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Sequence of presentation
REGULATED MARKETS IN INDIA 2. PRODUCER SURPLUS 3. TYPES OF PRODUCER SURPLUS
1.

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INTRODUCTION
The origin of regulated markets in India dates

back to 1864.
150 regulated markets

at the time of

independence.
Number has increased to the 6,251 by 1990. Currently, 6261 Wholesale Markets in India

(majority are regulated markets).

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 20870 Rural Primary Markets (about 15% are

regulated markets). Total 27131

2459 Principal Regulated Markets
5006 Regulated Market Sub-yards

Total 7465 (Only 286 regulated markets in 1950)

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 The regulated markets are established to

avoid the proverbial exploitation of farmers by the traders and their middle men.
To

develop the necessary facilities and fair practices

marketing

To create competitive marketing conditions

among the traders

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Contd

To provide remunerative high prices as well

as safeguard the farmers against various malpractices in the markets and

To create the requisite environment for

efficient marketing of the agricultural produce.

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Objectives Regulated Markets

1. To ensure reasonable gain to the farmers by creating

environment in markets for fair play of supply and demand forces,

2. To regulate market practices and attain transparency

in transactions
3. Aimed at providing proper method of sale, correct

weighment, prompt payment and various marketing related services

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4. Democratic set up to control and manage markets

5. Advent

of regulated markets has helped in mitigating the market handicaps of producers/ sellers at the wholesale assembling level

6. Achieved only limited success and Rural Periodic

Markets in general, and the tribal markets in particular, remained out of its developmental ambit.
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Constraints in Agricultural Marketing

Small size of land holding Lack of infrastructure Limited access to the market information Lack of fair price discovery mechanism

Multiple channels of distribution

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contd..
Multiple and exploitative intermediaries low returns Fragmented supply chain, poor cold chain & high

post-harvest losses

Lack of cleaning, grading, packaging & quality certification facilities Limited access to market information marketing opportunities available
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and
10

Initiative of Market Reforms

Amendments in APMC Acts suggested by Expert

Committee on Market Reforms constituted by the

Ministry of Agriculture (Report in June, 2001)

Expert Committee recommendations discussed in the

National Conference of State Agriculture Marketing

Ministers on 27.09.2002
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Contd
Standing Committee of State Agricultural Marketing Ministers

constituted under the Chairmanship of Union MOS (A) met & resolved to implement reforms in 2003

Committee headed by Additional Secretary (AM), GOI

including State Representatives set up to draft a Model Law for Agri-Marketing

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 Model APMR Act finalized on 09.09.2003 by the Committee and circulated to States by Central Government Model Rules based on the Model Act circulated to States by the Ministry in November, 2007
NDC has resolved on 29th May, 2007 for completion of amendments in APMC Acts and notification of Rules there under by March, 2008.
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PRODUCERS SURPLUS
Producers surplus is the quantity which

made available for to the non-producing population of the country.

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14

 Agriculture production expands determines

the pace of agriculture development, while the growth in the marketing Surplus determines the pace of economic development.

The larger the production of the commodity,

the larger the surplus of that commodity and vice-versa.

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Types of Producers Surplus

1. Marketable surplus. 2. Marketed surplus.

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16

Marketable surplus
The Marketable surplus is the residual left with the producer-farmer after meeting his requirements.

The Marketable surplus is the total quantity of arrivals in the market out of the new crop.

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17

Marketable surplus
Marketable surplus as follows:
MS= P-C Where MS = Marketable surplus P = Total production, and C = Total requirements (consumption)
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Marketed surplus
Marketed surplus is that quantity of the produce which the producer-farmer sells in the market, irrespective of his requirements for family consumption, farm needs and other payments.

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19

Relationship between Marketed Surplus and Marketable surplus

The Marketed surplus may be more, less or

equal to the marketable surplus, depending upon the condition of the farmer and type of the crop.

< Marketed Surplus > Marketable surplus =

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The relation between Marketed Surplus and Marketable surplus may be stated as follows: 1. Marketed Surplus is more than the Marketable surplus when the farmer retains a smaller quantity of the crop than his actual requirement for the whole family and farm needs.

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21

2. Marketed

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Surplus is less than the Marketable surplus when the farmer retains some of the surplus produce. This situation holds true in following condition: a) Large farmers generally sell less than the marketable surplus because of their better retention capacity. b) Farmers may substitute one crop for another crop either for family consumption purpose or for feeding their stocks because of variation in prices.

22

3. Marketed Surplus may be equal to the

Marketable surplus when the farmer neither retains more nor retains less than his requirement. This holds true in perishable commodities.

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23

Marketed and Marketable surplus

These helps the policy-makers as well as the traders in the following areas: 1. Farming sound price policies. 2. Developing Proper Procurement and Purchasing strategies. 3. Checking undue Price Fluctuations. 4. Decisions related to the export and export. 5. Development of transport and Storage system.
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Factors affecting Marketable surplus

1. 2. 3. 4. 5. 6. 7.
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Size of holding Production Price of the commodity Size of family Requirement of seed and feed Nature of commodity Consumption habits
25

CASE STUDY
Farm of Mr. Jagdish DATA GIVEN : Quantity sold
120 quintals of Wheat
15 quintals of barley 48 quintals of mustard

40 quintals of gram
60 quintals bajra

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Agril. Marktg. in India, S.S. Acharya N.L. Agrwal

26

Total production and the requirements of the farm and family are shown as:
Crops Area under crop (Ha) 8 2 Productivity Seed Consumption Requirement (Qtl/Ha) requirement requirement for Artisans (Qtl) per adult unit and others (Qtl) 20 12 10 6.0 1.0 0.4 2.00 0.50 0.10 2 -

Wheat Barley

Mustard 5

Gram
Bajra
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5
15

10
6

2.5
3.0

0.25
1.00

1
27

Crop

Total Production (Area x Productivity)

Seed Consumption Other requirem- requirement requirement ent No. of units x requirement per unit 6.0 1.0 0.4 2.5 6 x 2.0 = 12.0 6 x 0.5 = 3.0 6 x 0.1 = 0.6 6 x 0.25 = 1.5 2.0 1.0

T0otal requirement

Wheat Barley Mustard Gram

8 x 20 = 160 2 x 12 = 24 5 x 10 = 50 5 x 10 = 50

20.0 4.0 1.0 5.0

Bajra
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15 x 6 = 90

3.0

6 x 1.00 = 6.0

5.0

9.0
28

Crop

Total Producti on(Qtls)

Total requirement (Qtls)

Marketable Marketed Surplus surplus (Qtls) (Qtls)

As percentage of production
Marketable Marketed Surplus surplus

Wheat Barley

160 24

20 4 1 5

140 20 49 45

120 15 48 40

87.50 83.33 98.00 90.00

75.00 62.50 96.00 80.00

Mustard 50 Gram
50

Bajra
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40

81

60

90.00

66.67
29

Marketed Surplus of Important Agricultural Commodities in Various States in India

Group of Crops
1 Food grains : Cereals 1. Rice 2. Wheat 3. Maize 4.Jowar 5. Bajra 6. Barley 7. Ragi Vegetables
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Crops
2

Per cent
2003-04 4 75.19 67.69 73.26 62.50 56.95 43.40 37.33 99.78 2004-05 5 71.37 63.33 76.22 53.44 69.39 56.05 57.74 82.91

1. Onion

2. Potato

75.71

85.0030

Growth Rates of Production of Principal Crops in India from 2005-06 to 2009-10 (Base: T.E.1993-94 = 100)
60.00 50.00 40.00 30.00 20.00 10.00 Rice Wheat 2005-06 2006-07 2007-08 2008-09 2009-10* Ragi

0.00
-10.00

-20.00
-30.00

-40.00
-50.00
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Area, Production and Yield of Wheat in India (2004-05 to 2009-2010 )

Year

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

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Area (Million Hectare) 26.38 26.48 27.99 28.03 27.75 28.52

Production (Million Tonne) 68.64 69.35 75.81 78.57 80.68 80.71

Yield (Kg./ Hectare) 2602 2619 2708 2802 2907 2830

32

Source : Ministry of Agriculture, Govt. of India.

Arrivals of wheat in Markets of Major Producing States During 2005 to 2008 (Qty)
STATES
2005-06
Haryana Uttar Pradesh 3947470 1556179

YEAR
2006-07
4593091 1789734

2007-08
7574231 1810198

Bihar
MP

1237230
1164824

1451383
1377355

1081550
9061322

Punjab
Rajasthan

793000
789329

9698000
1037531

10579000
923467

Uttaranchal
Maharashtra Karnataka Jharkhand Delhi
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308629
283393 16488 21919 160390

282312
194678 33743 20596

320866
N.A 54569 10969
33

315260 86330 www. agmarknet.nic.in

District-wise Area, Production and Yield of Wheat in Karnataka(2004-2005)

District
Bagalkot Belgaum Bellary Bidar Bijapur Chikmagalur Chitradurga Davangere Dharwad Gadag Gulbarga Haveri Koppal Mandya Raichur
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Area (in hect.)

21202 56811 848 7373 49116 6 658 316 39502 36348 16517 783 9762 3 2746

Production (in tonne)

32903 59112 768 4546 44599 9 932 383 21470 24519 11494 433 4371 1 756

Yield (tonne/hect.)
1.55 1.04 0.91 0.62 0.91 1.5 1.42 1.21 0.54 0.67 0.7 0.55 0.45 0.33 0.28
34

Source : Ministry of Agriculture, Govt. of India.

Marketable and Marketed Surplus of Wheat

Marginal Commodity/st ate/Particulars Wheat Uttar Pradesh Haryana Punjab Rajasthan All India
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Small

Medium

Large

Over all

ML MD ML MD ML MD ML MD ML MD

-11.0 17.1 32.0 38.9 61.3 54.2 -31.2 18.5 4.1 23.5

48.1 22.7 50.0 60.8 70.1 62.3 0.8 13.7 49.6 32.3

52.7 48.6 65.0 76.9 80.7 91.8 47.1 53.2 61.4 62.3

64.0 68.0 63.0 67.1 88.1 91.1 41.4 49.7 70.8 73.0

45.7 42.2 62.0 70.7 83.1 87.2 32.9 49.1 59.7 58.9
35

ML- Marketable surplus, MD- marketed surplus

Source: DMI, GOI, Faridabad,1995

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36

TOTAL FARM FAMILY REQUIREMENT AND MARKETABLE SURPLUS OF

PADDY.(AVERAGE 1996-97, 1997-98 and 1998-99)
(000 tonnes) SL. No. Category Total production A (3) 52020.67 36672.35 33569.27 122270.29 Total farm family requirement including losses B (4) 28619.76 (55.01) 15268.70 (41.64) 10576.83 (31.51) 54465.29 (44.54) Marketable surplus (A-B) (5) 23408.91 (44.99) 21403.65 (58.36) 22992.44 (68.49) 67805.00 (55.46)
37

(1) 1. 2. 3. Total

(2) Small Medium Large

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Source: Ministry of Agriculture DMI Nagpur (2002)

MARKETABLE SURPLUS OF PADDY

(AVERAGE 1996-97, 1997-98 and 1998-99)
(000 tonnes) SL. Categor No y . Total production A Total farm family requirement including losses B Qty. % Marketable surplus (A-B) Marketed surplus

Qty.

Qty.

1.
2.

Small
Medium

52020.67
36672.35

28619.76
15268.70

55.01
41.64

23408.91
21403.65

44.99 22778.45
58.36 19619.09

43.78
53.49

3.
Total

Large

33569.27
122270.29

10576.83
54465.29

31.51
44.54

22992.44 68.49 21144.11

67805.0 0 55.46 63541.65

62.99
51.97
38

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Source: Ministry of Agriculture DMI Nagpur (2002)

Production, Marketable Surplus and Marketed Surplus of Paddy (Qantity in '000 tonnes and percentage of total production)
Production Marketable Surplus Marketed Surplus 122270.29 (100.00%) 67805.00 63541.65 (55.46%) (51.97%)

Paddy
140000

120000
100000 80000 Production Marketable Surplus Marketed Surplus

60000
40000 20000 0 Production
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Marketable Surplus

Marketed Surplus
39

STATE-WISE BREAK UP OF PRODUCTION, FARM FAMILY REQUIREMENT, MARKETABLE SURPLUS AND MARKETED SURPLUS OF PADDY. (AVERAGE 1996-97, 1997-98 and 1998-99)

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40

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Source: Ministry of Agriculture DMI Nagpur (2002)

41

MARKETABLE SURPLUS RATIOS OF FOODGRAIN CROPS

S. No. Commodity Marketable surplus ratio (Percentage) 32.2 37.8 29.6 27.2. 28.0 38.5 18.2 45.2 62.4 63.5 28.8 60.7 Year of which data relates

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Rice Wheat Jowar Bajra Barley Maize Ragi Gram Arhar Urad Masoor
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Market Report 1951 Marketing Report1957-58 and 1958-59 N.A. N.A N.A. N.A. N.A. N.A Marketing Report 1956-57 Source: Directorate of Economics and Statistics, 1976 42

Moong

MARKETABLE SURPLUS RATIOS OF SELECTED CEREALS

Sl. No. Commodity Marketable surplus ratio (Percentage) 8.87 Year of reference Year of publication of report 1979

1.

Paddy

1972-73

2.
3.

Wheat
Jowar

65.10
33.14

1973-74
1974-75

1986
1984

4.
5.

Bajra
Maize

36.31
30.86

1974-75
1974-75

1985
1987

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Source: National survey , DMI, 1972-73

43

Marketed Surplus of Paddy in Haryana

Category of farmers Marginal Small Semi medium Medium Large Total
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Marketed surplus (% to production) 90.82 90.73 94.39 96.39 98.14 96.31

Parmod kumar, 1999
44

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45

MARKETED SURPLUS OF RAGI (AVERAGE 1996-97, 1997-98 and 1998-99)

S. No. 1. 2. Contribution More than 400 50-400 States Karnataka (426.05) Andhra Pradesh (84.05) Tamil Nadu (62.69) Uttar Pradesh (33.73) Maharashtra (27.12) Orissa (15.56) Gujarat (3.52) Madhya Pradesh (0.61)

(000 tonnes)

3.

10-50

4.
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Less than 10

46

Production, Utilisation and Marketable Surplus of Ragi (Qantity in '000 tonnes and percentage of total production)
Estimated Production 2282.84(100.00%) Estimated Utilisation 1612.72(70.64%) Estimated Marketable Surplus 670.14(29.36%)

2500 2000 1500 1000

Estimated Production Estimated Utilisation Estimated Marketable Surplus

500
0

Estimated Production
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Estimated Utilisation

Estimated Marketable Surplus

47

TOTAL FARM FAMILY REQUIREMENT AND ESTIMATED MARKETABLE SURPLUS. (AVERAGE 1996-97, 97-98 and 98-99).
SL. No. Category Total production A Total farm-family requirement including losses B 648.59 (76.85) 441.74 (65.82) 522.37 (68.04) 1612.70 (70.64) Marketable surplus (A-B)

1. 2. 3. Total

Small Medium Large

844.01 671.14 767.69 2282.84

195.42 (23.15) 229.40 (34.18) 245.32 (31.96) 670.14 (29.36)

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MARKETABLE SURPLUS OF RAGI (AVERAGE 1996-97, 97-98 and 98-99).

Total SL. Category production No A

Total farmfamily requirement including losses B Qua ntity %

Marketable surplus (A-B)

Marketed surplus

Quan % tity 195.42 23.15 229.4 0 34.18

Quan tity

1 2 3 Total

Small Medium Large

844.01 671.14 767.69 2282.84

648.5 76.85 9 441.7 65.82 4 5222. 68.04 37 1612. 70 70.64

186.26 22.07 225.57 33.61 241.51 31.46

245.32 31.96 670.14 29.36

653.34 28.62
49

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STATE-WISE BREAK UP OF PRODUCTION, FARM FAMILY REQUIREMENT, MARKETABLE SURPLUS AND MARKETED SURPLUS OF RAGI. (AVERAGE 1996-97, 97-98 and 98-99).

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50

The startling fact to be noted here was that the states like Andhra Pradesh had more than 60 percent marketable surplus. In states like Karnataka, Orissa and Tamil Nadu, the marketable surplus was more than 20 percent
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RETENTION OF RAGI BY FARM HOUSEHOLD

Ragi is retained for i) Farm-family consumption, ii) Consumption by permanent labour and temporary labour engaged on the farm, iii) Seed purpose, iv) Animal feed, v) Barter (now nearly disappeared) and vi) Payments in kind and cash for different purposes.

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Production Retention and Marketable Surplus of Rice and Wheat (Farm size-wise) in India During 1999-2000
(Million Tonnes) Size group Production Feed and seed Family Marketable consumption surplus (%) 30.08 9.53 6.61 3.60 0.78 20.26 51.81 59.75 68.52 88.69

Rice
Marginal Small Semi-medium Medium Large 25.87 21.58 18.22 13.09 10.73 1.03 0.87 0.73 0.52 0.43

All groups

89.49

3.58
Wheat

50.60

39.46

Marginal
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16.94

1.86

20.31

30.88 Atteri,
53

Source : Various issues of CMIE Publications.

Marketable Surplus of Rice and Wheat and Benefits of Storage to the Farmers in India
It was concluded that 60 per cent of the farmers are

marginal farmers and do not have marketable surplus. In fact, marketable surplus of these farmers in respect of rice and wheat in 1999-2000 was negative. The small, semi medium, medium and large farmers had the marketable surplus in India. The estimated marketable surplus with small, semi medium, medium and large farmers was 51.81, 59.75, 68.52 and 88.69 per cent for rice and 8.74, 60.24, 71.53 and 85.00 per cent for wheat, respectively ignoring losses. The total estimated marketable surplus for all India was 39.46 per cent and 43.79 per cent for rice and wheat, respectively.
54

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D.S. Thakur AND A.S. Shandi

The Bihar Jn. Of Agri. Mktg.

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REASONS FOR LOW MARKET ARRIVALS STRATEGIES TO PROMOTE ARRIVALS IN REGULATED MARKETS
REASONS AND MARKETING PROBLEMS STRATEGIES
1.

1. Regulated Market yards are developed

away from the old shops of traders from the town.

Sufficient investment should be done to modern regulated markets near the towns at central place.

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56

2. Traders purchase the

2. market committee

produce direct from the farmers in the village or at their old shops out side the markets.

officials should be strong , and active to avoid such malpractices.

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57

3. Generally, market

3. Sufficient financial

committees are weak with and incompetent officials and staff play in the hands of traders.

support political and other must be given. rules and act must be implemented.

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58

4. Lack of competition,

4. Market committee and

arrival of only 2-3 traders in the regulated markets at the time of action, payment of low prices, delay in unloading of trucks and sale of produce at high rate of commission, Malpractices in Cleaning, weighing, grading and selling of produce. Delayed payment to farmers and same price offers for different lots of produce.

board officials should remove these bottlenecks which discourage market arrivals. private traders, cooperatives and Govt. agencies in the market yards must be encouraged for forward spiral of healthy competition marketing practices and prices allaround.

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59

5. Farmers remain at the 5. Must impose mercy of traders who restrictions and purchase bulk of exercise control over agricultural produce traders on building in the market yards by up stocks and unfair paying low prices with trading practice, no official coming to avoid exploitation of help the farmers. farmers and ensure remunerative prices.

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6. Market committee does

6. The marketing board and

not ensure proper and quick sale of produce Broad and committees not providing credit, storage facilities, ruralroads and transport facilities.

committee must provide facilities for the benefit of farmers so that farmers will bring more and more agricultural produce for sale in the regulated markets.

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7. Farmers not aware of the

7. There is a need for strong

benefits and facilities of sale in regulated markets. Market committee not developing required rapport, awareness and business relation with farmers. Regulated markets should also make available credit to farmers on the basis of pledge of their produce, as already done in some states. There is a need to supply other inputs. Transport facilities, market intelligence . 1/29/2014

training of framers in all aspects of regulated markets and agricultural marketing. Agricultural marketing to build a strong bond of relationship, rapport and knowledge so that farmers will bring all their marketable surplus to the regulated markets. The field and market visits of farmers should to be organized
62

Concluding remarks
The scope for large-scale increase in agricultural

production and arrivals in the regulated market in future. It is in fact the lack of efficient regulated markets poorly. The strategy of training of farmers, large-scale investment in the providing requisite marketing facilities, control over the scrupulous trading practices of traders and strict implementation of the regulated markets act as outlined above will at once market arrivals in the regulated markets.
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Concluding remarks cont..

The state Govt. and chairpersons of the marketing

board and market committees must personally ensure and oversee that staff of the marketing board and market committees work and act as the true servants of the farmers and public at large.

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64

-A Case analysis

N. Saktival Dr. A. SelvaraJ

Financing Agriculture A National Journal of Agriculture & Rural Development(2009)
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Distribution of Sample Responds by the level of Significance

Level of Significance Number of respondents Percentage

Less Satisfied Moderately Satisfied Highly Satisfied Total

36
60 104 200

18 %
30 % 52% 100 %

Performance of Satyamangalam regulated market, T.N.

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Problems faced by Farmers in Regulated Markets

Time consuming i.e., sale proceeding in regulated

market takes more time. Lack of market news services. Lack of transportation facilities. Lack of facilities for marketing of all agricultural commodities. Lack of amenities. Lack of storage facilities for keeping all the agricultural commodities.

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67

D.P. MALIK, S.N. SINGH AND K.N. RAI

Journal of Agricultural Marketing

1992
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Production, Consumption, Marketable and Marketed Surplus of Wheat and Paddy in quintals
Item
Total Stock Total Production Total consumption Marketable Surplus Marketed Surplus Stock left at the end of the year

Wheat
108.59 (100) 94.70 (87.21) 29.43 (27.10) 79.18 (72.90) 73.91 (68.08) 5.27 (4.48)

Paddy
117 (100) 103.72 (88.42) 10.49 (8.92) 107.19 (91.08) 101.60 (86.34) 5.59 (4.74)

Note: Total stock includes current year production + receipts from other sources carry over stock + purchase made during the year.
1/29/2014 69

REFERENCES
Web: 1.India stat

2.Ministry of Agriculture, Govt. of India.

3.Directorate of Economics and Statistics. 4. www. agmarknet.nic.in
Journals: 1.Financing Agriculture A National Journal

of Agriculture & Rural Development(2009). 2.Journal of Agricultural Marketing. 3.The Bihar Journal Of Agri. Mktg.
Book: Agriculture Marketing in India
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71