Government of Andhra Pradesh
Agricultural Marketing Department



The Preamble

Ø     Decentralising traders’-centric market activities to the farm or village level is the central idea of the proposed concept;

Ø     Core market activities such as processing and grading by using standardization techniques including storage, weighment and certification can as well be performed at the farm or village level to ease out congestion in regulated markets;

Ø     The concept is not a new idea but revival of forgotten market extension activity with re-oriented appropriate technological support; Cotton and Tobacco crops were standardized at the local level in the past before entering market yard/platform;

Ø     De-centralised procurement operations of Maize under MSP on pilot basis during the current market season have raised hopes to decentralize market activities at farm or village level involving women-self-help groups as procurement agents locally for the purpose;

Ø     Presently, the regulated markets suffer from locational disadvantage  and lack of needed infrastructural (support) facilities barring two or three dozen markets strategically functioning; 80% of market yards are non-functional ( out of 885 yards – 20 to 25 major yards are functional) in the State;

Ø     Regulating transactions ‘outside’ the market yard is a herculean task due to in-built nexus between farmers’ and traders’;

Ø     Breaking such traditionally and functionally strong links existing between traders and growers from ‘outside’ by tightening regulation of trade is fraught with the danger of disturbing the base without an assured alternative on a sustained basis;

Ø     Evolving systems from ‘within’ to rationalize the existing trade practices by a statutory clothing was thought of as a feasible alternative being the objective behind the proposed concept;

Ø     Nodal agencies designated for the purpose of procurement of paddy, coarse grain, maize, cotton and oilseeds under MSP and MIS such as A.P. Civil Supplies Corporation, A.P. Markfed, A.P. Oil Federation on behalf of FCI/NAFED/CCI could be largely encouraged under the proposed Concept to step-up their operations locally.

Ø     Proposed Concept is in tune with the policy guidelines of Govt. of India to enable the farmers to market their produce within a 8 KMs radius (distance) locally.

The Concept

v     Providing storage space, drying plat form, weighing machines, moisture meters and grading equipment including bagging/ packing facilities at the village(s) level to benefit farmers of a major Panchayat or group of villages locally as a viable unit;

v     Identifying a central place connecting and convenient to farmers like a cross road linking cluster of villages in the vicinity – need not be a Panchayat or a village head quarters – is crucial for making the concept a reality;

v     Inventing the existing market support infrastructure like rural godown(s) built under Gramin Bhandar Yojana and by PACS in the past under various schemes such as NCDC and State and Centrally  sponsored schemes and upgrading the facilities to match CWC/FCI standards is primarily needed to arrive at the gaps and planning for bridging the gap by way of creation of additional  (new) facilities at the centres now to be identified so that the existing facilities usage can also be done and duplication of efforts avoided;

v     Aiming at a minimum of one godown of required capacity(MTs), one drying platform, an electronic weighing machine supported by qualified graders (licenced),  a KIOSK ( Rajiv Internet Connectivity ), moisture meters and a laboratory (quality testing ) for a cluster of villages or a panchayat in order to decentralize these activities outside the regulated market yard legitimately by the respective AMCs’ licensing these facilities within the notified market area;

v     While storage space, grading and standardization techniques involve provision of hardware facilities – the software needed is qualified graders among rural youth as a farm brigade to be licenced by the AMC’s concerned in computer language;

v     Educated youth wholly engaged (employed) in agri and allied sectors (different from that of educated unemployed youth normally preferred for vocational courses for self –employment schemes) have to be identified locally and trained adequately to qualify themselves to obtain grading licences from the AMC’s to service the farmers; This youth force forms the main pillar for the proposed concept;

v     Five to seven graders for a  cluster of  villages to cover nearly 10 to 15 thousand clusters proposed require a minimum of 50 to 105 thousand say nearly one lakh youth to be on the higher side are to be trained in a phased manner to act as licenced graders at the local level on collection of user chares basis; These licenced graders can also act as market (extension) voluntary workers (MV WS) disseminating information on market trends, collection of market intelligence  and price situation in the long run;

v     Creation of additional infrastructural support –facilities including upgradation of existing rural godowns to match SWC /CWC/FCI standards require financial out lay with the following break-up on a conservative (estimate) basis.

a)      1000 MT capacity rural godown ( of an average size )

for a  clusters of villages costs approximately                   Rs:20,00,000

b)     Drying /grading/ Market Plat form                                      Rs:   3,00,000           

c)     Electronic Weighing machine (s)                                         Rs:       80,000

d)     Moisture metres ( 6 Nos)                                                       Rs:      30,000

e)     Tarpaulins (5 Nos)                                                                   Rs:        5,000

f)      Kiosks /Internet facilities                                                      Rs:        4,000


                    Average Unit Cost           Rs:25,00,000                                                                                                                        

v     Farm equipment, supply of agri. Inputs and pre-harvest and post-harvest machinery can be added gradually out-sourcing the services by engaging local youth on collection of user charges basis.

v     For establishing 10 to 15 thousand units at the proposed centres, the total out lay involved works out to Rs. 3750 crores.  Considering more than 21,000 Gram Panchayat existing in the State, barring 5 to 6 thousand Gram Panchayats, which are small and unviable panchayats not feasible to establish such units, the remaining 10 to 15 thousand panchayats are targeted for implementing the concept in a phased manner over a period of coming (3) years. 

v     Upgradation of existing rural godowns and building needed market infrastructure on the lines indicated above will be met with by the AMCs in their respective notified areas thereby lacking over the infrastructural facility/godown for usage by paying normal rent to the agencies ground on mutually agreed terms and conditions.

v     Traders presently operating at farm or village (local) level informally can be encouraged to concentrate their purchases at the proposed centres (market) licensing them duly by the respective AMCs with back-up infrastructural facilities on a commercial basis.

v     Trading operations at present confined in regulated yards can also be decentralised at market centres proposed to be developed under the concept.

v     To begin with, major (notified) panchayats numbering about 1200 are chosen for realizing the concept straight away considering their capability to invest partly towards capital cost and operate and maintain such facilities locally on a sustained basis and as a remunerative activity;

v     Funding pattern to create needed basic market infrastructure (capital cost) worked out to be

o       25% of unit cost as own contribution from Gram Panchayat;

o       25% as Govt. of India subsidy on unit cost

o       50% term loan from banks or RIDF (NABARD)

v     NABCONS, a subsidiary consultancy organization of NABARD has been identified as a Nodal Agency for preparation of detailed project reports (DPRs) at the state level. The cost of DPR preparation will be met with by Govt. of India, Ministry of Agril., Department of Marketing, as part of their scheme to modernize the agril. markets introduced recently;

v     In deserving cases and where Gram Panchayats are not in a position to bear their contribution, the term loan component (bank portion) can go up to 75% of unit cost. Involving Gram Panchayats and making them to contribute  will go a long way in generating interest to own and manage the facilities as a remunerative project. Therefore, it must be ensured even in smaller portions.

v     Gram Panchayats are encouraged to access bank loan (term) to enhance their Capital Investment Capacity and take-up technically feasible and economically viable projects to augment their resource base by collecting rent for the facilities to be let out to farmers and traders and other procuring agencies on a remunerative basis.

v     Where Gram Panchayats are reluctant to take up the unit, in such cases only the women self-help groups under IKP or Rythu Mitra or Gopalamitra or farmers clubs , as may be the case, are to be identified and entrusted with the job locally;

v     Substituting Gram Panchayats by the locally sponsored groups goes against spirit of 73rd and 74th Constitutional amendments to strengthen local bodies in tune with the state good policy;

v     Participation of grass-root level constitutional bodies is a must keeping in view that local markets are supposed to be organized and managed by them;

The Approach

Ø     AMCs in consultation with farmer-growers and the Gram Panchayats will select the feasible centers to locate such infrastructural facilities and prepare project reports as per the broad guidelines indicated by the consultants (NABCONS) for the purpose;

Ø     DRDA/IKP will identify rural youth among educated and well settled in agriculture (as their main occupation) through concerned Gram Panchayats.  Preference will be given to youth with intermediate qualification having chemistry as one of the optional subject to familiarize them with quality standard techniques. These youth may constitute women self-help group members and other village level voluntary workers promoted by agri and allied departments with a caution that no single individual is burdened with more than one responsibility so that the youth brigade among graders to be trained are basically agriculturists and are able to devote full time during the market season without additional responsibilities to be performed.  Acceptance of their credibility by the farming community is a must;

Ø     Training to these youth in the TTDCs under the control of DRDAs will be imparted by the Directorate of Marketing Inspection (DMI) – a Govt. of India unit to act as a Nodal Agency for the purpose of training as master trainer by notifying a schedule for training the rural youth;

Ø     Considering locally grown major crops and grading techniques needed, the DMI will prepare training modules, course content and duration of the course etc., to meet the requirement in the region; No uniform course material.

Ø     Preferably, the 1st  batch of training will be organized in April, 2006 as the DMI was already addressed to chalk-out a programme by State Marketing Department and they are on the job;

Ø     Identification of feasible centres/needed infrastructure after taking into account existing facilities like godown space available will be completed before March,2006 including preparation of project reports by the respective AMCs;

Ø     It is to be decided at the State level in consultation with Government in Finance Department either to tap RIDF from NABARD with Government guarantee for all the AMCs projects on a comprehensive basis or subject the Project report of each AMC to be funded by tapping bank finance locally;

Ø     Externally funded projects can also be thought of under International Fund for Agriculture Development (IFAD) – FAO being the funding Agency;

Ø     The issue was discussed preliminarily with the Ministry of Agriculture Department of Marketing and it was opined to pose the project for vetting under RIDF comprehensively;


Þ                Commodity – Specific producers’ Associations are to be organized among farmer – grower’s (village-wise) as support – voluntary groups to give phillip to the proposed concept;

Þ                A farmer can be a member of more than one commodity producers’ Association depending on major crops grown in his fields; Example, a farmer can be a member of paddy growers’ Association as well as groundnut growers’ Association if he is growing khariff paddy and groundnut as I.D. crop during Rabi in his field;

Þ                These associations are purely voluntary bodies – no election – no selection of president or secretary or office bearers – but all members with equal status to act as a pressure group to redress or address the problems of a particular commodity marketing;

Þ                These associations will be formed/organized by the AMCs’ in their respective notified areas as part of their market extension activity with focus on market related awareness campaigning;

Þ                Notified area of each AMC will be divided in to 10 to 15 segments or sectors with each segment headed by a committee member preferably a member from that area representing the AMC for the purpose of marketing vigorous campaign to organize and nurture such commodity – centric farm – growers’ Associations with a time bound programme during coming lean season say in April, 2006 – a month long drive-duly assisted by market functionaries/staff and field officers of agri. and allied departments at local level;

Þ                Such associations will meet and discuss their crop related issues in relation to market perspectives and perceptions based on experts’ opinion ( to be obtained by the AMCs); and placed before the village Association);

Þ                Pre-crop marketing; mid-crop marketing; pre-harvest and post-harvest meetings are to be convened by these associations compulsorily without any restriction on number of meetings to be conducted by those Associations over and above that; It is desirable that these Associations meet as opting as possible to achieve functional integration;

Þ                A small farmer and a big farmer based on previous year performance in transacting agril-produce in a regulated market – the smallest and the highest quantities – from among village Association members shall represent the AMC Advisory Committee for a specific commodity/major crop grown in the locality to be federated themselves at market committee level to interact with AMC and traders/purchasers at regular internals;

Þ                Similarly two representatives among growers’ Associations from each AMC federation shall constitute a state level federation for the specified commodity to act as a pressure group helping policy – frame work by the Nodal Agencies (Procurement) and marketing department at the regional or state level in relation to marketing aspects;

Þ                To re-iterate, these voluntary Associations are supposed to work as Advisory bodies and act as pressure groups;

Þ                Gradually, these Voluntary Associations can be formalized as producers’ Co-operatives to organize, manage and operate local markets professionally.

Þ                AMCs and marketing department are merely facilitators to organize and promote these Associations;

Þ                Strengthening of these Associations functioning at village, market and state level is directly proportion to the successful implementation of the concept now being convened to link-up villages to local markets and local markets to domestic markets within and outside the state and out side the country (International markets);

Þ                Balancing departmental/AMC efforts with the efforts to be made by those voluntary associations decides the successful implementation of the concept.

Þ                Farmers federations/bodies existing at present can as well supplement efforts of the AMCs to strengthen the proposed Associations working effectively at various levels as contemplated above;

Þ                Processing Units in and around proposed market centres can be established by encouraging private participation giving preference to Producers Associations/Federations/Co-operatives for value addition to the commodities;

Þ                Organizing the farmers is the crux;


Þ                Formally approving the concept concived by the department of marketing;

Þ                Guarantying the RIDF component from NABARD as the most preferred alternative in consultation with Govt. in Finance dept.

Þ                Addressing the Govt. of India to provide 25% subsidy towards capital cost of the infrastructure and training rural youth in grading and quality standardization techniques in a phased manner;

Þ                Govt. directive to DRDAS through Rural Development Department to facilitate training of rural youth in close co-ordination with the Directorate of Marketing Inspectorate, GOI, Ministry of Agriculture and meet the training cost. 

Þ                Govt. directive to panchayats through P.R. department to contribute their share towards capital cost of the proposed infrastructure and manage facilities on a remunerative basis;

Þ                Empowering AMCs through a Govt. order to pool godown space built under various schemes by the primary Agriculture co-operative  societies (PACS), Gramin Bhandar Yojana and other State/Central Govt. schemes at local level to intigrate the facilities for the benefit of farmers.

Þ                Govt. directive to State Warehousing Corporation (SWC) to provide technical assistance to upgrade existing godown space in rural areas in close co-ordination with AMCs;

Þ                 Govt. directive to agri. And allied depts. to associate their field functionaries  with AMCs in organizing farmers associations locally;


Ø                 Decentralized market activities in 15 to 20 thousand centers proposed linking-up villages to markets;

Ø                 Regulating market activity outside the market yards within the notified areas of AMCs;

Ø                 Involving gram panchayats to organize and manage markets at local level by undertaking remunerative schemes and improving their revenues;

Ø                 Creation of new and upgrading existing market support infrastructure facilities at about 15 to 20 thousand strategic locations easing out congestion in regulated markets and facilitating farmers to access market operations locally;

Ø                 Licensing of nearly one lakh rural youth as qualified graders to service the farming community;

Ø                 Organising commodity – specific growers’ associations at village, market (AMC) and state level integrating their functions in relation to market – centric activity;

Ø                 Achieving vibrant market activity through out the state to take care of deficit areas with market surplus on commodity – specific basis;

Ø                 Linking-up villages to local market; local market to regional/state markets and state markets to national and international markets duly net working them on-line (e-marketing);

Ø                 Gram Panchayats can be market centres providing pre-harvest and post-harvest services required by the farmers;

Ø                 Ultimately, facilitating remunerative price to farmers, timely payment, fair trades practices and elimination of middlemen through organized effort of           co-ordinating agencies and farmers Associations at all levels is going to be the expected out come of the concept out lined above.  


Commr.& Director of Marketing