Agriculture market system


Sreyashi Datta, Academic Content Writer at Edumartz

Have you ever thought about where the grains, vegetables, and fruits we eat every day come from? The technique by which these items arrive at various places is determined by the circuits of the market. Agricultural marketing is the process of assembling, storing, processing, transporting, packaging, classifying, and distributing various agricultural products throughout the country. 

Prior to independence, farmers were subjected to inaccurate weighing and accounting manipulations when selling their produce to retailers. Farmers who did not have the necessary information on market prices were often forced to sell at low prices. They also did not have sufficient storage facilities to store their goods for later sale at a higher price. Over 10% of agricultural products are wasted due to insufficient storage. As a result, government involvement was needed to restrict the operations of private retailers. 

Four measures have been taken to strengthen the marketing component. The initial step was to regulate the markets in order to provide orderly and transparent marketing conditions. Overall, this approach has benefited both farmers and consumers. markets, some 27,000 rural periodic markets are to be developed as regulated markets. The provision of physical infrastructures such as roads, trains, warehouses, depots, cold rooms, and processing units is the second component. Current infrastructure is insufficient to meet growing demand and needs to be modernized. The third component of the government plan is cooperative marketing, which aims to obtain fair prices for farmers’ products. The success of dairy cooperatives in changing the social and economic landscape of Gujarat and other regions of the country demonstrates the importance of cooperatives. Cooperatives, on the other hand, have recently suffered a setback due to insufficient coverage of member farmers, lack of adequate relationships between marketing and processing cooperatives, and poor financial management. The fourth component consists of policy mechanisms such as the guaranteed minimum support price (MSP) for agricultural products, (ii) the maintenance of buffer stocks of wheat and rice by the Food Corporation of India, and (iii) the distribution of cereals and edible sugar. through the public distribution system. These devices are designed to secure farmers’ incomes while providing subsidized grain to the needy. Agricultural markets are dominated by private commerce (loan sharks, rural political elites, large merchants, and wealthy farmers) rather than government interference. Necessity because government action is urgent, especially when the private sector manages a substantial part of agricultural assets. 

 Agricultural marketing has come a long way through government intervention in many ways. Some academics believe that the commercialization of agriculture offers huge opportunities for farmers to make better profits if government interference is limited. What do you think of this point of view? 

New alternative marketing channels: Selling farmers’ produce directly to customers has been shown to increase their income. Apni Mandi (Punjab, Haryana, and Rajasthan); Hadaspar Mandi (Poland); Rythu Bazaars (Andhra Pradesh and Telangana fruit and vegetable markets); and Uzhavar Sandies are some examples of such canals (farmers markets in Tamil Nadu). In addition, several national and multinational fast-food chains are increasingly entering into contracts/alliances with farmers to encourage them to grow high-quality agricultural products (vegetables, fruits, etc. ) by providing them not only with seeds and other inputs but also guaranteeing the supply of products at predetermined prices. 

It is suggested that such partnerships will help farmers reduce price risks while expanding market opportunities for agricultural products. Do you think these agreements increase the income of small farmers? 

 India’s parliament passed three laws in 2020 to modernize the agricultural marketing system. While some farmers support these reforms, most reject them and these laws are currently being challenged.

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