|Demand of the question |
Introduction. Contextual Introduction.
Body. Issue of lack of market linkages and bad policies.
Conclusion. Way forward.
The country’s food production has increased tremendously from just 51 million tonnes in 1950-51 to about 252 million tonnes in 2014-15. However, farm income did not grow much. This is mainly due to market bottlenecks. Higher output alone can not provide higher income to farmers unless it is well marketed.
Issue of lack of market linkages and bad policies:
- Poor Price determination: The producer of agricultural goods does not know the price at which his produce would be sold to the ultimate consumer. It is not something decided by the farmer. It is only the intermediaries who determine the final price in marketing agricultural goods.
- Lack of sufficient storage: Agricultural goods are easily perishable. Thus agricultural goods need to be stored in warehouses. The farmers may not have their own storage facilities. Absence of storage forces the farmers to sell their produce at the earliest. Sometimes, they sell at a very low price in the market. Thus, the farmers, as the producers, get a very low or even no profit.
- Lack of Transport Facilities: Most of the villages in India do not have proper roads. The farmers, as a result, have to rely mainly on bullock carts and such other conventional mode to transport their agricultural goods. The bullock carts can take the product only up to a limited area. During lack of transport facilities the farmer is unable to take his produce to the appropriate market and is unable to receive a fair price for his product.
- Long chain of middlemen: Agricultural goods, perhaps, have the longest chain of middlemen. There are a number of intermediaries in the market like the wholesalers, brokers, commission agents, retailers and so on. As it passes through each individual, the price increases. The high price paid by the consumer does not reach the grower. It is pocketed only by the market intermediaries.
- Lack of Market Information: The poor and illiterate farmers have no access to methods of gathering information about the market for their agricultural goods.
- Inelastic demand: The demand for agricultural goods is not influenced by a fall or rise in their price. Thus, the producer suffer on account of fall in the price during bumper harvest.
- Defective Weights and Scales: One of the biggest defects of agricultural marketing arises due to weights and scales. Usually, in rural areas bricks, etc. are used as weights and in urban markets also defective weights are found. Thus, the grain of the farmer is weighed by a heavier weight for their own gain. Most of the traders keep separate weights for purchase and sale of grain.
- Lack of Organised Marketing System: The agricultural marketing is also very defective in India because of absence of organised marketing. As a result, the farmer remains entangled In exploitation. The farmer sells his product personally to different people. The middle take full advantage of the unorganised farmers.
- Corrupt Policies of the ‘Mandis’: Middlemen and the traders jointly make the innocent farmers fool. There are corrupt practices in the mandis. The farmers are paid low price, as they lack appropriate knowledge about market prices, their fluctuations, government policies etc. Thus, by keeping the rates secret, the farmers are cheated.
Agricultural marketing plays an important role in stimulating production and consumption and in accelerating the pace of economic development. The agriculture sector needs competitive and well-functioning markets for farmers to sell their produce. Thus marketing reforms are important to increase income to farmers.