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Regulated market
Under the traditional system of marketing of the agricultural products, producer-sellers incurred a
high marketing cost, and suffered from unauthorized deductions of marketing charges and the
prevalence of various malpractices.
To improve marketing conditions and with a view to creating fair competitive conditions, the increase
in the bargaining power of producer-sellers was considered to be the most important prerequisite of
orderly marketing.
Most of the defects and malpractices under, the then existing marketing system of agricultural
products have been more or less removed by the exercise of public control over markets, i.e., by the
establishment of regulated markets in country.
DEFINITION
 A regulated market is one which aims at the elimination of the unhealthy and unscrupulous
practices, reducing marketing charges and providing facilities to producer-sellers in the
market.
 Any legislative measure designed to regulate the marketing of agricultural produce in order to
establish, improve and enforce standard marketing practices and charges may be termed as
one which aims at the establishment of regulated markets.
 Regulated markets have been established by State Governments and rules and regulations
have been framed for the conduct of their business.
 The basic philosophy of the establishment regulated markets is the elimination of
malpractices in the system and assignment of dominating power to the farmers or their
representatives in the function of the markets.
Objectives
The specific objectives of regulated markets are:
1. to prevent the exploitation of farmers by overcoming the handicaps in the marketing of their
products ;
2. to make the marketing system most effective and efficient so that farmers may get better prices for
their produce, and the goods are made available to consumers at reasonable prices ;
3. to provide incentive prices to farmers for inducing them to increase the production both in
quantitative and qualitative terms ;and
4. To promote an orderly marketing of agricultural produce by improving the infrastructural facilities.
Agriculture Marketing and Warehousing
The agricultural sector carries immense importance for the Indian economy. It plays a significant role
in the overall socio-economic fabric of India. Agriculture also enjoys vitality for ensuring food
security to all and has the potential to influence the growth of secondary and tertiary sectors of the
economy through its forward and backward linkages. But for that to happen, post-harvest activities
like storage, transport & marketing are as important as giving the right inputs and harvesting. Since
ancient times huge importance is given to these post-harvest activities.
The Constitution of India identified agriculture as a state subject – i.e. within the purview of the
various State Governments of India’s federal system. To protect farmer’s rights, States enacted
Agriculture Produce Markets Regulation Acts.
Storage and warehousing:
Storage:
Storage is an important marketing function, which involves holding and preserving goods from the
time they are needed for consumption.
o The storage of goods, therefore, from the time of production to the time of
consumption, ensures a continuous flow of goods in the market.
o Storage protects the quality of perishable and semi-perishable products from
deterioration;
o Some of the goods e.g., woolen garments, have a seasonal demand.

o To cope with demand, production on a continuous basis and storage become

necessary.
o It helps in the stabilization of prices by adjusting demand and supply.

o Storage is necessary for some period for performance of other marketing functions.

o Storage provides employment and income through price advantages.

Warehouses:
Warehouses are scientific storage structures especially constructed for the protection of the quantity
and quality of stored products.
Importance:
 Scientific storage
The product is protected against quantitative and qualitative losses by the use of such methods of
preservation as are necessary.
 Financing
Warehouses meet the financial needs of the person who stores the product. Nationalized banks
advance credit on the security of the warehouse receipt issued for the stored products to the extent of
75 to 80% of their value.
 Price Stabilization
Warehouses help in price stabilization of agricultural commodities by checking the tendency to
making post-harvest sales among the farmers.
 Market Intelligence
Warehouses also offer the facility of market information to persons who hold their produce in them.
Warehousing In India
 Central warehousing corporation (CWC):
Central Warehouse corporation was established as a statutory body in New Delhi on 2nd March 1957.
The Central Warehousing Corporation provides safe and reliable storage facilities for about 120
agricultural and industrial commodities.
 State Warehousing Corporations (SWCs):
Separate warehousing corporations were also set up in different States of the Indian Union. The areas
of operation of the State Warehousing Corporations are centers of district importance. The total share
capital of the State Warehousing Corporations is contributed equally by the concerned State Govt. and
the Central Warehousing Corporation.
 Food Corporation of India (FCI):
Apart from CWC and SWCs, the Food Corporation of India has also created storage facilities. The
Food Corporation of India is the single largest agency which has a capacity of 26.62 million tones.
Commission for Agricultural Costs and Prices (CACP)
The Commission for Agricultural Costs and Prices (CACP), set up in 1965, is a decentralized agency
of the Government of India (GoI). It is an expert body that recommends the Minimum Support Prices
(MSPs) by taking into consideration various factors.
The Commission for Agricultural Costs and Prices (CACP) was initially known as the Agricultural
Prices Commission. It was renamed the Commission for Agricultural Costs and Prices in 1985.
 It is a statutory panel under the Ministry of Agriculture & Farmers’ Welfare, Government of
India.
 The CACP is an expert body that recommends the MSPs of the notified Kharif and Rabi
crops to the Cabinet Committee on Economic Affairs (CCEA).
 The objective of the Commission: The Commission was established to recommend
Minimum Support Prices (MSPs), to motivate cultivators and farmers to adopt the latest
technology in order to optimize the use of resources and increase productivity.
 However, its suggestions are not binding on the Government.
Commission for Agricultural Costs and Prices Composition
The CACP is currently composed of five people. It consists of:
1. A Chairman
2. Member Secretary
3. One Official Member
4. Two Non-Official Members
The two non-official members are usually representatives of the farming community and have an
active association with the farming community.
Roles and Responsibilities of CACP
The CACP plays a key role in handling market inefficiencies.
 It provides an assurance of a remunerative and stable price environment. This is important for
enhancing agricultural production and productivity since the marketplace for agricultural
produce tends to be inherently volatile.
 It helps the farmers obtain a fair price for their crops, even if the market situation is unstable,
thereby preventing the farmers from falling into the vicious cycle of debt.
  The Government sets the MSPs on the basis of the recommendations given by the committee.
The CACP currently recommends the MSPs for 23 commodities, which include seven grains,
five pulses, seven oilseeds, and four commercial crops.
 CACP submits its recommendations to the Government in the form of Price Policy
Reports each year. The reports consist of five categories of commodities namely Kharif
crops, Rabi crops, Sugarcane, Raw Jute, and Copra.
 The CACP, while recommending support prices for a commodity takes a comprehensive
overview of the entire structure of the economy of a particular commodity, and likely effects
of price policy on the rest of the economy.
 The Commission also makes surprise visits to States for on-the-spot assessment of the various
constraints that farmers face in marketing their products or in raising the yield of their crops.

How is the MSP determined?

The Minimum Support Price was first introduced by the Government in 1966-67 for Wheat in the
wake of the Green Revolution. It was introduced with the aim to save the farmers from depleting
profits.

 The Government buys the crops at the MSP if the prices go down after harvest. This helps the
farmers indirectly.
 The Government decides the MSP after taking into consideration the recommendations of the
CACP, the opinions of the State Governments and all the other relevant Ministries.
 The Price Support Scheme (PSS) for oilseeds and pulses is implemented by the Department
of Agriculture and Cooperation through the National Agricultural Cooperative Marketing
Federation of India (NAFED).
 NAFED is the nodal procurement agency for oilseeds and pulses. Thus, when the prices of
oilseeds, cotton, and pulses fall below the MSP, NAFED purchases it from the farmers at
MSP.
 The procurement prices are usually announced at the beginning of the sowing season.
 This way, the CACP tends to have a very wide area of responsibility in the economic affairs
of the country.
Role of Food Corporation of India
The Food Corporation of India is one of the largest corporations established by the Indian government
and likely one of the largest supply chain management organisations in India. Its headquarters were
relocated from Chennai to New Delhi. The FCI purchases approximately 15 to 20% of India's wheat
output, as well as 12 to 15% of total rice output.
What is the Food Corporation of India?
 The Food Corporation of India (FCI) is a Public Sector Undertaking that reports to
the Ministry of Consumer Affairs, Food and Public Distribution.
 The Food Corporations Act of 1964 established the FCI as a statutory body in 1965.
 It was founded against the backdrop of a severe grain shortage, particularly wheat.
 Its primary responsibility is to buy, store, move/transport, distribute, and sell food grains and
other foodstuffs.
  FCI coordinates its functions through a nationwide network of offices, with headquarters in
New Delhi and five Zonal Offices, twenty-five Regional Offices, and 170 District Offices
under its command.
 Concurrently, the Commission for Agricultural Costs and Prices (CACP) was established
in 1965 to recommend fair prices to farmers.
Food Corporation of India - Objectives & Goals
The Food Corporation of India was established under the Food Corporation Act 1964 to achieve the
following Food Policy objectives:
 Price support operations that are effective in protecting farmers' interests.
 Food grain distribution throughout the country for the public distribution system.
 Maintaining a sufficient level of operational and buffer food grain stocks to ensure national
food security.
FCI's goals are as follows:
 To provide farmers with fair prices.
 Making food grains affordable, especially to the most vulnerable members of society.
 Keeping buffer stocks as a measure of food security.
 To intervene in the market in order to stabilize prices.
Role of Food Corporation of India
 FCI plays a critical role in ensuring food security.
 It entails maintaining a reasonable price to ensure that people of all income levels can buy
them, as well as purchasing grains from farmers who have a surplus at a standardised price to
avoid mismanagement.
 During its first decade, the FCI was at the forefront of India's quest for rice and wheat self-
sufficiency following the Green Revolution, managing grain procurement and stocking to
support a vast Public Distribution System (PDS).
 It has played an important role in India's food security since the Food Security Act was
passed.
 The main functions of FCI are effective price support operations to protect farmers' interests
by providing remunerative prices for their food grains and distribution of food grains
throughout the country via the Public Distribution System.
 To contribute to the transformation of crisis-oriented food security into a stable security
system that ensures the availability, accessibility, and affordability of food grains to all people
at all times, so that no one, nowhere, and at no time goes hungry.
 Ensure national food security by maintaining adequate operational buffer stocks of food
grains.
 Food grain distribution throughout the country for the Public Distribution System.
 Effective Price Support Operations to protect farmers' interests.
Functions of Food Corporation of India
Procurement
 Through the FCI and State Agencies, the Central Government provides price support for the
procurement of wheat, paddy, and coarse grains.
 All food grains that meet the prescribed specifications are purchased by public procurement
agencies at the Minimum Support Price (MSP) plus any announced incentive bonus.
 Procurement is done both directly and indirectly.
 Food grains are procured and distributed by the state governments themselves under
the Decentralised Procurement Scheme (DCP), which was implemented in 1997-98.
 The designated states procure, store, and distribute food grains through the Targeted Public
Distribution System (TPDS) and other government welfare programs.
 The decentralized procurement system was implemented to improve the efficiency of PDS
procurement, encourage procurement in non-traditional states, and save money on transit
losses and costs.
 Each procurement season, the Central Government announces uniform specifications for the
quality of wheat, paddy, rice, and coarse grains.
 The FCI Quality Control Division ensures that food grains are procured from procurement
centers in strict accordance with the uniform quality specifications of the Government of
India.
 FCI has also been designated as an additional procurement nodal agency for pulses and
oilseeds.
Distribution
 FCI meets the requirements of TPDS by procuring grains that are issued at the Central Issue
Price set by the government in order to help the economically vulnerable sections of society.
 FCI delivers food grains to state governments and agencies from its base depots for
distribution through Fair Price Shops.
 The role of FCI becomes even more important in the context of the National Food Security
Act of 2013, which commits to distributing grains at highly subsidised prices through TPDS
and other welfare schemes.
Public Distribution System
 During the interwar period, India had a public distribution of essential commodities.
 However, PDS, with its emphasis on food grain distribution in urban scarcity areas, arose
from the 1960s' critical food shortages.
 PDS had made a significant contribution to containing the rise in food grain prices and
ensuring food access for urban consumers.
 As national agricultural production increased in the aftermath of the Green Revolution,
PDS outreach was expanded to tribal blocks and high-poverty areas in the 1970s and 1980s.
 PDS is supplemental in nature and is not intended to meet a household's or a section of
society's entire requirement for any of the commodities distributed under it.
  The PDS is managed jointly by the Central and State Governments. The Central
Government, through FCI, has assumed responsibility for food grain procurement, storage,
transportation, and bulk allocation to state governments.
 The operational responsibilities of the State Governments include allocation within the
State, identification of eligible families, issuance of Ration Cards, and supervision of the
operation of Fair Price Shops, among other things.
 Currently, commodities such as wheat, rice, sugar, and kerosene are allocated to states/UTs
for distribution under the PDS.
 Some states/UTs also distribute additional mass-consumption items through PDS outlets,
such as pulses, edible oils, iodized salt, spices, and so on.
Agricultural Credit
Agricultural credit is considered as one of the most basic inputs for conducting all agricultural
development programmes. In India there is an immense need for proper agricultural credit as Indian
farmers are very poor. From the very beginning the prime source of agricultural credit in India was
moneylenders.
Types of Agricultural Credit:
Considering the period and purpose of the credit requirement of the farmers of the country,
agricultural credit in India can be classified into three major types:
(a) Short Term Credit:
The Indian farmers require credit to meet their short term needs viz., purchasing seeds, fertilisers,
paying wages to hired workers etc. for a period of less than 15 months. Such loans are generally
repaid after harvest.
(b) Medium Term Credit:
This type of credit includes credit requirement of farmers for medium period ranging between 15
months and 5 years and it is required for purchasing cattle, pumping sets, other agricultural
implements etc. Medium term credits are normally larger in size than short term credit.
(c) Long Term Credit:
Farmers also require finance for a long period of more than 5 years just for the purpose of buying
additional land or for making any permanent improvement on land like sinking of wells, reclamation
of land, horticulture etc. Thus, the long term credit requires sufficient time for the repayment of such
loan.
NEED FOR AGRICULTURAL CREDIT
 Credit is needed in every type of business and agriculture is no exception. The need for
agriculture credit becomes more important when it moves from traditional agriculture to
modern agriculture.
 Agricultural labour is often under-employed. Production suffers from weather risks. The
capacity of farmers to save and invest is very low.
 The agricultural productivity is low due to low use of inputs. The farmers therefore, need
credit to increase productivity and efficiency in agriculture.
  This need is increasing over the years with the rise in use of fertilizers, mechanisation and
rise in prices.
Some of the reasons why farmers need agricultural credit:
1. Purchase of new inputs
The farmers need finance for the purchase of new inputs which include seeds, fertilizers, pesticides,
irrigation water etc. If the seed of high yielding varieties and other modern inputs are made available
to the farmers they can increase productivity not only of land but also of labour.
2. Purchase of implements
Credit is required by the farmers for the purchase of tractors, threshers, harvesters, water pumping sets
etc. The use of appropriate machinery in land will increase production by growing more than one crop
on the same piece of land at the same time.
3. Better management of risk
Credit enables the farmers to better manage the risks of uncertainties of price, weather etc. They can
borrow money during raining days and pay back the loans during peak years of crops.
4. Permanent improvement in land
Credit also helps the farmers to make permanent improvements in land like sinking of wells, land
reclamation, horticulture, rotation of crops etc.
5. Better marketing of crops
If timely credit is available to the farmers, they will not sell the produce immediately after the harvest
is over. At that time the prices of agricultural goods are low in the market. Credit enables the farmers
to withhold the agricultural surplus an sell in the market when prices are high.
6. Facing crises
The credit is required by the farmers to face crisis. The crisis can be caused by failure of crop, draught
of floods.
Sources of Agricultural Credit in India:
Sources of agricultural credit can be broadly classified into institutional and non-institutional sources.
Non-Institutional sources include:
 moneylenders,
 traders and commission agents,
 relatives and
 landlords- In India, small as well as marginal farmers and tenants are also taking loan from
the landlords for meeting their financial requirements. This source has been following all the
ill-practices followed by money-lenders, traders etc.
Institutional sources include:
 co-operatives
 commercial banks including the SBI Group,
 RBI and
  NABARD
Another important source of agricultural credit is the Government of our country
Farmers face a number of problems when accessing agricultural credit, including:
 Lack of awareness: Farmers may not be aware of the financial products and services
available to them, including collateral-free loans and interest subvention schemes.
 Collateral requirements: Banks and financial institutions often require collateral for
agricultural loans.
 Inadequate credit history: Many small farmers don't have a credit history.
 High interest rates: Agricultural loans often have high interest rates.
 Loan amount: Farmers may not receive the loan amount they need.
 Loan application process: The process for obtaining credit may be cumbersome and
expensive.
 Loan repayment: Farmers may have low loan repayment discipline.
 Distance to banks: Farmers may live far away from banks.
 Transportation and communication: Poorly developed transportation and communication
infrastructure can make it difficult for farmers to access credit.
 Legal ownership: Farmers may have difficulty demonstrating legal ownership of their
assets.
What is NABARD and its function?
NABARD is a Development Bank with a mandate for providing and regulating credit for the
development of agriculture, small-scale industries, cottage and village industries, handicrafts and
other allied economic activities in rural areas to promote prosperity of rural areas.
What are Large Scale Industries?
Large scale industries are referred to as those industries that are having huge infrastructure, raw
material, high manpower requirements and large capital requirements. Those organisations having a
fixed asset of more than 10 crore rupees are considered to be large scale industries.
The growth of the economy is very much dependent on these industries. Such industries work towards
bringing in foreign reserves, generating employment opportunities and paving the way for economic
growth.
Large Scale Industries in India
Large scale industries in India can be categorised into the following types of industries:
1. Iron and Steel Industry
2. Automobile Industry
3.Textile Industry
4.Telecommunication Industry
5. Information Technology Industry
6. Petroleum and Natural Gas Industry
7. Silk Industry
8. Fertiliser Industry
9. Jute Industry
10. Paper Industry
11. Cement Industry
Characteristics of Large-Scale Industries
As the Large Scale Industry is not limited to a specific category, they all share some similarities
between them. They also have some distinctive characteristics which make them different from the
small and medium-scale industries.
1. Global Presence: Large-scale industries are mostly globally available. Maybe their offices or
centres are not present in a certain country, but their manufactured products are available, which
marks their presence in foreign countries as well. In this way, these industries generate revenue, but
also generate jobs for the local people.
2. Corporate Management: Usually, Large-Scale Industries are run by the Board of Directors, who
are very qualified and have knowledge about the market or how to grow the industry and generate
more revenue.
3. Large Audience: Large-scale industries generally target a huge amount of customers because they
mark their presence globally. They always try to grasp any opportunity to increase their number of
customers or generate more and more revenue. They always consider the feedback received and make
their product more and more user-friendly to attract more customers.
4. Technically Advanced Employment: Large-scale industries mostly use the latest technologies
available in the market, they also train their employees with them. By using the latest technologies,
they need to find different ways to automate the business processes and improve their product to
attract more customers or generate more revenue.
5. Employment Generation: Large-scale industries require a very large amount of workforce, due to
which these industries generate a very large amount of employment.
6. Investment: Generally, some large-scale industries also invest their profits into other small-scale
industries or medium-scale industries. They also invest funds in R&D (Research and Development)
sectors, which are used to train their employees.

Advantages of Large Scale Industries

Large scale industries offer the following advantages:
1. Large scale industries use the latest machinery and technology, which helps in improving the
production. Due to large scale production, the companies benefit as well as it is beneficial for the
economy as a whole.
2. Large scale industries help in the development of industries in the economy, which is essential for
industrialisation.
3. Large scale industries require skilled workers and therefore, the development of large scale
industries help in the development of a skilled workforce in the country.
4. Large scale industries require large amounts of raw materials, which opens up employment
opportunities in the related sectors.
5. As large scale industries are involved in large scale production, it provides an opportunity to reduce
the cost of goods and services as these are produced in bulk.
6. Large scale industries help in the development of small scale industries, as the requirement of items
cannot be met only by a single industry.
Hence, small scale industries are required to produce the ancillary products and therefore small scale
industries thrive on the growth of large scale industries.
7. Large scale industries can incur expenses required for research and development as they have a
high influx of capital. Such research will help in generating more profits in future.
8. Large scale industries also help improve the quality of life of its employees by providing them with
adequate remuneration and other benefits.
Major problems faced by large-scale industries in India
1. Infrastructure: One of the significant problems faced by large-scale industries in India is
inadequate infrastructure. Industries require access to reliable power supply, transportation,
and communication networks. However, in many parts of the country, infrastructure is still
underdeveloped or inadequate. Poor infrastructure can result in high transportation costs,
delays in the delivery of goods, and reduced productivity.
2. Labor laws: Labor laws in India are complex and often hinder the growth of industries. The
laws make it challenging for companies to terminate employees or reduce the workforce,
which can create problems in times of economic slowdown. Additionally, the laws also make
it difficult for companies to hire contract workers or outsource work, which can limit the
flexibility of the industry.
3. Taxation: The taxation system in India is complex and often leads to high taxes for large-scale
industries. The tax structure is also subject to frequent changes, which can create uncertainty
for businesses. The high tax rates can reduce the competitiveness of Indian industries in the
global market, making it difficult for them to compete with international companies.
4. Lack of skilled labor: Another major problem faced by large-scale industries in India is the
shortage of skilled labor. While India has a large workforce, the lack of skilled workers can
make it difficult for industries to find the right talent. This can lead to a skills gap that can
impact the growth of the industry.
5. Corruption: Corruption is another major problem faced by large-scale industries in India.
Corruption can lead to delays in obtaining necessary approvals and licenses, which can slow
down the growth of the industry. Additionally, corruption can also lead to unfair competition,
where businesses with connections or bribe-paying abilities gain an unfair advantage over
others.
6. Environmental concerns: Large-scale industries can have a significant impact on the
environment, and many industries in India have come under scrutiny for their environmental
practices. Industries must comply with environmental regulations and invest in sustainable
practices to reduce their environmental impact. However, these measures can increase the
cost of production and reduce the profitability of the industry.
7. Competition: Indian industries face fierce competition both from domestic and international
companies. The competition can lead to a price war, which can impact the profitability of the
industry. Additionally, the competition can also lead to the loss of market share for Indian
companies, reducing their ability to compete in the global market.