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Source: E-mail dt. 2.8.2012

 

Problems and Prospects of Banana Marketing in Tamilnadu

 

 K. Muthu lakshmi, Assistant Professor in commerce, Bishop Heber College(Autonomous)

 Tiruchirapalli - 620 017

 

Banana is an important food crop in Tropical region. South East Asia is said to be the probable origin for banana. Banana is otherwise called as, "Apple of Paradise". The annual production is estimated to be 45 million tonnes, out of which 20 million tonnes is dessert and 25 million tonnes is culinary type. Annually 6.7 million tonnes is exported. In India banana is largely grown in Tamil Nadu, Kerala, Maharashtra, Andhra Pradesh and Bihar.  Banana production alone constitutes 32 per cent of the fruit production in India.

 

BANANA STATUS IN TAMIL NADU

 

In India, Tamil Nadu is the leading Banana producer with an area of 79314 hectares with a production of 31.17 lakh tonnes. The undivided Tiruchirappalli ranks first with an area of 22,000 hectares and the production of 3.3 lakh tonnes. In this district commercial varieties like Poovan, Karpooravalli, Rasthali and Nendran are largely grown. Nendran is the most popular cultivar of Kerala, grown in this district in an extent of 6500 hectares and marketed in Kerala during its lean period.

 

DOMESTIC MARKETING OF BANANA

 

The non-development of agricultural markets in the State had exposed the farmers to various exploitative trading forces resulting into a situation where the farmers are unable to get the remunerative prices for their produce. The village level markets are manned by the highest bidding and they do not have the basic facilities for proper marketing. These markets are active only on the appointed days – once or twice in a week and on the appointed days the sellers and the buyers come to the market for their selling and purchase the bunches. Mostly the small and the marginal farmers and the landless labourers come to the rural market for selling. The grocery shop owners and the local merchants purchase bunches on the following days. But bulk of bunches are purchased by the wholesalers through their commission agents /brokers. The method of sale in force is usually by mutual negotiations often at the advantage of the broker or the commission agents / whole sellers rather than the sellers. In the rural areas, the local merchants and the petty traders also procure bunches from the production sites and sell it in the village auction centers.

 

The banana bunches are disposed through two ways. The banana bunches are harvested by the farmers themselves and taken to auctioning centers. Secondly, bunches are sold out to the middlemen who act as the contractors and the price is fixed by them and it is taken to the whole sale market. Bunches are transported from the field by trucks and the labourers handle them very poorly. Finally they are covered by the banana leaves and the tarpaulins. At wholesale market it is purchased by the retailers and the consumers as raw bunch or as ripened bunch after smoking.

 

The present marketing system in Tamil Nadu has not developed significantly for the following reasons:

 

J                   The price offered to the farmers is low. There is a wide gap between the farm price and the final market price at the consumer level. The gap ranges between 200 – 300 per cent.

J                   Traders and the commission agents take away their major share of the price.

J                   Lack of proper and adequate storage facilities make most of the small farmers to sell their produce immediately after the harvest.

J                   The cost of transportation being high by road compels the small farmers to sell their produce at the producer’s level to their advantage.

J                   There is lack of market intelligence to the farmers and traders.

 

 

PRE HARVEST CONTRACTORS

 

In Tamil Nadu, the Tiruchirapalli market is dominated by the pre-harvest contractors. They procure bunches at 50 per cent maturity of the crop and this practice is adopted by 88 per cent of the growers. The reason attributed by the grower is, that the contractor gives away around 50 per cent of the payment to meet out the immediate needs of production, consumption and for social activities of the growers.

 

The other reasons attributed for the pre harvest contractors among the growers are:

 

1.                  High fluctuation in the price

2.                  High wind velocity during the monsoon causing damage to the plant.

3.                  Inadequacy of institutional credit.

4.                  Absence of crop insurance

5.                  Small quantities and uneconomic qualities available for marketing.

6.                  Long association with the contractor.

7.                  Price discrimination in the market.

8.                  High marketing charges as open and hidden.


CONSTRAINTS IN BANANA MARKET

 

The infrastructure facilities available for banana markets are quite insufficient for orderly marketing and to prevent the exploitation of the growers/farmers. The basic facilities like adequate space, covered/protected space in the selling places, weighing facilities, drinking water, sanitation, communication facilities etc., are lacking almost in all the rural auction centers. These markets are lacking of any permanent structures and the business is carried out under the semi-permanent thatched sheds. The present set of local market is not conducive for providing the farmers a remunerative price for their produce. The consumers are also at disadvantageous position as they are unable to get quality bunches at competitive prices. The farmers are compelled to give various marketing charges and the trade allowances and the sales are effected at the negotiated rate which is often advantageous to the commission agents/traders.

 

The facilities available at sub-wholesale market in the townships or the whole sale market in the Tiruchirappalli district head quarter is comparatively better than the local rural market, but inadequate for orderly marketing. The physical facilities for grading, sorting and storage and weighing are also lacking. The means for communication for market information is also inadequate.  Actually the business transactions are carried out as per the prevailing customs, which are favourable to the commission agents and the successful bidders who manage the market. Because of the chain of functionaries there exists a wide gap between the farm gate price that are obtained to the producers and the actual consumer prices. Thus, the market agents enjoy major chunk of the profit in the process of channellising Banana bunches from the farmers to the consumers. To arrest the above tendency government should come forward to fix the floor price for the banana bunches to ensure a reasonable / remunerative price to the growers.

 

CONSTRAINTS AMONG THE BANANA GROWERS

 

Several malpractices prevail in Banana marketing observed in the several wholesale market that are as follows:

 

1.                  Arbitrary deductions

2.                  Manipulation in measures and cheating the farmers.

3.                  Collusion between the brokers and the buyers at price fixation.

4.                  Delay in the payment of amount due to farmers and even dragging payment.

5.                  Chain of intermediaries between the producers and the final consumer’s viz., village merchant, itinerant traders, wholesalers, commission agents, pre-harvest contractors and the retailers. At all levels a margin is cut which is due to the farmers.

6.         Some services such as storage, financing, grading, loading/unloading are costlier as well as inadequate.

7.         Lack of sufficient working capital has retarded the growth of this industry.

8.         High transportation costs.

9.         Even the existing processing units are also handicapped by the non availability of the right type of packaging materials at the time of processing. Since the processed products cannot be stored without proper packing the raw material cannot be processed for want of proper packing material at the right time.

 

PROCESSED INDUSTIRES

 

Poor consumer awareness and consumption habits had resulted in slow shelf movement of the processed products of banana resulting in lowered utilization of capacities. Lack of proper promotional efforts and proper display had resulted in the products being sold out in a single or few outlets within the District. These are the main reasons attributed to the poor consumer awareness and low rate of consumption of the processed products.

 

The need for Governmental support for marketing the processed products has been clearly emphasized by most of the industries. To process is not very difficult but to reach the consumer is the most difficult task. The units in the tiny and small sector are not in a position to afford huge promotional cost which of late has risen to very high levels. The district authorities could envisage setting up of an agro processing complex of Industrial Estates Pattern wherein the individual project costs for agro processing could be reduced by the Government providing centralized facilities like laboratory analyses, steam, hot water, softened process water etc., and marketing assistance where in all the products produced in the complex could be sold out under a single brand name.

 

Thus, there is a tremendous potential for the growth of agro processing industries for banana in the district.  The domestic market is fairly limited but the export prospects are tremendous. The district authorities and the State Government would have to chalk out a strategy to meet out the developmental needs of this process industry for Banana.

 

The following are the few other banana products, which can be prepared both on small/cottage and large scale. These processing industries can be established in a modular way such that several products can be processed /manufactured from a single unit as the equipment used for one process can be used for the other. The project costs are also very low with most of the equipments including the know-how is available locally.

With the adoption of quality standards the products can be prepared hygienically7.

 

They are; Banana Puree, Banana powder, Banana Ketchup, Banana Flour, Banana Chips or Crisps, Banana vinegar, Banana wine , Banana jelly ,Banana jam, Banana figs, Clarified juice, Starch and other products. Industrial uses as fancy items after dying and colouring, attractive napkins, place mats, beautiful carry bags, pot hangers, dining plate mats etc. can be prepared.

 

CONSTRAINTS FACED BY THE INDUSTRY IN PROMOTING BANANA

 

1.                  Most of banana products except chips are not very popular among the consumers. It is basically due to lack of awareness on the potential of using banana in various forms both among growers and consumers. In some states like Kerala where more number of banana based products are popular, and it has remained as a household profession. Many have not attempted to commercialize it.

2.                  India is yet to develop a technology to process banana on commercial scale to meet out international quality standards and to compete in the global market.

3.                  There are some scientific constraints like browning of the products like pulp / puree juices after processing.

4.                  Lack of proper advertisement and product promotion in domestic market and poor promotional efforts in the International market for Indian banana.

5.                  The non-coordination between farmers, Government machinery and entrepreneurs in the food processing industry.

Addition of cold storage capacity by way of investment in different centre is also necessary to achieve an increased per capita consumption of perishables by individuals and to provide better remuneration to the farmers by preventing distress sales. Cold storage facilities in the district is inadequate and can be augmented to a storage capacity level of 12,000 to14,000 metric tonnes against the present level of 2000 metric tonnes.

 

MEASURES TO TACKLE THE ABOVE CONSTRAINTS IN THE RECENT PAST

 

Considering the above constraints and needs for basic and strategic research a National Research Centre on Banana was established at Tiruchirappalli during 1994 by the Government of India (ICAR) to meet out the challenges of banana industry (Cultivation and Utilization) in our country. Extensive research work is being carried out to solve many of these problems. A separate export promotion organization called Agricultural Processed foods Export Development Authority (APEDA) which looks into the export promotion needs of various food items including banana has been established. Research and technological development is being carried out at various institutions like State Agricultural Universities, Central Food Technological Research Institute (CFTRI), Indian Institute of Horticultural Research (IIHR), Indian Agricultural Research Institute            ( IARI ) etc.,

 

To overcome the poor price and the glut in the market, the only alternative is the value addition through Banana fruit processing. The right variety is to be identified for the right product through food processing to meet out the domestic market and the international market.