Explain the factors responsible for inefficiency of agri-produce marketing. How e-commerce helps to reduce inefficiency of agri-produce marketing? Explain.
Efficient agri-marketing determines farmer income realisation, yet Indian markets suffer significant leakage between farmgate and consumer.
Factors of inefficiency:
- Fragmented APMC mandis with restricted geography and cartelisation by traders.
- Multiple intermediaries eroding farmer's share (often 25–40% of consumer rupee).
- Poor infrastructure: inadequate cold chains, warehousing, grading facilities — leading to 15–20% post-harvest losses.
- Information asymmetry on prices and demand.
- Small, scattered marketable surplus raising per-unit transaction cost.
- Regulatory barriers and inter-state movement restrictions.
How e-commerce reduces inefficiency:
- e-NAM integrates 1,300+ mandis into a unified online platform, enabling price discovery.
- Direct farm-to-consumer platforms (DeHaat, Ninjacart, ONDC) eliminate intermediaries, raising farmer realisation.
- Real-time price and demand data end information asymmetry.
- Digital payments ensure timely, transparent settlement.
- Aggregation via FPOs on online platforms achieves scale economies.
- Enables reach to distant urban markets and exports.
Success depends on logistics, digital literacy and last-mile connectivity.
Answered By:
Sakshi Negi
Sakshi Negi is a Delhi-based journalist and content specialist with expertise in educational content and digital media, focusing particularly on government exam preparation and career guidance. With a degree in Journalism and Mass Communication from NRAI School of Mass Communication and her background as a Kendriya Vidyalaya alumna, she brings unique insights into the Indian education system and government sector opportunities.
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