UNIT 1

INTRODUCTION TO AGRICULTURAL SECTOR

1.1 INTRODUCTION

India is an agrarian country, Unlike most countries India is blessed with enough resources to cultivate crops throughout the year. Agriculture is the most important sectors of Indian economy. Although the percentage of population engaged in  the workforce has reduced but still it has largest section of dependent Indian workforce(48.7%).Currently the agriculture contributes 17.4%(Ministry of agriculture, GOI, Feb 2019) to GDP. Hence, it means 48.7% of the population contributes only 17.4% to the GDP. When we compare this with the agriculture sector of the developed countries like USA, Norway, France, We find that in those countries population engaged and the contribution of that particular sector to GDP is almost same.

                               Agriculture is the biggest private sector and the biggest Unorganized sector too (90% of the agricultural workforce is in unorganized sector). Owing to ‘Green revolution’ India not only became ‘Food sufficient’ but also a ‘Food surplus’ country, which made us a major exporter of several crops like cotton, rice, guar, sugar etc.

                              Increase in efficiency of agricultural sector is also related to increase in industrial output and better performance of services sector. As pointed out by many great economists, like Mr. Raj Krishna, Mr .C Rangarajan, 1% increase in agriculture growth leads to 0.5% increase In industrial growth. A major concern in agriculture development is irrigation, as even today 66.1% of  India’s cropped area depends on Monsoon. However, government initiatives like river linking & multipurpose hydro projects are improving the situation.

Key Takeaways:

1. Agriculture is the biggest private sector and the biggest Unorganized sector too (90% of the agricultural workforce is in unorganized sector).
2. A major concern in agriculture development is irrigation, as even today 66.1% of India’s cropped area depends on Monsoon.

1.2 DEMOGRAPHIC FEATURES

 Poverty:  Poverty is a state  in which a person  does not have the  financial resources and essentials for a minimum standard of living.  On the basis of social, economical and political aspects, there are different ways to identify the type of Poverty:
1.  Absolute poverty.
2.  Relative Poverty.
3.  Situational Poverty.
4.  Generational Poverty.
5.  Rural Poverty.
6.  Urban Poverty.

1. Absolute poverty: It is also called extreme poverty or abject poverty, in this people have scarcity of basic food, clean water, health, shelter, education and information

2. Relative Poverty: It is defined in relation to the economic standards of population living in surroundings. Hence it is a measure of income inequality.

3. Situational Poverty: It is a temporary type of poverty based on occurrence of an adverse event like Natural disaster, job loss and severe health problem.

4. Generational Poverty: It is handed over to individuals and families from one generation to the another. This is very difficult to get out of as there is no escape because people are trapped in its cause and unable to access the tools required to get out of it.

5. Rural Poverty: Rural poverty occurs in rural areas with population below 50,000. It is the area where there are inadequate job opportunities, lack of required services, less support for disabilities and quality education opportunities. People are tending to live mostly on the farming and other menial work available to the surroundings.

6. Urban Poverty: Urban poverty occurs in the metropolitan areas with population over 50,000. Following are some major challenges faced by the Urban Poor:
•    Lack of access to health and education.
•    Inadequate housing.
•    Unhealthy environment because of overcrowding.
•    Little or no social protection mechanism.

CAUSES OF POVERTY:

1.Huge population: India’s population has increased at the rate of 2.2% per year during the last 45 years, which means India has added 17 million people are added to the population  every year. Hence  it puts huge pressure on country’s resource requirement.

2. Inefficient Resource Utilization: Underemployment and Disguised unemployment leads to inefficient use of human resources. Also slow technology development and  lack of investment in Research and Development  causes inefficient use of India’s Natural resources.

3. Low rate of Economic development: Slow economic development especially  before the Economic reforms  of 1991.

4. Unemployment: Huge young population means huge number of job seekers however we have not been able to create jobs at the pace it was required.

5.Social factors: Laws of inheritance, Caste system, Gender discrimination are also causing of poverty.

6.Colonial exploitation: British exploitation which lasted for around 2 centuries transformed India from one of world’s richest country to the one in  the shackles of poverty. Local Indian markets were ruined and the export dominated economy of the finished product was made to export the raw material and was used as market for cheap machine-made goods.

7. Low agricultural productivity: Largest section of Indian workforce is engaged in agriculture, Hence good agricultural productivity is very important for the economic development. Small land holdings, lack of knowledge about modern agriculture, lack of capital are some of the reasons for the low agricultural productivity.

POVERTY AND INDIAN AGRICULTURE: One of the reasons for the high incidence of poverty in India is its backward agriculture, whose productivity per hectare and per capita is amongst the lowest. The low per capita production is not only due to huge population, but also due to low productivity, which is only 64 percent of the world average. The productivity potential of Indian agriculture has been amply demonstrated in Punjab, where it is nearly equal to those of developed countries. If India attains the productivity level already achieved in Punjab, the national income of India would be more than double of what it is today. There are many reasons for the stagnated growth of Indian agriculture viz.-

1. Small land holdings: It discourages the farmer to invest in new technology and better infrastructure because of which the production does not increase.
2. Lack of Institutional support: We have to encourage the diversification of farming by increasing the timely institutional credit depending upon the needs of the farmer.
3. Area specific program: Due to the diversity of our country it is very difficult to create a Generic program, hence a Decentralized approach is required to reduce the poverty in farming sector.              

Way forward for poverty eradication:

• Government  is running numerous program like Integrated rural development program ,Indira awas yojana, Annapurna scheme, MGNREGA, Pradhan Mantri Jan Dhan Yojna.
• We need more comprehensive and inclusive approach along with rapid growth and technological development to eradicate poverty from our country.
   

Income inequality: Income inequality can be defined as unequal distribution of wealth and resources among people. Consider following examples before moving ahead-

CS 1: Let us assume that in a society there are 5 families with following monthly income:

F1              F2              F3             F4       F5

Rs100    Rs 120     Rs 125      Rs130   Rs 140

In the above example the income difference is not much, irrespective of the how much these families earn, if the income difference is not considerable then it will be easier for the government  to formulate the policies for betterment of the people, and also the society is likely to be harmonious and peaceful as long as everyone is able to get the basic necessities.

CS 2: Let us assume there are 5 families with following monthly income:

F1             F2      F3      F4          F5

Rs120  Rs180 Rs75 Rs 950 Rs 1200

The above example represents the real situation of our society, where there is considerable difference in the income. Also in India’s case this income inequality overlaps with caste and religion. Hence it becomes very complicated for the government to formulate the favorable policies. This difference leads to difference in the standard of living and access to services, which leads to disharmony in society.

The Gini Index of India places our country at 95th position out of 157 in equitable income and wealth distribution. According to ‘Credit Suisse data’ India’s richest 1% owned 36.8% of country’s wealth in 2000,since  than the richer has been getting richer and the poorer is going further south, the share of top 1% has exceeded 50%.In India the issue gets more complicated due to overlapping inequality(income and caste),Historical reasons and urban-rural divide.

CAUSES of  Income Inequality :  

1. Unemployment: India has not been able to generate the jobs required by the country’s rapidly growing population, hence there more job seekers than the job available. This leads to underemployment and unemployment, which in turn causes low productivity. 

2. Inflation: During inflation people earn profit but most wage earners lose .Wage earners lag behind due to fall in real income.

3. Lack of skill development: India has huge youth population but unfortunately our education system has not been able to recognize the different needs of people across the spectrum and equip them with the skill accordingly .However initiatives ‘Skill India’ and ‘National Education Policy’ are supposed to be steps in right direction.

4. Manufacturing: India’s manufacturing sector has not developed the way it was required leading to ‘Jobless Growth’. Lack of labour intensive industry has also led to poverty.

5.  Caste discrimination: In our country practice of Untouchability, Caste discrimination and Gender discrimination has also paved the way for poverty

6. Agricultural Strategy :Green Revolution made India self sufficient to meet our food demands  but at the same time it is true that the benefits of higher productivity were mainly reaped by rich farmers. Fertilizer subsidies did not necessarily reach the needy one. Also not all states were able to be part of the revolution. Due to less income more and more cultivators ,especially the younger ones are reluctant to continue farming, which will naturally have impact on future food requirements of the country, also it is causing severe problems like Farmer suicides. Traditionally the focus has been on increasing the farm output to benefit the farmer but now the focus has changed to increase the income of Farmers .In this backdrop the government aims to double the farm income by 2022 to promote Farmer’s welfare, reduce agrarian distress and bring parity in the income of farm and non-farm workers.

Consequences of Inequality:

1. Social problems: In India, where caste difference generally overlaps with income difference there can be far reaching consequences like sense  of unfairness, loss of dignity, weak societal fabric leading to violence,  lack of trust in institutions.
2. Separatism: India has seen demand for separate state or autonomous regions by many ethnicities.
3. Healthcare and Education: People will not be able to afford quality education and healthcare if there is concentration of wealth.

Way Forward:  

1. Manufacturing : We have to promote labor intensive manufacturing industries like  construction, textile, clothing ,footwear, etc. This industries have the ability to absorb the huge number of job seekers, hence it will also help to reduce the disguised unemployment in the agriculture sector.
2. Inclusive Growth: When all the sections of population get benefited by the development that is when there can be harmony in   the   society. Recent development in Chile   is   a glaring example in this regard.
3. Skill development:  Skill development of the youth of the country is the prerequisite to make use of our Demographic dividend. We have to focus not only on Technical Education but also on development of Vocational skills. This is especially more important in the rural area as it comprises larger chunk and also it has lesser avenues.
4. Equal opportunity for all: Government needs to make sure that all the citizen gets equal opportunity to pursue the educational field they desire, all citizen get quality healthcare and job opportunities is available to everyone irrespective of their socio-economic status and gender.

Unemployment:  Unemployment can be defined as when a person willing to work and actively searching for it but still does not get any work. It reflects the health of the economy. The National Sample Survey Organisation (NSSO) define employment and unemployment on the following basis:

• Working:-  Engaged in an economic activity i.e. Employed
• Available for work i.e. Unemployed
• Neither working nor available for work

The first two comprises labor force, the unemployment rate is defined as percent of labor force to that without work-

Types of Unemployment :

1. Disguised unemployment: When more people are employed than actually needed, which reduces the wages an individual gets.
2. Seasonal unemployment: When job is available only during a particular period. Agriculture labors, employment during festival season.
3. Structural unemployment: This is caused when there is a mismatch between skill and the job availability.
4. Cyclical unemployment: This arises due to economic slowdown and it is generally seen in capitalist countries.
5. Frictional unemployment: This refers to the period of unemployment when a person is searching for the job.
6. Vulnerable unemployment: This refers to the people working in the unorganized sector; where there is no job contracts which sans the legal protection.

Causes of Unemployment:  

1. Population: Huge population is the biggest factor responsible for the unemployment, as it becomes difficult to generate the required number of jobs for increasing population.
2. Low level of or inappropriate education and lack of or no vocational skills.
3. Inadequate State and Institutional support to the backward class.
4. Huge workforce in the Informal sector, which outside the legal safety net.
5. Lack of practical understanding experience of the real life at school and college level. This mainly leads to structural unemployment.
6. Slow growth of Industrial sector due to inadequate investment and State support.
7. Huge workforce engaged in the agriculture sector and lack of alternative for people to get out of it.
8. Societal hurdles for women.

Consequences of Unemployment:

1. Poverty: The biggest cause of Poverty is Unemployment, with no source of income it is very difficult for an individual even to meet the basic need of survival
2. Security: An unemployed person can be easily influenced by the wrong ways of making money, also it can cause a person to commit  crime.
3. Economy: Unemployment reduces the workforce hence reduces the production, which burdens the government. Also the overall economy is hampered as low level of income reduces the consumption, hence a lot money is to be devoted to welfare schemes.
4. Health: Low level of income can make a person compromise a person on the nutrition requirement, also unemployment also disturbs the mental health of the individual concerned.

Way forward:

1. In India there are many labour intensive industries like Leather and footwear, Food processing, Furniture, Textile, etc. We have to exploit these sectors to their optimum capacity by equipping people with required skills also by providing special financial packages tailor made for these sectors.
2. Increase of Public investment in the sectors like Health, Education, Police and Judiciary is required, which would not only create desirable jobs but also would reduce the pressure on the pockets of the citizen.
3. Development of rural area has to be given prime importance to provide alternative employment opportunities to the rural youth.
4. Entrepreneurial temperament needs to be developed in youth to create maximum number of Employment generators.
5. Strict actions are required against the social barriers for women by means of education and by creating healthy environment for women to work.

Key Takeaways:

1. Poverty is a state in which a person does not have the financial resources and essentials for a minimum standard of living.
2. Poverty is caused due to inefficient resources, large population, colonial exploitation, etc.
3. Unemployment can be defined as when a person willing to work and actively searching for it but still does not get any work. It reflects the health of the economy.

1.3 URBANIZATION AND ITS EFFECTS

Urbanization   refers to the shift of population from rural to urban area also it refers to the process of   development whereby backward area gets better amenities. People mainly migrate to urban area to get away from the hardships associated with living in rural area and to enjoy the fruits of development in the urban area.

Following are the main reason for the shift of population:

1. Industrialization : It means shit from traditional agricultural economy to non-agricultural economy. This gives people an additional avenue to earn the living. It is especially important in a country like India where such a huge section of population in engaged in agriculture, which causes stagnation in the earning.
2. Commercialization :  Commerce and trade play a major role in urbanization. In urban areas people engaged in pottery, carpentry, Dairy , etc earn much better profit.
3. Services: The services which one gets in rural areas are nowhere close to the one gets in urban areas. That is the reason many people travel to cities for health, education and employment. Also people living in   urban areas have better exposure to the novel ideas as the basic survival needs are generally taken care of.

Impact of Urbanization:

Urbanization is a big boon for the society if it is planned. The positive fallout of the urbanization can be seen in many ways like employment generation and better employment opportunities, technological and infrastructural developments, better transportation and communication,  better  educational opportunities, better health services and overall improved standard of living. Urbanization has also made it possible for the people from rural background to get out of shackles of casteism and move to urban area where caste discrimination is exponentially negative. However, if urbanization is not checked it also leads to Negative fallouts like following-

1. Housing problems: Cities attract rural people, who tend to settle in the outskirts of the city , gradually this leads to extension of the city limits and causes urbanization. As a result the number of people living in the city is increasing but not the city, this creates housing problem. Because of this people have to willy-nilly live in the unhygienic and insanitary conditions, which give rise to slums.
2. Overcrowding : This means when population density becomes high to make people living in the place uncomfortable. Problems associated with congestion of people  were clearly seen during the COVID 19 pandemic.
3. Unemployment: In our country people who migrate to urban areas are generally engaged directly or indirectly in primary sector. They leave rural areas for the better financial opportunities but due to lack of skills and proper education it becomes difficult for them to get the employment. 
4. Water and sanitation: Rapid and uncontrolled urbanization leads to inadequate sewage facilities. And due to heavy construction the ground water level goes down also unchecked and  heavy waste creation leads to inadequate water facilities. This becomes nightmare to manage for Municipalities and local Government. Hence causes pollution.
5. Poor health and spread of disease: This  become evident during COVID 19 Pandemic  that overpopulation can be disastrous. Also urban areas tend to be more polluted due to large number of vehicles, industries and lack of tree cover causing health problems like allergies, asthma, infertility, food poisoning,  premature death and many other things.
6. In metropolitan cities the traffic congestion is also a big issue for people. Less space and more vehicles makes continuous honking, long traffic jams, pollution part of people’s regular life and this can have a serious impact on the mental health of a person.
7. Crime: Luxury and extreme poverty can be seen side by side in the big cities. This can cause frustration to a migrant who has left behind his home in village in search of better life. This frustration can lead a person on the path of crime.

Way Forward:

It is clear that urbanization helps socio-economic development but unchecked urbanization causes lot of problems which are difficult to undo. In this light, it is important to make sure that along with  extending the limits of cities as far as development  is concerned we also focus on the development of villages. So that we limit the migration by providing people quality education, employment and healthcare  in the village only. Also, as social ills are highly connected to the economic problems, development would also gradually get rid of social ills.

Key Takeaways:

1. Urbanization   refers to the shift of population from rural to urban area also it refers to the process of   development whereby backward area gets better amenities.

1.4 Agricultural Sector:

Different countries have different organizing principles of Economy, however irrespective of the organizing principle the economy is divided into three sectors viz. Primary sector, Secondary sector and Tertiary sector. The primary sector is replaceable with Agricultural sector.

Presently, India ranks second in global farm output. However, the contribution of agriculture to GDP has continuously reduced over the period of time in spite of having approximately 50% of our working population engaged in it. The performance of agricultural sector improves when fisheries and forestry is also taken into account. India is the largest milk producer in the world and second in fruits and vegetables. Also India holds 7%  of market share in medicinal aromatic plants globally (According to Department of Agriculture and cooperation under Ministry of Agriculture). However, there is no denying the fact that Indian agricultural sector still faces many problems like low productivity, declining soil quality, dependency on agriculture, small land holdings, improper cropping pattern and insufficient cold storage.

Government measures like Gram sadak yojna, Kisan Credit Card  ,Pradhan Mantri Fasal Bima Yojna is helping the sector but still there is long way to go to make Agriculture a lucrative career option for youth.             

Key Takeaways:

1. India ranks second in global farm output.
2. Government measures like Gram sadak yojna, Kisan Credit Card, Pradhan Mantri Fasal Bima Yojna is helping the sector

1.5 Institutional structure-Land reforms in India:

During the Pre-British era the Indian agriculture was not at all satisfactory and it  was made worse by the Britishers. Indian agriculture was stagnated because various reasons like Zamindari system, Commercialization of agriculture, Low level of technology and the partition.

After Independence numerous steps were to be taken to revive the agricultural sector. Institutional discrepancies like size of agricultural holdings, land ownership, land inheritance, tenancy reforms, abolition of intermediaries had to be removed. The steps so taken can be seen in following two phases-

Phase 1

1. Abolition of intermediaries : The age-old exploitative systems of Zamindari, Ryotwari and Mahalwari were completely abolished.
2. Tenancy Reforms: Under this following three steps were taken:

1. Rent paid by the Share-croppers to the Land owners was regulated to make it fixed and rational.
2. Security of Tenure was established with respect to the land to make Share-croppers feel financially secure.
3. The ownership rights were given to the tenants(Land to the Tillers).

3.     Reorganization of Agriculture:  Redistribution of land to the land less masses after promulgating required Ceiling laws(however the failed in most of the states).Consolidation of land and Cooperative farming was encouraged.

The attempt of Land Reforms is considered to be unsuccessful by majority of  the experts. It was this opinion that made government lean towards the new policy of Green Revolution. The land reforms had failed to increase the production hence the government opted for the route of increasing productivity by means of new technique of agriculture.

Phase 2

According to the Economic Survey of 2012-13 analysis of steps taken by government shows clear 3 step policy.  

1. Mapping land carefully and assigning conclusive title: Land is probably the single most valuable asset for the people of our country. It can be used for land utilizing business or it can be used as collateral in Bank. For this purpose the National Land Records Modernisation Programme  was started in 2008. The aim is to move from Presumptive title, where registration of title is not legally valid, to Conclusive title, where registration of title is legally valid.  Digitization has helped greatly In this regard .
2. Devising fair yet speedy process of land acquisition, owing to which government passed Land Acquisition Bill,2013 , and also Land leasing Law as recommended by NITI aayog is being considered.
3. Devising transparent and effective land leasing policy as it is clearly seen from the heavy opposition to the land acquisition that except for the large projects with public purpose it is better if land is leased and not acquired.

Key Takeaways:

1. During the Pre-British era the Indian agriculture was not at all satisfactory and it was made worse by the Britishers.
2. After Independence numerous steps were to be taken to revive the agricultural sector. Institutional discrepancies like size of agricultural holdings, land ownership, land inheritance, tenancy reforms, abolition of intermediaries had to be removed.

1.6 Technological changes made in Agriculture:

Modern agriculture is driven by continuous improvements in technological tools for the better efficiency. Following are the few of many  technological changes which happened in the country after independence:

1. Green Revolution: There was a time when we had to import grains from USA to feed our own people. The reason we became not only food sufficient but also food surplus country is ‘Green Revolution’. The tireless work our scientist produced High Yielding Variety of seeds, which increased productivity of crops.  
2. Livestock  breeding: Human being has been domesticating live stock for thousands of years, so improving livestock breeding is not a new concept but certainly the tools used are much more advanced now. Animal Geneticists work to identify which elements of genes of livestock can improve animal growth, health and other important characteristics.
3.  Crop genetics: Farmers and scientist have used plant selection breeding to improve the productivity. Due to advancement in Genetic engineering we can now improve plant’s insect resistance, drought tolerance, disease tolerance and many other desired qualities.
4. Equipment’s:  Equipment’s like tractors, combines, harvesters and planters has increased the efficiency manifolds.
5. Expertise: With modernization the importance of specialization has been realized in the farming community. This again helps in improving efficiency.
6. Weather forecast: Reliable weather forecast and timely access to it helps farmers to decide when to sow the seeds, when to water and how much. Also, it helps government and farmers to minimize the damages in case of flooding.
7. Digitization: It has helped farmers greatly in marketing and selling their product. This way they have access to much larger market. Initiatives like Kissan TV   , e-NAM helps farmers to take better decisions with regards to crop rotation, use of fertilizer and transportation.

1.7 Agricultural Pricing and Agricultural finance:

Agricultural Pricing:

‘It is a tool through which government interferes to maintain the prices of the crops at a level where it is profitable for the growers and affordable for the buyers.’ To understand the purpose let us suppose that in a particular year   we have very good production of onions, it will bring down the price of onion and may cause loss to farmers especially the small ones. Also this will discourage the farmers to grow the crop next year which would reduce the supply and the price will rise and if it happens to a staple crop the fallout is be very bad. To control inflation then the government  will have to fill in with imports which would hamper farmers. This violent fluctuation in the price, supply and demand is disastrous for the agricultural economy.

Following are the main objectives of the Agricultural Pricing:

1. To ensure the welfare of both producers and consumers.
2. To maintain the prices of the competing crops to fulfill the production targets in regard to different commodities to meet the respective demand.
3. To hold the cyclical and seasonal fluctuation of prices at minimal level.
4. To bring parity in prices across the different regions of the country so that the surplus of any market  could be sold within or outside the country as per requirement.
5. To increase income of farmers and the production by providing a fixed investable income.

Sometimes it may happen that prices favorable to producer of agricultural products I not good for non-agricultural sector or vice-versa .Also  at times the agricultural inputs and the prices  can be manipulated to profit industries as it happened during the Green Revolution. Depending upon the intent of  the policy  we can classify it into following two types:

1. Negative Price Policy: The main objective of this policy is to keep the prices of raw material and food relatively low in comparison to the industrial products.  This  is done to facilitate the growth of Secondary and Tertiary sector.
2. Positive Price Policy: In contrast to above policy, in this policy the agricultural products have light taxes and also fair price is ensured to the farmers. This policy takes into account that unless agricultural sector is at minimum level of growth no other growth will bring welfare. This policy is generally adopted by developing countries.

Agricultural Finance:

The land reforms the reforms in credit system was very important. The conventional sources of loan for famers were the money lenders and Zamindars, who used to charge exorbitant rate of interest. This used to force  farmers into debt trap. Hence development of Institutional source of credit which would be welfare oriented was very important, which we would study in upcoming topic

Depending upon the period and  the purpose the credit system can be divided into following three types:

1. Short term credit: Period is less than 15 months and generally it is taken for purchasing seeds, fertilizers or to pay hired workers and machinery.
2. Medium term credit: Period is between 15 months and 5 years and generally it is taken for purchasing cattle or pumping sets or any other major agriculture equipment’s.
3. Long term credit:  Period is more than 5 years and it is generally taken for  buying additional land or for major rectification of land like sinking wells, horticulture, or to start any other side venture.

Major sources of Institutional credit:

1. Commercial Banks: In the initial period there was no big role played by the commercial banks, but with the help of ‘Village Adoption Scheme’ and the ‘Service Area Approach ‘ the commercial banks started coming close to meet the requirements of farmers. Moreover Commercial Banks started sponsoring many Regional Rural Banks (RRBs) to serve small and marginal farmers. This was done because the Commercial banks were finding it difficult to advance loans especially in regard to the lending techniques, collateral, recovery, etc.
2. Government: These type loans is called ‘Taccavi loans’ , and is giving at the time of distress like flood, famine, etc.
3. Other Credit Facility: 

1. Kissan Credit Card: This scheme was launched in 1998 with the aim of providing short term institutional credit to farmers
2. Interest Subvention Scheme: This scheme is being implemented by NABARD and RBI and its aim is to provide short term loan at subsidized rate of interest.

Key takeaways:

1. Agricultural pricing is a tool through which government interferes to maintain the prices of the crops at a level where it is profitable for the growers and affordable for the buyers.’

1.8 Agricultural Marketing:  

Agriculture marketing involves all the operations from movement of farm produce to reaching the consumer. In India, the agri-market  is regulated by Agriculture Produce Market Committee(APMC). There are around 2500 agri-market and close to 5000 submarkets. The services available in these market places are  auction halls, weight bridges , lights, bore wells, shops, soil testing, police station and many other things. Apart from APMC there are several ways in which growers can market their produce like Periodic markets (weekly fairs), cooperative farm and contract farming.

Issues in present agriculture marketing system of India:

1. Too many middlemen: This leads heavier burden on consumers and less profit for farmers.
2. Lack of storage facilities: This reduces the shelf life of the produce and farmers have to sell their surplus produce at a low rate.
3. Poor transportation: Bad road conditions combined with lack of transportation facilities forces farmers to sell their produce in the vicinity which reduces their bargaining power.
4. Lack of Institutional credit: This causes farmers to agree to unfavourable conditions with moneylenders and more often than not farmers have to sell their surplus to the same money lenders at a very low price.
5. Lack of skills and market information: Due to this the farmers end up selling their produce at a much lower rate than what their surplus deserves.

Way Forward: 

1. Reduction in the number of middlemen so that farmers can have an option of selling their produce directly to the consumers.

2. Improvement in transportation so that farmers can leave their vicinity for a better deal.

3. Reduction of digital divide so that farmers can use online platforms to market and sell their produce.

In India too many people are engaged in farming hence we have to make sure that we plug all the leaks to increase the farmers’ income. Integration of India as a single market for all the farmers of the country will help in this regard.

Key Takeaways:

1. Agriculture marketing involves all the operations from movement of farm produce to reaching the consumer.
2. In India, the agri-market  is regulated by Agriculture Produce Market Committee(APMC).

1.9 National Agricultural Policy: 

The National Agricultural Policy was announced in July 2000. The aim of the policy was to exploit the untapped potential of Indian agriculture. After Green Revolution it was found that some states had improved exponentially and some were far behind. There was considerable yield difference in similar land quality across the states. This policy was planned under the provisions of World Trade Organisation. The policy gave emphasis on promoting agricultural exports after meeting domestic demands.

Following are the features of the policy:

1. The target growth rate of agriculture was kept at 4%. Also to achieve this target growth in an environmentally and economically sustainable manner.
2. To encourage private sector   through contract farming.
3. Promotion of Biotechnology.
4. To encourage private sector participation in agricultural research to develop new varieties.
5. Formation of Farmer services cooperative societies to facilitate the marketing of products as per recommendation of National commission on Agriculture.
6. To evolve National Livestock Breeding strategy to meet future requirements of milk, meat, egg, etc.

Key Takeaways:

1. The National Agricultural Policy was announced in July 2000. The aim of the policy was to exploit the untapped potential of Indian agriculture.
2. The policy gave emphasis on promoting agricultural exports after meeting domestic demands.

References

1. Introduction to Agricultural Economics by Pearson Education
2. Agricultural Economics by Reddy