What is Agriculture Marketing?

It is a process that involves:

Assembling

Storage

Processing

Transportation

Packaging

Grading

Distribution

of Agriculture Produce

What Happens After Crops are Grown and Cut - Teachoo.JPG

 

How was Agriculture Marketing System before Independence?

1 Faulty Weighing & Manipulation

Farmers were selling produce to Traders

These traders cheated the farmers by using faulty weighing techniques and manipulation of accounts

2 No Market Information

Farmers were forced to sell their product at cheaper price

This is because farmers did not have market information (correct price of their produce)

3 No Storage Facility

Farmers did not have storage facility to keep their prodcue

Hence they could not store their goods to sell them at higher price in future

Problems In Agricultural Marketing Before Independence - Teachoo.JPG

 

What steps were taken by Govt to improve agriculture marketing?

1 Regulation of Markets

Govt established Mandis (or markets) which had transparent market conditions

Hence,farmers were saved from manipulation and got better price for their produce

 

2 Infrastructure Facilities

Govt developed physical infrastructure facilities like

roads, railways, warehouses, godowns, cold storage units etc

Hence, agriculture produce could be stored for long period of time and farmer can wait instead of selling at a lower price

 

3 Cooperative Marketing

It is a system by which all farmers can pool their produce (like milk) according to different grading

This food is processed and marketed by coopetative societies to urban centers (towns and cities)

Hence, work of agriculture marketing is done by copoerative societies instead of the farmers

 

4 Policy Instruments like MSP, Buffer stock, PDS

Policy instruments means schemes of the government to overcome different problems

Govt has introduced various policy instruments for agricultural marketing like:

MSP

Govt has assured farmers of Minimum Support Price (MSP)

Hence, farmers are guaranteed a minimum amt for their produce and hence they do not need to sell their produce at a loss

Buffer Stock

Govt has established Food Corporation of India

This organisation purchases food grains from farmers like wheat and rice as a buffer (surplus)

This is used in case of an emergency like famine

PDS

Govt has established Public Distribution System (PDS) or ration shops

These purchase food from farmers and give to poor at free or subsidized rates

Steps take by Govt to Improve Agriculture Marketing - Teachoo.JPG

Policy Instruments of Govt - Teachoo.JPG

What are emerging agriculture marketing channels?

OR

What steps should be taken by government to improve agriculture marketing?

Selling Produce Directly to Customers

Certain markets have come up where farmers can sell their produce directly to customers without the interference of farmers

 

Example

Name of Market State
Apni Mandi Punjab, Haryana, Rajasthan
Hadaspur Mandi Pune
Rythu Bazars Andhra Pradesh, Telangana
Uzhavar Sandies Tamil Nadu

 

 

Contracts with MNC/Food chains

Many MNC/ Fast food chains enter contract with farmers

Farmers can directly sell their produce to these companies

It is benefitial to both parties,Farmers get a better price and these companies get goods at a cheaper price

What are new emerging Marketing Channels - Teachoo.JPG

PROBLEMS STILL BEING FACED IN AGRICULTURAL MARKETING

Private Trade

Large amt of agricultural trade is handled by big farmers, money lenders, politicians

In this trade, small farmer get exploited and do not get a good price for their produce

 

 

 

Problems Faced by Cooperative Society:

Many cooperative societies are facing problems like

 

1 Inadequate Coverage of Farmers

2 Lack of Appropriate Link between Marketing and Processing Cooperatives

3 Inefficent Financial Management

4 Infrastructure Improvement

 

 

 

 

Infrastructure in rural areas need to be improved

Like Better Quality roads, More Cold Storage facilities

 

Developing More Rural Periodic Markets

Around 27,000 New rural markets need to be developed to realise the full potential of rural markets

 

 

Need for Agricultural diversification

Why farmers should not depend solely on agriculture for sustainence:

1 There is higher risk in just depending on agriculture

2 To provide more employment opportunities to rural people and present them with

opportunities to get higher

 

Problems Still Being Faced In Agricultural Marketing - Teachoo.JPG

ISSUES  FACED BY COOPERATIVE SOCIETIES -Teachoo.JPG

INADEQUATE INFRASTRUCTURE - Teachoo.JPG

NCERT Questions

Q4

Explain the steps taken by the government in developing rural markets.

View Answer

 

Q5

Why is agricultural diversification essential for sustainable livelihoods?

or

Q12

Explain the role of non-farm employment in promoting rural diversification.

View Answer

 

Q7

What do you mean by agricultural marketing?

View Answer

 

Q8

Mention some obstacles that hinder the mechanism of agricultural marketing.

View Answer

 

Q9

What are the alternative channels available for agricultural marketing?

Give some examples.

View Answer

 

Q11

Do you think various measures taken by the government to improve agricultural marketing are sufficient?

Discuss.

View Answer

 

MCQ Other Books

Q1

In the following questions, select the correct answers:

1 Why is minimum support price fixed by the government?

A For government own benefit

B To safeguard the interest of farmers

C To safeguard the interest of consumers

D None of these

View Answer

 

Q2

Agriculture marketing does not comprise of _____.

A Transportation of the produce to the market place for sale

B Grading of the produce according to the quality

C Storage of the produce for sale in future

D Credit taken to meet expenditure on agriculture

View Answer

 

Q3

AGMARK is related with:

A Agricultural production in government farms

B Standard quality of agricultural produce

C Heavy machinery

D None of the above

View Answer

 

Q4

In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R).

1 Assertion (A): It is essential to develop proper storage facilities in rural areas.

Reason (R): Farmers can wait for better price for their products in the market.

Mark the correct choice:

A Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

B Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

C Assertion (A) is true, but Reason (R) is false.

D Assertion (A) is false, but Reason (R) is true.

View Answer

 

2 Assertion (A): The Prime Minister urged to increase the rural income by increasing non-farm activities.

Reason (R): Non-farm activities (agro-processing industries, poultry, craft, handloom) provide alternative avenues for sustainable livelihood and may raise the level of income as the risks due to fluctuations in production and market prices is generally less.

Mark the correct choice:

A Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

B Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

C Assertion (A) is true, but Reason (R) is false.

D Assertion (A) is false, but Reason (R) is true.

View Answer
  1. Class 12 NCERT
  2. Indian Economic Development

Transcript

What Happens After Crops are Grown and Cut? This is called Agricultural Marketing What is Agriculture Marketing It is the process of Assembling, Storage, Processing, Transportation, Packaging and Grading of Agriculture Production Problems In Agricultural Marketing Before Independence Faulty Weighing and Manipulation Faulty Weighing and Manipulation Traders cheated Farmers Example- Produce of 1000 Kg weighed as 900 kg Less Amount given to Farmers No Market Information No Market Information Farmer didn’t know correct Market Price of their produce Example Actual Price Rs 20 /kg Sold for Rs 5/kg Farmers suffered loss and traders profit No Storage Facilities No Storage Facilities Farmers couldn’t store their produce for off seasons in proper godowns Example Price today =Rs 30/Kg Price in Off season =Rs 50 /Kg Crop to be sold today otherwise it will get damaged Steps take by Govt to Improve Agriculture Marketing Problems Faced by Farmers Faulty Weighing and Manipulation by traders No Market Information Availble to Farmers No Storage Facilities What did Govt Do Developed Mandis (No Manipulation, Transparent Price to Farmer) Govt encouraged cooperative Societies Like Amul, Farmer sold product to AMUL, Amul sold to customers Governmet Developed Infrastructure (Godowns, Roads, Railways)Policy Instruments of Govt (Oher Measures Taken by Govt) Policy instruments means schemes of the government to overcome different problems Problems Faced In case of Crop Failure Farmer Suffered a loss Country suffered Food shortage in case of Famine No food for Poor Even in Normal times What did Govt Do Govt launched MSP Farmers are guaranteed a Minimum Support Price for their produce Buffer Stock Govt has established Food Corporation of India to keeps a buffer stock to be used in case of famine PDS Govt has established Public Distribution System (PDS) or ration shops These purchase food from farmers and give to poor at free or subsidized rates What are new emerging Marketing Channels? What is Traditional Marketing Practice? Farmer Mandis Customer Sell Rice Rs 30/kg Sell goods Rs 40/ kg Farmer Sells Produce to Private Traders Farmer Private Trader Customer Sell Rice Rs 10/ kg Sell goods Rs 40/ kg New Marketing Channels for Farmers Direct Selling to Customer Farmer They get more Price Sell goods Rs 35/ kg Customer They get goods cheaper Contracts with MNC/Food chains Farmer Walmart Customer Farmer gets more price can sell in bulk They earn More profit They get goods cheaper Problems Still Being Faced In Agricultural Marketing PROBLEM 1 PRIVATE TRADE In this case, instead of selling goods to Mandis Farmer sells goods to Private Traders (who are large farmers, politicians etc.) What should Happen? Farmer Sell Rice Rs 30/kg Sell goods Rs 40/kg Mandis Customer What is Actually Happening? Sell Rice Rs 10/kg Sell goods Rs 40/kg Farmer Private Traders Customer Customer PROBLEM 2 ISSUES FACED BY COOPERATIVE SOCIETIES How Cooperative Society Function? Farmer 1 Farmer 2 Farmer 3 Farmer 4 Supply Goods to Cooperative Society Grading and processing Supply to State Cooperative Society(AMUL) Marketing and Advertising Sell to Customer PROBLEMS/ISSUES Problems Faced by Cooperative Society Inadequate Coverage of Farmers Lack of Appropriate Link between Marketing and Processing Cooperatives. Inefficient Financial Management PROBLEM 3 INADEQUATE INFRASTRUCTURE What is Current State Lack of Storage Facilities Fruits and Vegetables Rot Due to lack of Storage No Proper Village Roads Leads to problems in transportation What Infrastructure is More Required? More Cold Storage Facilities Required to prevent Crop Damage Better Quality Village Roads for Truck Transport

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.