Page 181 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 14: Rural Credit and Marketing

Fourthly, the conditions in the mandis are such, that the farmer may have to wait for some time Notes
before he may be able to dispose of his produce. He may not have proper warehousing facilities to
keep his stock while he waits. The method of transaction is generally against the interest of the
farmer. In the mandis the farmer makes use of the services of a dalal (broker) to sell his output to the
arhatiya. The dalal is often in collusion with arhatiya and, therefore, the price which is settled is
generally to the advantage of the arhatiya and not to the farmer. Moreover, through unnecessary
deduction on the plea that his produce is of inferior quality, the farmer often loses in going to the
mandis.
Fifthly, the number of intermediaries and middlemen between the farmer and the final consumer of
his produce is too many and the margin going to them too large.
Finally, the farmers do not ordinarily get information about the ruling prices in the big markets. As a
result the farmers have to accept whatever price is quoted to them and have to believe whatever the
traders tell them.
Regulated Markets

The purpose of a regulated market is to eliminate unhealthy market practices, to reduce marketing
charges and to ensure fair prices and in general, to protect the interests of farmers. All the States had
passed legislation known as State Agricultural Produce Marketing (Development and Regulation)
Act for the establishment of regulated markets. In 1951, there were more than 200 regulated markets
in India and by the end of the Second Five-Year Plan, i.e., in 1961, there were nearly 1,000 regulated
markets. By the end of March 1998 over 7,060 agricultural markets in the country had been regulated.
Features of a Regulated Market

A regulated market is started under the law either for any specific commodity or for a group of
commodities. Such a market is administered by a market committee, which consists of representatives
of the State Government, the legal bodies (as for instance, the district board), the traders, the commission
agents or the dalals and the farmers themselves. The committee is appointed by the government for
a specific period and is entrusted with management of the market.
The market committee fixes the market charges, such as the commission to be charged. It ensures that
no dalal represents either the buyer or the seller. It prevents unauthorised deductions from the price
paid to the farmer and ensures that correct weights and measures are always used. The committee
hears all the complaints and settles them. In cases of dispute, it arranges for arbitration. The committee
is responsible for the licensing of brokers and weighmen. It is vested with powers to punish any one
who is found guilty of dishonest and fraudulent practices.
The system of regulated markets has been found to be very useful in removing fraudulent practices
followed by brokers and commission agents and in standardising market practices. They have helped
farmers to secure fair prices for their produce and to come to the market without fear of being cheated.
They have helped in using standard measures and weights throughout the country. Hence it is the
policy of the government to convert all markets in the country into the regulated type.
Regulated markets aim at the development of the marketing structure to :
(a) ensure remunerative price to the producer of agricultural commodities,
(b) narrow down the price spread between the producer and the consumer,
(c) reduce non-functional margins of the traders and commission agents.
To achieve these objectives, the Government went for comprehensive and rapid expansion of regulated
marketing system. Considerable success has been achieved in States like Punjab and Haryana, where
regulated markets have been established in major producing areas, with linked up satellite markets
in the rural growth. The regulated marketing system has also proved a good source of generating
income for the marketing boards and for use in rural infrastructure. The regulated market complex
also includes facilities for grading and for monitoring of prices.
The regulated markets are set up especially in areas where commercial crops like cotton, jute, tobacco

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