Agricultural Marketing in India

 

Dr. Kuber Singh Gurupanch¹, Mrs. Shreelekha Virulkar²

¹ Principal, M.J. College, , Kohka Bhilai, Durg (C.G.)

 

ABSTRACT:

Trading of agriculture produce began for exchange of money. And from trading to marketing of agricultural produce began although mostly it is a way of traditional selling. The marketing as a term is broader than traditional trading. The producer was subjected to innumerable levies and charges, without having any say in the judicious utilization of the amount paid by him. He was also denied a large part of his produce by manipulation and defective use of weights and scales in the market. Many commissions and committees were set up by the Government of India to recommend measures to rectify the situation. there are a number of marketing situations which are either semiprivate or semi govt. However, India has been experiencing different forms of marketing systems time to time with changing nature of economic policies, pattern of production and marketing situation. Hence, there is need to focus such issues in the studies of agricultural marking in India.

 

 

 

INTRODUCTION:

India is basically an agrarian society where sole dependence has been on agriculture since time immemorial.¹ in the olden days, the agricultural produce was fundamentally bartered by nature where farmers exchanged goods for goods and also against services². Gradually the scenario changed with the changing times and agriculture produce began being sold with an element of commercial value. Trading of agriculture produce began for exchange of money. And from trading to marketing of agricultural produce began although mostly it is a way of traditional selling. The marketing as a term is broader than traditional trading. And agricultural marketing as a concept is still evolving in Indian society. In India, there are networks of cooperatives at the local, regional, state and national levels that assist in agricultural marketing³. The commodities that are mostly handled are food grains, jute, cotton, sugar, milk and areca nuts. Currently large enterprises, such as cooperative Indian sugar factories, spinning mills, and solvent extraction plants mostly handle their own marketing operations independently. Medium and small-sized enterprises, such as rice mills, oil mills, cotton ginning and pressing units, and jute baling units, mostly are affiliated with cooperative marketing societies.⁴

 

 

OBJECTIVE OF THE PAPER:

Make a review for Agriculture Marketing in India.

 

The basic objective of setting up a network of regulated 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. However, in the pre-Independence era, the agriculture produce markets were plagued with inefficiencies and were heavily loaded against the producer. The producer was subjected to innumerable levies and charges, without having any say in the judicious utilization of the amount paid by him.

 

He was also denied a large part of his produce by manipulation and defective use of weights and scales in the market. Many commissions and committees were set up by the Government of India to recommend measures to rectify the situation. It was recommended to enact a market legislation to regulate the markets. Most of the state governments and Union Territories have since enacted legislations (Agriculture Produce Marketing Committee Act) to provide for development of agricultural produce markets and to achieve an efficient system of buying and selling of agricultural commodities.⁵

 

RESEARCH GAP:

Though a handful of works on agriculture and its allied activities regarding the Marketing, performance, and prospects are found, most of the studies have been done during pre-reform period. In the post reform period, tremendous changes have been taken place in the Indian market. Hence, there is call for serious studies on marketing of agricultural produce during the post liberalization period and the performance of the agricultural sector in Indian economy.

 

NEED REFORMS:

The Department of Agriculture and Cooperation also formulated a model law on agricultural marketing for guidance and adoption by the state governments. The model legislation provides for the establishment of private markets/yards, direct purchase centers, consumer/farmers’ markets for direct sale and promotion of Public-Private Partnership (PPP) in the management and development of agricultural markets in India. Provision has also been made in the Act for constitution of State Agricultural Produce Marketing Standards Bureau for the promotion of grading, standardization and quality certification of agricultural produce. This would facilitate pledge financing, direct purchasing, forward/future trading and exports. Several state governments have initiated steps for amending their respective APMC Acts. A table indicating the state-wise status of reforms in APMC Acts as on 31 December 2006 is given below:

 

 

 

 

 

RURAL GODOWNS: 

Considering the importance of rural storage in marketing of agricultural produce, the Directorate of Marketing and Inspection initiated a Rural Godowns Scheme, in collaboration with NABARD and NCDC. Its objective is to construct scientific storage godowns with allied facilities in rural areas and to establish a network of rural godowns in the States and Union Territories. The main objectives of Rural Godowns Scheme are:

i)     To prevent distress sale of food grains and other agricultural commodities immediately  after harvest.

ii)   To reduce quantity and quality losses arising from sub-standard storage,

iii) To reduce pressure on transport system in the post-harvest period.

iv)  To help the farmers in getting pledge loans against the stored produce.

 

PRESENT CONSTRAINTS IN THE SYSTEM:

The purpose of state regulation of agricultural markets was to protect farmers from the exploitation of intermediaries and traders and also to ensure better prices and timely payment for their produce. Over a period of time, these markets have, however, acquired the status of restrictive and monopolistic markets, providing no help in direct and free marketing, organized retailing and smooth raw material supplies to agro-industries. Exporters, processors and retail Chain operators cannot procure directly from the farmers as the produce is required to be channelized through regulated markets and licensed traders. There is, in the process, an enormous increase in the cost of marketing and farmers end up getting a low price for their produce. Monopolistic practices and modalities of the state-controlled markets have prevented private investment in the sector. Post-harvest losses are estimated to be of the order of 5-7 per cent in food grains and 25-30 per cent in the case of fruits and vegetables.

 

FOOD COOPERATION OF INDIA:

The Food Corporation of India under the Department of Agriculture and Cooperation Government of India was set up to provide price support to producers, to distribute food grains at concessional prices through to the poor trough the Public Distribution System (PDS) and to ensure national food security by carrying buffer stocks. The operation of the Food Corporation of India has been facilitated by various government policies such as concessional credit andtransport, budget support and freedom from movement controls. The poverty line is price inelastic. Given the price inelasticity of demand an increase in food prices, ceteris paribus, would erode the real income of population and particularly that of the poor who spend a major share or their income on food. Also fluctuations in prices would affect adversely the long term investment and production decisions of producers and lead to a suboptimal allocation of resources. Therefore the government concluded intervention in food grain markets as a trader was warranted.

 

Attainment of self sufficiency in food grains at the national level is one of the country’s major achievements in the post-independence period. After remaining a food deficit country for about two decades after independence, India became largely self-sufficient in food grain production at the macro level. A large Public Distribution System, supplemented by arrangements for moderating prices in the open market and concerted efforts for achieving self sufficiency in food grains, coupled with measures for maximizing procurement from surplus areas.

 

CONCLUSION:

In the present agricultural market, in India, we can see two extreme situations: one “System operated freely by private enterprises’’ that is without state intervention and other is the “the systems completely under state control”. Between these two extreme situations, there are a number of marketing situations which are either semiprivate or semi govt. However, India has been experiencing different forms of marketing systems time to time with changing nature of economic policies, pattern of production and marketing situation. Hence, there is need to focus such issues in the studies of agricultural marking in India.

 

REFERENCES:

1.     http://moef.nic.in/divisions/ic/wssd/doc2/ch14.pdf.

2.     S.S. Acharya, and N.L.Agarwal, Agricultural Marketing In India, 3rd edn, (New Delhi: Oxford and IBH Publishing Co.Pvt.Ltd, 1999), p.36.

3.     Supra n.2, pp.280-295.

4.     H.M.Saxena, Marketing Geography, (New Delhi: Rawat Publications, 2004), p.57. Cf. Barbara Harris White, A Political Economy of Agricultural Marketing In South India, (New Delhi: Sage Publications, 1996).

5.     Gokul Patnaik State of Agriculture in India, http://www.idfresearch.org /ipnservices/ pdfs/ Gokul_patnaik _paper1.pdf.