Policy interventions

In the post-independence period, the Government of India has taken various measures to streamline the agricultural marketing activities through the intervention of Directorate of Marketing and Inspection (DMI) at central level. The basic thrust in the process has been to safeguard the economic interests of the producers against exploitation by large number of intermediaries. However, inadequacy of infrastructure and administrative arrangements at the level of various state governments and some deficiencies which are experienced in the existing state of affairs in the state marketing boards are responsible for weak enforcement of market regulation legislation. The Ministry of Rural Development at the Centre therefore had set up a high power committee on agricultural marketing (HPC) in 1992 to review the present State Marketing Acts and recommend appropriate measures for streamlining and strengthening the regulated markets in the country. Some of the major recommendations made by the HPC are as detailed below2.

In order to make the legal framework adaptable and effectively manage the regulated markets, the HPC recommended that

[i] the agricultural produce markets including the rural primary markets called haats, shandies should be brought under the ambit of Agricultural Produce Market Regulation (APMR) Act of the respective states to widen the scope of agricultural marketing,

[ii] the state governments may simplify its procedures of marketing regulation and infrastructure management,

[iii] effective co-ordination needs to be established among APMCs, Railway Board, Forward Markets Commission, Posts and Telegraphs Department, Audio and Visual Media and state planning commission or board,

[iv] each state should set up an independent cell for implementation of marketing policies of the government time and again,

[v] the constitution of the marketing committee should be brought to a standard of 11 members representing minimum 06 farmers, of which one member should invariably belong to the scheduled caste/tribe community. The tenure of the committee should be for a period of five years,

[vi] no marketing committee should be left superseded and administered in an undemocratic process, the regional agricultural marketing co-operatives should also elect their representative to work on the marketing committee, and

[vii] it is strongly recommended that an agricultural marketing tribunal may be set up in each state to handle the disputes arising from the implementation of the State Agricultural Produce Marketing Act.

The DMI has been providing financial assistance to agricultural produce marketing committees through the state agricultural marketing boards for developing marketing infrastructure as a part of the central assistance. The HPC has recommended some of the vital approaches in reference to the central assistance scheme for the development of regulated markets. These are as under:

[i] the central scheme for providing grant-in-aid to the state marketing board should continue and remain with DMI,

[ii] the central sector scheme for development of regulated markets may be revised to permit classification of the cattle markets as secondary markets and provide entitlement of grants up to Rs 20 lakhs,

[iii] the scheme of grant-in-aid may be suitably tailored in view of land norms, perishable produce, haats, etc., to enable them for the assistance of central government, and

[iv] master plans for agricultural markets may be prepared by each state on priority basis.

Apart from DMI there are many agencies helping the regulated markets in business. The marketing institutions like National Agricultural Cooperative Marketing Federation (NAFED), Food Corporation of India (FCI) and Tribal Cooperative Marketing Federation (TRIFED) have been extending their support in procurement of foodgrain and perishable produce. It is observed that their intervention in the regulated markets had not only made the flow of commodities smooth but also struck the balance between the demand and supply. The HPC has recommended the following points with reference to the public purchase agencies in agricultural marketing :

[i] the benefits of public purchase agencies should be extended to the tribal areas also,

[ii] the public purchase agencies should buy the produce from the farmers directly and not through the commission agents,

[iii] required infrastructure need to be provided in all the principal and sub-market yards to the public purchase agencies for conducting business, and

[iv] the Farmers Service Societies, may be a suitably tailored group action oriented ones may be provided the infrastructure at the market place for their shop-cum godowns.

In order to cater to the needs of marketing credit of the farmers at the place of marketing, the HPC recommended that the pledge finance scheme for providing short terms credit against the unsold produce should be uniformly adopted. However, a scheme for insurance against the price depression may also be considered by the Government of India. The HPC felt that there is an urgent need to set up a National Agricultural Marketing Bank with its branches in all the regulated markets to provide marketing finance of short and medium term to the various levels of functionaries including the farmers.

It has been observed that scientifically designed storage sheds and pre-cooling chambers for fruit and vegetables are not available to the most of the regulated markets in the country which obstructs the delayed transactions in the markets. The HPC recommends that the APMCs handling fruit and vegetables, and flowers should be provided with such infrastructure so that they can facilitate farmers for using the pre-cooling chambers and related packages. However, it would be in the interest of the APMCs that they should play an active role in guiding the farmers periodically on various aspects of the post-harvest care of perishable products.

It has been observed that the regulated markets are less popular because of the farmers’ ignorance of its advantages over the local markets. Thus, the HPC envisages that the farmers need to be trained in the state agricultural marketing colleges as is being done in Karnataka and the DMI may expand its extension service network for timely and meaningful support to the marketing boards for this purpose. An Agricultural Marketing Extension Unit needs to be set up in each regulated market to disseminate the market related information and other educational literature, audio-visual programmes and group meetings.