Morning at the Mandi

By Weisen Li

The air was filled with spices.  I could hardly breathe without sneezing or tearing.  It was early in the morning and we are touring the mandi, a wholesale market run by the APMC (Agriculture, Produce and Market Committee, a branch of the Ministry of Agriculture).  This is the place where the farmers bring their harvest to sell.  At first glance, the mandi looks frenzied and disorganized – piles of vegetables littering the ground, trucks driving through crowded areas and people shouting over the noise.  However, there is order in this chaos.

An average farmer would travel 20 kilometers to a nearby mandi (each town or city has one) to sell their produce to an APMC licensed commission agent.  The commission agents take an APMC set commission rate of 6% for onions, potatoes and garlic, and 8% for fruits and vegetables.  They then sell the goods to a buyer in the form of a wholesaler, retailer, business or processor.  APMC takes a 1% cut of the transactions which is paid by the buyer.  75% of the goods sold are to wholesalers and retailers while only 25% is sold to businesses and processors.  However, businesses and processors have increased their share from 5% to 25% in the past 3-5 years as a result of increasing consumption of processed foods.

Prior to the trip, we studied the ITC eChoupal Initiative case where it mentioned that farmers were taken advantage of due to their lack of market price knowledge.  This, based on our observations and interviews, does not seem like the case as the farmers would generally have price expectation of ± 5% of actual price through cell phone communication.  With so many commission agents at each mandi, the farmers can just as easily sell their products to the agent next door.  Commission agents also have the incentive not to take advantage of the farmers as it could cause their license to be revoked.  APMC store space and agent licenses can be traded for up to Rs 2,500,000 to Rs 4,000,000 (~$55,000 to $89,000 USD) on the grey market.  With that said, farmers still bear tremendous risks.  Any cost as a result of spoilage or damage (as judged by the commission agents) is carried by the farmers. 

The real challenge for farmer income generation lies in timing.  Currently, limited access to cold chain and reliance on weather for water supply forces the farmers to sell their produce immediately after harvest.  Unfortunately, harvest time is also the peak season and as a result, goods are being flooded into the market at a low price.  NGOs like International Development Enterprise (IDE) are working with farmers to provide them with affordable water irrigation technology to solve the water supply issue but the country is in desperate need for more cold chain infrastructure.  Until cold chain infrastructure is freely accessible, the Indian farmers will have a hard time improving their income generation.

Comments

[beijing opera night show]

Always good to come across a really thoughtful site,LIKE YOUR BLOG. LOVE LOVE LOVE IT!

[installing irrigation systems]

Today, thanks to improved irrigation systems, farmers can produce more products from every acre of crops. This improvement leads to increase of the farms, and although it looks like a mess in the market, this is actually a success

[Supra Shoes]

Oh, this is exciting! Good luck to see your blog of all the applicants, thank you share the information.

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Every tragedy makes heroes of common people.

[prashant vikram singh]

indian agriculture scientist are not work in proper way.those are the working in a form and their work is bound those form.so, every reasurch goes to former those are helping increasing their crop yield.

[Omdev Gohil]

hmmm.. nyc readin ur articl.. i hv 2 bear dis e day!!