Draft National Policy Framework on Agricultural Marketing

Syllabus: GS3/Agriculture

Context

• The Centre has released a draft “National Policy Framework on Agricultural Marketing” that seeks to help farmers realise the best price for their produce. 

About

• Department of Agriculture and Farmers’ Welfare (DA&FW), constituted a Drafting Committee under the chairmanship of  Faiz Ahmed Kidwai, Additional Secretary (Marketing), DA&FW. 
• The Drafting Committee has prepared a draft National Policy Framework on Agricultural Marketing.

Major Highlights of the National Policy Framework

• It has proposed the constitution of an Empowered Agricultural Marketing Reform Committee of State Agricultural Marketing Ministers to push agriculture marketing reforms.
  • The success of the GST Council in harmonizing tax policies across states and creating a unified tax regime serves as a model for this new initiative.
  • Composition of Committee: The empowered committee may be chaired by the agriculture minister of any state on rotational basis with agriculture ministers of the remaining states as members. 

• Supply Chain Reforms: It highlighted the need for private wholesale markets, direct purchases by processors and exporters, and the declaration of warehouses and cold storage as deemed market yards.
  • These measures are crucial for reducing the intermediaries in the supply chain and ensuring that farmers receive better returns for their produce.
• Price Insurance Scheme: It proposes a price insurance scheme along the lines of the Pradhan Mantri Fasal Bima Yojana (PMFBY) to protect farmers from price crashes.
  • This scheme aims to stabilize farmers’ incomes, encourage the adoption of modern agricultural practices, and ensure the flow of credit to the agriculture sector. 

What is Agricultural Marketing?

• Agriculture, generally means growing and/or raising of crops and livestock while, marketing encompasses a series of activities involved in moving the goods from the point of production to point of consumption. 
• It includes the planning, production, transportation, processing, and distribution of agricultural goods. 
• The goal is to ensure that the products reach consumers efficiently while meeting market demands at a fair price.
• Agricultural marketing is a State subject under Entry 28 of List-II (State List) of the VII Schedule under Article 246 of the Constitution.

Challenges Faced by Agriculture Marketing in India

• Inadequate Infrastructure: Poor transportation, storage, and cold chain facilities lead to high post-harvest losses and inefficiencies in distribution.
• Fragmented Markets: The lack of organized markets and reliance on multiple intermediaries increases costs and reduces farmers’ profit margins.
• Price Fluctuations: Farmers often face unpredictable prices due to market volatility, leading to income instability.
• Limited Market Access: Small-scale farmers struggle to access distant or organized markets, limiting their ability to sell at fair prices.
• Lack of Market Information: Farmers often lack timely information on prices, demand trends, and quality standards, which hinder decision-making.
• Limited Credit and Financial Support: Difficulty in accessing affordable credit for transportation, storage, and processing limits growth and profitability.
• Inadequate Value Addition: Low investment in processing and value addition leads to the export of raw, unprocessed goods at lower prices.

Government Initiatives to Reform Agricultural Marketing in India: 

• PM-AASHA (Pradhan Mantri Annadata Aay SanraksHan Abhiyan) 2018: A scheme to ensure farmers get remunerative prices through Price Support, Price Deficiency Payment, and Private Procurement Schemes.
• Agriculture Produce Market Committee (APMC) Reforms: Encouraging states to amend APMC Acts for direct selling and private market participation to reduce middlemen.
• E-NAM (National Agriculture Market): An online platform integrating mandis to enable transparent trading and better price discovery.
• Kisan Rail Scheme: Dedicated trains for transporting perishable goods, improving market access and reducing transportation costs.
• Agricultural Infrastructure Fund (AIF): Providing financial support for developing storage, processing, and cold storage facilities.
• One Nation, One Market: Aiming for seamless interstate trade by eliminating barriers and strengthening the E-NAM platform.
• FPO (Farmer Producer Organization) Promotion: Supporting farmer cooperatives to improve bargaining power and market linkages.
• Support for Agri-Startups: Encouraging innovation and new market solutions in the agriculture sector through financial and mentorship support.
• Minimum Support Price (MSP) Policy: The MSP system aims to provide a safety net for farmers by ensuring that the price they receive for their crops is above the cost of production.

Conclusion

• The government’s agricultural marketing reforms are aimed at addressing inefficiencies, reducing middlemen’s influence, and providing farmers with more opportunities for better income. 
• These reforms are designed to make farming more profitable and sustainable by offering better market access, fairer pricing mechanisms, and innovative solutions for both farmers and consumers.

Source: IE