INTRODUCTION

It is said that “ Production, Processing and Marketing ” are the

3 pillars of the agricultural economy. In India, basically,
agricultural production is scattered and is a small-scale production,
which creates problems of marketing. In addition, the infrastructure
facilities like roads, means of transport, storage facilities, etc.
are scarce in our rural areas.

In India, there are large numbers of markets which are not

regulated under the Marketing Acts. The regulated markets are very few
in numbers. The unregulated markets are in the hands of commission
agents or Dalals. There are many defects in these markets, they charge
high commission, no open auction `(hatta’ system), no proper
weighment, number of deductions, no prompt payment, etc.

Importance of Marketing and Peculiarities of

Agricultural Produce

With the developments that are taking place in recent years,

agriculture in India is becoming more and more market oriented. With
the onset of Green Revolution and subsequent White Revolution, the
problems of marketing are becoming more serious. Before dealing with
the marketing policies, it is necessary to throw some light on the
peculiarities of the agricultural produce.

In the first place, the volume of agricultural produce is larger

in relation to its price. Another important characteristic is the
perishable nature of agricultural produce. Milk, Vegetables, Fruits,
etc. are more perishable and are required to reach to the Consumers as
quickly as possible. Even the grains, if not dried and stored properly
are attacked by the store grain pests in a few days. Infrastructure
facilities such as roads, transport, storage, etc are very much
inadequate in our rural areas. Small holdings and large number of
producers scattered over a wider area, is another feature. All these
peculiarities create problems in marketing of agricultural produce.
 Defects in the Marketing of Agricultural Produce
They are many problems in the unregulated markets such as,

 Small holdings resulting in small quantities of marketable surplus

 Lack of infrastructure facilities.
 Lack of grading the produce.

As a result, they do not get remunerative price. At present,

majority of the markets are unregulated. The price is fixed by the
Commission agent and the retailers (Purchaser) under the cover of
cloth by making signs on the palm, popularly called as the “Hatta
System”. Thus, even though the farmer is present there, he cannot know
the real price at which his produce is sold. The Commission agents
exploit the farmers by using many fraudulent means. They charge heavy
commission, use faulty weights and measures and have number of
deductions. Farmers also lack in information about other markets and
prices prevailing there.

Measures adopted by Government to improve the Marketing

Government has taken various steps to improve the conditions of
agricultural marketing in the country. A few of the attempts made by
the government in this segment are,

 Improvement of the roads and communication facilities in the rural

areas through the development programmes under Five year Plans,
 Establishment of Central and State Warehousing Corporations which
encourage construction of warehouses and godowns,
 Village Co-operative societies are given necessary technical and
financial help for construction of godowns. Farmers can store their
produce in these warehouses and can get loans on that security.
 Declaring the Minimum Support Prices for the selected commodities,
before the sowing season stabilizes food grains prices.

Apart from these, The Department of Marketing, Government of

India, had undertaken `Marketing Surveys’ for various commodities.
These surveys brought out the problems of marketing and suggested the
remedial measures. These Surveys served as the basis for the policies
in the subsequent period. In the field of grading and standardization
under the `Agricultural Produce (Grading and Marketing) Act’, grades
and standards are fixed for many goods like ghee, flour, eggs, etc.
The Agricultural Marketing Department gives a seal “AGMARK” the graded
goods. For testing purpose, quality control laboratories are also
established.
 But the two main significant remedies for many ills in the
marketing of agricultural produce, are the introduction of Regulated
Markets and the Co-operative Marketing.

Co-operative Marketing in brief…..

Prior to 1954, separate co-operative marketing societies were
established as distinct from the co-operative credit societies.
However, since 1957, policy was adopted to have `Multipurpose Co-
operative Societies" undertaking both functions of supply of credit as
well as marketing of agricultural produce. The co-operative marketing
societies can link credit, farming, marketing and processing to the
best advantage of the farmers. It can have its own storage and
warehousing facilities.

The most important advantage of the co-operative marketing is

that it can eliminate many of the middleman and their profit margins.
The co-operative marketing society can also undertake supply of inputs
such as seeds, fertilizers, implements, etc required by the farmers.
Thus, co-operative marketing is the best method to reorganize rural
marketing and to promote planned growth of our rural areas.

At present, there are over 60,000 primary co-operative marketing

societies in India, of which 3500 are special commodity marketing
societies. At the district level, there are 160 Central Marketing
Societies. At the State level, there are 29 general purpose State
Level Co-operative Marketing Federation. (NAFED). In additions, there
are 8 State Level Trade Co-operative Development
Corporations/Federations.

“ In 1990-91, the co-operative marketing societies marketed agricultural produce worth

Rs.6300 crores. Punjab, Maharashtra, Uttar Pradesh and Gujarat States accounted for 75 per
cent of the total value of the agricultural produce marketed by co-operatives. The three major
commodities which accounted for about 75 percent of the total sales are food grains, sugarcane
and cotton. ”

The co-operatives have made a good progress in recent years in

the field of agricultural processing. Similar, is the case of co-
operative dairy development.The National Co-operative Development
Corporation (NCDC) was established in 1963 under the Act of
Parliament, with the object of planning and promoting programmes for
the production, processing, storage and marketing of agricultural
produce and notified commodities through co-operative societies.
 Regulated Markets

Evolution of Regulated Markets

The regulated markets are established as per the provisions of

the `Marketing of Agricultural Produce Acts’ of the State Government.
The first attempt at regulation of markets in India dates back to 1897
when the Berar Cotton and Grain Markets Law was passed to purge
marketing of many of its abuses. Subsequent Market Acts, wherever
passed, have virtually been passed on the principles embodied in it.
Though regarded as a model for adoption in the country, it suffered
from limitations like excessive bureaucratic control and lack of
independent machinery for settlement of disputes.

Consequently The Indian Cotton Committee was set up in 1917 which

recomended the setting up of markets for cotton on Berar system.
Further attempt at the regulation of market was made in Bombay by
passing the Bombay Cotton Markets Act in 1927. The defects and mal-
practices of unregulated markets can be recovered by the establishment
of regulated markets was suggested first in 1928 by the Royal
commission on Agriculture.

The Bombay Provincial Banking Enquiry Committee 1929-30, also

pointed put the glaring defects in the working of the traditional
markets and had recommended the immediate application of the Bombay
Cotton Act to important centers in the Presidency and the
establishment of regulated markets for agricultural commodities other
than cotton also. The movement of regulation of market gained momentum
only after 1930. The Bombay Agricultural Produce Market Act of 1939
was passed in respect all agriculture produce Viz., cereals, fibres
and fruits etc.

As a result at the outset of second world war there were in all

122 regulated markets. At the end of 1983 the number of regulated
markets in India increased to 5430. The total number of regulated
markets in the country was found to be 6,809 at the end of March 1994.
They were supported by the central assistance for infrastructure
development in terms of setting up of rural godowns. Grading centers
have also been laid down for different agricultural commodities.
Likewise special commodity boards are functioning for rubber, tea,
coffee, tobacco, spices, vegetable oils and horticulture.
 Regulated Markets : Meaning & Features

Regulated market is a wholesale market where buying and selling

is regulated and controlled by the state government through the market
committee. It aims at the elimination of unhealthy and unscrupulous
practices, reducing marketing charges and providing facilities to
producers and sellers in the market. It also aims at implementing
measures to remove defects such as, the poor standards of primary and
secondary markets where producer convert their produce into cash, the
prevalence of various malpractice's such as short-weights, excessive
market charges, unauthorized deduction, adulteration of produce and
the absence of machinery to settle disputes between sellers and
buyers.

Regulated markets aim at the development of marketing structures

to ensure remunerative prices to the producers and to narrow down the
price spread between the producer and the consumer. A fair price is
assured for the producers to get the largest share in the final sale
price of the produce. It also aims at reducing the non-functional
margins of the commission agents. It provides an ethical environment
for proper trade practices by prohibiting mal-practices in the market.
It also avoids the pitfalls of wide fluctuations in prices by
providing stable prices for the agricultural producer.

Main features of regulated markets

MARKET COMMITTEE: Market committee is comprised of representatives

from different sectors of society that is farmers, traders, government
local bodies and co-operative. In general it is observed that market
committee consists of 15 members 10 from farmers 3 from traders and 1
each from the government and local bodies.

AREA OF OPERATION: The concerned state government notifies that its

intention to regulate trade practices in specified area such an area
of operation is laid down either as a municipal limit or district or
even it may be a region. In Maharashtra area of operation of each
regulated market restricted to one taluka.

METHODS OF SALES: In regulated market the sale of agricultural

produce is undertaken either by open auction or by close tender method
these sales method ensure a fair and competitive price for the produce
and prevent the cheating of farmers by market functionaries. By these
methods, the sale is carried out under the supervision of an official
of the market committee.
LICENSING OF MARKET FUNCTIONARIES: All the market functionaries
including traders working in the regulated market have to obtain a
licence from the market committee after paying the prescribed fee to
carry on their business, the licensed traders have to keep proper
record and maintain accounts in accordance with the buy-laws of the
market committee.

MARKET LEVIES OR FEES: Growers and traders have to pay market fees
which are calculated on the basis of value of volume of a commodity
bought and sold in the markets. Sometimes it may be based on cartload
or truckload.
 Organization of regulated markets

The primary object of regulating the markets is to safeguard the

interests of the producers-sellers and raise the standard of local
markets where the first exchange of goods takes place. With a view to
achieve this object in each of the regulated market committees are
established consisting of the representatives of the growers, traders,
local bodies, sellers’ co-operative shops and the state government
nominees. Producers are generally in the majority in such committees.
These committees are responsible for utilizing the funds for,

 Maintenance and improvement of the markets and its buildings.

 Maintenance of standards of weights and measures.
 Pay and pension of the staff
 Payment of interests of loans.
 Collection and dissemination of market information.
 Propaganda for agricultural improvement.

Constitution of the committees

The strength of the committee should be such as to accommodate

various interests in proper proportion - the committee should be
neither too small nor too unwieldy. The committee should ideally
consist of 12 to 18 members depending on the size of the market and
other considerations. The growers should constitute at least 50% of
the seats in the committee. All business transactions are conducted
within the market area under the rules and law framed and administered
by the market committee. The charges, allowances and deductions that
can be levied are fixed and prescribed by the market committee and
anyone charging more is likely to have his license cancelled.

The market committees look after the weights and measures and
prohibit any use of unauthorised weights and measures and all weighing
is done by licensed weighmen. Dealers in regulated markets are
required to fix prices in public and keep accounts or returns in such
a way that their submission to the market committee at regular
intervals is facilitated. Any disputes arising between the sellers and
the traders within the market are submitted to arbitration by the
“Disputes Committee”.
Meeting The Financial Requirements

To meet its administrative expenditure and in order to create

infrastructure facilities in the market area the market committees
gets funds from the following two main sources:

 Market fees on the produce brought for the sales in the market
yard.

 License fee, renewal fee of market middlemen functioning in the

area.

The finances of the market committee also consist of borrowed

funds (government funds), government subsidies and grants and other
sources including fines, market fees, and others such as property
income in the form of rent on godowns, stalls, canteens, interests on
surplus invested in government and/or other securities, sale of forms
and other material prescribed by it, sale of grass grown on the yards,
sale of manures and cowdung collected on the yards, and miscellaneous
fees like the registration fees, license, transfer fees etc.

These funds are utilised for maintenance and improvement of the

market and its buildings and maintenance of standard weights and
measures. It is also used for collection and dissemination of market
information, and also for spreading propaganda for agricultural
improvement.
 Procedure for sale

In the regulated markets, the produce is brought by different

means of transport, particularly bullock carts and trucks or trailers.
The business hours are usually between 10.00 a.m to 4.00 p.m and no
transactions take place on week-ends or other public holidays. Market
hours are prescribed with a view to bring about orderliness in
purchase and sale of the produce and to ensure competitive prices.

In some markets, there are common platforms where all daily

arrivals are arranged for sale. The common practice for the
producers/sellers to take the produce to the shops of their commission
agents where it is unloaded and arranged for sale. Usually sale takes
place in on of the three ways:

 Open Heap System: In this system the produce is heaped into lots
in front of the commission agent’s shops if already graded, it is
arranged gradewise.

 Open Cart System: In this system the produce is not unloaded but
kept in the cart itself and the cart is exposed.

 Sample System : In this system the commission agent draws a

representative sample, indicates details of the quantity, name the
seller by putting a slip in the sample exhibit the same as the
representative of the bulk. All produce is auctioned and the
highest bidder gets it, the produce then is delivered by licensed
weighmen and put into gunny bags, stitched and delivered to the
buyer. The settlement of account and payment has to be made on the
same day. The sale slips are prepared by the commission agent in
triplicate- one for the seller, one for the market committee and
one for his own record. The market fee is levied on the ad volerem
basis and is collected from the sellers through commission agents
on the basis of the sales slip (known as Sale-Patties).
NUMBER OF WHOLESALE ASSEMBLING AND REGULATED MARKETS

WholeSale Regulated Markets Sub-

S.No. States. Total
Market Principal Markets markets
(1) (2) (3) (4) (5) (6)
Andhra Pradesh
1. 823 244 579(1) 823
Assam
2. 172 16 19 35
Bihar
3. 443 122 706 828
Gujarat
4. 380 156 224 380
Haryana
5. 275 100 175 275
Karnataka
6. 444 124 320 44
Madhya Pradesh
7. 633 292 292 584
Maharashtra
8. 838 257 570 827
Manipur
9. 20 - - -
Meghalaya
10. 111 - - -
Nagaland
11. 16 - - -
Orissa*
12. 163 46 87 133
Punjab*
13. 667 143 524 667
Rajasthan
14. 384 134 250 384
Tamil Nadu
15. 300 270 - 270
Tripura
16. 84 21 - 21
U.P.
17. 645 262 383 645
West Bengal*
18. 214 41 415 456
Delhi
19. 25 7 10 17
 Importance of Regulated Markets

The economic and social benefits accruing to the cultivators, as a

result of regulation of markets, may be briefly enumerated as below:

 Rationalisation of Market Charges: As a result of the

rationalisation of market charges alone, the producer seller is
benefited to the tune of 3 to 5 rupees for every hundred rupees
worth of produce marketed by him in regulated markets. This is very
beneficial to the tiller of the soil.

 Change in the Social Behaviour: A change has also been brought

about in the social behaviour of the influential, powerful and
economically well-off trading sections towards the illeterate,
ignorant, indebted and economically backward cultivators by
constant diversion of their attention to the canons of fair trading
and responsibilities that devolve on the licensed traders and
commmission agents of the market committies.

 Market charges are clearly defined and specified. Excessive

charges are reduced and unwarranted ones are prohibited. Before
regulation, market charges against the farmer-seller in 3 markets
averaged 8.65 percent of the value of the produce. After regulation
they averaged 2.14 percent for an average reduction of 6.51 percent
point. The reduction was nearly 80 percent of the original charge.

 Fair Dealing: Market practices are regulated, and the undesirable

activities of the market functionaries are brought under control so
that a fair dealing is assured. No market functionary or no other
person shall make, allow, receive or recover any deduction in
weight or payment or any other allowance in respect of any other
transaction relating to notified agricultural produce.

 Correct Weighment: Correct Weighment is ensured by periodical

inspections and verifications of scales and weights. Weighment is
done only by the licensed weighman.

 Settlement of Disputes: Disputes arising between producer seller

and traders by reason of the quality of the producer, accounts and
deductions of unauthorized charges are solved by the sub-committee
of the market committee this avoid the legal complications and
unnecessary expenditure. It safeguards the interests of the seller
and smoothens business by creating good relations between sellers
and buyers.
 Reliable Statistics: Reliable and up to date market news are
available to the sellers for this purpose, not only the notice
boards for daily bulletins and newspapers are maintained but also
the radio set, along with the loudspeakers are arranged in the yard
for decimating market news. At the same time these markets are a
source of most reliable statistics and have been rendering a
valuable service in planning market programmes.

 Provision of Facilities: Proper market yards with full facilities

like sheds for the sale of produce, cart parking place, water
troughs and cisterns for cattle, better grading and warehousing
facilities for the accommodation of agricultural produce are duly
provided by the Market Committees.

 Grading facilities: For helping to promote orderly marketing,

regulated markets provide facilities for grading. For eradicating
marketing evils, grading is the only weapon. Some commodities are
being graded under AGMARK specifications to provide pre-tested
quality produce to the consumer and to ensure competitive prices to
producers.

Thus, regulation of markets has been a boon to the

agriculturists. It has not only introduced a system of competitive
buying, helped to eradicate undesirable malpractice’s, rationalised
market charges, standardised weights and measures, protected
cultivators from unauthorized deductions, and unduly low quotations,
but has also developed a machinery for securing impartial settlement
of disputes between the parties taking the overall picture, regulated
markets have produced a wholesome effect on marketing structure and
have raised the efficiency of marketing at the primary level.
 Linkages in Agricultural Marketing

Agricultural marketing is closely linked with the network of

Primary Agricultural Credit Societies (PACS) as it provides credit-
marketing linkages to the members. They are linked onwards to the
state and national level organizations. However, there exists a
parallel institutional set-up of regulated markets in commercial towns
under the control of State Agricultural Marketing Boards. The
following diagram exhibits the network of agricultural marketing in
the country,

DMI, GOI NAFED (apex Private

body) Traders
SAMBs
PMYs Statefed Wholesaler
SMYs Unions Retailer
Primaries Consumer
RMs
Informal Processor
Policy Grou
Guid ps Exporter
ance
Weights,
Measure
s&
Certifica

DMI – Directorate of Marketing and Inspection

SAMB – State Agricultural Marketing Board

PMY – Principal Market Yard

SMY – Sub-Market Yard

RM – Rural Market

NAFED – National Agricultural Cooperative Marketing Federation

Statefed – State Cooperative Marketing Federations

 NAFED

National Agricultural Cooperative Marketing Federation (NAFED) has

been entrusted with the task of coordinating and promoting the trading
and marketing activities of its members in agricultural and other
commodities. Nafed was set up in 1958 as the apex body of marketing
cooperatives of the national level. It has the registered office at Delhi
and operates over the entire country.

Objectives of Nafed:
 To facilitate the working of its affiliated cooperative institutions.
 To coordinate and promote the marketing and trading activities of its
members in agricultural commodities, articles and goods.
 To undertake or promote either on its own or on behalf of its member
institutions or government, inter state, intra state and
international trade and commerce in and other commodities, articles
and goods and,
 To undertake supply of agricultural requisites like seed, manure,
agricultural implements, consumer goods, etc.

Present membership of Nafed consists of 16 state level

cooperative marketing federations, 5 marketing federations of union
territories and one regional marketing federation. The National Co-
operative Development Corporation (NCDC), a Government of India
undertaking, is also a share holder of Nafed. Nafed has established
branches in important terminal markets such as Chennai, Mumbai,
Kolkata, and Delhi. Sub offices have also been opened at Cochin,
Nasik, Guwahati and Hyderabad. Regional offices are being opened in
Uttar Pradesh, Madhya Pradesh and Rajasthan to establish effective
liaison.

Functions of nafed:

 Marketing of food grains: The food corporation of India has

agreed to give a positive preference to co-operatives and also
extend financial assistance. Guarantee cooperatives are being
assigned larger role in procurement of wheat in the state of Uttar
Pradesh, Punjab, Haryana, etc.

 Foreign trade: For regulated exports of commodities grown in the

different states, the agency of Nafed has been found suitable for
no artificial increase in the price takes place due to purchases
not being made in terminal markets and exports are effective only
if the internal conditions so demand.
 Canalized exports: The government of India has canalized the
exports of sensitive items like onions, sesamessed, HPS groundnuts
and pulses through Nafed. Once growers of large cardamom were
assured by remunerative prices and its exports were decanalised.
Simultaneously per unit value realization in export earnings are
increased. Substantially, due to the increasing role played by
Nafed in helping capacity utilization of cooperative, oilseed
producing and other types of processing units, cotton extraction,
etc were able to increase their exports.

 Coordination with commodity operations: A number of commodity

corporations like Food Corporation, Jute Corporation, and Cotton
Corporation have been set up. The business relationship between
them is being strengthened so that these organizations work to
their mutual advantage for the benefit of the farmer.

 Inter state trade: this involves purchase from the growers at the
harvest time at various levels either by themselves or through
primary credit societies and selling such purchase at terminal
consuming centers by expanding inter state trade.

 Development of managerial efficiency: Realizing the importance

of trained managerial staff and with a view to reduce the
dependency of marketing cooperatives on the personnel borrowed from
state cooperatives department a scheme for building up a key person
for marketing and processing societies was implemented during the
fourth period plan

NAFED thus plays an important role in developing cooperative marketing

of agricultural produce.
 Problems & Measures

Though the regulated markets are a boon to the agriculturists,

there are a number of problems in the functioning of regulated
markets. Some of the core problem areas are as follows:

Problems of location and publicity : Most of the farmers are

ignorant of the benefits of regulated markets.the present
regulated markets are confined to taluka headquarters and are not
accessible to all the farmers living in far villages of the
taluka .due publicity is also not given regarding the presence of
regulated markets .hence the farmers are unable to approach such
markets.

Presence of commission agents: commission agents have become

indispensible to the farmers to market their products .the
commission agents continue to flourish in the regulated markets
.they charge a hefty commission.

Payment and auction system : farmers are denied prompt payment by

the traders .due to thisthey find it very difficult to meet their
working capital needs .the auction system has a number of defects
for which the farmer has to bear the loss.

Vigilance and supervision: the officials in the market yard are

not keen on the transactions and as a result the faith of the
farmer is not firm.it is also found that often the traders violet
the rules and regulations in the market transactions .there are
various loopholes in the constitution of the market
committees .there is also a lot of political interference in
maaaany committees .due representation is not given to all the
categories of farmers in the committee.

Lack of incentives : the incentive provided are not sufficient

.higher market charges are levied on small and marginal farmers
whose produce constitute a major portion of the total produce .due
to illiteracy and ignorance the farmers are unaware of the
subsidy ,concessions and incentives provided to them by the
government .

Defective transactions : the buisness of the regulated market is

confined only to a few fixed hours on the working days and
consequently the farmers coming from far off places find it
difficult in reaching the market yard in time .as most of the
farmers are illiterate and ignorant .they find it difficult to find
exact dates,days and hours of the transactions .even the daily
 price reports are not despatched to all the important villages in
their jurisdiction.

MEASURES TO REMOVE THE DEFECTS OF REGULATED

MARKET:

 Due publicity: the officials should give a vidal publicity to the

regulated markets and their usefulness to the farmers .they must
also create a favourable image and positive outlook among the
farmers .it is also necessary to open more regulaated markets and
sub-markets.

 Abolition of commission agents : the agricultural market

committees should get rid of the commisssion agents who claim a
major chunk of the farmers income .it is also necessary to bring
about changes in the by-laws of the agricultural marketing yards
.it is inevitable to protect the interest of the farmers in order
to safeguard their survival.

 Regularity in payments: in order to assure prompt payment in the

regional markets ,the agricultural market committees should insist
the license traders who transact buisness in the yard to deposit a
fixed amount for the quick payment to the farmers in case of
failure of prompt payment.

 Proper supervision and vigilance : it is necessary that the

officials should take keen interest in the transactions .this step
will encourage the farmers in getting their farm produce to the
market yards and also their faith and confidence in the functioning
of the market would be strengthen. The agricultural market
committees should taken stern actionscharges ,loading-unloading
charges, etc.are borne by farmer producers in some others by the
buyer and in others equally.

 Information : market intelligence has been strengthened.licensed

functionaries are required to submit complete details of all
transactions taking place everyday.this enables the committee to
know the exact quantity of arrivals ,sale,stocks and prices of
different commodities which are published on notice boards
everyday.this information is further disseminated to hinterland
villages of market which are helpful to farmers in judging the best
time to go to the market when he can obtain best possible prices.
 Physical facilities:facilities like rest
house,canteen,drinking ,water,cattle shed, etc. are provided in
regulated market for the benefit of farmers and their cattle.

 Grading and standardisation: facilities for grading and

standardisation of the produce brought for sale by the farmer
producers are provided .Sizes of packing for various commodities
are also stipulated by the market committee eg.180 kg bales for
cotton,etc.

 Establishment of godowns:central and state warehousing

corporations are expected to establish godowns near the market for
benefit of farmer –producers.in the eventuality of prices being low
or if the produce cannot be sold on the day of arrival for any
reason ,they can store it in these godowns at the charges fixed by
warehouses.

In short ,’regulation of markets’ has really helped the farmers

in cutting down the marketing charges and also exploitation to an
extent .studies conducted on the impact of regulated markets revealed
that ,number of farmers selling the produce in such markets has
increased in addition to realisation of better prices .thus,the
establishment of regulated markets has conferred tangible and
intangible benefits on the faarmers in terms oof avoidance of mal-
practices and better price realisation.
 Corporatisation of Agricultural Markets

For well over 50 yrs now, Indian agriculture has been stuck in a
rut. At one end, farmers lack access to quality inputs, credit and
knowledge that will help them improve quality and productivity. At the
other end, the output side is characterized by middlemen like
consolidators and commission agents who gnaw away at the margins. The
result- farmers end up with just 30-40 % of the price one pays.

Over the last three years, an interesting development is quietly

taking place on the fringes of India’s Farm Sector. Some of India’s
Inc.’s biggest names have begun experimenting with ways to tap the
lagre opportunity across the agri value chain. These players are
spawning innovative business models which will leverage their
knowledge of agribusiness into new areas. Some of the examples are
given in the following tables :

One-Stop Shops

Agri- Objective Business Scope Roadmap

Initiative

Disintermediate Retail agri inputs, 800

Tata Kisan distribution of rent out agri- agricentres
Kendra fertilizers; implements in UP,
enhance brand Haryana &
Punjab
Create a Retail inputs, rent 200
Mahindra business that out implements, agricentres
Krishi Vihar helps the group advisory services, in 200
keep growing drying of crop districts;
each hub can
have a number
of spokes
Commission on output Validating
Rallis Kisan Tap business sold, retail of results by
opportunity by
Kendra addressing inputs, advisory experimenting
farmers’ services in different
concerns crops, across
regions.

The Mixed Bag

ITC’s Intl. Create an e- 2-3% commission each Eventually

Business sourcing model for ITC and the cover 10
Division by working Sanchalak/coordinator states with
closely with soya, wheat,
customers maize,
coffee.
Nagarjuna’s Create an Enrolling fee from Farmers can
ikisan.com infomediary and farmers, input access ikisan
e-marketplace dealers, commission through 11
in the agri on output. centres
space
EID Parry’s Catalyse e- Use partnerships to 20 e-centres
Indiagriline commerce in bring in savings from at
agricultural & new economy Nellikuppam
non-farm in Tamil
products Nadu.