MARKETING OF AGRICULTURAL

INPUTS
• Though India is number 1 in the world in
terms of irrigated land area, what
worries the most is LOW PRODUCTIVITY.

• Indian agricultural input could become

uncompetitive in the long run if it fails to
improve yield and quality of inputs.
 HOW TO IMPROVE PRODUCTIVITY?
• Increase the level of MODERNIZATION of
inputs.
MECHANIZATION
• Do soil testing
• Get analysis done and then plan the crop
• Select the best fertilizers available in the market
• Try to use more organic inputs like compost
• Restructure the transportation problem
 SCIENTIFIC METHODS
• Increase the acidity by providing Zeolite which
has the ability to increase soil PH without side
effects
• Add fertilizer containing Microbes, a friendly
bacteria which absorbs N,P,K from air.
• Provide manure compost which serves as a
provider of food for bacteria and also for
plants.
Agricultural inputs
 TYPES OF INPUTS
Agriculture input industry can be classified into
1. Consumables
(That can be consumed: consumable energy.
That may be depleted or worn out by use:
consumable paper products.
A consumable good or service: supplies of food,
fuel, spare parts, and other consumables)
2. Durables
(goods, such as most producer goods and some
consumer goods, that require infrequent
replacement )
 CONSUMABLE INPUTS
• Seeds.(high yield varieties)
• Fertilizers.(manures)
• Agrochemicals.(to protect plants from
diseases, pests)
• Oil and lubricants.
• Cattle feed.
• Veterinary medicines.
• Packing materials(gunnies, ,ropes,twine)
 DURABLE INPUTS
• Tractors
• Agricultural machineries (thrasher, harvester )
• Agricultural implements and tools (cultivators,
levelers, irrigation, pump sets, motors, sheds,
bullock carts, jeeps etc)
 MARKETING OF FERTILIZERS
• Fertilizer is the most important among all the
inputs purchased by the farmer.
 What made the marketing job of
fertilizers important?
• Application of fertilizers transformed the
agriculture sector from being dependent on
food grains imports to a stage of self
sufficiency.
• Availability of government subsidy
• Lack sufficient use of fertilizers
• Low production and productivity
• Transformation from subsistence farming to
enterprise farming
 FERTILIZER INDUSTRY IN INDIA
• Single Super Phosphate (SSP) manufacturing
unit was the first chemical fertilizer industry in
Ranipet near Chennai with a capacity of
6000MT a year.
• India’s Green Revolution in 1960s gave a
positive boost to the sector
• Presently India is the 3rd largest fertilizer
producer in the world.
 -Contd-
• There are presently 57 large fertilizer plants in
the country producing urea, DAP, complex
fertilizer, ammonium sulphate and calcium
ammonium nitrate.
 CLASSIFICATIONS OF FERTILIZER
INDUSTRY
• The grade of fertilizer is expressed in terms of
nutrients-N,P,K for Nitrogen, Phosphate and
Potassium fertilizers respectively
• Consumption of these are steadily growing
and they continue to grow creating lots of
opportunities for the marketers
Classification of Fertilizers in India
Fertilizers

Nitrogenous
Phosphatic Potassic Complex

Ammonium
Ammonium Single Super Muriate of
Phospate
Sulphate Phosphate Potash (MOP)
sulphate

Diammonium
Ammonium Sulphate of
Phosphate
Chloride Potash(SOP)
(DAP)

Calcium
Ammonium Nitrophosphate
Nitrate

Ammonium
Urea Nitrate
Phosphate

Urea
Ammonium
Phosphate

NPK fertilizers
 MARKETING FOR FERTILIZER INDUSTRY

• Fertilizer sector constitutes the backbone of

Indian industry.
• Government has played a very active role in
the evolution, marketing and development of
fertilizer industry in India.
• Fertilizer is one of the most capital intensive
industries, its marketing ecosystem is most
complex in Indian context
 GOVERNMENT REGULATIONS
• UREA is one of the highly regulated industries
in India
• Prices, subsidies, distribution restrictions,
imports, choice of technology , feeds stock are
controlled and regulated by the government
• Phosphatic and potassic fertilizers were
decontrolled in august 1992
• Consumption of urea increased due to
government subsidy
• Government is selling urea at a subsidized
price , if there were no subsidy the
consumption pattern of chemical fertilizer
would have been still very slow
• Ministry of commercial and fertilizers ,DOF
announced the nutrient based subsidy for
complex fertilizers for the year 2012
 DEVELOPMENTS IN INDIA
• Developments in fertilizer consumption in
India
 Share of Primary Nutrients (N,P and K ) in Total Consumption
of Chemical Fertilizers

120

100
10.1 11.4 10.2 8.5 11.5
24.1 23.6
21.4 20.6 25.6
80

K
68.6 67.9 67.9
60 65.7
%

62.9 P
N
40

20

0
1960s 1970s 1980s 1990s 2000s

19 10/28/2018
Source :www.Indiastat.com and Fertiliser Association of India
 Growth Rate in Chemical Fertilizer Consumption and Foodgrains
Production
Growth rate in fertilizer Growth rate in
consumption (%) foodgrains(%)
Period
Total Per ha. Production Yield
Pre-green revolution period
(1950-51 to 1966-67) 19.41 18.11 3.56 3.45

Post-green revolution period

8.75 8.49 2.65 2.53

Phase I (1967-68 – 1980-81)

9.9 9.29 2.27 1.87

Phase II (1981-82– 1991-92)

7.39 6.61 2.77 3.13

Post-reforms Period (1991-92

to 2009-10) 3.98 3.69 1.33 1.38
8th Five Year Plan 4.51 5.63 1.26 1.1
9th Five Year Plan 1.35 0.43 - 2.87 - 0.98
10th Five Year Plan 7.57 7.4 2.52 2.05

Rate of consumption of fertiliser is directly proportional to growth rate in production.

21
Source: Fertiliser Association of India (2010) 10/28/2018
 VARIATIONS IN
CONSUMPTION
• Variation across states.
• Variation across districts.
• Variation across product categories.
 VARIATIONS ACROSS STATES
• States like Punjab, Haryana, AP, TN shows
highest fertilizer consumption pattern
• States like Rajasthan, Assam, Orissa shows
lowest fertilizer consumption pattern
• The consumption patterns of fertilizer has
direct relevance to output pattern of crops.
• States consuming more nutrients are
producing more grain
 Million Tonnes Production and Consumption of N, P & K in India
18

16

14

12

N Production
10
N Consumption
8 P Production
P Consumption
6
K Consumption

0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Year
24 10/28/2018
Source: www.indiastat.com
 Per Hectare Chemical Fertilizer Consumption in States (kg/ha):
2009-10 and 2010-11
300

250

200
k
g
150
/
2009-10
h
a 100 2010-11

50

25 10/28/2018
Source: www.indiastat.com
 Per Hactere Consumption of Chemical Fertilizers in
India
Kg/ha

160
140 144.14
135.76
120 126.22
118.56
100 105.5 110.3
91.13 96.59
80 84.49 88.19
60
40
20
0

26 10/28/2018
Source: www.indiastat.com
 Crops wise consumption of Chemical Fertilizer in India
Crops wise consumption of Chemical Fertilizer in India

Vegetables Fruits
4% 2%
Cotton Others
Rice
3% 5%
Wheat
Sugarcane Food Grains
5%
Rice Pulses
37%
Oil Seeds
Oil Seeds Sugarcane
9%
Cotton
Vegetables
Pulses other Fruits
3% Food Grains
8% Others

Wheat
61%
24%

28 October 28, 2018

Source: Food and Agriculture Organization, 2011
 Million Tonnes
Consumption of Major Chemical Fertilizer Products in India

30

25

20

15 Urea
DAP
10 MOP

29 10/28/2018
Source: www.indiastat.com
FERTILIZER MANUFACTURES IN INDIA
• PUBLIC SECTOR
• Brahmaputra Valley Fertilizer Corporation
Limited
• Madras Fertilizers Limited
• The Fertilizer Corporation of India Limited (FCIL)
• Chambal fertilizers
• FACT( Fertilizers and Chemicals Travancore)
• HCL(Hindustan Copper Limited)
• SAIL
• Hindustan fertilizer corporation Ltd
• CO-OPERATIVE SECTOR
• IFFCO (Indian Farmers Fertilizer Cooperative
limited)
• PRIVATE SECTOR
• Mangalore chemicals and fertilizers (MCF)
• Nagarjuna fertilizers
• Godavari fertilizers and chemicals etc
Example of products of MCF
 MCF
• Products of MCF- Mangala Urea
• Mangala DAP
• Ammonium Bi Carbonate
• Mangala 20:20:00:13
• Sulphuric Acid
• ChemCF NL
• ChemCF NP
 MCF
• Other Products:
• Mangala MOP
Specialty Fertilizers
• Fertigation Products Soil Conditioners
• Organic Products
MCF PRODUCTS
 CHALLENGES FOR MARKETING OF
FERTILIZER INDUSTRY
• WTO guidelines
• Lack of irrigation
• Lack of availability of easy finance
• Limited availability of Natural gas
• Price hike of natural gas
• Unavailability of Raw materials
• Volatile international prices
 TRENDS
• Water soluble fertilizers
• Investments from technology providers and
players
• Increasing joint ventures. Indian fertilizer
companies joined hands with Jordan, Senegal,
Oman, Morocco, Egypt etc.
 COMPETETION
• Market is highly competitive with major
players batting for increased market share
• Players are expanding production capacities
and reviving their plants
 Summary and Conclusion
• India’s fertilizer consumption is consistently
increasing, while the total area under foodgrains is
decreasing.
• Intensity of per hectare fertilizer consumption of
fertilizer is more in northern(91.5 kg/ha avg.) and
southern (85.3 kg/ha avg.) region and lower in
eastern (44.7 kg/ha avg.)and western(40.7 kg/ha
avg.) region.
• More than half of the total consumption of fertilizer
is consumed by only two crops i.e. rice and wheat.
• By 2020, fertilizer demand in country is projected to
increase to about 41.6 million tonnes.
4
10/28/2018
0
 Summary and Conclusion
• Indian imports, which were about 2 million tonnes
in early part of 2000, increased to 11.69 million
tonnes of fertilizer in 2010-11.
• The intensity of fertilizer use varied greatly from
about 55 kg per hectare in Rajasthan to as high as
254 kg per hectare in Andhra Pradesh.
• In 2009-10, 112 out of 538 district (20.8%)
consumed more than 200 kg fertilizer per hectare.
• Overall, availability of raw material, capital
resources and price incentives will play critical role
in meeting the fertilizer requirement in the country.
4
10/28/2018
1
 MARKETING STRATEGIES OF
FERTILIZER INDUSTRY

Promoting balanced and efficient use of fertilizers

Demonstration

Below line promotion activities (exhibitions, fair,competitions etc)

Training programs for dealers

Provision of value added services

Use of information technology networks (kisan call centres)

 4 P’s of Fertilizers
Product
• Fertilizers fall in three categories based upon nutrients-
Nitrogenous(N), Phosphates(P), Potassic (K) which are being
supplied to crops.

1. Straight fertilizers – supply single nutrient

E.g. – ammonium sulphate, urea, calcium ammonium, nitrate,
single super phosphate.
2. Compound fertilizers – which contain more than one nutrient
E.g. – Di-Ammonium Phosphate(DAP) complex fertilizer contains
nitrogen and phosphate.
3. NPK fertilizers which has all three nutrients.
4. Fertilizers as per Fertilizer Control Order (FCO) marketed only by
generic name and not by trade or brand name.
5. Each bag should show proportions of 3 nutrients NPK.
 Price
• . Till 1991 the Govt. of India fixed the prices of different
grades of fertilizers
• From June 1994 except Urea fertilizer all other were
decontrolled.
• Decontrol was to reduce burden of subsidies on the Govt. It
provided subsidies on adhoc.
• Rate of subsidies varies across countries and types of
fertilizers.
• Fertilizer subsidy is to provide fertilizers to the farmers at
lower prices than its economic prices.
 Place
• 2,75,000 outlets selling fertilizers in the country.
• 70% private sector & 30% cooperatives societies and public
sector like State Agro Industries Corporations.
• Manufacturers store inventory in regional godowns maintained
by them and then released to wholesalers and then to retailers
during season.
• Manufacturers like Indian Farmers Fertilizer Cooperative Ltd.
(IFFCO) , Gujarat State Fertilizer & Chemicals Ltd. (GSFC),
Fertilizers & Chemicals Travancore Ltd. (FACT) maintain
their own outlets.
 Promotion
• Manufacturers use their own promotional measures and create
brand image.
• Inter-personal and group contacts
• Fertilizer festivals and Kissan Melas
• TV
• Newspapers and Journals
• Special promotional measures
• Village Adoption Programme
• Wall Paintings and Hoardings
 Policies for Marketing of Fertilizers
Retention •Introduced in 1997 , to keep the prices low.
Pricing scheme •Cost plus subsidy paid to urea manufacturers to compensate.

Distribution • Earlier only determined by Government but now there are

Policy many private selling points also.
• There are 2,72,000 fertilizers sales point presently.

Import policy • Import of fertilizer i.e UREA which is used at very large
scale is on restricted list.
• Prices are fixed in such a way that there is no difference in
price of fertilizers either imported or bought from domestic
market
AGROCHEMICALS
 INDIAN AGROCHEMICAL INDUSTRY
• Constitutes those chemical compounds that prevent
crops from attack of pests , weeds , fungus , insects
and other related diseases.
•Classification is on the basis of the purpose for which
it is used i.e insecticides , fungicides etc
•India is second largest producer of agrochemicals in
world after Japan.
 PRODUCT CATEGERIES
• INSECTICIDES
• HERBICIDES
• FUNGICIDES
• PESTICIDES
Pesticides Use Patterns
• Insecticides are the largest product sector
amongst agrochemicals in India contributing
75% of the total market (Also MNCs Money
making area)
• Herbicides account for the 12% of the total
Indian agrochemical market
• Fungicides account for 10% of the total
agrochemical market.
 MARKETING ENVIRONMENT FOR
AGROCHEMICALS IN INDIA
The marketing environment for agrochemicals
depends on following factors
1. Cropping pattern
2. Government policies and regulations
3. Factors affecting market growth
4. Factors creating challenges and threat for the
industry
CROPPING PATTERNS

GOVERNMENT POLICIES AND REGULATIONS

• Farmers dependent monsoons , limits possibilities of high

investment on agrochemicals.

• Agrochemical market is different for different crops and

different states .

• Eg: for cotton in south 12-15 sprays are required whereas in

north only 6-10.
• Economic liberalization had major impact.

• Reduction in import tariffs.

• De licensing in pesticide industry.

• Opportunity for exports

 FACTORS EFFECTING AGROCHEMICAL'S
MARKET GROWTH

 Farmers incomes are rising

Aggressive promotion

Backward integration

Usage of agrochemicals is increasing

New and effective products are reaching Indian markets

Irrigated area is rising because of corporate irrigation

 CHALLENGES FACED BY INDIAN
AGROCHEMICAL INDUSTRY
Low profit margins
Crop imbalance ( optimum consumption is difficult to
realize , crops need less or more chemicals)

Regional imbalance
Low selling price of agricultural products
Natural calamities
Environmental pressures (critics)
MARKETING STRATEGIES FOR AGROCHEMICALS

PRODUCT STRATEGY

The formulators are free to manufacture and market any

combination of insecticides or pesticides from the basic
chemicals

PLACE STRATEGY
Aggressive distribution strategy by dealing directly
with retailer.
The competition guides the prices
Effectiveness of certain brands gets the advantage
of premium pricing
PRICE STRATEGY

High MRP and low selling price

Good working capital management (limited credit)

PROMOTION STRATEGY

Promotional efforts to change attitude (exhibitions , melas)

Farmer education
EXPORT STRATEGY
In order to safeguard industry from
unpredictable losses from domestic market
Indian firms should consider whole world as its
market.(already considering too)
MARKETING OF FEEDS FOR LIVESTOCK
• Sale of feeds for consumption of cows,
bullocks, buffalos, and feeds for poultry, fish
etc is a fast growing business.
• Dairying is a very big business activity and for
this purpose food and care of cows and
buffaloes is essential.
• For poultry, fish and shrimps, some units
make and sell special packed feed
• In coastal areas, locally cultivated fish,
shrimps, are used as feeds.
SEEDS MARKETING
 SEEDS MARKETING
• Seed is the most essential input and hence not much of marketing
effort is required
• Marketers job is only when new varieties come
• Another explanation require is quantity required per acre and the
quantum of crops expected from a particular variety.
• Earlier seeds marketing was done only by government.
• The Indian seed industry is estimated to touch Rs. 15,000 crore in
the year 2015.
• The country imports more than half its required edible oils and
pulses, as domestic production is insufficient to meet the rising
demand. The country’s import bill on edible oils touched $ 9.65
billion, while that of pulses stood at $1.83 billion in 2011-12.
 AGRICULTURAL INPUTS
INDIAN SEEDS MARKET(2009-10)

Crop seed Value ( in Rs crores)

Cereals Rs 2000
Vegetables Rs 1300
Cotton Rs 1600
Sunflower Rs 300
Others Rs 300
Total Rs 5500 crores
 AGRICULTURAL INPUTS
SEEDS- MAJOR COMPANIES
• Public sector: National Seeds Corporation, State and
Central farms
• Indian Companies: Mahyco, Indo-American Hybrid
Seeds, Nath Seeds, Rasi Seeds, Bijo Sheetal, Nav
bharat, Nuziveedu
• Multinationals: Advanta, Bayer, Dow, Seminis,
Syngenta
 AGRICULTURAL INPUTS
SEEDS
• Types of seeds
• Traditional, high yielding and hybrid
• Public varieties/hybrids and Proprietary crop seeds
• Farm saved seeds (hybrid) cannot be used due to
loss of hybrid vigour and the farmer has to buy fresh
seeds from the market
 AGRICULTURAL INPUTS

DEMAND FOR SEEDS DEPENDS UPON

• Agro climatic conditions
• Price of the crop/competing crop
• Past performance of the variety
• Even if the demand is high, supplies cannot be arranged like
consumer goods
• Low demand leads to carry over of stocks and deterioration
of the quality of the seed material
 AGRICULTURAL INPUTS
SEED INDUSTRIES: OPPORTUNITES
• Fasted growing industry among the agricultural inputs
• Area under wheat about 27 million hectares and 90% of
wheat planted is farm saved seeds
• Area under paddy about 45 million hectares and only 2% of
the paddy seeds purchased are hybrids
• Area under cotton about 8.5 million hectares and over 70% of
the cotton sown is hybrid cotton
 AGRICULTURAL INPUTS
SEEDS
• Tremendous potential in crops like vegetables, jowar, maize,
sunflower.
• Need for increasing agricultural production to feed the growing
population and good quality seeds are essential to increase the
yields of crops.
• Limited availability of agricultural land.
• Subsidies by the government to use high-yielding varieties to
increase yields.
• Better quality seeds with vitality to raise crop yields from limited
area is the need of the hour to ensure the country's food security.
• PPP initiative, development and adoption of new technologies
would ensure the sector's growth.
 SEEDS MANUFACTURERS FROM
PRIVATE SECTORS.
ITC.
HUL.
Thapar Group.
Pioneer Group.
 4 P’s of Seeds
Product
New varieties are developed by
 ICAR
 SAU
 Private seed companies
For promising varieties All India Co-ordinated trials are conducted
Sent to Variety Release Sub-Committee of the Central Seed Committee.
Recommendation to Agricultural Ministry.
Consortium of private companies with International Crops Research
Institute for the Semi-Arid-Tropics ICRISAT
3 Generation system – breeder, foundation and certified seeds.
Three Types –
1) Seeds from the produce
2) Hybrid seeds developed by research agencies
3) Fake seeds
 Price

• Price fixation by Government- National

Seed Corporation
• Price fixation by Private traders-
sometimes when demand is more charge
exorbitant.
• Subsidies whenever necessary.
 Place
• Company Agro-Service Centre
• Distributors Dealers Retailers
• Co-operative Marketing Federation Affiliate
Primary Societies Member Farmers
• Agro Industrial Corporation Block-level
Offices
• Research Institutes Agricultural Universities
 AGRICULTURAL INPUTS
SEEDS-DISTRIBUTION
• Producer-Distributor-Retailer
• Distributor: 5-7.5%
• Retailer: 10-15%
• Attractive schemes
• Examples: Advance booking and payment, Quantity
discount, Timely payment, cash discount in lieu of
credit etc.
 AGRICULTURAL INPUTS
SEEDS-DISTRIBUTION
• Demand is highly seasonal
• To be made available as and when required by the
farmer even at short notice
• Demand lasts for about a month
• Quick decisions in moving the stocks from dry area to
wet area
 AGRICULTURAL INPUTS
ROLE OF DISTRIBUTOR
• Order booking from retailers
• Implementation of product schemes
• Participation in promotion activities
• Joint field visit with sales executive
• Feed back on market situation
• Complaint handling?
 Promotion
• Create Awareness- Radio, cinema slides, wall
paintings, hoardings, newspaper, advertisements,
krishi melas and exhibitions.

• Media to educate- Krishi Darshan, demonstration

farms and sampling.
 AGRICULTURAL INPUTS

TRACTORS
• Segmented on the basis of power of tractor engine
i.e. Horse power
• Market share
• Less than 30 HP (25%)
• 31-40 HP (55%)
• 41-50 HP (15%)
• More than 50 HP (5%)
 AGRICULTURAL INPUTS

Estimated sale 3 lakhs tractors (2008-09)

UP 60,000
Punjab 31,000
Haryana 22,000
MP 33,000
Rajasthan 24,000
Gujarat 22,000
Maharashtra 38,000
AP 39,000
Tamilnadu 7500
Bihar 18,000
 AGRICULTURAL INPUTS
TRACTORS
• Distribution
• Dealers in agricultural centres/ district /taluk
headquarters, Company Sales Force.
• Looks after sale and service of tractors
• Commission between Rs 30,000 to Rs 60,000
depending upon model and accessories sold
 AGRICULTURAL INPUTS
TRACTORS: RURAL PROMOTION
• Regional news papers, TV, Agricultural magazines,
Wall paintings
• Farm to farm visit
• Demonstrations
• Melas
• Opinion leaders(Bankers)
 AGRICULTURAL INPUTS
TRACTORS: OPPORTUNITIES
• Labor wages/ Cost of maintenance of animals are
increasing.
• Shortage of labor during peak season.
• Custom hiring of tractors.
• Contract farming.
• Availability of bank loans.
 AGRICULTURAL INPUTS

• Increasing population

• Need for increasing food production

• Judicious use of agricultural inputs- a must for

increasing agricultural production
Retail outlet in a fair
Pushkar Fair (Camel sale) of Rajasthan
Retail outlet in a rural fair