Effectiveness of the public distribution channel - the case of controlled cloth distribution

Abstract

The study was aimed at determining whether, in the light of the changing nature of products proposed to be distributed to the economically weaker sections of the population the public distribution channel, as it is organized today, would face any difficulty in distributing these products. In pursuit of this objective, answers to the following questions were sought: (i) What is the public distribution system and what is the role of the channel in the system? (ii)What are the functions that must be performed by the channel in order to effectively distribute these products? (iii) How well are these functions being performed presently? (iv)In the light of the answers to the above, how effective is the channel as a vehicle for distributing these products? Since controlled cloth approximates the nature of the new products (in that it is a non-commodity item) proposed to be distributed, answers to the above questions were sought through studying and evaluating the performance of the public distribution channel in distributing controlled cloth. A public distribution system was defined as a system, created through government intervention, with the objective of making available essential commodities at fixed prices to the economically weaker sections, who without the existence of such a system, would be unable to meet their minimum requirements of such commodities. It was postulated that the system comprised of five sub-systems, viz. (a production sub-system, a sub-system, a procurement sub-system, a distribution sub-system and a supervisory sub-system) and the absence of any one of these sub-systems would mean that the system was not a public distribution system. In the context of the changing role of the channel because of the changing nature of the products proposed to be distributed, it was postulated that the channel must perform functions in addition to merely making the product available to the target beneficiaries at the specified prices. The additional functions identified were: (i) the channel must ensure a regularity of product flow, (ii) the stocking policy of the channel must ensure adequacy of range and depth, (iii) the channel must ensure that the product is brought to the attention of the target beneficiaries at the point of sale to the extent necessary for its sales and (iv) the channel must obtain feedback information and relay this to either the policy makers or the producers or both. Measures for evaluating the performance of the channel for each of these functions plus the functions of availability and selling at the fixed price were developed. The focus of evaluation was from the target beneficiaries’ point of view. 426 respondents from thirty seven areas/villages in advanced as well as districts of Gujarat were interviewed. In addition, forty wholesalers and 110 retailers (34 fair price shops, forty-two cooperatives and thirty-four mills outlets) were also interviewed. The findings of the study indicate tint in spite of the fact that the channels are increasingly proposed to be used for distributing non- standard, non-commodity products, when called upon to do so they continue to view their role as one of merely making the product available at the specific prices. The implications of the findings, in the context of public distribution of non-standard, non-commodity items, are: (a) In order for the channel to be effective, there is a need to improve its reach and coverage. This, in itself, will to some extent help meet the objectives of public distribution. (b) Increase in reach and coverage will by itself be inadequate, unless the channel members are trained in the art of merchandising, salesmanship and sales promotion. (c) There is a need to rationalise the variety wise margins such that both fast moving and slow moving items are pushed by the channel. (d) Unless a systematic feedback system between the target beneficiaries and either the policymakers or the producers is established, through either the channel or any other agency, the effectiveness of the channel as well as the public distribution system itself will be severely limited. The methodology adopted for the study provides guidelines about the nature of the system and the content of the feedback required. (e) There is need to actively involve the national and state level nominees in the public distribution of essential commodities. Unless they function as marketing organisations, rather than indenting agents, with responsibilities of planning, analyzing, Coordinating and monitoring the distribution, the effectiveness of the channel will continue to be limited.