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In India Agriculture was practiced formerly on a subsistence basis; the villages were selfsufficient, people exchanged their goods, and services within the village on a barter basis. With the development of means of transport and storage facilities, agriculture has become commercial in character; the farmer grows those crops that fetch a better price. Marketing of agricultural produce is considered as an integral part of agriculture, since an agriculturist is encouraged to make more investment and to increase production. Thus there is an increasing awareness that it is not enough to produce a crop or animal product; it must be marketed as well. Agricultural marketing involves in its simplest form the buying and selling of agricultural produce. This definition of agricultural marketing may be accepted in olden days, when the village economy was more or less self-sufficient, when the marketing of agricultural produce presented no difficulty, as the farmer sold his produce directly to the consumer on a cash or barter basis. But, in modem times, marketing of agricultural produce is different from that of olden days. In modem marketing, agricultural produce has to undergo a series of transfers or exchanges from one hand to another before it finally reaches the consumer.
The National Commission on Agriculture defined agricultural marketing as ³a process which starts with a decision to produce a saleable farm commodity and it involves all aspects of market structure of system, both functional and institutional, based on technical and economic considerations and includes pre and post- harvest operations, assembling, grading, storage, transportation and distribution´. The Indian council of Agricultural Research defined involvement of three important functions, namely y y y Assembling (concentration) Preparation for consumption (processing) and Distribution.
y To reduce the price difference between the primary producer and ultimate consumer. y He should have adequate and cheap transport facilities which could enable him to take his surplus produce to the mandi rather than dispose it of in the village itself to the village money-lender-cum-merchant at low prices. There should be organized and regulated markets where the farmer will not be cheated by the -dalals. in the sense. the cropping pattern is no longer dictated by what he needs for his own personal consumption but what is responsive to the market in terms of prices received by him. While the trade is much organized the farmers are not Farmer is not conversant with the complexities of the marketing system which is becoming more and more complicated. Facilities Needed for Agricultural Marketing In order to have best advantage in marketing of his agricultural produce the farmer should enjoy certain basic facilities. He should have holding capacity. As a consequence. to sell at an incentive price. y y He should have proper facilities for storing his goods. time and price. The objectives of an efficient marketing system are: y y to enable the primary producers to get the best possible returns. and to make available all products of farm origin to consumers at reasonable price without impairing on the quality of the produce. otherwise may be cheated. The cultivator is handicapped by several disabilities as a seller. that he should be able to wait for times when he could get better prices for his produce and not dispose of his stocks immediately after the harvest when the prices are very low.and -arhatiyas-. to provide facilities for lifting all produce. the farmers are willing.Importance and Objectives of Agriculture Marketing The farmer has realized the importance of adopting new techniques of production and is making efforts for more income and higher standards of living. y He should have clear information regarding the market conditions as well as about the ruling prices. . He sells his produce at an unfavorable place.
This increases the returns to the farmers. The farmers especially in countries like India have low holding-back. y y There are various kinds and varieties in farm produce and so it is difficult to grade them. . Although some crops such as rice and paddy retain their quality for long time. Similarly the farmer may not really be in a position to take advantage of shortages or deficit crop. without any minimum guaranteed support price from the government may spell disaster for the farmer. These benefits may pass on only to the middleman. The demand on storage and transport facilities is heavier. most of the farm products are perishable and cannot remain long on the way to the final consumer without suffering loss and deterioration in quality. y There are certain agricultural products such as mangoes and grapes which are available only in their seasons but this condition of seasonal availability is not found in the case of industrial goods. Characteristics of Agricultural Product: Agricultural products differ in nature and contents from industrial goods in the following respects. y y y Agricultural products tend to be bulky and their weight and volume are great for their value in comparison with many industrial goods. y Agricultural produce is to be found scattered over a vast geographical area and as such its collection poses a serious problem. so that the middleman's profits are reduced. y Finally. A bumper crop. But such is not condition in the case of industrial goods. Therefore he has to sell his produce immediately after the harvest at whatever price he can fetch because of his pressing needs.y The number of intermediaries should be as small as possible. and more specialized in case of agricultural products than in the case of manufactured commodities. both demand and supply of agricultural products i are inelastic. Agricultural commodities are comparatively more perishable than industrial goods.
The practice usually prevalent is the one known as "dara" sales wherein heap of all qualities of produce are sold in one common lot Thus the farmer producing better qualities is not assured of a better price. Produce has to be carried on slow moving transport vehicles like bullock carts. 3. Obviously such means of transport cannot be used to carry produce to far-off places and the farmer has to dump his produce in nearby markets even if the price obtained in these markets is considerably low. As a consequence.Defectsof Indian Agricultural Marketing System: Indian system of agricultural marketing suffers from a number of defects. etc. Therefore. Improper warehouses. 1. These unscientific methods of storing lead to considerable wastage. Hence there is no incentive to use better seeds and produce better varieties. For instance. the Indian farmer is deprived 'of a fair price for his produce.5% of the produce gets rotten and becomes unfit for human consumption. "Kutcha" storehouses. The setting up of Central Warehousing Corporation and State Warehousing Corporation has improved the situation to some extent 2.D. Due to this reason supply in the village market increases substantially and the farmers are not able to get a fair price for their produce. Sidhan revealed. Presence of a large number of middlemen The chain of middlemen in the agricultural marketing is so large that the share of farmers is reduced substantially. Only a small number of villages are joined by railways and pucca roads to mandies. that farmers obtain only about 53% of the price of rice. Inadequate transport facilities Transport facilities are highly inadequate in India. 31% being the share of middle men (the remaining 16% being the . This is even truer with perishable commodities. 4. the farmer is compelled to store his products in pits. a study of D. There is an absence of proper ware housing facilities in the villages. mud-vessels. Approximately 1. Lack of grading and standardization Different varieties of agricultural produce are not graded properly.
5% and in the case of fruits was 46. Since such credit facilities are not available. Kutcha arhatiyas. money lenders. Wrong weights continue to be used in some unregulated markets with the object of cheating the farmers. while agreeing to pledge their produce to them at less than market prices. "garda" for impurities in the produce. puccaarhatiyas. However the price quotations are sometimes not reliable and sometimes have a great time-lag. "palledari" to unload the bullock-carts and for doing other miscellaneous types of allied works. It is often not possible for the farmers to obtain information on exact market prices in different markets. being poor. 39% in the former case and 34% in the latter. Inadequate market information. Malpractices in unregulated markets Even now the number of unregulated markets in the country is substantially large. 6. the farmers are forced to take loans from money lenders. Another malpractice in the mandies relates to the use of wrong weights and measures in the regulated markets. tries to sell off the produce immediately after the crop is harvested though prices at that time are very low.men in the case of vegetables was 29. Inadequate credit facilities Indian farmer. In the case of vegetables and fruits the share was even less. The co-operative marketing societies have generally catered to the needs of the large farmers and the small farmers are left at the mercy of the money lenders. The safeguard of the farmer from such "forced sales" is to provide him credit so that he can wait for better times and better prices. they accept whatever price the traders offer to them.marketing cost). wholesalers. 7. So. "tulaii" (weight charge) for weighing the produce. Arhatiyas and brokers. use unfair means to cheat them. The farmers are required to pay arhat (pledging charge) to the arhatiyas. taking advantage of the ignorance. 5. The newspapers also keep the farmers posted with the latest changes in prices. brokers. The trader generally offers less than the price quoted by the government news media. Some of the intermediaries in the agricultural marketing system are -village traders. With a view to tackle this problem the government is using the radio and television media to broadcast market prices regularly. retailers. etc.5%. and a number of other undefined and unspecified charges. . The share of middle. and illiteracy of the farmers.
. The regulation of markets broadcasting of prices by All India Radio. improvements in transport system. have undoubtedly benefited the capitalist farmers. and they are now in a better position to obtain favorable prices for their "market produce" but the above mentioned changes have not benefited the small and marginal farmers to any great extent. etc.Thus it is not possible to view the present agricultural marketing in India in isolation of (and separated from) the land relations..
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