CHAPTER - IV
MARKET MECHANISM
AND
PROBLEMS OF MARKETING OF
AGRICULTURAL PRODUCTS
96
CHAPTER-IV
MARKET MECHANISM
AND
PROBLEMS OF MARKETING OF AGRICULTURAL RODUCTS
Introduction
M arkets are the mechanism which is supposed to work for the
benefit o f both those who sell and those who buy. For this there has to
be a large number o f sellers as well as a large number of buyers to
compete among themselves and in a manner that the seller gets his
legitimate due and so does the buyer. But this kind o f competitiveness
requires a large number o f conditions to be satisfied. One o f them is that
there must be very large number of sellers as well as buyers, also that
the buyers should know about the sellers and the sellers about the
buyers. A great deal of information should flow with regard to the prices
available and there is no rigidity which prevents the buyers or the sellers
from exercising their choice with regard to maximizing their own profit.
In the field o f agriculture, I think the 'number' is not a problem in
the sense that there are a very large number of sellers and buyers. The
sellers in one sense are the farmers themselves and also traders with
respect to the consumers i.e. the buyers. But there are obviously a large
97
number o f rigidities with which we are all familiar. These arise on one
hand on account o f the weak position o f the farmer i.e. who is not well
informed about the market situation, who cannot take his product to
other markets easily and who is not in a position to bargain with the
customers much being a regular customer. As a result o f this, a variety
o f systems have aroused which give an excessive amount o f bargaining
strength to buyers from the farmer and who has used this position
always for increasing his own profit from the transaction. I think one
should not minimize these which have been more o f a personal
character. They are significant in the sense that they help the farmer
when he comes to the town for various purposes like finding a doctor or
a lawyer etc. Nevertheless, in the process, the farmer has been certainly
exploited to varying degrees. Now the existence o f this kind o f rigidity
become much worse where the supply and demand equation gets upset
as a result of inadequate supply which in the past happened very often
and still happens when the weather is unkind and the production is
inadequate and supply bottlenecks and shortages emerge. By and large,
the advantage o f such conditions is taken by the traders and very rarely
and not sufficiently by the farmer, the producer.
We have seen ‘Mandies’ of various sizes located at various
places, which had the purpose o f bringing the buyers and sellers together
98
in a competitive situation. But these have, o f course, been successful
only up to a certain point. They were largely dominated by the trader
who functions as a buyer from the farmer point o f view and as a seller to
the consumer. Though the function performed by them was certainly
admirable, the rigidities that I have talked of remained to the
determinant of the farmer on the one hand and the consumer on the
other. This led to the concept o f regulated market which essentially
means that we buy from a third authority, not the trader or the buyer or
the farmer. In that case, there has to be some regulation to see that fair
practices are followed in the market. Experience has so far shown that
regulating the market, has very substantial benefits not only in terms of
better prices for the farmers but more significant advantages have been
noticed by the study. It leads ultimately to an increase in the
productivity o f farms and also to an improvement in the input use. This
is a significant advantage in the sense that it is not financial but
economic advantage to the whole country and not only to the people
who are dealing in the various transactions related to the market.
There are at the moment two layers o f the market so far as
agricultural produce is concerned. One is at the village level which is
known very often as the village primary market. There are another type
o f market not every where but in some places, an assembly kind of
market, not strictly a market, but a kind of arrangement where products
are brought together for the wholesale market. O f course, the basic
market is the village primary market. At present in the district we have a
considerable number of rural markets. Substantial amount of transaction
take place in these markets. The regulated market essentially is a
wholesale market in bigger or smaller cities or towns or bigger villages.
Though there is the provision of regulated market but. it is not w orking
effectively for which the farmer producers have to face number of
problems. The existing regulated market of the district regulates only the
cattle market in Garobadha.
Fig (4.1) Cold Storage at Garobadha
100
The village primary markets are generally owned by individuals or by
panchayats or by municipal committees. These individuals’ panchayats
or municipal committees have these markets as a source o f income. And
very often, this is the main motivation for them to have these markets
and they are concentrating largely on them as a source o f income rather
than providing a mechanism for facilitating trade and good marketing
arrangements. The village primary markets are very often quite
rudimentary in terms o f infrastructural facilities available in them. They
are just a place where people bring their produce.
There is a central government grants in aid programme through
which money is available for providing certain facilities such as display
platform, drinking water and so on. And at various places these funds
are utilized for the development of these facilities. By and large these
are the places where not many facilities are available to make trading
more efficient. However, these are the markets which are being used by
the small and marginal farmers. The small and marginal farmers not in a
position to go through the larger markets — regulated or otherwise —tend very often to go to these markets and make their sales there, with
the result that the benefit that is supposed to accrue as a result o f the
regulated markets by and large, is not available to them.
101
Regulation of Rural Markets
Agricultural Produce Market Committees is constituted as per APMC
Act (Agricultural Produce Market Committees Act) to manage the
markets. To achieve an efficient system o f buying and selling of
agricultural commodities, State Governments and Union Territories
enacted Agricultural Produce Marketing Regulation Act to provide for
regulation o f agricultural produce markets. The wholesale markets and
the rural primary markets are brought under regulation of this Act. Many
o f the regulated wholesale markets have a principal market with large
area and relatively better infrastructure and number o f sub-yards
attached to the principal market. The establishment o f regulated markets
has helped in creating orderly and transparent marketing conditions in
primary assembling markets. The regulated market in the West Garo
Hills District is not in smooth functioning condition. The rural farmers
are not availing the facilities provided by the regulated market. Because
o f this the fanners suffer lots o f problems which are discussed in the
later paragraph. But it has come to the notice from the table given below
that Meghalaya is having only two regulated markets of which one is
situated at Garobadha in West Garo Hills District. The table reflects that
the North Eastern states like Manipur, Meghalaya, Mizoram, Nagaland
102
and Tripura are having very few regulated markets whereas the other
states of the country have numerous regulated markets.
TABLE: 4.1: Statement showing details of Regulated Markets in
different States As on 31.03.2009
Name of the Area in
Total
Total Nos.
Sq.
Population
of
No State
Kms.
Regulated
Markets
s
Area covered
by each
Market in Sq.
Kms.
Andhra
Pradesh
Arunachal
Pradesh
Assam
275045
75727541
894
307.66
83743
1091117
69
1213.67
78438
26638407
226
347.07
4 . Jharkhand
79714
26909428
201
396.59
3702
1343998
8
462.75
1
2
3
5
Goa
6
Gujarat
196024
50596992
414
473.49
7
Haryana
44212
21082989
284
155.68
8
Himachal
Pradesh
55673
6077248
42
1325.55
Karnataka
191791
52733958
499
384.35
308346
60385118
509
605.79
11
Madhya
Pradesh
Chhattisgarh
135100
20795956
184
734.24
12
Maharashtra
307690
96752247
880
349.65
9
10
1
0
3
13 Manipur
22327
2388634
0
0.00
14 Meghalaya
22429
2306069
2
11214*50
15 Mizorum
21081
891058
0
0.00
16 Nagaland
16579
1988636
0
0.00
17 Orissa
155707 36706920
314
495.88
18 Punjab
50362 24289296
488
103.20
342239 56473122
430
795.90
540493
1
7096.00
130058 62110839
292
445.40
3191168
21
499.33
238566 166052859
605
394.32
19 Rajasthan
20 Sikkim
21 Tamil Nadu
22 Tripura
23 Uttar
Pradesh
7096
10486
24 Uttarakhand
55845
8479562
58
962.84
25 West Bengal
88752 80221171
687
129.19
Source: Secondary Data Collectedfrom Website (Google)
Regulated Market
The Regulated Markets are managed and run by the marketing
committees. These are constituted by the Government. These
Committees have representatives from the Government for the trade as
well as from the farming community. The market committees have the
104
right to fix the commission rate, other market charges, market fees etc.
The market fee by and large, is the source o f finance for them for
providing various infrastructural facilities and other services. The
marketing committees are constituted under the State Agricultural
Produce Marketing Act which is a state Act. Very often the secretary of
the Committee is from the Government and the other representatives are
drawn from different communities. The marketing committees are
supervised by the marketing boards, which are the state level
organizations. In most places they do exist but there are some states
which do not have the marketing boards.
One is the policing function which amounts to licensing the
traders, ensuring that the proper Commission and other charges are
made by the traders and also ensuring that the farmers get prompt
payment for their sale. On the infrastructure and services side their
function, consists of providing display platforms, drinking water,
grading facilities market intelligence, storage godowns, transport,
processing finance etc. However, most o f these are not always provided.
There seems to be a lacuna here that some o f the facilities are not
provided by the regulated markets. Here again there is a scheme from
the Central Government which gives grants-in-aid for the purpose of
establishing these facilities.
105
The advantages that regulated markets can provide are quite a
few. The most important one is that the regulated markets have tended
to reduce fluctuation in prices. The fluctuation in prices can be o f great
disadvantage to the seller. Compared to the Mandies the regulated
markets charge lower price for the marketing facilities offered by them.
They have also helped in ensuring that the farmer gets his payment
promptly. These markets have also induced the farmer to sell directly
rather than through an intermediary, which again helped him to secure
better prices than he could at the village level, when he operated through
the trader, who would go to the village to collect his produce and bring
that to the market. These markets have also provided the scope and
facility for collecting better information on the market arrivals, total
quantities sold and the prices at which those were sold. Having
described these, I would try to assess the functioning o f the regulated
markets, point out some o f the problems and some of the
recommendations that have been made from time to time to resolve
them. One o f these is the operation o f the markets through the marketing
committees which varies very widely. That is because the Acts under
which they operate are not similar. There is a great deal of variation. To
this there has been a suggestion that there ought to be a model Act
which should be followed by most of the states. The Model Act should
106
provide that the Chairman as well as the Vice Chairman of the
committee should be bona fide agriculturists' and that it should not be
necessary that municipal committees should be represented on it. This is
obviously with reference to whether financial motivation is involved in
the market which .1 have mentioned earlier. There is also a suggestion
that the confusion on rights and functions of the marketing boards and
the agricultural marketing department of the Government should be
removed. The marketing boards should be responsible mainly for
development and planning of the market and not for the day-to-day
running of marketing business and that the latter function should be
passed on the agricultural marketing department. There are also
suggestions that the marketing committees should enter into trade
themselves to do buying and selling and they can thereby help in the
recovery of loans from the farmers. Others suggest that this function can
be taken up by the co-operative societies, and yet others think that the
procurement agencies could perform these functions. I think there are
merits and demerits in all those.
Probably the point is that there should be linking up between the
marketing and the recovery of losses, whether through this or that
agency. There is a great deal of need for training those functionaries
who are involved in managing the markets which I think need to be
107
looked into very carefully. With a view to provide better regulation of
buying and selling o f agricultural produce and to safeguard the interest
o f the producers, the Government o f Meghalaya has set up the
Meghalaya State Agricultural Marketing Board in 1983. The main motto
o f this Board is to develop marketing infrastructural facilities and to
provide marketing support to the fanners in the state. The Board’s
headquarter is in Shillong. The services to be provided by the Board are
better regulation o f buying and selling o f agricultural commodities and
improvement of markets in the state. Following are the functions of the
Board:
1. Better regulation of buying and selling of agricultural produce in the
State.
2. Provision of infrastructural facilities in each new regulated market
after acquisition o f land with amenities like godown, auction platform,
traders shop, retailers shop, rest house for farmers, bank, post office,
internals roads etc.
3. General improvement in the marketing efficiency and promoting
discipline among the trading community and other market
functionaries by introducing the licensing system in the market yards.
4. Provision for the financially weak market committees in the form of
grants and loans to enable them to discharge their duties effectively.
108
5 .
P r o p a g a n d a
a n d
o f a g r i c u l t u r a l
6 .
P r o v i s i o n
p r o d u c e
7 .
8 . A
c o m
t h e
m
M
M
i t t e e
o d e m
a n d
m
f o r
i l l a g e
g r a d i n g
s t a f f m
r e l a t i n g
a n d
e m
e a s u r e s
i n
t o
t h e
r e g u l a t e d
r e g u l a t e d
s t a n d a r d i z a t i o n
g e n e r a l
a n d
t o
b e r s
a n d
i m
o
f t h e
d e v i c e
t o
p r o v e m
s a f e g u a r d
a n d
m
E c o n o m
i x t u r e
i f
y "
f a c t
o f
b y
m
l a i s s e z
f a i r e .
m
o d e m
m
t h e
a r k e t
p r o m
e n t
m
m
a r k e t i n g
a r k e t .
o f a g r i c u l t u r a l
c o m
o t e
i n
m
t h e
t h e
i n t e r e s t
i t t e e s .
i n t e r e s t o f
m
a r k e t i n g
o f t h e
g r o w
e r s
o f
a n d
a
e d i e v a l
A
s
a
e l o d y ,
f
a r k e t i n g
w
e l l
s
a s
o f
f e u d a l i s m
p o l i c y ,
a
t y p e
o f
i t
m
i n
t h e
e c o n o m
a
w
f r o m
a s p e c t
p o l i c y .
e c o n o m
a n d
e a n s
c o n s c i o u s
i c
t h o s e
n o t
i t h
y
a n
i s
A
h i c h
a
h i c h
g r a s s
g i v e n
f a c t ,
it
u n c r i t i c a l
o f
a t
w
i t ’ s
m
w
s p r a n g
n a t i o n a l i z a t i o n
p r i s e s
o n e ’s ,
o r g a n i z a t i o n
w
c o m
t y p e s
d i s a b i l i t i e s
n o t
s
w
d i f f e r e n t
t r a d i t i o n a l
s u f f e r i n g
m
f o r m
b u t
a
t h e s e ,
i n d i v i d u a l s
a s
P r o d u c t s
o r g a n i z a t i o n s
O
t h e i r
v a r i o u s
b e h i n d
i n h e r i t e d
o r
o u n t e d
i s
r e p r e s e n t s
p a t t e r n s .
i n s t i t u t i o n s
s u r m
I n d u s t r i e s
I n d i a
o r g a n i z a t i o n a l
m
f o r
p r o d u c e
o f V
t r a d i t i o n a l
b e
a t t e r s
l ic e n s e e s .
a r k e t i n g
l e v e l ,
m
a r k e t s .
o f s u i t a b l e
a g r i c u l t u r a l
t h e
m
o n
h o r t i c u l t u r a l p r o d u c e
o f o f f i c e r s
d o p t i o n
t h e
a n d
o f f a c i l i t i e s
i n
T r a i n i n g
p u b l i c i t y
h i c h
d u e .
e a n s
h i c h
d u e
b y
w
t o
t h e
i x e d
c h a o t i c
a s
m
a c c e p t a n c e
i t
r o o t
c a n n o t
" M
a
o f
o d e m
o f
w
l e f t
t h i s
e l f a r e
109
state. In the field o f marketing o f the products of village industries, there
is a mixed organizational setup comprising profit seeking middleman,
state agencies, co-operatives and non-profit making agencies other than
co-operatives. Economic policy requires thorough planning for efficient
marketing o f the products o f an unorganized village industries sector.
The policy should be such so as to create scope in which each type of
marketing agency make maximum contribution without frustrating its
counterparts.
The village industry goods do not enjoy a compact local market.
In the present age o f mill made finished goods the marketing o f village
industry products posses a major obstacle for the development o f the
sector. In the face of competition from the organized industry sector,
even the production o f good quality of village industry products would
be in fructuous in the absence o f an efficient and well organized
marketing system. The general pattern of marketing of village industries
products through middleman is obvious. Independent entrepreneurs sell
their manufactured good to middleman.
Hie big stockiest or
shopkeepers purchase the products from them and in turn sell them to
consumers or export firms. This system is a channel o f one side
profiteering without benefiting the producer for better price. The
middleman exploit the entrepreneurs by paying unreasonable price,
no
taking advantage o f their illiteracy, lack o f adequate knowledge of
market information, prevailing prices etc. The marketing system needs
an integrated organizational approach with state intervention. The first
and foremost step to be taken to reorganize the traditional channels of
marketing may be towards elimination o f middleman and giving
training to the village entrepreneurs in all modem marketing techniques.
For marketing the village industry products, the function presents a
pentagonal set-up consisting o f village level worker at the industrial
village level, worker's supervisor at cluster of village industries or
panchayats village level, circle organizer at block level, District
organizer at district level and lastly headed by a senior official at apex
institution at the state level exclusively for the promotion of village
industries would be technically feasible for their intensive assistance and
growth. The village level workers would be directly associated with the
village entrepreneurs, keeping them in touch with the prevailing market
trends, demand and supply texture and the price movements under the
guidance o f the works supervisor at panchayats or village industrial
cluster level. The works supervisor would be required to do as an
instructor to the village entrepreneurs with the responsibility of
providing them training guidance and information regarding the input
market (raw materials etc) and output market bi-monthly or quarterly in
Ill
a short course o f 3 to 5 days. This could be done with the help o f the
village level workers. The hierarchy would be further led by the circle
organizer and District Organizer at the block and district levels
respectively. They would act as coordinators for policy implementation
and other developmental activities under the directive of the 'Apex'
institution.
The apex organization should be the top marketing concern for
the village industries products followed by the channel of various
administering centers. The headquarters of the village level workers
would be at the assembling centers for various village industries
products like edible oils, bamboo products, handmade paper and paper
products, leather products garments, etc. The products so assembled
would have to be graded primarily under the presence o f quality control
authorities o f the district level. Further grading o f the procured products
would be done at the block level and certified for sale by the district
organizers. A mark of standardization would have to be put by the Apex
institution before subjecting the products for distribution.
The village industries products canying such mark of
standardization have to be distributed through emporia, large scale
multipurpose co-operative societies and traders for retail sale. The
112
products of the village industries processed and canalized in such a way
for marketing would benefit the entrepreneur in two ways. First the
entrepreneur would be able to get better price for the product without
being exploited by the intermediaries and secondly, the products with
such standard marks would create an impact over the consumers and in
turn would be able to have more attraction than other equivalent
products. Since Khadi and village Industries commission continues to
play a pivotal role assigned to it in rural industrialization, it has to set up
a modified hierarchy in the field of marketing of village industries
products. Procurement and redistribution o f the products from village
industries have to be controlled by an apex institution for distribution of
manufactured goods. The procurement o f goods by the private agencies
has to be restricted and each manufactured village industry products
should be allowed to flow through the channel to subject it to quality
marking and grading o f the amount o f the price of the product, 80
percent has to be paid in advance for procurement by the Government,
Private agencies, state departments, traders etc. for the given quality
through the khadi and village Industries Commission. The product
should be manufactured at the standard formula specified at the apex
level. The rest of the 20 percent o f the amount of the price could be
released after the product carries the quality mark and finally moves to
113
the party concerned. This sort o f approach would help the entrepreneurs
in four ways: first amount o f advance paid for the procurement of
products could be utilized by the industrialist as working capital for
investment in the plant. This would also save him from borrowing and
undergoing some cumbersome formalities for the same. Secondly, the
village industrialists would be able to find an assessed market at the
doorstep. Thirdly, he could maintain the quality o f the product to have
the mark and finally he would get better price for the product.
Problems of Marketing of Agricultural products
Mahatma Gandhi once remarked that India lives in the villages,
which in true sense means that more than 80 percent o f the population
has their domicile in rural areas and 89 percent o f the workers belong to
the rural sector while almost 99 percent o f the farming community lives
in villages. Therefore, much stress is to be given on improving the rural
economy. Almost three quarters o f the word's 1.2 billion poorest people
live in remote rural areas and depend on agriculture for their survival.
The focus thus needs to be given on improving the infrastructure for
rural development which is considered to be the only measure to link up
the rural sector to the main stream o f life and activity. The growth of
agricultural sector is the key point in our overall growth. The market of
114
agricultural products is still underdeveloped in terms of infrastructure
and access to international market.
One of the worst problems faced by the farmers o f Meghalaya is
that o f marketing their products for which majority o f the farmers fail to
get remunerative prices and compel to dispose their products at a very
low price and thereby the middlemen avail the opportunity of deriving
undue benefits. It is no denying the fact that the present scenario of
agricultural marketing in Meghalaya is very unacceptable and
unfavorable which is mainly due to the major constraint that the farmers
usually do not have information about the prevailing market prices of
commodities. These shortcomings help the middlemen to play a
dominating role in collecting the produce from the producers than what
they pay in return. Marketing is critical to agricultural farming. Efficient
marketing network is very pertinent for the farmers to dispose of their
surplus products at reasonable price. Remunerative sale proceed is a
great incentive which encourages the farmer to cultivate more crops by
adopting new farming technologies. Farmers should posses some
comprehensive knowledge regarding the availability of inputs like seed,
fertilizer and pesticide and their market etc. It is noticed that in the area
o f socialistic planning, social plans could not provide a satisfactory
benefit to the downtrodden as the regions already richer and
115
comparatively well-off are benefited more while the regions dominated
by under privileged section lagged behind in most of the social and
economic indicators. Thus a gulf o f difference is prevalent between the
haves and have-nots, city men and country men, which has been
widening day by day rather than narrowing. The rural masses are the
significant segment of the population as they have a great contribution
in feeding the whole country with their hard earned produce.
Web Portal ASHA
Pragmatic steps have now been taken to initiate every scheme
right from the grassroots level to tide over the difficulties. Most of our
farmers fail to reap the benefits out o f their hard labour in terms of
sustainable farm income as they are lacking in knowledge, information
on crop weather condition, implementation o f schemes, marketing
facilities and various state policies etc. So, die crying need o f the hour is
to spare no pains to deliver the information and knowledge at the door
steps of the masses. Keeping this strategy in view, a noble gesture is
made by the Assam Small Farmer's Agri-Business Association in
collaboration with National Informatics Centre in embracing on
ambitious project and launching a web portal "ASHA' enriched with
vital information under one umbrella to focus all the activities in the
116
direction of agricultural achievement right from resources, input and
production to marketing linkage with an aim o f developing the prospect
o f farming communities and improve the rural economy. The
community Information Centers have been set up in all the rural areas of
some states with an objective to provide information which cater to the
need of the community on business model by investing an amount of
Rupees one crore per centre. A collective effort is being made in this
direction to render yeoman's service by developing a frame-work for
community Information Centers to undertake the initiative on a business
model which can act like a "Rural Knowledge Centre" to the farmers,
government functionaries, societies, traders and corporate sector which
aims at capacity building up gradation o f farmer's skill to maximize their
benefit. This will establish a direct link between buyer and sellers and
creating new livelihood and employment avenues in farming sector
there by raising the rural economy.
All these have an immense potentiality to equip the farming
community with all sorts o f skill knowledge and conception which will
pave the way for better development o f farming community and rural
sector in general. It is expected that the web portal will definitely go a
long way in improving capacities and confidence o f both the farmers
and government functionaries and boost up rural economy to a desire
117
extent. This is the best effort in the direction of improvement in
agricultural activities but the entire process will be a wild goose cheese
or meaningless exercise if regular updating o f data, response to the
queries, feed back of the farming communities o f the state is not
ensured. Any unreliable market price and fictitious information will
defeat the purpose o f the scheme. Timely and regular flow of reliable,
adequate and realistic information is the pre-requisite in executing the
scheme, a hope of rural prosperity. The rural areas o f West Garo Hills
District are devoid of certain basic facilities needed for marketing of
agricultural produce and thus the condition of agricultural marketing in
West Garo Hills in deplorable. The farmers in West Garo Hills are poor
and ignorant of the market conditions.
The problems of marketing o f agricultural produce in the rural
areas of West Garo Hills are highlighted below:
1.
The farmers do not have facilities in the form of adequate
warehouses in the rural areas for storing their produce and wait till they
get better price in future. They are forced to sell their surplus produce
immediately after the harvest to settle their debt. Besides the conditions
o f storage facilities available in the rural areas are so bad that 10% to
20% of the produce is eaten away by rats. There are no cold storage
118
facilities in the rural areas to store the perishable agricultural produce
like fruits and vegetables. On account of this certain fruits like oranges
which are seasonal in character are wasted and spoiled.
Fig (4.2) A portion o f Cold Storage at Garobadha
2. The average farmers in West Garo Hills district is not
financially strong and does not have access to easy credit facilities. They
have no capacity to wait till he gets a better price since he is indebted.
With the result the farmer is forced to sell the agricultural produce
immediately after the harvest to the local money lenders or to the
middleman or to the people who have provided credit facilities to the
fanners to earn on his agricultural operation and to maintain his family
during monsoon season.
119
3.
The transport condition of West Garo Hills area continued
to be so bad that even rich farmers may not feel like taking their surplus
produce to the commission agents or to the agricultural produce
marketing societies situated in the far away place in cities or towns.
Most of the roads in rural areas are non-metallic roads. In the interior
rural areas there is no road access and the farmers had to cany their
surplus produce on head.
4.
The conditions of the commission agents or agricultural
produce marketing committees or primary Agricultural produce
marketing societies are such that the farmer may have to wait for some
time before he could be able to dispose of his produce in anticipation of
higher price. The commission agents have to search for the wholesellers who are prepared to purchase the produce of the farmer in lots.
Till the commission agents are able to find the wholesalers to purchase
the produce, these produce have to be stored in the warehouse of the
commission agents or agriculture produce marketing committees for
which the rent is charged. Besides, the commission agents charge
substantial commission. In spite of these there is no guarantee that the
farmers will get high price for his produce out of the bargain of
commission agents. This type of transactions generally falls against the
interest of the farmer. The price which is settled ultimately is generally
120
to the advantage o f the wholesalers and not to the farmers. Moreover,
through the use o f faulty weights and measures and by offering low
price on the plea that the produce is of inferior quality and the farmers
are finally deceived.
5.
In the rural areas of West Garo Hills District o f Meghalaya,
the number o f intermediaries and middleman between farmers and the
final consumers of his produce are too many. Middlemen who are large
in number in villages dominate the trade in agriculture produce and
thereby pocket substantial margin. In the process, both the growers and
consumers o f agriculture produce are exploited. The farmers are derived
from getting better price for their suiplus produces.
The farmers in the interior rural areas ordinarily do not get
information about the market trend and about the ruling prices in the big
markets. As a result the farmers in rural areas have to accept the price
quoted to their produce and have to believe what ever tell them. Thus,
the traders make huge profit without their effort out of the produce of
farmers who grow it and thereby the farmers are exploited.
Prospects o f rural marketing in the district
The market place is one o f a few areas in modem society in which
people have an opportunity to participate directly in public life. In
121
today’s' business, effective use and flow of information is the key to
success. In recent years marketing has changed the nature o f business
due to opening up of economy and large number of products competing
with one another for market share. The rural markets are aptly being
described as towns villages or small hamlets which have poor
infrastructure, economy is driven by agriculture and is dependent for
many o f the amenities on the feeder market. The rural marketing has
becoming a key area o f focus for the corporate sector off late due to the
vast potential. MNCs and Indian companies like HLL, Philips Samsung,
Godrej, Nirma, TVs - Suzuki, Wilkinson, Larsen & Turbo, Britannia,
MRF, etc. are aggressively targeting the rural markets.
Rural marketing has changed its concept and scope over the years.
In earlier days rural markets were used to designate marketing of
agricultural produce and village artisan products. In modem society,
villages have acquired a new profile respectively adopting themselves to
the technological change taking place in an unimaginable trade in major
cities. There is a distinct impact of modem means and methods on the
life of rural folk in the recent years.
At present all companies are largely concentrating on rural
population to promote their goods. To reach rural markets, they however
122
adopt urban market strategies with the modifications required to suit the
rural condition. The following are the some of the strategies adopted by
companies to attract the rural consumers:
Nirm a soap captured the rural market by selling its products at
half the price of its rivals by offering the same quality. Samsung is
selling two new models of colour 'TV' for less than Rs.10, 000.
Wilkinson deputes salesman to villages whenever it launches a new
blade. Godrej is planning to set up service centers in rural areas. Rural
market is a huge market with lot o f potential in it. The rural market is
growing at least 5 times the rate o f the urban market. Nearly 70 percent
o f the Indian population is living in rural areas. Both rural and urban
markets differ significantly. Similarly, urban and rural consumers’
behaviour is significantly different with regard to price, guarantee,
durability, brand image, credit availability, after sale service etc. First
three factors are the factors which influence rural marketing namely
price, credit availability and durability whereas in the urban market the
related factors are price, latest technology and durability. Therefore,
v
importance is given to rural markets in the modem marketing scene.
Thus, it is often said that "markets are made, not found", this is
especially true of the rural markets.
123
Fig (4.3) Kalaichar Rural Market
************