Marketing of Agricultural Products of India

Agricultural Marketing in India

Agriculture is the backbone of the Indian economy. It contributes approx 25 % of National Gross Domestic Product (GDP). In India, agricultural product is the 4th largest exported principal commodity with a share of 10 % of total exports. Over 58 % of the rural households depend on agriculture as their principal means of livelihood. Agriculture, along with fisheries and forestry, is one of the largest contributors to the Gross Domestic Product (GDP). As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) was 15.35 % of the Gross Value Added (GVA) during 2015–16 at 2011–12 prices.

In today’s scenario, agricultural marketing is necessary not only to boost India’s economy but also for the welfare of farmers. It is the economic process through agricultural goods are exchanged. The importance of agricultural marketing has been defined as under:

  • Royal Commission on agriculture (1928): – “Problem of agricultural growth cannot be fully solved unless agricultural marketing is improved.”
  • National Commission on Agriculture (XII report): – “Agricultural marketing is a process which starts with a decision to produce a saleable farm commodity and it involves all aspects of market structure of system, both functional and institutional, based on technical and economic considerations and includes pre and post- harvest operations, assembling, grading, storage, transportation and distribution.”
  • Farque: – “Agricultural Marketing comprises of all operations involved in the movement of the agricultural produce from the producer to the final consumer. Thus, agricultural marketing is a specific part of marketing which is related to agricultural products.”

Defects of Agricultural Marketing system in India

The agricultural marketing in India suffers from many defects. Some of the noteworthy defects are as under: –

  • Lack of farmers’ organization: – Indian farmers lack collective organization. In the agricultural mandis, millions of small farmers brought their produce separately, which causes high transport cost and low-bargaining power.
  • Lack of grading & standardization: – The rural farmers are not aware of the impact of grading and standardization of their products. Due to this unawareness, the dishonest functionaries in the market take undue advantage of farmers. They may declare any produce as low-grade and quote a low price for such stocks, which in turn create a big loss to farmers.
  • Lack of transport facilities: – There is a lack of economical and fast means of transport between the rural and urban areas such as absence of the transport facility in agricultural marketing areas, high goods charges due to inadequacies, seasonal transporting services, lack of all-weather roads and transport vehicles, lack of transport facilities for transportation of some products like fruits, vegetables, eggs, etc., from rural areas. Due to these problems, transportation cost goes high and farmers force to sell their goods to the middlemen and nearest mandis at low prices and not able to get full benefit of their hard work & quality of their products.

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