A Tale Of Agriculture Marketing In India

The Indian farmer getting an appropriate return for his farm produce has been the goal

The Indian farmer getting an appropriate return for his farm produce has been the goal of successive governments since independence. So much so, that our 1st Five Year plan was centred around agriculture. To facilitate the farmer, the government has brought about a series of laws and schemes. This issue still holds relevance in the present day because adequate price for their crops is what farmers are protesting for in New Delhi. Agriculture marketing is a key ingredient in getting the farmer an appropriate price for his produce.

Agriculture marketing has an all-inclusive meaning. It includes assembly, storage, transportation, packaging, transportation, branding, and distribution. The markets are set up on a daily or weekly basis, where the farmer sells the produce. However, if a regular market is not available, the farmer must sell it at a temporary market at non-competitive price. It is in this light that laws to protect the farmer is gaining importance.  

The government is trying out a slew of measures in this regard, especially in recent history.  

  • The electronic national agricultural market (e-NAM) was launched in 2016. The states needed to amend their APMC (Agricultural Produce Market Committee) acts individually. Unfortunately, it failed to materialise as all the states could not keep up.
  • In September 2018, the government launched PM-AASHA. The objective was to give the farmer a minimum of 50% returns on the cost price. Public and private procurement were the main modus operandi in this scheme. However, only Public Procurement was implemented effectively. 
  • In 2019, PM-KISAN was launched. This programme involved a fixed payment of ₹6,000 per annum to each farm household with a budgetary outlay of ₹75,000 crore. This programme was implemented in a decent way. 

Despite these schemes, agriculture market is yet to reach its peak efficiency. The Frequent flip-flops in policies, from e-NAM to PM-AASHA should be avoided. Their varying nature disincentivises private sector to investment which look for a linearity in policy. Another lacuna is the lack of coordination between centre and state. Agriculture is a state subject with the laws being framed at the centre. This top-down approach is unable to cater to the need of individual states.

Further, absence of credit and insurance market leads to an increasing dependence on middlemen, which results in restricted access to the marketplace. This further disrupts any return the farmer may get in the supply chain had he contacted the buyer firsthand. It is also noteworthy, that restrictions on land leasing and limited land size holding leads to inefficient scale of production. Absence of land resource serves as a major drawback in trying to produce for the market.

Over and above the individual loss to the cultivator, the nation as a whole suffers major losses. The postproduction wastage amounts to Rs. 44,000 crores annually. Consequently, India’s share in global food trade stands at a miniscule 1.5% despite multiple schemes in place. Even if the supply chain is present, the delay in delivery renders it unproductive.

The solution lies in putting the farmers in direct contact with international companies. For efficiency, skilled manpower must be made available at every stage. The government must invest in strong physical infrastructure, competitive environment, and a favourable regulatory system. 

With 56% of the country dependent on agriculture, the marketing system in India should be based on transparency in all market operations, efficiency in terms of technology and dissemination of information, and simplicity in the entire process.