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Working and Management of State Agricultural Produce Marketing

Board of Uttar Pradesh (Rajya Krishi Utpadan Mandi Parishad)

Chapter – 1


India is predominantly an agricultural country. In India, agriculture has a significant history. Agriculture continues to be the main stay of life for majority of the Indian personnel. According to ninth five year plan, agriculture has all the way been the most vital sector of the Indian economy. Thus, one of the primary objectives of the ninth five year plan was to prioritize agricultural division and emphasize on its development. Moreover agricultural division has been the most important module of the economy of India. Agriculture provides employment to around sixty five percent of the total workforce in the country. Significant strides have been made in agriculture since independence.

India had a huge and diverse agricultural division, accounting, on an average for about sixteen percent of GDP and ten percent of export earnings. Indias arable land area of 159.7 million hectares (394.6 million acres) is the second prevalent in the world, after the United States. Its gross irrigated yield area of 82.6 million hectares (215.6 million acres) is the largest in the world. India has grown to become among the top three worldwide producers of a broad variety of crops, including wheat, rice, pulses, cotton, peanuts, fruits and vegetables. Global, as of 2011, India, had the biggest herd of buffalo and cattle, is the largest producer of milk and has one of the major and fastest budding poultry industries.1

Agricultural intensification has direct and optimistic impact on paucity obliteration. Many of the industries still depend on the agricultural division for raw materials and for the market. Agricultural growth is an important tool in controlling inflation, for employment generation and for raising agricultural wages. As a result, our development strategy must focus on awareness of the agricultural division which requires a unique combination of private effort and public support. However, agricultural division has not benefitted as much as it should have from policies of economic liberalization because it continues to suffer from too many impediments and restrictions which prevents farmers from marketing their produce at attractive prices.

The escalating trend of agricultural production has brought, in its wake, new challenges in terms of finding market for promotion of agricultural produce and market surplus. There is also a requirement to respond to the opportunities and challenges that the global markets offer in the liberalized trade regime. To benefit the farming community from new global market access opportunities, the internal agricultural marketing system in the country needs to be strengthen and integrated. Government of India is striving hard to prepare the Indian agricultural markets and marketing environment so as to provide maximum benefit to the producers and in turn is trying to compete hard with the global markets.

Most agricultural commodity markets generally operate under the normal forces of demand and supply. However, with a view to protect farmers interest and to encourage them to increase their production the Government fixes statutory prices for some crops and make arrangements for their purchase on state account, whenever the price of these crops fall below the support level. The role of Government is promoting organized marketing of agricultural commodities in the country, through a network of regulated markets spread all over the nation.

In order to achieve an efficient system of buying and selling of agricultural commodities and to provide better regulation of agricultural produce markets, most of the State Governments and Union Territories have enacted their own legislations. The basic objective of setting up of network of physical markets has been to ensure reasonable gain to the farmers by creating better environment in all the markets for fair play of demand and supply forces, attain transparency in transactions and regulate market practices.

With a view to cope up with the need to handle increasing agricultural production, the numbers of regulated markets have been increasing in the country. While by the end of 1950, there were two hundred eighty six regulated markets in the country, today the number stands around eight thousand. The Central Government advised all the State Governments to enact marketing legislations to promote transparent and competitive transactional methods to protect the interest of the farmers. Except a few, most of the States and Union Territories embarked upon a massive program of regulation of agricultural markets after enacting the legislation. Most of these regulated markets are wholesale markets. There are in all seven thousand two hundred ninety three wholesale markets in the country. Moreover, our nation has twenty seven thousand two hundred ninety four rural periodical markets, about fifteen percent of which function under the ambit of regulation. The advent of regulated markets has helped in mitigating the market handicaps of producers as well as sellers at the wholesale assembling level. The following table shows the number of regulated markets in different States and Union Territories in India: