The real challenge to India’s food security is poor grain management rather than a shortage of grain production.”
The agricultural sector carries immense importance for the Indian economy. It plays a significant role in the overall socio-economic fabric of India. Agriculture also enjoys vitality for ensuring food security to all and has the potential to influence the growth of secondary and tertiary sectors of the economy through its forward and backward linkages. But for that to happen, post-harvest activities like storage, transport & marketing are as important as giving the right inputs and harvesting. Since ancient times huge importance is given to these post-harvest activities. For example, in the Indus valley, civilization grains were stored in large granaries. Harappan seals contain information on agricultural production, transport, marketing, and distribution
The Constitution of India identified agriculture as a state subject – i.e. within the purview of the various State Governments of India’s federal system. To protect farmer’s rights, States enacted Agriculture Produce Markets Regulation Acts. The legal framework that evolved restricted purchase of agriculture produce to registered traders. The objective was to ensure fair and transparent trade in agricultural products.
Storage and warehousing:
Storage is an important marketing function, which involves holding and preserving goods from the time they are needed for consumption.
- The storage of goods, therefore, from the time of production to the time of consumption, ensures a continuous flow of goods in the market.
- Storage protects the quality of perishable and semi-perishable products from deterioration;
- Some of the goods e.g., woolen garments, have a seasonal demand.
- To cope with demand, production on a continuous basis and storage become necessary.
- It helps in the stabilization of prices by adjusting demand and supply.
- Storage is necessary for some period for performance of other marketing functions.
- Storage provides employment and income through price advantages.
Warehouses are scientific storage structures especially constructed for the protection of the quantity and quality of stored products.
- Scientific storage
The product is protected against quantitative and qualitative losses by the use of such methods of preservation as are necessary.
Warehouses meet the financial needs of the person who stores the product. Nationalized banks advance credit on the security of the warehouse receipt issued for the stored products to the extent of 75 to 80% of their value.
- Price Stabilization
Warehouses help in price stabilization of agricultural commodities by checking the tendency to making post-harvest sales among the farmers.
- Market Intelligence
Warehouses also offer the facility of market information to persons who hold their produce in them.
Warehousing In India
- Central warehousing corporation (CWC):
Central Warehouse corporation was established as a statutory body in New Delhi on 2nd March 1957. The Central Warehousing Corporation provides safe and reliable storage facilities for about 120 agricultural and industrial commodities.
- State Warehousing Corporations (SWCs):
Separate warehousing corporations were also set up in different States of the Indian Union. The areas of operation of the State Warehousing Corporations are centers of district importance. The total share capital of the State Warehousing Corporations is contributed equally by the concerned State Govt. and the Central Warehousing Corporation.
- Food Corporation of India (FCI):
Apart from CWC and SWCs, the Food Corporation of India has also created storage facilities. The Food Corporation of India is the single largest agency which has a capacity of 26.62 million tones.
Present Reforms in Agriculture Marketing:
Historic Reforms in Agriculture Marketing in September 2020, three Bills were passed by Parliament of India (Lower and Upper Houses):
Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020:
- Intra and Inter State Trade of farmer’s produce was now allowed beyond the physical premises of existing markets: Trade in/at:
- Farm gate,
- Factory premises,
- Silos and
- Cold storages.
- Online trading of farmer’s produce was allowed and farmer organizations and private sector were enabled to set up their electronic trading platforms.
- State Governments would not levy market fees, cess or levies outside the physical market area.
Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020:
- Farming agreements between farmers and buyers have been made possible, for production or rearing any farm produce.
- The price of the produce will be clearly mentioned in the contract.
- A clearly specified dispute resolution protecting the rights of both farmers and buyers.
The Essential Commodities (Amendment) Bill, 2020
- The Central Government may only invoke the provisions of the Essential Commodities Act, 1955 in an extraordinary situation (war, famine, extraordinary price rises and natural calamities)
- Imposition of stock limits must only be based on price rises -if there is a 100% increase in retail price of horticultural produce and a 50% increase in the retail price of non-perishable produce.
Importantly, these bills do not dismantle the existing structure of State APMCs; rather, they provide competition to this system by opening up alternative marketing structures, direct buying, and contract farming. These bills do not replace the prevailing system of public procurement at MSP.
Issues and Problems
The fragmentation and political significance of agricultural supply chains in has a direct impact on their functioning. Though the supply chain system has set in, a number of problems still exist in system implementation.
- Infrastructure: Infrastructure in India requires significant investment. Grain storage, Cold storage chain, proper Road and Transportation facilities are yet to be implemented in certain states esp. North Eastern Region.
- Government Purchase and supply system: Bureaucracy and corruption are well known problems in India.
- Middleman, Bargaining Power and Transparency
- Price volatility: All of the above factors mentioned, and diverse weather in country is contributing to price volatility. When future prices are difficult to estimate, farmers cannot plan to grow the most efficient or profitable crop.
- Financing, education, and Training.
- Package and storing.
- There is a great necessity to increase the shelf life of products by drying, curing and packaging.
- Information management and planning.
- Export enablement.
- Enabling of large private players.