What are the main bottlenecks in upstream and downstream process of marketing of agricultural products in India?. (UPSC CSE Mains 2022 - General Studies Paper 3)
Agriculture is the backbone of the Indian economy. Even, with the growth of other sectors, agriculture still continues to play a dominant part in the overall economic scenario of India. Agricultural marketing is mainly a state entitlement with the Central Government providing support under central sector schemes. The upstream process of agricultural marketing includes inputs to agriculture like seeds, machinery, and technology and the downstream process includes the food processing industry.
However, there are still many challenges in upstream and downstream process of agricultural marketing:
- In the upstream process, lack of coverage of reform policies is one of the main hindrances in addressing the issues of agricultural marketing. For example, only some States have adopted the Agricultural Produce and Livestock Marketing (APLMA) Act fully.
- Contract farming has been taken out of the Agricultural Produce Marketing Committee (APMC) domain, citing conflict of interest and this creates lacunae in the upstream as well as downstream process.
- Another downstream bottleneck is flawed MSP provision which forces the private traders to buy produce at or above MSP or penalizing for not doing so, which can kill the private markets for agricultural produce.
- There should be effective provision of procurement by the State and its agencies with the involvement of local institutions like Primary Agricultural Credit Societies (PACS) and producer companies as it effects sourcing activities and purchasing activities in upstream and downstream process.
- Most disappointingly, Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 (APLMA, 2017) ignores the vexed issue of the role of Arthiyas (commission agents or CAs) in the APMCs and maintains them as central agents in the system. This effects the whole agricultural marketing process.
However, with some reforms like the removal of entry barriers, involvement of other stakeholders and electronic settlement of sales, the process of marketing of agricultural products can be improved.
Addressing the challenges of the agricultural market is complex, yet doable, as the doubling of farmers’ income cannot come without developing a thriving market of agriculture. Hence, it is high time that focus must shift from agricultural production to agricultural marketing.
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