural people. Most often
livestock is the only source of cash income for subsistence
farmers as well as ensuring family purchasing power in
the event of crop failure. Rapid growth of livestock sector
is, therefore, most desirable not only to sustain steady
agriculture growth but also to reduce rural poverty.
Growth in livestock sector has more potential to reduce
poverty than a similar growth in crop sector (Mellor
2004).
Presently, livestock sector contributes 26.90 and
35.90 percent of agricultural GDP in India (The
Government of India 2016) and Punjab state (The
Government of Punjab, 2016). Despite being the leading
milk producer nation, the Indian dairy sector is plagued by
several hurdles such as low productivity of animals,
inadequate availability of quality green fodder and quality
fodder seeds etc. One of the main reasons for low
productivity of livestock is malnutrition, under nutrition
or both, besides the low genetic potential of animals. The
country is highly deficient in respect of availability of
green fodder, dry fodder and concentrates. The deficit of
green fodder currently is 35 percent (Planning
Commission, 2012). The area under fodder crops in India
has stagnated at about 8.5-9.0 million hectares during the
past decade and accounts for only about 4.6 percent of the
total cultivated area. The projected green fodder and dry
fodder demand for 2020 is 1134 and 630 million tonnes,
whereas, the availability is expected to stand at 406 and
473 million tonnes leaving a shortage of 64 and 25
percent, respectively (Srivastava, 2017). Standing at 40
percent even today, the availability of good quality
upgraded fodder seeds and conservation of fodder either
as silage or hay remains a major concern (Narke, 2017).
Among the livestock products, milk is the most
267
Indian J Econ Dev 14(2): 2018 (April-June)
important. The economic viability of milk production
heavily depends on source (s) of feed and fodder as
feeding cost account for about 70-75 percent of the total
variable cost of dairy farming. Profitable livestock
farming depends mainly on adequate availability of
fodder at reasonable price. Green fodder is the essential
component of feeding milch animals to obtain optimum
level of milk production which account for about 44
percent of the feed and fodder expenditure (Kaur et al.,
2012). Apart from that, green fodder crops are known to
be cheaper source of nutrients as compared to
concentrates and hence helpful in bringing down the cost
of feeding and thereby leading to higher profitability.
When it comes to enhancing the productivity of
Punjab's dairy sector, ensuring an adequate supply of
reasonable quality feed and fodder is one of the major
challenges. The tremendous pressure of livestock on
available feed and fodder resources and consequent
dismal scenario of fodder inadequacy has been the major
impediment in the sustained growth of dairy sector. The
deficit of green fodder is estimated to be 46.38 percent in
the state (Kaur et al., 2014). Owing to problem of shortage
of fodder and feed, the future growth of livestock has to be
sustained primarily on enhancement of animal
productivity and not on increase in number of animals.
The farmers will get the remunerative prices for their
surplus green fodder produce only when the effective and
efficient processing and marketing system of fodder is in
place. The present study was undertaken to examine the
marketing pattern of green fodder in the state, the price
spread in various marketing channels and to study the
marketing problems of green fodder growers.
METHODOLOGY
The study was conducted in three agro-climatic zones
of Punjab state viz. Sub mountainous zone, Central zone
and South Western zone. Three districts, one from each
zone, was selected purposively on the basis of highest
area under fodder crops. The selected districts were
Hoshiarpur from Sub-mountainous Zone, Ludhiana from
Central Zone and Ferozepur from South Western Zone.
Amongst the selected districts, two blocks from each
district, one block near and another distant to the
periphery of district headquarter was selected randomly
to realize the effect of distance factor. In the next stage, a
cluster of two to three villages was selected randomly
from each selected block. A sample of twenty fodder
growing farmers from each cluster was selected making a
total sample of 120 farmers. Different marketing channels
for the disposal of fodder crops in the study area were
examined to assess the cost and margins of different
functionaries involved in the disposal of fodder crops till
the produce reaches the consumers. Different marketing
channels for the disposal of green fodder crops in the
study area were examined by selecting a sample of four to
five intermediaries in each channel. The primary data was
collected using a specially designed and pre-tested
schedule by personal interview method for the
agricultural year 2016-17.
In order to examine the marketing efficiency of each
fodder marketing channel, Acharya's formulae of
marketing efficiency (Acharya & Agarwal, 2012) was
used which is represented as follow:
MME = FP / (MC + MM)
Where,
MME = Modified measure of marketing efficiency
FP = Price received by the farmer
MC = Marketing cost
MM = Marketing margins
RESULTS AND DISCUSSION
Pattern of Green Fodder Marketing
The perusal of Table 1 brought out that out of the total
sample size of 120 farmers; only 20 farmers were
involved in marketing of green fodder. The number of the
farmers engaged in marketing was highest in Submountainous zone followed by the South Western zone
and Central zone. Maximum of them (14) were selling
fodder occasionally out of which six were from Sub
Mountainous zone followed by South Western zone with
five and Central zone with three farmers. Majority of the
farmers were selling green fodder through Mandi. For all
the farmers, the criteria of payment were daily cash basis.
The maximum distance covered by majority of the fodder
growers for selling green fodder was between five to ten
km.
Reasons for Sale of Fodder
The reasons for sale of fodder given by the fodder
growers are discussed in detail in this section. A total of
four reasons for sale of fodder have been reported in the
state. The fodder growers were asked to rank these four
reasons. The number and percentage of responses given
by different fodder growers for various reasons for sale of
fodder is presented in Table 2, which brought out that
maximum number of the farmers reported fodder
production for sale as economical, followed by surplus
fodder production, high demand of green fodder and to
earn extra income through sale.
The number of farmers giving various ranks to
various reasons for sale of fodder, total score, mean score
and ranks assigned to various reasons is presented in
Table 3. The reason with highest mean score was given
first rank and the reason with next highest mean score was
given second rank and so on. According to the Garrett
ranking, the most important reason for sale of fodder was
fodder production for sale is economical followed by
surplus fodder production, high demand of green fodder
and to earn extra income through sale.
Marketing channels and price spread in marketing of
various fodder crops in Punjab state
The marketing of fodder through different channels
refers to the path through which green fodder from the
producer to the ultimate consumer. The major marketing
channels involved in marketing of fodder were
summarized as follows:
Channel-I: Producer-Consumer (Direct sale in village)
268
Singh et al.: Marketing pattern and price spread of green fodder in Punjab
Channel-II: Producer-Chaff cutter-Consumer
Channel-III: Producer-Dairy owner (Consumer)
The Channel-I involved direct sale of fodder in the
village but it was least important channel. The Channel-II
was the longest channel and was least efficient channel.
The Channel-III involved sale of green fodder to dairy
owner (consumers) through Mandi. The marketing costs,
marketing margins, price spread and marketing efficiency
in marketing of different green fodder crops in various
marketing channels in Punjab state is discussed.
Table 4 highlights the marketing costs, margins, price
spread and marketing efficiency of maize and sorghum
crops in various marketing channels. The study brought
out that for maize crop, there was only one marketing
channel (Channel-I) and price spread in this channel was
zero and the producer received hundred percent of
consumer's rupee. However, this was not so popular as
very few farmers are following this channel for the sale of
maize fodder.
In sorghum crop, there existed two marketing
channels (Channel-II and III). In both the channels, the net
price received by the farmer was same (`106.75 per q)
which was 67.31 percent of consumer's price. Costs
incurred by producer include weighing,
loading/unloading, transportation out of which
Table 1. Pattern of green fodder marketing
Particulars
Central zone
Total farmers
No of farmers marketing fodder
Frequency of sale
Always
Occasionally
Rarely
To whom
Dairy owner
Mandi
Neighbours
Criteria of payment on daily basis
Distance (km)
0-5
5-10
10-15
Table 2. Number and percentage of responses for reasons
for sale of fodder
(n=20)
Factors
Number Percentage
of
of
farmers responses
Surplus fodder production
High demand of green fodder
Fodder production is economical
To earn extra income through sale
15
13
20
2
75
65
100
10
transportation charges were the highest followed by
harvesting charges and loading/unloading. The total cost
incurred by producer was the same in both channels for
sorghum crop.
Total marketing cost was observed to be highest in
Channel-III followed by Channel-II. The marketing
margins were `20 per q in Channel-II and there was no
marketing margin in Channel-III as there was no
intermediary in this channel. The price spread was highest
in Channel-II followed by Channel-III. The marketing
efficiency was highest in Channel-III followed by
Channel-II. It may be concluded from the above
Sub-mountainous zone
South-western zone
Punjab
40
5
40
9
40
6
120
20
1
3
1
2
6
1
0
5
1
3
14
3
1
4
0
5
0
8
0
9
1
5
1
6
2
17
1
20
0
2
3
0
9
0
0
6
0
0
17
3
Table 3. Ranking of reasons for sale of fodder being given by fodder growers in Punjab
Reasons
Rank
No. of responders Total score
Mean score
Rank
55.40
54.92
59.80
35.50
II
III
I
IV
1 2 3 4
Surplus Fodder production
High demand of green fodder
Fodder production for sale is economical
To earn extra income through sale
5
4
9
0
5
5
6
0
3
2
4
1
2
2
1
1
269
15
13
20
2
831
714
1196
71
Indian J Econ Dev 14(2): 2018 (April-June)
discussion that Channel-III was the most efficient channel
for sorghum marketing as price spread was lower in this
channel and marketing efficiency was higher.
The marketing cost, margins, price spread and
marketing efficiency in marketing of bajra crop in
different marketing channels is presented in Table 5,
which revealed that there existed three channels for
marketing of bajra crop. In the Channel-I, the net price
received by the farmer was same as price paid by the dairy
owner consumer. Here, the price spread was zero but it
was used by very few numbers of the farmers for sale of
bajra crop. In both the Channel-II and III, net price
received by the farmer was the same. The costs incurred
by producer were highest on transportation charges
followed by harvesting charges and loading/ unloading.
The sale price of the produce was same in both the
channels. The purchase price of chaff cutter in Channel-II
was `128.95 per q (82.71 percent) and cost incurred by
chaff cutter includes loading/unloading and chaffing
which was same (` 2.6 per q) in each. Further, the cost
incurred by the dairy owners includes only transportation
charges. Similarly, in Channel-III, incurred by dairy
owner includes weighing charges, transportation and
commission charges out of which maximum was
transportation charges followed by commission and
loading/unloading charges. Here, price spread was
highest in Channel-II and Channel III was the most
efficient channel as compared to other channels.
The marketing cost, margins, price spread and
marketing efficiency in marketing of berseem crop in
different marketing channels has been presented in Table
6, which revealed that there existed two channels for
marketing of berseem crop (Channel-II and III). In both
these channels, the net price received by the producer was
same. Costs incurred by producer were the highest on
transportation charges followed by harvesting charges
Table 4. Marketing cost and price spread in marketing of maize and sorghum in Punjab
(`per q)
Sr. No.
Cost items
Maize
Sorghum
Channel-I
1.
2.
i.
ii.
iii.
iv.
3.
4.
5.
i.
ii.
6.
i.
ii.
iii.
iv.
7.
8.
9.
10.
11.
Net price received by the producer
Costs incurred by producers
Harvesting charges
Weighing charges
Loading/unloading
Transportation
Sub-total
Producer's sale price
Purchase price of chaff cutter
Costs incurred by Chaff cutter
Loading/unloading
Chaffing
Sub total
Chaff cutters margin
Sale price of chaff cutter
Costs incurred by Dairy owner(Consumer)
Weighing charges
Loading/unloading
Transportation
Commission charges
Sub-total
Total cost to dairy owner (Consumer)
Total marketing cost
Total marketing margins
Price spread
Marketing efficiency
Channel-II
Channel-III
Amount
PCP
Amount
PCP
Amount
PCP
105.58
100.00
106.75
67.31
106.75
74.96
-
-
6.60
1.25
5.00
10.00
22.85
129.60
129.60
4.16
0.79
3.15
6.30
14.40
81.72
81.72
6.60
1.25
5.00
10.00
22.85
129.60
-
4.63
0.88
3.51
7.02
16.05
91.01
-
-
-
2.50
2.50
5.00
20.00
154.60
1.58
1.58
3.15
12.61
97.48
-
-
105.58
-
100.00
-
0.00
4.00
2.52
4.00
158.60
31.85
20.00
51.85
2.06
2.52
100.00
20.08
12.61
32.69
-
0.80
3.00
5.00
4.00
12.80
142.40
35.65
35.65
2.99
0.56
2.11
3.51
2.81
8.99
100.00
25.04
25.04
-
PCP: Percent to consumer's price.
270
Singh et al.: Marketing pattern and price spread of green fodder in Punjab
and loading/unloading. The total cost incurred by
producer was same in both channels.
The sale price of producer in both the channels was
the same. The cost incurred by chaff cutter in Channel-II
includes loading/unloading and chaffing which was same
in each. Further, the cost incurred by the dairy owners
include only transportation charges The total marketing
costs and margins for Channel-II were estimated at
`31.98 and `18.67 per q respectively. Similarly in
Channel-III, the cost incurred by dairy owner was the
highest for transportation charges followed by
commission and loading/unloading charges. The price
spread in Channel-II was higher compared to the
Channel-III and the marketing efficiency was higher in
Channel III. Therefore, the Channel-III was found to be
the most efficient channel for berseem marketing.
Marketing problems
The marketing problems being faced by the fodder
growers in Punjab state are discussed in detail in this
section. A total of eight marketing problems have been
reported in the state. The fodder growers were asked to
rank these eight production problems. The number and
percentage of responses given by different fodder
growers for various marketing problems is presented in
Table 7, which showed that maximum number of the
farmers reported lack of proper market followed by
distant market, costly transportation and low output
prices.
The number of farmers giving various ranks to
various marketing problems, total score, mean score and
ranks assigned to various problems is presented in Table
8. The problem with highest mean score was given first
rank and the problem with next highest mean score was
given second rank and so on. According to the Garrett
ranking, among the marketing problems faced by fodder
growers, lack of proper market got the first rank followed
by price fluctuations low output prices, distant market,
costly transportation, high marketing costs, malpractices
by intermediaries and delay in payments.
CONCLUSIONS
From the foregoing discussion, it may be concluded
that criteria of payment was daily cash basis for all the
Table 5. Marketing cost and price spread in marketing of bajra in Punjab state
(`per q)
Sr. No.
1
2
i.
ii.
iii.
iv.
3
4
5
i.
ii.
6
i.
ii.
iii.
iv.
7
8
9
10
11
Cost items
Net price received by the producer
Costs incurred by producers
Harvesting charges
Weighing charges
Loading/unloading
Transportation
Sub-total
Producer's sale price
Purchase price of chaff cutter
Costs incurred by Chaff cutter
Loading/unloading
Chaffing
Sub total
Chaff cutters margin
Sale price of chaff cutter
Costs incurred by Dairy owner(Consumer)
Weighing charges
Loading/ unloading
Transportation
Commission charges
Sub-total
Total cost to dairy owner (Consumer)
Total marketing cost
Total marketing margins
Price spread
Marketing efficiency
Channel-I
Channel-II
Channel-III
Amount
PCP
Amount
PCP
Amount
PCP
102.00
100.00
105.85
67.90
105.85
75.07
-
-
6.80
0.80
5.00
10.50
23.10
128.95
128.95
4.36
0.51
3.21
6.74
14.81
82.71
82.71
6.80
0.80
5.00
10.50
23.10
128.95
-
4.82
0.57
3.55
7.45
16.38
91.45
-
-
-
2.60
2.60
5.20
18.00
152.15
1.67
1.67
3.34
11.55
97.59
-
-
102.00
-
100.00
-
3.75
3.75
155.90
32.05
18.00
50.05
2.11
2.41
2.41
100.00
20.55
11.55
32.10
-
0.80
3.00
4.75
3.50
12.05
141.00
35.15
35.15
3.01
0.57
2.13
3.37
2.48
8.55
100.00
24.93
24.93
-
PCP: Percent to consumer's price.
271
Indian J Econ Dev 14(2): 2018 (April-June)
Table 6. Marketing cost and price spread in marketing of berseem in Punjab state
(` per q)
Sr. No.
1.
2.
i.
ii.
iii.
iv.
3.
4.
5.
i.
ii.
6.
i.
ii.
iii.
iv.
v.
7.
8.
9.
10.
11.
Cost items
Channel-II
Net price received by the producer
Costs incurred by producers
Harvesting charges
Weighing charges
Loading/unloading
Transportation
Sub-total
Producer's sale price
Purchase price of chaff cutter
Costs incurred by Chaff cutter
Loading/unloading
Chaffing
Sub-total
Chaff cutters margin
Sale price of chaff cutter
Costs incurred by Dairy owner(Consumer)
Weighing charges
Loading/ unloading
Chaffing
Transportation
Commission charges
Sub-total
Total cost to dairy owner (Consumer)
Total marketing cost
Total marketing margins
Price spread
Marketing efficiency
Channel-III
Amount
PCP
Amount
PCP
94.45
65.10
94.45
72.79
6.73
0.95
5.00
10.33
23.01
117.46
117.46
4.64
0.65
3.45
7.12
15.86
80.96
80.96
6.73
0.95
5.00
10.33
23.01
117.46
-
5.19
0.73
3.85
7.96
17.73
90.52
-
2.57
2.57
5.14
18.66
141.26
1.77
1.77
3.54
12.86
97.36
-
-
3.83
3.83
145.09
31.98
18.67
50.65
1.86
2.64
2.64
100.00
22.04
12.87
34.91
-
0.80
3.00
4.83
3.67
12.30
129.76
35.31
35.31
2.67
0.62
2.31
3.72
2.83
9.48
100.00
27.21
27.21
-
PCP: Percent to consumer's price.
Table 7. Number and percentage of responses for
marketing problems
(n=20)
Factors
Number Percentage
of
of
farmers responses
Lack of proper market
Price fluctuations
Low output prices
Distant market
Delay in payments
High marketing costs
Malpractices by intermediaries
Costly transportation
20
19
16
12
1
5
14
18
100
95
80
60
5
25
70
90
farmers. Maximum distance covered by majority of the
fodder growers for marketing of green fodder was five to
ten km. The main reason for sale of fodder was production
being economical followed by surplus production.
Regarding the marketing channels, for the maize crop,
there was only one marketing channel i.e. Channel-I
which was not so popular and price spread in this channel
was zero. For sorghum crop, there were two marketing
channels (Channel-II and III).
The Channel-III
(Producer-Dairy owner (Consumer) was found to be most
efficient channel. For bajra crop, there existed three
channels (Channel-I, II, and III). The marketing
efficiency was highest in Channel III. Similarly, for
berseem crop, there were two marketing channels
(Channel-II and III) and Channel-III was found to be most
efficient channel for marketing of berseem crop. The most
important marketing problem was observed to be lack of
272
Singh et al.: Marketing pattern and price spread of green fodder in Punjab
Table 8. Ranking of marketing problems being faced by fodder growers in Punjab
Factors
Lack of proper market
Distant market
Low output prices
Price fluctuations
Delay in payments
High marketing costs
Malpractices by intermediaries
Costly transportation
Rank
1
2
3
4
5 6
7
8
9
3
2
1
0
0
1
4
5
4
8
1
0
2
1
1
3
8
2
5
0
0
4
2
2
3
1
4
0
1
3
4
1
0
0
1
1
2
3
4
0
0
1
0
0
0
0
0
0
0
1
0
0
0
0
0
0
1
1
0
0
0
2
3
proper market followed by price fluctuations, low output
prices and distant market.
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Total
score
Mean
score
Rank
20
19
16
12
1
5
14
18
1388.00
1187.00
961.00
706.00
47.00
281.00
767.00
1027.00
69.40
62.47
60.06
58.83
47.00
56.20
54.79
57.06
I
II
III
IV
VIII
VI
VII
V
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