Explain the factors responsible for inefficiency of agri-produce marketing. How e-commerce helps to reduce…

Question

Explain 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)

Ghissu Editorial · Accepted Answer

Agri-produce marketing is inefficient because of long intermediary chains, distant and cartelised mandis, and weak storage and price information. E-commerce such as e-NAM, which had integrated 1,656 mandis and over 1.80 crore farmers by March 2026, widens price discovery and shortens the chain.

**Introduction**

Farmers receive only about a third of the consumer rupee for tomatoes, onions and potatoes (RBI working paper, 2024), a sign of an inefficient marketing chain.

**Factors Behind Marketing Inefficiency**

1. **Fragmented, intermediated chain**: Small surpluses pass through commission agents, wholesalers and retailers, each taking a margin, while distant APMC mandis and cartelised trading limit price discovery.
2. **Weak infrastructure and information**: Poor grading, storage and cold chains force distress sales and wastage, and farmers lack price information across markets.

**How E-commerce Reduces Inefficiency**

SKETCH: comparison | Mandi vs Online
a: Mandi chain
b: E-commerce
- Many intermediaries :: Direct buyer link
- Local price only :: Nationwide bidding
- Delayed cash :: Online payment

1. **Wider price discovery**: e-NAM had integrated 1,656 mandis and registered over 1.80 crore farmers by March 2026 (PIB), enabling transparent online bidding.
2. **Shorter chains**: FPOs selling on ONDC and agritech platforms such as DeHaat and Ninjacart reach buyers directly, with assaying and logistics support.

**Conclusion**

Paired with storage and digital literacy, e-commerce can raise the farmer's share and help double farm incomes.

Explain 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)

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Storage, Transport and Marketing of Agricultural Produce5 questions

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