concept notes for establishing collection center

8/9/2019 Concept notes for establishing Collection Center

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Concept notes on Linking Production Pocket

Areas with the Collection Centers to Develop aStrong Market Chain with Sustained Business

Development Services

Source: Agriculture Marketing Manual, FAO andDepartment of Agriculture, Nepal

8/15/2010

Prepared by:

Mr. Sichan Shrestha

Marketing Consultant, Nepal

DRAFT


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(MMC) who will then operate collection centre. The objective of establishing Marketing

and Management Committee is to collective market all types of vegetables and other

agriculture crops so that they are self sustained.

Figure 1: Flow chart for setting up sustained market chain

2 to 3 each individual farmer from each producers group shall represents in a MMC.

Collection centre will be established with basic physical infrastructure such as storagefacility, shed, weighing machine etc. and will provide basic business services to the

individual farmers (read business services for more details). In the collection centre all

types of vegetables bought will be weighed and packaged as per the traders

requirement. Farmers will be immediately paid in cash with a prevailing market rate or

accumulated till the sufficient cash is deposited. There is a usual trend being observed is

that once the farmers received cash they will spend immediately purchasing unnecessary

things and they go home with no cash in hand. Before agriculture produce are bought in

the collection centre they should be provided with prevailing market rates so that they

can decide on whether to sell at the collection centre or other individual traders.

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Dzongkhag and GeogsProducers

Group

Producers

Group

Marketing &

Management

Committee (MMC)

Producers

Group

Collection

Centre

Dzongkha

gLevel Regional

Level

Farmers Group or

Cooperative

CONSUMER

2 to 3 farmers from

each producer

group will be a

representative of

MMC

Farmers aggregate their

produce; MMC takes

initiatives in marketing and

sales to the traders or

producers group themselves

can sell


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This collection centre will be provided with a support to facilitate logistics movement

to kick start the process of leading by example by demonstrating the aggregation and

collective transportation process to address the constraints arising from inadequate scale

due to fragmented production efforts.

The collected agriculture produce will then be sold to the traders by inviting them to

visit the centre in a regular basis from nearby market centre. They will build relationship

with few traders with whom they will regularly do business so that there is a trust and

feeling of social responsibility towards contributing to the poor farmers.

The collection centre will also positioned themselves as a full scale service provider to

their farmers and supporting them taking to the fairs, buyer-seller meeting, exhibitions

and other such efforts.

2. Roles and Responsibilities of Marketing and Management Committee

of Collection Center

Marketing and Management Committee shall operate with a structure as show below.

From the very beginning farmers will be made aware about the market and finally

the buyers. MMC will facilitate to the groups by orienting them to prepare acultivation plan according to the buyers requirements

Provide market information to the farmers

Motivate to involve more number of female members

Conduct meetings within a group and support them with the details of selection of

crops, crops variety, areas of production etc.

Conduct meeting every month and prepare its meeting minutes

Promotion of agriculture commodities produced by the individual farmers to fetch

better market price with the group marketing approach

Recruit manager and other staff as per the need

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Chairman

Secretary

Treasurer

Member Member Member Member


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Building relationship with the market traders, Government service centres,

projects etc. for resource mobilization, knowledge, skills and other resources

Establish a fund which will be utilized for welfare of farmers and regular operation

of collection centre. Fund will be deposited in the reliable bank with a provision of

signature from three persons (president, secretary and finance).

3. Business Services

Business services are services provided to the individual farmer, who regularly brings

agriculture produce in the collection centre. Following services are provided to the

farmers.

Regular collection of all types of vegetables and other agriculture commodities

Weighing scale

Record keeping

Seeds

Water facility

Training, workshop and interaction

Storage facility cold storage in advance type

Office space for administration and meetings

Sales of agriculture inputs

Market information

Linkages with the wholesale market traders

Cleaning and sanitation

One stop farmers shop this is a new concept envisioned to provided all types of

seeds, fertilizers, pest etc. from the same place

4. Service Charge

For long term sustainability of collection centre service fee will be charged for few

services they offer.

Price will be fixed for weighing every kg of vegetables and other agriculture

commodities bought in the collection centre

Selling seeds

Membership fee for new entry to the MMC

Existing infrastructure will be used in other businesses such as collection of NFTP,

livestock etc.

Consultancy services

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Collection centre can be more than regular business service providers. Few collection

centres in Nepal are providing additional services such as providing health services to

the farmers and building rural infrastructure.

Source: Marketing Manual, FAO and Department of Agriculture, Nepal


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5. Points to be considered for selecting appropriate place forestablishing collection center

1. It should be near to the road heads.

2. It should be located near to the production pocket areas and located where there

is possibility of sufficient collection of vegetables so that one truck of load can be

managed.

3. Before finalizing location, there should be enough discussion between the farmers

and traders and other concern stakeholders and they should give final approval.

6. Management of Collection Center

Following points should be taken into consideration for effective operation and

management of collection centre

1. There should be discussion on buying and selling days, time and other process.

There should be regular interaction and reporting to the traders

2. To protect from heat and rain, there should be proper space for storage, parking

facility

3. To build infrastructure make use of locally available resources

4. Coordinate with other organisation for financial resources

7. Management of MMC

1. There should be democratic election to select 9 or 11 members

2. Representatives of agriculture marketing management committee, traders,

service centres and other geog level actors

3. Collection centre management committee should solely take responsibility of

management and preparation of operation policy guideline

4. Look after production pocket for space for collection and equal price,

standardization and grading

5. Make available of crate and weighing machine

6. Recruit knowledgeable person for networking

7. Calculate transportation cost using existing available vehicles

8. Management packaging and explore possibility of reduction in packaging loss

9. There are incidences that farmers adulterate by putting inferior quality products

in-between the packet. Farmers feel that they can easily cheat market people but

when such incidence is identified the whole other farmers will also suffer as the

buyers will reject products from all farmers. This type of behaviour should not be

promoted and strictly monitored.

10. Always target nearby market interact with the buyers about the market demand

and price information before the product is harvested.

8. What to do when there is more supply than the local demand?

1. Collect market information

2. Build relationships with all the market traders located locally or in India borders

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3. To reduce transportation cost use existing available transport facility. In the

Eastern Bhutan there are frequent movement of truck transporting gypsum which

can be effectively utilized.

9. Conclusion

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concept notes for establishing collection center

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