Regulated Markets: Subject-Matter, Features and Objectives

In this article we will discuss about Regulated Markets. After reading this article you will learn about: 1. Subject-Matter of a Regulated Market 2. Features of a Regulated Market 3. Objectives.

Subject-Matter of a Regulated Market:

In India, marketing of agricultural produce is more or less operated under the free and normal operation of the forces of demand and supply. Private trade practice is the kingpin of the country’s market mechanism. In order to protect the interests of both producers and consumers, the Government has made limited intervention through the promotion of organised marketing of agricultural products.

To achieve this goal, most of the State Governments have enacted the necessary legislation for regulation of markets for agricultural produce.

The main objective with which the regulated markets are formed is to eliminate illegal and unhealthy marketing practices, to lessen marketing charges and to ensure fair prices both to producers and consumers. With these motives, 13 states of India have passed necessary legislation for the establishment of regulated markets at the dawn of the Fourth Plan.

Later on, gradually all other states have also passed legislation in this respect. Accordingly total number of regulated markets has increased from about 200 in 1950-51 to 1000 in 1961 and then finally to 7,114 as on 31st March, 2014.

The average area served by a market is 114.45 sq. km which the average area served by a regulated market is 462.08 sq. km, varying from 118.78 sq. km in Punjab to 11,214 sq. km in Meghalaya. The National Commission on Agriculture (2004) recommended a norm of one market within a radius of 5 km (or 80 sq. km). The low market spread creates problems of market access.

Features of a Regulated Market:

A regulated market can be started under the provision of law for any specific commodity or for a group of commodities. This type of market is managed and administered by a market committee. This market committee is composed of representatives of the State Government, the legal bodies (district board), the traders, the commission agents and the farmers themselves.

The Government appoints this committee for a definite period and this committee is empowered with the total management of the market.

The Central Government has provided assistance for the creation of infrastructural facilities in these markets and also for setting up of rural godowns. Grading standards have been finalised for 150 agricultural and allied commodities under Agricultural Produce (Grading and Marking) Act, 1937. In India, there are at present 3253 licensed cold storages with an installed capacity of 8,733 million tonnes as on March 31, 1996.

These market committees usually fix the market charges like commission, rates etc. It eliminates all dalals or brokers representing either the buyer or the seller. The committee ensures remunerative prices to the farmers as well as prevalence of the system of appropriate weights and measures.

The committee makes necessary provisions for hearing all complaints and settles those complaints accordingly. For any dispute, the committee arranges for arbitration. The committee is given responsibility to license brokers and weigh-men and is also vested with powers to award punishment to those people found guilty of dishonest and fraudulent practices.

These regulated markets are nowadays considered very useful for the elimination of fraudulent practices adopted by different brokers, commission agents and also for standardizing market prices of agricultural produce. These markets are ensuring fair prices for the agricultural produce to the farmers and also for adopting standard weights and measures.

Considering its achievements, the government has finalised its policy to convert all markets of the country within the fold of regulated markets.

Objectives of a Regulated Market:

Regulated markets are formed with the definite objective for the development of a rational marketing structure so as to:

(i) Ensure remunerative price of the agricultural produce to the farmers,

(ii) Narrow down the price differentials between the producer and the consumer, and

(iii) To control the non-functional margins of the traders and commission agents.

In order to fulfill these goals, the Government has been extending the network of the regulated marketing system by setting up more and more regulated markets in different states of the country. These regulated markets have been generating a good amount of income for the marketing committees which are mostly raised for the development of rural infrastructure.

In the states like Punjab and Haryana, this regulated marketing system has become very much successful to establish regulated markets in major producing areas as well as to link up the distant satellite markets in the rural areas.

The proposal to establish regulated market is mooted especially in those areas where the various commercial crops such as jute, raw cotton, tobacco, oilseeds and other non-traditional crops are produced in huge quantity and also sold through weekly markets and ‘hats’. In the meantime steps have been taken to link up these regulated markets with co-operative marketing system and banking.

Steps are also being taken to increase its coverage so that the regulated markets can cover all major crops. Steps are also being taken to raise the coverage of the regulated market so that it can cover also allied agricultural produce like livestock, fruits, vegetables and fish.

Thus, the regulated markets are playing an important role in establishing a rational marketing structure for the agricultural and allied produce of the country both in the semi-urban and rural areas. Again during the Seventh and Eighth Plan importance was laid on making provision of adequate and more modern storage and warehousing facilities.

To promote cold storage under the co-operative sector for ensuring improved year- round supply of agricultural produce, the National Co-operative Development Corporation (NCDC) has provided Rs 74.9 crore for installation of 247 cold storages with an installed capacity of 7.33 lakh tonnes till the end of March, 1998.