UPSC Economy

Agriculture marketing refers to the service of moving an agriculture product from farm to consumer.

Objectives of Agricultural Marketing:


1. To enable farmers to get the best possible returns.
2. To provide facilities for selling the produce at an incentive price.
3. To make available all products of farm origin to consumers at a reasonable price.

Important platforms of agriculture marketing in the country are APMC mandis, which are regulated by state governments. The concept of APMC mandi can be traced from the APMC Act (Agricultural produce market committee) act 1950. It is compulsory for farmers to sell their produce only within these APMC mandis. State governments notify which agricultural commodity or livestock has to be sold by farmers within these mandis.

But the following important problems has been traditionally found in APMC mandis:-

1. High registration fee.
2. Monopoly of middlemen due to which farmers get a very minimum share of the price which is paid by consumers for agricultural products.
3. Paucity of APMC mandis in villages due to which farmers can not easily access such a market.

Because of these important problems, most farmers of India decide to sell their product in the local market outside APMC mandi at a very minimum price. Therefore we can conclude that the larger nature of agriculture marketing in India is informal.

In order to resolve problems of APMC mandis and to formalise agriculture marketing in India, parliament has passed model APMC  Act in 2003.

Model APMC Act 2013:

• Union government has prepared model APMC act in 2003.


• Under model act legal persons such as growers and local authorities were permitted to establish new market. According to older APMC law, only the state government could set up such market.
• There is no compulsion on growers to sell their produce through the existing market administered by APMC.
• Model APMC act 2003 makes provision for the consumer market to facilitate direct selling of commodities to the ultimate consumer by farmer.
• Model APMC act also presented a separate chapter on contract farming for promoting income of farmers and maintaining transparency.
• In pursuance of Model APMC act, Bihar and Maharashtra state governments has decided to abolish monopoly of APMC mandis in their own state.

E-NAM (Electronic National Agricultural Market):-

• It is the Pan India Electronic trading portal launched by the Ministry of Agriculture to facilitate farmers, buyers, etc. with a common platform where they can interact with each other. It was launched in 2005.

Benefits of E-NAM:-

• e-NAM will provide Pan-India level common market where a farmer can get best price of his commodity. Earlier it was compulsion of farmer to sell commodities in local market which generally known as local mandis.

P.M Fasal Bima Yojana:

• Launched by the government in 2016 by replacing Rashtriya Krishi Bima Yojana (2000).
• In envisages a uniform premium of 2% to be paid by farmers of Kharif crops and 1.5% of Rabi crops.
• Premium for annual commercial/horticulture crop will be 5%.
• In this Bima Yojana post-harvest loss up to 15 days has also been covered.
• In 2017 central cabinet has approved a revenue insurance scheme for plantation crops in order to protect them from, loss of yield, pest attack, etc. (Plantation crops: sugarcane, Banana, Tobacco, Cotton, Jute, etc.)

Agriculture extension:

• It means application of new knowledge and research to agriculture practice through farmer’s education.
• For example- Public Sector Agriculture extension
• First major initiative was taken by World Bank with the establishment of training and visit systems. Since then many states have set up T and V systems.
• In this context role of Indian Council for Agricultural Research (ICAR) is also instrumental which provided various vocational training course to famers.
• Establishment of Kisan Vigyan Kendra in many states. Agricultural extension services in India faced a new look with privatization and gradual reduction of government support from agriculture extending. However, after some time, another major initiative taken by the government was setting up an agriculture technology management agency in 1998.

Farmer Produce Organisation (FPO)-

• This is a group of farmers whose objective is to secure the interest of farmers in the agriculture market.
• Currently more than 4000 FPOs are working in country and in Union budget 2018-19 government
has decided to provide tax holiday for next 5 years in order to ensure their profit.

Probelm of Agriculture Marketing in India-

1. Improper storage facilities: FCI has always been criticized of not having enough storage facilities.
2. Lack of standardization of agricultural products.
3. Inadequate transport facilities.
4. Existence of chain of middlemen like trader, porter, whole seller, retailer between farmer and consumer.
5. Problem of Inflation in the retail agriculture market due to activities like hoarding.
6. Inadequate farm credit: Because of the lack of farm credit, farmers can’t prepare their own
storage facilities due to which soon after harvest they have to sell their prouct at any cost which is known as “forced sell”.

Different types of farming-

1. Horticulture – Garden cultivation
2. Sericulture – Production of silk
3. Pissiculture – Rearing of fish
4. Viticulture – Cultivation of grapes

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