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98 4.4 AGRICULTURAL MARKETING For a very long period of time or from the beginning of the 20th century .Indian agriculture was mostly in the nature of “Subsistence Farming”. The farmer sold only a small part of his produce to pay off rents ,debts and meet his other requirements . Such sale was usually done immediately after harvesting of crops since there were no storing facilities. The poor and illiterate farmers took his small produce to the markets where he was exploited and cheated by strong traders and dealers. So the agricultural marketing system was very unsafe and exploitative .Accordingly the Govt. has to undertaken various steps after Independence to improve the system of agricultural marketing in India. The important types of agricultural markets in India are as follows: 1. Primary or local markets: These markets are organised by Village Panchayats, who charge some rent from shopkeepers for the space occupied. These markets are known as ‘shandies’, in southern states, or ‘chuna’ in Kerala, hat, painth or bazar in northern and north eastern states, held once or twice in a week in the neighborhood of a group of villages. More than 50 percent of the total marketed surplus is sold at these markets. 2. Secondary markets: Business in these markets is transacted regularly throughout the year. The markets provide facilities of storage, handling and banking services, and are well served by roads and railways. These are also known as ‘wholesale‘ or assembling‘ markets and are called mandis. A number of middlemen operate in these markets. 3.Terminal markets: These markets perform the function of carrying goods to consumers, final buyers or to places of processing. Such markets are located in big cities or at ports. 4. Fairs: held at religious occasions at pilgrim centers are important sources of marketing of agricultural produce in India. Such fairs are held annually and are organised by district officers, local bodies or private agencies. They are very popular in states like Bihar, Orissa, U.P., Maharashtra, W. Bengal and Rajasthan. 5. Regulated markets: These have been set up by the Government for the purpose of checking fraudulent practices which
99 are generally practiced by traders in the primary and secondary markets. Government rules and regulations govern the market practices. 6. Cooperative marketing: These markets function on the basis of principles of cooperation. A cooperative marketing society can carry the agricultural produce direct to the consumers, thus dispensing with a large army of middlemen and intermediaries. 7. State Trading: in agricultural produce has become an important element of agricultural marketing in India. State agencies, like the Food Corporation of India, set up their exclusive centers in and around villages and mandis at harvest time to procure produce from peasants at Government-fixed prices. 4.4.1 Defects of agricultural marketing: a. In the agricultural marketing in India there are a large number of middlemen indulging in widespread malpractices. b. Lack of proper warehousing facilities in the villages, therefore the farmer was compelled to store his products in pits, mud-vessels, kutcha storehouses etc. These unscientific methods of storing led to considerable wastage. c. There was not any provision for grading, thus there was no incentive to use better seeds and produce better varieties. d. Transportation facilities were also highly inadequate and only a small number of villages were joined by railways and pucca roads to mandis. The produce was carried on slow moving transport vehicles like bullock-carts which could not be used to carry produce to far-flung places and the farmer force to sell his produce in nearby market at low prices. e. Farmers are illiterate and they are not aware about the prices of their produce in different markets, so there is no option for them but to accept the price offered to them by the middlemen. f. Indian farmer is poor and lack staying power, so he tried to sell his produce immediately after harvest at less prices. g. There was a total lack of institutional sources of credit and the farmers were almost totally dependent on the moneylenders whose sole objective is to exploit the farmers by forcing them to sell produce to them at low prices than the market prices in turn for the loans granted to them.
100 4.4.2 Government measures to improve agricultural marketing system in India: An efficient agricultural market may lead to increase in efficiency of farmers and provide an incentive to produce more. Following measures have been adopted by Government to overcome the defects of agricultural marketing. 1. Establishment of Regulated markets: Regulated markets are places where transactions are governed by various rules and regulations. The market committees consist of representatives of growers, traders and the government, who look after functioning of these markets. These committees are responsible for the enforcement of fair grading practices, licensing of market functionaries, stopping the deduction of unauthorised market charges, introduction of the open auction system of sales and enforcement of standard weights and to secure impartial arbitration in case of disputes. The markets provide yards, godowns, sheds, etc. Reliable and up-to-date market news are made available to the farmers. There are 7,161 regulated markets in the country. 2. Private terminal markets: Private parties are being permitted to set up terminal markets for agricultural produce. These markets are being set up by corporate, other private enterprises and cooperatives. The facilities provided at the markets include electronic auction, cold chain and logistics support from the primary collection centers located at convenient places. 3. Provision for Storage and Warehousing facilities: Improved storage performs the function of regulating supply in relation to demand, stabilisation of prices and maintenance of buffer stocks. A warehouse is a godown where goods are stored on the journey from places of manufacture or consumption. Storage and warehousing facilities for agricultural crops on commercial basis are available both in the public and private sectors. The main institutional agencies providing these facilities are the Central and State Warehousing Corporations, the Food Corporation of India and the Cooperatives.
101 4. Corporate marketing: Corporate are more capable of undertaking risks and can face financial losses than small and medium farmers. The corporate buy the produce on contract basis from farmers, and pay them the prevailing market prices. The farmers can sell their produce elsewhere if they get a better price. The corporate are paying detailed attention to several aspects of retail chain right from seed distribution, fertiliser application, improving irrigation technologies, facilitating credit, processing and setting up cold storage, transporting and finally selling the produce. 5. Standard weights and Grading: The Standard weights and Measures Act was brought into force in 1958. Under the Act, only Government weights and measures can be used for transactions. Grading of agricultural produce is done under the provisions of the Agricultural Produce (Grading and Marketing) Act, 1937, for which purpose the insignia AGMARK is used. This insignia is the hallmark of quality. Grading standards have been laid down for 150 agricultural and allied commodities. Compulsory grading before export is carried out in respect of 41 commodities. 6. Market information: Relating to agricultural products collected by public agencies and co-operatives is made available to farmers. For dissemination of information all sorts of media, like display boards, radio, television, weekly, monthly and yearly publications, conferences, etc. are used. This information service is a part of the infrastructure that is needed for a healthy functioning of the market. Further, during 2005-06, a scheme for Marketing Research and Information Network, AGMARKNET, was implemented to provide electronic connectivity to important wholesale markets in the country for collection and dissemination of price and market related information. 7. Transport arrangements: In an integrated road development programme, rural roads have been assigned a higher priority so as to bring lakhs of our villages into the national mainstream. As at the beginning of the Tenth Plan, 61,947 villages out of a total of 67,915 villages with a population of 1,500 and above had been connected by all-weather roads. Similarly, 40,551 villages out of a total of 57,859 villages with a population between 1,000 and 1,500 had been so connected.

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