2022 · GS Paper 3 · Q13 · 15 marks
What are the main bottlenecks in upstream and downstream process of marketing of agricultural products in India ?
In short
Upstream, small lots, sparse mandis, no storage or credit and narrow MSP procurement force distress sales, while downstream, layered middlemen, weak cold chains and fragmented state rules widen the price spread. Farmers receive only about a third of the consumer rupee for tomatoes, onions and potatoes (RBI, 2024).
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 291 words
Tiny lots
About 86% of holdings are small and marginal (Agriculture Census 2015-16), so surpluses are small and costly to move, and are often sold to village traders.
Sparse markets and distress sale
Regulated markets are far apart, and with no grading, storage or pledge finance, farmers sell at harvest to the commission agent who lent them money.
Narrow procurement
The Shanta Kumar Committee (2015) found that only about 6% of farmers sold at MSP to a procurement agency.
Intermediary layers
Commission agents, wholesalers and retailers each add a margin without adding value.
Cold chain gaps
Cold storage of 40.21 million tonnes (PIB, 2025) sits mainly in potato belts, and NABCONS (2022) put post-harvest losses at about ₹1.53 lakh crore a year.
Fragmented rules and volatility
State APMC laws, multiple licences and the onion export ban of December 2023 to May 2024 deter private investment.
Aggregate and build
Scale the 10,000 FPO scheme and use the Agriculture Infrastructure Fund for pack-houses and reefer transport.
One market
Adopt the Model APLM Act 2017, e-NAM and warehouse receipts.
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This chapter in the exam
Storage, Transport and Marketing of Agricultural Produce5 questions
Asked in 5 of 14 sittings since 2013
- 2026Explain the factors responsible for inefficiency of agri-produce marketing. How e-commerce helps to reduce inefficiency of agri-produce marketing? Explain. (Answer in 150 words)
- 2025Elaborate the scope and significance of supply chain management of agricultural commodities in India.
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Question from the official UPSC Civil Services (Main) Examination 2022 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.