Explain the steps taken by the government in developing rural markets.

Question

Accepted Answer

The government has taken several steps to develop rural markets in India.

**Regulated Markets:** The first measure was the regulation of markets to create orderly and transparent marketing conditions. Regulated markets have been organised to protect farmers from the malpractices of sellers and brokers. The sale and purchase of produce are monitored by a Market Committee consisting of farmers, government representatives and traders. These markets help in enforcing standard weights and measures and settling disputes, thereby benefiting farmers as well as consumers. However, there is still a need to develop about 27,000 rural periodic markets as regulated market places to realise the full potential of rural markets.

**Development of Infrastructure:** The government aims to provide physical infrastructure such as roads, railways, warehouses, godowns, cold storages and processing units. These facilities prevent distress sales and help farmers store and transport their produce. The current infrastructure is still inadequate to meet the growing demand and needs improvement.

**Cooperative Marketing:** Cooperative marketing is a system in which farmers pool their marketable surplus and sell the output collectively through marketing societies to take advantage of collective bargaining. It improves the bargaining power of farmers, provides them credit to meet immediate cash requirements, offers storage facilities so that they can wait for better prices, and makes bulk transportation cheaper and easier. The success of milk cooperatives in Gujarat testifies to the potential of cooperative marketing, though cooperatives have received a setback due to inadequate coverage of farmers, lack of link between marketing and processing cooperatives and inefficient financial management.

**Policy Instruments:** The government also initiated policy instruments such as the Minimum Support Price (MSP), maintenance of buffer stocks by the Food Corporation of India (FCI) and the Public Distribution System (PDS). MSP safeguards the interest of farmers by fixing minimum prices for products like wheat, rice, maize, cotton, sugarcane and pulses. Buffer stocks created in surplus years are used during shortages to ensure regularity in supply and stability in prices. Through PDS, fair price shops provide essential commodities at subsidised rates to the weaker sections.

These measures aim to protect the income of farmers and provide foodgrains at subsidised rates to the poor.