Page 185 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 14: Rural Credit and Marketing

gum, jute, rubber, pepper turmeric, etc. These commodity exchanges have introduced various Notes
innovations which would increase efficiency of agricultural marketing in the country. Basically,
physical delivery is blocked by warehouse receipt – the rigidity inherent in the trading of physical
goods is thus eliminated. There is also a judicious mix of protection against both price and
quality risks. The National Commodity and Derivative Exchange, Mumbai has launched pilot
projects in the states of Gujarat, Madhya Pradesh and Andhra Pradesh to help farmers
understand the concepts and benefits of hedging the price risk on trading platform of an
Exchange prior to harvesting.
Reforms in Agricultural Marketing with Special Reference
to Model APMC Act
After independence there was a general feeling that agricultural markets do not function in an efficient
manner. There exist inefficiencies in distribution, including wastage of agricultural produce. Farmers
suffer due to exploitation by traders on different accounts such as weight, illegitimate deductions,
delayed payments etc. To overcome such problems different state governments enacted their respective
APMC Acts. Stringent provisions were made under these Acts, to safeguard the interests of the farmers
and save them from exploitation ensuring efficiencies. Norms were made for spending market fees
on different heads including infrastructural developments.
Structure of APMC committee, the apex decision making body in respective Mandis was made such
that farmers were in an overwhelming majority and Chairman of the committee would also be a
farmer. There is not doubt that with time we have to bring amendments in the laws, howsoever good
they may be in their original form. Emerging changes in the field of agriculture, on call for changes in
laws pertaining to agriculture marketing.
With the stated objective of making the agricultural marketing system more vibrant and competitive,
Government of India first constituted Expert Committee on Agricultural Marketing and later on
‘Inter Ministerial Task Force on Agricultural Marketing Reforms’ was constituted. Main
recommendations of the Expert Committee are listed as follows :
(a) An alternative marketing systems to promote direct marketing,
(b) Increasing Credit flow to agricultural sector
(c) Introducing a system of negotiable warehouse receipt
(d) System of ‘Forward’ and ‘Futures’ contracts be evolved and modalities be worked out
(e) Promoting Information Technology in the field of agricultural marketing.
(f) Extension and training services
‘Inter Ministerial Task Force on Agricultural Marketing Reforms’ set 9 priority areas for itself which
are as follows :
(a) Legal reforms;
(b) Direct marketing;
(c) Market infrastructure;
(d) Pledge financing;
(e) Warehousing receipt system;
(f) Forward and futures markets;
(g) Price support policy;
(h) Information Technology in agricultural marketing and
(i) Marketing extension, Training and Research.
The Task Force made various recommendations, The most important recommendations included
amendments to the State APMC Act and Contact Farming.

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