Meaning
Agricultural marketing involves the various activities related to the movement of agricultural products post-production from farms to consumers. It incorporates functions like procuring, grading, storage, transportation, and distribution of agricultural produce. Effective agricultural marketing ensures that farmers receive fair prices for their produce and that consumers get quality products at reasonable prices.
Features of Agricultural Marketing
1. Procurement: Buying agricultural produce from farmers after they are harvested.
2. Grading and Standardisation: Ensures quality control and uniformity in agricultural products.
3. Market Information: Dissemination of market prices and trends to farmers via various media channels.
4. Storage: Availability of warehouses and cold storage to prevent post-harvest losses.
5. Transportation: Efficient transportation to ensure timely delivery of produce to markets.
6. Processing Facilities: Value addition through processing units for products like grains, fruits, and vegetables.
7. Distribution: Distribution of primary agricultural produce or processed products to be supplied to end- consumer in a more streamlined manner.
Types of Agricultural Markets
1. Unregulated Markets: Located in villages where farmers sell their produce directly to local traders. It includes village haats and all. There are more than 22,000 rural periodical markets or rural haats in India.
2. Regulated Markets: Established to eliminate malpractices, ensure fair trade, and provide infrastructure like weighing, grading, and storage facilities. It can be secondary markets or terminal markets. In most of the states, these markets are regulated by Agricultural Produce Market Committees (APMCs) or mandies. There are more than 7300 regulated markets in India.
a) Secondary Markets: Situated in larger towns, these markets are often regulated and involve transactions between traders.
b) Terminal Markets: Located in major urban centers where goods are sold to wholesalers and processors.
3. Cooperative Marketing: Farmers organise themselves into cooperatives to market their produce collectively, which helps in better price realization and reducing the role of middlemen.
Significance
1. Income stability: Provides farmers with better income stability by offering fair prices and reducing price fluctuations.
2. Reduction of middlemen: Reduces the exploitation by intermediaries or arhatiyas, ensuring that farmers get a higher share of the consumer price.
3. Market access: Enhances access to national and international markets, boosting the potential for exports.
4. Quality improvement: Through grading and standardization, the overall quality of agricultural produce is improved.
5. Economic growth: Contributes to the overall economic development by improving the efficiency of agricultural supply chains.
Challenges
1. Inadequate infrastructure: Lack of proper storage, grading, and processing facilities leading to significant post-harvest losses. Fear of rotting of huge amount of produce triggers distress early sale by farmers without waiting for right prices in the market.
2. Market access: Limited access to markets, particularly for small and marginal farmers. This is also caused by the fact that small and marginal farmers have lower marketable surpluses as compared to large farmers. Thus, it reduces the bargaining power of these farmers.
3. Price volatility: Fluctuating market prices can result in unstable incomes for farmers. Moreover, longer post-harvest supply chain creates even higher price volatility as the supply chain is manipulated by middlemen.
4. Information asymmetry: Lack of timely and accurate market information hinders farmers from making informed decisions. Moreover, it also gives divergent signals about future crop production.
5. Exploitation: Presence of too many middlemen reduces the share of profits going to the farmers. They artificially create cycle of supply glut and stock-out situation to distort market prices.
6. Regulatory issues: Complex regulations and lack of uniformity across states hinder smooth functioning of agricultural markets. Since, agriculture is a State Subject, it creates disputes and jurisdictional issues which ultimately harms the agricultural supply chain and the farmers.
Government Initiatives
1. National Agricultural Market (e-NAM)
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- Launched on April 14, 2016, to create a unified national market for agricultural commodities.
- e-NAM has integrated 1361 mandis and is providing services to 18 million farmers with a trading volume of Rs 3 trillion till 2023-24.
- Objectives: Increase transparency, reduce transaction costs, and improve price discovery.
2. Pradhan Mantri Kisan SAMPADA Yojana
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- A comprehensive scheme for creating modern infrastructure with efficient supply chain management from farm gate to retail outlets.
- Includes projects like Mega Food Parks, Integrated Cold Chain, and Value Addition Infrastructure.
3. Agriculture Infrastructure Fund (AIF)
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- Operational from 2020 to 2032-33, provides a financing facility for post-harvest management infrastructure and community farm assets.
- Includes benefits like 3% interest subvention and credit guarantee support.
4. Grading and Standardisation
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- Implementation of AGMARK standards to ensure the quality of agricultural products.
- Establishment of Central Quality Control Laboratory and other regional laboratories for quality testing.
5. Rural Storage Scheme
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- Creation of godowns and cold storage facilities to reduce post-harvest losses.
- Ensures better preservation and timely disposal of produce to prevent distress sales.
- Launch of world’s largest decentralised foodgrain storage programme which will be managed at PACS level.
6. Price Support Schemes
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- Government purchases certain commodities at minimum support prices (MSP) to protect farmers against price fluctuations.
- Managed by agencies like Food Corporation of India (FCI) and state agencies.
7. Market Information Network (AGMARKNET)
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- Provides real-time market data to farmers through a network of over 2,700 markets.
- Disseminates information on market prices, arrivals, and trends via various channels including All-India Radio and digital platforms.
