Download Good Agricultural Marketing Practices, Mr. S.S. Randhawa

GOOD AGRICULTURAL MARKETING PRACTICES
There are 7190 numbers of regulated primary markets in India handling
agricultural production in the country as on 31st March, 2012 growing substantially
from a mere 286 in 1950. This network of wholesale markets was set up with the
basic objective of ensuring “reasonable gain to the farmers by creating an
environment in markets for fair play of supply and demand forces, regulate market
practices and attain transparency in transactions”, and is currently responsible for
the marketing of 255 million tones of food grains, 30 million tones of oilseeds and
220 million tones of fruits and vegetables. Besides, the country also has 22m505
rural primary markets out of which only 20% fall into any kind of regulatory
framework. The subject of agriculture and agricultural marketing in India is dealt
with by both the Central government and State governments.
The regulated markets set up under state APMC Acts with the responsibility
of developing various marketing infrastructure for agricultural products have
achieved only a ‘limited success’ in providing an efficient agricultural marketing
system in the country.
High incidence of mandi fee/taxes resulted in these
development oriented institutions becoming revenue generating centers rather than
institutions facilitating efficient marketing practices to benefit the farmers.
Uncertainties caused by inadequate market information, non-transparent price
discovery, inadequate infrastructure for storage, sorting, grading or post-harvest
management, unnecessary controls and domestic price volatility have prevented the
farmer producers from getting remunerative prices for their produce. High entry
barriers in the state-controlled markets have constrained private investments in
development storage and processing, hampering the development of effective
market institutions, and lowering the capacity of agricultural producers to be
internationally competitive.
To address these issues comprehensively, agricultural marketing reforms
were undertaken with the following objectives – empower producers with
knowledge, information & capability to undertake market-driven production;
provide multiple choice and competitive marketing channels to farmers; attract large
scale investments need for building post-harvest infrastructure.
The role of Agricultural Produce Market Committees (APMCs) and State
Agricultural Marketing Boards should be redefined to inter alia promote value
addition in primary markets, rather than just collection of fees and undertaking
construction activities. We should move to a system of professionally managed
wholesale markets.
For increasing the farm-gate and retail linkages, through contract farming or
otherwise, the efforts of organizing farmers in to marketing groups should be scaledup by financially support.
Evolution and development of supply chains and organized retail outlets
should be encouraged to save huge national wastage of farm products that occurs
under the present system and in this process, involvement of existing players or
retailers should not be endangered as has been successfully demonstrated by some
retail chains.
Grading facilities at all the stages of market chain should be upgraded by the
establishment of grading units and pack houses in the villages or sub-yards, grading
labs at district or regional levels, and state level bureaus, along with intensive
training of farmers through KVKs. The procedures should be simplified for speedy
implementation of infrastructure development schemes.
The administrative procedures should be made uniform across ministries and
a single window application and clearance system should be introduced with an ICT
interface.
The investment on rural roads, warehouses, cold stores and cold chains for
perishables have very high pay off and therefore, should be stepped-up. Rural roads
being critical link in marketing of farm products should receive adequate investment
in all the areas, especially in hilly, tribal and desert regions.
The returns to
investment in rural roads, in terms of accelerating rural growth and reducing rural
poverty, have been estimated to be very high in India.
Activities of market functionaries are regulated by several other legal
instruments promulgated and revised from time to time by the central and state
governments.
The main aims of the various regulations were to check the
exploitation of producers and consumers by private traders through collusion and
hoarding, to stabilize prices, and to raise the standards of markets and improve their
performance.
Many changes have taken place in the marketing and trade
environment since these regulations were framed. The development of transport
and communication, an expansion of marketing, and increased competition make it
possible for the private sector to play a larger role in agricultural marketing. It is felt
that excessive control and intervention by the government have hampered the
participation of private trade in agricultural marketing, which is counterproductive.
Some innovative marketing mechanisms have been developed in some states,
which involve the direct sale of farm produce to consumers, the sale of produce to
buyers without routing it through mandis, and group marketing. Many states have
attempted to promote direct contract between producers and consumers by making
arrangements for sale at designated places in urban areas.
Examples are Apni
Mandis or Kisan mandis in Punjab and Haryana, Rythu Bazaars in Andhra Pradesh,
Shetkari Bazaars in Maharashtra, krushak bazaars in Odisha, and Uzhavar Sandhais
in Tamil Nadu. The scale of operation of these marketing arrangements in quite
small as only farmers in the vicinity of big towns can take advantage of them. But
this mechanism has scope for reducing the market margin and eliminating
middlemen, through it cannot cover produce separated by a geographic distance
from consumers.
Farm producers’ organizations (FPOs) of various kinds are emerging as a new
model for organized marketing and farm business. Such models include informal
farmers’ groups or associations, marketing cooperatives and formal organizations
like producers’ marketing cooperatives and formal organizations like producers’
companies.
Producers can benefit from getting together to sell their produce
through economies of scale in the use of transport and other services, and raise their
bargaining power in sales transactions, while marketing expenses get distributed.
This results in a better share of net returns. Such models are particularly required
for small farmers to overcome their constraints of both small size and modest
marketable quantities.
In response to a long-pending demand from farmers’ groups, the government
amended the Companies Act, 1956 in 2002, allowing the incorporation of producer’s
companies. According to the amended Act, 10 or more individual producers, or two
or more producer institutions, or a combination of both, and cooperatives can form a
producer’s company. The company can produce, harvest, procure, handle, pool,
grade, market, sell, and export the primary produce of members, or import goods or
services for their benefit. It can also be involved in processing, including preserving,
drying, distilling, brewing, canning and packaging the produce of its members.
Such companies can go a long way in improving the well-being of producers
through group action – in production, post-harvest activities, and promoting
marketing and trading. Though the benefits of FPOs are obvious, they cannot be
expected to come up and grow on their own.
EPOs require committed and
sustained help development, and hand-hold them in the initial stages.
Initiative for Harmonizing Good Agricultural Marketing Practices:
In order to create a level playing field for private investors and to bring
uniform and parity across the country it is necessary to accept a standardized, well
bench marked system and practices for good management of marketing activities in
wholesale markets.
Therefore, following areas have been identified which are
required to be focused apart from the normal activities regularly being undertaken
by the APMCs and Boards.
A detailed project report on development of Modern Wholesale Market is
essential to be prepared in advance quite exhaustively, which should cover inter-alia, growth of population, demand and quantum handled, flow-pattern of
commodities, inter-dependency of markets etc.
The report should explain the
rational criteria for selection of cities and required area viz-a viz necessary facilities
including appropriate land use pattern and necessary facilities etc with scope of
future expansion.
Planning and Designing of markets is an important aspects
which actually makes the market more dynamic, efficient, successful, financially
viable and create climate for good hygien. Accordingly provision for suitable space
to associate ancillary activities is required to be rationally calculated. Public utility
services, like drinking water, electricity, power, sewerage, toilets, road parking etc.,
are required to be as per international standards.
Regular maintenance of premises with personal hygien standards for
functionaries and visitors equally important and accordingly the maintenance staff
needs to be given training etc. A separate waste management, solid, semi solid or
liquid of perishables, packing material etc need to be segregated and properly
process for secondary produce made out of it. Appropriate type of technology and
equipments need to be developed suiting to the local conditions. If possible a third
party contract arrangements be made for proper waste disposal and dis-infecting the
collected lots and disposal at appropriate distance of the city.
The produce should be transacted as per the Indian standards recently
harmonized and all necessary steps be taken to trained the farmers to bring the
produce in proper graded form and statutorily the standards be maintained by the
APMCs and Boards. Necessary technology including the portable quality stations,
portable pesticide testing machines be procured and fixed at the common places.
Testing and certification services with latest machines and equipments be provided
by all state marketing boards on spot at markets.
In order to ensure proper price discovery and transparent way of
transactions, it is necessary to introduce electronic auctions in the market and ensure
accurate recording of 100 percent arrivals, be it through SMS service or bar coding
techniques or RFID etc. It is necessary to capture entire material coming to the
market without human interface.
Similarly, based on the Electronic Auction,
Payment settlement system should also be linked with the latest methods and
systems advised by RBI and NPCI through known banking platform and involving
other private players including the recently introduced Payment Banks.
For the benefit of farmers it is necessary to strengthen their capability by
providing them information power through dissemination of necessary information
and market intelligence. Details of informatics based on modern analytics can differ
from place to place, need, commodity to commodity etc.
There is requirement of strong institutional building to support regulatory
mechanism in the country, to create inter-regulator co-operation, to set the service
standards for stake holders. Such kind of institutions can maintain strong relations
between centre and stage. Accordingly, appropriate regulations, laws and policy
need to be framed for the envisaged organization.
Market-led extension and market access to farmers has been largely unattended areas in the past.
Therefore, a separate mechanism of training and
extension system is evolved to take care of interest of all stake holders such as
producers, traders, market functionaries, transporters and processors etc.
Indian markets have a very bad track record of inside land use pattern.
As
per the standards minimum 65% of area should be left for parking and circulation,
whereas the studies conducted so far show that approximate 30-35% space is
dedicated to parking. This creates traffic congestion and further added to create
unhygienic conditions in the markets.
Therefore, it is necessary to manage the
traffic movement and accordingly space allocation and end-use pattern be uniformly
accepted to avoid traffic jams.
In the light of above it is felt need that all the State Marketing Board should
agree on a uniform pattern of marketing practices and standardized their practices
reaching close to the national standards.