Agricultural marketing refers to all those processes, which relate to taking the agricultural product from the farmers to the consumers, which includes gathering the agricultural produce, their standardization and grading, value addition (processing and preservation), their storage, transportation and selling in the market. An efficient system of agricultural marketing provides an incentive to take up agriculture as a gainful occupation and reduce unemployment. It also leads to the integration of the different sectors of the economy such as agriculture, industry, etc. A well-organised marketing system makes it possible to make available foodstuffs at different centres and secure non-farm products. Not only it facilitates modernization of agriculture but also helps to maintain stability in the prices by maintaining balance between demands and supply.

However, the agricultural marketing system in India faces a lot of issues such as

• Weakness of farming system: Production in small and scattered units and considerable dependence on natural forces aggravates the problem of agricultural marketing. Small farmers generate small surpluses, which make grading difficult. The surplus available for sale cannot be determined in advance. The cost assembling small quantities from different places becomes very high.
• Inadequate storage facilities: Every year 15 to 30 percent of the agricultural produce is damaged either by rats or rains due to the absence of proper storage facilities/ warehouses. This forces farmers to sell their surplus produce just after harvests at a very low and un- remunerative price.
• Inadequate means of transportation: Absence of proper road transportation facilities in the rural areas forces farmers to sell their produce at the village markets itself, instead of nearby mandis and other markets.
• Lack of grading and standardisation facilities: Lack of proper grading of the product results in failing to fetch a good price for the quality product. Further, different measures and weights are used in different markets that often provide opportunities for cheating and manipulation of farmers.
• Lack of Organisation: There are a large number of small farmers scattered throughout the length and breadth of the country. These farmers are unorganized and ill-informed and the middlemen therefore assume greater importance in agricultural markets.
• Inadequate market information: The market systems in India are not perfectly competitive in a view that the farmers do not usually get adequate information about the price that prevail in the markets.
• Finance issues: Financial assistance available to the farmer for meeting cultivation and marketing costs is grossly inadequate. This forces the farmer to borrow from local moneylenders or village traders. This forces the farmer to sell the produce at an unfavourable place, at an unfavourable time and at an unfavourable price.

To overcome these issues, the government has set up a digital national market (e-NAM), incentivized setting up of FPOs, setting up an agri-marketing infrastructure fund to upgrade agricultural marketing infrastructure in the Grameen Agricultural Markets (GrAMs) and APMCS. Also, the government has introduced institutional reforms that include amending the Essential Commodities Act to remove the existing restrictions on stocking food produce, a new law The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 to end the monopoly of the APMCs (APMC) and allows anyone to purchase and sell agricultural produce and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 to legalise contract farming, so that big businesses and companies can cultivate vast swaths of land on contract.