What are main bottlenecks in upstream and downstream process of marketing of agricultural products in India?

Agricultural marketing refers to movement of agricultural produce from farm land to the end-consumers. A well-developed agriculture market can streamline supply chain, eliminate intermediaries, reduce post-harvest losses and double farmers’ income.

However, the post-production activities of Indian agriculture have not kept pace with the production related activities. The agriculture marketing infrastructure remains out-dated and suffer from various bottlenecks.

Upstream bottlenecks

• Restrictive, Fragmented, Pro-Trader and Anti-Farmer APMC Regime
  • Lack of freedom to farmers to sell wherever and whomsoever.
  • Farm produce should be sold only at regulated markets through registered intermediaries.
  • Lack of efficient price discovery due to cartelisation by traders.
  • Imposition of multiple fees and cesses.
  • Lower price realisation for farmers

• Lack of Access to Markets:  An average APMC serves an area of 450 sq.km as against recommendation of 80 sq.km given by M.S. Swaminathan Committee.
• Limited participation of private sector in procurement and storage due to EC Act, 1955.
• Absence of legal framework to facilitate contract farming.
• Limited penetration of E-NAM (only 14% of APMCs)

Downstream bottlenecks

• Absence of “Inverse Fork-to-Farm approach” has led to demand-supply mismatch in agricultural commodities.
• Under-developed logistics such as transportation and cold chain has led to higher post-harvest losses (Rs 92,000 crores) and rising food inflation.
• Domination of Unorganised retail (98%) has led to fragmented and inefficient supply chain.
• Limited processing of commodities (10%)
• Limited growth of private labelling has affected quality of commodities.

Going forward, recommendations of Dalwai Panel and SC appointed committee on farm laws such as bringing agricultural marketing under concurrent list, High-level agricultural marketing council, giving freedom to farmers, promotion of contract farming, reviving repealed farm laws with more flexibility to the states etc. need to be implemented.