Agricultural Marketing in India

Agricultural Marketing 

Agricultural marketing can be defined as the commercial functions involved in transferring agricultural products consisting of farm, horticultural and other allied products from producer to consumer. Agricultural marketing also reflect another dimension from supply of produce from rural to rural and rural to urban and from rural to industrial consumers. In the olden days selling of agricultural produce was easy as it was direct between the producer to the consumer either for money or for barter. It brief, it was selling not marketing. In the modern world it became challenging with the latest technologies and involvement of middlemen, commission agents who keep their margins and move the produce further. As it is well known more the number of mediators more will be the costs as each transaction incurs expenses and invites profits. Ultimately when it comes to the producer the cost of the produce goes up steep. In the entire process of marketing the producer gets the lowest price and the ultimate consumer pays the highest as the involvement of more middlemen in the entire distribution process.

Market information is an important aspect of Agricultural Marketing. The importance of sound agricultural marketing policies for ensuring fair returns to the farmers can hardly be over-emphasized. It, therefore, becomes necessary on the part of regulatory agencies to ensure remunerative prices to the farmers for the sale of their produce, to boost up their efforts for increasing and sustaining the agricultural production. A number of measures have been taken by the Government to protect and safeguard the interests of farmers, like regulation of markets, grading of agricultural produce, cooperative marketing etc. Still the benefits are not percolating down to the farmers, as they are unable to plan their strategies for sale of their produce at remunerative prices, in the absence of correct and timely market information and advice about arrivals, prices, market trend, etc.

AGRICULTURAL SCENARIO

Indian agricultural has set new mile stones in its progress. Tremendous strides have been made in recent past . All time high record of production of 209 million tonnes of food grains in 1999-2000 and 137 million tonnes of fruits and vegetables etc reminds us of reviewing the past and the strategies to be conceptualized keeping in view the future and fast changing scenario. The increased trend in production has brought in its wake new challenges to handle in terms of huge marketable surplus. A strong and efficient marketing systems is the core content of agricultural Marketing in the country keeping in view thee management of Marketable surplus. It is also noteworthy to find the markets overseas keeping in view the policy of liberalization .

What are Agribusinesses ?

ASF defines Agribusinesses as “all enterprises that assemble, process and transform raw agricultural commodities into final products for distribution to local and international consumers”

ASF works in the following Agribusiness Sub-Sectors

Fresh Horticulture (All fruits & vegetables – Processed to increase shelf life)

Floriculture (ornamental) products
Processed horticultural products (frozen, canned, dehydrated, freshly cut, in brine etc)

Processed dairy products

Processed Meats & Livestock Products

High Value Agricultural products suited to small farms (high quality wood, vanilla, black pepper, saffron & other spices).

Channels involved in Agricultural Marketing

Most of the Agricultural produce is indirect channels ( different agents and retailers) because of lot of care is required and money is invested by different stake holders, while transport, keeping in view of perishableness. the highest wastage is agricultural produce when compare to other non - agricultural produce. with in agricultural produce again two different kinds, perishable and non-perishables ( grains pulses etc.) the perishable agricultural produce is Fresh fruits and vegetables (ffv). 

Direct marketing channels for Agricultural produce is apanimandi and rythubazaars etc. in this, there is no middlemen are involved, direct grower/producer and consumer or customer interpace. These innovations are taken place for the benefit of both farmer and consumer after amendments of APMC act

What are the challenges thrown up by the growing influence of these agribusiness firms, and how can their monopoly and unfair practices be regulated? 

Global corporations now control one-third of the world's productive assets and three-quarters of all world trade. Agribusiness firms have matured steadily over the last several decades, with the result that small processors and small agricultural producers have become a shrinking part of the landscape. The increased consolidation of agribusiness firms in the food industry has led to a more imperfect market.

Farmers are at a disadvantage because they are numerous, while processors are few. They turn up as price-takers with invariably no bargaining power. Firms wielding immense market power squeeze farmers from both sides. The market power of retailers, processors and grain companies dominates the agri-food chain and takes a larger and increasing portion of the producer's surplus, making windfall gains. They win both ways -- when prices fall as well as when they peak. On the other hand, farmers always bear the brunt, losing out during times of bumper production as well as low yields. 

The following methods could be used to regulate the unfair practices of Agricultural Marketing (agribusiness firms):

Introduce fairness in trade: All transactions should be done in a fair and transparent manner wherein farmers are made aware of the prevailing market price and receive a fair margin of the market share.

Strengthen cooperatives: Most developing countries have a large number of small farms and a collective mechanism of marketing and delivery of input through the cooperative movement. This goes a long way in providing a congenial atmosphere and mitigating the risks of marketing.

Public scrutiny of mergers and acquisitions (M&As): Most cartels exist on account of lack of effective regulation mechanisms and a review of competition policies. Stronger regulation and civil society participation in the review of M&As between companies could reduce imperfections in the market.

Strict auditing of food and trade flows: On account of lopsided trade rules and a restriction of State intervention in the marketplace, the role of transnational and multinational corporations is set to increase in the production and trade of food articles in developing countries. To regulate speculation, cartelisation and malpractice, strict auditing of food balances and trade flows needs to be carried out. Only such strong action will help check speculation as well as exploitation of natural resources.