MARKET
DEVELOPMENT PROPOSALS
PROPOSALS
FOR MODERNISATION AND DEVELOPMENT OF OTHER AGRICULTURAL MARKETING INFRASTRUCTURE
Strategy:
Whether it is domestic or
overseas trade, the agricultural produce sector has been most important
component of State economy. A lot
of progress has been made in this sector and new heights scaled in production of
foodgrains, fruits and vegetables and other important crops like soyabeen,
cotton, etc. The increasing trend
of agricultural production has brought, in its wake, new challenges in terms of
markets for handling huge marketed surplus.
There is now pressure from all segments of agricultural produce economy
to respond to the challenge that the global markets pose in the new liberalized
trade regime.
A marketing system backed by strong, adequate infrastructure is the core
content of agricultural marketing. Market
infrastructure is important not only for the performance of various marketing
functions and expansion of the size of the market but high investment and
entrepreneurial skills that are required for creation and managing these
infrastructures. Strategy in Xth
plan should encourage private and cooperative investment in the market
infrastructure development by undertaking appropriate legal and policy reforms
and offering a package of incentives.
Need
for Growth in Marketing Infrastructure:
Projections of production and marketed surplus of various farm produce in
the State exhibit that the commodities, which the marketing system will be
required to handle in future, are quite large. The capacity to clean, grading,
packing, processing and transporting would have to correspondingly expanded to
handle the additional marketed quantities.
Current
status of Agricultural marketing: Government
has promoted organized marketing of agricultural commodities in the country
through a network of regulated markets. Most
of the State Governments and Union Territories have enacted legislations to
provide for development of agricultural produce markets.
As on 31.3.2001, 7177 markets have been covered under regulation.
Regulated markets have helped in mitigating the market handiships of
producer-sellers at the wholesale assembling level.
These have also provided physical facilities and an institutional
environment to the traders, processors and other market functionaries for
conduct of their trading activities. It
was envisaged that physical markets with facilities and services would attract
the farmers and the buyers creating competitive trade environment thereby
offering best of the prices to the producer-sellers.
Performance of Regulated markets: Studies indicate that the institution of regulated markets has achieved a limited success in providing need based amenities and services conducive to efficient marketing. Most of the regulated market yards lack requisite facilities for handling the produce arriving there. Rural periodic markets in general, and tribal markets in particular, remained out of its development ambit. Over a period of time these markets have acquired the status of restrictive and regulated markets, providing no help in direct and free marketing organized retailing, smooth raw material supplies to agro-processing, competitive trading, information exchange and adoption of innovative marketing systems and technologies. Monopolistic practices and modalities have prevented development of free and competitive trade in agricultural marketing, future markets, use of latest technologies in post-harvest technology and handling exports, agro-based industries, warehousing etc. Promoting competition in the trade and facilitating farmers with supporting services like grading, standardization, storage with pledge finance and facilities in the markets have become secondary activities. Funds from the Agricultural Marketing Boards have been siphoned off on occasions to Public Ledger Account. Consequently, modernization/infrastructure development conductive to operational efficiency of the markets has suffered heavily.
Need for Efficient Marketing System: An efficient agricultural marketing is essential for the development of the agricultural sector. In as much as it provides outlets and incentives for increased production, the marketing system contributes greatly to the commercialization of subsistence farmers. Worldwide, Governments have recognized the importance of liberalizing agricultural markets. Government policy and programmes have to effectively address issues of marketing liberalization and overcome the constraints faced by various organizations including private sector involved in agricultural marketing. The ever increasing production, spread of latest technologies, changing socio-economic environment, increasing demand for downsizing the distribution chain and reducing the margin between farmers and ultimate consumers, challenges emerging out of liberalization and globalization in the post WTO period requires a vibrant, dynamic and assimilative marketing structure and system.
Reforms in Agricultural Marketing: In promoting vibrant competitive marketing systems, Government need to bring about reforms in existing policies, rules and regulations with a view to remove all legal provisions inhibiting free marketing system. Liberalization of world trade in agriculture has provided new opportunities to the farm sector to access markets of agricultural commodities worldwide. However, to actualize these market access opportunities, reforms have to be brought in agriculture sector to remove all barriers, whether legal or policy induced, which introduce inefficiencies and monopoly trends in the functioning of agricultural markets. At present, though agricultural production is largely free from controls, the same is not true of marketing and processing of agricultural commodities. The State Governments alone are empowered to initiate the process of setting up of markets for agricultural commodities in notified areas. Processing industries cannot buy directly from the farmers, except through the notified markets where intermediaries take away a sizeable share from the price of the produce. Processed foods derived from agricultural commodities suffer from multiple taxes at various stages starting from the harvest till the sale of final processed products. Multiple restrictions have not only cascading effect and the prices but also sets a barrier to free flow of materials from farm to the factory and ultimately to the consumers. All these controls are now widely recognized as going against marketing and processing efficiencies. In the present situation these restrictions are acting as a disincentive to farmers trade and industries.
Emerging Role of Private Sector in Agricultural Marketing: Role of Government in managing markets is on the decline worldwide. Experience throughout the world has shown that efficient markets depend in part on growers and market functionaries having a say in the marketing of their produce. In most countries in the world, market operation is conducted by the corporate sector. In countries similar to India like South Africa and Brazil the process of government withdrawal from the markets management has already been initiated. In South Africa, agricultural marketing is changed from controlled of marketing to a free system. In Holland, to achieve a high degree of professionalism selling/ marketing process, growers co-operatives are acquiring new companies specialized in commodity exports and imports.
Expert
Committee Recommendations on Reforms: An Expert Committee on Strengthening and Development of
Agricultural Marketing set up by the Ministry of Agriculture. Department of
Agriculture & Cooperation on 19.12.2000, has suggested various reforms in
the statutory arrangements relating to agricultural marketing as well as
policies and programmes for development and strengthening of agricultural
marketing within specific reference to needed investment, package of incentives
and easy and adequate marketing credit. The
Committee has recommended a review of the existing legal framework governing the
institutions of regulated markets and removal of restrictive provisions to
promote a competitive marketing structure in the country, to promote direct
marketing of agricultural produce by the farmers to improve price realization,
to encourage forward and futures trading to reduce price risk, to establish a
national warehousing receipt system for agricultural commodities to induce
increased flow of funds to agriculture sector to support pledge financing by
treating as a direct priority sector lending and to promote market led extension
and use of Information Technology for improved marketing services to the
farmers.
Inter-Ministerial
Task Force on Marketing Reforms: With a view to examine the aforesaid recommendations of the
Expert Committee and to suggest measures to implement them, the Ministry of
Agriculture constituted a Task Force on 4.7.2001 under the chairmanship of Sri
RCA Jain, Additional Secretary in the Department. All the State Governments were
also consulted in the matter at the National Agriculture Conference held at
Vigvan Bhavan to initiate a programme of reforms in this sector.
The Task Force after holding extensive discussions identified nine
priority areas requiring reforms to strengthen agricultural marketing system in
the country. The areas identified
are a) Legal reforms; b) Direct marketing; c) Marketing infrastructure; d)
Warehousing receipt system; e) Forward and futures markets; f) Price support
policy; g) Pledge financing; h) Extension, training and research in agricultural
marketing and I) IT in agricultural marketing.
i)
Two important legislations namely, the Essential Commodities Act (EC Act)
and the Agricultural Produce Marketing Regulations Act (APMR Act) have inhibited
development of free and competitive trade in agricultural commodities, including
warehousing, forward and future markets etc. and that it is essential to remove
internal controls and restrictions, which inhibit free production, storage,
movement and marketing of all agricultural commodities, and in particular those
commodities which are covered by liberalized international trade agreements.
This was necessary to encourage private sector to play an important role
in creating a competitive marketing structure in the country, to take full
advantage of trade liberalization and to ensure remunerative price to farmers
for the produce.
With regard to bringing about needed changes in the EC Act, the Union
Finance Minister has announced a review in his budget speech for the year
2001-02. The Ministry of
Agriculture has recently constituted a Standing Committee of the Union Ministers
and the State Chief Ministers to review the list of essential commodities and
Control Orders to ensure free movement of agricultural products in the country.
The Task Force has finally adopted the sub group reports in its meeting held on
9.5.2002 and submitted its report to the Govt. of India.
Based on above discussion, following specific areas are identified for
reforms in the Chhatisgarh :
a) Promotion
of integrated markets in private/cooperative sector: Under the APMCs. State Government alone is empowered to
initiate the process of setting up of a market for certain commodities, which
are regulated and for certain areas, in which the regulation is enforced.
As a result of this very process of initiation of a market, the service
providers for agricultural marketing do not have any role.
Nobody can take initiatives in assessing the viability and feasibility
for setting up the markets equipped with best facilities at competitive cost.
These provisions have to be modified by providing for setting up of the
alternate marketing systems in private/corporate sector, which can operate in
addition to and parallel to existing markets.
The Govt. of Karnataka has inserted a new Chapter (Chapter XIII A) in its
Karnataka Agricultural Produce Marketing (Regulation) Act, 1966, to provide for
the establishment of ‘National Integrated Produce Markets’ to be owned and
managed by the NDDB for the marketing of fruits, vegetables and flowers.
The amendment permits NDDB to set up integrated markets for fruits
vegetables and flowers. All other States have to similarly amend respective APMC Acts
to permit any person, organization or corporate body to set up ‘Integrated
Agriculture Produce Market’ to provide to the farm producers the services of
a) assembling, grading, storage, transport, packing and quality control; b)
retailing, wholesaling and/or e-trading and exports; c) marketing and or value
additional; d) warehousing and pledge financing; e) marketing infrastructure;
and f) marketing extension and intelligence.
For the services so provided the owner/operator of the market be allowed
to levy and collect user fee from the producer-sellers.
The amendment will facilitate private/ corporate sector in developing
integrated markets in producing areas; direct integration of processing units
with rural producers; building of marketing infrastructure, warehousing and
marketing credit; and integration of market intelligence, extension, production
planning and marketing efforts.
b) Direct
Marketing: Direct marketing
enables farmers to meet the specific requirements of wholesalers from the
farmers’ inventory of graded produce and of retail consumers based on
consumers’ preferences, thus enabling farmers to dynamically take advantage of
favorable prices and improve their net margin.
It encourages farmers to undertake grading of farm produce at the farm
gate and obviates the necessity of farmers to haul produce to regulated markets
that are not necessarily spaced on the principles of efficiency.
Direct marketing thus enables farmers and buyers to economize on
transportation costs and to improve price realization considerably.
In South Korea, for instance, as a consequence of expansion of direct
marketing of agricultural products, consumer prices declined by 20 to 30 per
cent and producer received prices rose by 10 to 20 per cent and this also
provided incentive top large scale marketing companies to increase their
purchases directly from producing areas.
Direct marketing by farmers to the consumers was experimented
through Apni Mandis in Punjab and Haryana.
The concept, with certain improvements for popularized in Andhra pradesh
through Rythu bazaars and in Tamil Nadu as Uzhavar Santhaigal.
At present, these markets are being run at the expenses of State
exchequer, as a promotional measure, to inculcate habit of marketing without
help of middlemen by the small and marginal producers of fruits and vegetables.
Considering the vastness of the State, more and more such markets need to
come up in the organized sector with private investment in Chhatisgarh so that
they can be developed in tune with the market requirements with backward &
forward linkages.
c) Contract
Farming: Contract farming can
be defined as an agreement between processing and or marketing firm for the
production and supports agricultural production under forward agreements,
frequently at predetermined prices. The
arrangement also invariably involves the purchaser in providing a degree of
production support through, for example, the supply of inputs and the provision
of technical advice. The basis of
such arrangements is a commitment on the part of farmer to provide a specific
commodity in quantities and quality standards determined by the purchaser and
commitment on the part of the company to support the farmer’s production and
to purchase the commodity. Contract
farming is becoming an increasingly important aspect of agribusiness whether
multinationals, smaller companies, Govt. agencies, farmer’s cooperatives or
individual entrepreneurs purchase the products. In our country this would appear to have considerable
approach potential where small and marginal farmers can no longer be competitive
without access to the services provided by the contract farming companies.
This type of contractual agreement with farmers also provide access to
production services and credit as well as knowledge of new technology.
Pricing arrangements can reduce risk and uncertainty.
There are few success stories on contract farming by PepsiCo India in
respect of potato, tomato, groundnut and chili in Punjab, Safflower in
Chhatisgarh, oil palm in Andhra
Pradesh, seed production contracts for hybrids seed companies etc.
Which helped the growers in realization of better returns of their
produce. Other success stories of
contract farming are Amul and NDDB for milk procurement, sugarcane cooperative
in Maharashtra, prawn acqua culture in Andhra Pradesh etc.
In Chhatisgarh Market Regulation Act, there is no provision to
support contract farming. It is,
therefore, necessary to incorporate provision allowing/ setting up registered
contract farming program by the private entrepreneurs.
There is also need to abolish or reduce fee, cess, taxes, duties etc on
procurement of agricultural or horticultural produce procured through any
registered contract-farming program.
d)
Direct contracts between producers and processing factories:
The present Act restricts the farmer to enter into direct contract
with the processor/manufacturer/bulk processor located outside the market area
as the produce will have to channelise through regulated market.
In the changed scenario, the producer should be free to enter into direct
contract without attracting the provisions of the Act whether inside or outside
the market/ market area. This will
promote contract marketing between the producers and processing factories with
monitory gains to the producer-seller through improving competitiveness and the
consumers by way of reasonable prices.
e)
Direct purchase from farmers without any license: As per the
provisions of the present Act once a market area is notified, no person can set
up, establish or use any place for the purchase, sale, storage, weighment,
curing, pressing or processing of any agricultural produce or products of
livestock or for the purchase or sale of livestock except in accordance with the
condition of a license granted to him by the market committee.
This prohibits free sale and purchase of agricultural and allied
commodities to other persons which leads to less competition in pricing and adds
to marketing costs to the producers in the event of bringing the produce to
market yard. It is, therefore,
necessary that to create competition and free trading, the producers should be
allowed to sell produce at the field house or point of harvest or threshing
floor. This will promote direct
contract between producers and processing factories with better monitory gains
to the producers selling in market area.
f)
Notification of commodity for regulation upon provision of requisite
infrastructure: At present, the
State Government is empowered to notify any agricultural produce under the
provisions of the Act for the purpose of regulation of marketing activities.
This has resulted into anomalies such as notifying commodities, which do
not pass through the market yard and for which no services are provided by the
market committee. It is essential that only such commodity should be notified
in respect of which the concerned market committee has requisite infrastructure
to provide marketing services under the Act.
g)
Single point levy of market fee: By and large market fee is collected
on a particular lot whenever it is transacted in different markets.
This amounts to multiple point collection of fee adding to the avoidable
marketing costs in other places. It
is, therefore, necessary to introduce single point levy of market fee in the
entire process of marketing in the State. The
present system of levy of fee at multiple points for the same commodity at
different stages of transaction needs to be replaced.
The collection of market fee outside the main yard/sub-yard amounts to
recovering the fee without providing any services and facilities to the seller
as well as purchasers. This is
again putting extra costs on the producer in disposal of this produce.
The levy of fee can be at different slabs in consonance with the type of
scale of services/facilities provided to all market users.
h) A
model APMC Amendment Act is
being drafted to provide to the State Governments a legal framework to introduce
aforesaid marketing reforms in regulated agricultural markets. A new Agricultural Marketing Regulation Act is also being
drafted to promote secondary markets in the country and to provide for the
establishment of a regulatory mechanism to administer both government owned
regulated markets as well as markets in the private sector.
i ) Other
Suggestions
i)
The Govt. of India in the Planning Commission constituted in November,
2000 the Working Group on ‘Agricultural Infrastructure/ Warehousing/Rural
Godowns/ Marketing/ Post-Harvest Management/ Processing and Cold Storage, Trade
and Export Promotion for formulation of the Xth Five Year Plan (2002-07).
Apart from the primary markets, the Working Group has suggested that
there is an imperative need for an effective price risk management in
agricultural sector to protect it from price volatility emanating from
international markets. Towards this
end forward and futures markets have to play an important role.
A committee in the Department of Consumer Affairs is examining proposals
to expand the scope of forward and futures markets and commodity exchanges in
the country.
ii) The
Working Group has also suggested that a national system of negotiable warehousing
receipt needs to be introduced in the country. Warehouse receipts can play an important part in making
Indian agriculture more responsive to market opportunities and more competitive
in relation to world markets. Warehouse
receipts can also be made an important instrument to make it more attractive for
banks to lend to the agricultural sector, to reduce the cost of public support
for agricultural marketing, to reduce transaction costs and to improve
price-risk management. This is also
necessary to encourage private sector to specialize in the storage of
commodities and perishable storage, marketing credit, standardization and in
building the warehousing infrastructure in the country.
An expert has been engaged to work out the legal amendments required in
various Acts and an action plan in this regard.
iii) With
regard to pledge financing, the Working Group has observed that through
this mechanism farmers are enabled to access credit from the organized credit
market at cheaper rates of interest, to dynamically take advantage of favorable
prices and improve their net margin. It
enables farmers to hold inventory of graded produce under storage conditions and
standardized preservation. The
group has recommended the scheme of rural godowns being formulated by this
Ministry to promote pledge financing in farm sector.
iv)
The Working Group on Marketing Extension, Training and Research
has observed that this area will have to play a vital role in capacity building
of farmers, market functionaries and other officials involved in the process of
agricultural marketing to effectively face the challenges of new trade regime in
the liberalized and globalized economy and have identified several areas for
initiatives.
v) The
Working Group on Information Technology has recommended extension of the
ongoing central sector scheme of establishing a market information network to
provide coverage to all the 7177 wholesale agricultural markets in the country,
to use IT as an effective tool of market led extension, to set up a network
based closed user group of marketing related organizations and to prepare atlas
of agricultural markets and commodity profiles in local languages.
vi)
With regard to marketing infrastructure, the Working Group has
expressed the view that increased investment in agricultural marketing
infrastructure will go a long way in making agricultural sector vibrant and
enable it to face the competition of liberalized international trade environment
without adversely affecting the livelihoods of those who depend on farming.
However, for realizing the potential of investment (an estimate of
Rs.12,500 crores in next 10 years) a major part of which need to come from the
private sector, a conducive and favorable environment would have to be created
in the country. Through an
appropriate policy frame, private sector needs to be encouraged to take an
active role in the development of marketing infrastructure, alternative markets,
cold storages and warehousing, market-led extension services etc. For attracting the private sector investment at a level
visualized, there is a need for (a) reducing the regulatory controls and
simplifying the procedures (b) active stance by the Central Government in some
initiatives; (c) making complementary investment by the State and Central
Government; (d) subsidizing a few activities to enable the private sector
initiatives to attain viability; and (e) ensuring adequate credit flows to
agricultural marketing activities. Government’s
role should be that of a facilitator rather than that of a financier having
control over the management of the markets.
In fact, it is need of the hour to reverse the declining trend in
investments in agricultural sector particularly agricultural marketing
infrastructure development by banking sector as well as private sector.
Investment
Proposals (2002-07)
Keeping in view the recommendations made by the Expert Committee
constituted by Ministry of Agriculture (June, 2001) and the measures suggested
by the Inter-Ministerial Task Force for the development and strengthening of
agricultural marketing in the country and aforesaid recommendations of the
Working Group on Agricultural Infrastructure etc. as well as the Sub-Group on
Agricultural Marketing constituted thereof by the Planning Commission, it is
proposed for formulation of the proposals for the development of agricultural
marketing during 2002-2007. It is proposed to launch various new
schemes/programs for development of agricultural marketing infrastructure;
construction of rural godowns and promotion of grading, standardization, quality
control and certification besides strengthening of the ongoing programs in the
State .It is suggested that maximum benefits be extracted from the Central
Sector Schemes of Govt of India.
1. Central
Sector-Scheme on Marketing Infrastructure:
The market infrastructure is important not only for the performance
of various marketing functions and expansion of the size of the market but also
for transfer of appropriate price signals leading to improved marketing
efficiency, infrastructure facilities lead to reduction in marketing costs,
which is crucial for increasing the realization of growers and reducing the cost
of the consumer. Basing on the
projections of production in marketed surplus of various farm products in the
country, the Expert Committee has estimated an investment requirement of
Rs.12,500 crores for infrastructure development of markets in next 10 years and
have recommended that a major portion of this investment has to come from
private sector. To attract the
private investment as envisaged, there is a need to (a) reduce the regulatory
controls and simplify the procedures (b) making complementary investment by the
State and Central Governments; (c) providing subsidy to enable the private
sector initiative to attain economic viability; and (d) ensuring adequate credit
flows to agricultural marketing activities.
A new central sector scheme has been recently approved with the following
salient features:
a)
Back
ended subsidy on capital investment for setting up of new general or commodity
specific ‘agriculture produce markets’ and for strengthening of existing
markets, wholesale, rural periodic or in tribal areas to provide to the farm
producers any or all of the following categories of services:
i)
Assembling, grading, packing, standardization, quality control and
certification;
ii)
Retailing, wholesaling and/or e-trading and exports;
iii)
Direct marketing from producers to consumers;
iv)
Direct integration of processing units with rural producers; and
v)
Market intelligence, extension and market oriented production planning.
b)
The scheme is to be implemented as a bankable scheme and individuals,
corporate bodies, cooperatives, and Government and Semi-government organizations
can avail of its benefits;
c)
The Central Government will provide 25 per cent subsidy on the capital
cost of the Project after its completion as an incentive to the entrepreneur on
the same pattern of assistance as approved under the Cold storage scheme being
implemented by National Horticulture Board:
d)
Subsidy under the scheme will be released to the financing agency through
the State Government concerned within whose jurisdiction the project is located
and be subject to the concerned State Governments’ introducing requisite
legal, policy and tax reforms and outlined above, through appropriate amendments
in APMC Acts. It is assumed that Central Government on its part will
similarly amend the EC Act to remove controls and restrictions on the free
movement, storage and marketing of all agricultural commodities and in
particular those commodities in respect of which qualitative restrictions have
been removed under the WTO Agreement on Agriculture;
e)
The RBI will be requested to issue instructions to all banks in private
and cooperative sectors to provide long term credit for the creation of market
infrastructure treating it as priority sector direct lending to agriculture, at
rates of interest restricted to PLR;
f)
Total outlay of the country on the scheme during Xth Plan is expected at
Rs.6000 crores, with a central subsidy of Rs.1600 @ 25% of the capital
investment and @ 1/3rd for the NE hilly and tribal areas 20%
component. It is proposed that the State should avail at least legitimate share
of 5% and ensure investment of Rs.300 crores with availing subsidy of Rs. 80
crores.
2.
Central sector scheme on Rural Godowns:
It is well known that the small farmers do not have the economic strength
to retain the produce with themselves till the market prices are favourable.
There is a felt need in the country to provide to the farmers the
facility of rural godowns for scientific storage so that wastage and produce
deterioration are avoided and also to enable it to meet its credit requirement
without being compelled to sell the produce at a time when prices are low.
This Ministry has already formulated and launched a new scheme for the
construction of rural godowns involving an outlay of Rs.400 crores, with a
subsidy element of 25 (1/3rd in North East States, Hilly and Tribal
areas) from the central government budget.
The scheme envisages creation of 25 million tonnes of storage with the
facility of pledge financing to the farmers within two years i.e. by
March, 2003. During Xth plan period, it is proposed to continue the scheme
to create an additional of 75 lakh tonnes of rural godown capacity in the
country on the same terms and conditions already formulated to the scheme,
involving a total capital outlay of Rs.1510 crores entailing a central subsidy
of Rs.410 crores inclusive of a general awareness and training programmes for
the farmers and entrepreneurs to ensure that these godowns are managed by
trained personnel. It is also
expected that a national system of warehouse receipt will be introduced in the
country and all the rural godowns will be networked into a National Grid of
warehouses to facilitate e-trading in standardized graded agricultural
commodities.
It is proposed that the State should create at least1.25
million tonnes of storage capacity in the State upto 2003 and accordingly be
increased in subsequent years as per Govt. of India allocations. It should
ensure an subsidy of Rs. 20 crores in this period.
3. Central sector scheme on Grading, Standardization,
Quality Control and Certification: Sale
of agricultural commodities on the basis of standard quality grades
mutually acceptable to the sellers and buyers and consumers would boost the
marketing. A major deficiency in
agricultural marketing is lack of grading, standardization and quality control.
There is a need to focus on promotion of grading, sorting and
standardization of farm produce to enable farmers to realize better price.
Compliance with international quality including hygiene and safety
standards is becoming increasingly stringent and will have to be complied with
if we have to be in the internal market. Standards
have to be established for all agricultural products and be harmonized with
international standards wherever required.
There is also a need to adopt internationally recognized quality
management systems and establish a credible system of registration of accredited
laboratories for quality certification. Once
the required grading, standardization and quality norms are fixed by appropriate
agency of the Government, a major task would be to organize an awareness program
amongst the farmers in the country in respect of such standards and for the
purpose to organize a large number of training programs for the market
functionaries. The Directorate of
Marketing & Inspection has formulated and notified standards for 163
agricultural and allied commodities under the Agricultural produce (Grading
& Marking) Act, 1937. The
procedures for inspections, grading, labeling and quality certification are also
notified along with these AGMARK standards.
The domestic standards need to be harmonized with the international
standards in a phased manner and popularized among farmers across the country.
On the other hand, there is a persistent demand from consumer’s welfare
organizations through Ministry of Consumer Affairs and Public Distribution that
adulteration prone food items should be covered under mandatory certification
for reasons of ensuring safety of consumers.
Since, this would be very difficult to manage such a programme, it is
considered desirable to provide selective coverage of a few highly a
adulteration prone items in packaged from in specified urban areas to start with
under the existing programme. With
a view to strengthen grading, standardization, quality control and
certification, following areas will required to be taken up for development
during Xth Plan. A token amount of
Rs.5 crores can be put for the purpose.
4. Application of IT in Agricultural Marketing a Network Development: Market Information is an important facilitating function in a marketing system. It facilitates marketing decisions, regulates the competitive market processes and facilitates marketing mechanisms. Market information is needed by farmers in planning production and marketing and equally needed by other market participants in arriving at optimal trading decisions. The existence and dissemination of complete and accurate marketing information is the key to achieving both operational and pricing efficiency in marketing system. To fully utilize the new emerging trade opportunities for the benefit of farming community, agriculture marketing information system in the country needs to be strengthened and IT has a vital role to play in the process.
In addition, the scope of data collection and dissemination under the Central Sector Scheme has been enlarged. There are several areas of agricultural marketing with which farmers need to be fully familiarized in order to improve price realization. Important areas among these are Grading and Standardization, Packaging and labeling, Storage and warehousing, Marketing Credit, Marketing Infrastructure including direct markets, SPS and marketing Regulations, Forward and Futures markets and Export markets. Awareness on the part of farmers in each one of these areas will enable him to plan his production and sale in a manner economically most advantageous to him. Promotion of nationally and internationally acceptable standards of grading and standardization, packaging and labeling, storage and warehousing and sanitary and phytosanitary measures and quality certification in farm sector will also enable trade and processing sector to undertake large scale agricultural marketing operations in domestic as well as international markets.
To facilitate both the Government as well as the private sector in planning development of an appropriate marketing strategy in agriculture sector, it would be necessary to create at national level an ‘Atlas of Agricultural Markets’ which would provide information in respect of each commodity, major areas of production, movement and storage and of market and consuming centers. In parallel, commodity profile will have to be prepared for all major commodities outlining the market requirements in terms warehousing, forward and futures markets etc. The Central sector scheme should provide funds to create such an Atlas and commodity profiles in a user-friendly format in regional languages. The National Institute of Agricultural Marketing will be responsible to prepare the Atlas and commodity profiles by engaging the services of experts. Commodity profiles containing entire market related information for important commodities should be put on CD for mass dissemination in areas where there is no Internet connectivity. Information in CD should be in local languages with multimedia features to enable transfer of knowledge to growers/traders. The Central sector scheme should provide funds to create such CDs in a user-friendly format in regional languages.
The Directorate of Marketing and Inspection will have to be reorganized to set up a market information wing both at Center as well as at the State level. The services of economist from the Economics and Statistics wing of the Ministry of Agriculture and of computer specialists from NIC will have to be utilized to analyze the data and to operationalise the Scheme. The wing will work in close coordination with State Agricultural Marketing Boards/Directorates and all other related agencies concerned with agricultural marketing to evolve and implement IT based information services to farmers and other market functionaries. The National Institute of Agricultural Marketing, Jaipur (NIAM) can provide necessary training and extension related support and undertake monitoring and evaluation studies of the Scheme. At least an allocation of Rs. 5 crores for the purpose may be kept.
5) Setting up Grading units at Village level: There is need to create facilities for cleaning, grading as per good agricultural practices and scientific packaging at village level from where produce is brought to the market for sale. It will encourage development and strengthening of value added function in the marketing infrastructure at farm level at one end and reduce congestion at wholesale assembling markets at the other end, improve the returns to the former reduce the chances of contamination and microbiological infestation, thus improve shelf life of the commodity. The centers for these facilities will be located at vantage points in the producing areas. Such centers will be established and managed by Farmers’ Associations, Farmers Self-help Groups/Cooperatives, NGOs, Young entrepreneurs etc. It is proposed to accord it private grading laboratories under Agmark at farm level for creating a network of grading at producers level throughout the country for direct marketing.
It is, therefore, proposed to set up 50 grading units at village level
through the private sector by providing 25% central subsidy on the capital cost
of the centers. The total outlay
for the Xth plan required for this programme would be Rs.1.00 crore.