Agricultural marketing

Agricultural marketing is everything that happens to a crop after the harvest, until it reaches the buyer: assembling it, storing, processing, transporting, packaging, grading (sorting by quality) and distributing it.

Farmers have long faced problems in selling:

• Faulty weighing and dishonest practices by traders.
• No information about prices in different markets, so they sell too cheaply.
• No storage: farmers must sell right after the harvest, when prices are lowest, and more than 10 per cent of produce is wasted for lack of storage.

A trader will always buy where the price is lowest; a single small farmer has no bargaining power.

What the government did:

• Regulated markets, with fair weighing and rules for buying and selling.
• Better infrastructure: roads, storage, cold stores.
• Cooperative marketing: farmers join together to sell, as in Gujarat's milk cooperatives.
• Minimum support price (MSP): the government promises to buy certain crops at a fixed minimum price.
• Buffer stocks of wheat and rice kept by the Food Corporation of India (FCI).
• The public distribution system (PDS), which sells food grains cheaply to the poor.
• e-NAM (2016): an online portal that links mandis (markets) across the country.

Alternative channels let farmers sell directly to consumers, cutting out middlemen: Apni Mandi (in Punjab, Haryana and Rajasthan), Hadaspar Mandi, Rythu Bazars, Uzhavar Sandies, and contract farming with companies.

(Three farm laws passed in 2020 to change agricultural marketing were later repealed.)