What are the problems faced by Agri Markets in India?
What we call "agricultural marketing" encompasses every step involved in getting a crop from the farm to the table. Gathering agricultural products yielded by the agriculture companies in India, standardising and grading them, storing them, transporting them to the market via various middlemen, selling them in the market, providing the necessary financing, etc., all fall under the umbrella of agricultural marketing.
Problems Faced By Agri Markets in India:
India is a predominantly agricultural nation, yet the agri markets including Krishi market, Krishi bazaar as well as Kisan mandi have been subpar. Despite their efforts, Indian farmers are still being taken advantage of by middlemen who refuse to pay fair prices for their goods.
- Too Many Intermediates:
Too many intermediaries and their abuse of farmers is the primary problem with India's agricultural marketing system. These middlemen take advantage of the farmers by paying them less than market value for their goods, and of the consumers by charging greater prices. Many middlemen exist for one reason only that is to increase their own financial gain at the expense of those farther up the value chain. These intermediaries exploit the less fortunate initially because of the latter's lack of resources.
Inaccurate weighing scales:
The misuse of weights and measures is a major flaw in the agricultural marketing system. Bricks, stones, etc., are commonly employed as weights in rural regions, and flawed weights can also be obtained in metropolitan shops. So, for financial gain, farmers use bigger weights to measure their grain. Most grain merchants maintain two sets of scales, one for buying and one for selling.
Lack of education and unity among farmers:
A significant amount of Indian farmers are illiterate, making them easy prey for moneylenders, dealers, and middlemen. Indian farmers are dispersed across vast rural areas, making it easier for middlemen to abuse them on deciding a reasonable rate for their produce, in Kisan Mandi. They can't get together to work out their differences, thus they're underpaid for their goods.
Lack of Financial Resources:
A lack of financial resources means that even urgent needs in rural areas sometimes go unmet. Produce is sold before it is fully mature because of these conditions. Also, they need to sell the product quickly so that they can pay off their monthly or quarterly payments on financial facilities like loans for a thrasher, pumping set, tractor, etc. Therefore, just as the farmers' inability to obtain loans is an issue, so too is the aid they do receive.
The absence of a well-structured marketing infrastructure:
Since cooperative societies, marketing efforts made by state and central governments, regular Krishi market, etc. are not as developed as they should be in India, agricultural marketing is also relatively ineffective there. This means the farmer is still caught in a cycle of exploitation. Farmers suffer as a result of the lack of a streamlined distribution network. As a result, the farmer must make individual sales to each customer. The middle class makes good use of the farmers' lack of organisation.
Subpar Transportation Options:
Unimproved routes between rural areas and urban centres or Krishi bazaar are impassable when it rains. Bullock carts can only transport goods a little far. A lack of reliable means of transportation makes it impossible for the farmer to sell his goods at compromised rates.
Inadequate Storage Facilities:
The absence of storage facilities is a serious issue for the agricultural marketing sector in India. Because of the lack of infrastructure, the farmer has to sell their goods below market value in order to make a profit. It is estimated that farmers lose anywhere from 20 per cent to 30 per cent of their harvest to pests like rats, insects, and the like, costing them hundreds of millions of rupees.
The absence of uniformity:
Because of the lack of uniformity and grading in the Indian Agri market, it is difficult to reach a fair price for these goods. Customers have trouble acquiring the product because of issues with standardisation and grading.
Insufficient Market Knowledge:
The average Indian farmer knows nothing about business. He puts his faith in the word of the local merchants and loan sharks. Most Indian farmers are unable to read the newspaper because of their lack of literacy. They, however, lack an adequate understanding of the market. Today, the government shares the market's interest rate on the ratio, which is a huge boon to their economy.
Corruption in the 'Mandis' Policies:
Taking a look at how the mandis are now set up, it is clear that the dealers, as well as the middlemen, work together to defraud innocent farmers. Here are some facts about the Kisan mandi and Krishi markets' corrupt policies, as stated by the Indian Organizing Society:
- About five per cent of a farmer's earnings are taken out of the economy in India under the guise of donations, 'dharmada,' Chanda, etc. due to the country's deeply flawed marketing structure.
- Since most farmers don't have a good grasp of how markets work, why prices rise and fall, what policies are being implemented, etc., they accept unfairly low prices for their produce. Since the rates are concealed, the farmers are essentially scammed.
- Many farmers have substantial amounts of their grain sampled just before a sale. Minimal or the lowest prices are being paid for all those products that are deemed to be of low quality.