Activities like transportation, processing, storage, grading etc. are included in agriculture marketing. These activities are very important for the development of the agricultural atmosphere in any country. Currently, the Agriculture Produce Market Committee (APMC) Acts facilitates different states permit the first sale of crops after harvesting by farmers to take place only in regulated market yards or Mandis.
For a long period Indian agriculture was mostly based on the concept of 'subsistence farming'. The farmer sold only a small part of his produce to pay-off rents, debts and meet his other requirements. Such sale was usually done immediately after harvesting of crops since there were no storing facilities. A considerable part of the total produce was sold by the farmers to the village traders and money lenders often at prices considerably lower than the market prices. The farmers who took their produce to the Mandis (wholesale markets) also faced a number of problems as they were confronted with powerful and organised traders. In Mandis, business was carried out by Arhatiyas (wholesalers) with the help of brokers, who were the agents of Arhatiyas. In fact, there was a large chain of middlemen in the agricultural marketing system like village traders, kutcha Arhatiyas, pucca Arhatiyas, brokers, wholesalers, retailers, moneylenders, etc. As a result, the share of farmers in the price of agricultural produce was reduced substantially.
In addition to the above mentioned shortcomings in the agricultural marketing system in India and presence of a large number of middlemen and widespread prevalence of malpractices in the mandis, - there were a number of other problems as well.
Transportation facilities were also highly inadequate and only a small number of villages were connected by railways and pucca roads to mandis. Most of the roads were kutcha roads not fit for motor vehicles and the produce was carried on slow moving transport vehicles like bullock-carts.
Government Measures to Improve the System of Agricultural Marketing
After Independence, the Government of India adopted a number of measures to improve the system of agricultural marketing, the important ones being establishment of regulated markets, construction of warehouses, provision for grading and standardisation of produce, standardisation of weights and measures, daily broadcasting of market prices of agricultural crops on All India Radio, improvement of transport facilities etc.
1. Organisation of Regulated Markets: Regulated markets have been organised with a view to protect the farmers from the malpractices of sellers and brokers. The management of such markets is done by a Market Committee which has nominees of the State Government, local bodies,Aarhatiyas, brokers and farmers. Thus, all interests are represented on the committee. These committees are appointed by the government for a specific period of time.
Most of the State and Union Territory governments have enacted legislations (Agriculture Produce Marketing Committee Act) to provide for regulation of agricultural produce markets. There were 7,157 regulated markets in the country as on March 31, 2010.
2. Grading and Standardisation: Improvements in agricultural marketing system cannot be expected unless specific attempts at grading and standardisation of the agricultural produce are made. The government recognised this quite early and the Agricultural Produce (Grading and Marketing) Act was passed in 1937. Initially, grading was introduced for hemp and tobacco.
The government set up a Central Quality Control Laboratory at Nagpur and a number of regional subsidiary quality control laboratories. Samples of important products are obtained from the market and their physical and chemical properties are analysed in these laboratories. On this basis, grades are drawn up and authorised packers are issued AGMARK seals (AGMARK is simply an abbreviation for Agricultural Marketing).
3. Use of Standard Weights.
4. Godown and Storage Facilities.
5. Dissemination of Market Information.
6. Government Purchases and Fixes Support Prices.
Shortcomings of Agricultural Marketing
According to the estimates of 11th Five Year Plan, the regulated markets lack even basic infrastructure at many places. When the Agriculture Produce Marketing (Regulation) Acts were initiated, there were significant gains in market infrastructure development. However, this infrastructure is now out of date, especially given the needs of a diversified agriculture. At present, only one-fourth of the markets have common drying yards, trader modules, viz., shop, godown and platforms in front of shop exist in only 63 per cent of the markets. Cold storage units are needed in the markets where perishable commodities are brought for sale. However, they exist only in 9 per cent of the markets at present and grading facilities exist in less than one-third of the markets. The basic facilities, viz., internal roads, boundary walls, electric lights, loading and unloading facilities, and weighing equipment are available in more than 80 per cent of the markets. Farmers' rest houses exist in more than half of the regulated markets.
Eleventh Five Year Plan proposes to address the following issues related to agricultural marketing - marketing system improvement and conducive policy environment, strengthening of marketing infrastructure and investment needs, improving market information system with the use of Information and Communication Technology (lCT), human resource development for agricultural marketing, and promoting exports/external trade.