Impact of Marketing Reforms on Farm-Market Linkages

Abstract

Agriculture is the prime source of livelihood for majority of the Indian population. The contribution of agriculture in the national income contracted steadily since 1950–1951, coming down to around 18.8% in 2021–2022. Moreover, small and marginal holdings that constitute 85% to the total land holdings in India prevent farmers to adopt latest technology and also reduce their bargaining power in the market. With small marketable surpluses, these farmers are forced to sell their produce, locally under distressed conditions. Taking cognizance of the challenges faced by agricultural marketing system in India (input and output both), and in an effort to turn farming into a viable enterprise, the Government introduced several reforms over the years to establish farm-market linkages. These reforms have been well in line with the national and global needs, however, their effective implementation remains a question. The need of the hour is to produce as per the global and local market needs. Quality of the produce plays a key role in deciding the price. Adhering to Sanitary and phyto-sanitary standards could play a far bigger role in connecting farmers to the international markets, and enhance agricultural exports. At local/regional/national level, it is highly important to enhance the bargaining capacity of marginal and small peasants, hence aggregation of farm produce through formal producer’s organizations viz., producer companies and cooperatives are suggested as a viable solution to let small and marginal farmers realize scale economies. The marketing reforms are expected to enhance farm incomes—a major goal of existing Government policies. These reforms are also expected to establish strong marketing linkages in Agri-value chain. With this background, this chapter focuses on the impact of marketing reforms in India—expected and realized on farm-market linkages.