Agricultural marketing refers to the entire process involved in moving farm produce from the farmer to the final consumer. In India, this system faces bottlenecks at both upstream (farm-level) and downstream (market-to-consumer) stages.
Fragmented Landholdings – 86% small and marginal farmers with low production volumes make aggregation difficult.
Poor First-Mile Connectivity – About 25% rural habitations lack pucca road connectivity – increases spoilage of perishables.
Lack of On-Farm Storage leads to distress sales. Eg- 166 MMT storage capacity gap (FAO)
Inadequate Primary Processing – Minimal grading, sorting, cleaning, and drying at the farm level
High Post-Harvest Losses – Losses of 6-18% in fruits & vegetables due to poor handling.
Weak Farmer Institutions – FPO/cooperatives have limited capacity for aggregation and marketing
Limited Access to Information – Farmers lack real-time data on prices, demand and arrivals.
High Input & Transport Costs makes farm-to-mandi movement expensive. Eg- logistics cost is 14% of GDP
Demand and supply gap due to Cobweb Phenomenon (Economic Survey) – Crop production depends on prices in previous periods rather than present demand
63% of agricultural households sold their crops to local markets and only 7.2% sold to APMCs.
APMC operating in monopolised silos limit free inter-state movement and competition. Eg- Licensing barriers and cartelisation
Dominance of Intermediaries leads to low price realisation. Eg- Farmers get only 25-30% of final price in perishables.
Inadequate Market Infrastructure – Mandis lack grading, sorting, storage, and drying yards. Only 10% of mandis meet required norms (Dalwai Committee).
Low Digital Integration – Only about 1500 mandis integrated with e-NAM (2024).
Quality & SPS Compliance Gaps – Inadequate testing infrastructure impacts domestic sales and exports. Eg- EU rejecting Mango consignment
Organised retail remains concentrated in metro and Tier-1 cities, with limited rural coverage
Low investment – Private investment <1% Agri-GDP.
Way Forward
Strengthening FPOs to enhance collective bargaining and direct market access for farmers. Eg- Sahyadri FPO in Maharashtra – increased incomes by 30%
Cold-Chain-as-a-Service (CCaaS) – IoT-based cold storage + logistics integration to reduce post-harvest losses
MSP 2.0 based on 3 D’s – Decentralisation, Diversification and Digital Procurement.
Rural Agri-Logistics Nodes under Gati Shakti Framework to develop cold chains, aggregation centers near farm gates.
Legal Reforms – Eg- adoption Model contract farming Act by states
Strengthening supply chain management is key to ‘Doubling Farmers Income’.