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India’s Agricultural Markets: Regulation and Revitalization

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India’s Agricultural Marketing

Part of the book series: India Studies in Business and Economics ((ISBE))

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Abstract

Agricultural marketing has been regulated from colonial times to minimize exploitation of farmers by traders and other powerful entities in interlocked markets. India is on the threshold of a change in the regulatory regime that allows more space for private sector and farmer’s participation in the market, but political realities of the states along with developments in the managerial and information fronts determine the pace of change.

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Notes

  1. 1.

    Now called Ministry of Consumer Affairs, Food and Public Distribution.

  2. 2.

    India exported 5 million tonnes of wheat and 9 million tonnes of rice in 2012–2013 and has a large food stock in public storage.

  3. 3.

    Auctions have not been very common a few centuries ago although their existence is recorded in Roman history even in 500 BC. Works of art were sold by the method, and the oldest auction house in the world is the Stockholm Auction House established in 1674. Sotheby’s and the Christie’s are other long-standing examples. English auction, an open auction, is the most common practice in which participants bid openly against one another, with each subsequent bid required to be higher than the previous bid (alternatively, it can also be reverse). An auctioneer may announce prices to which the bidders may call out their bids. Walrasian auction is another open auction. The Walrasian tâtonnement is an auction in which the auctioneer takes bids from both buyers and sellers in a market of multiple goods. The auctioneer progressively either raises or drops the current proposed price depending on the bids of both buyers and sellers, the auction concluding when supply and demand exactly balance. As a high price tends to dampen demand while a low price tends to increase demand, in theory there is a particular price somewhere in the middle where supply and demand will match.

  4. 4.

    LMPs were formed by the recommendation of Bawa committee in 1976. They were successful due to high education level of members while other cooperative societies in Odisha failed, due to government indifference and lack of professional training of staff.

  5. 5.

    According to another estimate, 2.25 % of fruits, in India are processed (GOI 2007). However, such estimates are not based on any rigorous methodology.

  6. 6.

    Guru Committee.

  7. 7.

    Chairman: Shri R.C.A. Jain, Additional Secretary, Ministry of Agriculture.

  8. 8.

    In 2012, FDI in retail was a major issue of political confrontation among the opposing parties in the central government and faced strong resistances from opposing state governments. In November, the issue was put to vote in the Parliament, and despite the contentions, the central government found majority support in favour of FDI in retail. It is now up to the state governments to accept the motion through legislation.

  9. 9.

    The Bharti Walmart tie-up was seen to be one firm apparently affected seriously by the delay.

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Authors and Affiliations

  1. Agricultural Economics Research Unit, Institute of Economic Growth, New Delhi, Delhi, India

    Nilabja Ghosh

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  1. Nilabja Ghosh
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Ghosh, N. (2013). India’s Agricultural Markets: Regulation and Revitalization. In: India’s Agricultural Marketing. India Studies in Business and Economics. Springer, New Delhi. https://doi.org/10.1007/978-81-322-1572-1_5

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