Transport and marketing of agricultural produce and issues and related constraints

Transport and Marketing of Agricultural Produce: Issues and Constraints

Overview

Transport and marketing of agricultural produce and issues and related constraints: Agricultural produce must move efficiently from farms to consumers through a complex supply chain involving storage, transport, and marketing. However, India loses approximately 74 million tonnes of food annually—accounting for about 22% of foodgrain output and 10% of total foodgrain and horticulture production. Post-harvest losses for specific commodities are significant: 4-8% for grains, 5-15% for fruits and vegetables. These losses result in an estimated ₹1.53 trillion (USD 18.5 billion) annual loss to the economy, making transport and marketing efficiency critical for improving farmer income and food security.

Part 1: Post-Harvest Handling and Storage

Definition and Objectives

Post-harvest handling refers to the set of activities and practices that occur after agricultural produce is harvested from the field. It encompasses sorting, grading, cleaning, packaging, storage, and transportation—activities that serve as the critical link between production and consumption.

Primary Objectives:

• Preservation of quality and freshness of agricultural produce

• Reduction of losses during harvesting, storage, transportation, and processing

• Enhancement of shelf life and marketability of products

• Ensuring safety and hygiene of agricultural commodities

• Value addition through cleaning, sorting, grading, and processing

Post-Harvest Losses: Magnitude and Causes

Quantum of Losses by Commodity Type:

• Livestock produce (eggs, fish, meat): 22%

• Fruits: 19%

• Vegetables: 18%

• Cereals: 3.89-5.92%

• Pulses: 5.65-6.74%

• Oilseeds: 2.87-7.51%

• Fruits (range): 6.02-15.05%

• Vegetables (range): 4.87-11.61%

Root Causes of Post-Harvest Losses:

1. Inadequate Storage Infrastructure

   • Storage capacity of only 47% of total foodgrains production

   • Skewed regional distribution: 60% of cold storage concentrated in UP and West Bengal (primarily for potatoes)

   • Limited cold storage availability: Only 11% of total production capacity for fruits and vegetables

   • Lack of end-to-end storage infrastructure, concentrated near urban areas rather than farmgates

   • Reliance on outdated cover and plinth (CAP) storage with open platforms and tarpaulin coverage

2. Poor Storage Practices

   • Over-reliance on non-scientific storage methods

   • Inadequate temperature and humidity control

   • Pest and insect infestation accounting for 20-40% of yield losses globally

   • Mold growth due to improper moisture control

   • Lack of WDRA certification limiting access to negotiable warehouse receipts

3. Physical Infrastructure Deficits

   • Damage during harvesting and handling increases deterioration rate

   • Inadequate packaging leading to physical damage and pest exposure

   • Poor handling practices throughout the supply chain

   • Multiple loading and unloading steps (3-6 times) creating damage risks

Storage Categories

Cold Chain Infrastructure Types:

• Chilled Storage (0°C to 10°C): Dairy products, fruits, flowers, vegetables

• Frozen Storage (-18°C and below): Meat, poultry, seafood, frozen products

• Deep Freeze Storage (-30°C and below): Specialty pharmaceuticals, biotech items, biologics

Government Initiatives for Storage Infrastructure

1. Integrated Cold Chain and Value Addition Infrastructure Scheme

   • Part of Pradhan Mantri Kisan Sampada Yojana (PMKSY)

   • Financial assistance up to ₹10 crore per project

   • Covers pre-cooling, weighing, sorting, grading, waxing at farm level

   • Multi-product/multi-temperature cold storage facilities

   • 376 projects approved, 268 operationalized (as of 2022)

   • Additional cold storage capacity of 3.5 million MT required

2. Warehousing Development and Regulatory Authority (WDRA)

   • Established in 2010 under Warehousing (Development and Regulation) Act, 2007

   • Mission: Establish negotiable warehouse receipt system

   • Functions: Regulation of warehouses, promotion of scientific warehousing, enhancement of rural liquidity

   • As of 2021-22: 123 warehouses registered, 17,975 electronic Negotiable Warehouse Receipts (e-NWR) issued

   • Limited coverage remains a constraint for widespread agricultural commodities

Part 2: Transportation

Importance of Transportation

Transportation is critical for moving agricultural produce from farms to markets and diverse urban neighborhoods. It determines:

• Timely movement of goods from production centers to consumption areas

• Quality preservation of perishable commodities

• Access to wider markets and better prices

• Reduction of spoilage and post-harvest losses

Major Constraints in Transportation

1. Road Transportation Infrastructure

Inadequate Road Connectivity:

• Approximately 40% of rural habitations lack all-weather road connectivity

• Limited pucca (all-weather) roads in rural areas create major bottlenecks

• Interconnectivity between road, railway, and ports not fully developed

• Average distance between two agricultural markets: ~12 km (recommended: 5 km)

• Poor accessibility between rural areas and main market centers in urban areas

Implications:

• High cost of transportation in rural areas

• Delays in reaching markets, causing spoilage of perishable goods

• Farmers forced to sell at local markets despite poor prices

• Distress sales due to inability to transport to distant markets

2. Rail Transportation

Limitations:

• Limited refrigerated rail coaches despite Kisan Rail initiative

• Inadequate railway connectivity to agricultural areas

• Higher operational costs for long-distance transport

• Limited coverage of perishable commodity corridors

3. Mode of Transport Used

• Cumbersome conveyances: Bullock carts and basic vehicles dominate

• Limited capacity: Cannot transport produce to distant markets efficiently

• High costs: Modern transport is expensive and time-consuming for small farmers

• Lack of specialized transport: Insufficient mobile cold storage units for perishable produce

Transportation Challenges

1. Logistics Connectivity: Insufficient logistics infrastructure and support facilities

2. Modal Integration: Poor interconnectivity between different transport modes

3. Cost Structure: High per-unit transportation costs increase farmer losses

4. Cold Chain Transportation: Lack of specialized refrigerated transport for temperature-sensitive products

5. Supply Chain Fragmentation: Multiple intermediaries increase handling and transport costs

Part 3: Marketing of Agricultural Produce

Structure of Agricultural Marketing

Components of Organized Agri-Supply Chain:

1. Procurement or sourcing

2. Logistic management (transportation, material management)

3. Storage facilities (warehouse, cold storage, ripening chamber, storage shed)

4. Processing infrastructure (cleaning, grading, sorting, packaging, palletization)

5. Extension support and advisory services

Current Marketing Challenges

Structural Constraints

1. Market Infrastructure Deficits

• Inadequate market yards and APMC (Agricultural Produce Market Committee) infrastructure

• Limited sorting, grading, and packing facilities at farm level

• Absence of farm-level collection centers causing additional losses

• Concentration of modern infrastructure near urban/semi-urban areas

2. Fragmented Supply Chain

• Multiple intermediaries between farmers and consumers

• Inefficient product aggregation from scattered farmers

• Limited farm-to-consumer connectivity

• Information asymmetry leading to poor price discovery

3. Price Volatility

• Uncontrolled cycles of excesses and shortages

• Lack of uniform grading and standardization systems

• Price spread between farm gate and retail market unfavorable to farmers

• Limited real-time price information access

Institutional Constraints

1. APMC Regulations

• Agricultural Produce Market Committees regulate sale of produce in designated markets

• Restrictions on farmers selling outside regulated markets

• Multiple fees at different transaction stages

• High security deposits and entry barriers

• Domicile restrictions on traders limiting competition

2. Credit Access

• Limited financial resources restrict small farmers from accessing modern facilities

• Difficulty in obtaining loans for transport and storage infrastructure

• Inadequate credit against agricultural commodities

3. Technology Adoption

• Low penetration of modern logistics technology and tracking systems

• Limited use of e-commerce platforms

• Inadequate digital infrastructure in rural areas

• Skill gap in supply chain management and cold chain operations

4. Quality Standards

• Absence of uniform grading systems across regions

• Inconsistent quality standards affecting export potential

• Limited quality assurance mechanisms

• Difficulty in meeting international market standards

Market Information and Price Discovery

Current Situation:

• Limited real-time price information despite e-NAM initiative

• Market information asymmetry between producers and consumers

• Difficulty in assessing demand-supply dynamics

• Limited access to online platforms for price information in rural areas

Part 4: Government Reforms and Initiatives

Agricultural Marketing Reforms

Model APMC Act

Key Provisions:

1. Single License: Valid across all markets within the state

2. Single Market Fee: Single-point levy of transaction fee, eliminating multiple fees

3. Direct Marketing: Farmers can sell directly to consumers, processors, exporters, bulk buyers

4. Electronic Trading: Promotes use of e-trading platforms for transparency

5. Contract Farming: Encourages arrangements with agribusiness firms for price assurance

6. Price Discovery: Facilitates transparent price discovery mechanisms

Benefits:

• Reduced intermediaries ensuring higher farmer profit share

• Enhanced market diversification and access

• Reduced transaction costs

• Increased bargaining power for farmers

National Agriculture Market (e-NAM)

Overview:

• Pan-India electronic trading portal integrating APMCs and mandis

• Vision: “One Nation, One Market”

• Features: Contactless remote bidding, mobile-based any-time payment

Functions:

• Trading through nearby e-NAM mandis

• Online bidding for traders from any location

• Single-window services for commodity arrivals and quality assaying

• E-bidding and e-payment settlements directly to farmer accounts

• AI-based quality equipment for assaying

Objectives:

• Market integration (state and national levels)

• Uniform marketing and transaction protocols

• Enhanced market opportunities and buyer access

• Quality assurance through standardized systems

• Stable prices and fair remuneration

Prerequisites for State Integration:

1. Electronic trading provision in APMC Act

2. Single trading license valid across state

3. Single-point levy of market fee

4. Electronic auction mechanisms for price discovery

5. 100% trading of selected commodities through e-trading/e-auctions

Pradhan Mantri Kisan Sampada Yojana (PMKSY)

Integrated Cold Chain and Value Addition Infrastructure Scheme:

• Financial assistance for end-to-end cold chain development

• Covers: Pre-cooling, storage, processing, distribution infrastructure

• Coverage: Horticulture (excluding fruits/vegetables post-2022), dairy, meat, poultry, fish/marine products

• Creates seamless farm-to-retail cold chains

Part 5: Post-Harvest Management Practices

Key Post-Harvest Activities

1. Harvesting

• Optimal stage of harvest critical for quality

• Gentle handling to minimize damage

• Timing affects shelf life and transportability

2. Sorting, Grading, and Cleaning

• Removal of damaged, diseased, or substandard produce

• Cleaning removes soil, debris, and contaminants

• Standardization improves market acceptability

• Reduces waste and improves price realization

• Extends shelf life by reducing contamination

3. Packaging

Requirements:

• Quality corrugated fiber boxes (CFB) with proper ventilation

• 5-7 ply strength as per industry standards

• Appropriate weight capacity (5-10 kg)

• Proper cushioning (newspaper) for mechanical impact protection

• Clear labeling with produce details, quantity, date, grower information

• BOPP tape sealing with farm branding

Benefits:

• Protects from mechanical damage during transit

• Maintains product appearance and quality

• Improves trade and consumer appeal

• Facilitates logistics tracking and management

4. Storage Conditions

• Temperature and humidity control

• Prevention of pest and disease infestations

• Proper ventilation and air circulation

• Protection from physical contamination

• Regular monitoring to prevent deterioration

5. Emerging Technologies

Scientific Storage Methods:

• Controlled Atmosphere (CA) Storage: Precise gas regulation to extend shelf life

• Modified Atmosphere Storage (MAS): Environment modulation for perishable preservation

• Hermetic Technology: Controls insect infestation, preserves quality and quantity

• Silo Bag Technology: Modern alternative to CAP storage

Quality Preservation Techniques:

• Edible coatings (chitosan, aloe vera) creating moisture and gas barriers

• Organic and ascorbic acid treatments slowing enzymatic browning

• SO₂ fumigation for fruit storage

• Heat treatment as fungicide alternative

• Wireless sensing and remote monitoring for real-time protection

Part 6: Supply Chain Value Addition

Components of Value Addition

1. Processing: Transformation of raw produce into processed products

2. Quality Enhancement: Sorting, grading, standardization

3. Packaging: Professional packaging meeting market standards

4. Branding: Creating market identity and differentiation

5. Distribution: Efficient logistics ensuring timely delivery

Benefits of Value Addition

• Higher price realization for farmers and traders

• Extended market reach and shelf life

• Improved competitiveness in both domestic and export markets

• Reduced post-harvest losses and wastage

• Enhanced economic viability of agriculture

• Better consumer access to quality produce

Supply Chain Models

Components of Integrated Agri-Supply Chain:

• Procurement/Sourcing

• Logistics Management (Transportation, Material Management)

• Storage and Warehousing

• Processing and Value Addition

• Marketing and Distribution

• Extension Support and Advisory Services

Process Linkages:

• Information sharing enabling coordination

• Quality assurance mechanisms throughout chain

• Transaction volume commitments

• Continuous improvement processes

• Reciprocal scheduling for timely performance

Part 7: Specific Commodity Considerations

Perishable Commodities

Challenges:

• Higher post-harvest losses (fruits 15.34%, vegetables 18%)

• Rapid deterioration requiring quick transport

• Complex cold chain requirements

• Limited cold storage capacity (11% of total production)

• Temperature sensitivity during all handling stages

Solutions:

• Specialized cold chain infrastructure

• Rapid transport using refrigerated vehicles

• Pre-cooling facilities at farm level

• Temperature-controlled storage throughout supply chain

• Minimal handling and quick turnaround times

Non-Perishable Commodities (Grains, Pulses)

Challenges:

• Long-term storage requirements

• Pest and disease management

• Moisture control for quality maintenance

• Large storage capacity needs

Solutions:

• Covered and plinth storage with gradual phase-out

• Silo bag technology for modern storage

• Containerized movement to reduce transit losses

• Scientific storage practices with humidity control

• Regular pest monitoring and management

Part 8: Key Stakeholders and Their Roles

Part 9: Critical Data Points and Statistics

Infrastructure Gaps:

• Storage shortfall: ~35 million metric tons

• Cold storage capacity gap: Additional 3.5 million MT required

• Rural road connectivity: 40% of habitations lack all-weather roads

• Average inter-market distance: 12 km (vs. recommended 5 km)

• WDRA registered warehouses: 123 (limited coverage)

Loss Indicators:

• Annual food loss: 74 million tonnes

• Economic loss: ₹1.53 trillion annually

• Perishable commodity loss: 22% (livestock products)

• Fruit loss: 19%

• Vegetable loss: 18%

APMC Market Issues:

• Multiple intermediaries increasing price spread

• Limited market yard capacity

• Fragmented supply chains

• Information asymmetry across markets

Part 10: Policy Recommendations and Way Forward

Infrastructure Development

1. Expansion of cold chain infrastructure targeting tier-2 and tier-3 cities

2. Investment in rural road connectivity and all-weather roads

3. Development of multi-temperature warehousing facilities

4. Railway infrastructure enhancement for refrigerated coaches

5. Farm-level collection centers near production areas

Institutional Reforms

1. Full implementation of Model APMC Act across states

2. Expansion of e-NAM to cover more commodities and markets

3. Streamlining WDRA processes for warehouse registration

4. Standardization of grading and quality standards

5. Simplification of trade licensing and fee structures

Technology Integration

1. Digital tracking and supply chain management systems

2. Real-time price information platforms

3. AI-based quality assessment systems

4. Wireless sensing and remote monitoring in storage

5. E-payment and settlement systems

Financial Support

1. Improved credit access for farmers and traders

2. Subsidized rates for modern storage and transport infrastructure

3. Negotiable warehouse receipt financing facilitation

4. Risk mitigation mechanisms for perishable commodity trade

Capacity Building

1. Training in modern post-harvest handling techniques

2. Supply chain management skill development

3. Quality standardization and grading expertise

4. Cold chain management professionalism

5. Digital literacy for platform adoption

Research and Development

1. Development of better packaging materials

2. Emerging preservation technologies (hermetic, CA storage)

3. Pest management innovations

4. Post-harvest loss reduction research

5. Commodity-specific handling protocols

Conclusion

The efficient movement of agricultural produce from farm to consumer through improved transport and marketing systems is fundamental to enhancing farmer income and ensuring food security in India. Current constraints in infrastructure, institutions, and technology result in substantial post-harvest losses and inefficient price discovery. Government initiatives like e-NAM, PMKSY, and WDRA provide frameworks for reform, but successful implementation requires coordinated action across multiple stakeholders. Priority investments in cold chain infrastructure, rural transportation networks, institutional modernization, and technology adoption are essential for transforming India’s agricultural marketing system and realizing the potential to double farmer income while ensuring affordable food for consumers.

Key Terms and Concepts

APMC: Agricultural Produce Market Committee—regulates agricultural commodity sales in designated markets

CAP Storage: Covered and Plinth storage—traditional method of grain storage on raised platforms with tarpaulin coverage

Cold Chain: Temperature-controlled supply chain maintaining optimal conditions from farm to consumer

e-NAM: Electronic National Agriculture Market—digital platform for unified agricultural trading

NWR: Negotiable Warehouse Receipt—tradable document representing deposited commodities in regulated warehouses

PMKSY: Pradhan Mantri Kisan Sampada Yojana—government scheme for agricultural infrastructure

Post-Harvest Loss: Quantitative and qualitative losses after harvesting until consumer stage

WDRA: Warehousing Development and Regulatory Authority—regulates warehousing sector and NWR system

NOTES : AGRICULTURE (UPSC Mains perspective )