7. Impact on Agricultural value chain commodity market in India

Parul Kulshrestha and Dhiresh Kulshrestha

Indian Journal of Agricultural Marketing, 2025, vol. 39, issue 3

Abstract: The agricultural value chain in India is critical for food security, rural livelihood and economic development which contributed approximately 18.6% to the overall Gross Value Added (GVA) of the economy in 2023-2024 (as reported by the Ministry of Agriculture & Farmers Welfare, GoI). The agricultural commodity market is going through dynamic challenges and opportunities in the postpandemic period and as our economy encounters different global supply issues, climate variability and the rollout of policy shifts in schemes such as e-NAM, PM-KISAN and AIF. The purpose of this study is to assess the consequences of these developments on the agricultural value chain in India, specifically the changes in pricing, logistics, procurement policies and digital market linkages. The specific objectives of the study will include: To analyse structural shifts that will take place in commodity value chains due to policy interventions and digitalisation. To evaluate the market integration of farmers after the implementation of the electronic National Agriculture Market (e-NAM); To evaluate the role of Farmer Producer organizations (FPOs) with respect to their bargaining power and ability to reduce post-harvest loss. To evaluate the trends in commodity price volatility for major crops (wheat, rice, pulses and oilseeds, from 2020-2024); and, To make suggestions for policy related to inclusive, efficient and climate resilient value chains. Based on preliminary findings, it appears that digital platforms have led to greater pricing transparency and lower transaction costs, however there are still differences across regions, especially in eastern and north eastern India. The average monthly price volatility index for onions (23.5%) and tomatoes (21.8%) from 2022-2023 indicates a need for better cold chain and storage infrastructure. Additionally, even though there has been an increase in the number of FPOs (over 10,000 have been registered by 2024), only 20% are included in organised markets. This study highlighted the need for a focus on improved logistics, access to markets and to institutionalise reforms so that the development potential of India's agricultural value chains can be recognised, therefore providing opportunities for improving rural livelihoods and sustainable growth.

Keywords: Supply; Chain (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:400119

DOI: 10.22004/ag.econ.400119

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