MARKETING  INFRASTRUCTURE  &  AGRICULTURAL 
 MARKETING  REFORMS

                                                                              
 
                       
                                                                                           
         


AGRICULTURAL MARKETING

 

1.                 BACKGROUND

          Agriculture continues to be main stay of life for majority of the Indian population.  It contributes around 25% of the GDP and employs 65% of the workforce in the country.  Significant strides have been made in agriculture production since independence.  The agriculture production of food grains increased from 51 million tones in 1950-51 i.e. before beginning of the 1st Five Year Plan to 213 million tones in  2003-04. The output of oilseeds went up to 23 million tones. Similarly, the production of fruit and vegetables also increased to more than 134 million tones. The subject of agriculture and agricultural marketing is dealt with both by the States as well as the Central government in the country.      

           Starting from 1951, the different Five Year Plans laid stress on development of physical markets, on farm and off farm storage structures, facilities for standardization and grading, packaging, transportation etc..  Development of horticulture marketing attracted attention of policy makers during the 3rd Five Year Plan.  The year 1965 witnessed coming into existence of Central Warehousing Corporation, Food Corporation of India, Agricultural Prices Commission (later renamed as Commission for Agricultural Costs and Prices) and several other organizations.  Besides number of organizations were set up in the form of commodity boards, cooperative federations and export promotion councils for monitoring and boosting the production, consumption, marketing and export of various agricultural commodities. The prominent among them included Cotton Corporation of India Limited (CCI), the Jute Corporation of India Ltd. (JCI), the National Cooperative Development Corporation Ltd. (NCDC), the National Agricultural Cooperative Marketing Federation Ltd. (NAFED), the National Tobacco Growers Federation Ltd. (NTGF), the Tribal Cooperative Marketing Development Federation Ltd. (TRIFED), the National Consumers Cooperative Federation Ltd. (NCCF), etc for procurement and distribution of commodities; and the Tea Board, Coffee Board, Coir Board, Rubber Board, Tobacco Board, Spices Board, Coconut Board, Central Silk Board, the National Dairy Development Board (NDDB), National Horticulture Board (NHB), State Trading Corporation (STC), Agricultural & Processed Foods Export Development Authority (APEDA), Marine Products Export Development Authority (MPEDA), the Indian Silk Export Promotion Council, the Cashewnuts Export Promotion Council of India (CEPC), etc. for promotion of production and exports of specific commodities.  

           Most agricultural commodity markets generally operate under the normal forces of demand and supply.  However, with a view to protecting farmersí interest and to encourage them to increase production, the Government also fixes minimum support/statutory prices for some crops and makes arrangements for their purchase on state account whenever their price falls below the support level.  The role of Government normally is limited to protecting the interests of producers and consumers, only in respect of wage goods, mass consumption goods and essential goods.  The role of Government is promoting organized marketing of agricultural commodities in the country through a network of regulated markets.  To achieve an efficient system of buying and selling of agricultural commodities, most of the state Governments and Union Territories have enacted legislations (APMC Act) to provide for regulation of agricultural produce markets.  The basic objective of setting up of network of physical markets has been to ensure reasonable gain to the farmers by creating environment in markets for fair play of supply and demand forces, regulate market practices and attain transparency in transactions.  

With a view to coping up with the need to handle increasing agricultural production, the number of regulated markets have also been increasing in the country.  While by the end of 1950, there were 286 regulated markets in the country, today the number stands at 7521 (31.3.2005). The Central Government advised all the State Governments to enact Marketing Legislation to promote competitive and transparent transactional methods to protect the interests of the farmers.   Barring a few, most of the States and Union Territories embarked upon a massive programme of regulation of markets after enacting the legislation.  Most of these regulated markets are wholesale markets. There are in all 7293 wholesale markets in the country. Besides, the country has 27294 rural periodical markets, about 15% of which function under the ambit of regulation.  The advent of regulated markets has helped in mitigating the market handicaps of producers/sellers at the wholesale assembling level.  But, the rural periodic markets in general, and the tribal markets in particular, remained out of its developmental ambit. The State-wise distribution of regulated markets and market yards is given in Annexure-I.            

          The area served by each market across the States (Annexure-II) reveals large variations.  The area served per regulated market varies from 74 sq km in Punjab to 2257 sq km in Assam.  On an average, a regulated market serves 459 sq km area in the country which is quite high. Farmers have to travel long distances with their produce to avail the facility of regulated markets. The National Commission on Agriculture (1976) had recommended that the facility of regulated           market should be available to the farmers with in a radius of 5 km and if this is considered a bench mark, the command area of a market           should not exceed 80 sq km. However, in the existing scenario, except Delhi, Punjab, Chandigarh and Pondicherry, in no State, the density of   regulated markets is  close to the norm.  

          The infrastructural amenities available in the regulated markets of the country are shown in Annexure -III.  Auction platforms are needed in market for settlement of price of the produce in a congenial atmosphere between buyers and sellers. Both covered and open auction platforms exist in only two-thirds of the regulated markets. Some commodities when brought for sale contain higher moisture than desired level and hence there should be a space for drying. Presently only one-fourth of the markets have common drying yards.  Trader modules viz. shop, godown and platform in front of shop exist in 63% of the markets.  Cold storage units are needed in the markets where perishable commodities are brought for sale.  They are brought for sale only in a few markets.  The cold storage units exist only in 9% of the markets and grading facilities exist in less than one-third of the markets. The basic facilities viz. internal roads, boundary walls, electric lights, loading and unloading facilities and weighing equipment are available in more than 80% of the markets.  Farmersí rest houses exist in more than half of the regulated markets.  It is evident from the above that there is considerable gap in the facilities available in the market yards.