Topic: transport and marketing of agricultural produce and issues and related constraints.
Q5. The persistence of food inflation despite distress sale of agricultural produce reflects deeper structural distortions in India’s agri-marketing system. Assess the factors responsible for this paradox. Examine the limitations of existing market intervention mechanisms. (15 M)
Difficulty Level: Medium
Reference: DTE
Why the question
Recent incidents of distress sale of onions, potatoes and tomatoes despite rising retail food inflation have highlighted structural inefficiencies in India’s agricultural marketing system and renewed debates around market reforms, farmer income security and food-price management.
Key Demand of the question
The question requires analysing the structural reasons behind the coexistence of food inflation and farmer distress, examining weaknesses in current market intervention mechanisms, and suggesting suitable reforms for improving agricultural price stabilisation and market efficiency.
Structure of the Answer:
Introduction
Briefly mention the paradox of rising retail food inflation alongside falling farm-gate prices as a reflection of structural distortions in agricultural marketing and supply chains.
Body
- Structural distortions in agri-marketing system: Mention issues related to fragmented supply chains, weak storage infrastructure, intermediary dominance, poor price transmission or market fragmentation.
- Limitations of market intervention mechanisms: Briefly indicate shortcomings of MSP coverage, limited PSF operations, reactive policy interventions or weak implementation of market reforms.
- Way forward for market stabilisation and farmer protection: Suggest reforms related to cold-chain infrastructure, FPO strengthening, integrated markets, predictive price management or institutional reforms.
Conclusion
Conclude by emphasising the need for a resilient and integrated agricultural marketing ecosystem that balances farmer remuneration with consumer affordability through long-term structural reforms.
