GURU NANAK DEV ENGINEERING COLLEGE BIDAR
DEPARTMENT OF MBA
Academic Year – 2022-23
Subject: Marketing Management.
Date: 20-05-2023
Study on Market Dynamics of APMC
Introduction
The APMC in Bidar is Established in 1940s.The Agricultural Produce Market Committee (APMC) plays
a crucial role in the agricultural marketing system in many countries. APMC acts as a regulatory
body that governs the functioning of market yards, mandis, or agricultural produce markets. This
report aims to analyse the dynamics of the APMC market, including its structure, stakeholders,
challenges, and potential improvements.
Market Structure
The APMC market operates through a hierarchical structure involving various stakeholders. The key
components of the market structure include:
a) Market Yards/Mandis: These are physical locations where farmers bring their agricultural
produce for sale. Market yards provide a platform for buyers, traders, and commission agents to
participate in the auctioning and trading of commodities.
b) Commission Agents: Commission agents act as intermediaries between farmers and buyers. They
assist in the sale and purchase of agricultural produce on behalf of farmers, earning a commission on
the transactions.
c) Traders/Buyers: Traders or buyers are individuals or entities that purchase agricultural commodities
from the market yards. They may be wholesalers, retailers, processors, or exporters.
d) Farmers: Farmers are the primary producers who bring their agricultural produce to the APMC
market yards for sale.
Market Dynamics
The dynamics of the APMC market are influenced by various factors:
a) Price Discovery: The APMC market acts as a platform for price discovery. Through the auctioning
process, buyers bid for the agricultural commodities, and the highest bidder secures the purchase. Price
fluctuations occur based on factors such as demand, supply, quality, seasonality, and market
conditions.
b) Quality Control: APMCs often have quality control mechanisms in place to ensure that the
commodities meet the specified standards. These mechanisms help maintain the quality and safety of
agricultural produce.
c) Market Fee and Taxes: APMCs levy market fees and taxes on transactions within their jurisdiction.
These fees contribute to the revenue of the APMC and fund infrastructure development and
maintenance. The structure and rates of these fees can impact market dynamics and the overall cost
of trading.
d) Market Information: Timely and accurate market information is crucial for effective decision-
making by farmers, traders, and other stakeholders. APMCs often facilitate the dissemination of market
information through bulletin boards, websites, or mobile applications.
e) Market Integration: APMC markets can be standalone or integrated with other markets through
electronic trading platforms or e-NAM (National Agricultural Market) initiatives. Market integration
aims to create a unified national market, enabling farmers to access buyers from different regions and
enhancing price transparency.
Challenges
The APMC market dynamics face several challenges that hinder their efficiency and effectiveness:
a) Lack of Infrastructure: Many APMCs suffer from inadequate infrastructure, including storage
facilities, grading and sorting units, and transportation logistics. Insufficient infrastructure limits the
market's capacity and affects the quality of agricultural produce.
b) Middlemen Dominance: The presence of multiple intermediaries, such as commission agents, can
lead to exploitative practices, unfair pricing, and delays in payments to farmers. These middlemen often
possess significant market power and influence.
c) Limited Price Transparency: Lack of transparency in price discovery can disadvantage farmers
and result in price manipulation. Farmers may not have access to real-time market information,
making it difficult for them to negotiate fair prices for their produce.
d) Regulatory Barriers: Cumbersome licensing procedures, complex regulations, and multiple
inspections pose administrative challenges for market participants. Simplifying and streamlining
regulatory processes can enhance market efficiency.
e) Inefficient Dispute Resolution Mechanisms: Disputes between market participants, such as
farmers, traders, and commission agents, can hinder the smooth functioning of APMC
