Rural Management

RURAL MANAGEMENT

PRASANJEET BHATTACHARJEE

UNIT - I

Rural Management Rural Management aims at creating an efficient rural system that integrates operations, marketing, financed, HR and IT functions for achieving the overall effectiveness and efficiency. Rural Management is a subject that studies the various aspects of rural life and business with a view to suggest strategies for the optimum utilization of available resources thereby resulting in increased efficiency.

Rural Management Rural Management as a specialized field of a study aims to bring about an overall positive change in the rural society by effectively Planning, Organizing, Directing and Controlling various personal, professional and infrastructural aspects which are crucial for growth and development. The objective of Rural Management is to ensure the progress and development of backward and forward linkages of agri-businesses by the suitable application of various tools, techniques and concepts.

Defining Rural India Organisation

NSSO ( Census)

Planning Commission

Definition

Limitations 

rural not defined

Population density < 400 / Sq Km  75 percent of the male working population is engaged in agriculture No Municipal corporation / board 

Towns upto 15,000 population are considered rural 

Town characteristics not defined

Cont’d LG Electronics

All places other than the 7 metros

Only clarifies what are the cities

NABARD

All locations with a population upto 10, 000 considered “ rural”

Village & town characteristics not defined

Sahara

Commercial establishments located in areas servicing less than 1000 population

Population characteristics unknown

Defining Rural Marketing National Commission on Agriculture

NGOs

Corporate Rural Marketing Definition

Decisions to produce saleable farm commodities involving all the aspects of the market system or structure, both functional and institutional, based on technical & economic considerations and includes the pre & post harvest operations.

Marketing products produced in rural areas to urban areas

Function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into effective demand for specific products and services to create satisfaction & a better standard of living for achieving organisational goals.

Marketing products produced in rural areas in rural markets

Phases in Rural Marketing Sr. No

Time Frame

1

Phase One( Pre 1960’s)

Key Events & Trends Marketing

rural products in rural and urban areas Agricultural inputs in rural areas “Agricultural marketing” Farming methods were primitive and mechanisation was low Markets unorganised

Cont’d 2

Phase Two ( 1960s to 1990s)

3

Phase Three( 1990s to Present)

Green

Revolution Companies like Mahindra and Mahindra, Sri Ram Fertilisers and IFFCO emerge Rural products were also marketed through agencies like KVIC Demand

for consumables and durables rise Companies find growth in urban markets stagnating or falling

Scope of Rural Marketing • Keenly debated topic • Definitions based on organisational/ institutional vision, mission & goals

• Need for a comprehensive and modular understanding • Rural Marketing is a “ work in progress” • Multi – disciplinary approach is necessary for sharper understanding

Domain of Rural Marketing To

Rural

Rural From

Urban

Urban

Scope of Rural Marketing Domain of Rural Marketing

Dimensions of the transaction

Participants

Rural to Rural Rural to Urban Urban to Rural

Products/ services

Modalities

Norms

Outcomes

Changes in Rural India • Diverse change levers in rural India • The “ pull of the cities & towns” – migration and its side effects

• Effect of government programmes • Civil society interventions • Natural & manmade disasters • Slow but sure change

Transitions In Rural India

•Non –food, cash crops •

Food Grain Crops

• On land activities •

Farm Activities

•Livestock & fisheries •Manufacturing & services

Rural Employment Patterns( Male) Sector

Year – 1987 ( % share in employment)

Year -2004 ( % share in employment)

Agriculture

75

67

Transport & Communication

2

8

Trade & Hotels

5

7

Construction

4

7

Manufacturing

7

8

Rural India – Population Trends 1971

1981

1991

2001

548.2

683.3

848.3

1026.9

Rural Population (in million)

524.0

628.8

741.6

As a proportion of total population

76.7

74.3

72.2

Decadal Variation

19.8

16.7

15.2

Total Population (in million)

Source: Census 2001

Cont’d • The joint family system is being replaced by the nuclear family system • The occupational pattern shows a predominance of cultivators

and wage earners • Cultivators( 40.86 %) and Wage Earners( 35.28 %) according to NCAER studies (2002)

Rural Settlement & Habitation Trends • Key findings from 2001 census • Population density 253/ sq kilometer and total number of villages is 638, 588

• Villages having less than 500 population are falling • Villages having 2000 + population most prosperous • What are the implications of these trends?

Cont’d • Size of villages/ habitations are changing • Role & influence of towns is changing • Social interaction is a mix of rural and urban

• Let’s look at some key trends in detail

Rural Income Trends Annual Income ( at 1998-99 prices)

Income Class

1989-90( % Households)

1998-99 ( % Households)

1,40,000

High

0.5

3.0

Rural Marketing- Schools of Thought • Determinist School • Activist School • What is the right approach?

• Dependent on level of market development, stage in the PLC and access to resources • Amul & ITC prominent examples • No water-tight compartmentalisation

Strategic Issues & Directions in Rural Marketing • Evolutionary Vs revolutionary changes in rural markets • Role of state & market forces • ICT based interventions

• Partnership innovations • Developmental role of rural marketing • Scalability & replication of rural marketing programmes

ICT in Rural Markets Category

Government

Private

NGO/ PPP

Infrastructure Provision

NIC

N- Logue

Simputer

Rural Services

Bhoomi( Karnataka)

Agri Marketing

Agmarknet

E- Choupal

Agri extension

Universities

EID Parry

Sewa

Ozhwar Sandhiyes

Functions / Scope of Rural Management • • • •

Rural Operations Rural Marketing Rural Finance Rural Information & Communication Technology • Rural Human Resources • Rural Development

Importance of Rural Management • • • • • •

Improving Efficiency Quality of Life Rural Financing Poverty Alleviation Overall Development Better Rural-urban Coordination

Features of Rural Society • • • • • • • • •

Predominantly Agricultural Caste System Jajmani System Poverty Illiteracy Low Population Joint Family System Heterogeneity Simple Lifestyle

Geographical Spread of Rural Consumers • Geographical Area • Population Density • No. of Villages

Physical Structure of Rural Society • Settlement Patterns Clustered Settlements Semi-clustered Settlements Dispersed Settlements Hamletted Settlements

• Housing

Rural Infrastructure • Transport • Education • Healthcare

Demographic Profile • Age • Literacy • Occupation and Income

Social Structure of Rural Society • Religion • Caste Hereditary Hierarchical System Restrictions on Social Interaction

• • • •

Social Class Family Marriage Kinship

Rural Marketing Rural Marketing can be defined as a two way process, comprising a set of integrated activities which ensure the smooth exchange of products and services within the rural sector and also between rural and urban sectors

Classification of Rural Markets • • • • •

Local Retailers Shandy / Haat Mandi Mela Trade Fairs / Exhibitions

Classification of Rural Products Agricultural products – Agricultural Input • • • • • • •

Seeds Fertilizers Pesticides Farm Machines & Implements Transportation Carts Human Labor Farm Animals

Classification of Rural Products Agricultural Output Food grains - Rice - Wheat - Maize - Bajra - Jowar - Ragi - Barley - others

Classification of Rural Products Agricultural Output Cash Crops Tea Cocoa Sugarcane Cotton Tobacco Jute & Mesta Oilseeds Rubber Spices Dry Fruits Fruits & Vegetables Others

Classification of Rural Products Non-Farm Products • • • • • •

Fisheries Poultry Products Agro-Forestry Dairy Products Handicrafts Pottery

Reasons for the rise in demand for Consumer Durables • • • • • • • •

Surplus Income Rising Corporate Interest Industrialization Tailor Made Products Contact with Urban Agglomerates (Clusters) Improved Communications Electrification Societal Changes

Corporate Interest in Rural Market Corporate Houses have now realized the importance of rural sector, which until a decade ago was neglected due to a misconception that it offers fewer rewards, now more and more companies like HUL, ITC, Phillips, Nirma, AMUL, Escorts and many more have undertaken major initiatives to make a mark in the rural sector.

Corporate Interest in Rural Market • • • • • •

Market Size High Potential, Low Penetration Rise in Income Risk Diversification Urban Competition Changes in consumer behavior

Socio-Economic Reforms • • • • •

Rural Housing Land Reforms Rural Literacy Rural Employment Poverty Eradication Schemes

Consumer Durables These are consumer durables that remain in operation for quite a long duration. Durables could be classified into following categories: – Agricultural input like tractors, tillers, pump sets, generator sets, etc. – Non-agricultural goods like refrigerator, television, air cooler, mixer, automobiles, etc.

Use of Consumer Durables India's Consumer Markets: identifying a plausible market size for products

This report is intended to assist consumer product companies in identifying a plausible market size for their product/s in India. The table below should be viewed in conjunction with the text that follows.

India's consuming class

Table I Estimated households by annual income Annual income (in Rupees) at 1994-95 No. of households prices (in million)

106,000 Total no. of households: 164.9 million

80.7 50.4 19.7 8.2 5.8

Table II Structure of the Indian consumer market (1995-96)

Annual income

Classification

(in Rupees) at 199495 prices 215,000

Destitutes Aspirants Climbers Consumers The rich

Total no. of households

Number of households (in million) Urban 5.3 7.1 16.8 16.6 0.8

Rural 27.7 36.9 37.3 15.9 0.4

Total 33 44 54.1 32.5 1.2

46.6

118.2

164.8

Source: National Council of Applied Economic Research (NCAER). The above presentation has been slightly modified by IndiaOneStop.Com



Data on income distribution of households is insufficient in determining market size for different consumer products in India. This is because of the lack of homogeneity of the consuming class and the varying prices of a single product in different parts of India. For example, vegetables generally cost more in Mumbai than in Calcutta, hence vegetable-purchasing power for identical income groups would be different in the two places even though they are the two biggest cities in India with comparable populations. In other words, purchasing power is location-specific, not income specific. Consumption habits of households are therefore better determinants of consumer market size than income distribution. Of course, other factors are also to be considered and they are detailed below.



While determining market size for a consumer product, the structure of the consuming class as seen in Table II above, can be both revealing as well as misleading depending on the kind of product. For example, any specific consuming class would be fit to be a market for consumer products like tea or soap, but a product such as vacuum cleaners would find market largely only in the "consumers" and "rich" segments of the market

Rural Demand The rapid rise in surplus income has led to an increased demand for consumer durables in rural areas.

Use of Consumer Durables Rural consumers exhibit a skewed use of consumer durables possibly reflecting the lack of suitability of the current products available in the market. The rural consumers require products suited to their needs. Rewards await the marketer willing to invest in understanding their needs and translating them into products and services.

Use of Consumer Durables Rural markets, with a share of 71 per cent of the population, own about 54 per cent of the total stock of consumer durables. The opportunity for marketers of durables is present as the average number of durable goods owned per rural household is only 3.84 compared to 8.19 in urban areas. The use pattern, however, is skewed.

Consumer Market India's Consumer Markets: identifying a plausible market size for products

This report is intended to assist consumer product companies in identifying a plausible market size for their product/s in India. The table below should be viewed in conjunction with the text that follows.

India's consuming class

Table I Estimated households by annual income Annual income (in Rupees) at 1994-95 No. of households prices (in million)

106,000 Total no. of households: 164.9 million

80.7 50.4 19.7 8.2 5.8

Table II Structure of the Indian consumer market (1995-96)

Annual income

Classification

(in Rupees) at 199495 prices 215,000

Destitutes Aspirants Climbers Consumers The rich

Total no. of households

Number of households (in million) Urban 5.3 7.1 16.8 16.6 0.8

Rural 27.7 36.9 37.3 15.9 0.4

Total 33 44 54.1 32.5 1.2

46.6

118.2

164.8

Source: National Council of Applied Economic Research (NCAER). The above presentation has been slightly modified by IndiaOneStop.Com



Data on income distribution of households is insufficient in determining market size for different consumer products in India. This is because of the lack of homogeneity of the consuming class and the varying prices of a single product in different parts of India. For example, vegetables generally cost more in Mumbai than in Calcutta, hence vegetable-purchasing power for identical income groups would be different in the two places even though they are the two biggest cities in India with comparable populations. In other words, purchasing power is location-specific, not income specific. Consumption habits of households are therefore better determinants of consumer market size than income distribution. Of course, other factors are also to be considered and they are detailed below.



While determining market size for a consumer product, the structure of the consuming class as seen in Table II above, can be both revealing as well as misleading depending on the kind of product. For example, any specific consuming class would be fit to be a market for consumer products like tea or soap, but a product such as vacuum cleaners would find market largely only in the "consumers" and "rich" segments of the market as defined in Table II above. Furthermore, even this may not be correct, because a taste for a vacuum cleaner is not necessarily a function of purchasing power but of culture and/or taste as well.

For instance: More than half the rural households own bicycles and mechanical wristwatch. About 49 per cent of the rural households have radios or Transistors.

Rural Communication Rural consumer behavior differs from the urban consumer behavior and so requires developing communication strategies unique to the rural markets. A study of TV commercials for four brands brings out the differences in the comprehension of the messages between the rural and the urban consumers

Factors Affecting Rural Communication Literacy level

Media Habits Traditional approach High resistance – more so initially Lavish at occasions (e.g. Marriage) Purchasing power also depending on weather- the crops Inequitable distribution of wealth Too many languages Culture

The Communication Process Model

RURAL COMMUNICATION Effective Communication goes a long way in establishing the right Messages and thereby more interaction with Potential Customers Communication, however, is not complete if there is no feedback, It is very important to reenforce messages in Rural areas

Rural Communication Communicating in the Rural Market Landscape This chapter examines the complexity in communication strategies due to the spread and heterogeneity of rural markets. Managerial actions for reducing the large heterogeneous market into smaller homogenous ones are considered in this chapter. A process perspective of communication is used to understand communication strategies in rural markets. The consumer influence on the communication process is examined to overcome the problem of ‘selective comprehension’. The influence of ‘stage of readiness’ and ‘involvement’ of the consumer on communication is discussed. These address the issue of ‘selective comprehension’ by consumers. These different variables are put together by developing a taxonomy of communication strategies for rural markets. Rural consumer behavior differs from the urban consumer behavior and so requires developing communication strategies unique to the rural markets. A study of TV commercials for four brands brings out the differences in the comprehension of the messages between the rural and the urban consumers Variation in the Comprehension of Communication in Rural and Urban Markets The brands tested included Babool toothpaste (showing a young man in different situations dancing to a catchy jingle), Navaratna Oil (featuring Govinda and Rambha), Samsung Colour TV (sparks coming from the TV) and Asian Paints (Sunil Babu!). While the total understanding of the main message of all the four spots among the urban audience was calculated to be 100 per cent, it was only 30–60 per cent among the rural audience. When it came to specifi c attributes, some of the comments from the rural folks were interesting. Let us take the example of Babool toothpaste: � � � � � � �

Too quick to understand. Confused with a toothpowder. Is it for a shaving cream? No one will dance simply for a toothpaste. What is a dog doing in a toothpaste advertisement? Characters are not actually recommending the toothpaste. The jingle was catchy, but I cannot relate to the person.

In the case of the Navaratna Oil fi lm, the audience in Tamil Nadu could not recognise Govinda while the UP audience did not recognize Rambha. In both markets, the rural audience was surprised that a character with a headache can dance so vigorously. So the conclusions from the study, which only endorsed the already established beliefs, were as under: � Rural folks do not understand clever, gimmicky, quick (fast-paced), suggestive and hitech fi lms. � Use of unrelated symbols, characters and icons confuse and distance them. � They want a clear connection between the problem and the solution offered by a brand.

Types of Rural Communication Rural Communication Media

Conventional -

Non-Conventional-

Radio Television Cinema Personal Selling Hoardings Point of Purchase (POP)

Puppet Shows Wall Paintings Trolleys Folk Theatres Mobile Vans Demo Contests Direct Mail

Rural Communication - Challenges & Strategies • • • • •

Illiteracy Language Media Values & Ethics Heterogeneity

UNIT - II

Geographical Spread of Rural Consumers in India Geographical spread of rural consumers could be analyzed in terms of: • • •

Geographical area Population density Number of villages

Physical Structure of Rural Society Some physical elements of the rural society: • • • • • •

Settlement Patterns Clustered Settlements Semi-clustered Settlements Dispersed Settlements Hamletted Settlements Housing

Rural Infrastructure • Transport • Education • Healthcare

Demographic Profile • Age • Literacy • Occupation and Income

Social Infrastructure of Rural Society • • • • • • • • • • • • •

Religion Caste Hereditary Hierarchical system Restrictions on Social Interaction Social Class Family Marriage Endogamy Exogamy Rituals Dowry Kinship

Classification of Socio-Economic Reforms in India Rural Housing Rural Land Reforms

Rural Poverty Eradications

SocioEconomic Reforms

Rural Employment

Rural Literacy

Factors affecting Rural Consumer Behavior

FACTORS

Socio-cultural factors Status Family Reference Groups Festivals / Ceremonies Customs

Personal Factors Age and Lifecycle Occupation Lifestyle Personality

Psychological Factors Perception Attitude Motivation Learning

Stages of Buying Process

Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post-purchase Evaluation and Feedback

Market Segmentation It is important for marketers to thoroughly understand the market and indentify that particular groups which can offer maximum returns. Segmentation is like profiling buyer groups and clubbing together people with similar needs and demands. This activity of identifying groups with similar habits , needs, behavior, socio-psychological traits, etc. is known as market segmentation. It is about moving from generic to specific.

Benefits of Segmentation • It helps the marketers identify those sections of the market that provide the best business opportunities. They can compare across various segments that are available and select the one that promises the best potential for their products. • Selecting a particular segment helps the marketers channelize their resources and efforts on that particular group which can offer the maximum returns. • Marketers find it easy to identify the needs of a homogeneous group as compared to the entire population which is highly heterogeneous. • It is easy to serve a limited number of people who exhibit similar characteristics. • In case of any change in customers’ preferences, tastes, needs etc. marketers can quickly modify their marketing strategies. • In their targeted segments, marketers can introduce unique products thereby minimizing competition from rival firms, it helps them assess their competitive strategies and redesign the marketing approach, if necessary.

Bases of Market Segmentation Sociological

Land Holding

Occupational Rural Market Segmentation

Village Size

Demograhic

Occupational Segmentation The occupation that they follow depends on a number of factors like inheritance, availability of resources, terrain, climate, etc. Following are some of the important occupations practiced in rural areas: • • • •

Farming Livestock Fishing Artisanship

Sociological Segmentation Rural Market could be segmented into six types on the basis of social standing: • • • • • •

Proprietors of Land Rich farmers Small Peasants or Marginal farmers Tenant Farmers Agricultural Laborers Artisans – Potters – Blacksmiths – Carpenters

Requisites for Successful Segmentation • • • • •

Homogeneous Measureable Practically Accessible Responsive Purchasing Power

Thomson Rural Market Index The first real & highly successful attempt at assessing the potential of Indian rural markets was made by Hindustan Thompson Associates (HTS) Pvt. Ltd. In the year 1972. The Thompson Rural Market Index, which it came up with was the first guide to the rural market. At that time, HTA collected data for 334 districts of the country. For establishing accurate market potential, 11 most important factors were identified and according to their relative importance a weight was assigned to each. Though at that time it was a big achievement yet only within a few years need was felt for a more comprehensive market study which would involve more factors and a better market potential . Therefore in the year 1986 another index by the name of Thompson Rural Market index, 1986 was published.

Indicators for Thompson Rural Market Index 1. Area of the district in sq. kms. Demographics 2. Population: Rural Number 3. Number of Males 4. Number of Females 5. Density per sq. km. 6. Percentage Distribution of population by population strata 7. Number of Villages 8. Percentage Distribution of villages by population strata 9. Number of Rural Literates 10. Per cent of Literacy 11. Literate Males 12. Literate Males

Indicators for Thompson Rural Market Index Occupational Pattern 13. Number of Cultivators 14. Number of Agricultural Laborers 15. Number of Non-Agricultural Laborers Agriculture Related Data 16. Gross Cropped Area in Hectares 17. Gross Irrigated Area in Hectares 18. Area under Non-food crops in Hectares 19. Average Size of Operational Holdings in Hectares Agricultural Input Data 20. Number of Pump Sets and Tube-wells 21. Fertilizer Consumption in Metric Tonnes 22. No. of tractors

Indicators for Thompson Rural Market Index Rural Electrification Data 23. Percentage of Villages Electrified Commercial Banks Data 24. No. of Rural Branches 25. Deposits in Rs. Lakh 26. Advances in Rs. Lakh

Agricultural-related variables 1. Agricultural Laborers 2. Gross Cropped Area 3. Gross Irrigated Area 4. Area under Non-Food Crops 5. Pump Sets 6. Fertilizer Consumption 7. Tractors 8. Rural Credit 9. Rural Deposits 10. Villages Electrified

MICA Rural Market Rating It ranks districts according to seven parameters like population, fertilizer consumption, etc. It also depicts census data in digital maps, where one can zero in on district level details. It was priced at Rs. 35000 in 1999

Linquest Market mapping tool from AP Lintas was the predecessor of Lincompass. IT ranked districts on 42 variables. It was available for Rs. 75000 in the year 1999

MICA Ratings Though there were many scientific methods for studying markets and predicting their potential yet a need was felt to have an index that was on entire country’s data. “MICA ratings” seems to be answer. Credit for its development goes to Mudra Institute of Communications Ahmedabad; hence the name of MICA. It collaborated with ML Infomap Pvt. Ltd., and came up with MICA Rural Market Ratings (MRMR). While MICA is one of the best institutes for training communication professionals, ML Infomap is a consulting firm. Together, they carried out the research work and prepared what is “the best guide’ to rural India. MRMR is important because it gives marketers a wider range of information needed to judge the potential of various rural markets. The Rural Market Index is a comprehensive guide to rural India, which the marketers find quite useful. Because it was conducted all across the country the index indicates the market potential of all districts. The comprehensive research covered: 579 Districts 79 Urban Agglomerations (UA) 5154 Towns 42 Variables

MICA Ratings Methodology The research was done simultaneously for urban and rural sectors. Following are the steps involved during the development of the index: Identifying Variables Demographic Ownership Financial Services Agricultural Amenities Market potential Index District Market Potential Rating

Salient Features of MRMR • As a by-product • Data on 42 Demographic & Economic Variables separately • Digitized Maps of all Districts with Pictorial Location • User Interface Permitting

Highlights of MICA Rating • Credit for the development of MICA goes to Mudra Institute of Communications, Ahmedabad; hence the name MICA • The research was done simultaneously for urban and rural sectors • The first job was to identify the variables on whose basis research was to be carried out • Using discriminant analysis, weights for the linear combination of principle variables are calculated • Using weighted linear combination of rural and urban market potential indices, based on projected consumer expenditure for rural and urban segments, the districts market potential rating is calculated • MRMR is important because it gives marketers a wider range of information needed to judge the potential of various rural markets

Highlights of MICA Rating • The research results are all presented in the form of maps. Using digital mapping technique, it has been made user friendly so that the districts are all plotted on the Indian Map and just by clicking on a particular district information can be obtained. • Ratings have been calculated scientifically through a linear combination of demographic and economic variables values so that these are applicable across a large variety of consumer products • Principle variables could be manipulated to devise new ratings for new product or location

Targeting / Target Market A target market strategy is a group of customers at whom the sellers specifically aim their marketing efforts. IT is based on effective segmentation of the market which provides the marketer with clearly-defined market segments from which he/she can be picked one market segment that is most appropriate for his/her organization to serve. This market segment is called the target market

Developing a Targeted Marketing Strategy The process of segmenting is a sequential process which involves the following eight steps: • • • • • • • •

Define relevant market Analysis of characteristics and wants of potential customers Identify the basis for segmenting the market Define & describe market segments Analyze competitor’s position Evaluate market segments Select market segment(s) Finalize marketing mix (es)

Identifying and Selecting Target Markets This is one of the toughest tasks for a rural marketer. After he has segmented the rural market, he has to consider a combination of factors (for which the availability of authentic data is not easy even in the present day information age) to decide which rural market segments an organization would like to target and the ones which are not fit to be targeted. Some of the factors important for this analysis are as follows: • • • • •

Socio-cultural, economic development and Infrastructural environment of different districts Density of population in different villages Heterogeneity and homogeneity of population across regions Mobility, media availability and cost of access to the area System of Interaction

Product Product refers to anything that is capable of or can be offered to satisfy a need or want . The term product includes both tangible goods and intangible services. It involves a decision on the number of variants, sizes, packaging, color, logo and the brand name. However a product must deliver a minimum level of performance; otherwise even the best work on the other elements of the marketing mix won’t do any good in the long run.

Price Price refers to the amount the customer has to pay in order to acquire a product or service. It depends on a host of factors that include: cost of production, segment targeted, ability of the market to pay, demand and supply of competing products and substitutes, pricing objective of the firm and host of other direct and indirect factors. Pricing involves not only a decision on the retail price but also decisions on dealer and dealer and retailer margins that need to be provided to the channel partners. There can be several types of pricing strategies each tied in with an overall business plan. Pricing can also be used as a tool to promote, differentiate and enhance the image of a product or service.

4C’s of Pricing: (a) Customer Value (‘c) Cost to the Company

(b) Competitors’ Prices (d) Strategic and Pricing Objectives of the company

Pricing Methods (a) (b) (c) (d)

Cost plus Pricing Target-return Pricing Value-based Pricing Psychological Pricing

Pricing Through the Product or Service Life Cycle Organization have not only to determine the price for the new products but they also have to decide on the different price-mixes over the different stages of the product life cycle. The product is likely to face different demand levels and competitive scenario at different stages of its life cycle; this change in demand changes the price of the product. Companies also have to determine the position of the product on the product or technology life cycle in order to decide the right price for it at different times. Pricing new technologies and new product introductions is different from pricing products and services during competitive turbulence and pricing for products in nature or declining markets.

Promotion This refers to all the activities undertaken to make the product or service known to and preferred amongst the user and trade. This can include advertising, word of mouth, press reports, incentives, commissions and awards to the traders; it can also include consumer schemes, direct marketing, contests and prizes. Advertising a paid form of non-personal communication from an identified sponsor using mass media to persuade or influence an audience is generally the most important element of the promotion mix. The 1990s and 2000s bought the concept of Integrated Marketing Communication (IMC). IMC is the practice of unifying and synergizing all marketing communication tools so that they send a consistent and persuasive message promoting the company’s goals to its target audiences. Sales Promotion: It refers to the value provided by the product or service by offering an extra incentive to purchase a brand or product.

Promotion Strategies • • • • •

Think Global Act local Think in local Idiom Simplicity and Clarity Narrative Story Style Choice of Brand Ambassadors

Product & Price as Critical Factors

The rural rich may have less exposure to brand but he is willing to pay the extra price for the premium products in the market. Brands like Onida KY Thunder and LG Golden Eye series were the highest selling brands in the rural markets.

Type of Traders in Periodic Market

UNIT - III

Marketing of Agricultural Products Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing, transport, storage, agro- and food processing, distribution, advertising and sale. Some definitions would even include “the acts of buying supplies, renting equipment, (and) paying labor", arguing that marketing is everything a business does[1]. Such activities cannot take place without the exchange of information and are often heavily dependent on the availability of suitable finance.

Marketing of Agricultural Products Marketing systems are dynamic; they are competitive and involve continuous change and improvement. Businesses that have lower costs, are more efficient, and can deliver quality products, are those that prosper. Those that have high costs, fail to adapt to changes in market demand and provide poorer quality are often forced out of business. Marketing has to be customer-oriented and has to provide the farmer, transporter, trader, processor, etc. with a profit. This requires those involved in marketing chains to understand buyer requirements, both in terms of product and business conditions.

Marketing of Agricultural Products Agricultural Input Consumable Input Fertilizers Seeds Insecticides Fuel Veterinary Medicines

Durable Input Tractors Pump Sets Power Tilters Other Implements and Machineries

Other Input Repair Services Human Labor Credit

Major Agricultural Commodities in India • Food Grains • Jute • Cotton • Sugar • Milk • Areca Nuts

Government Efforts Agricultural Marketing Regulations in India • The agricultural marketing system in India operates primarily by the supply and demand forces within the private sector Producer’s and consumer’s interests are well protected by the Indian Government, who are also interested in the promotion of organized marketing efforts for agricultural commodities. The following are organizations operated by the central government. who are involved in the marketing of agricultural goods in India :

• Commission for Agricultural Costs and Prices • Food Corporation of India • Cotton Corporation of India • Jute Corporation of India

Government Efforts • Independently owned marketing operations are most often run by large enterprises producing agriculture in India. Medium-sized companies such as those who trade in rice, oil, cotton, and jute are often part of cooperative marketing efforts within the country. • Various measures have been put into effect by the Indian Government in order to improve agricultural marketing, such as : • Establishing Regulated Markets • Constructing Warehouses • Grading and Standardizing Produce • Standardizing Weights and Measures • Providing Information on Agricultural Prices over All India Radio Networks.

Government Efforts The government’s ultimate objective is to provide reasonable prices for basic food products throughout the country. This is achieved through the Public Distribution System, which is a network of 350,000 fair-price shops that are monitored by stategovernments. This ensures that all agricultural commodities remain at a stable level, and at a fair level for all consumers.

Challenges There are several challenges involved in marketing of agricultural produce. There is limited access to the market information, literacy level among the farmers is low, multiple channels of distribution that eats away the pockets of both farmers and consumers. The government funding of farmers is still at nascent stage and most of the small farmers still depend on the local moneylenders who are leeches and charge high rate of interest. There are too many vultures that eat away the benefits that the farmers are supposed to get. Although we say that technology have improved but it has not gone to the rural levels as it is confined to urban areas alone. There are several loopholes in the present legislation and there is no organized and regulated marketing system for marketing the agricultural produce. The farmers have to face so many hardships and have to overcome several hurdles to get fair and just price for their sweat.

Challenges Slow agricultural growth is a concern for policymakers as some two-thirds of India’s people depend on rural employment for a living. Current agricultural practices are neither economically nor environmentally sustainable and India's yields for many agricultural commodities are low. Poorly maintained irrigation systems and almost universal lack of good extension services are among the factors responsible. Farmers' access to markets is hampered by poor roads, rudimentary market infrastructure, and excessive regulation. —World Bank: "India Country Overview 2008"

Challenges The low productivity in India is a result of the following factors:

• According to World Bank, Indian Branch: Priorities for Agriculture and Rural Development", India's large agricultural subsidies are hampering productivity-enhancing investment. Overregulation of agriculture has increased costs, price risks and uncertainty. Government intervenes in labor, land, and credit markets. India has inadequate infrastructure and services. World Bank also says that the allocation of water is inefficient, unsustainable and inequitable. The irrigation infrastructure is deteriorating. The overuse of water is currently being covered by over pumping aquifers, but as these are falling by foot of groundwater each year, this is a limited resource. • Illiteracy, general socio-economic backwardness, slow progress in implementing land reforms and inadequate or inefficient finance and marketing services for farm produce.

Challenges • Inconsistent government policy. Agricultural subsidies and taxes often changed without notice for short term political ends.

• The average size of land holdings is very small (less than 20,000 m²) and is subject to fragmentation due to land ceiling acts, and in some cases, family disputes. Such small holdings are often over-manned, resulting in disguised unemployment and low productivity of labor. • Adoption of modern agricultural practices and use of technology is inadequate, hampered by ignorance of such practices, high costs and impracticality in the case of small land holdings. • Irrigation facilities are inadequate, as revealed by the fact that only 52.6% of the land was irrigated in 2003–04,which result in farmers still being dependent on rainfall, specifically the Monsoon season. A good monsoon results in a robust growth for the economy as a whole, while a poor monsoon leads to a sluggish growth. Farm credit is regulated by NABARD, which is the statutory apex agent for rural development in the subcontinent. At the same time over pumping made possible by subsidized electric power is leading to an alarming drop in aquifer levels.

Agricultural Marketing

Agriculture Marketing The bridge that links producer & consumer

What Is Marketing? • The process of determining the needs and wants of consumers & being able to satisfy those needs & wants • Marketing includes all of the activities necessary to move a product from the producer to the consumer

What Is a Market? Buyers

Sellers

What Is a Market? • A market is made up of buyers & sellers • Buyers are people who need or want a product or service and have the money to buy it • A market must also have sellers who are willing & able to produce goods & services for sale

Two Types of Markets Input market – The input market includes items like metal, fertilizer, seed & wood – These types of products are purchased by producers

Product market – This is the market where final products are sold to consumers – Eggs and potatoes from farms – Shoes from shoe stores

Types of Agricultural Markets Input markets Product markets

Supply and Demand • The price of a product is determined by the value that buyers place on the product • When many buyers want a certain product the price will be higher • If few buyers want a product the price will be lower

Supply and Demand Low quality High quality

How Can I Add Value? Simple vegetables Pre-packaged vegetables

Production The goal is to add value through effective management: Inputs (Resources)

Production

Labor

Vegetables

Equipment Operating inputs

Value Added

Dairy products Other

Two Types of Markets Input market – The input market includes items like metal, fertilizer, seed & wood – These types of products are purchased by producers

Product market – This is the market where final products are sold to consumers – Eggs and potatoes from farms – Shoes from shoe stores

Types of Agricultural Markets Input markets Product markets

Supply and Demand • The price of a product is determined by the value that buyers place on the product • When many buyers want a certain product the price will be higher • If few buyers want a product the price will be lower

Supply and Demand Low quality High quality

How Can I Add Value? Simple vegetables Pre-packaged vegetables

A Value Chain Customer Input supplier Farmer Equipment supplier Wholesaler Cooperative

Retail Sales

Exporter

A Value Chain Customer Input supplier Farmer Equipment supplier Wholesaler Cooperative

Retail Sales

Exporter

A Value Chain Customer Input supplier Farmer Equipment supplier Wholesaler Cooperative

Retail Sales

Exporter

Conducting Market Research Market research is essential in order to identify a specific target market for your product. The ideal marketing plan contains a mix of product, promotion, advertising, price and distribution information.

Conducting Market Research • Knowing a specific target market and the consumers needs within it, will increase your chances of making a profit with your product. • If you don’t have adequate knowledge and information about your target market you will be shooting in the dark and your chances of success will be slim.

• One of the best methods of obtaining information about a particular market is to create a survey and send it out to potential customers

Analyzing Market Research After collecting your survey and other sources of data, it is time to assemble it into meaningful information.

Physical Resource Inventory Resources • Land • Livestock • Equipment • Facilities

Pricing Your Product • Higher prices usually result in lower sales volume and encourages competition Market demand

Price



How does price affect profits?

Marketing of Non-Farm Products As about 72% of the Indian population lives in rural areas, agriculture is already overburdened with a large proportion of people depending on it for their livelihood. With a constant increase in population and limited land resource availability there is a very high percentage of disguised employment in agriculture sector . Therefore a large number of people have started opting for non-farm activities either as a sole source of earning or sometimes to add to the small and irregular income from agriculture. Apart from primary agriculture all the other activities providing employment or income to the rural people are termed as non-farm activities. E.g. dairy business is a non-farm activity, providing milk for final consumption. The major activities providing employment in non-farm sector in rural areas are listed below: Fisheries Agro-forestry Dairy farming Beekeeping Food Processing Handicrafts Transportation and Communication services

Poultry Farming Tourism

Marketing Network A set of interrelated organizations that work in close coordination to ensure timely delivery and availability of a product or service.

Intermediaries in the rural Distribution channel • Primary – – – –

Wholesalers Manufacturer’s agents Brokers Retailers

• Secondary – Clearing & Forwarding Agents – Warehousing Firms – Financial Institutions

Flow of Goods in Distribution Channel

Flow of Goods in Distribution Channel

STRUCTURE OF RURAL SOCIETY

Main features of rural society VILLAGE IS A COMMUNITYThe village satisfies all their needs in the village. They have a sense of unity and a feeling of amiability towards each other. VILLAGE IS A INSTITUTIONThe development of villages is influenced considerably by the life of the village. In this way village is a primary institution.

RELIGIOSITYFaith in religion and universal power is found in the life of the villages. The major occupation is agriculture which involves dependence on nature. Farmers worship forces of nature. The life of the village is the joint family system. Family has a strict control and administrative powers over the individual. All the members of the family share the burden of the family occupation. In this way of working together the villagers maintain sense of cooperation among themselves. In the life of the villagers group feeling occupies an important place. They respect the judgment and obey the orders of their elders and the panchayats. Society, caste and panchayat have control over the individual.

UNIT - IV

Marketing Research ‘the systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services’ American Marketing Association

Rural Marketing Research Marketing research is the process of identifying variables and situations that are bound to affect the Product, Price, Place and Promotion strategies of an organization. The data obtained through Marketing Research helps the organization device a strategy for a particular function.

Market Research Process • • • • • • •

Defining a research problem Finalizing a research design Developing a research hypothesis Planning the research methodology Data Collection Data Analysis Conclusion & Recommendations

Major Techniques of Market Research Market Research Techniques Market research can provide critical information about the buying habits, needs, preferences and opinions of current and prospective customers. There are many ways to perform market research, but most businesses use one or more of five basic methods: 1. Surveys 2. Focus Groups 3. Personal Interviews 4. Observation 5. Field Trials

Major Techniques of Market Research 1. Surveys Using concise, straightforward questionnaires, you can analyze a sample group that represents your target market. The larger the sample, the more reliable the results. a. In-person surveys are one-on-one interviews. They allow you to present people with samples of products, packaging or advertising and gather immediate feedback. While In-person surveys can generate response rates of more than 90 percent they are also costly. b. Telephone surveys are less expensive than in-person surveys, but costlier than mail. However, due to consumer resistance to relentless telemarketing, getting people to participate in phone surveys is difficult. c. Mail surveys are a relatively inexpensive way to reach a broad audience. They're much cheaper than in-person and phone surveys; however they only generate response rates of 3 percent to 15 percent. Despite the low return, mail surveys are still a cost-effective choice for small businesses. d. Online surveys usually generate unpredictable response rates and unreliable data because you have no control over the pool of respondents. But an online survey is a simple, inexpensive way to collect anecdotal evidence and gather customer opinions and preferences.

Major Techniques of Market Research 2. Focus Groups In focus groups, a moderator or facilitator uses a discussion guideline to lead a discussion among a group of people. These sessions are usually conducted at neutral locations, using videotaping techniques or tape recorders to record the discussion session. A focus group usually lasts for one to two hours, and it takes at least three groups to get balanced results.

Major Techniques of Market Research 3. Personal Interviews Like focus groups, personal interviews include unstructured, open-ended questions. They usually last for about an hour and are typically recorded. These type of surveys provide more subjective information than surveys do. The results usually don't represent a large segment of the population; nevertheless provides valuable insights into customer attitudes and are excellent ways to uncover issues related to new products or service development.

Major Techniques of Market Research 4. Observation Individual responses to surveys and focus groups are sometimes at odds with people's actual behavior. By observing consumers in action by videotaping them in stores, at work or at home, you can observe their actual buying behavior. This gives you a more accurate picture of customers' usage habits and shopping patterns.

Major Techniques of Market Research 5. Field Trials Placing a new product in selected stores to test customer response under real-life selling conditions can help you with information regarding product modifications, price adjustments or package improvements. Building rapport with local store owners and Web sites can help Small business owners test their products.

Methods of Data Collection Primary Data Survey Method Personal Interview Questionnaire / Schedule Telephonic Survey Computerized Interview Observation Method

Methods of Data Collection Some examples of situations where data is collected through observations are: • Customers’ behavior in a shopping mart • Behavior of a salesperson in a departmental store • Students’ behavior during a presentation • Audience’s behavior during an election rally

Methods of Data Collection • Secondary Data Government Publications and Reports Non-Government Publications

Overview of Basic Methods to Collect Information Overview of Basic Methods to Collect Information The following table provides an overview of the basic methods to collect data.

Method

Overall Purpose

Advantages

Challenges

questionnaires, surveys, checklists

when need to quickly and/or easily get lots of information from people in a non threatening way

-can complete anonymously -inexpensive to administer -easy to compare and analyze -administer to many people -can get lots of data -many sample questionnaires already exist

-might not get careful feedback -wording can bias client's responses -are impersonal -in surveys, may need sampling expert - doesn't get full story

interviews

when want to fully understand someone's impressions or experiences, or learn more about their answers to questionnaires

-get full range and depth of information -develops relationship with client -can be flexible with client

-can take much time -can be hard to analyze and compare -can be costly -interviewer can bias client's responses

documentation review

when want impression of how program operates without interrupting the program; is from review of applications, finances, memos, minutes, etc.

-get comprehensive and historical information -doesn't interrupt program or client's routine in program -information already exists -few biases about information

-often takes much time -info may be incomplete -need to be quite clear about what looking for -not flexible means to get data; data restricted to what already exists

observation

to gather accurate information about how a program actually operates, particularly about processes

-view operations of a program as they are actually occurring -can adapt to events as they occur

-can be difficult to interpret seen behaviors -can be complex to categorize observations -can influence behaviors of program participants -can be expensive

focus groups

explore a topic in depth through group discussion, e.g., about reactions to an experience or suggestion, understanding common complaints, etc.; useful in evaluation and marketing

-quickly and reliably get common impressions -can be efficient way to get much range and depth of information in short time - can convey key information about programs

-can be hard to analyze responses -need good facilitator for safety and closure -difficult to schedule 6-8 people together

case studies

to fully understand or depict client's experiences in a program, and conduct comprehensive examination through cross comparison of cases

-fully depicts client's experience in program input, process and results -powerful means to portray program to outsiders

-usually quite time consuming to collect, organize and describe -represents depth of information, rather than breadth

Methods of Collection of Information The data on these prices are collected every week from a number of villages selected on a purposive basis during the specified harvest period of six to eight weeks after commencement of the harvest in respect of the commodities. Weekly prices are then arranged into district averages by taking their simple mean and the state average is worked out as a weighted average of the district production figures for the current year as weights. Generally, ten villages are selected from each tehsil (taluka). Deficiencies Wholesale price Source of reporting Specification of variety and quality Specification of time reporting Retail Prices Information re4garding arrivals and dispatches of stocks

Dissemination of Market Information In order to obtain better prices for growers’ produce, it is very essential that the marketing cooperatives have various information regarding availability of commodity, its quality and ruling rates demands. They should also know the trade opinion as to future trends and the probable effect as also seasonal and climatic influences on the prices. All these information enable the farmers, the marketing cooperatives an the traders to take proper decisions at the right moment, provided there is free play in the process of marketing. Out of the above mentioned information, the most important one is about prices. No doubt, it is difficult to get timely, accurate and meaningful information regarding prices because there are differences in quality and also in trade practices. However, if there are quality standards and price information are received according to these standards, the same becomes easy.

Agencies for Collection and Dissemination of Market Information • • • •

Private Agencies Newspapers Public Agencies Marketing Cooperatives – – – –

Market Report Market day report Monthly reports and seasonal reviews Annual Review

Advantages of Market Reports • They bring the market to the door of the trader and offer opportunities for safe business operations as far as possible. • They enable the traders to make a comparative study of several markets for one commodity and also of different commodities, at different periods and in different markets of the world. • They tend to stabilize prices in all markets by publishing rates and thus prevent profit making by arbitrary operations • They serve as an index to future movements of prices • They provide data for speculative enterprise by accurately gauging the demand and supply of the commodity • They render a true account of the nature and volume of business transacted • They facilitate the sale of commodities brought into market by service as a media of advertisement • They offer opportunities to the public in general to come in direct touch with the commercial world and to understand readily and easily the highly specialized operations of they rural market

Reading of The Market Report • • • • •

The type of the market report The nature of commodity reported The tone of the market The volume of business transacted The tendency of price and the critical opinion of the reporter

Type of Market Report The first thing about reading of a market report is the recognition and classification of its type. A type represents the class to which the report belongs, whether the report is the market report, weekly report or periodical review. “Tone” term refers to the state of the market in regard to the usual and natural course of business. It is used to convey the considered opinion of the writer about the market or to describe the essence of business conditions. Thus the tone of the market may be: Firm or quite Steady or nervous Strong or weak Cheerful or depressed Confident or hesitant

Interpretation of Market Reports Reading of market reports is one thing but to interpret the same is quite another. Interpretation of a report is done after properly analyzing the same and thereafter conclusions are arrived at.

Introduction to Rural financing Finance is essential to start and run any business, be it industrial or agro-based. Small and marginal farmers need finance for sustenance whereas big farmers and landlords need it for growth and development activities. Need for Finance: Rural India especially the agriculture sector needs credit facility for a variety of reasons as mentioned below: For hiring or buying land for farming For buying agricultural Inputs like seeds, fertilizers, tractors, gensets, etc. For performing marketing activities Setting up their own businesses like small parchoon shop, cycle repair, paan gumti, pheriwaala thela, etc. Supportinhg the families during the off season i.e. when nothing is being cultivated Meeting any contingency like drought, flood, epidemic, earthquake, etc.

Sources of Finance • Non-Institutional Credit:

This source incorporates private sources like money lenders, commission agents. Merchants, friends and relatives. Mutual trust and past pattern of refunds rule the game. Normally the interest burden is twice compared to that of banks in case of private credit facility. Generally small farmers use private credit.

• Institutional Credit:

There are cooperative societies, state cooperatives apex banks, commercial banks and nationalized banks. There will be paperwork and some kind of guarantee or mortgage is involved. Processing units, large size cultivation, single owner of land and progressive farmers find it easy to get credit from institutions. The interest rate is governed by rules of the Reserve Bank of India (RBI).

Requisites of Good Finance System • Interest Burden: In case of Institutions, the rate of interest is as per the RBI guidelines. The main problem is in private credit facilities. If burden is more, the farmer finds it difficult top repay. Even though rules are made to curb excess claim on interest, it has become difficult to implement it in practice. • Finance the needy: The finance facility should go to the needy. The institutions should verify the sincerity of purpose and only then clear the loan request. If the credit is used for some other cause, then the purpose of giving the loan is not served. • Timing of Loan: Loan should be given when it is needed. e.g. the loan for fertilizers should be given when the crop is growing and not after it has grown. Delay or early loan may end up by the use of funds for some other purposes. • Absence of Risk: The funding agency should be reasonably assured of repayment possibilities as per agreed terms. If there is delay in payments, it affects other applicants wanting credit facility. • Supervision of Credit: The funding agency should periodically see that the funds are used for which they are taken. The progress chasing keeps both sides on alert. Only those who show progress are capable of repaying.

NABARD NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts. It also has the mandate to support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas. In discharging its role as a facilitator for rural prosperity NABARD is entrusted with 1. Providing refinance to lending institutions in rural areas 2. Bringing about or promoting institutional development and 3. Evaluating, monitoring and inspecting the client banks

NABARD Besides this pivotal role, NABARD also: • Acts as a coordinator in the operations of rural credit institutions • Extends assistance to the government, the Reserve Bank of India and other organizations in matters relating to rural development • Offers training and research facilities for banks, cooperatives and organizations working in the field of rural development • Helps the state governments in reaching their targets of providing assistance to eligible institutions in agriculture and rural development Acts as regulator for cooperative banks and RRBs

MAJOR ACTIVITIES OF NABARD Major Activities • Preparing of Potential Linked Credit Plans for identification of exploitable potentials under agriculture and other activities available for development through bank credit. • Refinancing banks for extending loans for investment and production purpose in rural areas. • Providing loans to State Government/Non Government Organizations (NGOs)/Panchayati Raj Institutions (PRIs) for developing rural infrastructure. • Supporting credit innovations of Non Government Organizations (NGOs) and other non-formal agencies. • Extending formal banking services to the unreached rural poor by evolving a supplementary credit delivery strategy in a cost effective manner by promoting Self Help Groups (SHGs) • Promoting participatory watershed development for enhancing productivity and profitability of rain fed agriculture in a sustainable manner. • On-site inspection of cooperative banks and Regional Rural Banks (RRBs) and offsite surveillance over health of cooperatives and RRBs.

NABARD (National Bank for Agriculture and Rural Development) Introduction

• NABARD is an apex institution accredited with all matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas. • It is an apex refinancing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas • It takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc.

NABARD (National Bank for Agriculture and Rural Development)

•

It co-ordinates the rural financing activities of all the institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India and other national level institutions concerned with policy formulation. • It prepares, on annual basis, rural credit plans for all districts in the country; these plans form the base for annual credit plans of all rural financial institutions • It undertakes monitoring and evaluation of projects refinanced by it. • It promotes research in the fields of rural banking, agriculture and rural development

Functions of NABARD NABARD's credit functions cover planning, dispensation and monitoring of credit. This activity involves: • Framing policy and guidelines for rural financial institutions • Providing credit facilities to issuing organizations • Preparation of potential-linked credit plans annually for all districts for identification of credit potential • Monitoring the flow of ground level rural credit

Schemes and Patterns of NABARD • Development of infrastructure facilities like development of land, construction of worksheds, godowns etc. • Purchase of machinery, equipment, implements, tools etc. • Working capital requirements restricted to automatic refinance schemes

There are two types of schemes covered under automatic refinance schemes as under:  Composing loan up to Rs. 50000 which covers term loan and working capital  Integrated loan up to Rs. 7.50 Lakhs, term loan plus working capital

Schemes and Patterns of NABARD In addition there are a number of promotional schemes for which NABARD extends financial assistance in form of grant such as: Training cum production centres Research and Development programme Entrepreneurial Development programme Project preparations / formulations Exchange of collaborations and expertise

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