The transport and marketing of agricultural produce in India encounter a myriad of challenges, stemming from a complex interplay of factors that impact the entire supply chain. One of the primary constraints is the inadequate transportation infrastructure, characterized by deficient road connectivity and insufficient cold storage facilities. This hampers the timely and efficient movement of perishable goods from farms to markets, leading to significant post-harvest losses. Additionally, the absence of a streamlined market mechanism and the prevalence of middlemen often result in farmers receiving a meager share of the final selling price, exacerbating the economic challenges faced by the agricultural community. Regulatory hurdles, outdated trading practices, and the susceptibility of the sector to external shocks further compound these issues. Addressing these constraints is crucial for enhancing the competitiveness of Indian agriculture and ensuring a sustainable and equitable agri-value chain.
UPSC Mains General Studies Paper – 3 Mains 2020
Agriculture: production and marketing, transport and marketing of agriculture produce and issues and related constraints.
UPSC Mains Civil Services IAS Exam Question Paper – 2020
Decoding the Question
- In the Introduction, try to briefly discuss agricultural marketing in India.
- In Body,
- Discuss the main constraints in transportation.
- Discuss the main constraints in marketing goods.
- Try to conclude by writing some suggestions.
Answer
Introduction
Since the Green Revolution, India has made significant progress in food security. Despite this, the farmers’ income remains subdued owing to the infrastructure deficit in agricultural supply chains. This combined with the nature of agricultural marketing laws in India makes the marketing of agricultural products more cumbersome than their production.
Constraints in the transportation of agricultural produce:
- Poor Transportation Network: In India, the interconnectivity between road, railway, and ports are not fully developed and utilized. Thus, Accessibility between rural areas to main market centers in urban areas and various other parts of the country is poor. This results in the costly transportation of agricultural produce.
- Lack of Pucca Roads or All-Weather Roads: All-weather roads in rural areas is a major constraint. In monsoon season most of rural India remained disconnected due to poor conditions of rural roads. Poor quality of roads leads to 16% of agricultural produce.
- Lack of Mobile Cold Storage: Mobile cold storage facilities are vital when it comes to the transportation of perishable agricultural produce such as vegetables, marine products, animal products, etc. The lack of investment in this sector is another problem, especially private sector investment.
- Lack of Private Investment in Storage: Private participation in storage facilities has not come up because of the “Essential Commodities Act” as it prohibits the private sector.
Constraints in agricultural produce marketing:
- Selling at Local Market: The supply chain in agriculture is affected by several issues owing to the infrastructure deficit. The lack of cold storage, metalled or pucca road, forces a farmer to go for distress sale. Also, the lack of proper warehousing facilities leads to uncontrolled cycles of excesses and shortages, which in turn leads to price volatility.
- Selling To Government at MSP: The government announces MSP for 23 crops but its purchases are limited to only 3 crops. (Wheat, Rice & Sugar). Also, government procurement facilities are not available throughout the country. Due to this, the farmers engaged in dairy products, vegetables, fruits, etc., have no security in selling their produce at competitive prices.
- Inaccessible Information on future pricing, inadequate information regarding marketing mechanisms, etc. leads to the exploitation of farmers by the middlemen.
- Too Many Middlemen: There are too many middlemen in the channel of distribution between the wholesaler or the miller at the producing end and the wholesaler at the consuming end.
- Absence of Grading: The absence of grading and standardization of agricultural produce is another great stumbling block hindering the growth of markets and smooth marketing operations.
- Absence of Co-Operative Marketing: The farmers are still reluctant to pool their produce and allow a cooperative organization to sell the pooled and graded produce. The development of cooperative marketing got the tempo only after 1960. The growth is relatively slow.
Way Forward
- Promote FPOs in Marketing: Farmer producer organizations/companies should be encouraged to take up direct marketing of their members’ produce to large buyers and processors. It will result in more competition and better prices at APMCs.
- Integrating Agri-Markets: The Government has announced an E-NAM project to connect all the wholesale markets through the pan-India trading market. But there are still issues of internet connectivity, there is no evidence of the reduced role of middlemen in these marketplaces. These issues must be addressed to make this program successful and achieve its desired objectives.
- Legal Reforms: The government has passed three laws to remove discrepancies in the agricultural markets. However, to implement these laws effectively, the government needs to adopt a holistic approach by taking farmer unions into confidence.
- Kisan Rail: It has been very successful during the pandemic; it has brought much-needed relief to the farming community to solve the issue of marketing and transportation of agricultural produce in various parts of the country. Now it is high time to increase Kisan rail routes and connect every part of the country and make available the whole country as a market for farmers and create a “One Country One Agriculture Market”.
Conclusion
Thus, to achieve the target of doubling farmers’ income and accelerating the agriculture growth rate, it is necessary to solve issues related to transportation and agricultural produce marketing and make farming communities and villages self-sufficient or “gram swaraj”. Addressing the challenges of the agricultural market is complex, yet doable, as the ambitious target of doubling farmers’ income by 2022 cannot be achieved without developing a thriving market of agriculture. Hence, it is high time that the focus must shift from agricultural production to agricultural marketing.
Frequently Asked Questions (FAQs)
1. What are the key challenges faced in transporting agricultural produce in India?
Answer: The primary challenges in transporting agricultural produce in India include inadequate infrastructure, such as poor road conditions and limited cold storage facilities. Additionally, a lack of efficient logistics and transportation systems leads to delays and losses in transit.
2. How does the lack of proper storage facilities impact the marketing of agricultural produce in India?
Answer: Inadequate storage facilities result in post-harvest losses due to spoilage, pests, and decay. Farmers often sell their produce immediately after harvest, leading to a glut in the market and lower prices. This lack of proper storage adversely affects the marketing and pricing of agricultural produce.
3. What role does infrastructure play in the efficient transport and marketing of agricultural goods?
Answer: Insufficient transportation infrastructure, including poorly maintained roads and limited connectivity, hampers the timely and cost-effective movement of agricultural produce. This deficiency contributes to increased transportation costs, delays, and inefficiencies in the marketing process.
4. How do government policies impact the transportation and marketing of agricultural produce in India?
Answer: Government policies can both positively and negatively affect the transport and marketing of agricultural goods. Policies supporting infrastructure development, cold chain facilities, and efficient logistics can improve the situation. On the contrary, inconsistent policies and bureaucratic hurdles may exacerbate existing challenges.
5. How does the fragmentation of the supply chain affect the marketing of agricultural produce in India?
Answer: The fragmented nature of the agricultural supply chain in India, with multiple intermediaries between farmers and consumers, results in increased transaction costs and reduced profits for farmers. Streamlining and integrating the supply chain through modern practices can enhance the efficiency of marketing agricultural produce.
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