The Indian system of agricultural marketing suffers from a number of defects. As a consequence, the Indian farmer is deprived of a fair price for his produce. The main defects of the agricultural marketing system are discussed here.
Improper Warehouses: There is an absence of proper warehousing facilities in the villages. Therefore, the farmer is compelled to store his products in pits, mud-vessels, “Kutcha” storehouses, etc. These unscientific methods of storing lead to considerable wastage. Approximately 1.5% of the produce gets rotten and becomes unfit for human consumption. Due to this reason supply in the village market increases substantially and the farmers are not able to get a fair price for their produce. The setting up of Central Warehousing Corporation and State Warehousing Corporation has improved the situation to some extent
Lack of Grading and Standardization: Different varieties of agricultural produce are not graded properly. The practice usually prevalent is the one known as “dara” sales wherein heap of all qualities of produce are sold in one common lot Thus the farmer producing better qualities is not assured of a better price. Hence there is no incentive to use better seeds and produce better varieties.
Inadequate Transport Facilities: Transport facilities are highly inadequate in India. Only a small number of villages are joined by railways and pucca roads to mandies. Produce has to be carried on slow moving transport vehicles like bullock carts. Obviously such means of transport cannot be used to carry produce too far-off places and the farmer has to dump his produce in nearby markets even if the price obtained in these markets is considerably low. This is even truer with perishable commodities.
Presence of a Large Number of Middlemen: The chain of middlemen in the agricultural market is so large that the share of farmers is reduced substantially.
Malpractices in Unregulated Markets: Even now the number of unregulated markets in the country is substantially large. Arhatiyas and brokers, taking advantage of the ignorance, and illiteracy of the farmers, use unfair means to cheat them. The farmers are required to pay arhat (pledging charge) to the arhatiyas, “tulaii” (weight charge) for weighing the produce, “palledari” to unload the bullock-carts and for doing other miscellaneous types of allied works, “garda” for impurities in the produce, and a number of other undefined and unspecified charges.
Inadequate Market Information: It is often not possible for the farmers to obtain information on exact market prices in different markets. So, they accept whatever price the traders offer to them. With a view to tackle this problem the government is using the radio and television media to broadcast market prices regularly. The news papers also keep the farmers posted with the latest changes in prices.
Inadequate Credit Facilities: Indian farmer, being poor, tries to sell off the produce immediately after the crop is harvested though prices at that time are very low.