Measures Adopted in India to Improve Agricultural Marketing
Agricultural marketing plays a critical role in ensuring that farmers get fair prices for their produce, while consumers benefit from stable prices and access to quality produce. India has adopted various measures over time to improve agricultural marketing by addressing the structural and institutional challenges faced by the sector. Below are the key measures that have been implemented to improve agricultural marketing in India:
1. Development of Agricultural Markets (APMC Act)
- Agricultural Produce Market Committee (APMC) Act:
The APMC Act, passed in most states, has been one of the most significant steps to improve agricultural marketing. It regulates the sale of agricultural commodities in markets, aiming to provide a transparent price mechanism for both farmers and consumers. Under this Act, farmers can sell their produce in regulated markets to avoid exploitation by middlemen. - Market Regulation and Modernization:
The government has made efforts to modernize traditional markets through investment in infrastructure, including cold storage, warehouses, packaging facilities, and auction platforms.
2. E-NAM (National Agriculture Market)
- Electronic National Agriculture Market (e-NAM):
Launched in 2016, e-NAM is a pan-India electronic trading platform that connects various mandis (markets) across the country. It enables farmers to sell their produce online and access better prices through a transparent auction system. The platform also facilitates:- Price discovery: It helps farmers get real-time price data across different regions, allowing them to make informed decisions.
- Market linkage: Farmers can now reach multiple buyers across the country, increasing the market opportunities available to them.
- Integration of APMCs:
The e-NAM system is integrated with APMCs, ensuring the smooth flow of commodities through digital platforms, thereby reducing intermediaries and transaction costs.
3. Minimum Support Price (MSP) System
- Minimum Support Price (MSP):
The government announces an MSP for certain cereal, pulses, oilseeds, and commercial crops before the sowing season to protect farmers from price fluctuations. The MSP guarantees a minimum price to farmers for their produce, ensuring they do not sell below the cost of production. - Procurement Centers:
The government also sets up procurement centers where it buys the crops at MSP to prevent distress sales and provides safety nets for farmers in case of bumper crops or price crashes.
4. Price Support Scheme (PSS)
- Price Support Scheme (PSS):
The PSS aims to stabilize prices for perishable and other crops that are not covered under MSP. Under this scheme, the government directly intervenes to purchase excess production of commodities like pulses, oilseeds, and fruits at a price that supports farmers. - Food Corporation of India (FCI):
The FCI plays a critical role in the procurement and storage of food grains to stabilize prices and ensure food security.
5. Contract Farming
- Contract Farming:
Contract farming has gained popularity as a means to address issues like price volatility and market access. Under this system, farmers enter into agreements with corporates or processing companies to grow specific crops under predefined conditions, including prices, input support, and technical assistance. - Benefits:
- Assured market for produce
- Price stability and protection against market fluctuations
- Technical support and input provision
- Challenges:
- Need for proper regulation to protect farmers’ interests
- Risks of exploitation and imbalanced agreements
6. Cold Storage and Warehousing Infrastructure
- Cold Storage Chains:
Cold storage plays a significant role in reducing post-harvest losses, especially for perishable crops like fruits, vegetables, and dairy products. The government has invested in the development of cold storage chains and multi-chambered cold storage facilities to help farmers store their produce and sell it at higher prices during off-seasons. - Warehousing Development and Regulatory Authority (WDRA):
The government has set up the WDRA to develop and regulate warehouse receipts. This helps farmers to store their produce in certified warehouses and receive loans against the stored produce, thus improving their liquidity.
7. Promoting Farmers’ Producer Organizations (FPOs)
- Farmers’ Producer Organizations (FPOs):
FPOs are farmer-centric cooperative organizations that help farmers pool their resources for collective marketing, bargaining power, and access to better market opportunities. They provide:- Bulk selling power to secure better prices
- Access to inputs like seeds, fertilizers, and machinery
- Market intelligence and price information
- Government Support:
The government has been promoting the formation of FPOs through various schemes such as SFAC (Small Farmers’ Agri-Business Consortium) and National Bank for Agriculture and Rural Development (NABARD).
8. Direct Benefit Transfer (DBT) in Agricultural Marketing
- Direct Benefit Transfer (DBT):
To minimize leakages and inefficiencies, the government has introduced DBT for subsidy payments and financial assistance to farmers. This ensures that farmers receive direct financial support for inputs like fertilizers, pesticides, and seeds, which helps reduce dependence on middlemen. - Transparent Payment System:
DBT has improved transparency in subsidy distribution and timely payments to farmers, ensuring better cash flow and market access.
9. Strengthening Agricultural Credit
- Agricultural Credit:
Access to timely and affordable credit is critical for farmers. The government has promoted various measures like Kisan Credit Cards (KCC), Rural Development Banks, and Public Sector Banks to increase agricultural credit availability. - Interest Subvention Schemes:
The Interest Subvention Scheme provides interest rate subsidies on loans to farmers, thus encouraging them to take loans for purchasing inputs and engaging in market-oriented farming.
10. Policy and Legal Reforms
- Model Agricultural Produce and Livestock Marketing Act (2017):
This Act aims to reform agricultural marketing laws by promoting the creation of a single national market. It allows farmers to sell their produce outside the traditional APMC mandis, increasing their choice of buyers and reducing intermediaries. - Amendments to the APMC Act:
The government has introduced several amendments to allow for the free flow of agricultural produce across states, remove restrictions on private trade, and create a single market platform for agricultural commodities.
11. E-Commerce and Digital Platforms
- Online Agricultural Platforms:
In recent years, digital platforms like Ninjacart, FarmersFarms, and BigHaat have emerged as a way for farmers to sell directly to consumers and businesses, bypassing intermediaries. These platforms provide:- Better price realization
- Online marketing and logistics solutions
- Agri-Tech Startups:
A growing number of agri-tech startups are using technology like artificial intelligence, blockchain, and big data to improve market efficiency, transparency, and traceability.
Conclusion
The Indian government has adopted a multi-pronged approach to improve agricultural marketing. From structural reforms like the APMC Act and e-NAM to infrastructure development such as cold storage and warehousing, these measures aim to provide farmers with better market access, reduce post-harvest losses, and improve price realization. Despite these efforts, challenges like lack of infrastructure, market inefficiency, and inadequate policy enforcement still persist, and continuous reforms and investment are required for further progress.