Agricultural marketing

 
Agricultural Price Stabilization
Price instability does great harm to agriculture. Government takes the 
responsibility to stabilize agricultural prices. The objectives of price stabilization assures 
reasonable level of living, keeping parity with other sectors, adjustment of production to 
demand as well as stabilization of general price level in relation to world prices. 
Concerned by the spiraling prices of agriculture and food articles, the government is 
likely to set up a price stabilisation fund along with a market intervention plan for key 
agricultural products. A proposal to this effect is currently under the consideration of the 
Ministry of Agriculture. This move by the government comes at a time, when inflation 
has been on a ten month high at 5.92%, mainly on account of rising food and agricultural 
products. With the proposed market intervention plan, the government would be able to 
step in when prices of a particular product rises beyond a threshold limit or fall below a 
floor price. Various state governments have similar plans for farm products.
Need for Agricultural Price Policy

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Agricultural Price Policy has special significance when there is a maladjustment in 
demand and supply and jump up and down the equilibrium price level. Several 
government interventions were initiated to protect farmers and consumers. Government 
undertakes the following measures. 
1. Procurement operations. 
2. Public distribution at fixed issue prices, rationing, restrictions on movement of 
food grains from one place to another place i.e. state to state. 
3. Maximum controlled prices, assured minimum prices, statutory minimum prices, 
ban on exports, stepping up of imports, regulation of futures trading.
4. Minimum price for sugarcane to sugar factories. 
5. Floor and ceiling prices, controls on futures trading and imports have been the 
major policy measures taken for regulation of prices of raw cotton and jute.
6. History of Agricultural price policy :
Agricultural Price policy 1947 – 1965 i.e before setting up of APC 
Food grains prices committee, was set up in 1964 to determine producer prices of 
rice & wheat on all India basis for 1964 season subsequently. Food grain policy 
committee, 1966 was established. The important aspects pertaing to foodgrains are : 
(i).Controls on the movement, (ii).Compulsory levy procurement (iii). Fixation of 
maximum statutory prices of food grains, (iv). Rationing, either statutory or informal. 
Other crops covered are sugarcane, cotton, jute and oil seeds.