Agricultural Marketing: A Challenge with Indian Economy and Development of Agriculture in India
India produces the huge amount of food grains and other crops every year. But, the revenue generated through agricultural sector is far less than the production. The reason for this condition is that all the agricultural produce is not properly marketed. The farmers are not able to sell their produce directly in the market, but have to give them to the Middlemen at very low prices.
These middlemen stock them in the cold storages and warehouses and sell them in the black market at very high prices. Sometimes, by stocking the material for long periods they create demand in the market and the government itself is forced to raise the prices. Indian economy is very badly affected by this kind of illegal practices and mainly, the farmers do not get money even to cover their expenses and are even committing suicides.
The government in 1951 itself constituted APMC (AGRICULTURAL PRODUCING MARKETING COMMITTEE) ACT and created REGULATORY MARKETS under this act.
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REGULATORY MARKETS SET UP IN 1951 to Promote Agriculture in India:
Regulatory markets were set up at regional levels. It is managed by the marketing committee which consists of a government representative, representatives of farmers, traders and commission agents. The chairman of the committee should be from the farming community. The main functions of this committee are:
- To ensure a reasonable price to the farmers preventing middlemen and unauthorised commissions.
- To maintain standard weights and measures, by which the commodities are measured and sold under the supervision of the committee.
- To impose fines and penalties for any irregular practices in the market.
These regulatory markets have done their job in an efficient manner for many years. But, over time, they became very monopolistic controlled by locally powerful people and also became non-competitive.
The incompetencies of these regulatory markets are as follows:
- Monotony and monopoly in fixing the rates.
- New marketing techniques and practices were not encouraged.
- Lack of proper cold storage facilities.
- Unable to empower the farmers.
- Overflowing (or) drought of stocks.
To address these problems, many changes were made to the APMC act of 1951 in the year 2003, to make the agricultural marketing system competitive and at the same time aiding the farmers.
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APMC ACT of 2003, for development of agriculture in India:
The main features of this ACT are as follows:
- Giving credit facilities to the farmers so that they can handle their own produce.
- Apart from regulatory markets, other markets by private traders are also permitted.
- Farmers are permitted to sell their produce directly to the consumers.
- Public and private partnership should be encouraged in the marketing system.
- Setting up of sufficient cold storage and warehouse facilities and making them accessible to the farmers.
- Special markets should be set up for perishable items like fruits and vegetables.
- Separate committees to decide the rates of commercial crops and non-commercial crops.
- Imposing severe punishments for illegal practising and black marketing.
Many states have adopted these measures and some states are in the process of changing from old methods to new ones.
In addition to these many recent initiatives like e-chaupal (selling of agricultural produce through internet) also reduced the gap between farmers and consumers even making them accessible to foreign customers also.
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Agriculture in India is the backbone of our country and to protect the economic interests of farmers is our responsibility by empowering them financially through innovative marketing practices.