Roadmap for Answer Writing 1. Introduction Define agricultural marketing and its significance in India. Briefly mention the importance of transport in the marketing of agricultural produce. 2. Main Constraints in Transport and Marketing Increased Transportation Costs: Explain how poor connectivity and lack of scale lead to ...
Model Answer Introduction Buffer stocks play a crucial role in stabilizing agricultural prices in India and ensuring food security, especially during periods of crisis such as crop failures or inflationary surges. As of April 2023, India’s central pool had 113 million tonnes (LMT) of wheat and 236 LRead more
Model Answer
Introduction
Buffer stocks play a crucial role in stabilizing agricultural prices in India and ensuring food security, especially during periods of crisis such as crop failures or inflationary surges. As of April 2023, India’s central pool had 113 million tonnes (LMT) of wheat and 236 LMT of rice, significantly exceeding the buffer norms of 75 LMT and 136 LMT, respectively . The management of these stocks is vital for protecting both consumers and farmers from market volatility.
Importance of Buffer Stocks for Stabilizing Agricultural Prices
- Price Stability: Buffer stocks act as a safeguard against price volatility by releasing stocks during price surges, ensuring food prices remain affordable. For instance, the Food Corporation of India (FCI) releases grains during high price periods to stabilize markets, particularly during poor monsoon seasons .
- Food Security: They ensure food security during natural disasters or crises by supplying essential food grains to the Public Distribution System (PDS). For example, during the COVID-19 pandemic, buffer stocks were utilized to provide free grains under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) .
- Support for Farmers: By procuring grains at Minimum Support Prices (MSP), buffer stocks provide assured income to farmers, shielding them from price crashes during surplus production .
- Market Intervention: Buffer stocks enable government intervention to correct market imbalances, preventing extreme price fluctuations that can harm consumers or farmers .
- Economic Stability: They contribute to macroeconomic stability by controlling food price inflation, which has direct impacts on overall inflationary pressures in the economy .
Challenges Associated with the Storage of Buffer Stocks
- Storage Infrastructure: India’s storage infrastructure is inadequate, leading to poor handling and spoilage of grains. The reliance on conventional godowns results in significant post-harvest losses .
- High Maintenance Cost: Maintaining large buffer stocks incurs high operational costs, including storage and transportation, straining public finances .
- Pilferage and Theft: The system faces challenges of pilferage and theft due to poor security measures, resulting in substantial losses .
- Quality Degradation: Grains stored for extended periods often suffer from quality degradation, particularly in traditional storage facilities lacking proper ventilation.
- Logistical Challenges: Transportation and movement of buffer stocks across remote regions present logistical hurdles, leading to delays and mismanagement.
Conclusion
In conclusion, while buffer stocks are essential for stabilizing agricultural prices and ensuring food security in India, addressing the challenges associated with their storage is crucial for enhancing their effectiveness.
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Model Answer Introduction Agricultural marketing encompasses the activities, agencies, and policies involved in the procurement of farm inputs and the movement of agricultural produce from farms to consumers, manufacturers, and exporters. In India, several constraints hinder the effective transportRead more
Model Answer
Introduction
Agricultural marketing encompasses the activities, agencies, and policies involved in the procurement of farm inputs and the movement of agricultural produce from farms to consumers, manufacturers, and exporters. In India, several constraints hinder the effective transport and marketing of agricultural produce.
Main Constraints
The lack of scale and poor connectivity often results in higher transportation costs, making it difficult for farmers to access markets efficiently.
India’s transport infrastructure, particularly in rural areas, is inadequate and poorly maintained. This deficiency complicates the timely and cost-effective transportation of agricultural products to markets.
Many farmers lack access to adequate storage facilities, leading to spoilage and waste of agricultural products. This situation often forces farmers to engage in distress selling, where they sell their produce at significantly lower prices due to the urgency to offload perishable goods.
Agricultural produce is often not graded properly, resulting in a mix of various qualities being sold together. This lack of standardization diminishes the incentive for farmers to invest in better seeds and produce higher-quality crops.
Small farmers frequently have restricted access to formal markets and are compelled to sell their products to middlemen at low prices. This practice reduces their profitability and discourages further investment in agriculture.
Farmers often struggle to obtain accurate information about market prices across different regions. The prevalence of unregulated markets limits their ability to seek redress for grievances, further complicating their marketing efforts.
Conclusion
Addressing these constraints is crucial for achieving the goal of doubling farmers’ incomes in India. While initiatives like the ‘Kisan Rail’ service and the ‘Krishi Udaan’ scheme have been implemented to improve the situation, significant work remains to ensure that farmers can fully benefit from their labor.
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