What are the main bottlenecks in upstream and downstream process of marketing of agricultural products in India? (Answer in 250…

Agricultural marketing in India is constrained by bottlenecks across the upstream and downstream chain. Upstream, high costs and poor quality of seeds, fertilizers and credit raise production costs, while fragmented landholdings prevent scale economies. Weak extension services and the absence of pre-harvest contracting leave farmers exposed to price risk and unable to align production with demand. These gaps are more acute for perishables and smallholders.

Infrastructure and market structure compound distress. Inadequate cold storage, poor rural road connectivity and lack of warehousing near farm gates force immediate sales. Dominance of APMCs creates entry barriers, while multi-layered intermediaries widen the price spread, often leaving farmers with about a third of the consumer rupee (RBI studies, 2024, for tomatoes, onions and potatoes). Direct farmer-buyer linkages remain weak.

Information, processing and policy gaps further weaken bargaining. Price discovery is weak, e-NAM access is limited, MSP announcements are delayed, and futures markets are underutilized for hedging. Processing and value addition remain low—about 10% versus 30–70% in developed countries—due to few food parks near production clusters and weak FPO institutional capacity. Implementation gaps in the Model APMC Act 2003 and the 2017 Model APLM Act (the 2020 farm laws were repealed in 2021), delayed FCI payments and poor integration of crop insurance with marketing decisions reduce income security.