Despite its importance, agricultural marketing faces various institutional and infrastructural-related issues in India. Elaborate. Also, discuss the measures that have been taken in this context.
Agricultural marketing is a subject under the state list and is regulated by state acts on Agriculture Produce Market Committees (APMCs). These are designated as 1st place of sale for farm produce.
Issues faced by APMCs:
- Infrastructural Issues:
- Lack of adequate infrastructure for proper handling and storage of produce.
- Only 10% APMCs have cold chain facilities.
- Only 25% APMCs have common drying grounds.
- High market fees that amount to 0.5%-2% of crop submitted, but on adding other levies, reach as high as 15%. This fee isn’t spent on infrastructure improvement.
- Weak backward and forward linkages of APMCs with farmer’s fields as well as wholesale markets
- Institutional Issues:
- APMCs are dominated by middlemen and politically powerful merchants, who don’t give proper prices to farmers.
- The APMCs heads are often engaged in market manipulation by hoarding and creating artificial scarcity, leading to inflation for consumers.
- The government had introduced farm laws that allowed the sale of agricultural produce at any place without any fee. This competition could have forced APMCs to reform. However, the laws were taken back due to protests and they need to be remodeled before introducing again.
- Essential Commodities Act imposes limits on hoarding and ensures adequate supply to markets.
- e-trading – Initiatives like e-NAM (National Agriculture Market) and e-RAKAM (e- Rashtriya Kisan Agri Mandi) can help farmers directly connect with buyers along with real-time price discovery.
- Gramin Agriculture Market (GRAMs) for helping farmers sell their produce nearby, without having to travel to far-located APMCs.
Recommendations of the Ashok Dalwai committee can help India improve its agriculture marketing infrastructure.