Agricultural Economics Research Review
Vol. 25 (Conference Number) 2012 pp 421-426
Deficiencies in Agricultural Marketing and Input
Delivery System: A View from the Field
Ajit Kumar Singh
Giri Institute of Development Studies, Aliganj, Lucknow-226 024, Uttar Pradesh
Abstract
The deficiencies in the public delivery system in agriculture have been highlighted on the basis of a field
survey of nearly 3500 farmers in Uttar Pradesh conducted in 2010. The survey has revealed that farmers
face various problems related to agricultural marketing and delivery of inputs. The main problems reported
are non-availability or insufficiency and high cost of credit; high cost of irrigation and irregular supply of
electricity, and non-availability of fertilisers and good quality seeds when required. High input prices is
another area of concern. The problems of transportation of produce to market and lack of storage and
processing facilities have also been mentioned as major constraint by a majority of farmers. The paper
has suggested that there is a clear need of revamping input and service delivery systems at the grass root
level so that the problems faced by the farmers could be effectively addressed.
Key words: Agricultural marketing, inputs delivery, farmers problems, Uttar Pradesh
JEL classification: Q13, Q12
Introduction
An efficient service delivery system for agricultural
inputs is an essential pre-requisite of agricultural
development. The central and state governments have
been playing an important role in providing inputs and
support services to farmers through the state
departments of agriculture and other specialized
organisations. However, over time, the effectiveness
of these institutions has been seriously eroded for a
variety of reasons including inadequate staff, lack of
funds and absence of motivation among service
providers. Moreover, most of the benefits of
agricultural support system are cornered by large and
medium farmers, and small and marginal farmers
remain largely neglected. Thus, there are a number of
deficiencies in the public delivery system in the field
of agriculture. In this paper, we have discussed the
views of farmers about the problems they face in
Email: aksingh101@rediffmail.com
accessing various inputs and services and selling their
output.
Data and Methodology
This paper is based on the findings of a field survey
of nearly 3500 farmers in Uttar Pradesh. The study
was sponsored by the Planning Department,
Government of Uttar Pradesh, with a view to find out
income levels and conditions of farmers in the state.
The data referred to the agricultural year 2009-10 and
the survey was carried out during June to December
2010. A multistage stratified random sample design
was followed to identify the sample farmers. The nine
agro-climatic zones in the state were taken at the first
stage of sampling. From each zone, 5 per cent of the
blocks were selected. The selected blocks were
distributed over the districts within the zone. At the
second stage, two development blocks were selected
from every selected district-one from blocks with
higher agricultural productivity and the other from
blocks with lower agricultural productivity. At the third
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Vol. 25
(Conference Number) 2012
stage, two villages from each of the selected blocks
were randomly selected. At the final stage, about 15
per cent of the total farm households in the village
representing different land-size classes were selected
for survey.
Table1. Problems faced in sale of output in regulated
market
(per cent)
Thus, our sample represented 24 districts, 42
blocks, 84 villages and covered 3474 farm households.
The total farm households comprised about 60 per cent
marginal farmers, 25 per cent small farmers, 11.4 per
cent medium farmers and 4.4 per cent large farmers.
Data were collected on different aspects of agricultural
economy by trained field staff through personal
interviews using a detailed questionnaire.
Undue deductions
Lack of transport facilities
Long distance from market
Delayed payment
False weighing
Small marketing surplus
Low price
Results and Discussion
quality and hence lower price is offered. More than
two-thirds of the farmers surveyed complained about
the long distance to the market and lack of transport
facilities. Delayed payment and false weighing were
the other common problems faced by the farmers.
About 20 per cent farmers opined that they face
problems in marketing as they have small surplus to
sell.
Problems of Marketing
It is well-known that agricultural marketing in
India is full of deficiencies and farmers are not able to
get a fair share in the price paid by the consumers. Our
survey revealed that farmers sell more than half of their
produce to the traders, 28.3 per cent to the wholesalers,
25.8 per cent to the village traders and only 14 per
cent to the government agencies. Nearly same
proportion is sold by the farmers at the regulated
markets. Only 5.6 per cent of the output is sold to the
cooperative societies. Hardly 2.3 per cent output is sold
directly to the consumers. The remaining 10 per cent
output is sold to other agencies like money lenders,
agro-processing units, etc. These figures indicate that
agricultural marketing in the state is dominated by
traders, and the role of government agencies is quite
limited. As a result, farmers do not get a fair value of
their produce.
About 58 per cent of total produce is sold by the
farmers just after harvesting. One-third farmers
reported that they sell their produce within the village
and another 21.6 per cent sell their produce within 2
kilometres from their farmgate. About one-fourth
farmers reported selling of their produce within 2 to 5
km from their farms. The point of sale was more than
5 km away from the farm in case of about 20 per cent
farmers.
Farmers face a lot of problems in selling their
output in regulated markets (Table 1). Nearly threefourths of the farmers surveyed complained of undue
deductions. Often, the produce is declared of lower
Type of problem
Yes
No
73.37
69.33
64.32
62.94
50.24
20.47
19.72
26.63
30.67
35.68
37.06
49.76
79.53
80.28
Farmers were asked to rank the problems they
faced in marketing their produce in order of their
importance. About one-fifth farmers ranked lack of
transport facilities as the major problem in marketing
and another 17.2 per cent ranked it as the second most
important problem (Table 2). False weighing was
mentioned as the most important problem by 19.1 per
cent farmers and as second most important problem
by 14 per cent farmers. Undue deductions, delayed
payments and long distance from market were
mentioned as the most important problem by about 16
per cent farmers in each case. Very few farmers
mentioned low price as a problem.
Access to Extension Services
With a view to assess the role of the government
extension system, the farmers were asked about the
frequency of visit of the extension workers. Only 15
per cent farmers reported that the Block Development
Officer (BDO) visits them, while 27 per cent revealed
that Agriculture Development Officer (ADO) has
visited them (Table 3). Visits by the officers of the
agriculture department were reported by 37 per cent
farmers. Visits by the employees of the agricultural
university were reported by only 2.5 per cent farmers.
The majority of farmers said that the frequency of visits
Singh : Deficiencies in Agricultural Marketing and Input Delivery System
423
Table 2. Ranking of problems of marketing by their importance
(per cent)
Type of problem
Lack of transport facilities
False weighing
Undue deductions
Delayed payment
Long distance from market
Small marketing surplus
Low price
Most important
Ranking of problems
Second most
Third most
19.57
19.11
16.98
16.55
16.38
5.35
4.20
17.18
14.02
11.14
15.37
16.75
6.42
4.00
13.93
8.12
11.05
5.33
12.23
3.11
2.65
Table 3. Details of visits of government officers for extension services
(per cent)
Extension agency
Visits by government officers
Yes
No
Frequency of visits in a year
Less than 2
2 to 4
More than 4
B.D.O.
15.1
84.8
73.7
11.5
14.8
A.D.O.
27.0
72.9
58.3
29.2
12.5
Agriculture officers
37.4
62.5
53.4
26.7
19.9
Employees of agricultural university
2.5
97.4
94.6
2.4
3.0
Employees of farmer service centre
19.6
80.3
70.9
22.6
6.5
Employees of otherpublic institutions
5.3
94.7
89.5
6.6
3.9
was less than 2 times in a year. The frequency of visits
was relatively higher by the ADOs and officers of the
agriculture department. Thus, it appears that the public
extension agencies are not performing their task
adequately and their contact with the farmers is limited.
A large number of farmers reported that they have never
come in contact with the employees of the public
extension agencies.
Problems in Procuring Agricultural Inputs
The problems faced by the farmers in procuring
various types of agricultural inputs are listed in Table
4. The main problems reported in the case of credit is
non-availability or insufficiency of credit and high cost.
The most important problem related to irrigation
reported by the farmers is its high cost. About onesixth farmers also complained about lack or
insufficiency of irrigation water. Insufficiency and nonavailability were mentioned as the most important
problems related to electricity supply. Problems in the
supply of fertilisers were mentioned by the maximum
number of farmers. The most important problem with
respect to fertilisers was their high price, followed by
lack of availability and insufficiency of supply. Poor
quality and adulteration of fertiliser were also reported
by many farmers. High cost and poor quality were again
mentioned as the main problems associated with
manure and pesticides. The major problem reported
with respect to agricultural equipments was their high
cost.
Problems Related to Irrigation
Details about the problems related to different
sources of irrigation are shown in Table 5. The
problems of erratic electric supply and high cost were
mentioned as important constraints affecting tubewell
irrigation. High cost emerged as the most important
problem with respect to irrigation by pump sets. The
main problems related to canal water were nonavailability on time and insufficient availability.
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Table 4. Problems faced in purchasing agricultural inputs and equipment
(per cent)
Type of problem
Non-availability
Insufficient supply
Highcost
Poor quality
Adulteration
12.99
17.39
17.45
28.10
16.21
8.00
4.84
13.27
17.22
32.02
26.86
19.09
7.86
6.10
15.49
53.70
12.81
63.98
71.61
77.40
39.97
0.06
0.35
0.43
18.49
21.85
29.37
2.74
0.00
0.14
0.20
18.40
8.55
9.56
1.35
Credit
Irrigation
Electricity supply
Fertilizer
Manure
Pesticides
Agricultural equipments
Table 5. Irrigation related problems
(per cent)
Source of
irrigation
Non-availability
on time
High maintenance
cost
High cost
Insufficient
electric supply
Insufficient
availability
of water
12.29
16.53
14.25
0.78
13.01
32.39
0.29
22.80
49.09
0.63
37.55
2.36
0.17
6.39
11.34
17.42
2.59
Canal
Tube-well
Pumping set
Pond/Well
Access to Credit
Access to credit is another important problem faced
by the farmers. The main complaints about credit from
commercial banks in order of importance were the
lengthy process, non-cooperative attitude of the bank
officials and high rate of interest (Table 6). Inadequate
amount and non-availability of loan in time were also
mentioned as the problems in availing loans from
commercial banks. The complaints were relatively less
with respect to credit obtained from cooperative
societies, money lenders and other private sources.
Problems Faced after Harvesting
A large number of farmers also mentioned
problems related to marketing and storage (Table 7).
The problem of transportation of produce to market
was mentioned by three-fourths of the farmers. More
than half of the respondents complained about storage
Table 6. Problems in availing loan
(per cent)
Credit agency
Commercial bank
Cooperative bank
Money lender
Landlord
Trader
Input supplier
Relatives/friends
Others
Inadequate Non-availability
loan amount
on time
13.59
2.88
0.29
0.03
0.09
0.40
0.60
0.03
14.08
3.40
0.12
0.14
0.14
0.32
1.12
0.03
High rate
of interest
Demand of
collateral
Long
process
Non-cooperation
of officials
20.07
3.51
4.84
2.68
0.43
0.29
0.06
0.26
6.13
1.21
3.08
3.54
0.32
0.09
0.12
0.06
29.89
8.78
0.03
0.00
0.03
0.06
0.06
0.20
22.89
4.43
0.37
0.66
0.66
0.58
1.84
0.14
Singh : Deficiencies in Agricultural Marketing and Input Delivery System
Table 7. Problems faced after harvesting
(per cent)
Type of problem
Yes
No
Transportation
Storage
Marketing
No value addition
Processing
Low quality
73.86
53.12
19.23
12.78
11.00
6.13
26.14
46.88
80.77
87.22
89.00
93.87
problem. Marketing was mentioned as a problem by
about one-fifth farmers. Low value addition and lack
of processing facilities were also mentioned by a
number of farmers.
Suggestions Made by Farmers
Farmers were also asked to give suggestions for
addressing the problems they face. Table 8 summarises
the main suggestions offered by the farmers. The most
acutely felt problem faced by the farmers was timely
supply of fertilisers and sufficient availability of good
quality seeds. Over 70 per cent farmers interviewed
said that arrangement for timely supply of fertilisers
and good quality seeds should be made by the
government. Irrigation is another important area of
concern for farmers. About 41 per cent farmers wanted
that more public tubewells should be installed. About
one-fourth farmers wanted regular electric supply.
425
Some 15 per cent farmers suggested that canal water
should be released in time and about 4 per cent wanted
free boring.
The farmers were conscious about the
developments in agriculture and about 23 per cent
farmers wanted that adequate arrangement should be
made for providing information about new agricultural
techniques and 22 per cent farmers demanded that soil
testing centres should be opened at the block level.
For smooth marketing of their produce, opening of
government purchase centres at the village level was
demanded by 18.3 per cent farmers. About 15.5 per
cent farmers favoured supply of pesticides at lower
prices. A wider coverage of Kisan Credit Cards and
loans at low rate of interest were the other demands of
the farmers.
Conclusion and Policy Implications
The survey has revealed that the farmers are facing
serious problems that are related to agricultural
marketing and supply of inputs and services. The main
problems reported in the case of credit are nonavailability or insufficiency of credit amount and high
interest cost. The most important problems related to
irrigation reported by farmers are the high cost and
irregular supply of electricity. The farmers also face
problems in obtaining fertilisers and good quality seeds
at the time of sowing. High cost of input prices is
another area of concern for the farmers. The problem
Table 8. Suggestions made by farmers
Suggestion
Percent of farmers
Govt. should provide fertilizer on time
72.6
Govt. should provide good quality seeds
70.6
More public tube-wells should be installed
41.4
Ensure regular supply of electricity
25.8
Information about new agricultural techniques should be provided
23.3
Open soil testing centre at block level
22.4
Open government purchase centre in village
18.3
Canal water should be released in time
15.5
Govt. should provide pesticides at low cost
15.5
Kisan Credit Card should be provided to all farmers
7.7
Loans should be provided at low rate of interest
7.7
Govt. should take up free boring
3.9
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Agricultural Economics Research Review
of transportation of produce to market and lack of
storage and processing facilities have also been
mentioned as major problems by a large number of
farmers.
The study has indicated that various public support
systems for agriculture are not functioning properly
and their benefits are not effectively reaching the
majority of farmers. There is a clear need of revamping
these programmes and the delivery systems at the grass
root level so that the problems faced by the farmers
are effectively dealt with. It is not merely a matter of
allocating more funds and appointing staff. The whole
approach to the delivery system has to change
focussing on the end-user that is the farmer. It requires
attitudinal changes in the officers and staff of the
concerned departments and organisations as well as
procedural changes to minimize paper work and time
lag. Adequate advance planning is required to ensure
that the critical inputs like fertilisers, good quality seed
and credit are made available in time and in adequate
quantity. Improvement in the power supply system to
rural areas is of critical importance for improving the
irrigation system. Separate feeder lines for rural areas
need to be provided.
Vol. 25
(Conference Number) 2012
The agricultural input and credit delivery system
should be re-oriented so as to serve the requirements
of the small and marginal farmers. Specific targets may
be fixed for this category of farmers in various
government programmes and distribution of inputs and
subsidies. One may think of reviving the small and
marginal farmers agency to serve this section of
farmers. Farmers should be encouraged to form
cooperatives like farmers help groups to reap benefits
of the economies of scale and to deal on better terms
in the input and output market.
Finally, the public sector is probably not in a
position to deliver all the services to the farmers on its
own. The involvement of private sector should be
encouraged and public-private partnerships may be
forged to deliver the agricultural extension and input
services to the farmers. Rural Business Hubs may be
setup under PPP mode within 5 to 10 kilometres of
villages where marketing facilities for sale of output
and purchase of inputs may be made available. There
are many success stories in different parts of the
country; these should be spread to more areas for
agricultural development in the country.
