CHAPTER III

REGULATED MARKETS: AN OVERVIEW

3.1. Introduction

India is an agrarian economy. About 70 per cent of people are

dependent on agriculture for their basic income. Earlier the farmers were

concerned about the sale of their produce due to low quality. The Royal

Commission on Agriculture found that there weren’t enough marketing

activities carried on by the farmers and suggested the formation of regulated

markets and accordingly various market committees were incorporated.

Regulated markets aim at the development of the marketing structure to

ensure remunerative price to the farmers; reduce non-functional margins of

the traders and commission agents; and narrow down the price spread

between the producer and the consumer. To achieve these objectives, the

government has made comprehensive and rapid expansion of regulated

marketing systems. Besides, the regulated marketing system has proved a

good source of generating income for the marketing boards and for use in

rural infrastructure. The first attempt for the regulation of markets in India

dates back to 1897, when the Berar Cotton and Grain Markets Law was

passed to purge marketing of many of its abuses. Since then various Acts,

rules and laws have been passed, and many committees and commissions
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have been appointed for facilitating and promoting the growth of regulated

markets all over the country.

3.2. Regulated Markets

Regulated market is wholesale market where buying and selling is

regulated and controlled by the state government through the market

committee. It aims at the elimination of unhealthy and unscrupulous practices

reducing marketing charges and providing facilities to producers and sellers

in the market. The prevalence of various malpractice's such as short-weights,

excessive market charges, unauthorized deduction, adulteration of produce

and the absence of machinery to settle disputes between sellers and buyers

were recognized as the main hindrances in agricultural marketing. These

defects and malpractices can be recovered by the establishment of regulated

marketing there country may be regulated either by local bodies or under

state legislation was suggested first in 1928 by the Royal Commission on

Agriculture. The movement of regulation of market gained momentum only

after 1930. The Bombay Agricultural Produce Market Act of 1939 was

passed in respect of all agriculture produces viz., cereals, fibres, fruits, etc.

Regulated markets are established under the provisions of the Agricultural

Produce Marketing Committee Act of state governments. The establishment

of regulated markets helped in creating orderly and transparent marketing

conditions. Main features of regulated markets are as follows.

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Market Committee: Market committee comprises representatives

from different sectors of society that is farmers, traders, government local

bodies and co-operatives. In general, a market committee consists of 15

members, 10 from farmers 3 from traders and 1 each from the government

and local bodies.

Area of Operation: The concerned state government notifies that its

intention to regulate trade practices in specified area such an area of operation

is laid down either as a municipal limit or district or even it may be a region.

Methods of Sales: The sale of agricultural produce is undertaken

either by open auction or by close tender method. These sales methods

ensure a fair and competitive price for the produce and prevent the cheating

of farmers by market functionaries. By these methods, the sale is carried out

under the supervision of an official of the market committee.

Licensing of Market Functionaries: The market functionaries of the

regulated market have to obtain license from the market committee to carry

on their business. The licensed traders have to keep proper record and

maintain accounts in accordance with the bylaw of the market committee.

Market Levies or Fees: Farmers and traders have to pay market fees

which are calculated on the basis of value of volume of a commodity bought

and sold in the markets. Sometimes it may be based on cartload or truckload.

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3.3. Regulated Markets in India

Agriculture is a way of life and a tradition, which for many centuries

has shaped thoughts, outlook, culture and the economic life of Indians. It will

continue to be central to all strategies of planned socio-economic

development of the country. Today, agriculture and allied sectors account for

22 per cent of GDP and provide more than 60 per cent of rural employment

with more than 142 million hectares of cultivated land. India ranks second in

terms of total arable land as well as irrigated area in the world. Since

independence Indian agriculture has made rapid strides because of multi-

disciplinary and multi-institutional approaches. India achieved self-

sufficiency in food grains production, largest producer of fruits, coconut,

milk and second largest producer of vegetables, rice and wheat.

Unfortunately, pattern of growth of agriculture has brought in its

wake uneven development across regions and crops as also across different

sections of farming community. It is characterized by low levels of

productivity and degradation of natural resources, which could be partly

due to capital inadequacy, lack of infrastructural support and demand side

constraints. Unfavourable price regime and low value addition also

contributed their might which led to migration from rural areas. This

situation is likely to be exacerbated in the wake of integration of agriculture

trade in global system. Establishment of an agrarian economy which

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ensures food and nutrition to India’s billion people, raw materials for

expanding industrial base, surplus for exports and a fair and equitable

reward system for farming community will be the mainstay of reforms in

the agriculture sector. During pre-independence period, Government of

India had too little interest in the problems of agriculture. They rather

concentrated on increasing the revenue and looking after law and order

situation and judicial administration in the country. The great famine of

1866, which hit badly the Provinces of Assam and Bengal, forced the

government to draw its attention to the need of developing agriculture as a

means of averting famines and protecting people from starvation.

The history of regulated markets in India was started, when the

British government felt the necessity of supplying the pure cotton at

reasonable price to the textile mills at Manchester. The Karanjip Cotton

Market was established in 1886 as a regulated market under the first

legislation in India was the Barer Cotton and Grain Market Act of 1897. In

1927, the Government of Bombay enacted the Bombay Cotton Markets Act.

This Act provided for the establishment of markets for cotton, constitution

of market committee, notification of cotton, the levying of market fee, use

of authorized weights and measures and appointment of dispute

subcommittee for settling dispute between the farmer-seller and trader-

buyers. During pre-independence period, the first Act was passed in 1897 in
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the name of Berar Cotton and Grain Markets Law.1 Then after that many

Acts have come like the India Cotton Committee Act, 1927.  The

government of India appointed the Royal Commission on Agriculture in

1928 and it submitted its report in 1929. The Indian Central Banking

Enquiry Committee, 1931 endorsed the recommendations of the Royal

Commission and offered some suggestions for the organization and

improvement of agricultural marketing in India. The Hyderabad

Agricultural Markets Act was passed in 1930, followed by the Central

Provinces Agricultural Produce Act in 1935, for all kinds of produces

except cotton. The Bombay Agricultural Produce Market Act was passed in

1939, replacing the Bombay Cotton Markets Act, 1933 to regulate the

buying and selling of commercial crops like cotton, groundnut and tobacco.

Regulated markets were established in Tiruppur in 1936 for cotton and in

Tindivanam for groundnut in 1939, both in former Madras state. For cotton,

a regulated market was established in Baroda state in 1938. These were the

pioneer regulated markets in India. The outbreak of Second World War

checked the progress of market regulation activities in India.

At the end of 1940 there were 135 regulated markets in India which

increased to 286 by 1950. The growth of regulated markets in India showed a

remarkable progress since the beginning of the planning era (1951). The

1
Ghosh, M.M (2002). Growth and Development of Regulated Markets in Tripura,
in Prasad Jadish (Ed.), Encyclopedia of Agricultural Marketing, Delhi: Mittal
Publications, p.92.
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Planning Commission laid emphasis on the development of regulated

markets throughout the country. In the post-independence period, the Five

Year Plans visualized the importance of regulation of new markets through

out the country. The First Five Year Plan pioneered economic developments,

including agricultural development of the country where importance of

regulated markets to remove defects of agricultural marketing was

recognized and so it made modest target of organizing 184 markets and

passing of the Agricultural Produce Markets Acts in different states. The

Second and Third First Five Plans aimed at organizing 245 and 267 markets

respectively. As a result, there were 982 regulated markets in country with

506 submarket yards, totaling 1488 markets by March 1965. The Third Five

Year Plan contemplated the regulation of markets in different parts of the

country. But, in that period there were many draw backs in the markets, like

lack of space, poor lay-out, unfair trade practices, inadequacy of marketing

facilities, etc. From the foundation laid by the Third Five Year Plan the

regulated markets start to develop to give security to the cultivators regarding

better prices, weighment and freedom from illegal deductions. After the Third

Five Year Plan the socio-economic conditions of the country was facing a

number of favourable and unfavourable circumstances many states entered

into the new phase of its development in market regulation.

The special emphasis was given on regulated markets in the Sixth

Five Year Plan. These basic points of this Plan on regulated markets are
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further expansion of the regulated market system in terms both more

markets and commodities to be brought within the scope of regulation;

strengthening the arrangements for enforcement/and inspections to ensure a

regulated system of open auctions, trading practices and margins of

intermediaries; and development of rural markets and establishment of rural

markets in the areas where such a facility is not available with in a

reasonable distance. The Eighth Five Year Plan is more conscientious to the

need for regulated markets. It notes that regulated markets can be used as an

instrument of regeneration of the whole “rural infrastructure” with a view to

achieve the objectives. The Plan provides the following programmes:

comprehensive and rapid expansion of the regulated marketing system

having organic links with the primary markets; the establishment of linkage

with major consuming centres; the inclusion of facilities for grading and for

monitoring of prices; utilizing regulated markets for the generation of the

resources by levying a surcharge and associating panchayats in this task;

and the development of regulated markets in command areas and terminal

markets especially in areas where commercial crops like cotton, jute,

tobacco and important non-traditional crops are produced and sold in

weekly markets. The National Commission on Farmers, 2004 has

recommended that the facility of regulated markets should be available to

the farmers within the radius of 5 km. There were 286 regulated market

yards at the time of independence and were increased to 7249 markets in

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2011. These consist of 2433 principal markets and 4816 sub-yards. The

number of regulated markets is relatively more in geographically large

states viz. Andhra Pradesh, Karnataka, Maharashtra, Madhya Pradesh, Uttar

Pradesh and West Bengal. Plan-wise number of regulated markets in India

is as follows:

TABLE 3.1
Plan-wise Number of Regulated Markets in India

No. of Regulated
S.No. Plan Plan Period
Markets

1 First Five Year Plan 1951-1956 470

2 Second Five Year Plan 1956-1961 725

3 Third Five Year Plan 1961-1966 1600

4 Fourth Five Year Plan 1969-1974 2640

5 Fifth Five Year Plan 1974-1979 4000

6 Annual Plan 1974-1980 4050

7 Sixth Five Year Plan 1980-1985 5895

8 Seventh Five Year Plan 1985-1990 6275

9 Annual Plan 1991-1992 6780

10 Eighth Five Year Plan 1992-1997 7100

11 Ninth Five Year Plan 1997-2002 NA

12 Tenth Five Year Plan 2002-2007 NA

13 Eleventh Five Year Plan 2007-2012 7,139

Source: Sontakki, C.N (2008). Marketing Management, Ludhiana: Kalyani
Publishers, p. 631.
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Table 3.1 shows the Plan-wise number of regulated markets in

operation in India. During the First Five Year Plan, there were 470 regulated

markets in operation, and then it has been increased to 720 and 1600 markets

during the Second Five Year Plan and Third Five Year Plan respectively.

There shows an increasing trend in the number of regulated markets from

Fourth Five Year Plan onwards. The number of regulated markets during

Fourth Five Year Plan, Fifth Five Year Plan, and Sixth Five Year Plan period

was 2640, 4000 and 5895 respectively. There were 6275 regulated markets

during the Seventh Five Year Plan and this number was increased to 7100

regulated markets during the Eighth Five Year Plan period. At the end of the

Eleventh Five Year Plan, 7139 regulated markets were in operation in India.

TABLE 3.2

Number of Regulated Markets in Operation in India as on 2010-11

Principal Sub-
State/UTs Regulated Market/Market Total
Markets Yards

Andhra Pradesh 329 576 905

Arunachal Pradesh 16 113 129

Assam 20 206 226

Bihar (APMR Act Repealed)

Jharkhand 28 173 201

Goa 1 7 8

Gujarat 196 218 414

Haryana 106 178 284

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Himachal Pradesh 10 38 48

Karnataka 152 352 504

Madhya Pradesh 241 276 517

Chhattisgarh 73 112 185

Maharashtra 299 581 880

Meghalaya 2 - 2

Nagaland 18 Nil 18

Orissa 45 269 314

Punjab 139 349 488

Rajasthan 129 302 431

Sikkim 1 - 1

Tamil Nadu 277 15 292

Tripura 21 - 21

Uttar Pradesh 249 356 605

Uttarakhand 25 33 58

West Bengal 43 644 687

Chandigarh 1 - 1

Delhi 8 13 21

Puducherry 4 5 9

Total 2433 4816 7249

Source: Department of Agriculture and Cooperation, Ministry of
Agriculture, Government of India.

Table 3.2 shows the state-wise formation of regulated markets during

2010-11. In India, there were 7249 regulated markets during 2010-11. The

number of regulated markets is relatively more in geographically larger

states viz. Andhra Pradesh, Karnataka, Maharashtra, Madhya Pradesh, Uttar

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Pradesh and West Bengal. These six states account for 55.15% of total

regulated markets in the country. In Andhra Pradesh and Maharashtra

states, the number of regulated markets in operation are more than 875

hundred i.e. 905 in Andhra Pradesh and 880 in Maharashtra. Number of

regulated markets in operation in West Bengal and Uttar Pradesh are 687

and 605 respectively. Madhya Pradesh has 571 regulated markets. Less

number of regulated markets is in operation in the states of Chandigarh (1),

Sikkim (1) and Meghalaya (2).

3.4. Regulated Markets in Tamil Nadu

Agriculture is the prime profession that helps in the overall

development of the economy of Tamil Nadu. Various steps taken by the

government to increase the investment in agriculture, agri-based

technologies, marketing development, planning approach, etc. have brought

substantial improvement in production in spite of seasonal vagaries like flood

and drought. Agricultural marketing has become the key driver of the

agriculture sector today due to new market realities posed by the increasing

accent on globalization, liberalization and privatization of the economy. The

Department of Agricultural Marketing functioning since 1977 for regulating

agricultural marketing, had been renamed as “Department of Agricultural

Marketing and Agri Business” to focus on other latest technologies like post-

harvest management, grading, packaging, food processing and export. The

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core objective of the Department of Agricultural Marketing and Agri

Business is to help the farmers in marketing their agricultural produce at a

fair price and to ensure remunerative returns to them. The aim of this

department is regulating agricultural produce trade by enforcing Tamil Nadu

Agricultural Produce Marketing (Regulation) Act 1987 most effectively and

also implementing new technologies to minimize post-harvest losses by

adopting various cost effective post-harvest operations like value addition,

storage, grading, packaging, processing, and easy transportation.

The Government of Madras enacted the Madras Commercial Crops

Market Act in 1933. In order to extend the scope of the Act to all agricultural

produces, the Act was modified as Tamil Nadu Agricultural Produce Market

Act in 1959. The era of regulated markets started in Tamil Nadu in 1936 with

the establishment of the first regulated market for cotton at Tiruppur under

the Coimbatore Market Committee. The second regulated market was

established at Tindivanam in 1939 under the South Arcot Market Committee.

Today all districts in Tamil Nadu have market committees except Nilgiris

district. At present there are 21 market committees and 292 regulated markets

are in operation in Tamil Nadu. These market committees are functioning

with members nominated by Government and Chairpersons elected by the

members. The market committees are constituted at district level and they

establish regulated markets under their control for better administration.

There exist differences between the Tamil Nadu pattern of regulated

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markets and the all India pattern. In Tamil Nadu pattern, there is one market

committee for each revenue district, whereas, in all India pattern, each

regulated market is an independent entity with a market committee of its

own. Further, in all India pattern, the traders are allowed to have their shops

within the premises of regulated markets, while in Tamil Nadu pattern, no

such practice is followed with the exception of Tirupur Regulated Market.

3.4.1. No. of Market Committees and Regulated Markets

The following table shows the market committee-wise number of

regulated markets in operation in Tamil Nadu.

TABLE 3.3

Market Committee-wise Regulated Markets in Tamil Nadu

No. of Regulated
S.No. Market Committees
Markets
1. Kanchipuram 14
2. Vellore 12
3. Thiruvannamalai 16
4. Cuddalore 10
5. Villupuram 17
6. Salem 19
7. Dharmapuri 16
8. Coimbatore 18
9. Erode 24
10. Tiruchirappalli 17
11. Thanjavur 29
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12. Pudukkottai 10
13 Madurai 21
14. Ramanathapuram/Virudhunagar 20
15. Tirunelveli 19
16. Kanyakumari 6
Total 268

Table 3.3 shows the market committee-wise formation of regulated

markets in Tamil Nadu. 268 regulated markets are in operation in Tamil

Nadu. The number of regulated markets is relatively more in Thanjavur,

Erode and Madurai Market Committees. These three Market Committees

have 27.61% of total regulated markets in the state. The Thanjavur Market

Committee has promoted more number of regulated markets (29) followed by

Erode Market Committee (24) and Madurai Market Committee (21). The

Kanyakumari Market Committee has promoted less number of regulated

markets (6) followed by Pudukkottai and Cuddalore Market Committees (10).

3.4.2. Facilities Available in the Regulated Markets

The market committee offers godown, rural godwon, transaction shed,

drying yard, farmers rest shed, sanitary facilities and drinking water facilities

to farmers. The following table shows various facilities available in various

market committees for the benefits of the farmers in Tamil Nadu.

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TABLE 3.4

Facilities Available in the Regulated Markets

Farmers Rest
Drying Yard
Transaction
Committees

Own Land

Drinking
Facilities

Facilities
Sanitary
Godown

Godown
Market
S. No.

Rural

water
Shed

Shed
1. Kanchipuram 7 - 5 4 7 2 6 5
2. Vellore 9 6 4 6 4 2 7 7
3. Thiruvannamalai 13 5 7 14 11 6 10 9
4. Cuddalore 5 2 3 11 5 3 9 5
5. Villupuram 12 4 9 26 13 10 22 12
6. Salem 5 1 2 4 4 - 4 3
7. Dharmapuri 9 1 4 7 7 3 11 7
8. Coimbatore 18 58 11 19 21 6 14 12
9. Erode 14 12 9 19 16 3 14 14
10. Tiruchirappalli 12 13 10 24 13 3 19 11
11. Thanjavur 10 11 4 17 7 6 9 9
12. Pudukkottai 3 1 2 3 2 1 3 2
13. Madurai 4 - 2 1 3 3 2 3
14. Ramanathapuram 14 8 10 12 10 2 12 13
15. Tirunelveli 15 3 12 9 13 10 14 15
16. Kanyakumari 5 2 5 6 7 5 5 5
17. Theni 4 - 2 3 6 1 3 4
18. Dindigul 6 1 4 6 7 - 5 5
19. Nagapattinam 1 1 1 2 1 - 1 1
20. Thiruvarur 1 - 2 1 1 2 1 1
Total 167 129 108 194 158 68 171 143

From the above table it is observed that Coimbatore Market

Committee (58) offers more number of godowns, followed by Erode

Market Committee (12). In regards rural godwon, Tirunelveli Market

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Committee (12) offers more number of rural godowns, followed by

Coimbatore Market Committee (11). Villupuram Market Committee had

more number of transaction sheds (26) followed by Tiruchirappalli Market

Committee (24). In regards drying yards, Coimbatore Market Committee

(21) offers more number of drying yards, followed by Erode Market

Committee (16). There are more number of farmers sheds in Tirunelveli and

Villupuram Market Committees (10) followed by Thiruvannamalai and

Thanjavur Market Committees (6). Villupuram Market Committee offers

more number of sanitary facilities (22) followed by Tiruchirappalli Market

Committee (19). In regards drinking water, Tirunelveli Market Committee

offers drinking water facilities in 15 regulated markets followed by 14

regulated markets in Erode Market Committee.

3.4.3. Agriculture Produce Marketing Committee

Regulated markets are functioning under market committees.

At present 21 market committees are functioning in Tamil Nadu at district

level. There are 268 regulated markets, 15 check posts, 108 rural godowns

and 108 grading centres functioning under the market committees.

Regulated Markets are functioning by the governance of Tamil Nadu

Agricultural Produce Marketing (Regulation) Act 1987 and Rules 1991.

This Act and Rules are in existence since 01.02.1991. The Model Act, 2003

and Model Rules, 2007, which is formulated by Government of India, had

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been received for amending the existing State Act 1987 and Rules 1991.

The Model Act 2003 emphasizes the following points:

• Establishment of private markets/yards, direct purchase centres,

consumer/farmers markets for direct sale and promotion of public

private partnership in the management and development of agricultural

markets in the country.

• Separate constitution of special markets for commodities like onions,

fruits, vegetables, flowers, etc.

• A separate chapter has been included in the legislation to regulate and

promote contract farming arrangements in the country.

• Prohibition of commission agency in any transaction of agricultural

commodities with the producers.

• Redefine the role of state agricultural marketing boards to promote

standardization, grading, quality certification, market led extension and

training of farmers and market functionaries in marketing related areas.

• Facilitate, e-trading, direct purchasing, export, forward/future trading

and introduction of negotiable warehousing receipt system in respect

of agricultural commodities.
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3.4.4. Functions of Regulated Markets

The primary object of regulating the market is to safeguard the interest

of the producer sellers and raise the standards of the local markets where the

first exchange of the goods takes place. With a view to achieve the object in

each of the regulated markets, market committees are established consisting of

the representatives of the growers, traders, local bodies, sellers, co-operative

shops and the state government nominees. The market committee consists of

12 to 18 members depending on the size of the market and other

considerations, which are responsible for utilizing the fund for:

• Maintaining and managing the market.

• Enforcing in the market area, the provisions of the Act, the rules and

the bylaws.

• Enforcing the conditions of licenses granted to different market

functionaries in connection with the purchase and sale of agricultural

produce regulated by it.

• Granting, renewing, suspending and canceling a general or a special

license for the purchase and sale of regulated agricultural produce.

• Maintaining the register containing the names of all licensed traders

and general commission agents.

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• Providing all facilities in the market as per the directions of the Director.

• Preparing budget estimate of its income and expenditure for the next

succeeding year and sanctioning it within the prescribed period.

• Levying fees on the agricultural produce or sold in the market area and

collecting them through agents or otherwise.

• Managing the income, incurring the expenditure and investing the

surplus funds.

• Keeping the account and other records in such a manner as directed by

the Director or any other officer authorized by him on his behalf.

• Maintaining a register showing the fees collected by it.

• Paying contribution every year at prescribed rates to the State

Agricultural Produce Fund.

• Prescribing the market charges with the previous sanction of the

Director for the services of different market functionaries rendered in

connection with the purchase and sale of agricultural produce regulated.

• Taking all possible steps to prevent adulteration of agricultural produce in

the market area.

• Promoting, grading and standardizing of agricultural produce.

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• Collecting and maintaining daily list of prices of different types and

grades of agricultural produce regulated by it and supplying them to

the government when required.

• Placing information on matters like the prices of the commercial crops

ruling at the principal markets of the tract and at the ports at the

disposal of the users of the market by publishing it.

• Communicating the full names and addresses of the traders holding

general licenses in the market area to the authorized officer within the

prescribed time when general election or by-election to be held.

• Prescribing the units of quotations in respect of the regulated

agricultural produce to be bought and sold.

• Appointing one or more sub-committees for carrying out any work or

to resort to it on any matter and delegating such powers and duties to it

or them or to any of its members as may be deemed necessary.

• Issuing all directions necessary for the guidance of the persons using

the market by publishing them on the notice board.

3.4.5. Services Rendered by the Regulated Markets

Regulated markets operate through Agricultural Produce Marketing

Committee. They aim at protecting the farmers from malpractices and

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securing a remunerative price for the produce. Regulated markets provide

better places to farmers to sell their produce under competitive condition

and better supervision where there are no cheating in weights and measures,

to unauthorized deductions, no quarrels, no litigation, etc. There are

regulated markets which have shown new paths, there are cattle markets,

fruits and vegetable markets, they organize exhibitions useful to the

farmers, supply price positions for farm produce on All-India Radio,

provide better amenities to the farmers, and new ideas are disseminated to

the farmers on these markets.

Competitive and remunerative prices are ensured for the produce

sold by the farmers through closed tender system. Free grading facilities for

agricultural commodities are also made available in regulated markets. No

fee is collected from farmers for the services provided in regulated markets.

Market committees collect 1% as market fee from the traders on the value

of agricultural produce purchased by them. Besides, license fee is also

collected from traders and weighmen.

Regulated markets provide various kinds of facilities like electronic

weigh bridges, weighing balances, godowns, immediate payment after

auction, daily price information, rest sheds, drinking water, cattle sheds,

free medical aid to farmers, input shops, phone, fax facilities, etc. Under

"AGMARKNET" centrally sponsored scheme 93 regulated markets have been

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provided with computer and internet connectivity for effective price

dissemination among farmers through AGMARKNET website. The

information on commodity prices prevailing in various markets is made

available and the farmers would be able to get better price of their produce by

moving their produce to the market which pays higher.

The government, on the basis of the recommendations of the

concerned market committee does notification of crops. The notified area of a

market committee is a revenue district and that of regulated market is an area

with a radius of 16 kms from the regulated market. The government notifies

the principal crops in the notified area depending on the cropping pattern.

Notification of crops implies that purchase and sale within and movement of

produce out of the notified area should be done only with the permission of

market committee. Further, traders dealing in such market committee should

obtain license from the market committee, pay the necessary market fees and

submit periodical accounts for their transactions to the market committee.

Notifications of crops differ for each market committee, and only a few

commodities are common to most of the market committees.

The training centre of Tamil Nadu State Agricultural Marketing Board,

Chennai, is functioning at Salem in an extent of 2.25 acres of land. This

training centre caters to the training needs of the market committee employees

and the farmers. Three different training programmes namely, graders

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training, market committee employees’ refresher training and personal contact

programme are conducted by this training centre. The graders training is

conducted for the employees of the market committee for 30 days duration in

3 batches per year, comprising 60 employees. The refresher training of

28 days duration is conducted for the staff working in market committees in

one batch per year comprising 20 persons. The personal contact programme of

3 days duration is conducted for the farmers in 5 batches for 100 farmers.

Regulated markets are issuing pledge loan to small and marginal

farmers to avoid distress sales due to price fall. Under this scheme, farmers can

store their agricultural produce in the godowns of regulated markets for a

period of 6 months without any fee and avail pledge loan of 75% on a total

value of their produce upto a maximum of Rs.1,00,000 at 5% interest rate.

Similarly pledge loan facilities are also extended to traders at 9% interest rate.

Farmers or tenants who sell one or more than one metric tonnes of

agricultural produce every year through regulated markets are enrolled under

Tamil Nadu Farmers Development and Welfare Scheme, and they are eligible

for a grant of Rs.1,00,000 in case of death/permanent disability due to

accident/death due to snake bite. In case, the eligible farmer or tenant loses

both the hands/legs/eyes due to accident is eligible for a grant of Rs.75,000/-.

In case of losing one hand/leg/eye or permanent hip disability due to accident

the farmer or tenant is eligible for a grant of Rs.50,000/-. Farmers need not
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pay any premium to avail this facility in the scheme. The market committee

concerned and the Tamil Nadu State Agricultural Marketing Board bear the

premium amount of Rs.10 per individual per year equally.

3.5. Profile of the Select Regulated Markets

A brief description of the select regulated markets for this study is

given below.

3.5.1. Date of Registration and Area of Operation

Table 3.5 reveals the date of registration and area of operation of the

select regulated markets in Salem district.

TABLE 3.5
Year of Establishment and Area of Operation of the Select
Regulated Markets

Regulated Year of
No. of Villages Category
Market Establishment
Salem 22.08.1979 136 Primary
Valappady 01.11.1980 12 Primary
Attur 01.08.1979 20 Primary
Gengavalli 15.07.1983 17 Primary
Thalaivasal 11.01.1980 26 Primary
Source: Secondary Data

It is observed from the above table that Salem and Attur regulated

markets were established in the year 1979. Valappady and Thalaivasal

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regulated markets were established in the year 1980. Gengavalli regulated

market was established in the year 1983. All the select regulated markets

are primary markets in nature. Of the select regulated markets, Salem

regulated market has vast coverage covering 136 villages, followed by

Thalaivasal regulated market (26 villages) and Attur regulated market (20

villages). Valappady and Gengavalli regulated markets have an area of

operation about 12 villages and 17 villages respectively.

3.5.2. Human Resources Strength and Category

The various categories of employees that are found in the select

regulated markets are broadly categorized into officers, clerical staff,

weighmen and other category. The category-wise strength of employees of the

select regulated markets as on 31.09.2012 is given below.

TABLE 3.6

Employees Strength of the Regulated Markets as on 31.09.2012

Regulated Clerical
Officers Wieghman Others Total
Market Staff
Salem 2 1 25 - 28
Valappady 1 1 - 2 4
Attur 2 1 1 1 5
Gengavalli 1 - 1 1 3
Thalaivasal 1 - - 2 3
Source: Secondary Data
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Table 3.6 reveals the category-wise composition of employees of the

select regulated markets. 28 employees are working in Salem regulated

market, 4 in the Valappady regulated market and 5 in the Attur regulated

market, and 3 employees are working each in Gengavalli and Thalaivasal

regulated markets.

3.5.3. Market Fee at the Select Regulated Markets

A brief description of the market fee to be paid in select regulated

markets is given below.

TABLE 3.7
Market Fee to be Paid in the Regulated Markets

Regulated Market Market Fee Paid by Market Fee (%)

Salem Traders 1.00

Valappady Traders 1.00

Attur Traders 1.00

Gengavalli Traders 1.00

Thalaivasal Traders 1.00

Source: Secondary Data

Irrespective of regulated markets, the traders are asked to pay market

fee about 1 per cent on their trade value to the respective regulated market.
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3.5.4. Price Determination and Payment Procedure

Table 3.8 reveals the price determination and payment procedure

followed in the select regulated markets in Salem district.

TABLE 3.8
Price Determination and Payment Procedure

Regulated Market Price Determination Payment Procedure

Thalaivasal Bidding On spot cash

Gengavalli Bidding On spot cash
Attur Bidding On spot cash
Salem Bidding On spot cash
Valappady Bidding On spot cash
Source: Secondary Data

Price for the agricultural produce is determined by bidding in all

select regulated markets. The price for the agricultural produce is paid on

spot to farmers in the select regulated markets.

3.5.5. Facilities Available at the Select Regulated Markets

A brief summary of the facilities available to farmers at the select

regulated markets is given below.

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TABLE 3.9
Facilities Available at the Select Regulated Markets

Regulated Number of Physical Marketing Special

Facilities
Market Functionaries Facilities Equipment Arrangements

Thalaivasal Traders: 40 Rented office. Weighing Processing. Storing.

Water supply. scales. Grading. Grading.
Computer. Moisture Price Payment.
metre. notification. Administrative
help.
Self-help

Gengavalli Traders: 90 Auction Weighing Grading. Storing.

Platform: 1. scales. Price Grading.
No. of store/ Moisture notification. Payment.
godown: 1. metre. Self-help.
Office.
Water supply.
Computer.

Attur Traders: 60 Auction Weighing Establishment. Storing.

Processors: 15 Platform: 2. scales. Diversion of Grading.
No. of store/ Moisture trade. Payment.
godown: 2. metre. Grading. Administrative
Rented office. Standardization. help.
Water supply. Price Self-help.
Computer. notification.

Traders: 900 Auction Weighing Establishment. Grading.

Salem Processors:100 Platform: 2. scales. Diversion of Administrative
No. of store/ Moisture trade. help.
godown: 2. metre. Grading. Self-help.
Office. Standardization.
Water supply. Price
Cattle shed. notification.
Computer.

Valappady Traders: 295 Auction Weighing Grading Grading.

Platform: 1. scales. Price Administrative
Rented office. Moisture notification help.
Water supply. metre.
Computer.
Source: Secondary Data

From the above table, it is observed that Thalaivasal regulated

market is functioning at the rented office with 40 traders. In the case of

physical facilities, it has water supply and computer. It has weighing scales
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and moisture metre. Processing, grading and price notification facilities are

available to farmers at the Thalaivasal regulated market. During peak

season, storing, grading, payment, administrative help and self-help

arrangements are made. Gengavalli regulated market is functioning in its

own office with 90 traders. In regards physical facilities, it has auction

platform, godown, water supply and computer. It has weighing scales and

moisture metre. Grading and price notification facilities are available to

farmers at the Gengavalli regulated market. During peak season, storing,

grading, payment and self-help arrangements are made. Attur regulated

market is functioning at the rented office with 60 traders and 15 processors.

With regard to physical facilities, it has auction platform, godown, water

supply and computer. In case of marketing equipment, it has weighing

scales and moisture metre. Establishment, diversion of trade, grading,

standardization and price notification facilities are available to farmers at

the Attur regulated market. During peak season, storing, grading, payment,

administrative help and self-help arrangements are made. Salem regulated

market is functioning in its own office with 900 traders and 100 processors.

In regards physical facilities, it has auction platform, godown, water supply,

cattle shed and computer. In case of marketing equipment, it has weighing

scales and moisture metre. Establishment, diversion of trade, grading,

standardization and price notification facilities are available to farmers at

the Salem regulated market. During peak season, grading, administrative

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help and self-help arrangements are made. Valappady regulated market is

functioning at the rented office with 40 traders. In regards physical

facilities, it has auction platform, water supply and computer. In case of

marketing equipment, it has weighing scales and moisture metre. Grading

and price notification facilities are available to farmers at the Valappady

regulated market. During peak season, grading and administrative help

arrangements are made.

3.6. Summary

In this chapter, an attempt has been made to review the working of

regulated markets in India as well as in Tamil Nadu. Regulated markets

were started in India as early as in the beginning of 19th century. The first

legislation in the country was Barer Cotton and Grain Market Act of 1897.

The Bombay government also passed the Bombay Cotton Market Act in

1927 for a better regulation of the commodity in the presidency. However,

the markets organized under the Barer Cotton and Grain Market Act of

1897 suffered from serious drawbacks. The Royal Commission on

Agriculture investigated the whole position of regulated markets and gave

its recommendations for the better marketing of agricultural produce. The

total number of regulated markets in India was 7132 in 2012. The

Government of Madras enacted the Madras Commercial Crops Market Act in

1933. In order to extend the scope of the Act to all agricultural produces, the
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Act was modified as Tamil Nadu Agricultural Produce Market Act in 1959.

This Act is intended to provide for better regulation of buying and selling of

agricultural produce. At present there are 297 regulated markets functioning

in the state. The regulated markets are expected to carry out the marketing

functions such as assembling, transport, storage, financing, grading and

market information. The establishment of the regulated markets helps in

creating orderly and transparent marketing conditions.