MARKETING OF COTTON SEEDS – A MARKET STRATEGY ANALYSIS

Thesis submitted to the University of Agricultural Sciences, Dharwad in partial fulfillment of the requirement for the Degree of

MASTER OF BUSINESS ADMINISTRATION In AGRIBUSINESS

By TIMMANNA R. BEAKATTI

DEPARTMENT OF AGRICULTURAL MARKETING, CO-OPERATIONS AND AGRIBUSINESS MANAGEMENT COLLEFE OF AGRICULTURE, DHARWAD UNIVERSITY OF ARGICULTURAL SCIENCES, DHARWAD – 580 005

JULY, 2007

ADVISORY COMMITTEE DHARWAD JULY, 2007 (R. A. YELEDHALLI) MAJOR ADVISOR

Approved by: Chairman: Members : _______________________ (R. A. YELEDHALLI) 1.______________________ (BASAVARAJ BANAKAR) 2.______________________ (B. K. NAIK) 3.______________________ (K. A. JAHAGIRDAR) 4.______________________ (Y. N. HAWALDAR)

CONTENTS
Sl. No.
CERTIFICATE ACKNOWLEDGEMENT LIST OF TABLES LIST OF FIGURES LIST OF APPENDICES 1. 2. INTRODUCTION REVIEW OF LITERATURE 2.1 2.2 2.3 2.4 2.5 3. The market structure and conduct Farmers buying behaviour Dealers margin Gap between the demand and supply of cotton seeds Problems in dealers and farmers

Chapter Particulars

METHODOLOGY 3.1 3.2 3.3 3.4 Description of the study area Nature and sources of data Sampling design Analytical techniques employed

4.

RESULTS 4.1 4.2 4.3 4.4 4.5 Market structure and conduct Farmers buying behaviour Dealers margin Projected gaps in demand and supply Problems in dealers and farmers

5.

DISCUSSION 5.1 5.2 5.3 5.4 5.5 Market structure and conduct Farmers buying behaviour Dealers margin Projected gaps in demand and supply Problems in dealers and farmers

6.

SUMMARY AND POLICY IMPLICATIONS REFERENCES

LIST OF TABLES
Table No.
3.1 3.2 3.3 4.1 4.2 4.3

Title
Area (ha) under important crops in the study area Details of the sample farmers for the study Licensed dealers in Dharwad, Gadag and Haveri districts Extent of inequality of trade in cotton seeds marketing Factors influencing brand loyalty for Bt and non-Bt cotton seeds Purchasing beaviour of different brands of Bt cotton seed by the farmers Purchasing beaviour of different brands of non-Bt cotton seed by the farmers Factors considered by the farmers for the source of supply in Dharwad district Factors considered by the farmers for the source of supply in Gadag district Factors considered by the farmers for the source of supply in Haveri district Preferences of the agencies for the Sources of supply of cotton seeds Brand-wise trader margins for Bt cotton seeds Brand-wise trader margins for non-Bt cotton seeds Projected gap between demand and supply of cotton seeds in Karnataka Problems faced by farmers in purchasing of cotton seeds Problems faced by dealers in the sale of cotton seeds

4.4

4.5

4.6

4.7

4.8

4.9 4.10 4.11

4.12 4.13

LIST OF FIGURES
Figure No.
1. 2.

Title
Map of Karnataka state showing selected districts for the study Extent of inequality of trade in cotton seeds marketing

APPENDIX
Appendix No.
1. Interview schedule

Title

1. INTRODUCTION
In India, increasing agricultural production in future depends on the increase in productivity, as the sustainable limit in the case of acreage expansion has crossed. In the near future, the area under plough is likely to decrease with increasing urbanization, industrialization and expansion of urban infrastructural facilities. Now the solution to meet the increasing food grain demand is to produce more from limited land resources by the efficient use of improved agricultural technologies. The process of modernizing Indian agriculture primarily involves the intensive use of non-conventional inputs such as quality seeds, chemical fertilizers, pesticides, weedicides, irrigation, farm machinery and a network of research and extension infrastructure. The quality seed is a trigger point which sets in motion the process of technological change. The returns to investment depend significantly on the quality of crops. Impact of quality seeds in enhancing the yield potential is highly felt now-adays. Superior planting material and high quality seed is the single most important factor enabling a country to make its agriculture more productive and cost competitive especially in the scenario of world agricultural trade under the WTO regime. In the development of agriculture, seed has been important since crops were first domesticated. In the traditional agriculture, the cultivators use to retain part of the produce for seed purposes. However, with the introduction of new technology in Indian agriculture which was based on the use of high yielding varieties and hybrids of crop plants responsive to high levels of chemicals of fertilizers and irrigation. With the development of plant breeding in the early twentieth century, improved crop varieties were evolved and their seed production was taken up in the organized sector. Seed is a very vital input and dynamic instrument for increasing agricultural production. It has been one of the miraculous inputs responsible for green revolution in India and elsewhere. The green revolution has brought prosperity, stability and confidence not only in agriculture, but also in the economic well being of the country. This is also an established fact that amongst different critical inputs used in the process of agricultural production, quality seeds hold the key position as it alone contributes nearly 15-20 per cent more to the agricultural production. Farmers in India know the value of good seed from times immemorial and have contributed for improvement of seeds through selection and cultivation. Seed is a basic input and though it forms only a small part of the investment compared to investment on fertilizers, pesticides and other inputs. In fact, seed is the real vehicle of production and other inputs like water and fertilizers can be regarded as fuel. Quality seed production is a specialized activity and a portion of crop produce retained by the farmer as seed cannot substitute for quality seed since such seed is devoid of genetic vigour and may suffer from lack of desired qualities. Seed industry is heterogeneous in many dimensions. The product segment corresponds to all the major field crops and vegetables. With respect to product type, a major distinction is between hybrids and open-pollinated varieties. As a result, beyond the initial purchase, farmers can multiply their own seed. This is not a viable strategy with hybrids because they suffer noticeable declines in yields in subsequent generations. As a result, hybrid seed need to be repeatedly purchased. Hybrids dominate in coarse cereals consisting of sorghum, pearl millet, maize, cotton and oilseeds. In terms of organization, the seed industry consists of a large public sector and a growing private sector. The public sector consists of the National Seeds Corporation, the State Farm Corporation of India and 13 State Seeds Corporations. These corporations multiply and market varieties by the public institutes financed by the Indian Council of Agricultural Research (ICAR) and the State Agricultural universities.

There are no firm estimates of the number of private seed firm. Estimates vary from 200 to 500. Private seeds firms are heterogeneous with respect to size, research capacity and product segments. Plant breeding research is found in the larger firms. Unlike the public sector, where research is separate from seed production and marketing, these functions are integrated in the private firms. The other striking difference is in product types. The private sector focuses largely on hybrid seed. The private sector is a major player in the hybrid seed markets for vegetables, sorghum, oilseeds (e.g., sunflower), maize, cotton and pearl millet. In terms of ownership, private firms are closely held and not listed in the stock exchanges although some of the large firms have sold equity to foreign seed companies. Foreign firms maintain a presence through equity stakes in Indian firms, technical alliances or through wholly owned subsidiaries. Seed firms, whether in the private or public sector, outsource the production of seeds through contract growers. These growers are supplied with the foundation seed that is used to produce commercial seed. The seed industry is one of the earliest examples of contract farming in India. The value of the global seed market is estimated to be close to one billion U.S. dollars (www.worldseed2003.com/invitation.htm). The seed industry was probably half this size in the early part of the 1990s (Shiva and Cromption, 1998). It has therefore grown rapidly in the last decade. Estimates of the share of the private sector range from 60 per cent to 70 per cent (Shiva and Cromption, 1998). Because the private sector sells high value hybrids, their share in value is greater than their share in quantity sold. The government regulates the seed industry and the seed trade in various respects. The Seed Act of 1996, the Seeds Control Order of 1983, and the Seeds Policy of 1988 are the major components of policy specific to the industry. The seed industry has also been subject to policies relating to industrial licensing and direct foreign investment that are applicable to all industry. In September 2001, the Plant Variety Protection and Farmers Rights Act came into being. In June 2002, the government announced a new seeds policy that significantly alters the framework of regulation. The Seed Act of 1996 and the Seeds Control Order of 1983 provides statutory backing to the system of variety release, seed certification and seed testing. Varieties are released after evaluation at multi-location trials for a minimum of three years. Varieties approved are “notified” which is a pre-requisite for certification. While all public sector varieties go through this process, it is not mandatory for private varieties.

Cotton
Cotton is as ancient as the human civilization as the human civilization exclusive cotton fabrics have become a status symbol and are becoming increasingly costlier. Cotton the ‘White Gold’ and ‘King of Fibres’, is a crop of prosperity and is considered to be an industrial commodity of world wide importance. Cotton is the most vital crop of commerce to many countries such as USA, China, India, Pakistan, Uzbekistan, Australia, few African and South American countries. About eighty countries of the world are growing cotton. Cotton occupies a pre-eminent place among cash crops touching country’s economy at several points. Cotton occupies a place of pride being the prime supplier of raw material (85 per cent) for textile industry, which is one of the leading industry in the country. Cotton industries provides means of livelihood for about 250 million people in the world and about 60 million people through its cultivation, trade and industries in India (Basu, 1995). Commercially cotton is one of the best export-earning commodities in the country. The important cotton producing states are Gujarat, Maharashtra, Andhra Pradesh th th and Karnataka. Karnataka state stands 4 position in the area and 7 position in the production of cotton in the country.

In Karnataka, cotton is cultivated in about Bellary, Dharwad, Gadag, Haveri, Mysore, Raichur districts, mostly favoured with black soils and highly tropical climate. The area under cotton in Karnataka is estimate to about 9.13 million ha with annual production of 2.70 million bales. Karnataka is one of the fore runner in the production of long staple cotton, which is globally exported. Realizing the role of cotton in the Karnataka state with the liberated policy of the Government of India, it was an opening for most of the multinational companies and Indian companies to enter into this mega demand based cotton crop to make huge profit through hybrid seed production. Since, then the seed industry, the pesticide and other supporting sectors have received a boost in terms of their trade with the rural market. The marketing of seed has undergone a tremendous transformation in terms of seed logistics and farmer acceptance of varieties specially in the last decade. As is well know the technological breakthrough in development of Bt cotton also created a revolution in development of pest resistance hybrids etc. have all contributed for the overall improvement in the yields of cotton. The cotton seed industry has emerged as an important component in the seed market basically due to its ability for development of hybrids and diversity of production etc. It becomes very important on the part of the seed producer to deliver good seeds at right time, at right place and required quantities for better performance of the company. The marketing of seeds involves demand assessment, structure, shares, farmers brand acceptance, logistics etc. Which is of considerable importance in the light of changing agricultural scenario. The previous studies have been mostly concentrated on the technological breakthrough in hybrids, economics of production etc. But, in the present content of globalization, liberalization and privatization, it becomes more important that we should more focus on the marketing and services states which will ultimately bring the results of the technological changes in the near future. Hence, a study has been taken up in North Karnataka in which cotton is one of the major crops. Maintenance of the study is to focus on the marketing services and provide policy initiatives in the wake of development of this cotton economy. It is therefore decided to target the investigations with the following basic objectives.

Specific objectives
1. To study the market structure and conduct of cotton seed market. 2. To analyse the farmers buying behaviour of cotton seeds. 3. To analyse the variation in the dealers margin for different brands of cotton seeds. 4. To ascertain the demand and supply and the gap for the cotton seeds. 5. To analyse the problems faced by the farmers in purchasing of cotton seeds and in sales by the dealers.

2. REVIEW OF LITERATURE
Review of the existing related literature forms an integral part of any systematic research work. It contributes to the understanding of issue involved, analytical tools to be adopted and overall handling of the research work. A very little work has been done on marketing of cotton seeds. The literature closely related and relevant to the present investigation has been reviewed under the following headings. 2.1 2.2 2.3 2.4 2.5 Market structure and conduct Farmers buying behaviour Dealers margin Gap between the demand and supply of cotton seeds Problems in dealers and farmers.

2.1

The market structure and conduct

Harris (1979) examined the paddy marketing system in Northern Tamil Nadu in terms of Sosnik’s concept of structure, conduct and performance. She inferred that the paddy marketing system was for from competitive and failed to be efficient when measured from absolute standard the imperfections were partly explained by the faults in the working of free trade and partly due to government intervention. Bhide et al. (1981) studied the structural changes in the arecanut market of Mangalore using data on the size distribution of firms and coefficients inequality (Gini coefficient) for the period from 1965-66 to 1972-73, they projected the distribution of firms in different size categories by using Markov Chain Analysis. The impact of these changes on price structure was evaluated by using regression analysis. The analysis suggested an increasing degree of competitiveness in market structure. Characterized by more equal distribution of share in the market transactions. Elangovan and Zeaudeen (1983) studied the market structure of groundnut in Ramanthpuram district of Tamil Nadu, the market structure was analysed by computing the coefficient of inequality from size distribution of buyers of farms, which came down from 0.55 to 0.38 over the study period indicating a steady improvement in the size distribution. Bain (1989) emphasized that most of the characteristics and strategic aspects of market structure are the degree of seller concentration, the degree of buyer concentration, the product differentiation and the condition of entry to the market. He classified any product or service marketing as high seller concentration (where three sellers supply about 90% of the market), the moderate seller concentration (where four sellers about 60% of the market) and low seller concentration (where twenty sellers supply about 45% of the market). Yeledhalli (1991) studied the agency-wise marketing of fertilizer in Karnataka and found that the agencies operating in the state are KAIC, MARKFED and private. The private agency had the lion share in marketing of fertilizer. He found that the distribution of retail outlets in the districts was also dominated by private agencies. Colton (1993) studied about consumer information and workable competition in telecommunication and emphasized that market are classified according to the structure of the industry serving the market. Industry structure of categorized on the basis of market structure variable which are believed to determine the extent and characteristics of competition. Variables which have received the most attentions are number of buyers and sellers. Extent of product substitutability, costs, extent of mutual interdependence and ease of entry and exit. According to Colton, the taxonomy of market structure, perfect competition, monopolistic competition, oligopoly and monopoly.

Mundinamani et al. (1993) using Bain’s classification of markets and the Lorenz coefficient of inequality technique analysed groundnut market in Karnataka highly and moderately concentrated oligoposonic nature of competition was observed with regards to buyers and slightly concentrated o competing type of markets with regard to sellers. A few big firms performing multiple functions were controlling the major portion of the groundnut trade. Nagaraja (1998) studied the market structure, market share and market potential for sunflower seeds in Raichur district of Karnataka state. Thiel’s intropy index of 0.4638 suggested that sunflower seed market was moderately concentrated with few suppliers dominating the trade. The market share of individual brands and their switching pattern indicated that local unbranded seeds had the major share. A very high degree of brand switching was noticed among the different varieties of seeds. Padmanabhan and Sankaranarayana (1999) studied the market structure for pesticides in Tuticorin district in South Tamil Nadu. In this study, they made an attempt to analyse the market structure of pesticides at retail level and degree of concentration. The market structure of pesticide at retail level was identified as oligopoly implying that major share of pesticides sales was concentrated with few dealers based on brand name, symbol and colour of picking material offered by the firms. The farmers were able to differentiate the pesticides, competition between the existing retailers in retaining the market share and high investment act as barriers to entry. Patil (2003) studied the physical distribution management of seeds by Karnataka State Seeds Corporation Ltd. (KSSC), the study revealed that the KSSC has adopted a mixed distribution network comprising of its own retail outlets and are as follows. KSSC KSSC KSSC KSSC Farmers Karnataka Agro Industries Corporation Market Branches Farmers Farmers Branches Farmers

Private seed dealers

2.2

Farmers buying behaviour

Venkateshwaralu et al. (1984) attempted to examine the reason for being brand loyal. It has been found that 50 per cent of the consumer respondents preferred a particular brand because they were convinced that its quality was better than that of other brands. Another 38 per cent of the sample consumers felt, it was the taste which made them to go in for a particular brand. While, very few consumers in the sample stated low price and easy availability as the main reasons for selecting and brand. Ramaswarny and Chandrashekaran (1990) examined factors influencing cotton seed buying behaviour of farmers in Kamraj district of Tamil Nadu, India, sixty cotton growers were selected from four villages for agriculture year 1987-88, factors influencing farmers purchase of cotton seeds were source of purchase, varietal preference, seed quality, source of information about the supply of cotton by different agencies and brand preference. Dealers with credit facility, availability of seeds at lower prices and premises located close to the farmers locality attracted. Ali (1992) studied the factors influencing purchase decision for processed products. It revealed that factors such as tase, family, preference, price, good keeping quality, well known brand, colour and consistency were important in the buying decision of the consumer in that order. Sivakumar et al. (1994) analysed buying behaviour of farmers with respect to pesticides, considering the factors influencing loyalty of farmers towards dealers and brand friend, neighbours and relatives were major source of information on dealers. In case of brands it was extension personnel of department of agriculture, the price quality and advertisements about the brand contributed significantly to brand loyalty credit availability, advertisements and price of products available with dealer contributed significantly to dealers loyalty.

Sidhu (1996) studied the seed use practices of farmers in Punjab. The results of the study indicated that the farmers judged the purity and quality of seeds purchased from public seed agencies, research organizations, government departments, private seed companies/dealers etc. by their past experience and reputation of agencies. The results also indicated that among the institutions/agencies, Punjab Agricultural University had the highest reputation among the selected farmers in Punjab. Singh (1998) in his study in Bihar concluded that seeds were purchased from private traders and fellow farmers mostly on cash basis. The reasons for preferring these sources were seed quality, availability and accessibility. This implied that the marketing bodies and seed business units did not carry out their functions in a manner as to create time, place and form utility. Further, farmers purchased seeds only at the time of requirement i.e., a few days before use which was very rational given that seed I a perishable and costly input. Padmanaban (1999) conducted study on brand loyalty, which revealed that the price of the preferred brand and efficiency of preffered brand as well as influence advertisement significantly influenced the brand loyalty. Only when the price of a particular brand is competitively lower to price of other brand in the market the farmers would naturally prefer to low priced brand, otherwise farmer would naturally continue to purchase the same brand.

2.3

Dealers margin

Patel and Dholaria (1981) studied the marketing cost of certified seed of Hybrid-4 cotton in Gujarat. They found the distribution of seed was undertaken by co-operative societies and group of farmers. The rate of hybrid seed differed from district to district because the rate has been fixed by the co-operative societies. In open competitions, the procurement price of Rs. 78.09 per kg of seed had covered production cost leaving more than 10 per cent profit to the seed producers. Patel (1984) observed that unit purchasing price per kg of H-4 cotton seed in Gujarat was Rs. 70.56 and prevailing sale price per kg was Rs. 74.00. hence, net margin to the middleman worked out to be Rs. 3.44 per kg of H-4 cotton seed. Mane and Hiremath (1995) studied the economic performance of seed marketing of two important hybrid cotton varieties (NHH-44 and PKV Hy-2) grown in Parbhani district, Maharashtra, India. A sample comprised of 28 per cent of dealers from Hingoli and Parphani taluks was selected and data were collected for 1990-91. There were set marketing costs at various levels for both hybrids. The dealers net margin was found to be higher for advance purchases and their marketing margin constituted about 6 per cent of consumers price. Sabur and Aktar (1997) studied marketing and economic use of pesticides in Bangladesh and noted that the gross margin and net margin of dealers was higher than that of retailers. This was because of dealers lower marketing cost and imperfection of market at dealer level. Entry and imperfection of market at dealer level. Entry into dealers market was not easy compared to retail market, because dealers need larger amount of capital and reputation.

2.4

Gap between the demand and supply of cotton seeds

Sankayan et al. (1973) observed longer price spread in all fertilizers, except two in the case of private dealers than those in the co-operatives. This was primarily due to the shortage of fertilizers which enabled the private dealers to charge higher than the controlled prices and retain bigger margin. Chandrakanth and Venkataram (1983) projected the demand and supply of forest products in Karnataka for the years 1990 and 2000 in the input output framework. The prospective of supply and demand was considered by the national planning commission. The strategies for bridging the gap in the requirements of forest products aimed at efficient utilization of existing wood resources and also simultaneously to meet the growing demand for forest products in the future.

Quasem (1986) examined the availability of two major inputs, fertilizers and pesticides in Bangladesh. It was found that wholesaler operated only in less than 40 per cent of markets surveyed. Retailers however, were present in all markets. Pesticides dealers operated only in 40 per cent of market surveyed. Concluded that 40 per cent shortage of pesticides and the prices of some of the pesticides were high. Bhargave (1988) studied demand supply and impact of certified seeds in the four districts of Madhya Pradesh and concluded that there should be multichanneled distribution system involving co-operative societies. He identified inadequate irrigation, high input price and less uncertain availability of certified seed. Khanna and Gupta (1988) in their study on seed strategy to boost agricultural yield reported that production of certified seeds was limited on account of non-availability of adequate volume of breeder and foundation seeds. Plan provisions were made to strengthen the national seeds corporation to enable it to assume direct responsibility for production of breeder and foundation seeds so that the shortage exhibited at the national level in the past could be eliminated. Radha and Chowdry (2002) studied present status and policy perspectives of seed industry in Andhra Pradesh. There was a wide gap ranging from 80 to 90 percent between the production and demand of certified seed of different crops in the state. Out of the total quantity of 27.49 lakh quintals of seed produced in the state, a quantity of 12.69 lakh quintals were exported, indicating the wider scope for expansion of area under seed production in the state Srilatha et al. (2003) studied seed production in India with special reference to Andhra Pradesh. The three major crops maize, sunflower and cotton selected for the study. The study estimated seed production gaps for maize, sunflower and cotton. In case of maize certified production and requirement gap in 2000-01 is -55.68 thousand quintals (Actual production is 23.48 thousand quintals and requirement is 79.16 thousand quintals). In case of sunflower gap is -17.14 thousand quintals (Actual production is 2.59 thousand quintals and requirement is 19.73 thousand quintals). In case of cotton gap is -35.45 thousand quintals (Actual production is 15.63 thousand quintals and requirement is 51.08 thousand quintals). Anonymous (2006) reported that according to an estimate there is a demand for 150 quintals of DCH-32 cotton seed in Dharwad district. But Official Agriculture Department reported that 35 quintals were available. Hence a gap of 115 quintals of DCh-32 cotton seeds was noticed. Further, there was a shortage of seeds for some varieties of groundnut (JL-24), paddy (indan), cotton (Dch-32, DHB-105 and DHH-11). It was reported that in Dharwad district likely shortage of 10000 quintals of seeds. For the kharif season, there is heavy demand for green gram seed in Dharwad and Gadag districts, where there is likely to a shortage of 1000 quintals and also in case of groundnut seeds. Anonymous (2007) reported that the shortage of potato seeds in hassan district was 50000 tonnes. The demand is more than 4 lakh tonnes. Anonymous (2007) reported that the shortage of seeds and fertilizers in Dharwad and Gadag district. About 900 kgs of soyabean seeds and 14000 tonnes of fertilizers shortage in these districts. Anonymous (2007) reported that there is a shortage of soyabean and groundnut seeds in the Belgaum district. The supply of soyabean seeds is 25050 quintals and groundnut seeds was 1500 quintals.

2.5

Problems in dealers and farmers

Choudhary and Prasad (1972) reported that small farmers perceived lack of money as the most important problem. The other problem of small farmers in order of importance were high cost of fertilizer, non-availability of fertilizer in village, lack of adequate knowledge about fertilizers, lengthy time taken by in the delivery of fertilizer, use of fertilizer, deteriorated quality of land, lack of transport facilities and short weight of fertilizer bags.

Yeledhalli (1991) studied the problems faced by agencies involved in the marketing of agricultural inputs. In case of private agencies, which sold only fertilizers, lack of transportation facilities and high competition among the sellers were the problems faced by them. In the case of co-operative, problems such as lack of storage facility. Inadequate retail outlets and lack of transportation facility were pointed out by the majority of the respondents and the same problems were also stated by a respondents of Karnataka Agro Industries Corporation (KAIC). Ramamoorthy (1995) studied the major socio-economic constraints in cotton production and management, the constraints were identified and ranked through rank analysis. The study identified the major production constraints as poor quality input supply, inadequate credit supply and high production risk and the marketing constraints as price fluctuation, storage, problems under weighment and poor market development. Sidhu (1996) in his study in Punjab observed that self-retained seed was most commonly used followed by the seeds from fellow farmers in Punjab. They found that large number of farmers (76%) did not receive the certified seeds in adequate qualities. Also, a majority of farmers (60%) expressed that price of certified seeds was very high. The researcher suggested that for proper and timely distribution of quality seeds. There was a need to develop proper network.

3. METHODOLOGY
In the process of achieving the objectives of the study, it is very essential to follow a systematic and scientific approach so as to present and interpret the results of the study or investigation conducted. This chapter on methodology consists of the details of the description of the study area, the sampling procedure, nature and sources of data, the analytical tools and techniques employed and other information to support the existing results like secondary sources of information required to keep the reader inferred for reference and documentation. The methodology chapter is discussed under the following heads. 3.1 3.2 3.3 3.4 Description of the study area Nature and source of data Sampling design Analytical techniques employed

3.1

Description of the study area

3.1.1 Location
Karnataka sate is situated in West Central part of the peninsular India. It consists of a narrow elongated belt between the Arabian sea and western ghats and enhancing coastline of about 400 km. The state has an area of 1,19,257 sq. km and situated between 115 and 19' North latitude and 740 and 78' East longitudes. The state is bounded by Maharashtra on the north and by Goa and the Arabian sea on the west. It has a common border with Andhra Pradesh on the east and with Tamil Nadu and Kerala on the south. The average rainfall of the state is 1139 mm. The state receives rainfall both from southwest and northeast monsoons. The mean temperature ranges from 21.50 to 31.70C. The climatic endowments are favourable for the adoption of crossbred, cattle and for the production of crops throughout the year. 1. Dharwad district The divided Dharwad district falls in the northern part of Karnataka between 15 15’ and 15 35’ N latitude and 750 00’ and 750 20’ E longitudes. It is bounded on the north by Belgaum district, on the south by Haveri district, on the east by Gadag district and on the west 2 by Uttara Kannada district. The district has an area of 4263 km contributing 2.22 per cent of the state area and population is of 15.75 Lakhs (2001 census).
0 0 0

The soils of the district are predominantly red loam with patches of black soils. Red soils are well drained and range from red to pale brown in colour. The district generally has a humid and dry climate with the normal rainfall of 772 mm per annum. Important crops of the district are cotton, jowar, oilseeds, pulses, paddy and sugar cane. Dharwad district is endowed with semi-malnad geographically advantage and contributes good towards agriculture production. The district has recorded production of potato, cotton etc. The district is equipped with good infrastructure like roads, markets, godowns, good network of agriculture input centres throughout the district according to 2006 there about a total 180 licensed agriculture input centres. 2. Gadag district Gadag district is situated between 14 33 to 14 62 north latitude and 75 13 to 75 42 east latitude. It is bounded east by Koppal district, in the west by Dharwad district, in the north by Bangalore district and in the south by Haveri and Bellary districts.
0 0 0 0

Fig. 1. Map of Karnataka state showing selected districts for the study

Table 3.1: Area (ha) under important crops in the study area

Crops Cotton Sugarcane Groundnut Paddy Jowar Maize Wheat Gram Tur

Dharwad 51899 3039 37040 29316 72946 9594 52237 54648 3004

Gadag 37175 92 35954 1543 93799 8319 37589 43264 1338

Haveri 47319 2246 23931 37108 111813 110081 1833 1983 2946

This district has five taluks, covering a geographical area of 4,66,000 hectare, out of which forest area is 32,000 hectare. The climate of the district is generally dry and in the premonsoon it is cool. The average rainfall of the district is 612.7 mm in annual. The temperature ranges from 140C to 420C. There are two main type of soils viz., black and laterite soil. The average water holding capacity is medium to high. The important crops grown in this district are jowar, cotton, groundnut, wheat, paddy, pulses and chilli. Gadag district is endowed with semi geographically advantage and contributes good towards agriculture production. The district has recorded production of chilli, jowar, wheat etc. The district is equipped with good infrastructure like roads, markets, godowns, good network of agriculture input centres throughout the district according to 2006 there about a total 240 licensed agriculture input centres. 3. Haveri district Haveri district was formed dividing it from erstwhile Dharwad district situated at 14 28’ and 14 29’ N latitudes and 75007’ and 75038’ E longitudes. The district is bounded on north by Dharwad and Gadag districts, on south by Davanagere and Shimoga districts, on west by Uttara Kannada district and on east by Bellary district.
0 0

The total geographical area of the district is 4848 km amounting to 2.53 per cent of the area of the Karnataka state. The district consists of 7 taluks with 682 villages. According to 1991 census the total population of the district was about 1.2 million. Of the total geographical area of 4,85,156 hectares, the net area sown is 3,52,804 hectares, out of which 73,627 hectares (20.9%) constitutes the net irrigated area from different sources of water. Major crops of the district are jowar, paddy, cotton, chilli, groundnut, sunflower, sugarcane and safflower. The average rainfall of the district is 752 mm per annum. Haveri district is endowed with good geographically advantage and contributes good towards agriculture production. The district has recorded production of cotton, chilli, maize, soybean etc. The district is equipped with good infrastructure like roads, markets, godowns, good network of agriculture input centres throughout the district according to 2006 there about a total 280 licensed agriculture input centres.

2

3.2

Nature and sources of data

In order to evaluate the objectives of the study, data was collected from both primary and secondary sources.

3.2.1 Primary data
The primary data forms an important component of any research investigation. As the study focuses on the preferences of farmers over purchase of seeds, behaviour of farmers towards the solution and adoption of brands, the loyalty of farmers towards dealers as a subjective phenomenon focuses on the behaviour of farmers. Hence, greater thrust was given to collect information at farmers level. However, the number of dealers, their problems etc. were also important and the primary data was very essential to be elicited. The primary data was collected using a pre-structured questionnaire encompassing a number of variables/parameters which could explain their behaviour towards purchase of seeds, the dealers margin etc.

3.2.2 Secondary data
As the research study focuses on the aspects such as estimating of demand and supply of their gaps and also some of the information relating to the number of dealers in each district, quantities handled, the role of departments, the licensing of agriculture input agencies, the statistical data etc. were very much required to take some of the investigation process. Hence, the secondary data required were collected from Department of Agriculture, Districts Statistical Officer and other related departments.

3.3

Sampling design

In order to proceed with investigation as per the objectives stated, it was necessary to adopt an appropriate sampling design so as to focus the importance of objective in taking the problems in cotton seed marketing. It was proposed at the outset to study the area under cotton crop in primary stage, for this purpose the secondary source data published by Directorate of Economics and Statistics, Bangalore was used. The districts are ranked in order of the highest area by districts, the percentage contribution of each district were computed to ascertain the relative importance of these lists among the total districts in the area under cotton. However, the figures on production of cotton could not be ascertained which directly dependent on the diversity in productivity in different location. A multistage random sampling was adopted as appropriate sampling procedure for the study.

3.3.1 Selection of districts
The data on area under cotton in Karnataka when observed indicated that the three northern districts of Karnataka namely Dharwad, Gadag and Haveri reported to have the highest area under cotton which contributed about 30 per cent of the total area under cotton. Hence, it was proposed to select these three districts for the study so as to investigate into the research problem.

3.3.2 Selection of taluks
In the second stage, it was proposed to select to taluks in each district which acted as hinterland markets for agriculture input agency supplying cotton seeds. These taluks ranked in descending order in order to their area under cotton crop. It was decided to select two taluks in each of the district based on area of cotton seeds, hence, total of six talks were selected. Taluks selected Dharwad and Kalaghatgi in Dharwad districts; Haveri and Hirekerur in Haveri district and Gadag and Shirahatti taluks in Gadag district.

3.3.3 Selection of villages
In third stage, three villages in each taluk were selected based on the area coverage under cotton production. Hence, total of 18 villages were selected for the study.

Table 3.2: Details of the sample farmers for the study

Sl. No. 1.

District Dharwad

Taluks a) Dharwad

Villages a) Arravatgi b) Kadabagatti c) Honnapur

Sample farmers 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 270

Sample dealers 5

b) Kalaghatgi

a) Dastikoppa b) Devikoppa c) Hanmapur

5

2.

Gadag

a) Gadag

a) Antur b) Chincholli c) Mulgund

5

b) Shirahatti

a) Magadi b) Gulaganji c) Devagiri

5

3)

Haveri

a) Haveri

a) Devagiri b) Devihosur c) Kabbur

5

b) Hirekerur

a) betegerur b) Chickgonkoppa c) Chickerur

5

Total

3

6

18

30

Table 3.3: Licensed dealers in Dharwad, Gadag and Haveri districts

Sl. No. 1.

Districts Dharwad

Taluks Dharwad Kalaghatgi Hubli Navalgund Kundagol

Licensed dealers 34 14 92 12 15 74 20 73 57 38 70 35 25 40 120 20 20

2.

Gadag

Gadag Mundargi Naragund Ron Shirahatti

3.

Haveri

Haveri Byadagi Hangal Hirekerur Ranebennur Savanur Shiggaon

3.3.4 Selection of farmers
In order to initiate first hand information using primary source techniques on various variables in the purchase of cotton seeds, prices, brand, dealers preferences, source preferences etc., it was proposed to select 15 sample respondents who were growing cotton from each village on random basis accounting for 90 sample farmers in each of the selected districts. Hence, a total of 270 farmers were selected. These samples were then post classified as small, medium, large categories so as to meet the requirement of research study.

3.3.5 Selection of market
The importance of study is to focus of marketing of cotton seeds bearing the importance of cotton production in the study area as cotton is an important commercial crop. The secondary markets formed an important centre of business activity. Hence, it is true and fact that the districts headquarter viz., Dharwad, Haveri and Gadag are important cotton markets in northern Karnataka. Hence, it was proposed to select these headquarters places as central market for agriculture input marketing and specially cotton seeds.

3.3.6 Selection of dealers
The study also proposed to analyse the important component in the seed industry i.e., agriculture input agency which form nodal agency for agriculture input marketing. It was proposed to select 10 dealers from each district on cross sectional basis, keeping in mind the relative importance of agencies/companies in the total volume of business specially in cotton seed marketing. Hence, a total of 30 dealers were selected to elicit information required for the study.

3.4

Analytical techniques employed

3.4.1 Tabular analysis
Percentages and simple averages were extensively used for the presentation of the aspects like farmers buying behaviour, brand loyalty, brand preferences, sources of supply and problems faced by dealers and farmers.

3.4.2 Compound growth rate
For evaluating the trend in area and distribution of cotton in Dharwad, Gadag and Haveri district, an exponential form of the growth function was used as shown below. Y = AB Vt --------------------------------------------- (1) Where, Yt A B ti : Area/distribution in the year ‘t’ : Intercept indicating Y in the base period (t = 0) :+g : time period (i = 1 to 13) t Equation (1) was converted into the logarithmic form in order to facilitate the use of linear regression. Taking logarithms on both sides of the equation (1). In Yt = 1n A + t (1n B) + 1n Vt This was of the following form Qt = a + bt + Ut ------------------------------------- (2) Where, Qt : 1 n Yt

a b Ut

: 1n A : 1n B : 1n Vt

The values of ‘a’ and ‘b’ were estimated by using ordinary least squares Antilogarithms of ‘a’ and ‘b’ values as A B : Anti 1n a : Anti 1n b

Average annual compound growth rate was calculated as B g :1+g : B –1

For the effective comparison, the growth rates worked out with the help of equation (2) were multiplied by 100 to obtain the percentage change in the variable concerned.

3.4.3 Gini ratio analysis
This analysis was carried out in order to know the market structure in the agricultural input marketing system by different agencies in cotton trade. This helps in exploiting precisely the extent of inequality in distribution of volume of business. The agencies were arranged in the descending order of the volume of commodity transacted. The frequency distribution of different agencies and the actual volume of the business were worked out. The coefficient of inequality is given by L = 1 - ∑ (Pi – Pi-) (Qi – Qi – 1) Where, Pi Pi-1 Qi Qi-1 L : The cumulative per cent of agencies upto i agency : The cumulative per cent of agencies upto (i-1)th agency : The cumulative per cent of quantity handled upto ith agency : The cumulative per cent of quantity handled upto i agency : The coefficient of inequality th th

The results of the analysis would suggest the extent of inequality in the distribution of business in cotton seed input marketing between different agencies. The gini coefficient would indicate the extent of inequality in the marketing system, higher the coefficient less be the inequality and vice-versa.

4. RESULTS
This chapter is developed for the presentation of results obtained after a systematic analysis and interpretation of data/information collected. The results so obtained are presented under the following heads. 4.1 4.2 4.3 4.4 4.5 Market structure and conduct Farmers buying behaviour Dealers margin Gap between the demand and supply of cotton seeds Problems in dealers and farmers.

4.1

Market structure and conduct

4.1.1 Extent of inequality in trade for cotton seed marketing
The market structure determines the concentration on business in the hands of the marketing agencies. It may also mean the market share enjoyed by the agency’s in the cotton trade. In order to investigate the extent of concentration/market share in the hands of dealer, it was proposed to compute the cumulative per cent of the all dealers and also compute the cumulative per cent of the quantities handled by dealers in the study area. These values were subjected to Gini coefficient ratio. The Gini coefficient ratio helps in explaining precisely the extent of inequality in the districts of volume of business. Table 4.1 represents the cumulative percentage of dealers in Bt cotton in the sample district and the cumulative percentage of quantity’s handled by these agency’s in the study area. Gini coefficient was observed to be 0.95, which indicates that less is the inequality in the marketing of Bt cotton seeds in the study area. This means that the Bt cotton trade is well distributed among various dealers or evenly distributed among different agency’s in Bt cotton seeds trade. In the case of non-Bt cotton, the coefficient observed to be 0.947 which was quite similar indicating less inequality showing the even distribution of cotton trade between different agency’s involved in cotton trade.

4.1.2 Factors influencing brand loyalty
In the course of investigation, it was found that the cotton seed trade was highly competitive with various types of players, MNC’s, private companies and public sector companies. So, the market situation seems to be highly oligopolistic in cotton trade indicating the presence of innumerable brand of cotton seeds in market. This situation faces the farmers in a situation to decide and adopt a particular brand of cotton seeds. Hence, it was thought to focus the study on how a farmer is brand loyal for cotton seeds. Table 4.2 represents the factor influencing brand loyalty of cotton seed for ten variables. Influence of price was found to be less important for brand loyalty by the farmers in all the districts. Across study area, price was the important factor as 75 per cent of farmers were influenced by these factors for brand loyalty followed by the influence of advertisement (63.00%) of attractive package unit size, availability on credit, high yield compared to other brands and dealer influence on brand were found to be negligible importance in influencing the brand loyalty. The overall figures showed that the percentage of farmers who responded to these aspects varied 15 to 36 per cent. The variable peer group influence is one of the dominant factor influencing brand loyalty as indicated by the overall figures, 94 per cent were influenced towards this variable. Haveri district farmers more responded by this variable by the extent of 97 per cent, in the purchase of cotton seeds. However, the variable resistant bollworm received 100 per cent brand loyalty among Haveri farmers as they were growing only Bt cotton. However, the availability of seeds on credit did not find any important place in brand loyalty in all the districts.

Table 4.1: Extent of inequality of trade in cotton seeds marketing

Bt cotton Cumulative Cumulative percentage of percentage of dealers quantity 0.00 0.03 0.07 0.10 0.13 0.17 0.20 0.23 0.27 0.30 0.33 0.37 0.40 0.43 0.47 0.50 0.53 0.57 0.60 0.63 0.67 0.70 0.73 0.77 0.80 0.83 0.87 0.90 0.93 0.79 1.00 L = 0.9516 0.00 0.11 0.23 0.24 0.34 0.40 0.44 0.49 0.54 0.58 0.62 0.66 0.69 0.73 0.77 0.80 0.82 0.85 0.87 0.88 0.89 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99 1.00

Non-Bt cotton Cumulative Cumulative percentage of percentage of dealers quantity 0.00 0.05 0.11 0.16 0.21 0.26 0.32 0.37 0.42 0.47 0.530 0.58 0.63 0.68 0.74 0.79 0.84 0.89 0.95 1.00 L = 0.9473 0.00 0.16 0.31 0.45 0.59 0.72 0.79 0.86 0.88 0.90 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99 0.99 1.00 -

Fig. 2. Extent of inequality of trade in cotton seeds marketing

4.2

Farmers buying behaviour

4.2.1 Purchasing behaviour of Bt and non-Bt cotton seeds
The market for cotton seed being monopolistic represented unique buying behaviour with respect to the various brands. Farmers had about seven important brands which were major players in the overall cotton seed market. Table 4.3 represents the quantities purchased by farmers in Bt cotton. Bt cotton tends to be popular in Haveri district compared to Gadag and Dharwad districts. In Dharwad district, Bt cotton tends to be unpopular however few farmers (16) have purchased Bt cotton of which Banni brand was purchased by 94.75 per cent and Rasi by 6 per cent in case of Gadag district, 57 per cent of the farmers purchased rasi brand of cotton seed followed by 26 per cent Mahyco 6918 brand and about 13 per cent of the farmers purchased Banni. In the case of Haveri district, nearly 60 per cent of the farmers bought rasi brand. The other brands like banni and mahyco 6918 occupied second position accounting for 16 per cent each. The overall picture of cotton seed found that rasi brand was popular among the districts in the study area, which was to the extent of 50 per cent followed by banni, Mahyco 6918 and Varalaxmi. Table 4.4 represents the purchase of non-Bt on the sample districts. The overall picture showed across the study area showed that Jayadhar cotton seed was purchased by majority of the farmers (42.20%) followed by DCH-32 (29%), DCH-11 (6.09%) and Karnataka. Haveri district sold unique absence of non-Bt cotton. In Gadag district, Jayadhar was purchased by nearly 82 per cent of the farmers, which was found to be very popular in the area. Dharwad district represent a unique feature of purchase of non-Bt cotton seeds. However, DCH-32 cotton seeds were found to relatively popular and were purchased by nearly 46 per cent of the farmers. Other farmers showed mixed reaction with respect to the various other 11 brands of cotton seeds which range between 3 to 10 per cent.

4.2.2 Preferences for the source of supply
The sources of supply plays a very important role in the purchase behaviour of farmers for any seeds. Various factors would be responsible for a particular behaviour in their purchase. Therefore, it was essential to focus on the purchase behaviour with respect to the source of supply of cotton seeds by the farmers in the sample districts. Table 4.5 showed the preference for source of supply for cotton seeds and the characteristics preferences made by the sample farmers in Dharwad district. As indicated in the table different source of supply were private fellow farmers, KSSC and co-operatives. The private dealers dominated the seed supply in the district followed by the KSDA a Government agency. Nearly 50 per cent of the farmers opined about their preference to private dealers for their purchases for availability, timely nearness of the stores, quality seed material and the technical advise received from private dealers. Cost considerations and credit facility provided by the private dealers accounted for less than 30 per cent. Nearly 75 per cent of the farmers opined that the seeds obtained from KSDA was less priced and hence brought from that agency. Around 50 per cent of the farmers opined for the preferential characters listed in the table. Table 4.6 shows the preference for particular source of supply by the sample farmers in Gadag district. Purchase of seeds from fellow farmers and KSSC was totally absent in the Gadag district. It was well distributed between private dealers and the co-operatives followed by KSDA. Nearly 45 per cent of the farmers opined that they preferred private dealers because they could get their preferred brand of cotton seeds. There was timely supply, quality material was found and above all the required quantities. The cost consideration was factor as opined by 30 per cent farmers and hardly few farmers opined that they did not prefer private dealers due to the credit facility rendered by them. The co-operatives found unique preference by the sample farmers in Gadag district. Nearly 45 per cent of the farmers preferred co-operatives because of timely supply, the society was near to them, cost considerations as they were available at lower prices compared to the private dealers. However, 90 per cent of the farmers opined that they did not receive any technical guidance

Table 4.2: Factors influencing brand loyalty for Bt and non-Bt cotton seeds (n = 90) Sl. No. 1. Price Particulars Dharwad 67 (74.44) Gadag 76 (84.44) 44 (48.88) 19 (21.11) 86 (95.55) 37 (41.11) 4 (4.44) Haveri 59 (65.55) 66 (73.33) 40 (44.44) 87 (96.66) 62 (68.88) 8 (8.88) Overall 202 (74.81) 171 (63.33) 84 (31.11) 254 (94.07) 166 (61.48) 128 (47.40) 202 (74.81) 99 (36.66) 40 (14.81)

2.

Influence of advertisement

61 (67.77)

3.

Attractive package and unit size Peer group influence

25 (27.77)

4.

81 (90.00)

5.

Availability of brands

67 (74.44)

6.

Availability on credit

28 (31.11)

7.

Resistant to bollworm

7 (7.70)

31 (34.44) 56 (62.22) 18 (20.00)

90 (100)

8.

High yield compared to other brands Dealer influence on brand

60 (66.66)

86 (95.55) 47 (52.22)

9.

34 (37.77)

Figures in parenthesis indicate percentage of sample respondent

Table 4.3: Purchasing beaviour of different brands of Bt cotton seed by the farmers

(n = 90)
Quantity of Bt cotton purchase (in kgs) Sl. No. Brands Dharwad 1. Banni 15 (93.75) Gadag 5.5 (12.7) Haveri 20.5 (15.47) 1 (0.75 22 (16.60) 79 (59.62) 2 (1.50) 7.5 (5.66) 0.5 (0.37) 132.5 (100) Overall 41 (21.40) 1 (0.52) 33 (17.23) 104.5 (54.56) 5 (2.08) 7.5 (3.91) 0.5 (0.26) 191.5 (100)

2.

Mahyco 6322

-

3.

Mahyco 6918

-

11 (25.58) 24.50 (56.97) 2 (4.65) -

4.

Rasi

1

(6.25)

5. 6.

Tulsi Varalaxmi

-

7.

Vedha

-

-

Total

16 (100)

43 (100)

Figures in parenthesis indicate percentage to the total

Table 4.4: Purchasing beaviour of different brands of non_Bt cotton seed by the farmers (n = 90) Quantity of non-Bt cotton purchase (in kgs) Dharwad 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Banni Brahma DCH-105 DCH-11 DCH-32 DHH-91 Gabbar Jayadhar JK-99 Karnataka Mahyco NHH-44 Rasi Tulsi Kaveri Total 11 (4.72) 10 (4.29) 5 (2.14) 19.5 (8.36) 106.5 (45.70) 12 (5.15) 8 (3.43) 18 (7.25) 9 (3.86) 21 (9.01) 5 (2.14) 2 (0.85) 6 (2.57) 233 (100) Gadag 2 (0.99) 8 (3.98) 7 (3.48) 16 (7.96) 164 (81.59) 2 (0.99) 2 (0.99) 201 (100) 1 (100) 1 (100) Haveri Overall 11 (2.52) 12 (2.75) 13 (2.98) 26.5 (6.09) 122.5 (28.16) 12 (2.75) 8 (1.83) 182 (41.83) 11 (2.52) 21 (4.82) 5 (1.14) 2 (0.45) 1 (0.22) 2 (0.45) 6 (1.37) 435 (100)

Sl. No.

Brands

Figures in parenthesis indicate percentage to the total

Table 4.5: Factors considered by the farmers for the source of supply in Dharwad district

Sources of agencies Sl. No. Factors Private dealer 41 (45.55) 40 (44.44) 40 (44.44) 30 (33.33) 23 (25.5) 50 (55.55) 45 (50.00) Fellow farmer 3 (3.33) KSDA 49 (54.44) 50 (55.55) 47 (52.22) 67 (74.44) 40 (44.44) 45 (50.00)

1. 2. 3. 4. 5. 6. 7.

Availability of particular brand Timely supply Nearness source of supply Credit facility Cost consideration Quality seed material Provision for technical guidance

KSDA – Karnataka State Department of Agriculture Note : Figures in parentheses indicate percentage to sample respondents by the co-operatives. Nearly 50 per cent of the farmers opined that they preferred KSDA as they could get good technical advises. Table 4.7 shows the preferential character for the purchase of cotton seeds and the source of supply in Haveri districts. Private dealers dominated the market in the districts followed by KSDA for the preferential characteristics as stated in the table. Cent per cent of the farmers opined that they prefer private dealers as they were near to the place of purchase. Most of the farmers (98.00%) preferred private dealers as they found availability of preferred brand, timely supply and good quality seed material in their shops. Nearly 50 per cent of them opined that provision of technical guidance by the private dealers was one of the reason to purchase. KSDA was preferred for cost consideration and technical guidance by the sample farmers in Haveri district.

4.2.3 Sources of supply of Bt and non-Bt cotton seeds
The sources of seeds form an important component of seed marketing. The sources may have an impact on the quantities purchased by the sample farmers. Table 4.8 shows the percentage of farmers purchasing cotton seeds from a particular sources of supply. The overall figures indicate the dominance of private dealers in the marketing of cotton seeds. Nearly 62 per cent of the farmers bought from private dealers followed by KSDA to the extent of 28 per cent and about 16 per cent from the co-operatives. KSDA was found to be relatively popular in Dharwad district which was to the extent of 60 per cent followed by about 50 per cent of the farmers purchasing from private dealers. Gadag district farmers purchased cotton seeds from co-operative societies (43%) followed by private dealers to the extent of 37 per cent. In the case of Haveri district, almost all (99%) preferred the private dealers as source of supply compared to other sources of supply in the districts.

Table 4.6: Factors considered by the farmers for the source of supply in Gadag district

Sl. No. 1. 2. 3. 4. 5. 6. 7.

Factors Availability of particulars brand Timely supply Nearness source of supply Credit facility Cost consideration Quality seed material Provision for technical guidance

Private dealer 38 (42.22) 37 (41.11) 35 (38.88) 6 (6.66) 27 (30.00) 40 (44.44) 30 (33.33)

Fellow farmer -

KSSC -

KSDA 17 (18.88) 13 (14.44) 16 (17.77) 20 (22.22) 25 (27.77) 50 (55.55)

Cooperative 35 (38.88) 40 (44.44) 39 (43.33) 43 (47.77) 25 (27.77) 10 (11.11)

KSDA – Karnataka State Department of Agriculture Note : Figures in parentheses indicate percentage to sample respondents

Table 4.7: Factors considered by the farmers for the source of supply in Haveri district

Sl. No. 1. 2. 3. 4. 5. 6. 7.

Factors Availability of particulars brand Timely supply Nearness source of supply Credit facility Cost consideration Quality seed material Provision for technical guidance

Private dealer 88 (97.77) 89 (98.88) 90 (100) 8 (8.88) 60 (66.66) 80 (88.88) 50 (55.55)

Fellow farmer -

KSSC -

KSDA 2 (2.22) 1 (1.1) 30 (33.33) 10 (11.11) 40 (44.44)

Cooperative -

KSDA – Karnataka State Department of Agriculture Note : Figures in parentheses indicate percentage to sample respondents

Table 4.8: Preferences of the agencies for the Sources of supply of cotton seeds

Sl. No. 1. 2. 3. 4. 5.

Sample districts Agencies Dharwad Private dealer Fallow farmer KSSC KSDA Co-operatives 45 (50.00) 3 (3.30) 54 (60.00) 4 (4.40) Gadag 33 (36.66) 18 (20.00) 39 (43.33) Haveri 89 (98.88) 1 3 (3.33) Overall 167 (61.85) 4 (1.48) 75 (27.77) 43 (15.92)

KSSC – Karnataka State Seeds Corporation KSDA – Karnataka State Department of agriculture Note : Figures in parentheses indicate percentage of sample respondent

4.3

Dealers margin

4.3.1 Brand-wise margins for Bt cotton seeds
The presence of monopolistic market situation for cotton seeds entails presence of number of brands of cotton seeds in district in the study. The margins of the dealer does not vary with levels of operations and margins mostly vary according to their cost of marketing and other services provided by the dealers to the farmers. The Table 4.9 depicts the various brand (12 brands) Bt cotton seeds in the study area and the dealers price i.e., purchase and retail margin over dealers price. It is quite evident from the table that the dealers retail price is found to be Rs. 750 for 450 g of Bt cotton. There was no much variation in the pries of all the brands found in the district on the study, the dealers price varied from Rs. 718 in chamundi brand and Mayhco to Rs. 723 in the case of Rasi brand of cotton seeds. It was found that there is not much procurement price of the dealer. The margin obtained by dealers varied from Rs. 27 in the case of Rasi brand to Rs. 32 in the case of chamundi and mahyco brands of cotton seeds. The percentage of margin obtained by the dealer varied from 4.46 in mahyco 6322 to about 3.72 per cent in the case of Rasi seeds. However, the brands namely mahyco BG-2, chamundi, JK Durga, realized about 4 per cent margin as revealed from the table.

4.3.2 Brand-wise margins for non-Bt cotton seeds
Brand-wise dealers margin for non-Bt cotton seeds is presented in Table 4.10. The margin observed from the table reveals that it varied from Rs. 20 in Badri brand to Rs. 2.43, in case of DCH-32. The percentage margin over dealers price of Brahma brand of cotton seeds was 11 per cent followed by Karnataka, DCH-32 which was 8.37 per cent and JK-99 to the extent of 8.43 per cent. These margins are regulated on the dealers purchase price and the extent of profit margin. The procurement prices range between Rs. 502 in supper Banni followed by Dhanu and Amoga. The other brands varied around Rs. 390 for 500 g of cotton seeds. The average dealers retail price were found to be highest for supper banni and amogha, which was more than Rs. 500.

Table 4.9: Brand-wise trader margins for Bt cotton seeds Average dealers purchase price (Rs./450 g) 718.00 720.00 721.83 720.00 720.00 722.83 718.00 721.96 720.00 723.06 722.00 721.07 % of gross margin over price 4.46 4.16 3.90 4.16 4.16 3.75 4.45 3.88 4.16 3.72 3.87 4.01

Sl. No.

Brand Name

Dealers retail price (Rs./450 g) 750.00 750.00 750.00 750.00 750.00 750.00 750.00 750.00 750.00 750.00 750.00 750.00

% of gross margin (Rs./450 g) 32.00 30.00 28.17 30.00 30.00 27.17 32.00 28.04 30.00 26.94 28.00 28.93

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Mahyco 6322 Ankur Banni Mahyco BG-1 Mahyco BG-2 Brahma Chamundi JK-99 JK-Durga Rasi Tulsi Varalaxmi

Table 4.10: Brand-wise trader margins for non-Bt cotton seeds Average dealers purchase price (Rs./450 g) 472.00 396.67 390.00 406.00 500.91 376.67 370.00 415.00 422.50 502.00 417.78 % of gross margin over price 5.93 5.04 11.11 8.37 5.80 6.19 8.10 8.43 6.50 5.57 6.38

Sl. No.

Brand Name

Dealers retail price (Rs./450 g) 500.00 416.67 433.33 440.00 530.00 400.00 400.00 450.00 450.00 530.00 444.44

% of gross margin (Rs./450 g) 28.00 20.00 43.33 34.00 29.09 23.33 30.00 35.00 27.50 28.00 26.67

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Amoga Badri Brahma DCH-32 Dhanu DCH-11 JK-99 Karnataka Rasi Super banni Banni

4.4

Projected gaps in demand and supply

The projected supply and demand gap was calculated by the differences between projected demand and projected supply. The projected demand was calculated by multiplying the projected area of cotton and seed rate and projected supply was calculated by using sale of cotton seeds based on the values of compound growth rate obtained. The gap in projected supply and demand for the 5 years that is from 2007 to 2011 was worked out for major hybrids and varieties in the state are presented in Table 4.11. It is observed from the Table that the projected demand for DCH-32 is expected to be decrease from 1525.95 quintals in 2007-08 to 1270.39 quintals in 2011-12. The projected supply is also expected to be decrease from 1108.41 quintals during 2007-08 to 621.58 quintals by 2011-12. The gap was found to be deficit and it ranges from 471.54 quintals in 2007-08 to 648.81 quintals in 2011-12. The projected quantity of demand expected to be decrease from 220.46 quintals in 2007-08 to 136.56 quintals in 2011-12 in case of NHH-44. Similarly the projected supply is also expected to decrease from 134.53 quintals in 2007 to 81.58 quintals in 2011. The gap is found to be wide, however it is expected to decrease from 85.94 quintals in 2007 to 54.98 quintals in 2011. For Varalaxmi, cotton seed the projected demand is expected to decreases from 39.73 quintals in 2007 to 18.02 quintals in 2011. Similar to the projected demand, projected supply is also expected to be decrease from 43.87 quintals in 2007 to 19.89 quintals in 2011. But the gap found to be surplus and it ranges from -4.14 quintals in 2007 and it is expected to increase to -1.88 quintals in 2011. For other hybrid cotton seed in the state, the projected demand is expected to decrease from 2696.75 quintals in 2007 t0 1768.64 quintals in 2011. The similar results were expected for supply also i.e. it is expected to be decrease from 1220.06 quintals in 2007-08 to 736.91 quintals in 2011. The gap expected to be deficit and it is also decrease from 1476.69 quintals in 2007 to 1031.73 quintals in 2011. Similarly the projected demand and supply of cotton seed varieties was calculated and estimated gaps are furnished in the Table 4.11. The Projected demand is expected to be decreasing 19628.75 quintals in 2007-08 to 16176.80 quintals in 2011. Here also the gap is found to be deficit and it is decrease from 18125.26 quintals in 2007 to 14771.08 quintals in 2011. In case of Jayadhar cotton seeds also projected demand and supply were expected to be decreasing from 19615.2 quintals and 80.16 quintals in 2007-08 to 18021.57 quintals and 55.89 quintals in 2011 respectively. The gap was deficit range, ranges from 19535.04 quintals in 2001 and 17965.68 quintals in 2011. For LRA-5166 cotton variety the projected demand is expected to increase from 1394.76 quintals in 2007 to 2336.15 quintals in 2011. In case of supply of cotton seeds also it is expected to decreasing from 730.28 quintals in 2007-08 to 627.33 quintals in 2011. The gap was found to be deficit i.e. it will increase from 644.47 quintals in 2007-08 to 1708.87 quintals in 2011-12.

4.5

Problems in dealers and farmers

4.5.1 Problems faced by farmers
Cotton is an important commercial crop grown in the study area an higher investment of capital in terms of purchase inputs that monopolistic nature of market situation of cotton seeds market directly focusing on the presence. Innumerable brands of cotton seeds, varieties Bt, non-Bt etc. possess challenge for farmer to meet appropriate make decision with respect to purchase use of cotton seeds. So, it was appropriate to go into the details of the problems faced by the purchase of cotton seeds a 3 point continuum scale opinion survey was conducted for a sample of farmers in each district so as to focus on the various problems faced by the farmers and suggest appropriate policies for marketing of cotton seeds.

Table 4.11: Projected gap between demand and supply of cotton seeds in Karnataka

(in quintals)
Hybrids Year 2007-08 2008-09 2009-10 2010-11 2011-12 Demand 1525.95 1457.61 1392.33 1329.96 1270.39 DCH-32 Supply 1108.41 959.18 830.04 718.29 621.58 Gap 471.54 498.43 562.28 611.67 648.81 Demand 220.46 195.58 173.52 153.94 136.56 NHH-44 Supply 134.53 118.72 104.76 92.45 81.58 Gap 85.94 76.87 68.75 61.48 54.98 Varalakshmi Demand 39.73 32.61 26.75 21.95 18.02 Supply 43.87 35.99 29.54 24.24 19.89 Gap -4.14 -3.39 -2.79 -2.28 -1.88 Other hybrids Demand 2696.75 2426.84 2183.94 1965.35 1768.64 Supply 1220.06 1075.57 948.20 835.91 736.91 Gap 1476.69 1351.26 1235.74 1129.44 1031.73

Contd…..

Table 4.11 Contd……… (in quintals) Varieties Year 2007-08 2008-09 2009-10 2010-11 2011-12 Demand 19615.20 19204.04 18801.51 18407.41 18021.57 Jayadhar Supply 80.16 73.25 66.94 61.16 55.89 Gap 19535.04 19130.79 18734.57 18346.25 17965.68 Demand 1394.76 1586.72 1805.09 2053.53 2336.15 LRA-5166 Supply 730.28 703.06 675.85 651.62 627.33 Gap 664.47 883.66 1128.24 1401.91 1708.82 Other Varieties Demand 19628.75 18702.20 17819.38 16978.24 16176.80 Supply 1503.48 1478.43 1453.78 1429.55 1405.73 Gap 18125.26 17223.77 16365.60 15548.69 14771.08

Table 4.12: Problems faced by farmers in purchasing of cotton seeds

Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9.

Dharwad Problems Low Untimely supply of seeds Instability of yield Viability problem Germination losses Pest and disease attack Weather changes Lack of technical guidance Price variation in the cotton seeds Improper weighment 10 (11.11) 6 (6.66) 34 (37.77) 37 (41.11) 8 (8.88) 24 (26.66) 45 (50.00) 9 (10.00) 31 (34.44) Medium 41 (45.55) 23 (25.55) 43 (47.77) 26 (28.88) 17 (18.88) 47 (52.22) 39 (43.33) 59 (65.55) 55 (61.11) High 39 (43.33) 61 (67.77) 13 (14.44) 27 (30.00) 65 (72.22) 19 (21.11) 6 (6.66) 22 (24.44) 4 (4.44) Low 0 (0.00) 24 (26.66) 30 (42.22) 50 (55.55) 31 (34.44) 21 (23.33) 63 (70.00) 11 (12.22) 48 (53.33)

Gadag Medium 70 (77.77) 33 (36.66) 48 (53.33) 30 (33.33) 21 (23.33) 49 (54.44) 27 (30.00) 45 (50.00) 42 (46.66) High 20 (22.22) 33 (36.66) 4 (4.44) 10 (11.11) 38 (42.22) 20 (20.22) 34 (37.77) Low 4 (4.44) 62 (68.88) 47 (52.22) 87 (96.66) 75 (83.33) 43 (47.77) 66 (73.33) 17 (18.88) 52 (57.77)

Haveri Medium 62 (68.88) 23 (25.55) 43 (47.77) 3 (3.33) 14 (15.55) 43 (47.77) 22 (24.44) 66 (73.33) 38 (42.22) High 24 (26.66) 5 (5.55) 1 (1.11) 4 (4.44) 2 (2.22) 7 (7.77) -

Note : Figures in parentheses indicate percentage of respondent each district

The problems faced by farmers in the purchase of cotton seeds in Dharwad district are presented in Table 4.12. As many as 9 important problems are listed so as to know the intensity problems faced by farmers. The table clearly showed that majority of the Dharwad farmer opined that the seeds were of low quality, leading to higher incidence of pest and disease inspite of mentioning on the product label with respect to control of pest and diseases to larger extent. Nearly 68 per cent of the farmers also opined that inspite of assured yield there was instability in yields obtained from particular brands of cotton seeds. The untimely supply of seed is also important problem faced by as opined by around 45 per cent of the farmers. The problems like viability of cotton seeds, lack of technical guidance were found to have less intensity among the problems. They highly intensive problem were instability in pest and disease problem which was opined by most of the farmers. The data presented in the table analyzed the problems faced by farmers in the purchase of cotton seeds. The problems of lack of technical guidance was found to be least important compared to improper weighment, germination losses were major among the low intensive problems. Untimely supply of seeds was found to be medium intensive problem as opined by nearly 78 per cent of the farmers in Gadag district. The other problems were also medium intensive in nature as indicated in the table. The problems faced by the farmers in purchase of cotton seeds in Haveri district presented in Table 4.12 revealed that the overall basis the problems mentioned the table were off less intensive. However, there were presents of medium intensive problems such as price variation, which was expressed by 73 per cent of the farmers followed timely supply of seeds (69%), weather change an extent of 48 per cent, low intensive problem included attack of pest and diseases, lack of technical guidance, germination losses were opined less intensive problems.

4.5.2 Problems faced by dealers
The popularity of the crop in the study of the commercial nature of the cotton makes the market for cotton seeds very competitive. The players of MNCs and number of domestic players made the cotton seed market highly complex. The dealership returns is widely distributed. The study investigated into the problems of dealers in the study area with a view to propose suggestions for the improvement of cotton seed marketing. The Table 4.12 shows the problems faced by dealers in the sale of cotton seed in the study area. The problems have been classified as procurement problems and sales problems. The Table 4.13 shows that Government interference was quite high as opined by 67 per cent of the dealers followed by risk in investment in the business. Mostly the problems were of medium nature as opined by majority of the dealers (percentage varying from 74 to 45 per cent) among the procurement problems. Timely supply and inadequate storage facility were found to be major problems. The supply of adulterated seeds and high transportation were reported as low intensive problem by dealers in all the districts. The sales problems were found to be acute for problems like competition among dealers as reported by 87 per cent of the dealers followed by high investment in the sales of the cotton seeds. The problems such as lack of awareness of use of particular seeds by farmers inventory management were found to be medium intensive. The other problems like high taxes, management of advertisement were found to be lower intensive among the problems enlisted.

Table 4.13: Problems faced by dealers in the sale of cotton seeds

Sl. No.

Problems Procurement problems

Low

Medium

High

1. 2. 3. 4.

Risk in investment High transportation cost Government interference Procurement formalities like registration etc. Supply of adultrated seeds Timely supply of seeds Scientific facilities Lack of storage facilities Inadequate trained personal Sales problems

14 (46.66) 7 (23.33)

15 (50.00) 14 (46.66) 10 (33.33) 18 (60.00)

15 (50.00) 2 (6.66) 20 (66.66) 5 (16.66)

5. 6. 7. 8. 9.

12 (40.00) 9 (30.00) 10 (33.33) 6 (20.00) 16 (53.33)

18 (60.00) 21 (70.00) 18 (60.00) 22 (73.33) 13 (43.33)

2 (6.66) 1 (3.363) 1 (3.33)

1. 2. 3. 4. 5. 6. 7.

Credit sale Management of advertisement Competition among the dealers High taxes Huge investment Inventory management Lack of awareness of use of seeds by farmers

5 (16.66) 20 (66.66) 1 (3.33) 21 (70.00) 3 (10.00) 3 (10.00) 4 (13.33)

17 (56.66) 7 (23.33) 3 (10.00) 6 (20.00) 13 (43.33) 12 (40.00) 21 (70.00)

8 (26.66) 3 (10.00) 26 (86.66) 3 (10.00) 14 (46.66) 15 (50.00) 5 (16.66)

5. DISCUSSION
The results of the investigation presented in the previous chapter are discussed in this chapter under the following heads. 5.1 5.2 5.3 5.4 5.5 Market structure and conduct Farmers buying behaviour Dealers margin Gap between the demand and supply of cotton seeds Problems in dealers and farmers.

5.1

Market structure and conduct

5.1.1 Extent of inequality in trade for cotton seed marketing
The analysis on Gini ratio for market structure indicated 0.95 for Bt cotton and 0.947 for non-Bt cotton for the three districts put together. The results showed that there was less concentration among traders in handling of the cotton trade. Almost everyone had role in the overall seed trade. Because the cotton being a commercial crop of the area, being very responsive to prices of cotton. The farmers take up cotton in large scale. Cotton demands for purchased inputs and investment. Many companies and dealers do participate in the trade. The market for cotton is highly competitive and the results analysed also indicate the same.

5.1.2 Factors influencing brand loyalty
The results of the analysis are presented in Table 4.2. Price was found to be less important for brand loyalty by the farmers in all the districts. The overall figures showed 75 per cent of the farmers response was price which influence their brand loyalty followed by influence of advertisement was also found to be less important in influencing brand loyalty which indicated that only about 63.00 per cent of the farmers find about influence of advertisement the attractive package unit size, availability on credit, high yield compared to other brands and dealer influence on brand were found to be negligible importance in influencing the brand loyalty. The overall figures showed that the percentage of farmers who responded to these aspects varied 15 to 36 per cent. The variable peer group influence is one of the dominant factor influencing brand loyalty as indicated by the overall figures, 94 per cent were influenced towards this variable. However, the variable resistant bollworm received 100 per cent brand loyal Haveri farmers. The reasons attributed to this situation is that the districts are confined to adoption of single variety/hybrid in each district like Dharwad for non-Bt cotton, Haveri with Bt and mixture of these two cotton in Gadag district. This is relatively explained by the climatic and other features for their adoption. The commercial nature of the production of cotton does not have much influence on prices as farmers are ready to pay higher prices for seeds to get better germination, good quality and yields of cotton. However, the peer group influence was also high in case of Bt cotton in Haveri district. Though, government has not noticed Bt cotton but to be found popular with farmers. The farmers were brand loyal to same important brands available in the market.

5.2

Farmers buying behaviour

5.2.1 Purchasing behaviour of Bt and non-Bt cotton seeds
The popularity of the Bt cotton was found to be popular in Haveri as compared to Dharwad and Gadag district. Farmers mostly purchased banni brand (94.75%) of Bt cotton followed by rasi (6.00%). In the case of Haveri district, 57 per cent of the farmers purchased rasi brand of cotton seed followed by 26 per cent in Mahyco 6918 brand, nearly 60 per cent of the farmers bought rasi brand. The other brands like banni and mahyco 6918 occupied second position to about 32 per cent. The rasi brand of cotton seeds occupied major portion followed by banni and mahyco in Haveri district. The private company seeds found to be popular in the study area. This is mainly attributed to better performance of quality and adoptive characteristics of cotton seeds in the study area. In the case of non-Bt cotton, the purchase behaviour showed the popularity of adoption in Dharwad and Gadag districts as revealed by Table 4.4. Jayadhar cotton seed occupied the major position (42.20%) among the other types of non-Bt cotton available in the market. This was followed by DCH-32 (29%) a traditional hybrid in the districts. In the case of Haveri district absence of non-Bt cotton was a unique feature. In Gadag district, Jayadhar was purchased by nearly 82 per cent of the farmers. Dharwad district and Gadag district farmers have been growing Jayadhar and DCH32 as important variety hybrid since long-time and have confidence over yields, quantities and prices received from production. They are not much responsive to the Bt cotton performance. The soils and other features have better performance on these non-Bt cotton varieties.

5.2.2 Preferences for the source of supply
The results presented in Table 4.5 clearly shows that the private dealers dominated the seed supply in the district followed by the KSDA a Government agency. Nearly 50 per cent of the farmers opined about their preference to private dealers for their purchases for availability, timely nearness of the stores, quality seed material and the technical advise received from private dealers. Cost considerations and credit facility provided by the private dealers accounted for less than 30 per cent. Nearly 75 per cent of the farmers opined that the seeds obtained from KSDA was less priced and hence brought from that agency. Around 50 per cent of the farmers opined for the preferential characters listed in the table. The reasons attributed were the private dealers were selling seeds which were of high quality, high yield levels and the sources of supply were quite near and also supplied the seeds in time compared to other sources. The farmers were ready to pay higher prices for privately sold cotton seeds. However, with the policy of the government to sell private company brands of seeds through Raitha samparka Kendra also found second place in the source of supply and were also providing technical guidance to farmers while they visited the department in Dharwad district. The results presented in Table 4.6 indicated relatively distributed agencies supplying cotton seeds in Gadag district. Nearly 45 per cent of the farmers opined that they preferred private dealers because they could get their preferred brand of cotton seeds. There was timely supply, quality material was found and above all the required quantities. The cost consideration was obtained by 30 per cent farmers and very few opined that they did not prefer private dealers due to the credit facility rendered by them. The co-operatives found unique preference by the sample farmers in Gadag district. Nearly 45 per cent of the farmers preferred co-operatives because of timely supply, the society was near to them followed by cost considerations as they were available at lower prices compared to the private dealers. However, 90 per cent of the farmers opined that they did not receive any technical guidance by the co-operatives.

Table 4.7 shows the preferential character for the purchase of cotton seeds and the source of supply in Haveri districts. Private dealers dominated the market in the districts followed by KSDA for the preferential characteristics as stated in the table. Cent per cent of the farmers opined that they opted for private dealers as they were near for purchase. Most of the farmers (98.00%) preferred private dealers as they found availability of preferred brand, timely supply and good quality seed material in their shops. Nearly 50 per cent of them opined about the provision of technical guidance by the private dealers.

5.2.3 Sources of supply of Bt and non-Bt cotton seeds
The overall figures indicate the dominance of private dealers in the marketing of cotton seeds as reviewed in the Table 4.8. Nearly 62 per cent of the farmers bought seeds from private dealers followed by KSDA to the extent of 28 per cent and about 16 per cent from the co-operatives. KSDA was found to be relatively popular in Dharwad district which was to the extent of 60 per cent followed by about 50 per cent of the farmers purchasing from private dealers. Gadag district farmers purchased cotton seeds mainly from co-operative societies (43%) followed by private dealers to the extent of 37 per cent. In the case of Haveri district, almost all (99%) preferred the private dealers as source of supply compared to other sources of supply in the districts. The KSDA was popular in Dharwad district due to the better services provided by them. However, the farmers were also approaching crops in Gadag district as the cooperatives are performing well in the district with better services in time supply and adequate quantities. The farmers of Haveri clarified to private dealer due to almost 100 per cent adoption of Bt cotton.

5.3

Dealers margin

4.3.1 Brand-wise margins for Bt cotton seeds
The results of Table 4.9 depicted the various brand (12 brands) Bt cotton seeds in the study area and the dealers price that is purchase and retail margin over dealers price. It is quite evident from the table that the dealers retail price is found to be 750 for 450 g of Bt cotton. There was no variation in the pries of all the brands found in the district on the study, the dealers price varied from Rs. 718 in chamundi brand and Mayhco to Rs. 723 in the case of Rasi brand of cotton seeds. It was found that there is not much procurement price of the dealer. The margin obtained by dealers varied from Rs. 27. In the case of Rasi brand to Rs. 32 in the case of chamundi and mahyco brands of cotton seeds. The percentage of margin obtained by the dealer varied from 4.46 in mahyco 6322 to about 3.72 per cent in the case of Rasi seeds. However, the brands namely mahyco BG-2, chamundi, JK Durga, realized about 4 per cent margin as revealed from the table. The margins did not vary much for Bt cotton as the government check is present in the prices of Bt cotton in their MRPs sold. Larger margins were noticed in non-Bt cotton and the presence of brands is also quite high making more competitive in the market.

5.3.2 Brand-wise margins for non-Bt cotton seeds
The margin observed from the Table 4.10 reveals that the margin varied from Rs. 20 in Badri brand to Rs. 2.43, in case of DCH-32 which was found to be highest among 11 brand of cotton seeds in the study area. The percentage margin over dealers price for brahma brand of cotton seeds and followed by Karnataka, DCH-32 which was 8.37 and JK-99 to the extent of 8.43 per cent. These margins are regulated on the dealers purchase price and the extent of profit margin. The procurement prices range between Rs. 502 in supper banni followed by Dhanu and Amoga. The other brands varied around Rs. 390 per cent 500 g of cotton seeds. The average dealers retail price where found to be highest supper banni and amogha, which is higher than Rs. 500 but less than 530.

5.4

Projected gaps in demand and supply

The projected gap between demand and supply for major hybrids and varieties for the 5 years i.e. from 2007-08 to 2011-12 presented in Table 4.4. The projected gap between demand and supply of cotton hybrids and varieties seeds was found to be deficit except in Varalakshmi Hybrid. In the case of DCH-32 the projected demand for cotton seeds is expected to be decrease from 1525.95 quintals in 2007-08 to 1270.39 quintals in 2011-12 and projected supply is also expected to be decrease from 1108.41 quintals in 2007-08 to 621.58 quintals in 2011-12, but the gap is expected to increase from 471.54 quintals in 2007-08 to 648.81 quintals in 2011-12. This shows that the deficit of DCH-32 cotton seeds. The findings of the present study are in line with Anonymous (2006) and Anonymous (2007). For NHH-44 hybrid the projected demand for cotton seeds expected to decrease from 220.46 quintals in 2007-08 to 136.56 quintals in 2011-12 and projected supply expected to decrease from 134.53 in 2007-08 to 81.58 quintals in 2011-12. Similarly the gap also expected to decrease from 85.94 quintals in 2007-08 to 54.98 quintals in 2011-12. The projected gap between demand and supply is expected to be deficit. In case varalakshmi cotton seed, the projected demand and supply is expected to be decrease over the years considered in the study i.e. projected demand is expected to decrease from 39.73 quintals in 2007-08 to 18.02 quintals in 2001-12. Similarly the supply of seeds is also expected to decrease from 43.87 quintals in 2007-08 to 19.89 quintals in 201112. During this period the expected gap would be the surplus and increasing from -4.14 quintals in 2007-08 to -1.88 quintals in 2011-12. The reason might be the earlier trends in production influencing seeds production. Projected demand and supply for other hybrids in the state was calculated. The results are presented in the Table 4.5 of this chapter IV. The projected demand is expected to be decrease from 2692.75 quintals in 2007-08 to 1768.64 quintals in 2001-12. Similarly the projected supply is also expected to decrease from 1220.06 quintals in 2007-08 to 736.91 quintals in 2011-12. The gap is expected be deficit and decrease from 1476.69 quintals in 2007-08 to 1031.73 quintals in 2011-12. For Jayadhar variety projected demand and supply gap is expected to be decrease from 19535.04 quintals in 2007-08 to 17965.68 quintals in 2011-12. The projected demand also expected to decrease from 19615.2 quintals in 2007-08 to 18021.57 quintals in 2011-12. Similar results found in projected supply also i.e. projected supply decrease from 80.16 quintals in 2007-08 to 38.89 quintals in 2011-12, but there is larger demand for cotton seeds supply is very less. This would be the reason that majority of the farmers using own produced seeds from previous crop for next year sowing. In case of LRA-5166 the projected demand is expected to increase from 1394.76 quintals in 2007-08 to 2336.15 quintals in 2011-12, but the projected supply is expected to decrease from 730.28 quintals to 627.33 quintals in 2011-12. The gap expected to be deficit increase from 664.47 quintals in 2007-08 to 1708.82 quintals in 2011-12. Finally, for other varieties put together projected gap expected to decrease from 18125.26 quintals in 2007-08 to 14771.08 quintals in 2011-12 similarly in case of demand i.e. projected demand expected to decrease from 19628.75 quintals in 2007-08 to 16176.80 quintals in 2011-12 and supply expected to decrease from 1503.48 quintals in 2007-08 to 1405.73 quintals in 2011-12. This might be that farmers using own produced seeds from previous crop for next year sowing.

5.5

Problems in dealers and farmers

5.5.1 Problems faced by farmers
As many as 9 important problems are listed so as to know the intensity problems faced by farmers. The Table 4.12 clearly showed that majority of the Dharwad farmer opined that the seeds were of low quality, leading to higher incidence of pest and disease inspite of mentioning on the product label with respect to control of pest and diseases to larger extent. Nearly 68 per cent of the farmers also opined that inspite of assured yield there was instability in yields obtained from particular brands of cotton seeds. The other problems of untimely supply of seed is also important problem faced by around 45 per cent of the farmers opinion. The problems like viability of cotton seeds, lack of technical guidance were found to have less intensity among the problems. The problems like variation in prices of seeds untimely supply of seeds and viability problems were found to be off medium intensive. They highly intensive problem were instability in pest and disease problem which was opined by most of the farmers. The problems by lack of technical guidance was found to be least important compared to improper weighment, germination losses were major among the low intensive problems. Untimely supply of seeds was found to be medium intensive problem has opined by nearly 78 per cent of the farmers in Gadag district. Gadag district farmers did not have much of these problems intensively at higher levels. Among the problems listed as revealed by the percentages which varied from 42 to 12 per cent showing relatively less problem in Gadag district with purchase of cotton seeds. The problems faced by the farmers in purchase of cotton seeds in Haveri district presented in Table 4.12 the overall table indicates that the problems mentioned the table were off less intensive. However, there were presents of medium intensive problems such as price variation, which was expressed by 73 per cent of the farmers followed timely supply of seeds (69%) weather change an extent of 48 per cent, low intensive problem included attack of pest and diseases.

5.5.2 Problems faced by dealers
The popularity of the crop in the study of the commercial nature of the cotton makes the market for cotton seeds very competitive. The players of MNCs and number of domestic players was made the cotton seed market highly complex. The dealership returns is widely distributed. The study was investigated into the problems of dealers in the study area with a view to propose suggestions for the improvement of cotton seed marketing. The Table 4.12 shows the problems faced by dealers in the sale of cotton seed in the study area. The problems have been classified as procurement problems and sales problems. The government interference was quite high as opined by 67 per cent of the dealers followed by risk in investment in the business. Mostly the problems were of medium nature as opined by majority of the dealers (percentage varying from 74 to 45 per cent) among the procurement problems. Timely supply and inadequate storage facility were found to be major problems. The supply of adulterated seeds and high transportation were reported as low intensive problem by dealers in all the districts. The problems such as lack of awareness of use of particular seeds by farmers inventory management were found to be medium intensive. The other problems like high taxes, management of advertisement were found to be lower intensive among the problems enlisted.

6. SUMMARY AND POLICY IMPLICATIONS
In India, increasing agricultural production in future depends on the increase in productivity, as the sustainable limit in the case of acreage expansion has crossed. In the near future, the area under plough is likely to decrease with increasing urbanization, industrialization and expansion of urban infrastructural facilities. Now the solution to meet the increasing food grain demand is to produce more from limited land resources by the efficient use of improved agricultural technologies. The process of modernizing Indian agriculture primarily involves the intensive use of non-conventional inputs such as quality seeds, chemical fertilizers, pesticides, weedicides, irrigation, farm machinery and a network of research and extension infrastructure. The quality seed is a trigger point which sets in motion the process of technological change. In the development of agriculture, seed has been important since the crops were first domesticated. In the traditional agriculture, the cultivators retained part of the produce for seed purposes, the introduction of new technology in Indian agriculture during the mid sixties enabled the country to become self-sufficient in food grain production. It would not be an exaggeration to say that that the well known agricultural revolution was based on the use of high yielding varieties and hybrids of crop plants responsive to high levels of chemicals of fertilizers and irrigation. With the development of plant breeding in the early twentieth century, improved crop varieties were evolved and their seed production was taken up in the organized sector. Seed industry is heterogeneous in many dimensions. The product segment corresponds to all the major field crops and vegetables. With respect to product type, a major distinction is between hybrids and open-pollinated varieties. As a result, beyond the initial purchase, the farmers can multiply their own seed. This is not a viable strategy with hybrids because they suffer noticeable declines in yields in subsequent generations. As a result, hybrid seed need to be repeatedly purchased. Hybrids dominate in coarse cereals consisting of sorghum, pearl millet, maize, cotton and oilseeds. Seed firms, whether in the private or public sector, outsource the production of seeds through contract growers. These growers are supplied with the foundation seed that is used to produce commercial seed. The seed industry is one of the earliest examples of contract farming in India.

Cotton
Cotton is as ancient as the human civilization as the human civilization exclusive cotton fabrics have become a status symbol and are becoming increasingly costlier. Cotton the ‘White Gold’ and ‘King of Fibres’, is a crop of prosperity and is considered to be an industrial commodity of world wide importance. Cotton is the most vital crop of commerce to many countries such as USA, China, India, Pakistan, Uzbekistan, Australia, few African and South American countries. About eighty countries of the world are growing cotton. The previous studies have been mostly concurrently on the technological breakthrough in hybrids, economics of production etc. But, in the present content of globalization, liberalization and privatization, it becomes more important that we should more focus on the marketing and services states which will ultimately bring the results of the technological changes in the near future. Hence, a study has been taken up in North Karnataka in which cotton is a major crops s to focus on the marketing services and provide policy initiatives in the wake of development of this cotton economy. It is therefore decided to target the investigations with the following basic objectives.

Specific objectives
1. To study the market structure and conduct of cotton seed market. 2. To analyse the farmers buying behaviour of cotton seeds. 3. To analyse the variation in the dealers margin for different brands of cotton seeds.

4. To ascertain the demand and supply and the gap for the cotton seeds. 5. To analyse the problems faced by the farmers in purchasing of cotton seeds and in sales by the dealers.

Methodology
Description of the study area
Location Karnataka sate is situated in West Central part of the peninsular India. It consists of a narrow elongated belt between the Arabian sea and western ghats and enhancing coastline of about 400 km. The state has an area of 1,19,257 sq. km and situated between 1150 and 19' North latitude and 740 and 78' East longitudes. The state is bounded by Maharashtra on the north and by Goa and the Arabian sea on the west. It has a common border with Andhra Pradesh on the east and with Tamil Nadu and Kerala on the south. The average rainfall of the state is 1139 mm. The state receives rainfall both from southwest and northeast monsoons. The mean temperature ranges from 21.50 to 31.70C. The climatic endowments are favourable for the adoption of crossbred, cattle and for the production of crops throughout the year. It is wafe is made available. 1. Dharwad district The divided Dharwad district falls in the northern part of Karnataka between 150 15’ 0 0 and 15 35’ N latitude and 75 00’ and 75 20’ E longitudes. It is bounded on the north by Belgaum district, on the south by Haveri district, on the east by Gadag district and on the west by Uttara Kannada district. The district has an area of 4263 km2 contributing 2.22 per cent of the state area and population is of 15.75 Lakhs (2001 census).
0

Dharwad district is endowed with semi-malnad geographically advantage and contributes good towards agriculture production. The district has recorded production of potato, cotton etc. The district is equipped with good infrastructure like roads, markets, godowns, good network of agriculture input centres throughout the district according to 2006 there about a total 180 licensed agriculture input centres. 2. Gadag district Gadag district is situated between 14033 to 14062 north latitude and 75013 to 75042 east latitude. It is bounded east by Koppal district, in the west by Dharwad district, in the north by Bangalore district and in the south by Haveri and Bellary districts. Gadag district is endowed with semi geographically advantage and contributes good towards agriculture production. The district has recorded production of chilli, jowar, wheat etc. The district is equipped with good infrastructure like roads, markets, godowns, good network of agriculture input centres throughout the district according to 2006 there about a total 240 licensed agriculture input centres. 3. Haveri district Haveri district was formed dividing it from erstwhile Dharwad district situated at 14028’ 0 0 and 14 29’ N latitudes and 75 07’ and 75 38’ E longitudes. The district is bounded on north by Dharwad and Gadag districts, on south by Davanagere and Shimoga districts, on west by Uttara Kannada district and on east by Bellary district.
0

Haveri district is endowed with good geographically advantage and contributes good towards agriculture production. The district has recorded production of cotton, chilli, maize, soybean etc. The district is equipped with good infrastructure like roads, markets, godowns, good network of agriculture input centres throughout the district according to 2006 there about a total 280 licensed agriculture input centres.

Nature and sources of data

In order to evaluate the objectives of the study, data was collected from both primary secondary sources. Primary data The primary data was collected sing a pre-structured questionnaire encompassing a number of variables/parameters which could explain their behaviour towards purchase of seeds, the dealers margin etc. Secondary data As the research study focuses on the aspects such as estimating of demand and supply of their gaps and also some of the information relating to the number of dealers in each district, quantities handled, the role of departments, the licensing of agriculture input agencies, the statistical data etc. were very much required to take some of the investigation process. Sampling design However, the figures of production of cotton could not be ascertained which directly dependent on the diversity in productivity in different location a multistage random sampling was adopted as appropriate sampling procedure for the study. Selection of districts The three northern districts of Karnataka namely Dharwad, Gadag and Haveri reported to the highest area under cotton which contributed about 30 per cent of the total area under cotton were selected. Selection of taluks Total of six talks were selected as representative district in the cotton seed marketing the taluks selected Dharwad and Kalaghatgi in Dharwad districts; Haveri, Hirekerur in haveri district and Gadag, Shirahatti taluks in Gadag district. Selection of villages Three villages in each taluk were selected based on the area coverage under cotton production. So, totally of 18 villages were selected for the study. Selection of farmers Totally 15 sample respondents, who where growing cotton from each village on random bases however, ensuring to note that the importance of cotton production in this cropped area were choosen. Hence, a total of 270 farmers were selected. Selection of market The importance of study is to focus of marketing of cotton seeds bearing the importance of cotton production in the study area as cotton is an important commercial crop. Dharwad, Haveri and Gadag are important cotton markets in northern Karnataka were selected. Selection of dealers Keeping in mind the relative importance of agencies/companies in the total volume of business specially in cotton seed marketing. Hence, a total of 30 dealers when selected to elicit information required for the study. Tabular analysis, compound growth rate and Gini coefficient ratio were used in the present investigation as analytical tools.

Major findings of the study
Extent of inequality in trade for cotton seed marketing

The cumulative percentage of dealers in Bt cotton in the sample district and this cumulative percentage of quantity’s handled by these agency’s in the study area. Gini coefficient was observed to be 0.95, which indicates that less is the inequality in the marketing of Bt cotton seeds in the study area. This means that the Bt cotton trade is well distributed among various dealers or evenly distribution among different agency’s in Bt cotton seeds trade. In the case of non-Bt cotton, the coefficient observed to be 0.947 which was quite similar indicating less inequality showing the even distribution of cotton trade between different agency’s involved in cotton trade. Cotton demands for purchased inputs and investment. Many companies and dealers do participate in the trade. The market for cotton is highly competitive and the results also indicate the same

Factors influencing brand loyalty
In the course of investigation, it was found that the cotton seed trade was highly competitive with various types of players, MNC’s, private companies and public sector companies. So, the market situation market seems to be highly monopolistic in cotton trade indicating the presence of innumerable brand of cotton seeds in market. This situation faces the farmers in a situation to decide and adopt a particular brand of cotton seeds. Hence, it was thought to focus the study on how a farmer is brand loyal. The brand preferred in Dharwad district farmers (93.00%) followed by Haveri district farmers (92.00%) and Gadag district farmers (72.00). The overall figures showed that 86 per cent of the farmers had in their mind to purchase preferred brand cotton seeds. The reasons attributed to this situation is that the districts are confined to adoption of single variety/hybrid in each district like Dharwad for non-Bt cotton, Haveri with Bt and mixture of these two cotton in Gadag district. This is relatively explained by the climatic and other features for their adoption.

Purchasing behaviour of Bt and non-Bt cotton seeds
The cotton seeds purchased by farmers in Bt cotton. Bt cotton tends to be popular in Haveri district compared to Gadag and Dharwad districts. In Dharwad district, Bt cotton tends to be unpopular however few farmers have purchased banni brand (94.75%) of Bt cotton followed by rasi (6.00%), 57 per cent of the farmers purchased rasi brand of cotton seed followed by 26 per cent in Mahyco 6918 brand, even in the case of Haveri district, nearly 60 per cent of the farmers bought rasi brand. The other brands like banni and mahyco 6918 occupied second position to about 32 per cent. The overall picture of cotton seed found that rasi brand was popular among the districts in the study area, which was to the extent of 50 per cent followed by banni brand. Other farmers showed mixed reaction with respect to the various other 11 brands of cotton seeds which range between 3 to 10 per cent. The popularity of the Bt cotton was found to be popular in Haveri and not popular in Dharwad and Gadag district. Farmers mostly purchased banni brand (94.75%) of Bt cotton followed by rasi (6.00%), 57 per cent of the farmers purchased. Dharwad district and Gadag district farmers have been growing Jayadhar and DCH-32 as important variety hybrid since long-time and have confidence over yields, quantities and prices received from production. They are not much responsive to the Bt cotton performance. The soils and other features have better performance on these non-Bt cotton varieties.

Preferences for the source of supply
The sources of supply play a very important role in the purchase behaviour of farmers for any seeds. The preference for source of supply for cotton seeds and the characteristics preferences made by the sample farmers in Dharwad district. The private dealers dominated the seed supply in the district followed by the KSDA a Government agency. Nearly 50 per cent of the farmers opined about their preference to private dealers for their purchases for availability, timely nearness of the stores, quality seed material and the technical advise received from private dealers. Cost considerations and credit facility provided by the private dealers accounted for less than 30 per cent. Nearly 75 per cent of the farmers opined that the seeds obtained from KSDA was less priced and hence brought from that agency. Nearly 45 per cent of the farmers opined that they preferred private dealers because they could get their preferred brand of cotton seeds. The purchase of cotton seeds and the source of supply in Haveri districts, private dealers dominated the market since in the districts followed by negligible in the KSDA for the preferential characteristics. The farmers opined that

they opined for private dealers became they were near for private dealers because they were near for purchase. Most of the farmers (98.00%) preferred private dealers as they found availability of preferred brand, timely supply and good quality seed material in their shops.

Sources of supply of Bt and non-Bt cotton seeds
The overall figures indicate the dominance of private dealers in the marketing of cotton seeds. Nearly 62 per cent of the farmers bought from private dealers followed by KSDA to the extent of 28 per cent and about 16 per cent from the co-operatives. KSDA was found to be relatively popular in Dharwad district which was to the extent of 60 per cent followed by about 50 per cent of the farmers purchasing from private dealers. Gadag district farmers purchased cotton seeds from co-operative societies (43%) followed by private dealers to the extent of 37 per cent. In the case of Haveri district, almost all (99%) preferred the private dealers as source of supply compared to other sources of supply in the districts.

Brand-wise margins for Bt cotton seeds
The various brand (12 brands) Bt cotton seeds in the study area and the dealers price that is purchase and retail margin over dealers price. It is quite evident from the table that the dealers retail price is found to be 750 for 450 g of Bt cotton. The margin obtained by dealers varied from Rs. 27. In the case of Rasi brand to Rs. 32 in the case of chamundi and mahyco brands of cotton seeds. The percentage of margin obtained by the dealer varied from 4.46 in mahyco 6322 to about 3.72 per cent in the case of Rasi seeds. However, the brands namely mahyco BG-2, chamundi, JK Durga, realized about 4 per cent margin. The margins did not vary much for Bt cotton as the government check is present in the prices of Bt cotton in their MRPs sold. Larger margins were noticed in non-Bt cotton and the presence of brands is also quite high making more competitive in the market.

Brand-wise margins for non-Bt cotton seeds
The margin varied from Rs. 20 in Badri brand Rs. 2.43. In case of DCH-32 which was found to be highest among 11 brand of cotton seeds in the study area. The percentage over margin over dealers price brahma brand of cotton seeds and followed by Karnataka, DCH-32 which was 8.37 and JK-99 to the extent of 8.43 per cent. These margins are regulated on the dealers purchase price and the extent of profit margin. The procurement prices range between Rs. 502 in supper banni followed by Dhanu and Amoga. The other brands varied around Rs. 390 per cent 500 g of cotton seeds. The average dealers retail price where found to be highest supper banni and amogha, which is higher than Rs. 500 but less than 530.

Projected gaps in demand and supply
The projected supply and demand gap was calculated by the differences between projected demand and projected supply. The projected demand was calculated by multiplying the projected area of cotton and seed rate and projected supply was calculated by using sale of cotton seeds based on the values of compound growth rate obtained. The gap in projected supply and demand for the 5 years that is from 2007 to 2011 was worked out for major hybrids and varieties. Projected gap expected to decrease from 18125.26 quintals in 2007-08 to 14771.08 quintals in 2011-12 similarly in case of demand i.e. projected demand expected to decrease from 19628.75 quintals in 2007-08 to 16176.80 quintals in 2011-12 and supply expected to decrease from 1503.48 quintals in 2007-08 to 1405.73 quintals in 2011-12.

Problems faced by farmers
As many as 9 important problems are listed so as to know the intensity problems faced by farmers. The table clearly showed that majority of the Dharwad farmer opined that the seeds were of low quality, leading to higher incidence of pest and disease inspite of mentioning on the product label with respect to control of pest and diseases to larger extent. Nearly 68 per cent of the farmers also opined that inspite of assured yield there was instability in yields obtained from particular brands of cotton seeds. The other problems of untimely supply of seed is also important problem faced by around 45 per cent of the farmers opinion. The problems like viability of cotton seeds, lack of technical guidance were found to have less

intensity among the problems. The problems like variation in prices of seeds untimely supply of seeds and viability problems were found to be off medium intensive. They highly intensive problem were instability in pest and disease problem which was opined by most of the farmers. The overall problems were off less intensive. However, there were presents of medium intensive problems such as price variation, which was expressed by 73 per cent of the farmers followed timely supply of seeds (69%) weather change an extent of 48 per cent, low intensive problem included attack of pest and diseases, lack of technical guidance, germination losses were opined less intensive problems.

Problems faced by dealers
The problems such as lack of awareness of use of particular seeds by farmers inventory management were found to be medium intensive. The other problems like high taxes, management of advertisement were found to be lower intensive among the problems enlisted. The popularity of the crop in the study of the commercial nature of the cotton makes the market for cotton seeds very competitive. The players of MNCs and number of domestic players was made the cotton seed market highly complex.

Policy implications
1. The results of the study on market structure showed that there is in less inequality as indicated by the gini coefficient ratio. This indicates that the market for cotton seeds is well distributed among different dealers and shows high competitive nature in the cotton seed trade. Adequate policy measures need to be directed towards stabilization of cotton seed trade in the interest of the farming community. 2. The brand loyalty results showed that farmers wished to buy good seeds from the companies with good quality, timely supply, comparison of yield etc. which makes them more popular among private dealer as compared to KSDA and thus KSDA need strategies to become professional in seed marketing. To make KSDA brand loyal to avoid exploitation by MNCs and other indigenous private companies, it needs to gear up its activities. The State Department of Agriculture can make arrangement for supply cotton seeds with good quality and timely so that the farmers could procure seeds at lower prices. 3. The results also indicated that Bt cotton was popular in Haveri district. Adequate strategies need to be adopted to popularize in other districts also to reduce the cost of production and higher returns. 4. The results of the study shows that there is decreasing trend in the area under cotton in Karnataka which is reflected by decline in the demand for cotton seeds, the reasons attributed are instability in the prices of cotton, decrease in productivity levelly , timely non-availability of labour for various operations in cotton production like plant protection and harvesting. One more important reason that can be attributed is the competitive crops like maize and sunflower have been replacing cotton from the point of view prices and labour management. 5. The higher dealer’s margins observed in the case of non-Bt cotton and lower in Bt cotton showed that there is higher competition among Bt cotton players (specially from MNC’s) which have dominated the cotton trade seen. There is need to develop sound marketing strategies through reduction in margins and sell seeds at lower prices through development of adequate retail outlets of government like KSDA to provide better facilities in the remotest corners of villages for supply of cotton seeds. 6. The results of the study indicated that the farmers were facing problems of incidence of pests attack inspite of guarantee provided by the dealers/agencies and lower yields noticed in the hybrids. There is need to have a check on the quality of seeds market through strengthening government control.

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Appendix I. Interview Schedule 1. Name of the dealer 2. Location 3. Taluk 4. District : : : :

Name of the brand Years Bt Non-Bt

Quantity sold (kg) Bt Non-Bt Bt

Price (Rs.) Non-Bt

Sl. No.

Brand

Purchase price of dealer

Company discounting/kg or quintal

Dealers retail price

Margin

Percentage

Problems faced by dealers in marketing of cotton seeds

Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Procurement problems Risk in investment High transportation cost Government interference Procedural formalities like registration etc. Supply of adulterated seeds Timely supply of seeds Scientific facilities Lack of storage facilities Inadequate trained personal Others a) b) c)

High

Moderate

Low

Sl. No. 1. 2. 3. 4. 5. 6. 7. 8.

Sales problems Credit sales Management of advertisements Competition among the dealers High taxes Huge investment Inventory management Lack of awareness of use of seeds by farmers Others a) b) c)

High

Moderate

Low

MARKETING OF COTTON SEEDS– A MARKET STRATEGY ANALYSIS
TIMMANNA R. BENAKATTI 2007
ABSTRACT
Cotton is an important commercial crop of North Karnataka. With the development of new hybrids in cotton, seeds coupled with innovative production technology has transformed cotton production. With the liberalized policy of government there is an emergence of monopolistic market situation posing farmers in decision making on the selection of seeds for production. The study has been undertaken in selected districts in North Karnataka. The results revealed that the cotton seeds purchased by farmers in Bt cotton. Bt cotton tends to be popular in Haveri district compared to Gadag and Dharwad districts. Most of the farmers purchase Banni brand (93.75%) of Bt cotton followed by Rasi (60.00%), 57 per cent of the farmers purchased Rasi brand of cotton seed followed by 26 per cent in Mahyco 6918 brand. Nearly 45 per cent of the farmers opined that they preferred private dealers because they could get their preferred brand of cotton seeds. The overall figures indicated the dominance of private dealers in the marketing of cotton seeds. Gadag district farmers purchased cotton seeds from co-operative societies (43%) followed by private dealers to the extent of 37 per cent. About 12 brands of Bt cotton seeds were sold in the study area. The dealers margin varied from Rs. 20 in Badri brand Rs. 2.43. The market for cotton seeds represented a monopolistic nature. Thus, making it more competitive in the seed industry. It is suggested that policy measures need to be directed towards the popularization of Bt cotton in non-traditional areas and improve institutional arrangements for marketing of cotton seeds.

Dr. R. A. YELEDHALLI Major Advisor