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Problems Related To The Elements Of Marketing

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1. PACKING : Soon after the completion of drying and manual grading process, tendered nuts are ready for marketing. It will be packed in gunny and plastic bags and top end mouth of the bags are stitched or tied with rope. No special packing and branding is used when the crop is ready for sale in the primary market. 

2. STORING : As regards processed areca nut is concerned, after packing process storage becomes an inevitable marketing function. As they need to be stored in the farmers house itself or in the society go-downs. Both variety of nuts are stored in a single or double plastic or gunny bags and kept in dry rooms in anticipation of high rates. The nuts so stored can be protected from insects by sulfur fumigation or by using aluminum phosphate tablets. T.S.S, T.A.P.C.M.S. like societies are providing storage facility to the farmers. Whenever upward trend prevails in the market it acts as a boon. In case rates come down even after storing, it becomes bane to the farmers.

3. ASSEMBLING OF NUTS : The long chain of intermediaries and ignorance of the growers are the main causes for this state of affairs. The growers in the study area did not know commercial grading. Moreover, they feel that it is not necessary to grade commercially when quantity sold is in small volume. Therefore, the producers sell the areca nut by doing traditional grading in the primary market. Now a days, it is practiced that the producer can sell produces in immature form and sundried ripe nuts state, boiled and dried nuts, (with or without grading) and outright sale of crops (crop contracting). Therefore, the further processing is undertaken by the assemblers.



     In the 1990’s new system called "crop contracting" emerged in the market  As a consequence, ‘Crop Contractor’ or ‘Palaguttigedar’ or "kheni" have entered the areca market in a unique way. Before  harvesting they meet the farmers concerned and negotiate the selling rate of crop. If the deal is finalized, they take the crop after effecting the payment as per the deal and undertake processing work. Then they sell in the open market where it fetches a good rate. In some cases big landlords of the village go in for such business and accept crop contract from small farmers and again they sell it through Co-operative societies. At the outset it seems like smooth sailing for small farmers and those who cannot undertake harvesting themselves because of lack of time and pre-occupation in the other professions. Another reason for entering into crop contract agreement is that severe problems of seasonal and casual labors. Some farmers want to get rid of tensions from market fluctuations and other problems of processing and marketing. However, it is not so simple as imagined. On the One side, it puts the farmer lazy and cause loss to him. On the other side major effect of crop contract is a stumbling blow to co-operative movement in the District. Because, majority of the ‘Crop Contractors’ sell the areca nut directly to the ultimate consumers or final traders without bill. If second sale is encouraged, it ultimately result in loss to the Government in the form of sales tax, loss to the A.P.M.C. These trends were developed after 1990 due to several reasons. Gradually farmers started selling by embracing this new channel of marketing even though they know losses and demerits of the system.  


     Another major problem of areca market in the District is practice of second sales. Here private traders enter market through back doors. Unlike crop contractors, traders who have involved in second sales are really a tentative puff for the development of market. A portion of damage caused by traders through second sale is more than that of crop contractors. Second sale has adversely affected co-operative movement and those agencies do authenticate business are  not following such norms of market. 

Why second sale takes place? Because traders attract the farmers by offering a little more amount than the prevailing market price in the regulated market. In the process by violating the norms and practices of marketing, traders save Rs. 600-800 per quintal of areca on an average and just they sacrifice Rs.200/- to Rs.250/-. Enchantment of corrupt practices of traders, greediness of farmers, support extended by the transport operators and helpless situation of APMCS are practically responsible for this phenomena. Practice of second sale is witnessed heavily in Honnavar, Bhatkal and Kumta markets. Therefore, in coastal region people are worried, who really wants to enjoy the benefits of co-operation and stability in areca price. Comparatively less second sale is seen Malnad region. However, credit linked marketing facility, outright purchase, storage, finance facilities followed by the co-operative societies, transport facilities provided from the village societies are contributing factors to make co-operation a success in these area. For the progress and prospects of areca market is concerned, immediate attention is to be given to curb the second sale and crop contracting practice.


    Areca is the main ingredient for gutkha and pan masala. Areca marketing has direct connection with gutkha production. Since gutkha and pan masala has occupied the place of song and singer in tobacco market, issues relating to gutkha ban at times create incredible problems on the growers front. National level lobby is prevailing to curb the consumption of gutkha by banning it. Since it cause severe Socio-economic problem of the country, some state government has shown little interest in banning the gutkha. Nevertheless, areca farmers agree that gutkha consumption is bad for health, they have concern over the social problems. But argument is that areca consumption is not bad for health, since people are consuming it from the vedic period. It has nutritional value and digestive feature when accustomed to a particular consumption pattern. Gutkha is considered causing health problems as areca is associated with tobacco and other chemicals. Therefore, issue of gutkha has become very pertinent, sensitive question to the farmers of U.K. District. It is a real challenge to the Government, a question of survival of areca dependants. In order to save farmers from the hanging sword of gutkha banning, there is a need of new thinking in a unique way to solve the problems of areca marketing and find out the new avenues, possibilities and potentialities of areca marketing of U.K. District in particular.


Red variety areca nut of Malnad region has good demand in local markets of Karnataka, Bombay, Nagpur and Lucknow. White variety areca nut of the District has good demand in Maharashtra and Gujarat markets. Farmers of the District do not have fundamental knowledge of secondary marketing. Hence, they are evidencing the new challenges in terms of contract farming, practice of second sales and hanging sword of gutkha banning.

Growers deposit their produce, the different channels (CLS) are as follows :

   1. Producer - Taluk Society - Trader
   2. Producer - Village Society - Trader
   3. Producer - Commission Agent - Trader
   4. Producer - Crop Contractor - Trader
   5. Producer - Crop Contractor Commission Agent - Trader
   6. Producer - Crop Contractor Taluk Society - Trader
   7. Producer - Retail Trader - Terminal Market
   8. Producer - Whole Sale Trader - Terminal Market

Majority of the farmers did not keep trading relationship with the shopkeepers. Their contact was limited. They are not ready to take risk and wanted to be on the safer side by selling through co-operative societies. Shopkeepers are panvalas or distributors and their requirement is less. Moreover, among the farmers community very few of them were engaged in selling areca to the ultimate consumers. However, lack of entrepreneurship, less contact, interest, negative attitude, intension of secured payment, requirement of huge amount of capital for trading and less profit are the factors responsible for this trend.


Unlike cultivation, harvesting, peeling and processing functions, areca marketing requires different types of labors like skilled, semi-skilled, unskilled, female, male, seasonal and regular. Therefore, problems of availability and non availability of such labors as and when required will cause certain problems. Timely harvesting calls for areca tree climber to do his job in time. The delayed harvest results in percentage of red and white variety to undergo a change. The harvested areca need to be peeled, boiled and put to sun burning as early to avoid expected losses. Labor for these works are not available in sufficient number in time and the coolie demanded by them is equal to that of a software employee now a days. Machines to perform these works are under progress but not developed to the satisfactory extent. We can quote several reasons for non availability of labor. Tree climbing is risky job, migration of youth towards urban, lack of interest and capability among farmers to adopt new technique (lack of purchasing power ), low rate of agriculture commodities in the market etc.