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Exercises · Q4

Q.Explain the steps taken by the government in developing rural markets.

Madhya Pradesh MpbseTextbookSubjective· 3mImportance★★★★★
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The government stepped in to make agricultural markets fair and efficient through four measures: regulating markets, building marketing infrastructure, promoting cooperative marketing, and using policy tools like MSP, buffer stocks and the PDS.

Why the government intervened

Traditional agricultural markets were dominated by traders and middlemen who exploited farmers through faulty weighing, false accounting and low prices. To make marketing orderly and remunerative, the government adopted several measures.

The four measures

1. Regulation of markets

  • Creating regulated markets (mandis) to ensure orderly and transparent marketing conditions.
  • This benefited both farmers and consumers, though more work is needed on transparency.

2. Provision of physical infrastructure

  • Facilities such as roads, railways, warehouses, godowns, cold storages and processing units were expanded so that produce can be stored and moved without distress sale.
  • Present infrastructure is still inadequate to meet the growing demand.

3. Cooperative marketing

  • Farmers form cooperatives to realise a fair price for their produce by selling collectively.
  • The success of milk cooperatives (for example, AMUL in Gujarat) transformed the economic and social landscape and shows the potential of cooperative marketing.
  • Cooperatives have, however, suffered in recent years due to inadequate coverage, weak links, and lack of finance.

4. Policy instruments …

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