[Model Answer QP2022 GS3] What are the main bottlenecks in the upstream and downstream process of marketing of agricultural products in India?


The Upstream industries are engaged in the initial processing of agricultural commodities. The common examples are rice and flour milling; leather tanning; cotton ginning; oil pressing, fish canning etc. The upstream industry is dedicated to extraction of raw material for manufacturing use. It also includes procurement of these products from cultivators.

Downstream industries undertake further manufacturing operations on intermediate products made from agricultural materials. Examples are manufacturing of bread, biscuit and noodle making, textile spinning and weaving; paper production; clothing and footwear manufacturing; and rubber manufacturers.
Thus, in downstream industries, the extracted raw materials are processed and finally transformed into consumable products. The downstream also includes sales of these products to wholesalers, retailers and consumers.

Bottlenecks in the upstream process of marketing of agricultural products in India

1. Fragmented Markets: Failure to implement model APLM Act (Agriculture Produce Marketing Regulation Act) by the states.
2. Presence of a Large Number of Middlemen: The chain of intermediaries in the agricultural market is so large that the share of farmers is reduced substantially.
3. Inadequate Market Information: All states have not implemented e-nam initiative of the union government. 
4. Inadequate Credit Facilities: Lack of access to formal credit systems in rural areas.

Bottlenecks in the downstream process of marketing of agricultural products in India

1. Improper Warehouses: The storage of products are done in unconventional methods such as cover and plinth. 
2. Inadequate Transport Facilities: Especially linking primary processing facilities with secondary and tertiary processing facilities. 
3. Delay in Projects: All  Food parks announced in PM SAMPADA are still to take off. 
Agricultural marketing plays an important role in the creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet. It will not only provide a big boost to the growth of food processing sector in the country but also help in providing better returns to farmers and is a big step towards doubling of farmers income, creating huge employment opportunities especially in the rural areas, reducing wastage of agricultural produce, increasing the processing level and enhancing the export of the processed foods.

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