Answer: 

Introduction:

Agricultural marketing refers to movement of agricultural produce from farm land to the end-consumers. It is an important part of the agricultural value chain. A well-developed agriculture market can streamline the supply chain, eliminate intermediaries, reduce post-harvest losses, double farmers’ income and keep prices affordable for the consumers.

Upstream in Indian agricultural marketing refers to the raw materials required for production, whereas downstream is the other end, where products are made and delivered.

Body:

Problems in upstream processes:

• APMC obligation: Farmers are forced to sell their produce at APMC Mandis even if they get a better price in the private market.
• Inadequate market information: In Indian agriculture, the middleman frequently has more knowledge about prices, supply, and stocks available than both farmers and consumers. The lack of awareness and the inability to use the various initiatives of the government like e-NAM, Negotiable Warehouse Receipts (NWRs), etc. make it worse for the farmers.
• Lack of credit: Farmers are forced to make distress sales because they urgently need inputs and the income from the sale of their produce is the only source of money for them. As per NABARD, just 60% of India’s small and marginal farmers are currently receiving formal credit, despite the existence of several schemes.
• Lack of awareness of standardization and grading: Due to the lack of proper standardization and grading, the customers face problems in purchasing quality produce and farmers also get affected because of price variability.

Downstream challenges:

• Demand-supply mismatch: The demand for a variety of agricultural produce has increased due to increasing purchasing power. The supply side is constrained by lack of diversification of agricultural production and huge post-production losses due to lack of storage.
• Lack of storage and transportation facilities: Many farmers in India do not have access to adequate storage and transportation facilities, which can make it difficult for them to preserve and transport their products to markets. Cost of transportation is high for small farmers and the connectivity is very poor. There is also a lack of support infrastructure at ports.
• Warehouse and storage: There is a lack of adequate storage facilities and the existing ones have very low capacity. So, the farmers have no option rather than distress selling, especially in the case of perishable produce.
• Law: Acts like Essential Commodities Act, 1955 create hindrances in private participation for warehouse construction as such a construction can be misinterpreted as a hoarding mechanism under ESA.
• Export issues: There has been an increase in product specific competition from different countries. For instance, dairy products from New Zealand, Basmati from Pakistan are tough competitors against Indian products. The increasing wave of protectionism through non-tariff measures like phytosanitary barriers have led to a decline in exports to various countries.

Conclusion:

The government has taken various measures for improving marketing of agricultural products. However, there are challenges and they need to be addressed. It is necessary to raise awareness of the issues among farmers and other stakeholders. Improving e-NAM and direct selling by farmers and farmer producer organisations to consumers, retailers, and exporters like Rythu Bazaar (in Andhra Pradesh) and Apni Mandi (in Punjab) are some suggested ways to move ahead.

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