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1. Agricultural Marketing: Concept and Definition:
The term agricultural marketing is composed of two words-agriculture and
marketing. Agriculture, in the broadest sense, means activities aimed at the use of
natural resources for human welfare, i.e., it includes all the primary activities of
production. But, generally, it is used to mean growing and/or raising crops and
livestock. Marketing connotes a series of activities involved in moving the goods
from the point of production to the point of consumption. It includes all the
activities involved in the creation of time, place, form and possession utility.
According to Thomsen, the study of agricultural marketing, comprises all the
operations, and the agencies conducting them, involved in the movement of farm-
produced foods, raw materials and their derivatives.
Scope and Subject Matter of Agricultural Marketing:
Agricultural marketing in a broader sense is concerned with:
• The marketing of farm products produced by farmers
• The marketing of farm inputs required by farmers in the production of farm
products
CHARACTERISTICS OF AGRICULTURAL PRODUCE
Agricultural products have certain characteristics of their own which necessitate a
completely different system of marketing for them. Some of the characteristic
features of Indian agricultural marketing system are:
(1) Uncertainty
There is a high degree of uncertainty in Indian agricultural system because it is
largely dependent on the rainfalls. The tropical climate has a great influence on
agriculture and, it is very difficult to forecast the volume and quality of output. A
cultivator can only plan the production of a certain crop but the final output
considerably depends upon weather, disease, pests, flood, storm etc. over which he
does not possess any control. On the other hand production in the factories can be
controlled, regulated and adjusted according to the existing or anticipated demand.

2. (2) Heterogeneity of produce
The quality of agricultural products cannot be controlled as it can be done for the
other products. This lack of standardization of quality makes the task of gradation
and assortment very difficult for the marketers.
(3) Perishability
Agricultural commodities are more perishable than industrial goods. Although,
some crop such as rice, wheat, gram etc. retain their quality for a long time but
most of the farm products are perishable and cannot remain long on the way to the
final consumer without suffering loss and deterioration in quality. This makes the
task of a marketer very difficult because he has to store the product in the best
possible conditions and make it available to the consumer at the earliest
convenience.
(4) Seasonality
Seasonal character of agriculture is also a problem in itself and production cannot
be adjusted to the changes in level of demand. We can neither shut-off agricultural
production nor mould it at once. Hence maintaining smooth supply of agricultural
products throughout the year; calls for good and large storage space.
(5) Processing
Some of the agricultural products like sugarcane, cotton, jute, tobacco etc. have to
be processed before they are consumed. This requires adequate processing facility.
(6) Bulkiness
Agricultural products tend to be bulky and their weight and volume are high when
compared with their value. This makes their storage and transportation difficult
and costly.
CLASSIFICATION OF AGRICULTURAL PRODUCTS
Agricultural products can be classified into various categories on the following
basis:

3. (1) On the basis of season
Agricultural products can be classified into two categories on the basis or seasons;
Rabi, Kharif and Zaid.
(i) Rabi: Sowing is done from October to December and harvesting season is from
March to May. The various Rabi crops include wheat, gram, peas, potatoes and
barley.
(ii) Kharif: Sowing for the crops is done from April to July and harvesting is done
from September to December. The various crops of Kharif season include rice,
sugarcane, jowar, jute, bajra, maize, cotton and groundnut.
(iii)Zaid:april-may;july-august
Ex: water melon,cucumber,muskmelon,sunflower,sugarcande,bitter gourd
(2) On the basis of encashability
Agricultural products can be divided into two categories-food crops and cash
crops. The food crops refer to rice, wheat, barley, maize etc. while cash crops or
commercial crops include tea, coffee, rubber, oil seeds, tobacco etc.
(3) On the basis of perishability
Agricultural products can be classified into two categoriesperishable and non-
perishable products. Generally all the vegetables fall in the category of perishable
agricultural products as they survive on for a few days while cereals and pulses can
survive for years and hence can be classified in the category of non-perishable
agricultural products.
(4) On the basis of processing
Some products require processing before they are finally consumed while others
need no processing at all. Sugarcane, cotton, jute, wheat, rice etc. require
processing but these can not be concerned vegetables, milk fishes etc. do not
require any processing.
After understanding agricultural products and their unique features, let us now
move to agricultural marketing.

4. AGRICULTURAL MARKETING PROCESS
Agricultural marketing process involves wide variety of functions such as: (i)
Assembling (ii) Grading and standardization (iii) Processing and Storage (iv)
Transportation (v) Wholesaling and retailing
The process of agricultural marketing begins with the farmer and end up with the
consumer. In between these two extreme ends one can find many intermediaries
like transporters, warehouse owners, commission agents, wholesalers, retailers etc.
performing their duties to enable the agricultural marketing process to reach its
completion.
(1) Assembling
At the start of the process, the assembling of goods is important. Agriculture
produce is collected in small lots and then assembled into large ones. This function
becomes essential because of small size of farms and small quantity of production.
(2) Grading and standardization
[When goods are assembled, grading and standardisation have to be undertaken.
Because of the difference in tastes and needs of the buyers, whatever is assembled
is to be classified in different lots according to their inherent qualities, such as
colour, size, taste and utility.
The classification is effected on the basis of certain specific characteristics which
are codified into grades and then become standard by which the assembled lots are
judged.
(3) Processing & Storage
Some of the agricultural commodities may, then, undergo the processing. For
example, wheat may be turned into flour, cotton into cloth and oilseeds into oil.
During the processing the goods are transformed so as to increase their shelf life
and to make them more acceptable to the consumer than in their original form.
The manufactured goods may not, however, be immediately disposed of and may
require space for storage. The needs of storage brings into the existence of
warehouses and godowns.

5. (4) Transportation
For the final consumption, the goods have to be moved from the point of storage to
the point where they are in actual demand. This may require their transportation
over long distances and across many lands. It may be necessary to store them again
for a while on arrival before they could be sold to the wholesalers and through
them to the retailers.
(5) Wholesaling and retailing
The task of making the goods available to the consumer for the final consumption
is entrusted upon the wholesalers and the retailers. They are the final link in the
process of agricultural marketing and they playa vital role in the entire process.
FUNCTIONS OF AGRICULTURAL MARKETING
Agricultural marketing functions are many and varied. The part played by each
function varies widely as regards to the specific goods and services. It may further
be noted that these functions ere indispensable regardless of the institution or
agency which performs them or the commodity in connection with which they are
performed. These functions are closely related to each other and cannot be isolated
from one another. Accordingly, the functions of agricultural marketing can be
classified into three broad categories: i) Exchange functions; ii) Physical
functions; and iii) Facilitative functions.
(1) Exchange Functions
Exchange functions are considered to be the most important of all the functions of
agricultural marketing. These mainly include functions related to buying and
selling. Buying and selling are complementary to each other and one cannot take
place without the other. Buying function is largely one of seeking the sources of
supply, assembling of products and activities which are associated with the
purchase of goods, raw materials-etc. Selling is the process which stimulates
demand or desire, finds the buyer, advises the buyer, and negotiates with him to
bring about a transfer of title.

6. (2) Physical Functions
These functions relate to the physical handling of agriculture produce either in
moving it from one place to another or in storing it over a period of time.
Agriculture produce has to be moved from threshing floors to the consuming areas,
because it is not consumed at the place of its production. Then, on account of
seasonal operations, agricultural production cannot be undertaken at will. This can
be done in a particular season only under a particular set of conditions. On the
contrary, the demand for agricultural produce exists all the year round. Hence,
there must be some system by which the year’s, crop may be used throughout the
year. This requires extensive transportation and storage facility. Storing operations
may, however, take place anywhere along the channel of distribution from
production to consumption and it may be performed by the producer, processor,
distributor or even the consumer.
(3) Facilitative functions
As the very name of these functions implies, they involve neither transfer of title to
goods nor handling of the product but help in the smooth discharge of the above
functions. The function of classification and grading helps in classification and
sorting out of commodities according to size, quality colour, weight, etc. This
makes the determination of prices easy and thereby assumes a fair return to the
producer, on the one hand, and good quality produce to the consumer, on the other,
without any trouble to either. Then, there is always a time lag between the
assembling of commodities and their sale in the consuming markets. During this
period, somebody’s money remains tied up in the stocks. This creates the problem
of finance.
Further, the growing vastness between the place of production and place of
consumption has made the function of market information valuable. This function
involves activities of collecting, interpreting and disseminating market news to
various agencies including producers residing in the interiors of the country. This
helps the government in formulating policies and plans of production and
marketing of good. Lastly, no business can be done without undertaking the
inherent risk which may be caused either due to a decline in price, bad debts or

7. deterioration of the produce itself by fire, flood etc. These risks have to be borne
by someone in the channel. Physical risks may be covered under insurance while
risks stemming from price fluctuations are handled through the hedging operation.
ORGANIZATION OF AGRICULTURAL MARKETS
In order to know more about agricultural marketing, let us discuss how agricultural
marketing activities are organized. This calls for a clear understanding of types,
structure and functionaries of agricultural markets.
Classification of Markets
The various basis on which agricultural markets may be classified
are:
1. Frequency
On the basis of the frequency at which the markets are held, they can be classified
as daily, weekly, fortnightly, etc.
2. Types of products traded
Different markets deal with different products. While some might deal with all
products, a few markets might specialize in some products. On the basis of the type
of product traded, they can be named as Grain markets, Cotton markets, Fruit &
Vegetable markets, etc. It is relevant to quote ‘gur mandi, noon mandi etc.’ in
Ludhiana and Amritsar. They specialize in one single commodity only, although
now-a-days they are dealing with other products also.
3. Types of transaction
On the basis of their transactions, the agricultural markets can be classified as spot
and forward markets. The spot markets undertake those transactions only in which
the exchange is affected at the current prices; while in the forward markets, the
commodities are traded for future delivery. The future markets resemble with the
future trading system of stock market.

8. 4. Area Served
Depending upon the type of area served, the agricultural markets can be classified
as Local, Central, etc. The local markets cater to the needs of only the local
population, while the central markets are located in the city center and cater to the
needs of the entire city or the region. The latter are much bigger in size and area of
operation.
Other bases of classification
It may, however, be noted that there is no rigidity in these classifications and one
classification overlaps the other. However, for our discussion, let us classify
agricultural markets into primary, secondary and terminal markets.
(1) Primary Markets
These are periodical markets locally known as ‘Haats’. They are generally held
once or twice a week. The days on which these markets meet are fixed so that
traders can visit the area. They are generally held in the open and along roadsides
in important or centrally situated localities.
These markets are situated in the producing areas and commodities produced in the
surrounding tracts are mainly sold in them. A part of the produce is purchased by
the small retailers who, further, sell it to the non-farm rural population. During the
lean season, a part of the produce might be sold back to the cultivators themselves.
The rest of the produce is purchased by intermediaries and finds its way to the
wholesale market. Besides agricultural produce, a number of other articles required
by rural folk such as salt, tobacco, oils, gur, fruits and vegetables, spices, cloth,
hosiery products and ornaments of cheap metals are also sold in these markets.
These markets usually serve an area of 10 kms radius but it may be more, ranging
from 10 to 50 kms, depending upon the availability of communication and
transportation facilities, nature of commodities handled and the location of the
market with respect to other markets.
The basic function of these markets is to serve as assembling centres for the local
produce but they also function simultaneously as distributive centres for local

9. consumption. Although, these markets are unorganized, they do, serve the useful
purpose of providing a common meeting place for buyers and sellers.
In spite of being situated in rural areas, the prices ruling in these markets are
influenced by those prevailing in the wholesale markets.
(2) Secondary markets
These markets, also known as ‘Mandis’, are regular wholesale markets and provide
a permanent place for daily transactions. The work starts in them early morning
and continues till all transactions are over.
These markets are generally situated in the towns, districts, and important trade
centres. Usually they are situated near railway stations. Shops or ‘Arhats’ are built
in these markets. Postal, Banking and telephone facilities are available at such
places.
(3) Terminal Markets
A terminal market is the place where the produce is either finally disposed of to the
consumer or to the processor or assembled for exports. Such markets are usually
situated in metropolitan cities like Delhi, Bombay, Madras and Calcutta etc. In
these markets, merchants ere well organised and use modern marketing methods.
MARKET FUNCTIONARIES
Beginning from the agriculturists, down to the final consumer, one can find a long
chain of different functionaries. Let us discuss these functionaries under two heads
viz. i) Functionaries at village level ii) Functionaries at Mandi level
(1) Functionaries at village level
Some important functionaries operating at village level are: a) Big Cultivators; b)
Village Merchants; and c) Itinerant Traders.
(a) Big Cultivators
Big cultivators with large holdings and substantial marketable surplus constitute
the first type of market functionaries operating at village level. They also own
tractor, carts and other means of transportation. Massive volume of marketable

10. surplus at their disposal is the result of both their own large-scale cultivation as
also of the seasonal purchases conducted at the village level. In fact, they create
buffer stock by purchasing grain in the season and selling it afterwards in nearby
‘Mandis’. Small cultivators sell their surplus grain either to them or through them.
(b) Village Merchants
They are known by different names in different parts of India such as ‘Beopari’,
‘Baniya’, ‘Sahukar’, ‘Paikars’, ‘Farias’, etc. They constitute one of the most
important assembling agencies at village level. Although, they operate in some
cases with their own capital but in rest or the cases they are financed by ‘Arhatias’
or ‘Arhatdars’ or large wholesale traders in assembling and distributing centres.
Village Merchants’ job is to collect the marketable surplus from villages and
village markets and carry it to the wholesale mandis or nearest towns. It is in this
manner and through these agencies that the marketable surplus is brought to the
secondary and terminal market.
(c) Itinerant(travelling from place to place) Traders
They are petty merchants who move between villages and purchase the produce for
cultivator. They either own some animal such as pony or possess carts to transport
the produce to the nearby market. They offer a lower price than that ruling in the
nearby market as they take into consideration all factors such as transportation,
market charges and their profit margin. They generally pay the cultivators in 3-4
days after the produce has been disposed of in the market and payment has been
received from ‘Arhatia’.
(2) Functionaries at mandi level
Important functionaries at Mandi level are: a) Arthatias; b) Brokers; and c) Co-
operative Marketing Societies.
a) Arhatias
The most Important functionary to be found in bid mandis are ‘Arhatias’ who
include both buyers on commission and outright buyers. Broadly speaking, the
Arhatias can be grouped under two heads, viz., Kuchha Arhatias and Pucca
Arhatias.

11. i) Kuchha Arhatias: They are small commission agents. Their sphere of activity is
purely local and they act mainly as middlemen or an intermediary between the
primary producer or seller and the buyer in the large wholesale market. Such a
person seldom buys on his own account. His main business is to establish contact
between producer-seller and the buyer in the assembling market. He also advances
money to the cultivators and village banias on the condition that the produce will
be disposed of through him alone and hence, charges a very nominal rate of
interest on the money advanced.
ii) Pucca Arhatias: They are generally big firms of some substance and they
mostly deal in grains, oil-seeds, and other agricultural products either as agents or
act on their own account. They also help in assembling of the farm products by
financing the operations of the ‘KuchhaArhatias’ and small traders.
b) Dalal (Brokers)
Their main function is to bring buyers and sellers together. They differ from the
Arhatias in the sense that they have no fixed business of their own. They charge
commission from the buyers and the sellers.
c) Co-operative Marketing Societies
These have been established under the integrated Rural Credit and Marketing
Scheme initiated under the Second Five-year Plan. The main function of these
societies is to sell the produce of their members. They also undertake outright
purchases, provide storage facilities for storage and grading, and thus save
cultivators from exploitation by traders, and help the farmers in securing a fair
price for their produce.
METHODS OF SALE
The methods of sale or fixation of rate prevalent in agricultural markets may be as
follows:
(1) Under Cover (Haththa) Method
In this method, the buyer or his broker and commission agents join hands under the
cover of cloth usually a towel or a dhoti or front portion of kurta or shirt. The price
is settled by pressing the fingers. The negotiations go on in this secret manner till

12. they are called off due to failure in arriving at as on agreed price, or a price is
settled. The commission agent then informs the seller and asks for his consent to
sell. He is, however, not told anything about the price offered by other buyers. The
under cover method of sale is advocated to be advantageous by the middlemen
group. This method has ample scope for malpractices against the interests of sellers
because of secret negotiations. Now-a-days, traders are shifting from this method
to private negotiations.
(2) Auction Method
Under this method, the prospective buyers gather around separate heaps of grains
and announce their bids loudly. When the bids have reached the highest, the
auctioneer who is generally a commission agent, in consultation with the seller,
sells the produce to the highest bidder. The auction system is definitely better than
the undercover system as this increases competition among the buyers and the rates
are very likely to rise if there is fairly strong demand for the product. Moreover the
chances of malpractice are also minimal.
(3) Private Negotiations
This is the most common method of sale. Under this method, individual buyers or
their brokers visit the shops of commission agents, inspect the quality of grains and
offer rates as they think appropriate. Both the parties then negotiate on the rates
and if both agree on rates, the deal is struck.
CONTRACT FARMING
In the recent times, contract farming is becoming very popular. Since the land
holdings are getting smaller, the farmers cannot make heavy investment in
agriculture, nor are they ready to take the risk of diversifying to other crops. In this
situation, business corporates are coming into picture. They enter into a contract
with the farmers and take their piece of land on a sort of mortgage. They provide
all the inputs to the farmer, including the seeds, fertilizers etc. The farmer has to
provide the services of sowing the crop, watering and taking other care. After the
crop is ready, the entire crop is lifted by the business corporate, at a price which is
decided in advance.

13. This method has several advantages. The farmer gets a remunerative price and the
manufacturer gets a good quality produce at a fixed price throughout the year. The
contract farming shall emerge as an important method of agricultural marketing
and shall have a longterm impact on the existing system.
Many big companies are into this system of farming. Pepsi is practicing it in
Punjab, wherein it is getting the tomatoes sown with the farmers. The entire
produce is lifted and processed into sauce. Airtel (telecom giant) is also starting a
similar venture in Punjab and many more companies are planning to start the same.
KEYWORDS
Rabi: This is a group of crops which are sown from October to December and
harvesting is performed from mid March to May. The crops include mainly wheat,
gram, peas, potatoes, and barley.
Kharif: This is another group of crops which are sown from April to July and
harvesting is done from September to December. It includes rice, sugarcane,
Jowar, Jute, Bazra, Maize, Cotton, and Groundnut etc.
Perishable products: Agricultural products which survive only for few days like
vegetables, fishes, and milk etc.
Haats: The periodical local markets are known as ‘Haats’. These markets operate
once or twice a week. These markets are situated near production area of
commodities.
Terminal market: A market where a product is finally disposed of either for
consumption or assembled for exports. In this kind of market, businessman are
highly organized.
Arhatias: An important functionary in agri-business at mandi level who can be
found at the time of bidding. He can participate in the agribusiness either in form
of a commission agent or he can also be an outright buyer.

14. Government Measures to Improve the System of Agricultural Marketing
After Independence, the Government of India adopted a number of measures to
improve the system of agricultural marketing, the important ones being
establishment of regulated markets, construction of warehouses, provision for
grading and standardisation of produce, standardisation of weights and measures,
daily broadcasting of market prices of agricultural crops on All India Radio,
improvement of transport facilities etc.
1. Organisation of Regulated Markets: Regulated markets have been organised
with a view to protect the farmers from the malpractices of sellers and brokers. The
management of such markets is done by a Market Committee which has nominees
of the State Government, local bodies,Aarhatiyas, brokers and farmers. Thus, all
interests are represented on the committee. These committees are appointed by the
government for a specific period of time.
Most of the State and Union Territory governments have enacted legislations
(Agriculture Produce Marketing Committee Act) to provide for regulation of
agricultural produce markets. There were 7,157 regulated markets in the country as
on March 31, 2010.
2. Grading and Standardisation: Improvements in agricultural marketing system
cannot be expected unless specific attempts at grading and standardisation of the
agricultural produce are made. The government recognised this quite early and the
Agricultural Produce (Grading and Marketing) Act was passed in 1937. Initially,
grading was introduced for hemp and tobacco.
The government set up a Central Quality Control Laboratory at Nagpur and a
number of regional subsidiary quality control laboratories. Samples of important
products are obtained from the market and their physical and chemical properties
are analysed in these laboratories. On this basis, grades are drawn up and
authorised packers are issued AGMARK seals (AGMARK is simply an
abbreviation for Agricultural Marketing).
3. Use of Standard Weights.
4. Godown and Storage Facilities.
5. Dissemination of Market Information.
6. Government Purchases and Fixes Support Prices.

15. Agricultural Marketing – Problems of Agricultural Marketing in
India
Agricultural Marketing
Agricultural marketing refers to all those processes which relate to taking the
agricultural product from the farmers to the consumers. Agricultural marketing
includes gathering the agricultural produce, their standardization and grading,
their storage, sending them to the market through various middlemen, selling in
the market and arranging the required finance etc.
DEFECTS/PROBLEMS OF INDIAN AGRICULTURAL
MARKETING
Even though India is an agricultural country, still its agricultural marketing has
been defective. The Indian farmers are unable to get reasonable price for the
products even after their hard work and are fully exploited by the middlemen.
1. Too Many Intermediates
Fruit & Vegetables Market
The one main defect of the Indian Agricultural marketing is the presence of
too many middlemen and exploitation of farmers by them. On one hand these
middlemen exploit the farmers by purchasing the produce at lower prices and
on the other hand they exploit the customers by demanding higher prices
from them. The only aim of a number of commission agents, brokers etc. is to

16. derive a higher income from the middle processes. These middlemen take
undue advantage of the poor former on the basis of their financial resources.
2. Defective Weights and Scales
One of the biggest defects of agricultural marketing arises due to weights and
scales. Usually, in rural areas bricks, etc. are used as weights and in urban
markets also defective weights are found. Thus, the grain of the farmer is
weighed by a heavier weight for their own gain. Most of the traders keep
separate weights for purchase and sale of grain.
3. Illiteracy and Lack of Unity among Farmers
The Indian farmers are illiterate who are easier be fooled by the money
lenders, traders, middlemen, due to their simple nature. Similarly, lack of
unity among farmers also causes their exploitation because Indian farmers are
spread in distant areas in rural places. They are unable to meet with each
other and resolve their problems, as a result they do not get a fair price for
their produce.
4. Lack of Financial Resources
In the rural areas there is lack of financial resources, due to which even their
emergency requirements are not fulfilled. In such conditions the farmers sell
their produce before its ripening. Similarly, some financial facilities, like,
installments on loans for pumping-set, tractor, thrasher etc. have to be paid on
monthly or quarterly basis due to which they have to sell the product as soon
as possible. Thus, as the lack of financial assistance, is a problem for the
farmers; so does the receipt of loan also puts them in problem.
5. Lack of Organised Marketing System
The agricultural marketing is also very defective in India because here
organised marketing is not in vogue, like, cooperative societies, government
marketing activities, regular markets etc. As a result, the farmer remains
entangled In exploitation. Thus, lack of organised marketing system is
harmful for the farmers. That is -why; the farmer sells his product personally
to different people. The middle take full advantage of the unorganized
farmers.
6. Lack of Transport Facilities
The roads from Villages to cities are usually unmade which are not capable of
transport during the rainy season. The bullock carts can take the product only

17. up to a limited area. During lack of transport facilities the farmer is unable to
take his produce to the appropriate market and is unable to receive a fair price
for his product.
7. Lack of Store Houses
An important deficiency of Indian agricultural marketing is lack of store
houses. Due to lack of this facility the farmer is unable to keep his product
safely until it can fetch a fair price, and he is forced to sell his product at a
low price. The insufficient and unscientific facilities of shortage which are
available, waste large quantities of grains. Approximately 20% to 30% grains
are lost due to rats, insects etc. and the farmers have to bear crores of loss due
to lack of these facilities.
8. Lack of Standardization
The lack of standardization and grading is clearly visible in the Indian
Agricultural marketing, due to which fixing a deal in relation to these
products becomes difficult. Due to lack of proper standardization and grading
the customers have problem in purchasing the product.
9. Lack of Awareness of the Market
The Indian farmer has no knowledge about marketing. He believes on
information acquired from the businessmen and money lenders of the village.
Mostly, the Indian farmers are illiterate so they cannot read the newspaper.
Thus, they do not have sufficient knowledge about the market. Now,
government transmits the rates of the market on the ratio, which has
definitely benefited them.
10.Corrupt Policies of the ‘Mandis’
If we observe the condition of the mandis, this fact is no more hidden that the
middlemen and the traders jointly make fool the simple farmers. The Indian
Organizing Society has clarified the following facts relating to the corrupt
policies of the mandis
▪ The inappropriate marketing system is so deep laden in India that about
5% of the amount is deducted from the farmer’s produce in the name of
donations, ‘dharmada’, ‘chanda’ etc.
▪ The farmers are paid low price, as they lack appropriate knowledge
about market prices, their fluctuations, government policies etc. Thus,
by keeping the rates secret, the farmers are cheated.

18. ▪ Before the sale, large amounts of grains are taken from the farmers as
samples. By declaring the product to be of sub standard quality
minimum prices are paid for it.
VARIOUS GOVERNMENT SCHEMES TO SUPPORT AGRICULTURAL
MARKETING IN INDIA
1. Soil Health Card Scheme
Launched in 2015, the scheme has been introduced to assist State Governments to
issue Soil Health Cards to all farmers in the country. The Soil Health Cards
provide information to farmers on nutrient status of their soil along with
recommendation on appropriate dosage of nutrients to be applied for improving
soil health and its fertility.
2. National Mission for Sustainable Agriculture (NMSA)
NMSA is one of the eight Missions under National Action Plan on Climate Change
(NAPCC). It aims at promoting Sustainable Agriculture through climate change
adaptation measures, enhancing agriculture productivity especially in rainfed areas
focusing on integrated farming, soil health management, and synergizing resource
conservation.
NMSA as a programmatic intervention caters to Mission Deliverables that focuses
mainly on conservation agriculture to make farm sector more productive,
sustainable, remunerative and climate resilient by promoting location specific
integrated/composite farming systems.
Schemes under NMSA
• Rainfed Area Development (RAD): RAD is being implemented by RFS
Division.
• Soil Health Management (SHM): SHM is being implemented by INM
Division
• Sub Mission on Agro Forestry (SMAF): SMAF is being implemented by
NRM Division
• Paramparagat Krishi Vikas Yojana (PKVY): PKVY is being implemented
by INM Division
• Soil and Land Use Survey of India (SLUSI): Being implemented by RFS
Division
• National Rainfed Area Authority (NRAA): Being implemented by RFS
Division

19. • Mission Organic Value Chain Development in North Eastern
Region (MOVCDNER): Being implemented by INM Division
• National Centre of Organic Farming (NCOF): Being implemented by INM
Division
• Central Fertilizer Quality Control and Training
Institute (CFQC&TI): implemented by INM Division
3. Neem Coated Urea (NCU)
This scheme is initiated to regulate use of urea, enhance availability of nitrogen to
the crop and reduce cost of fertilizer application. NCU slows down the release of
fertilizer and makes it available to the crop in an effective manner. The entire
quantity of domestically manufactured and imported urea is now neem coated. It
reduces the cost of cultivation and improves soil health management.
4. Pradhan Mantri Krishi Sinchai Yojana (PMKSY)
It was launched on 1st July, 2015 with the motto of ‘Har Khet Ko Paani’ for
providing end-to end solutions in irrigation supply chain, viz. water sources,
distribution network and farm level applications.
PMKSY not only focuses on creating sources for assured irrigation, but also
creating protective irrigation by harnessing rain water at micro level through
‘Jal Sanchay’ and ‘Jal Sinchan’.
Micro irrigation is to be popularised to ensure ‘Per drop-More crop’. PMKSY
adopts State level planning and projectised execution that allows States to draw up
their own irrigation development based on District Irrigation Plans and State
Irrigation Plans.
Components:
• Accelerated Irrigation Benefit Programme(AIBP): implemented by Ministry
of Water Resources, RD & GR.
• PMKSY (Har Khet ko Pani): implemented by Ministry of Water Resources,
RD & GR
• PMKSY (Watershed): implemented by Department of Land Resources.
• PMKSY(Per Drop More Crop - PDMC)
5. Paramparagat Krishi Vikas Yojana (PKVY)
It is implemented with a view to promote organic farming in the country. To
improve soil health and organic matter content and increase net income of the
farmer so as to realise premium prices. Under this scheme, an area of 5 lakh acre

20. is targeted to be covered though 10,000 clusters of 50 acre each, from the year
2015-16 to 2017-18.
6. National Agriculture Market (e-NAM)
It provides e-marketing platform at national level and support creation of
infrastructure to enable e-marketing.
This innovative market process is revolutionizing agriculture markets by ensuring
better price discovery. It brings in transparency and competition to enable farmers
to get improved remuneration for their produce moving towards ‘One Nation One
Market’.
7. Micro Irrigation Fund (MIF)
A dedicated MIF created with NABARD has been approved with an initial corpus
of Rs. 5000 crore (Rs. 2000 crore for 2018-19 & Rs. 3000 crore for 2019-20) for
encouraging public and private investments in Micro irrigation. The main objective
of the fund is to facilitate the States in mobilizing the resources for expanding
coverage of Micro Irrigation.
MIF would not only facilitate States in incentivizing and mobilizing resources for
achieving the target envisaged under PMKSY-PDMC but also in bringing
additional coverage through special and innovative initiatives by State
Governments.
An Advisory Committee has been set up to provide policy direction and ensure
effective planning, coordination and monitoring of the Micro Irrigation Fund.
8. Agriculture Contingency Plan
Central Research Institute for Dryland Agriculture (CRIDA), ICAR has prepared
district level Agriculture Contingency Plans in collaboration with state agricultural
universities using a standard template to tackle aberrant monsoon situations
leading to drought and floods, extreme events (heat waves, cold waves, frost,
hailstorms, cyclone) adversely affecting crops, livestock and fisheries (including
horticulture).
Total 614 district agriculture contingency plans are placed in the ‘farmer portal’ of
the Ministry of Agriculture and Farmers Welfare, Government of India
(http://www.farmer.gov.in) and also in the ICAR / CRIDA website
(http://www.crida.in) for downloading the full plan by stakeholders for operational
use.

21. 9. Rainfed Area Development Programme (RADP)
Rainfed Area Development Programme (RADP) was implemented as a sub-
scheme under Rashtriya Krishi Vikas Yojana (RKVY).
Aim
• To improve quality of life of farmers’ especially, small and marginal farmers
by offering a complete package of activities to maximize farm returns.
• Increasing agricultural productivity of rainfed areas in a sustainable manner
by adopting appropriate farming system based approaches.
• To minimise the adverse impact of possible crop failure due to drought,
flood or un-even rainfall distribution through diversified and composite
farming system.
• Restoration of confidence in rainfed agriculture by creating sustained
employment opportunities through improved on-farm technologies and
cultivation practices
• Enhancement of farmer’s income and livelihood support for reduction of
poverty in rainfed areas and
10. National Watershed Development Project for Rainfed Areas (NWDPRA)
The scheme of National Watershed Development Project for Rainfed Areas
(NWDPRA) was launched in 1990-91 based on twin concepts of integrated
watershed management and sustainable farming systems.
Aim
• Conservation, development and sustainable management of natural
resources.
• Enhancement of agricultural production and productivity in a sustainable
manner.
• Restoration of ecological balance in the degraded and fragile rainfed eco-
systems by greening these areas through appropriate mix of trees, shrubs and
grasses.
• Reduction in regional disparity between irrigated and rainfed areas and;
• Creation of sustained employment opportunities for the rural community
including the landless.
11. Pradhan Mantri Fasal Bima Yojana (PMFBY)
PMFBY is an actuarial premium based scheme under which farmer has to pay
maximum premium of 2% for Kharif, 1.5% for Rabi food & oilseed crops and 5%

22. for annual commercial/horticultural crops and remaining part of the
actuarial/bidded premium is shared equally by the Centre and State
Government. One of the objectives of the scheme is to facilitate prompt claims
settlement. The claims must be settled within two months of harvest subject to
timely provision of both yield data and share of premium subsidy by the State
Government.
12. Livestock insurance Scheme
It aims to provide protection mechanism to the farmers and cattle rearers against
any eventual loss of animals due to death. The scheme also demonstrates the
benefit of the insurance of livestock to the people and popularizes it with the
ultimate goal of attaining qualitative improvement in livestock and their products.
13. National Scheme on Welfare of Fishermen
This scheme was launched to provide financial assistance to fishers for
construction of house, community hall for recreation and common working
place. It also aims to install tube-wells for drinking water and assistance during
lean period through saving cum relief component.
14. Scheme on Fisheries Training and Extension
It was launched to provide training for fishery sector so as to assist in undertaking
fisheries extension programmes effectively.
15. Gramin Bhandaran Yojna
Objective of this Scheme:
• Create scientific storage capacity with allied facilities in rural areas.
• To meet the requirements of farmers for storing farm produce, processed
farm produce and agricultural inputs.
• Promotion of grading, standardization and quality control of agricultural
produce to improve their marketability.
• Prevent distress sale immediately after harvest by providing the facility of
pledge financing and marketing credit by strengthening agricultural
marketing infrastructure in the country.

23. Marketing of non-farm products
BEFORE describing marketing mechanism of non-farm rural products, it
would be better if these products were to be identified. And while doing so, we
have to see things in the context of rural development, as to which products
other than farm products may be termed as non-farm products.
In general, non-farm products are synonymous with manufactured items. However,
as economic terms, non-farm products, as opposed to farm products are those
which after some sort of processing in small units in the rural areas, themselves
become value-added and are traded at premium.
Such non-farm activities in rural areas include tobacco curing, small-scale oilseed
crushing, tanning on cottage-scale, etc. Beside these, collection of milk, wool-
shearing, dates-curing, primary processing of raw sugar (shakkar) and gur-making
are non-farm activities and eventually become non-farm products. This sort of
small-scale industry in the rural areas over a period of time has grown appreciably.
Marketing in rural areas: Unlike marketing in urban areas, a complex and multi-
sectoral operation, marketing in rural areas is based on age-old traditional way of
processing and distribution. The bulk of marketing function is usually performed
by persons traditionally known as, ‘middlemen’ or ‘distributors’ and also called,
whole sellers, retailers, or brokers. They include trader-cum-peasants in various
‘open markets’.
In some comparatively bigger rural areas where production of a particular
commodity gets concentrated, a sort of a market develops on permanent basis. For
instance, Kunnri, district Mirpurkhas (Sindh) is perhaps the largest chilis market in
Pakistan.
Efficiency: In order to improve the working and the efficiency of such rural
markets, efforts be made to revitalise them altogether. Their efficiency is much
more important if one was to keep in mind that these are the markets with which
farmers come in contact with directly and from which they earn their incomes.
The reason of their failure could be traced to their uni-sectoral nature and single-
purpose approach. All of such programmes were based on the theory that it was the
ignorance about the modern agricultural practices which was the basic cause of
low production and consequently the rural poverty. In other words, these
programmes remained production-oriented with little stress on marketing. They

24. just failed to appreciate as to how the benefits of increased production could be
made available to small farmers.
The integrated rural development programme (IRDP) was still yet another rural
development effort. No doubt, it had some innovative features, like people’s
participation in decision-making, planning and implementation through the
branches of various nation-building departments at dispersed rural focal points. But
even these arrangements failed to prove effective as these centres largely remained
pre-occupied in the supply of various input items.
Inadequate facilities: It is due to insufficient facilities in the rural areas that
farmers, particularly owners of small land holdings, have to sell their products at
highly unfavourable prices.
The markets in the rural areas are still ungoverned by any legal framework.
However, in the province of Punjab a concept of “Feeder Markets” has been
translated into practice according to which certain rural markets have been linked
with the adjacent regulated wholesale markets in the urban areas. In fact it is an
exercise towards the revitalisation of rural market under a legal cover.
Non-farm products: Marketing mechanism of the non-farm products in the rural
areas is not a problem like that of farm products. Selling non-farm products such as
edible oils, oil cakes, raw sugar and gur, domestically processed fruits and
vegetables such as chutney achar, murabba etc., curd date, hides and skin, animal
bones, wool and hair as well as various items of inputs (such as seeds, pesticides
etc.), take place mostly through ‘arhthis’ (commission agents).
The price fixation, in the case of farm produce, is mostly based on the open auction
sale and the prices of non-farm products are mostly fixed by producers themselves.
In some cases, price fixation is also done through bargain between buyers and
sellers.
Suggestions: In view of the above problems, some suggestions are made for
improving the marketing of non-farm products:
(1) Suitable varieties of fruits and vegetable may be evolved which are all
exclusively meant for processing. (2) Facilities such as transportation, may be
made available at cheaper rates in rural areas. (3) In order to end the dependency of
non-farm products, it is proposed that separate walled markets be established
exclusively for sale-purchase of non-farm products, in rural areas. (4) Non-farm
product of greater value may be processed and produced in the rural areas. (5) A
survey of non-farm products and an estimation of those which can be produced

25. with advantage may be carried in prospective focal areas and pilot projects be
prepared by qualified consultant, keeping in view the findings of the survey. (6)
Non-farm products may not be taken for granted. Rather proper arrangement of the
necessary items for the rural inhabitants like textile goods, electric and electronic
appliances may also be made