MARKETING PROBLEMS OF INDIAN FARMERS by T. HAQUE POINTS MADE AT THE ANNUAL GENERAL BODY MEETING OF THE NATIONAL COUNCIL OF STATE MARKETING BOARDS AT GUWAHATI ON APRIL 3, 2008

PRESENT AGRICULTURAL SCENARIO INDIAN AGRICULTURE IS IN LOW LEVEL EQUILIBRIUM TRAP-HAVING LOW FARM PROFIT AND INCOME, LOW SAVINGS, LOW INVESTMENT AND SLOW GROWTH SLOW PROCESS OF PARADIGM SHIFT FROM SUBSISTENCE TO COMMERCIAL ARICULTURE SLOW PROCESS OF AGRICULTURAL DIVERSIFICATION AND VALUE ADDITION LACK OF ADEQUATE ACCESS OF FARM YOUTH TO QUALITY EDUCATION AND TRAINING FOR UPWARD MOBILITY OUTSIDE AGRICULTURE LACK OF APPROPRIATE INFRASTRUCTURE, SMALL FARMER FRIENDLY SUPPORTIVE INSTITUTIONS, TECHNOLOGY AND POLICY SUPPORT

IMPORTANCE OF AN EFFECTIVE AND EFFICIENT AGRICUTLRUAL MARKETING SYSTEM -IT SHOULD ENSURE ADEQUATE AND TIMELY AVAILABILITY OF KEY FARM INPUTS FOR IMPROVEMENT IN FARM PRODUCTIVITY -IT SHOULD ENSURE TIMELY DISPOSAL OF FARM OUTPUT, ESPECIALLY PERISHABLES -IT CAN HELP IMPROVE FARM INCOME -IT CAN RAISE THE SATISFACTION LEVEL OF CONSUMERS -IT CAN BE AN EFFECTIVE AGENT OF CHANGE FOR AGRICULTURAL DIVESIFICATION AND VALUE ADDITION -IT CAN HELP THE FARMERS TO BENEFIT FROM THE OPPORTUNITIES OFFERED BY TRADE LIBERALISATION AND GLOBALISATION

PROBLEMS OF AGRICUTLRUAL MARKETING IN INDIA -INADEQUATE NUMBER OF ORGANISED MARKETS -INADEQUATE PROGRESS OF CO-OPERATIVE MARKETING -POOR FACILITIES IN REGULATED MARKETS -LACK OF ADEQUATE RURAL GODOWNS AND WAREHOUSING FACILITIES -RESTRICTIVE AND MONOPOLISTIC MARKETS -RESTRICTIONS ON DIRECT FARMING -LACK OF ADEQUATE COLD STORAGE AND COOL TRANSPORTAION FACILITIES FOR PERISHABLES -LACK OF ALL WEATHER RAODS AND ADEQUATE ELECTICITY STAND IN THE WAY -LACK OF QUALITY CONSCIOUNESS, GRADING STANDARDISATION ETC.

-POOR MARKET AND PRICE INFORMATION SYSTEM-PRESENTLY INADEQUATE MARKET INTEGRATION -INFORMATION SYSTEM-PRESENTLY AGMARK NET SEEMS TO WORK -WIDE AND WIDENEING MARGINS BETWEEN WHAT THE CONSUMERS PAYAND WHAT THE PRODUCERS RECEIVE -WIDE INTER-SEASONAL FLUCTUATION IN PRICES -MALPRACTICES AND CORRUPTION AT INDIVIDUAL MANDI LEVELS, RESULTING IN FARMERS EXPLOITATION -NOT MUCH ORGANISED RETAILING -WEAK INTEGRATION OF PRODUCTION SYSTEM WITH POST HARVEST VALUE CHAINS, RESULTING IN HIGH COST OF MARKETING AND LOW PRICE REALISED BY FARMERS. -LIMITED OPTINS FOR PRIVATE INVESTMENT IN AGRICULTURAL MARKETING -MULTIPLICITY OF TAXES AND LEVIES

States/Union Territories Wholesale Markets Rural Primary Markets Regulate Market Yards/ Sub-yards Area Served Per Market Yard/ Sub- Yard (Sq. Km) Andhra Pradesh Arunachal Pradesh Assam Bihar (+Jharkhand) Goa Gujarat Haryana Himachal Pradesh J & K Karnataka Kerala* Madhya Pradesh (+ Chattisgarh) Maharashtra Manipur* Meghalaya Mizoram Nagaland Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh (+ Uttarnchal) West Bengal Union Territories Total GEOGRAPHICAL DISTRIBUTION OF REGULATED MAREKTS IN INDIA * APMR ACT NOT YET ENACTED/IMPLEMENTED SOURCE: Govt. of India and Updated by records of Directorate of Marketing and Inspection, Faridabad (as on 31/03/05)

FACILITY/AMENITIES % OF MARKETS WITH FACILITY % UTILIZATION OF FACILITIES COMMON AUCTION PLATFORM (COVERED) 6484 COMMON AUCTION PLATFORM (OPEN) 6782 COMMON DRYING YARDS 2687 LOADING/UNLOADING & PARKING 100 TRADERS MODULES 6389 RETAIL SHOPS STORAGE GODOWNS 7491 COLD STORAGE 9100 WEIGHING EQUIPMENT GRADING FACILITIES 3089 PROCESSING UNITS 783 PLEDGE FINANCING 1793 AGRICULTURAL INPUT SHOPS 2996 INTERNAL ROADS ELECTRIC LIGHTING AVENUE & SHED TREES 5798 PRICE DISPLAYBOARDS 6192 PUBLIC ADDRESS SYSTEM 3491 BANK POST OFFICE SECUIRTY POST 42- POLICE POST 15- BOUNDARY WALL 84- PUBLIC TELEPHONE 24- GARBAGE DISPOSAL SYSTEM 84- DRAINAGE SYSTEM 55- FARMERS’ REST HOUSE 6189 COMMON BATH ROOMS 2798 COMMON TOILETS CANTEEN 4397 DRINKING WATER TAPS28100 FACILITIES/AMENTITIES IN REGULATED MARKET YEARDS SOURCE :DMI

RECOMMENDATIONS OF INTER-MINISTERIAL TASK FORCE ON MARKETING REFORMS -PROMOTIN OF COMPETITIVE AGRICULTURAL MARKETS IN PRIVATE AND CO-OPERATIVE SECTORS, DIRECT MARKETING AND CONTRACT FARMING PROGRAMMES BY AMENDING THE STATE APMC ACTS AND TO PROVIDE CENTRAL ASSISTANCE FOR THE DEVELOPMENT OF MARKETING INFRASTRUCTURE SUBJECT TO SUCH REGULATION AND REFORMS. -PROGRESSIVE DISMANTLING OF CONTROL AND REGULATIONS UNDER THE ESSENTIAL COMMODITIES ACT -PLEDGE, FINANCING TO ENHANCE FARMERS’ HOLDING CAPACITY TO OBTAIN BETTER PRICES -INTRODUCING NEGOTIABLE WAREHOUSING RECEIPT SYSTEM FOR AGRICULTURAL COMMODITIES -FUTURES TRADING IN ALL AGRICUTLURAL COMMODITIES

ADDITIONAL RECOMMENDATIONS OF THE NATIONAL COMMISSION ON FARMERS -AUCTION SYSTEMS AT THE REGUALTED MARKETS NEEDS TO BE MADE MORE TRANSPERENT -DELAYS IN THE MANDIES BE AVOIDED -ROLE OF APMC/SAMBS SHOULD CHANGE FROM REGULATION TO PROMOTION OF GRADING, BRANDING, PACKAGING AND DEVELOPMENT OF DISTANT AND INTERNATIONAL MARKETS FOR THE LOCAL PRODUCTS -ESTABLISHMENT OF COMMODITY BASED FARMERS’ ORGANISATIONS -FIXING QUALITY STANDARDS AND COMPULSORY GRADING BEFORE SALE IN THE REGULATED MARKETS IN A PHASED MANNER -SUPPORT TO INITIATIVES SUCH AS ITC’S E-CHAUPAL OR NDDB’S SAFAL -A FARMER CENTRIC’ CODE OF CONDUCT FOR CONTRACT FARMING -SETTING UP OF INFORMATION KIOKS IN THE MARKETS

SOME RECENT INITIATIVES FOR AGRI-MARKETING REFORMS -A MODEL LAW ON AGRICULTURAL MARKETING -AMENDMENTS IN APMC ACTS -CONTRACT FARMING -DIRECT MARKETING -DILUTION OF ESSENTIAL COMMODITIES ACT-ESSENTIAL COMMODITIES (AMENDMENT BILL, 2005) -FUTURES TRADING -FOOD SAFETY AND STANDARDS BILL, WAREHOUSING (DEVELOPMENT AND REGUALTION) BILL, PUBLIC-PRIVATE PARTNERSHIP IN AGRICULTRUAL MARKETING -TERMINAL MARKETS -CENTRE FOR PERISHABLE CARGO -AEZs AND SEZs -PROMOTION OF FARMERS’ ORGANISATIONS-INCLUDING, SHGs AND PRODUCER COMPANIES

-PREPARING THE ROAD MAP FOR AGRICULTURAL DEVELOPMENT AND PROVIDING THE MISSING LINKS IN AGRICULTURAL MARKETING -STRENGTHENING OF AGRICULTURAL MARKETING INFRASTRUCTURE -ENABLING ENVIRONMENT FOR INCREASED PRIVATE INVESTMENT IN AGRI-MARKET DEVELOPMENT -RATIONAISATION OF MARKET FEES AND TAXES -STRENGTHENING OF FUTURES TRADING -ENABLING THE FARMERS TO PARTICIPATE AND BENEFIT FROM AGRO-PROCESSING AND VALUE ADDITION THROUGH FORMATION OF PRODUCER COMPANIES -REMOVING THE EXISTING SHORT COMINGS OF CONTRACT FARMING -APPROPRIATE, ALBEIT FARMER FRIENDLY EXPROT-IMPORT POLICY -EXPLOITING THE OPPORTUNITIES OF INTERNATIONAL TRADE LIBERALISATION -DEALING WITH WTO RELATED ISSUES SUCH AS –WTO COMPATIBLE SUBSIDIES, FTSs, RTAs ETC. UNFINISHED TASKS