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Essay Questions · Q12

Q.Explain the problems of agricultural marketing in India and the reforms/measures undertaken to improve it.

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A. Problems in Indian agricultural marketing

  1. Too many intermediaries — produce often passes through several traders/agents before reaching the consumer, each taking a margin, so the farmer's realised price is a small fraction of the final consumer price.
  2. Inadequate storage and warehousing — forces many farmers, especially small ones, into distress sales immediately after harvest when prices are lowest.
  3. Poor market information — farmers often do not know prevailing prices in nearby or distant markets, weakening their bargaining position.
  4. Malpractices in unregulated markets — manipulated weighing, arbitrary deductions, and delayed payments.
  5. Weak transport and market infrastructure in many rural areas, raising costs and post-harvest losses, particularly of perishables.
  6. Limited grading/standardisation, reducing farmers' ability to earn a price premium for better-quality produce.

B. Reforms and government measures

  1. Regulated markets under state APMC laws — licensed traders, supervised weighing/grading, aimed at protecting farmers from malpractice.
  2. Minimum Support Price (MSP) and procurement, notably for paddy and wheat, through agencies such as the Food Corporation of India, to guard against sharp price falls.
  3. Expansion of storage/warehousing capacity via the Central Warehousing Corporation and state warehousing corporations, and a warehouse-receipt system letting farmers borrow against stored produce instead of selling immediately.
  4. Market information and e-marketing — systems such as e-NAM (electronic National Agriculture Market) that give farmers price information and, in principle, wider buyer access beyond their local market.
  5. Co-operative marketing societies that pool produce to give members collective bargaining power. …

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