Agricultural Marketing

Agricultural Marketing

Agricultural marketing covers every activity involved in moving farm produce from the farmer to the final consumer — assembling scattered output, grading, storage, transport, financing, and the actual sale.

Channels of agricultural marketing

• Traditional/private channels — produce passes from farmer to village trader to wholesaler to retailer to consumer, often through several intermediaries.
• Regulated markets — markets set up under state Agricultural Produce Market Committee (APMC) laws, where licensed traders/commission agents buy through supervised weighing, grading and (in principle) open auction, intended to protect farmers from malpractice.
• Co-operative marketing — farmers' marketing co-operative societies pool members' produce for collective sale, giving small farmers more bargaining power than they would have individually.
• Direct and electronic marketing — farmers selling directly to consumers, processors or retail chains, and, increasingly, through the e-NAM (electronic National Agriculture Market) platform, an online trading network that links APMC mandis across states so a farmer's produce can, in principle, reach buyers beyond the local market.

Defects in Indian agricultural marketing

• Too many intermediaries, each taking a margin, so the price the farmer actually realises is often a small fraction of what the final consumer pays.
• Inadequate storage and cold-chain capacity, forcing many farmers — especially small ones without holding capacity — into distress sales immediately after harvest, when prices are typically at their lowest, and causing real wastage of perishable produce such as fruits, vegetables and milk.
• Poor market information, leaving many farmers unaware of prices prevailing in other, possibly better, markets.
• Malpractices in unregulated markets — manipulated weighing, arbitrary deductions, and delayed payment.
• Weak rural transport links in many areas, raising costs and post-harvest losses.
• Limited grading and standardisation, which reduces a farmer's ability to earn a price premium for better-quality produce.
• Small, scattered marketable surplus on the part of most individual farmers, which weakens their bargaining power relative to traders.

Reforms and measures

• Regulation of markets under APMC Acts — licensing, supervised weighing and grading.
• Minimum Support Price (MSP) and public procurement for select crops, cushioning farmers against a sharp price collapse.
• Expansion of warehousing and cold storage, and warehouse-receipt arrangements that let a farmer borrow against stored produce instead of selling immediately. …