India’s agriculture sector, employing over 45% of the population and contributing around 18% to the Gross Value Added (GVA) in 2023-24, remains foundational to its economy. Yet, despite its size, the sector continues to face inefficiencies in marketing, price realization, and global competitiveness. The need for reforming agricultural marketing has become more urgent in light of increasing trade volatility, geopolitical tensions, and climate-induced supply shocks that disrupt both domestic and international agri-trade flows.

The Current Landscape of Agri-Marketing

Agricultural marketing in India is primarily regulated by the Agricultural Produce Market Committee (APMC) Acts of states, which mandate that farmers sell their produce through regulated mandis. While originally meant to protect farmers from exploitation, APMC mandis have increasingly become known for cartelisation, high commission charges, lack of infrastructure, and delayed payments.

The 2017 e-National Agriculture Market (e-NAM) initiative aimed to digitize and integrate mandis, but as of 2024, it covers only about 1,260 markets, and limited inter-state transactions have occurred. Farmers still rely heavily on local traders and middlemen, restricting their access to wider markets and better prices.

Impact of Global Trade Uncertainty

Recent geopolitical tensions, such as the Russia-Ukraine conflict and the Red Sea shipping disruptions, have led to increased volatility in global food prices and input costs. India’s ban on exports of non-basmati white rice and restrictions on wheat and sugar exports in 2022-24 were responses to concerns about domestic inflation and food security.

However, such export bans have a dual impact:

• They shield domestic consumers temporarily but
• Hurt farmers by denying them higher prices in international markets.

According to the Food and Agriculture Organization (FAO), global food prices in early 2024 remain elevated, and protectionist tendencies are expected to continue. This limits India’s ability to integrate into global agri-value chains unless marketing reforms make the domestic system more efficient and resilient.

Key Challenges in Agri-Marketing

1. Fragmented Supply Chains: Smallholder farmers lack economies of scale and face difficulties in aggregation, grading, and packaging.
2. Price Discovery Issues: Due to opaque auction systems and lack of real-time data, farmers have little bargaining power.
3. Limited Storage and Logistics: India loses an estimated 15-20% of perishable produce annually due to inadequate cold storage and transportation.
4. Policy Inconsistency: Frequent export bans, MSP procurement limited to few crops and states, and state-level differences in APMC Acts create uncertainty.
5. Low Farmer Incomes: Despite record foodgrain production, farm incomes have stagnated, as per the National Sample Survey (NSS) and NABARD surveys.

Recent Government Measures

• PM-SAMPADA (2021): Aims to modernize food processing and reduce post-harvest losses.
• Agri Infra Fund (Rs. 1 lakh crore): For setting up warehouses, cold chains, and primary processing.
• FPO (Farmer Producer Organisation) Promotion Scheme: Targeting 10,000 FPOs by 2027 to enable collective marketing.
• Digital Agriculture Mission (2021-26): To leverage technologies like AI, blockchain, and GIS for data-driven decision-making.

Suggestions for Reform

1. APMC Modernization and Harmonization: Uniform adoption of Model APMC Act across states and revamping mandi infrastructure with digital weighing, quality labs, and real-time price updates.
2. Expand e-NAM Coverage: Interlink more mandis and enable cross-border (inter-state) trading. Strengthen logistics and dispute resolution mechanisms.
3. Market Access Beyond Mandis: Encourage private markets, direct farmer-to-consumer models, contract farming under regulatory oversight, and integration with e-commerce platforms.
4. Stable Export Policies: Move towards predictable trade policy with minimum export restrictions and promote agri-export zones.
5. Invest in Post-Harvest Infrastructure: Increase support for cold chains, ripening chambers, and agro-processing hubs, especially in high-value crops like fruits, vegetables, and dairy.
6. Data-Driven Pricing and Forecasting: Strengthen market intelligence systems using satellite imagery, AI-based price forecasts, and integrated farmer advisories.
7. Skilling and Financial Inclusion: Expand credit outreach, crop insurance penetration, and agri-marketing training under schemes like PMFBY and PM-KISAN.

The Road Ahead

India must move from a supply-driven to a market-oriented agricultural model. Effective agri-marketing reforms can improve farmer incomes, attract private investment, and stabilize food prices. Given the complexities of federalism, cooperative federalism between the Centre and States is crucial.

India’s G20 Presidency in 2023 emphasized resilient and inclusive food systems, which should now be pursued domestically through better marketing structures and policy coherence.

Ultimately, strengthening agri-marketing is not just about economic efficiency, but also about empowering farmers, ensuring food security, and making Indian agriculture globally competitive amid rising uncertainties.