Agricultural marketing: mandis, eNAM and farmer producer organisations

How farmers sell matters as much as what they grow. Traditionally, farmers sold in regulated wholesale markets, or mandis, governed by state Agricultural Produce Market Committee laws, which licensed traders, charged market fees and aimed to prevent exploitation. In practice, mandis vary widely: some offer competitive auctions, transparent weighing and timely payment, while others are dominated by a few traders, charge high fees, and leave small farmers with weak bargaining power, especially when they must sell quickly to repay loans or meet household needs.

Reform efforts have tried to widen choice without abandoning regulation. The model Agricultural Produce and Livestock Marketing Act, promoted by the Centre, encouraged private markets, direct purchase by processors and contract farming, but states adopted it unevenly because mandi fees fund state revenues and local bodies. The electronic National Agriculture Market, or eNAM, launched in April 2016, links mandis on a common online platform for inter-mandi and inter-state trade, with assaying, grading and online payment intended to improve price discovery. Its reach depends on assaying quality, logistics, payment reliability and trader participation, which remain uneven.

Farmer producer organisations offer a collective route to markets: by aggregating produce, grading and transporting in bulk, and negotiating with processors, retailers and exporters, smallholders can overcome scale disadvantages. Contract farming, governed in many states by separate laws after the farm laws of 2020 were repealed in 2021 following prolonged protests, can give assured buyers and inputs, but contracts must protect farmers against one-sided terms, quality rejection and delayed payment. The repeal itself shows how marketing reform touches federal powers, state revenues and farmer trust, and why reform design and consultation matter as much as economic logic.

Marketing policy also interacts with price policy. Announced support prices are only useful if procurement, storage and transport exist, and market prices for perishables can crash at harvest when supply peaks. Storage, including warehouses and negotiable warehouse receipts that let farmers borrow against stored produce, helps farmers wait for better prices, but warehousing capacity and credit linkages remain limited for smallholders. For civil studies, marketing is where agriculture, federalism and competition policy meet: rules on who can buy, where, and on what terms decide how much of the consumer's rupee reaches the farm.