Agricultural Market System

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Agricultural Marketing System

The agricultural products that we consume daily reach us through a long journey through the market system from their origin. The efficiency of the system has a direct impact on our day to day lives. The agricultural market system defines the method through which agricultural products reach us from their source and spread all over parts of the country. Agricultural marketing is a mechanism through which the goods reach different places depending upon the market. It is a process that involves assembling, processing, storage, packaging, transportation, grading, and distribution of various agricultural products across the country. The term encompasses the entire range of the supply chain operations of the farming products.

Measurement for Improvement

The agricultural system began to reform as the government started taking steps in making it efficient. The markets were regulated and improvements were done in transport infrastructure which bought new channels of connectivity.

Infrastructure was uplifted to reach better heights about the storage, processing units, warehouses, etc. The cooperatives also helped in bringing various farmers together. It provides them with a common voice, helping them to get fair prices for their produce.

The cooperatives in Gujarat are a perfect illustration of the point mentioned above. Lastly, measures are taken by the government, such as the assurance of minimum support price (MSP), maintenance of buffer stocks, and distribution through PDS, were a step in the right direction. 

Preventive Measures

The following measures should be taken to protect the farmers:

Misinformed farmers often fall prey to producing produce at rates lower than the prevailing market rates.

Lack of access to proper and good storage facilities forces them to sell produce at whatever rate being asked. Hence, they cannot store the output to sell it in the future when prices are high. It prevents them from earning good returns.

Lack of easy formal credit makes farmers knock on informal sources, which eventually push them into debt traps.

Emerging Markets

Among all the positives and negatives, various marketing channels with innovative and helpful ideas have emerged. They are successfully linking producers to consumers eliminating the need for a middleman. Hence the money lost in commission now becomes a part of the profit for the farmers. Some examples of such markets are Apni Mandi (Punjab, Rajasthan, Haryana), Hadapsar Mandi (Pune), and many more. Other channels involve various national and multinational food chains reaching out to farmers directly. These companies enter into deals with farmers, which require them to produce certain quality.

Companies also provide good quality seeds to farmers to encourage this culture. It also maintains a stable income for farmers, as they are paid according to a pre-decided price for their output.

Essential Requirements of Farmers


Farmers should have adequate storage facilities. Development of warehousing is essential.


Farmers should have sufficient holding power; i.e., he should wait for favorable prices. He should not be forced to sell their stocks immediately in the village to the trader-cum-money lender, even at low prices. Cooperative credit can solve this problem.


Farmers should have up to date market information regarding supply, demand, and prices. Only regulated markets and cooperative marketing society can supply market intelligence services.


There should be a reasonable number of middlemen between the farmers and the consumers. Here again, marketing cooperatives can reduce the number of middlemen and assure better prices for agricultural goods.


Marketing depends on transport. We must have an efficient and economic network of road-rail transport for home trade. The agricultural market can be wide if the transport facility is cheaper.

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Solved Example on the solution of Agricultural Marketing

Q1. What are the Obstacles that the Agricultural System Face?

Ans: Some of the problems that the agricultural market system face are as follows:

Lack of efficient warehouse facilities.

Unregulated Markets.

Poor credit facility and lack of affordable finance.

Malpractice in weighing and grading of the products.

Q2. Give Some Examples of Farmer Markets.

Ans: Some examples of farmer market are:

Apni Mandi in Punjab, Rajasthan, and Haryana.

Rythu Bazars in Andhra Pradesh.

Uzhavar Sandies (farmers market) in Tamil Nadu.

Hadaspur Mandi in Pune.

FAQ (Frequently Asked Questions)

Q1. Mention the Basic Facilities Farmers Should Have in Agricultural Marketing.

Answer: In order to have the best facility in the marketing of agricultural products, the farmers should enjoy the following facilities:

The farmer must have proper knowledge about the future demand of a certain commodity in the market so that he can plan earlier to sow the seeds of those crops, which he knows can get him a fair return.

Remote village farmers are dependent on other small towns or cities for the sale and purchase of output and input of the product. So, a good transport system is necessary for every rural farmer or people.

Most of the villages are not connected with the mandi or business centers, which is the only way of transport for a farmer. Hence, a proper rural network with all roads is important to develop the farmer's rural areas.

Q2. Briefly Describe the Types of Agricultural Markets.

Answer: The types of agricultural market are as follows:

I. Primary or Local Market: Primary markets, also known as Hatts or Shandies, are held once or twice a week in a group of villages. More than 22,000 primary markets are there in India. More than 50% of the total marketed products are sold in these markets. These markets are organized by village Panchayats who charge some money from shopkeepers for space.

II. Fairs: Fairs held on religious occasions at pilgrim centers are important sources of  marketing of agricultural products in India. These fairs are held on an annual basis and are taken care of by the district officers, local bodies, or private agencies. These fairs are very popular in Bihar, Orissa, Maharashtra, Rajasthan, and Gujarat.