REVIEW of AGRICULTURE_Efficient Agricultural Marketing

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Efficient Agricultural Marketing

Zaibun Y Jasdanwalla

This paper attempts an assessment of the efficiency of the marketing structure for agricultural

products in India. In doing so, it formulates certain criteria for judging marketing efficiency at the midro

and macro levels.

After reviewing various aspects of marketing practice, the author concludes that the existing mar-

keting structure does not need radical overhaul at the present stage of development of the economy.

She, however, argues for a series of improvements in transport, in grading and storage systems and in

the adoption of fair practices.

THE rate of growth in the agricultural

sector for 1975-76 was 8 per cent . A

part of this growth is attributable to

the chance factor of singul arly good

weather. But a considerable par t of it

is the result of substantial investment

in the agr icul tur al sector — bot h at

governmental and non-official levels.1

In fact, the gradually discernible insti

tutional and technological transformation

in agriculture lends ^plausibility to the

official projection of an estimated rate

of growth of 4.35 per cent in the Sixth

Flan.8

Increased agricultural output will

lead to higher levels of marketed sur

pluses. The upw ard trend in marketed

surpluses clue to higher production wi l l

be supported by growing movements of

the farm populati on away from rur al

areas. Also, a change in consu mptio n

patterns among farmers, will occur as

the latter get introduced to more andmore non-farm items of consumption.

This will induce farmers to market

more so as to get additional purchasing

power. And farthe r, the rising trend

towards greater crop specialisation, in

place of diffused cropping patterns, will

raise the size of markete d surpluses.

Though researchers in the field of

agricultural marketi ng have long been

emphasising the importance of market

ing as an economic activity, it is in the

present context of substantial, actual

and anticipated, increases in agriculturaloutp ut and marke ted surpluses tha t

both public and private attention will

focus on the study of marketing pro

cedures and on the ways and means

of improving the structure for mar

keting agricultural produce.

In this paper an attempt is made

to outline some efficiency criteria for

marketing, and to relate them to the

Indian situation.

MARKETING EFFICIENCY

Since production without the adjunct

of marketing is inconceivable, the

possible theoretical options for any

community of people, with the retention

of marke ting as a procedure, may first

be considered. There could be hand

ling of all marketing activities by the

producers alone; there could be take

over of all marketing activities by the

various categories of consumers of agri-

cultural products; or there could be

total take-over by the State, Alter

natively, there could be — as in most

societies which are not totally centralis

ed — a system which is private-cum-

publi c and wh ich includes some co

operative activity associating both pro

ducers and consumers in the marketing

processes.

Experience with even the most

limited consumer handling of marketing

has not been very successful. Therefore,

the option of a take-over by consumers

of every aspect of marke ting of all

agricultural products does not merit

much consideration. A tota l take-over

by the producer does not also seem afeasible proposition for most societies,

If the farmer has become, or is steadily

becoming, a specialist in crop cultiva

tion technology, he is not, generally

Fpeaking and cannot be expected to

become, a specialist in all the dimen

sions of the marketing operation, even

in the most progressive agricultural

situations. Moreover, sipce, for reasons

of equity, government policy in most

LDCs is to discourage large-scale

farming, it would be realistic to expect

that future surpluseswil l

originate onsmall farms, with the farmers' need for

market functionaries increasing. Large

fanners do and can by-pass middlemen

for certain crops and can transact

direct ly wi th the users of thei r pro

ducts — especially the commercial

users. This option, is not open in

most cases to the small farmers who

have small individual surpluses to sell.

The third alternative is total take

over" of marketi ng by the State. The

motivation for such fake-over may be

multi-dimensional. The objectives couldbe to raise mark eting efficiency; to

promote social welfare and distributive

justice; to bring about efficiency in

resource allocation; and to stimula te

agricul tural production. Moves towards

such a take-over receive an impe tus

when agricultural production, parti cu-

larly foodgrains product ion, is low

Just as when there is too little, also

when there is too much of surplus of

agricultural produce, governmental

take-over may be strongly mooted. In

a scarcity situa tion, considerations of

social justice weighing in favour of the

low-income consumer may be the major

inducement; in a situation of abundance,

the need to sustain enlarged agricultural

production even in future years may be

the prime factor. However , even in

these situations, there must precede an

assessment of what is expected of a

marketing set-up and what criteria are

to be applied in assessing the efficiency

of marketing operation.

Basically', the marketing organisation

is expected to procure and assemble

surpluses of agricultural products fromwherever they originate, and thereafter

to dist ribu te them among those who

do not produce such commodities but

have a demand for them. Thi s is the

purely physical dimension of the task,

and is significant when agricultural pro

duction is showing a long-term upward

movement. It is impor tant also when

production exhibits wide fluctuations

and is geographical ly more diffused. A

marketing set-tip that has grown and

developed to handle a larger and more

varied output, grown over a more extensive area, and fluctuating trends in

outpu t, is usually a viab le and flexible

service to the economy.

Tables 1 and 2 show the production

rise as well as the fluctuations in pro

ductio n for six imp ortant crops (viz,

rice, wheat, sugarcane, groundnut,

cotton , and jute) dur ing 1949-50 to

1975-76. A larger quan tum of output

is handled today than two and a half

decades ago. Also the fluctua tion in

output of cash crops that has had to

be accommodated is marked. Andlastly, a more extensive fob of physical

assembly and dispersal of products has

been assigned to the marketing orga

nisa tion in the country over the last

35 years.





ECONOMIC AND POLITICAL WEEKLYReview of Agr ic ult ure December 1977



Review of Ag ri cul tu re December 177 ECONOMIC AND POLITICAL WEEKLY

The state and districtwise scatter

of production of rice, wheat, sugarcane,

groundnut, cotton, and jute, is given

in Table 2 . T h i s Table depicts the

total number of districts producing each

crop and their geographical dispersal in

the different states.

For rice the major producing states

have a total of 257 main markets; for

wheat 317; for sugarcane (gur) 83; forgroundnut 221; for cotton 35; and for

jute 40 such markets. Table 3 gives

a statewise break-up of the location of

these markets.

The complexities of marketing these

commodities can be appreciated further

from the fact that each of these crops

has several different varieties grown

and sold. Table 4 gives the varieties

for two of the crops, viz, rice and

cotton."

The conclusion that can be drawn

here is that the marketing structure inIndi a is performing effectively a job

tha t is intricate and challenging.

PRICES AND ALLOCATION OF RESOURCES

The second requirement from the

marketing set-up would be that, through

it, an effective price mechanism should

operate. Prices should be determined

through an interacti on between inde

pendent buyers and sellers of agr icu ltu ral

products who are under no pressure or

coercion to buy or sell at the prevailingmarket price. Prices should perf orm

the useful function of acting as signals

to producers and consumers. Their

'rationing' function would ensure that

the commodity would get allocated to

those users who have the greatest use

for it and who would therefore, be

willing to pay the highest prices. Their

'motivating' function would ensure that

the state of demand for commodities

would get reflected for the producers

who would be accordingly motivated to

move thei r resources away from or

towards the production of certain crops.

Further, the price mechanism could

also bring about an appropriate distri

bution of products, regionally and over

time, for each production period. If

the territorial differences in prices keep

within reasonable limits of the trans

port atio n costs, then the marketi ng

organisation is said to be doing its job

satisfactorily. If the difference in prices,

from one point of time to another, does

not exceed storage costs subs tant ial ly,

then again the inference is that the

organisation is operating efficiently. Infact, a further conclusion is that the

situation is an optional one, in that, all

profitable opportunities will have been

explored for holding surpluses over into

future periods of demand as also moving

them regionally, for the benefit of both

the consuming and producin g sections

of society.

In low-income, traditional, agricultu

ral situations, however, the market

operation becomes complicated, because

agricu ltura l outpu t and prices fluctuate

violently with changes in weather condi-tions. This opens the efficiency of the

system to question. Such price fluctua

tions produce frequent inter-crop move

ments in cultivated area, and the agri

cultural situation becomes an unstable

one. The suggestion is that the market

structure should provide a cushion,

through appropriate changes in whole-

sale inventories, to counteract such

erratic supply behaviour. This wou ld

prevent frequent acreage and produc

tion fluctuations. Then shifts from one

crop to another would occur as a matterof gradual transition, in response to a

secular, long-term change in demand,

and would be the result of a rational

and optimal set of decisions taken by

the farmi ng community. In the latter

situation, the demand shifts would be

transmitted through the price and

market mechanisms, and these mechan

isms are, therefore, said to be working

efficiently.

Further, economic development,

risi ng per capita incomes, and low

income elasticities of demand for basicfood items, will mean that demand will

shift to the non-cereal food products

and industrial raw material crops.

Even currently, it is estimated that the

cash value of the marketing of such

items as cotton, oilseeds, fruits, vege

tables, milk and milk products is quite

high.4 This shifting trend in demand

will have to be transmitted by market

forces to individual producers, through

changes in the str ucture of relat ive

prices. When changed price relat ion

ships achieve the new situation of lowered emphasis on foodgrains pro

duction and increased produc tion of

other consumer food items and crops

which constitute industrial inputs, then

the next task for the market organisa

tio n w il l be efficacious movements of

increasing amounts of such crops to the

consuming points. If the costs of such

movements are not kept low, then much

of the advantage of the improved

demand situation wi ll be lost. " I f this

(the moving of perishable commodities)

is reflected in much higher cost, thenthe net price received by farmers will

not fully reflect the growth in urban

demand and the production incentive

wi l l not be given" 5 Adequate, speedy,

and inexpensive marketing facilities

will have to be increasingly provided

for the new consumer-preferred crops.

The market structure and -th e pri ce

mechanism thus have a specific function

in promoting resource shifts which are

necessitated as a consequence of econo

mic development.

To recapitulate, a marketing structurecould be assessed as efficient if it offers

agricultural products at prices which re

flect realistically the demand and supply

situations. This can happen in a com

petitive environment, especially where



ECONOMIC AND POLITICAL WEEKLY Review of Agr ic ult ure December 1977

the movement into the trading section

of the-marketing structure is unrestrict

ed. Further, there should be mini mal

price divergences — from one regional,

seasonal, and vertical point in the mar

ket to another. An d further , price

movements should direct resource re

allocations within agriculture in amanner wh ic h is stable and socially

desirable. This, then, would ensure-

allocative efficiency in resource use and

also optimal allocation of marketed

surplus among different users separated

by time, distance, incomes, and uses to

which they put their product.

Exist ing research of marketing in

the Ind ian situation, establishes that

seasonal fluctuations in prices are not

inconsistent with storage costs and that

regional price differences are fairly

closely in line with transportation costs.Hence spatial and temporal market

integration does exist to a considerable

extent in the case of several agricul

tura l commodities. Also, very lit tle

evidence has been found to show that

serious collusion exists among , market

intermediaries for explo iting the far

mers. In many cases, since market ing

firms can work wi th very lo w over

heads, instead of oligopolistic or mono

polist ic situations there is in "fact au

overcrowding of firms.

DISTRIBUTIVE JUSTICE

The third efficiency criterion for the

marketing set-up, relates to distributive

justice. The relevant questions in this

context are, whether the marke ting

system is aggravating income inequali

ties, reducing them, or maint aining a

xtittw quo. The system escapes criti-

cism only if its functioning is contribu

tory to a realisation of a more equitous

distribution within society.

The market structure is assessed as

unsatisfactory if it is aggrava ting i ncome inequalities in the following ways.

The marketing industry may be getting

a return which is greater than its 'real'

contri bution to the national outp ut.

Moreover, the dis tri but ion of profits

mtra-industry may be skewed, with a

a disproportionate share going to the

larger marketing firms. The output of

food crops — in periods of shortages,

particularly — may be channelled into

only the most lucrative avenues; low-

income consumers may find themselves

extra-marginal buyers, reduced to destitution for lack of purchasing power.

In a similar manner, the small farmer

— particul arly in periods of abun-

dance — may be discr iminated against

by being offered a lower return, due

to his small surplus, his lack of stay

ing power, and his immediate need for

cash Contrariwise, the larger farmers

may get preferential treatment by being

paid higher returns for their surpluses.

Greater inter-group inequalities may

be promoted; the trad ing communi ty

gaining at the expense of the fanning

or consuming groups, Intra -group in

equalities — i e, between large and

small farmers, between large and small

traders, between large commercial users

of agricultural products and small pur

chasers of basic essential food items —

may get accentuated. Regional dis

parities — i e, between prosperous high

income areas and backward areas where

purchasing power is low — may get

increased by the movement of surpluses

by the market organisation to only

those regions where the returns wi l l be

the highest.The basic issue, then, is that if the

small farmer, the low-income consumer,

and those backward areas that do not

have significant purchasing power, are

discriminated against, or penalised by

the marketing structure, then on

grounds of distributive justice it conies

up against social disapprobation.

In applying the above efficiency cri

terion to the Indian set-up, one relevant

poin t needs to be stressed. The low-

income consumer's precarious situation

as regards the procuring of food is acircumstance for which the blame can

not be attributed to the marketing or

ganisation alone. It is part of income

disparities, whi ch are a concomitant

of a non-centralised and private enter

prise economic system. With various

tonus of government intervention, a

palliative may be found which lessens

the symptoms of a serious, basic,

underlying problem. The marketing

organisation is to be censured only in

so far as it adds to an already grave

situation, by causing harm to the weaker

sections of the community.

MARKETING FIRM'S STRUCTURE

A common opinion is that if the mar

gin between the price paid by the con

sumer and that received by the far

mer is small, the marketing operation

is being performed satisfactorily. This

is obviously an erroneous generalisa

tion. Margins may be small in a pri-

mitive situation where few market ser

vices are being rendered. Cont rari

wise, the marketing procedure may be

a well organised and highly developed

one, with sophisticated market services

being rendered, and so the consumer's

price may be much higher than that

received by the producer. The latter

situation is certainly not indicative of

an inefficient marketing operation.

However, when the margin is rising

not because of improved services, but

eithe r because "the costs or the p rof it

levels of the marketing firm are high,

then the inference to be drawn is that

there is inefficiency. Hi gh profits and

high charges for market services may

be indicative of absence of competition

and restriction of entry for new marketing firms. And a hig h charge may

also be a consequence of high costs of

operation for the firm such as for re

source-use inefficiencies, inappropria te

inp ut- mix less than opt imu m use of

capaci ty, obsolescence of equipment

and technical procedures, etc.

At any one point in the movement

of the commodity — from its produc

tion point to the point of consumption

— there will be several firms or busi

ness unit s in operation. Examples are

of units offering assembling, handling,

transportation, grading, processing,

packaging and transport services.

Reallocation of resources for firms

engaged in marketing is indicated if ex

cessive costs are being incurred. Such



ECONOMIC AND POLITICAL WEEKLYReview of Ag ric ult ur e December 1977

reallocation may not be given effect to

if there is protection from the rigours

of competition and if high levels of pro-

fits accommodate high costs and ineffi-cjencics. Alternatively, the situation

could be a competitive one and yet the

firm may continue to operate at lo w

levels of efficiency. Its hig h costs of

operation may prevent it from making

normal profits. It s conti nued existence

in the field is attributable to tradition;

inter-generational occupational speciali

sation is still prominent in certain areas

in developing countries. Lastly, a move

towards greater efficiency on the part

of the firm may be checked by uncer

tainties about government policy. Mo

dernisation involving heavy private in

vestment outlays, is not generally gone

into if the overall direction of change

in the economy is towards greater so

cial control,7

Market ing studies in In di a have

have shown that margins, between the

prices paid by the consumer and the

prices received by the grower, are not

excessive, But, whi le the margin may

be commensurate to the services ren

dered by market intermediaries, consi

derable scope for improvement of the

service — especially in terms of processing and packaging — does exist.

Such improvement may, however, come

into effect as a natural concomitant of

economic progress, as consumer tastes

get increasingly sophisticated with ris

ing incomes.

As regards producing a |£iven level

of marketing service at lowest cost, the

possibiliti es do exist of economies

through mechanisation of several ope

rations connected wi th storage, grad

ing, processing and packaging. How

ever, such economies, when viewed inthe context of existing levels of unem

ployment, provide some justification for

preserving the status qua.

AREAS FOR IMPROVEMENT

On the basis of the marke ting re

search that exists, the appli cation of

some of the efficiency cri ter ia list ed

above to the Indian marketing system

docs not warrant the conclusion that

the situa tion calls for a complete

change-over from existing structures.

Further research in the future, linkedto some of the criteria not tested may

support or negate this conclusion. Eve n

otherwise, there is no gain in saying

that the set-up could be improved sub

stantially through the introduction of

changes in certa in cr it ica l areas. These

relate to systems of sale, tram spoliation,

grading, storage, and warehousing.

A producer may sell his product at

his village to a consumer (if his crop

is directly edible), or to a local shop

keeper, or he may be compelled to set

off his surplus against loans taken froma moneylender . He may sell to an i t i -

nerant buyer or to the agent of a large

purchasing fir m, on his far m. If it is

not an on-the-farm or village sale, the

farmer may be taking his produce to

the prim ary wholesale market and his

sales may be negotiated through a co

operative marketing society or a com

mission agent to the wholesaler ; or he

may sell to a processing firm, whole

saler, or retailer, even directly.

When surpluses are disposed of at

an assembling market, instead of in the

village, in the' majori ty of cases, the

fanner benefits — because, apart from

other reasons, the element of competi

tion on the buy ing side is decidedly

stronger at the market centre than in

the village. Howe ver, to foster a rise

in the proportion of sales at assembling

markets, the system of sales at these

markets needs to be regularised. Al l

existing systems should be replaced by

either the open auction system or the

tender system of sale.

The major defects connected wit h

the open auction system of sale is thatit is very time-consuming. To overcome

this problem, the important need is to

promote the adoption of the practice

of gradin g by cultivator s. If the lots

placed for auctioning are pre-cleaned

and prepared as per standard quality

specifications, then the time involved in

inspection and negotiation woul d be

eliminated. The appointment of trained

and impartial paid auctioneers, and the

fixing of a minimum u nit by which

bids will be increased by the buyers

during the auction, are other devicesby which open auction sales could be

expedited . In fact, wi th the extensive

adoption of the practice of grading and

the establishment of warehouses, the

sample of open-auction system could be

adopted. This system, while retaining

the advantages of the aucti on, mi ni

mises the amount of time that would

be utilised in the conduct of the auc

tio n. Open auctions woul d be conduct

ed on the basis of representative sam

ples drawn from the warehouses, by

depositors who wish to sell off their

produce on a certai n day. Since thesample issued by the warehouseman

would indicate the grade, the scope for

time-wasting disputes, between the

buyer and the seller, relating to va

riation in quality between the sample

and the bulk, would be reduced.

The tender system of sale, prevalent

in certain regulated markets in Tamil

Nadu, is a system which like the open

auction is very fair to the farmer-seller;

it should, , therefore, be promoted in

other markets in the country as well

Muc h of the responsibility for thesmooth functioning of this system has

to be assumed by an impartial agency,

such as the market committee of a re

gulated market . Wh en the produce is

brought in by the farmer, he is required

to clean it as per the specification of

the commit tee. The produce is weigh

ed under inspection, arranged into lots,

and tenders are invited from prospec

tive buyers for the different lots. This

system is time-saving and also involves

minimum physical labour. Since

cleaning, weig hing, and the arrangement of produce into lots based on

quality, is done under the direction and

supervision of the market commi ttee,

the possibility of disputes is minimised.

Importantly, the prices quoted in the

tenders are based more on individual

calculations of profit margins of buyers

than on .a motional working out of pa

rities based on the termina l market

prices.

TRANSPORTATION

In the movement of agriculturalproduce, a key service utilised is trans

portat ion. In the Indi an context, it is

particularly important because of the

wide geographical scatter of production

areas. The ro ad and ra il systems are



ECONOMIC AN D POLITICAL WEEKLY Review of Agr icu ltu re December 1977

the transportation systems chiefly used

in India for the movement of agricul

tural produce.

Of the total road kilometrage in the

country of 1,130,000, only 474,000 km

are surfaced roads. Since 1960-61, con

siderable progress has been made. Sur

faced roads have increased from

$63,000 km t o 474,000 km between

1960-61 to 1972-73, Nevertheless, 59

per cent of the roadways in the coun

try are yet unsurfaced. These unsur-

faced roads are main ly vil lage roads

and roads other than major dist rict

ones, over which agricultural produce

moves from farms to primary markets

and assembling centres. It is only wi th

the development of good road links

that a fluid and efficient movement of

surpluses from farms to market centres

could be promoted.Government recogn ition of the im

portance of transport and communi

cation facilities is reflected in the

sizeable outlays for the purpose under

the Five-Year Plans. In the Second,

Third and Fourth Plans highest allo

cations in percentage terms were to

this head of expenditure. In the Fifth

Plan 19 per cent of the total outlay

is to be on transport and communica

tions. However, rural roads come un

der the purview of state governments.

For the Fifth Five-Year Plan, out of the total targeted state outlays of Rs

17,073 crores, Rs 1,297 crores or ap

proximately 7 per cent only was allo

cated to transport and communications.

In this context, it is noteworthy that,

according to 1969 estimates, out of tax

revenues from road transport amounting

to Rs 17,778,000 the states and territo

ries were spending only Rs 10,692,000 on

development and maintenance of roads.

The need to increase the quantity and

quality of motorable roads gets stress

ed further when it is noted that transport costs work out to be less for me

chanised forms of transport, such as

trucks and tractor-t rolleys, than for

animal-drawn carriers, such as bullock

carts. For a hau l of 18 to 20 miles ,

it is calculated that in Punjab, the

transport cost per quintal of foodgrains

is Rs 2.30 by bullock cart, Rs 1.35

by truck and Rs 1.70 by tractor-trolley.

The conclusion, then, is that the surfacing of roads should be expedited

thro ugh greater allocation of state finances to rura l roads. The othe r possibility is to encourage regulated mar

kets to spend a part of their funds onthe bui ldi ng of li nk roads betweenthe villages and the market centres as

is being done in Haryana.

Greater effort should also be made

to promote the development of the

Indian trucki ng industry. Licensing of

trucks is done at the state level, and

licences are granted by and large to

small firms to operate within a radius

of approximately 150 miles. This polic y requires modifica tion; since the

cost of haulage decreases with the dis

tance hauled, long-distance baulage in

volving inter-state movement by vehicles

of the same trucking firm should be

encouraged- This can happen only if

the growth of the size of the firm in

the trucking industry is allowed thro

ugh the issue of suitable licences. For

this, inter-state trucking licensing

would have to be done through a cen

tral agency outside the control of in

dividual state governments. Lastly,

measures for the co-ordination of railand road transport, with the objective

of streamlining the transport service in

the country, which are under considera

tion of the Planning Commission,

should be finalised and implemented

without further delay.

GRADING

Grading, as a practice to improve

marketing procedures, first received offi

cial attention 39 years ago, when the

Agricultural Produce (Grading and

Marking) Act, 1937, was passed. There

are at present approximately 5,000 per

sons licensed to grade commodities un

der the Act . However, only about 100

of these are producers; and, as is to

be expected, most of these licencces be

long to the trading class.

If grading were adopted more ex

tensively not only wou ld farmers be

helped to realise a higher price, but

market news dissemination and bulk

storage and transporta tion practices

could also be facilitated. W it h theobjective of helping fanners and pro

mot ing more scientific mark eting, 500

centres have been opened under the

aegis of state marketing departments, to

grade the producer's surplus in the as

sembling markets, before it is sold by

auction. Fo r 1969-70, it was estimated

that output worth about Rs 100 crores

was graded at these centres. This is

still a small beginning and there have

been suggestions that, to speed up tha

extension of this pract ice, compulsory

grading should be enforced. Expe ri

ence with such compulsion has shown

that the grower benefits immensely and

that oppositi on comes main ly from

tracers who gained in the earlier situ

ation by underpaying the farmer.

STORAGE AND WAREHOUSING

Storage availability, particularly in

the context of growing surpluses, is A

crucial ingredient of efficient marketing.

The need for action in this field was

recognised as early as in 1928 by the

Royal Commission on Agriculture. The

All India Rural Credit Survey Committee emphasised the necessity for

the development of warehouses so that

surpluses could be stored scientifically

over periods of time, with warehouse

receipts serving as negotiable paper. In

this way, fanners wanting to store pro

duce could be helped to overcome both

the physical and financial hurdles that

they would face,

The storage capacity owned by the

Government and the FCI has gone up

markedly as shown in Table 5. How

ever, much of the storage capacity that

is either owned or hired by the govern

ment is not utilised by the farmer as

seen below:

Utilisation of Central

Warehouse Capacity (1970) ,

(per cent)

(a) Producers 6

(b) Co-operatives 23

(c) Traders 71

Total: 100

Utilisation of State Warehouse

Capacity (1970)

(a) Government 72(b) Producers 1

(c) Traders 22

(d) Co-operatives 5

Total: 100

Source: M S Asthana: "Role of Ware

housing in Promotion of Or

derly Marketing of Agricultural

Produce", pp 235 and 236.

[Seminar on Emerging Pro b

lems of Marketing of Agricul

tural Produce August 1972

(mimeographed) ]

The farmer's storage practices remain by and large unscientific and the

estimates of loss of produce, at this

point, remain hig h. The s ituatio n

would ease considerably if more small

warehouses were opened at assembling

points and if research results of the

advantages from the use of improved

types of storage receptacles are publicised, among farmers.

CONCLUSION

The conclusion that emerges is that,for the present stage of developmentof the Indi an economy, the existingmarketing structure is not in need of radical overhaul. Wi th the regulationof an increasing number of markets and

the ado pti on of fai r systems of sale,with improvements in transport and com-



Review of Agri cul ture December 1977 ECONOMIC AND POLITICAL WEEKLY

municat ion facilities, wit h increased

market news dissemination, with an ex

pansion of storage and warehousing fa-

eilities, with the extensive adoption of

standardised grading, with the applica

tion of improved technology at the

packaging and processing stages, the

mark-ting structure that exists will im

prove considerably, In the case of most

of the changes that are necessary, it is

obvious that government sanction, sup

po rt and even exemplary init iat ive, is

essential. If this is provided, then there

is no reason why one should not ex

pert the private sector agricultural

marketing system to keep pace with

the progressive development of the

other segments of the Indian economy.

Notes

1 The annual report of the Reserve

Bank of India states that "...thereare indicators that the investment-induced growth component ascontra-distinguished from the fortuitous component, was quite significant in 1975-76", Reserve Bank of India. Annual Report, 1975-70,P 2.

John W Mellor in his latest reviewof Indian agriculture takes agrowth rate of 3.5 to 4 per cent,in the agricultural sector, "as asale projection". John W Mellor,'The Agriculture of India Scienti- fic Amercian, Volume 235, September 1976, p 163.

J R Moore, S S Johl, and A MKhusro: "Ind ian Foodgrain Market-ing", New Delhi, 1973, p 175.

J W Mellor, T F Weaver, U J Leleand S R Sheldon, "Developing

Rural India : Flan and Practice

1

',Indian Reprint, Bombay, 1972,p 357, " . . . according to theweights used for the consumer

price indexes, foodgrains compriseonly a little over 40 per cent of the cash value of marketings of agricultural commodities, while milk and milk products comprise nearly20 per cent and industri al rawmaterial crops account for over 25'per cent.

5 Ibid p 358.

6 Ralph Cummings Jr: "Pri cingEfficiency in the Indian WheatMarket",' Impex India, New Delh i,1967; and Uma J Lele ; "Food-grain Marketing in India; PrivatePerformance and Public Policy",Cornell University Press, USA,1871.

7 Uma J Lele: "Foodgrain Market ing in India" op cit; p 223.

8 J R Moore, S S Johl and A MKhusro: "Indian Foodgrain Mar-keting" and M G Pavaskar and VRadhakrishnan; T o s t of Marketing Cotton', Bombay, 1970.

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REVIEW of AGRICULTURE_Efficient Agricultural Marketing