In this article we will discuss about:- 1. Introduction to Agricultural Produce 2. Characteristics of Agricultural Produces 3. Processing 4. Marketing Produce 5. Government and Agricultural Produce.
Introduction to Agricultural Produce:
Agricultural produce while moving from the farm or the production point to the ultimate consumption point through different marketing stages. These points are the farm site, the wholesale market, the retail market and the market of other countries. The markets for agricultural produce may be broadly classified in two categories viz., the wholesale markets and retail markets.
The wholesale markets fall into three sub-categories, viz.:
(a) Primary Wholesale Markets:
It is the market where the bulk of arrivals is from villages or village hats. These markets are periodically held, either once or twice a week or at longer intervals or on special occasions. Agricultural produce or livestock or both are sold in these markets. There are about 22,000 such markets located mostly in the interior of the country. The hats in Maharashtra, Tamil Nadu and Andhra Pradesh deal in both agricultural produce and livestock, while the majority of hats in U.P., West Bengal, Bihar deal mainly in agricultural produce.
The area served by a hat or a shandy varies considerably. In some cases it is only one village but in others it may have a radius of 6 to 7 miles. The average attendance at the village hats varies from 3,000 to 5,000 in Bengal, 500 to 1,000 in Assam, 2,000 to 3,000 in Bihar and 2,000 to 5,000 in Tamil Nadu and Andhra Pradesh.
The amount of produce passing through a hat varies from 1,000 to 4,00,000 mds. Sonepat (Punjab), Dhanduha (Gujarat), Bulandshahr, Deoband, Shamli, Ghaziabad, Ujhani, Hapur, Meerut, Khokara and Dankaur (U.P.), Kumbakonam (Tamil Nadu), Fatehnagar, Kekri, Beawar (Rajasthan), Nellore (Andhra Pradesh) are examples of primary wholesale markets.
Such markets are organised by village panchayats and every shopkeeper has to pay some rent for the space he occupies. Higgling and bargaining is a common feature. The village bania acts as a middleman in return for a small commission. Such markets are known as painths or hats in U.P., Bihar, Orissa and West Bengal and shandies in South India.
(b) Secondary Wholesale Markets:
It is called mandis and gunjs, stretch over a wide area covering from 10 to 20 miles. There are about 1,700 such markets in the country. In these markets, the bulk of the arrivals is from other markets. These are usually situated in the district and taluka headquarters, important trade centres or near railway stations. Here transactions are generally between wholesalers or between wholesalers and retailers. Markets like Chandausi (U.P.), Kurnool (Andhra Pradesh), Tiruchirappalli (Tamil Nadu), Calcutta (West Bengal), Sri Ganganagar (Rajasthan), etc. fall in this category.
These are wholesale markets held in fixed places where business is transacted daily. The produce is handled in large quantities and specialised operators become necessary for the performance of different services. In these markets produces like fruits, grains, vegetables, etc. are sold.
They enjoy facilities of storage, handling and banking services and are well served by roads and railways. These markets are both decentralised and centralised, where arhatiya work. They are usually owned by private persons or local bodies. In Tamil Nadu they are mostly owned by District Boards, whereas in Assam, Bihar and West Bengal they are mostly private. In M.P. they are owned by municipalities.
(c) Terminal Markets:
These are the markets in which the produces is either finally disposed of direct to consumers or processors or assembled for shipment to foreign destinations or for redistribution to surrounding areas. Such markets are usually the ports, which possess sufficient warehousing and storage facilities and cover a very wide area extending over even a state or two.
It may be observed that a particular market may function as a primary wholesale market for some agricultural commodities which are produced locally and as a secondary market for other commodities. Again even for the same commodity a market may function as primary wholesale market for certain parts of the year and as a secondary wholesale for the rest of the year.
Fairs:
Besides, these are held on religious occasions at pilgrim centres, over 1,700 fairs which deal in agricultural produces and livestock. Of these 50% deal in livestock only; 10% deal both in livestock and produce and 40% deal in agricultural produces only. Produce fairs are held in Bihar and Orissa only, while livestock fairs are held in U.P., Maharashtra, West Bengal and Rajasthan.
These fairs are held annually—specially between the months of October and May and the duration of lives tock fairs varies from one day to 3 months. Camels, horses, bulls, donkeys, cows, bullocks, sheep and goats are usually sold in the fairs. Such fairs are organised by district officers, local bodies or private agencies.
Special Characteristics of Agricultural Produces:
Certain special features have an important bearing on the demands made on agricultural marketing system and organisations. Farm produces tend to be bulky and their weight and volume are great for their value in comparison with many manufactured goods. The demand on storage and transport facilities is heavy, and specialised. Although some crops, such as rice and paddy, retain their quality for a long time, most of the farm produces are perishable and cannot remain long on the way to the final consumer without suffering loss and deterioration in quality.
Peaches, grapes, tomatoes and many other fruits and vegetables rapidly become over-ripe and decay if they are not soon consumed or kept in special storage. Meat keeps for only a short-time in hot climates. Until the advent of refrigerated ships and rail-cars, trade in meat and dairy produces was conducted in the form of live animals. Milk is an important commodity of exceptional perishability. In hot areas without any special treatment, its effective life may be only a few hours.
Processing of Agricultural Produce:
After a crop is harvested and before it reaches the consumer, it is subjected to one or more forms of processing which differ for different crops and for different uses and preferences on the part of the consumer. A single form of processing may consist of more than a single operation earned out by different parties at different stages.
Thus, paddy may be threshed and winnowed by the cultivator but husked by the miller, the trader or even the consumer. In more prevalent forms of processing of major crops, there is a broad uniformity in this country.
We indicate here, in brief, the principal methods of processing employed in respect of more important food and commercial crops:
1. Rice:
The main form which the processing of rice takes is the husking of paddy. Sometimes rice is parboiled before it is husked. The husking may be manual as in hand-pounding, or by a power-driven machine as in rice mill. The bulk of grain is hand-pounded, only 25 per cent is processed by rice mills.
2. Wheat:
Threshed and winnowed wheat is still covered with earth hence a large-number of labourers are employed to clean it and dress it before passing it on to the retailer or the consumer.
3. Oilseeds:
The processing of groundnut consists in removing the kernel from the nut by mechanical decorticator or by hand shelling. Nuts for eating are generally mixed with hot sand and roasted and the kernels then taken out.
4. Tobacco:
The operations involved in the process of tobacco are curing, sorting, bulking (for fermentation) and reconditioning, followed by bundling and packing.
5. Sugarcane:
Sugarcane is sold for being made into sugar or gur. Extraction of juice from the cane is largely done in the factories. 20 percent of the cane used for gur making is crushed in bullock driven three roller iron mills and about 7 per cent by wooden or two roller iron mills
6. Cotton:
The bulk of the cotton produced is disposed of by the growers as kapas. Very little is ginned by the cultivator, he usually brings cotton to the marketing place which is sometimes the yard of a ginning factory.
7. Jute:
The two main operations in the processing of jute are- (a) steeping which involves the immersing of bundles of jute plants in running water in order to soften the tissues of the plants, and (b) the stripping of the fibre. The processing is done by the cultivator who generally engages paid labour. Each labourer strips about half a maund of fibre per day. The fibre is then left for about 2 days in the sun to dry and sold in bundles in hats.
8. Potato:
The crop after harvest and before dispatch to the market receives little attention in regard to preparation. After harvest they are collected in the field and stored in pits or removed to the village from where they are assembled by the wholesalers.
Marketing Channels for Foodgrains:
Foodgrains marketing channels, excepting that of rice, is fairly similar. In case of rice, rice millers play an important role.
The usual channel for marketing of wheat, millets and pulses consists of the following:
(i) Producer-Consumer Channel:
Wherein the consumers purchase directly from the producers in the village, so that the producer gets cent percent of the consumer’s rupee.
(ii) Producer-Village-Shopkeeper-Wholesaler-Retailer-Consumer Channel:
Producers sell part of their produce to village merchants in exchange for household requirements. They re-sell it in the village or at the nearby periodic or wholesale market.
(iii) Producer-Itinerant Merchant-Wholesaler-Consumer Channel:
The itinerant merchants purchase directly from the producer at the threshing floor in small lots, at a price which is close to the primary market price excluding transport cost. The producer is paid after the produce is sold.
(iv) Producer-Primary Wholesaler-Secondary-Wholesaler-Retailer- Consumer Channel:
It is the most widely used channel, wherein the commission agents (katcha arhatias) purchase from the producers in primary wholesale markets, and in turn sell (for the producers) to commission agents (pucca arhatias), who purchase on behalf of wholesalers who in turn sell to the retailers in towns and cities.
(v) Producer-Primary Wholesaler-Miller Retailer Consumer Channel:
The foodgrains miller purchase their requirements through wholesale markets, and then mill the grain and distribute the flour through wholesalers or direct to retailers.
(vi) Producer-Primary Wholesaler-Government Procurement Agency-Roll Flour Mill-Fair Shop-Consumer Channel:
In this channel the Central and the State Governments purchase large quantities, of foodgrains in primary wholesale markets and sell them through fair price shops in cities at fixed prices. Since 1974, rabi season, wheat is being purchased by the traders, 50% of which is to be delivered to the Government for sale through fair price shops and the rest to be sold by the traders in the market.
Marketing Channel for Rice and Paddy:
The purchase and sale of rice and paddy is done under Government control viz. monopoly procurement, producer levy, miller (rice) levy and distribution at fixed prices. Paddy and rice can cross procurement and distribution zone boundaries only under Government permission.
The main channel is paddy-rice marketing is the rice mill, who buy paddy, mill it and sell the rice in the market.
The marketing channel is somewhat like the following:
(i) Producer-Commission Agent-Miller-Wholesaler-Retailer-Consumer Channel:
It is the most widely adopted channel. Commission agents work on behalf of the producers, get offers and sell rice to the millers. The payment by the miller may be made either at the time of sale or after its milling and sale. Millers sell rice to wholesalers either direct or through commission agents.
(ii) Producer-Itinerant Merchant-Miller Wholesaler-Retailers-Consumer Channel:
In this, the merchant replaces die commission agent, who buys from the farmers and sells to the miller.
(iii) Producer-Miller-Wholesaler-Retail-Consumer Channel:
Here, the miller directly purchases from the producer and through wholesalers-retailers pass it on to the consumers.
(iv) Producer-Miller-Consumer Channel:
Since most of the rice is milled by hand-pounding so the rice is purchased by the village shopkeepers who mill it and sell it in the village itself.
(v) Producer-Primary Wholesale-Retailer-Consumer Channel:
The producer sells rice in a primary wholesale market either direct to the miller or through a commission agent.
(vi) Producer-Government-Miller-Government-Fair Price Shop- Consumer Channel:
As much as about 80 to 90 per cent of the paddy and rice is purchased by the Government, have it milled and sell it through fair price shops.
Marketing Produce:
In all primary markets, the procedure for the sale of foodgrains is practically the same.
It involves:
(a) Delivery of the produce—by bullock carts or trucks, through pack animals or headloads—in bags;
(b) Grain preparation and display, through kaccha arhatias who undertake such activities as unloading, preparation of grain for sale, finding buyer, making actual sales, bagging and stitching of grain bags, weighing, collecting payments, etc.;
(c) Transaction, the sales are made by the pacca arhatias at the price negotiated, the produce may be left with the farmer for some time or re-sell it in the nearby primary markets;
(d) Payment is done either on the same day or within a week or 10 days as settled between the kaccha and pacca arhatias;
(e) Lifting of the produce is the responsibility of the buyer, who may take it in bullock cart or truck for storage in his godown.
Market Conduct:
Market conduct refers to the various methods which traders use against the competitors in attracting the customers, the village traders compete with each other for getting the producers’ produce, by offering both price and non-price inducements to the producers. Price may be offered, which is based on the prevailing price in the nearby market, less the assembly, transport, and probable profit.
The non-price inducements include such methods as:
(i) Giving of loans to the farmers, upto 10 or 20 per cent of the expected value of the crop at a high rate;
(ii) Banking services through which the arhatias arrange for loans on his next crop;
(iii) Providing business advice regarding dealings in markets and informations about prices, etc.;
(iv) Providing facilities of stay and lodging of the farmers and their cattle;
(v) Supply bags and storage facilities for the produce, etc.
Marketing Facilities:
The foodgrains markets are generally equipped with such facilities as market regulations and their enforcement, physical market facilities, market news, grading and inspection, and supervised weighing.
Lines of Improvement:
If the agriculturist in India is to secure a higher price for his produce, if the needs and preferences of the consumer are to be conveyed to the producer with the minimum amount of delay and friction; and it the large-scale industries are to secure steady and reliable supplies of raw materials of uniform quality, obviously the defects in the machinery for marketing of agricultural produce should be remedied as quickly as possible. In fact, an improved system of agricultural marketing which will secure for the cultivator a larger proportion of consumer’s price is a sine qua non for agricultural improvement in India.
Orderly marketing acts as an excellent incentive for increased agricultural produceion and its importance in the planned economy of the country needs no emphasis. In this connection the observation of the Marketing Committee of U.N.O. (1945) deserves note. It said.
“It would be useless to increase the output of food, it would be equally futile to set up optimum standards of nutrition, unless means could be found to move food from the producer to the consumer at a price which represents a fair remuneration to the producer and is within the consumer’s ability to pay. Similar considerations also apply to other agricultural produces and to fish and forest produces.”
It is, therefore, necessary to remove the defects in the machinery for marketing of agricultural produce. An improved system of agricultural marketing, which will secure for the cultivator a larger proportion of consumer’s price is a sine qua non for agricultural improvement in India.
The Royal Commission on Agriculture recommended and the Provincial and Central Banking Enquiry Committees endorsed the following measures for improving and organising agricultural marketing:
(1) Improvement of transport facilities including rural communications,
(2) Lowering of railway freight rates and grant of other railway, facilities,
(3) Establishment of regulated markets under State legislation,
(4) Standardisation of weights and measures,
(5) Adoption of measures to secure improved quality of produce by organisation among buyers and traders to guard against adulteration,
(6) Fixation of standards and grades of commodities;
(7) Promotion of co-operative sales,
(8) Holding of auction sales by agricultural departments to ensure increased prices to the cultivators who produce improved varieties,
(9) Carrying out of market survey, and
(10) Appointment of expert marketing officers on the staff of the agriculture departments.
The defects of marketing may be removed in the following manner:
1. Establishment of Regulated Markets:
Most of the defects and malpractices to the disadvantage of producer-seller can be removed by the exercise of proper control over markets and this could be done by the establishment of regulated markets in the country. Markets may be regulated either by local bodies or under State Legislation.
The chief advantages of such markets art:
(i) Market charges are clearly defined and specified; excessive charges are reduced and unwarranted ones are prohibited. The saving to the producer seller has been estimated at Rs. 3 for every Rs. 100 worth of goods sold as compared to sale in an unregulated market;
(ii) Market practices are regulated;
(iii) Correct weighment is ensured by periodical inspection and verification of scales and weights;
(iv) Suitable arrangements for the settlement of disputes regarding quality, weighment and deductions, prevent litigation, safeguard the interest of the seller and smooth business;
(v) Reliable and up-to date market news are made available to the users of the market;
(vi) Suitable, quality standards and standard terms for buying and selling are conveniently enforced;
(vii) Reliable statistics of arrivals, stocks, prices are maintained and
(viii) Facilities like sheds for the sale of produce, space for packing carts, water cisterns for cattle and, storage accommodation for agricultural produce are provided;
(ix) Propaganda for agricultural improvement is more conveniently undertaken.
The Market Committees are responsible for enforcement of fair grading practices, licensing of market functionaries, deduction of unauthorised market charges, introduction of open auction systems of sales and enforcement of standard weights and to secure impartial arbitration in cases of disputes between the seller and the buyer.
They also maintain market yards, provide facilities for parking carts, rest houses for farmer’s canteens, godowns and sheds for auctioning the proceeds. The producer is given a sale slip showing details of the sale proceeds and deduction and payment is made on the same day.
Thus, organised marketing of agricultural commodities has been promoted in the country through a network of regulated markets to ensure reasonable gains to farmers and consumers. The number of regulated markets have gradually increased in India. There were only 283 regulated markets in India in 1960-61.
The number of regulated markets including principal and sub markets increased to 6,809 in 1994 as given in table below:
In order to bring about reforms in agricultural marketing a model Agricultural Produce Marketing Committee (APMC) Act was prepared in 2003 for guidance and adoption by State Governments.
2. Use of Standard Weights and Measures:
The use of standard weights and measures safeguards the interest of parties against cheating by false or under-weight. It is even now more urgently needed in rural areas in regard to transactions in which the farmer is concerned. The Planning Commission has recommended to adopt the metric system of weights and measures throughout the country because it is simple, easier to learn and remember; and its use would save time and labour in calculations.
In 1958, the Standards of Weights and Measures Act was brought into force in certain industries and Government departments. For example, industries like cotton textile, jute, iron and steel, heavy chemical, engineering, cement, salt, paper, non-ferrous metals, rubber, copper, aluminium, lead, antimony, tin, coffee have all adopted it.
Metric commercial weights and measures conform to the specifications laid down by the Indian Standards Institution. Weights may be of cast iron, brass or sheet metal. Cast iron weights are hexagonal and brass weights round. Brass weights for weighing bullion are cylindrical with knobs to facilitate handling. Weights of the lowest denominations are of sheet metal. Capacity measures are made of metal sheets and may be cylindrical or conical.
Thus the gram has replaced tola, the kilogram seer or pound, the quintal (100 kilograms) the maund or cwt, the metric tons the long ton, the metre the yards the kilometre the mile, and the litre the gallon. Retail prices of foodgrains, sugar and other items of grocery are charged in kilograms. The use of metric capacity measures became compulsory from April, 1953, throughout the country.
3. Increased Provision of Storage and Warehousing facilities:
It has been well said that “the business of accumulating and storing perishable as well as non-perishable produces in times of flush produceion, preserving them safely and then distributing them in times of scarcity is necessarily a part of produceion and equal in importance and dignity. By holding back a part of the surplus at harvest time the middlemen prevent a sharp fall in prices of commodities so that the producer’s share in the benefit is increased and by letting out produce from the store in seasons when prices are normally likely to rise sharply, they check the rise and bring about some stability in market prices which benefits the consumer immensely.”
Storing is, therefore, a very important part of marketing. This point was realised by the Royal Commission on Agriculture and subsequently supported by the Central Banking Enquiry Committee.
Storing goods, before they are sold, is an important part of marketing. This point was fully realised by the Royal Commission on Agriculture and subsequently supported by the Central Banking Enquiry Committee and later on by the Agricultural Finance Sub-Committee, the Rural Banking Enquiry Committee and by the Rural Credit Survey Committee. All these bodies recommended that storage and warehousing facilities should be made available at all nuclear points of trade in agricultural produce.
Losses in storage are due partly to the change in temperature, dampness and partly to insects etc. These losses in temperature can be reduced by making provision for efficient ventilation in the godowns and by closing them during the monsoons and keeping them open during the dry season. Grains in bags can also be protected by dunnage. It is necessary that sufficient space is kept between the bags while preparing a stack plan.
The damage caused by dampness can be reduced by making the floor or the godown damp-proof and the ceiling leak-proof. The pits should be of concrete and where this is not possible a proper layer of straw, ashes, neem leaves and sand can serve the purpose to a great extent.
4. Improvement in Transport Facilities.
As an inseparable adjunct to proper marketing, adequate and appropriate transport facilities are indispensable. If the national economy is to be properly developed from all angles and if the interests of all sections of the community are to be safeguarded, the available transport facilities of every kind have to be very much improved and expanded.
The State Governments should:
(i) Give the highest possible priority for the construction of all-weather feeder roads in agricultural areas for facilitating the movement of agricultural produce to assembling markets or despatching stations and
(ii) Popularize and assist in the use of pneumatic tyres for bullock-carts and to assist in the manufacture and utilization of country carts, for transporting agricultural produce.
The rail transport and steamship authorities should also:
(i) Introduce a unified rates policy for different classes of goods for the whole country and
(ii) Provide adequate number of ventilated wagons and refrigerated transport for perishable produces like fruits, vegetables, eggs, fish, milk and butter.
Good metalled road linking the village to market town will reduce the cost of transport and the strain on the cultivator’s livestock and make it easier for the-grower directly to market his produce in the town thus eliminating middlemen. The railways by charging low freights for the transport of perishable produces such as fruits and vegetables and by providing faster services can make available to the producer an expanding market.
The Rural Credit Survey Committee strongly suggested an immediate examination of the rates which railways, and State buses, etc. charge for the transport of the cultivator’s produce and recommended that relief may be given in the rates now charged. The Conference on Marketing and Co-operation (1956) recommended that in order to ensure quick movement of agricultural commodities by rail or sea on behalf of the co-operatives, the State Governments, should take steps to sponsor such movements.
5. Provision of Marketing News:
The Agricultural Commission had recommended that steps should be taken for a better dissemination of the marketing news. The marketing surveys conducted under the direction of the Central marketing staff have shown that there is at present a surprising lack of co-ordination in between different markets. Prices do not move in harmony even in markets which are not far from each other. We often find a market glutted with a produce which is scarce in another, perhaps only a few miles off.
An efficient market news service can well be compared with the signalling system of railways as complete market information from various centres indicates green or red light- green from those markets where the demand exceeds supply and red from those where the supply exceeds demand. Goods from nearby areas are rushed to the centres, indicating green light and supplies to the market indicating red lights stopped. Supply and demand thus get quickly adjusted.
The objective of an efficient market news service should be to aid towards more intelligent produceion with the ultimate object of achieving effective distribution and fair pricing of farm produce both for the producers and the consumers.
6. Remunerative Prices for Farmers:
It has been increasingly realised that mere increased produceion could be of little avail so long as the excess produceion failed to reflect itself in the shape of some extra income to the producer.
How to ensure an economic and remunerative return to the producer ; how to establish a relationship between the price return and the quality of a produce ; how to provide a self-propelling incentive for the maintenance of a standard which will bring the maximum return ; how to prepare the produce for the market, how to grade and differentiate—how to pack and transport ; what security and what facilities the producer should get in the market ; how to keep him informed of market trends and prices ; how to keep him abreast of consumer preferences—these have been some of the questions which demanded close attention of those concerned with the agricultural marketing.
Government and Agricultural Produce:
In India attention came to be focussed on the improvement of marketing only about 50 years ago with the publication of the Report of the Royal Commission on Agriculture. The Commission in their Report said- “The marketing of produce is such an important matter from a cultivator’s point of view that we consider that an expert marketing officer should be appointed to the staff of the Agricultural Department in all major provinces.”
The Central Banking Enquiry Committee in 1931 endorsed the recommendations of the Royal Commission and went a step further by recommending the setting up of a Central Agency for initiating and coordinating State activities relating to the development of marketing. As a result of these recommendations a Central Organisation, which was called the Office of the Agricultural Marketing Adviser to the Government of India was set up in 1934.
On the recommendation of the Patel Committee, the work of the compilation of statistics and dissemination of marketing news, done by the marketing staff, was transferred to the Directorate of Economics and Statistics, Ministry of Agriculture, in order to avoid the duplication of work and to promote specialisation in certain aspects.
The Directorate of Marketing and Inspection with its headquarters now situated at Faridabad, since 1974, undertakes the following functions:
(i) Promotion of grading and standardisation of agricultural, horticultural, dairy and livestock commodities;
(ii) Statutory regulation of markets and market practices;
(iii) Market research and surveys;
(iv) Training of personnel;
(v) Market extension; and
(vi) Administration of the Cold Storage Order, 1964 and the Meat Food Produces Order, 1973.
1. Market Research and Surveys:
During the existence of this Directorate for over 44 years, marketing surveys of agricultural commodities have been carried out on an all-India basis and over 140 marketing survey reports and brochures relating to 40 important commodities have so far been published.
The surveys covered all important aspects of marketing such as trends in produceion and utilization in India as well as world markets, net available supplies, market surpluses, prices, market practices in respect of assembling and distribution, transport, storage processing, commercial classification, financing, market functionaries, marketing costs and price spreads. In addition, reports have been published on certain functions and institutions such as cold storage, co-operative marketing, and regulated markets. A survey of marketable surplus and post-harvest losses of important foodgrains is under way.
2. Regulation & Control of Market Charges:
To regulate and control market charges and to penalise the merchants who levy more than the prescribed charges, legislation has been enacted in all the states. To provide against unhealthy speculation, forward trading in agricultural commodities is being regulated under the Forward Contracts Regulation Act, 1952.
The Forward Market Commission was created in 1953 for enforcing the provisions of the Act. The Forward Commission has established forward markets in raw cotton, jute, groundnut oil, coconut oil, black pepper and oilseeds. The policy being followed is that there should not be any monopoly in forward marketing of any single centre and that forward marketing should be brought as near to different regions as possible.
3. Standard Weights & Measures:
To widen the market for agricultural produce and to avoid manipulations in prices to the disadvantage of the seller, and for easy comprehension of price quotations in various markets, Standard Weights Act, 1939 and the Metric Systems of Measures Act, 1958 were enacted, and their application made compulsory throughout the country.
4. Grading and Standardisation:
To enable the produce of good quality to be exported and also for use in internal consumption, grades and standards of quality and appropriate trademarks have been developed under the Agricultural Produce (Grading and Marketing) Act, 1937. The agricultural produces are graded under the trade mark AGMARK.
To ensure that grading is done properly the inspecting staff is maintained under the Agricultural Marketing Adviser, who visits the grading stations, and inspects the graded produces in the market. The staff also inspects the commodities graded for export to ensure that the produce conforms to prescribed specification. To ensure this, raw produce is screened to eliminate dirt, dust and other extraneous materials.
Strict supervision is maintained during processing, packing and labelling. In respect of foodgrains, sann hemp, wool, bristles, the emphasis is on physical cleaning, while in case of ghee, butter, vegetable oils, the produce is pooled together to obtain homogeneity, under the supervision of qualified chemists. There were in all 530 grading units in 1976-77 as against 572 in 1973-74, and 541 in 1972-73. The number of certificates of authorisation were 5059 in 1976-77 as against 4805 in 1973-74.
The commodities for export compulsorily graded (Under Sea Customs Act, 1962) are unmanufactured tobacco, sann hemp, wool, bristles, goat hair, lemongrass oil, palmrosa oil, Sandalwool oil, vegetable oils, oils and oilseeds, myrabolans, walnuts, chillies, cardamom, spices, lac, turmeric, ginger, onions, garlic, tendu leaves, table potatoes, animal casting, pulses, resin and turpentine, etc. Commodities worth Rs. 259.76 crores in 1976-77 as against Rs. 174.74 crores in 1973-74 and Rs. 142.71 crores in 1972-73 were graded for export.
Grading in respect of commodities for internal consumption is being carried out on a voluntary basis for ghee, vegetable oil, butter, eggs, arecanut, cotton, wheat flour, rice, bura, gur, potatoes, fruits, honey, pulses, chillies, and whole ground spices like turmeric, coriander, curry powder and cumin seed and Kangra valley tea. The value of commodities so graded were worth Rs. 163.36 cr. in 1976-77 as against Rs. 248.37 cr. in 1973-74 and Rs. 186.0 cr. during 1972-73.
To provide adequate laboratory facilities for fixing grade standards, a Central Agmark Laboratory at Nagpur and 16 regional Agmark laboratories function at Guntur, Madras, Cochin, Kanpur, Rajkot, Calcutta, Bombay, Sahibabad, Jamnagar, Bangalore, Kozhikode, Alleppey, Calicut, Tuticorin, Virudhnagar and Patna.
5. Market Intelligence:
To collect and disseminate information regarding marketing services, regulatory measures, handling and storage of agricultural produce among producers, traders and consumers, the Market Extension Cell has been organised at Nagpur.
Market Intelligence Service Scheme aims at:
(i) Effecting improvements in the collection, coverage and reliability of market intelligence,
(ii) Processing, analysing and interpreting marketing intelligence and using it in formulating and review of agricultural price policy, and
(iii) Effecting improvements in the market news service.
The scheme works on the following lines:
(a) Broadcast of a daily market news bulletin from the regional stations of A.I.R. in the rural programme;
(b) Broadcast of a weekly market review from the regional stations of AIR;
(c) Distribution of a periodical market news bulletin to rural institutions;
(d) Issue to local newspapers unofficial handouts containing days’ prices of important commodities in respect of important, markets; and
(e) Publicity of the rates through notice-boards in the markets.
Extension work among the producers and consumers is carried out through various media like documentaries, printed literature, exhibitions and cinema slides with the object of developing orderly marketing in the country.
The quarterly journal ‘Agricultural Marketing’ and monthly ‘Marketing News’ is published by the Directorate.
6. Training of Personnel:
A number of courses for training of personnel in agricultural marketing are being conducted by the Directorate.
Important of these are:
(i) 11 -month diploma course at Nagpur for the training of superior personnel of the State Marketing Departments;
(ii) Four months’ course at Sangli, Lucknow, Chandigarh and Hyderabad for the training of marketing secretaries and marketing superintendents required for regulated markets are conducted;
(iii) Three months’ course for training graders, grading, supervisors and assessors at Chandigarh, Hubli, Lucknow and Madras;
(iv) Six months’ course in marketing of livestock and livestock produces at Nagpur; and
(v) Four months’ training course in grading of cotton at Surat.
7. Storage and Warehousing:
The need for warehousing for agricultural produce was emphasised by the Reserve Bank of India as early as 1944. But the establishment of warehouses took place only after the enactment of the Agricultural Produce (Development and Warehousing) Corporation Act, 1956′. To provide warehousing facilities to the traders as well as to the producers the Agricultural Produce (Development and Ware housing) Corporation Act was passed in 1956.
The Act provided for the establishment of central warehousing corporation and State warehousing corporations in each State except the State of Jammu and Kashmir. The Central warehousing corporation started functioning in July 1957. A number of state warehousing corporations were constituted in July 1957.
The progress of Central and State Warehouse Corporations during the past decade has been phenomenal. The fact that in 1960-61, there were only 40 Central warehouses with a storage capacity of 79,000 tonnes. At the end of 1969-70, as many as 123 Central warehouses were functioning in the country and their storage capacity was of the order of 12.73 lakh tonnes.
The storage capacity including both covered and plinth available with Food Corporation of India, Central Warehousing Corporation, State Warehouse Corporation and State agencies has increased to 34.2 million tonnes as on 31 Dec., 2012. In order to incentivizing the creation of storage capacity in the country Government has initiated the Private Entrepreneurs Guarantee Scheme that aims to construct storage godowns through private Entrepreneurs.
Construction of godowns is to be further enhanced as storage capacity for 80 million tonnes is required for the country. The FCI has reported the short term hiring of private godowns.
The Government has recognised the importance of liberalising agriculture marketing in the wake of sanitary and Phyto Sanitary agreement of WTO. Accordingly, several initiatives have been taken to develop agricultural markets. An expert committee was constituted under the Chairmanship of Shri Shankarlal Guru for recommending the development and strengthening of the country’s agriculture marketing system.
Following are the important recommendations of Guru Committee:
1. Private sector and Joint Venture in setting up markets need to be encouraged.
2. Co-operatives will have to be freed from control of politicians and bureaucrats.
3. Specialised markets for fruits, vegetables and other horticulture produces may be promoted.
4. Public sector is to play important role in marketing efforts in remote and difficult areas.
5. The number of commodities under forward contracts may be enlarged.
6. Modernisation of infrastructure is essential for the development of markets.
7. Mega markets and/or alternate marketing structure with the involvement of private, public, cooperative or joint venture may be promoted.
A marketing system which protects the interests of both producers and consumers is the key to agricultural development.
Agricultural marketing infrastructure has not kept pace with increase in agricultural produceion. This has resulted the increase in post-harvest losses of agricultural produce. Government of India has provided assistance for setting-up of rural godowns. During the Ninth Plan, the panchayats are also being encouraged to participate in creating marketing infrastructure at the rural level.
Agricultural markets particularly for fruits are also being improved to ensure fair and remunerative prices to the growers. The wholesale markets are also being modernised. Marketing extension is a key factor in bringing desirable change in attitude and behaviour of the farmers. Accordingly, a high priority was given in the Ninth Five Year Plan for promotion of marketing extension. It was emphasised in the Ninth Five Year Plan that market should be free and there should be a free movement of commodities.
It was also mentioned in the plan that the nation should proceed towards a full national market by removing unnecessary restrictions. It was opined that free movement in the domestic market would lead to movement of commodities from surplus region to deficit region. It shall also help in diversification of cropping pattern.
Currently agricultural markets are regulated under respective State Agricultural Produce Marketing (Regulation) Act, generally known as APMC Act. Besides, there are other regulations also such as Essential Commodities Act and various control orders. All this have created restrictive and monopolistic marketing structure. When APMCs were first initiated there was significant gain in market infrastructure development.
However, this infrastructure is now out of date. There is considerable gap in the facilities available in the market yards. Accordingly, on the basis of the recommendation of the Inter- Ministerial Task Force, Ministry of Agriculture drafted a model law on marketing which would allow new markets to be established by private entities or corporatives. Several State Governments have already amended their APMC Acts allowing varying degree of flexibility.