GS3 PYQ (Mains Answer Writing): Agriculture | Indian Economy for UPSC CSE PDF Download

What are the main constraints in the transport and marketing of agricultural produce in India? (UPSC MAINS GS3 )

Indian agriculture support to the national gross domestic product (GDP) is around 15 percent. With food being the uttermost need of humans, the emphasis has been on commercializing agricultural production. Due to this, adequate production and even distribution of food have become a high priority global concern.
However, there are several difficulties involved in agricultural marketing as agricultural produce involves an element of risk like perishability and it again depends on the type of produce. If the agricultural produce happens to be seasonal, it also pose threat. Similarly, there are several risk elements involved in agricultural marketing.

Some major constraints associated with transportation and marketing of agricultural produce:

• Connectivity: There is a lack of connectivity from villages to markets. 
• Sorting and grading technology: Farmers lack knowledge about the process 
• Numerous stakeholders working in isolation: The food supply chain is complex with perishable goods and numerous small stakeholders. In India, the infrastructure connecting these partners is very weak. 
• Lack of demand estimation: Demand forecasting is absent and the farmers try to push whatever they produce into the market. 
• Lack of technology applications: Cold chain logistic supply chains should take advantage of technology improvements in data capture and processing, product tracking and tracing, synchronized freight transport transmit times for time compression along the supply chain, and supply-demand matching. 
• Lack of system integration: The supply chain needs to be designed and built as a whole in an integrated manner. The process of new product development, procurement, and order to delivery processes should be well designed and well supported with the help of IT tools and software. 
• Presence of a large number of unorganized retailers: At present, the unorganized retailers are linked with farmers through wholesalers or commission agents. The commission agents and wholesalers’ redundant supply chain practices make unorganized further inefficient. 
• Slowdown in production growth: With around 67 percent of landholdings being marginal, with an average size of 0.4 hectares, more than half of marginal farmers are likely to not have any excess income to spare beyond subsistence, hindering the improvements in farm-level productivity. 
• Weak rural Infrastructure: Lack of better roads and rail facilities creates logistics problem. 
• Absence of Cold Storage Facilities: It leads to spoiling of perishable items like fruits etc. 
• Unavailability of Insurance Products to protect goods while moving. 
• Presence of Asymmetric information: It is usually found that the middle man has more information than both farmers and consumers regarding prices, supplies, and stocks available. 
• Other issues: Apart from the above areas of concern, other issues such as Lack of applied research, Taxation issues, access to credit, obsolete technologies, etc. persist in the sector.

Way Forward

• Improving infrastructure through schemes like Ajeevika Grameen Express yojana, SAMPADA yojana for building warehouses. 
• Vertical coordination of farmers through cooperatives, contract farming, and retail chains would facilitate better delivery of output, reduce market risks, provide better infrastructure, attract more public interest, acquire better extension services, and create awareness regarding the prevailing and new technologies. 
• Customized logistics is another important immediate requirement to make logistics effective. This reduces the cost, facilitates the maintenance of the quality of the produce, and fulfills the requirements of targeted customers. 
• Information system for better coordination among different stakeholders from farmers to consumers is the need of the hour. The internet and mobile communication can also be used to enable information and financial transfer between the stakeholders. 
• There are initiatives such as the India Food Banking Network (IFBN), which is promoting the concept of collaborative consumption with support from the private sector and civil society organizations.

Topics Covered- Constraints in Agriculture