Assess how well the government’s price support programs—the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) and the Minimum Support Price (MSP) system, in particular—achieve stable agricultural markets and fair prices for farmers.
Model Answer Introduction Agricultural marketing in India encompasses the movement of agricultural products from farms to consumers, playing a crucial role in the agricultural value chain. Effective marketing can streamline supply chains, reduce post-harvest losses, and enhance farmers' incomes whilRead more
Model Answer
Introduction
Agricultural marketing in India encompasses the movement of agricultural products from farms to consumers, playing a crucial role in the agricultural value chain. Effective marketing can streamline supply chains, reduce post-harvest losses, and enhance farmers’ incomes while keeping consumer prices affordable.
Upstream Challenges
APMC Obligations
Farmers often must sell their produce at Agricultural Produce Market Committees (APMC) Mandis, even when better prices are available in private markets. This compulsory selling limits their earning potential.
Inadequate Market Information
Farmers and consumers frequently lack access to accurate market information. Middlemen often possess better knowledge of prices and stocks, exacerbating the situation. Many farmers are unaware of government initiatives like e-NAM (National Agriculture Market) and Negotiable Warehouse Receipts (NWRs), further hindering their market access.
Lack of Credit
A significant bottleneck is the limited access to formal credit. According to NABARD, only 60% of small and marginal farmers receive formal credit, forcing many to resort to distress sales to meet urgent cash needs.
Poor Standardization and Grading
The absence of proper standardization and grading leads to quality issues, making it difficult for consumers to purchase reliable products, which adversely affects farmers’ earnings due to price variability.
Downstream Challenges
Demand-Supply Mismatch
While the demand for agricultural products has increased with rising purchasing power, supply remains constrained due to a lack of diversification and high post-harvest losses, mainly from inadequate storage.
Storage and Transportation Issues
Many farmers lack access to adequate storage and transportation facilities, leading to high transportation costs and poor market connectivity. Existing storage facilities are often insufficient and underutilized, compelling farmers to sell perishables at distress prices.
Regulatory Constraints
Regulatory frameworks like the Essential Commodities Act, 1955, hinder private investment in warehouse construction, as it can be misinterpreted as hoarding.
Export Competition
Indian agricultural products face stiff competition from imports, such as dairy from New Zealand and Basmati rice from Pakistan. Non-tariff barriers and increasing protectionism have further impacted exports.
Conclusion
Despite government efforts to enhance agricultural marketing, significant challenges persist. Raising awareness among farmers and stakeholders, improving systems like e-NAM, and promoting direct selling initiatives are essential for advancing agricultural marketing in India.
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