Government interventions in the marketing of selected agricultural commodities in India

Governments have played an important role in influencing policies in the agricultural sector all over the world. In developing countries, agriculture accounts for a substantial share of all productive activity and food is a dominant share of total consumption. In this situation, price interventions in food markets can have far reaching consequences. Besides, agricultural prices in a developing economy are highly influences by the interaction between producer, consumer and groups of trader and their relative effectiveness in infl uencing government decisions-making. The current agricultural marketing system in India is the outcome of several years of Government interventions. In view of the distorted and unregulated market conditions prevailing for agricultural produces in India, support prices are proved very imperative for farmers to get assured income from their crop cultivation. Although price support policy linked to procurement has served the country well in the past three decades, it has come under severe scrutiny and atiack for various reasons in the recent years. Though agricultural marketing in India has made noticeable progress since independence but many challenges still remain. It suffers from eficiency, disconnect between the prices received by producers and the prices paid by consumers, fragmented marketing channels, poor infrastructure and policy distortions. The growth of market facilities did not keep pace with the growth in market arrivals, forcing producers to seek the help from middleman. The wide gap between price received by producer and price paid by consumer of commodity is another important concern of marketing of agriculture commodities in the country. Also, there are several regulatory measures which come in the way of eficient functioning of the domestic market for agricultural commodities and adversely affect both the growers and the consumers. There has been a debate on price versus non-price factors in the literature. However, a review of literature shows that they are complements rather than substitutes. Thus, agricultural price policy is one of the important instruments in achieving food security by improving production, employment and incomes of the farmers. Therefore, there is a need to remove botilenecks in marketing and to provide remunerative prices for farmers in order to maintain food security and increase the incomes of farmers.