Seminar on Role of Private Sector in Agricultural Marketing
September 3, 2001 New Delhi

Address by Shri J.N.L. Shrivastava, Secretary, Department of Agriculture & Cooperation

Hon'ble Shri Ajit Singhji, Union Minister for Agriculture, Shri Chirayu R. Amin, President, Federation of Indian Chambers of Commerce and Industries, senior representatives from trade and industries and Government, ladies and gentlemen. It is indeed my privilege to be here in this important seminar on 'Role of Private Sector in Agricultural Marketing' organized by FICCI, New Delhi in association with my Ministry. This seminar, first of its kind, is vital in the present era of economic liberalization and globalization that envisages free trade in agricultural and allied commodities. Whether it is domestic or overseas trade, the agricultural produce sector has been the most important component of Indian economy. We have made lot of progress in this sector and scaled new heights in production of foodgrains ( 209 million tonnes in 1999 - 2000 ), fruits and vegetables ( 137 million tonnes in 2000 - 2001 ) and other important crops like cotton, sugarcane, tea etc. The increasing trend of agricultural production has brought, in its wake, new challenges in terms of markets for handling huge marketed surplus. There is now pressure from all segments of agricultural produce economy to respond to the challenges that the global markets pose in the new liberalized trade regime.

The Government has promoted organized marketing of agricultural commodities in the country through a network of regulated markets. At present most of the agricultural produce in the country is marketed through private trade operating in these organized markets / mandies. These markets have been playing an important role in providing physical facilities to farmers to dispose off their produce and an institutional framework to the trade, industries and other market functionaries to conduct related commercial activities. These markets have, however, achieved limited success. Restrictive legal framework has not augured well with competitive market structure. Promoting competition in trade and facilitating farmers with supporting facilities and services like grading, standardization, storage, pledge financing etc. have been neglected.Secondary markets in agricultural commodities have not grown. Development of market infrastructure has been, by and large, responsibility of the public sector.

In the context of the fast changing economic scenario, issues relating to the development of agricultural marketing have assumed great significance. An Expert Committee set up by the Ministry of Agriculture under the Chairmanship of Shri Shankarlal Guru has suggested several measures to strengthen and develop agricultural marketing in the country. The Committee has recommended a review of the existing legal framework governing the institutions of regulated markets and removal of restrictive provisions to promote a competitive marketing structure in the country, to promote direct marketing of agricultural produce by the farmers to improve price realization, to encourage forward and future trading, to reduce price risk, to establish a national warehousing receipt system for agricultural commodities, to induce increased flow of funds to agriculture sector, to support pledge financing by treating as a direct priority sector lending and to promote market led extension and use of Information Technology for improved marketing services to the farmers. The recommendations envisage the private sector to play an important role in creating a competitive marketing structure in the country to take full advantage of trade liberalization and to ensure remunerative price to farmers for the produce.

I hope this Seminar would deliberate upon all the issues and make suggestions, which will facilitate Government to initiate further measures for strengthening the marketing system and make it more vibrant and competitive in the interest of all the market users and development of agriculture sector in the country.