Agricultural Marketing & Storege [Part 2]

June 27, 2012
By Krishiworld


India being a primary producing country, agriculture plays a vital role, both as an essential infrastructure and a development component in generating and sustaining a higher national income. Out of a natonal income of about Rs 38,921 crores in 1972-73 as much as Rs 17,500 crores or about 44.9% is contributed by agriculture and allied sectors. It is estimated that about 50% of the agricultural produce is available as marketable surplus. The marketing system in India provides sustenance for abour 3 million persons who are engaged in performing various marketing function . In the field of exports too, the agricultural sector accounts for about 50% of the total value.

The process involved in the disposal of such a substantial produce of great economic importance are significant not only for the farmer but also for the country as a whole. The unreasonably low return that the farmer gets for his produce and the excessive margin of profit retained by the intermediaries attracted the Govt’s attention and it was felt that the economic condition of the agriculturists could not be improved unless determined steps were taken to establish an orderly system of marketing in the country.


With this object in view, a number of marketing surveys were conducted by the Directorate of Marketing and Inspection which revealed the shortcomings in the country’s marketing system. A rectification of these deficiencies was sought to be achieved by rationalizing various activities and standardizing various practices in the markets through legislation or otherwise. The primary objective of improving the system of agricultural marketing was not only to remove the handicaps from which the producer-seller was suffering but also to increase his income by ensuring him a fair price.

Regulation of markets. Prevailing market practices and market charges made a deep cut in the share of the producer in the price paid by the consumer. Some of the market charges were authorized whereas others were more than what the service rendered warranted. It was felt that a remunerative price to the producer could only be ensured if the market practices and market charges were regulated and rationalised. And thus the regulation of the markets has been given a high priority in the various Five Year Plans. The markets are sought to be regulated through an Act of each legislature. The Act is generally known as the Agricultural Produce Markets Act and it is provided for the removal of various malpractices widely prevalent in the markets for the settlemnt of disputes between sellers and buyers and for the promoting of orderly marketing of farm produce in general. Various state govts have made considerable progress in this field by bringing in the necessary legislation. The Acts enabling the respective states to regulate the markets generally provide for the notification of market areas and the commodities to be covered in the act in different areas. A ‘Marketing Committee’ consisting of the representatives of growers, traders, merchants, local bodies and govt nominees administers the working of each market. The functions of the market committee are to frame bye-laws, define local market prices, fix market prices payable to various functionaries, licence the functionaries, settle disputes, supervise weightment and promote the development of orderly marketing in general. The committee is generally empowered to raise funds for its working by levying a small fee on the produce bought and sold in the market in addition to the licence fees received from the functionaries.

Market surveys. A survey conducted in 496 markets in 1961-62 has shown that after the regulation the market charges have been reduced by 48%. Another survey of selected commodities revealed that for some commodities market charges have been reduced by as much as 98%.

Although the first market to be regulated was Karanja in 1886 the regulation of markets did not make headway till the first Five Year plan. It got a fillup in the second and third five year plan.

The states and union territories which have regulated the markets are: Andhra Pradesh(335), Bihar(62), Chandigarh(1), Delhi(3), Gujarat(212), Mysore(102), Madhya Pradesh(233), Haryana(80), Kerela(6), Maharashtra(212), Orissa(34), Punjab(95), Rajasthan(90), Tamil Nadu(136), Tripura(1), Uttar Pradesh(264), Goa, Daman and Diu(1), West Bengal(15), and Himachal Pradesh(5). The states and union territories which are yet to regulate markets are Assam, Andaman and Nicobar islands, Arunachal Pradesh, Dadra and Nagar Haveli, Jammu and Kashmir, Laccadive and Minicoy islands, Meghalaya, Mizoram, Nagaland, and Pondicherry. Necessary measures to regulate markets in these states and union territories are at various stages of progress. It is expected that these states and union territories will regulate the markets by the end of the Fifth plan.

All the states where necessary legislation has since been passed, have formulated phased programs for the regulation of markets. By the end od the fifth plan it is expected that all the wholesale assembling markets would be brought within the regulatory orbit.

As a result of this scheme, excessive commissions and other market charges have been substantially rationalized. Unauthorized and arbitrary deductions have been prohibited and malpractices stopped. The issue of sale slips by licensed commission agents to the sellers, indicating the details of sale proceeds, deductions effected etc has been made obligatory. Weightment is also done by licensed weightmen of the market committee.

The dissemination of marketing information and news is one of the functions of the market committees. This is done through the displaying of the prices prevailing in the market and also in the neighbouring markets on the notice boards and announcements through loud speakers at regular intervals. This information is also supplied to the Central Govt and the State Govt and also to other market committees. Arrangements have been made for the maintainence of reliable statistics arrivals, sales, stocks, prices etc which are maintained by the market committees.

It is also obligatory on the part of the market committee to provide the market yards with the necessary amenities. In some of the markets that have been regulated amenities like rest houses, cattle sheds and water troughs have been provided by the market committees for the convenience of the producer sellers. Facilities for grading before sale and storage have also been provided.

A survey of 500 regulated markets was undertaken by the Directorate of Marketing and Inspection in the Ministry of Agriculture in 1970-71 and 1971-72, with a view to assessing the adequacy and efficiency of the existing regulated markets and highlighting their drawbacks and deficiencies and suggesting measures to develop them. One of the most important drawbacks has been the inadequate financial resources of some of the market committees. During the fourth plan, a central sector scheme was drawn up by the Ministry of Agriculture to provide a grant at 20% of the cost of development of market, subject to a maximum of Rs 2 lakhs. The balance will have to be provided by the commercial banks.

An important development in the field of regulated markets is the keen interest taken by the International Development Agency (IDA) in the development of the infrastructure in regulated markets. The IDA is financing the development of infrastructure in 50 markets of Bihar.

The World Bank has approved a loan assistance of 6.5 crores to Karnataka also for the development of markets.

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