Agricultural Marketing in India

The term agricultural marketing is composed of two words -agriculture and marketing. Agriculture, in the broadest sense means activities aimed at the use of natural resources for human welfare, and marketing connotes a series of activities involved in moving the goods from the point of production to the point of consumption. Specification, the subject of agricultural marketing includes marketing functions, agencies, channels, efficiency and cost, price spread and market integration, producers surplus etc. The agricultural marketing system is a link between the farm and the non-farm sectors.

Agricultural marketing - introduction

In India Agriculture was practiced formerly on a subsistence basis; the villages were self sufficient, people exchanged their goods, and services within the village on a barter basis. With the development of means of transport and storage facilities, agriculture has become commercial in character, the farmer grows those crops that fetch a better price. Marketing of agricultural produce is considered as an integral part of agriculture, since an agriculturist is encouraged to make more investment and to increase production. Thus there is an increasing awareness that it is not enough to produce a crop or animal product; it must be marketed as well. Agricultural marketing involves in its simplest form the buying and selling of agricultural produce. This definition of agricultural marketing may be accepted in olden days, when the village economy was more or less self-sufficient, when the marketing of agricultural produce presented no difficulty, as the farmer sold his produce directly to the consumer on a cash or barter basis. But, in modem times, marketing of agricultural produce is different from that of olden days. In modem marketing, agricultural produce has to undergo a series of transfers or exchanges from one hand to another before it finally reaches the consumer. The National Commission on Agriculture, defined agricultural marketing as a process which starts with a decision to produce a saleable farm commodity and it involves all aspects of market structure of system, both functional and institutional, based on technical and economic considerations and includes pre and post- harvest operations, assembling, grading, storage, transportation and distribution. The Indian council of Agricultural Research defined involvement of three important functions, namely (a) assembling (concentration) (b) preparation for consumption (processing) and (c) distribution.

II. Importance and Objectives of Agriculture Marketing

The farmer has realized the importance of adopting new techniques of production and is making efforts for more income and higher standards of living. As a consequence, the cropping pattern is no longer dictated by what he needs for his own personal consumption but what is responsive to the market in terms of prices received by him. While the trade is very organised the farmers are not Farmer is not conversant with the complexities of the marketing system which is becoming more and more complicated. The cultivator is handicapped by several disabilities as a seller. He sells his produce at an unfavorable place, time and price. The objectives of an efficient marketing system are: 1. to enable the primary producers to get the best possible returns, 2. to provide facilities for lifting all produce, the farmers are willing, to sell at an incentive price, 3. to reduce the price difference between the primary producer and ultimate consumer, and 4. to make available all products of farm origin to consumers at reasonable price without impairing on the quality of the produce.

III. Facilities Needed for Agricultural Marketing

In order to have best advantage in marketing of his agricultural produce the farmer should enjoy certain basic facilities. 1. He should have proper facilities for storing his goods. 2. He should have holding capacity, in the sense, that he should be able to wait for times when he could get better prices for his produce and not dispose of his stocks immediately after the harvest when the prices are very low. 3. He should have adequate and cheap transport facilities which could enable him to take his surplus produce to the mandi rather than dispose it of in the village itself to the village moneylender-cum-merchant at low prices. 4. He should have clear information regarding the market conditions as well as about the ruling prices, otherwise may be cheated. There should be organized and regulated markets where the farmer will not be cheated by the -dalals- and -arhatiyas-. 5. The number of intermediaries should be as small as possible, so that the middleman's profits are reduced. This increases the returns to the farmers.

Industrial Agriculture: Features and Policy

Industrial agriculture views the farm as a factory with "inputs" (such as pesticides, feed, fertilizer, and fuel) and "outputs" (corn, chickens, and so forth). The goal is to increase yield (such as bushels per acre) and decrease costs of production, usually by exploiting economies of scale. The purported benefits of this industrial approach are well known: low food prices for American consumers, cheap feed for animal factory farms, a potential energy source to replace foreign oil, and substantial exports to foreign markets. But the environmental costs of this approach are considerable. And it is not the only method of agriculture. A sustainable approach, based on understanding agriculture as an ecosystem, promises sufficient produce without sacrificing the environment. For sustainable agriculture to thrive, the policies that foster industrial agriculture will need to be refocused. 1. Features of Industrial Agriculture

Monoculture Few crop varieties Reliance on Chemical and Other "Inputs" Separation of Animal and Plant Agriculture

2. Policies That Support Industrial Agriculture

Research and Extension Subsidies Marketing

3. The Challenge

Features of Industrial Agriculture A key feature of industrial agriculture is its cultivation of a single crop for food, feed, fiber, or fuel purposes, a practice called monoculture. Monoculture results in economies of scale that can reduce production costs and as a result the prices of commodities in the marketplace. From this primary feature, others, such as the reliance on pesticides, necessarily flow. Farms that grow one

or two crops inevitably invite pests and usually require heavy doses of insecticides and herbicides to control them. Planting the same crops year after year can deplete the soil, increasing the need for fertilizers. At the same time, the large acreages under cultivation provide large markets for pesticides, fertilizer, and farm vehicles (such as combines and harvesters). Similarly, concentrated livestock operations put animals in close proximity to one another, often under stressful conditions. As a result, the animals may become more susceptible to disease, creating a large market for antibiotics, medications, and vaccines. And the huge scale becomes necessary to afford the great expense of developing medicines and pesticides. Monoculture The United States grows all of its major commodity cropscorn, wheat, soybeans, and cotton in monoculture. Sometimes crops in monoculture are rotated: corn often alternates with soybeans in a two-year rotation. Much corn, however, is grown in continuous cultivationyear after year in the same field. Although they vary from year to year, the acreages devoted to single crops in the United States are enormous. U.S. farmers plant on the order of 50-70 million acres each of corn, soybeans, and wheat each year. But because so few crops are grown in such large acreages, the opportunities for crop rotation are also few. Few Crop Varieties U.S. agriculture rests on a narrow genetic base. At the beginning of the 1990s, only six varieties of corn accounted for 46 percent of the crop, nine varieties of wheat made up half of the wheat crop, and two types of peas made up 96 percent of the pea crop. Reflecting the global success of fast food, more than half the world's potato acreage is now planted with one variety of potato: the Russet Burbank favored by McDonalds. Farmers and researchers have recognized for decades that the decline in genetic diversity in agriculture is a problem, but it has, if anything, gotten worse rather than better over that period of time. The pressures on farmers to grow uniform varieties come from many sources: seed companies, food processors, consumers, transporters, and the designers of farm machinery. Decline in the genetic diversity in agriculture is important for a number of reasons. Crops that are very similar to each other in yield and appearance are also similar in their susceptibility to disease. Growing thousands or even millions of acres of crop plants that are genetically similar makes the food supply extraordinarily vulnerable to disease. In 1970, the Southern Corn Leaf Blight destroyed 60 percent of the U.S. corn crop in one summer, clearly demonstrating that a genetically uniform crop base is a disaster waiting to happen. In addition, modern crop breeders rely on the broad varieties of crops developed over the centuries as sources of resistance traits. Plants that farmers or gardeners no longer grow are sometimes lost forever, taking with them genes for pest resistance and stress resistance that future farmers may desperately need. Finally, restricting the genetic variety in the food supply means foregoing a cornucopia of tasty and nutritious foods. The current enthusiasm for heirloom seeds is bringing back hundreds of

varieties of watermelons, squash, apples, and other foods that would otherwise be on their way to oblivion. Reliance on Chemical and Other "Inputs" Industrial agriculture relies heavily on pesticides: primarily herbicides, of which atrazine and metolachlor are the most widely used, but also insecticides and fungicides. According to the Environmental Protection Agency, the total U.S. pesticide usage in 1992 (excluding wood preservatives and disinfectants) was 1.1 billion pounds of active ingredients. This impressive figure does not take into account the so-called inert ingredients in pesticide formulations, which can be higher in concentration and more toxic than the active ingredients. And it does not include pesticides used outside agriculture in 69 million households, a not inconsiderable usage amounting to a third of the quantity used in agriculture. U.S. agriculture also consumes enormous amounts of fertilizer. Total consumption of nitrogen, phosphate, and potash increased dramatically between 1960 and 1980, reaching a high of 23.7 million nutrient tons in 1981. Fertilizer use has fallen somewhat since then, amounting to 20.7 million tons in 1992. Separation of Animal and Plant Agriculture At one time, farmers raised crops and livestock on the same farm, an approach that provided a diversity of agricultural products and byproducts that could be recycled on the farm, reducing off-farm purchases. For example, manure could be used as fertilizer, crops and crop byproducts could be fed to animals. Animal operations also provided financial security against the ups and downs of the more volatile crop markets. Now animalscows, chicken, and pigsare increasingly grown in concentrated livestock operations. These generate mountains of water-polluting manure that has become a dangerous waste product rather than a valuable input. Meanwhile, many midsize farmers have abandoned animals and now grow only one or two crops. This trend is largely attributable to the pursuit of the economies of scale inherent in mass producing similar products.
Sources

1. 2. 3.

Economic Research Service, Pesticide and Fertilizer Use and Trends in US Agriculture. United States Department of Agriculture. Agricultural Economic Report No. 717 (1995). Environmental Protection Agency, Pesticides Industry Sales and Usage: 1992 and 1993 Market Estimates, 2, 1994. P. Raeburn, The Last Harvest, Simon and Schuster, 1995.

Policies That Support Industrial Agriculture Is an industrial-style agriculture inevitable? The only way to produce enough food for a hungry world? No. There are other options. Industrial agriculture has been shaped by the forces of global competition, as well as a number of deliberate government policies and programs. If the public chooses to reshape some aspects of our agricultural system, it can. And it can do so by using the

same policy toolsresearch, extension, subsidies, and market assistancethat help to produce the current system. Research and Extension Research and technology are key elements in modern agricultural systems. The hallmarks of today's agriculturemonoculture and dependence on chemicalsare the direct result of yesterday's research priorities. Those priorities focused intensively on few crops and generated a wide array of chemical pesticides and fertilizers. As a result, farmers who wanted solutions to pest problems were offered reams of information about insecticides but heard nothing about crop rotation. Farmers' choices were limited and agriculture was shaped by the direction of the research agenda. Subsidies A complicated mix of market forces and government programs governs agriculture. Some of the most important programs provide direct subsidies to farmers who grow particular crops. These so-called commodity programs were originally designed to serve as broad safety nets that helped out when crop prices were low. But these subsidies were available for only a small handful of crops, like corn and wheat. Thus, the subsidies provided strong incentives for farmers to cultivate only those crops, in large acreage and year after year. Production-oriented commodity subsidies have continued despite legislative attempts to phase them out. In addition, changes in the structure of subsidies that abandoned the practice of setting a minimum price for commodity crops in favor of government payments to farmers when prices fall has largely resulted in a glut of cheap grain on the market that enables the proliferation of animal factory farms and lowpriced ingredients for processed food and drinks on store shelves. About $18 billion were paid out by the government in 2005 of which about $16 billion encouraged production and only $1.9 billion served as incentives for environmental stewardship. Marketing U.S. marketing policies have reinforced dependence on a few food products. Familiar examples of the kind of marketing assistance USDA provides to agriculture are the campaigns encouraging Americans to drink more milk and eat more beef and pork. Although government programs encouraging increased consumption of meat and dairy are questionable from a health standpoint, they make excellent sense from the standpoint of an interlinked industrial agriculture. Encouraging increased consumption of these animal foods pumps up the demand for corn, since one of its major uses is as animal feed. The Challenge The programs and policies discussed above support an industrial style of agriculture. If the American public were to agree on a different vision of agriculture, redirected versions of these policies would become the elements of a strategy for producing that new vision. Research would focus on interdisciplinary work aimed at understanding the interrelationships of soil, crops, and pests. Extension would help farmers learn not only what science and technology had

to offer, but what other sustainable farmers had learned from their experiences. Subsidies would help farmers adopt practices that protect the environment. Marketing policies would concentrate on building up local and regional markets and integrating rural communities near the farms into the marketing and distribution process.