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ThesisItem Open Access Value chain mapping of paddy in Thrissur district(Department of Rural Marketing Management, College of Co-operation Banking & Management, Vellanikkara, 2019) Keerthi, P N; KAU; Mohanan, MValue chain is a set of linked activities that work to add value to a product, which consist of actors and actions that improve a product while linking producer to processors and markets. A value chain work best when their actors cooperate to produce high quality products and generate more income for all participants along the chain. A value chain encompasses the flow of products, knowledge and information, finance, payments, services and value additions at different levels. A value chain approach in agricultural development helps in identifying weak points in the chain and actions to add more value. The study on value chain mapping of paddy in Thrissur district has been undertaken with the objective of mapping value chain of paddy, identifying the factors influencing choice of value chain of paddy, analysing price spread efficiency and factors influencing it, identifying interventions necessary to improve value chain of paddy. The area of study was confined to Thrissur district. The sample respondents consist of thirty farmers, one miller, one agent, five wholesaler and three retailers. Thirty farmers were selected from two blocks of Thrissur district namely Pazhyannur and Puzhakal (with more production in paddy) through snow ball sampling. The data were collected using pre- tested structured interview schedule. The collected data were analysed with the help of value chain mapping tool (global approach), modified market efficiency (Acharya’s approach), percentage analysis, index method and chi square test. The mapping of paddy value chain revealed that the core process involved in the chain is input supply, production, procurement, processing, marketing and consumption with actors like Krishi Bhavan, open market traders, technology and information, labour and financing institutions in input supply, farmers in production process, SUPPLYCO, agents and millers in procurement and processing, PDS, wholesalers and retailers in marketing and consumers in consumption stage. The farmers are mainly depending on Krishi Bhavan for farm inputs especially for seed or fertiliser at subsidised price. The padasekara samithies are the main information disseminating agency for farmers. They provide information on input availability, registration time for selling to SUPPLYCO, information on classes/ training conducted by Krishi Bhavan/ Panchyath in the group, time of insuring crop, etc. Provisions of seeds and fertilisers are the major support to farmers from Krishi Bhavan as the cost of seeds and fertilisers are high in open market. They also provide high yielding varieties of seeds which are resistant to common diseases. The dependency on banks is mainly for financial support and maintenance of accounts since all transactions are operated through bank account only. Farmer’s contact with Krishi Bhavan, private traders, financing institutions, SUPPLYCO, millers, agents and other institutions like KAU, Paddy research station and insurance companies. The paddy produced in the field is procured by agents, millers or SUPPLYCO and converted to boiled rice, raw rice and broken rice which is then distributed to local markets, others districts in Kerala and to abroad. SUPPLYCO is the major purchaser of paddy, 60 percent of farmers in virippu and 64.70 percent of farmers in mundakan, and 100 percent of farmers in punja season are selling paddy through SUPPLYCO. The rest is marketed through channels including agents and millers. The identified marketing channels are 1. Farmers agents millers wholesalers retailers consumer 2. Farmer miller wholesaler retailer consumer 3. Farmer consumer 4. Farmer SUPPLYCO PDS Consumer In channel 1 and 2 the average price received for paddy is Rs.16.18 and Rs.19.00 per kilograms respectively. It leads to Rs. 2.73 and Rs. 3.70 loss to a farmer per kilograms. In channel 3 in which a farmer directly sell to consumers is at a good margin of Rs. 5.51 per kilogram. In first two channels actors other than farmers are profit makers. The formal channel of marketing of paddy in Kerala is through SUPPLYCO. The SUPPLYCO procure paddy from farm gate at minimum support price, which is Rs. 21.50 during the study period. In this case a farmer can get a higher margin of Rs. 9.54 for each kilogram of paddy. To identify the factors influencing the choice of value chain of paddy the variables like income of actors, availability of inputs, holding capacity, time required for realisation of payment and product acceptability norms were taken to account. The chi-square test between the choice of value chain and the selected variables showed that promptness of payment has a significant relationship in choice of value chain. Eventhough SUPPLYCO is the highest paid channel actor for farmers, delay in procurement by the SUPPLYCO and delay in payments influence the farmer to choose informal channels for marketing. It takes nearly 3 to 6 months to get payment from SUPPLYCO. So for easy realisation of cash the farmers are depending on informal channels for marketing. The paddy farmers always sell their produce after keeping for self-consumption, seed, keeping for wage and rent purpose. So the assessment of distress sale cannot be done based on quantity of paddy marketed compared to other agricultural produces like vegetable which are highly perishable. So price spread efficiency was calculated for studying channel efficiency. The increase in number of intermediaries in a value chain decreases the market efficiency through increasing cost and margin of intermediary. The percentage of producer share in consumer rupee is better for lesser intermediary chain. Among four channels of marketing, channel 1 is least efficient with market efficiency 0.71 followed by channel 2 were market efficiency is 0.83, where number of intermediaries are more. Channel 3 is most efficient channel in informal channels of marketing with market efficiency 1. The producer share in consumer rupee was found to be higher for channel 3 (100) followed by channel 2 (83.77) and channel 1 (71.34). Even though producer share in consumer rupee was higher in channel 2 total marketing margin was negative, it was due to higher labour cost incurred by farmer in virripu season for harvesting. If the farmer is able to reduce harvesting cost they can make profit from channel 2. The only channel which give maximum return to farmer is the formal channel of marketing through SUPPLYCO. Since the PDS is not meant for margin the marketing efficiency was not considered for the channel. The problems faced by actors were analysed to find out interventions required in the value chain. The major problem faced by farmer are labour shortage, attack by pest and diseases and lack of fair price in marketing of produce. The agents and millers face the problem of non-availability of demanded variety in the market and higher storage expenses. The government intervention during festival season through Onam and Vishu markets negatively affect the business of wholesalers and retailers very much by reducing demand for their produce. The study pointed out the major area of interventions necessary to improve the value chain of paddy. The development and dissemination of good quality seeds and fertilisers are to be continued by the institutions involved in it. The timely distribution is also an important factor for better production result, since the farm output is decreasing day by day. The training programs in this aspects can be imparted through Krishi Bhavans in association with Panchayathraj organisations. Timely availability of harvesting machines are also important since on maturity, the crop won’t stand on the plant as days passes. Lack of storage facility and timely procurement problem in formal channels can be reduced by setting up of rural godowns in main production centers and pooling the produce in such centers. Setting up of labour bank and spreading it to all major production centers are to be taken up by the cooperative societies. Inadequate support price and high loading unloading charges affect farmers in the marketing stage. Exploitation of farmers by intermediaries is found in Pazhayannur area. These improper marketing channels need to be eliminated by the proper intervention of the Padasekarasamithies and the government. Paddy sector of Kerala can be improved only by making farmers comfortable ie, by improving procurement and payment. SUPPLYCO should change its procurement policy by speeding up procurement and payment system. So that the hesitated farmers will come back to cultivation and the dependency on other states can be reduced.