Rythu Bazar: Case on Agricultural Marketing

Rythu Bazar: An introduction
The Government of Andhra Pradesh introduced the concept of Rythu Bazars in January 1999 with the following objectives:
• providing direct interface between farmers and consumers and eliminating intermediaries,
• ensuring that farmers get remunerative prices for the fruits and vegetables they grow and consumers get them fresh and cheap,
• making sale proceeds available to farmers without any deductions and
• curbing malpractices in weighing.

The Rythu Bazars act as markets for a variety of agricultural products such as rice, pulses, edible oils, milk and milk products in addition to fruits and vegetables.

The beneficiary group
Rythu Bazars are intended to benefit farmers by providing them access to markets. Inadequate marketing support is one of the major handicaps faced by the farming sector. The movement of produce from the farms to the ultimate retail outlets faces a number of constraints and farmers are at the mercy of the middlemen and commission agents. In the absence of adequate facilities for storage and preservation, farmers are forced to make distress sales. At present, market yards are mostly set up by the State Governments. For setting up of agricultural markets, funds are sourced from NABARD through RIDF and National Cooperative Development Corporation (NCDC). However, infrastructure available to farmers for selling their produce still remains inadequate. Raythu Bazar is an initiative to create infrastructure facilities to enable farmers to sell their products directly to retail consumers thereby ensuring that farmers realize better prices and consumers receive fresh vegetable, fruits, etc. at reasonable prices and thus address constraints in agri-marketing infrastructure.

Products and Services
The service features in the working of the Bazaars coordinated by the department of marketing, Government of Andhra Pradesh are as follows:
• Allotment of shops to farmers is done on daily basis on “First Come First Serve” principle,
• Occupy the same shop continuously is not permitted,
• Price fixation through a committee, which consist of a few farmers and estate officer of Bazar. The prices are fixed generally 25% of above the wholesale rates and 25% less than local retail price.
• Farmers organized as self help groups function as sellers of fruits which are not grown locally.

Rythu Bazars are expected to generate sufficient income for their maintenance through auction of vehicle parking space, hoardings, canteen etc. A cabinet sub-committee of the State Government reviews the implementation of the scheme of Rythu Bazars on a fortnightly basis.

Business Linkages – Strategy
Typically, a Rythu Bazar covers 10 to 15 villages and at least 250 farmers including 10 groups (self help groups) are selected by a team consisting of Mandal Revenue Officers, Horticulture Officers and Agriculture Officers in the villages to operate in the Bazars. Joint Collectors of the concerned districts ensure that adequate transport facilities are arranged for transport of goods to Rythu Bazars in consultation with State Road Transport Corporation. In addition online information of prices and commodities movements is provided on the internet.

Rythu Bazar: Outreach and Potential
As on February 2002, ninety six Rythu Bazars were in existence benefiting 4500 farmers and large number of consumers. India is estimated to have over five lacs villages and almost sixty percent of the population is employed in the farm sector. However, agriculture contributes to only 25% of the national income. Lack of marketing information and inadequate access to markets as well as supply chain inefficiencies inherent in the farm sector contribute to low realizations and incomes to the farmers. Rythu Bazars can play a key role in addressing some of these problems, and there is a clear need to facilitate similar marketing infrastructure throughout the country.

Investment and Costs
The Rythu Bazars are located in government plots convenient to farmers as well as consumers. Built in a 1 acre (minimum) vacant land, the infrastructure provided by the government include sheds, arrangements of supply of drinking water, toilets with sanitation facility, parking for vehicles, arrangements for removal of garbage and cleaning of market by local body, facility for storage of unsold produce, provisions of weighing scales for all farmers, telephone, fax etc. Thus the AP government meets all the capital expenditure which varies according to the land prices prevailing in an area.

Private – Public partnership opportunities
The Rythu Bazars of Andhra Pradesh depend on government spending for infrastructure. But, now more of private initiative is required to upscale the Rythu Bazar model and even the Tenth Plan envisages a prominent role for private sector in infrastructure development and capacity building in rural areas. Moreover, flow of bank credit and popularization of warehouse recipt financing as well as introduction of user charges for some of the facilities can make the Rythu Bazar model a self sustaining one.

Contact Addresses
Director,
Department of Marketing,
BRKR Bhavan, 1st floor, 'C' Block
Tank Bund Road,
Hyderabad- 500063
Phone No:(040) 3221307,3222161, FAX: 3221084
http://gist.ap.nic.in/market.html