Vegetable Market

There was a filed visit arranged to study the ground reality of Agribusiness sector. The visit
was to Naveen mandi, Sitapur Road in Lucknow.
Structure
This biggest mandi of Uttar Pradesh spreading over 15 acres was constructed in 1978. It has
around 550 plus licensed traders operating in it. On an average 40000 kg of fruits and
vegetables are traded in a month. These vegetables are sources from local farmers and
nearby areas. The other vegetables which are not
available in Lucknow are sourced from other states
like Maharashtra, Himachal Pradesh etc. Major
vegetables traded in the market were onions,
potatoes, pumpkins and tomatoes.

Process Flow
Farmer (Producer)

Wholesaler via
commission agent

Retailer

Consumer

Market Selection by producers

The producers research about the auction rates and sell the vegetables in the market which
fetches them higher price. Farmer cannot directly sell his products to third party. According
to APMC Act, farmer can sell his products via mandi through auction.
Commission Agent
Vegetable are auctioned through commission agents to help farmers fetch maximum prices
through auction at mandi as mandated by APMC act. Commission agent charges 5 %
commission of the total sales value of the produce. The commission agent does not own the
products. They just mediate the process.
Traders, Wholesalers and retailers
The vegetables brought by traders are sold to retailers or wholesalers. Consumers buy the
vegetables from them. In this whole process, there is a lot of wastage of produce as high as
50%. This is the reason why there is high price difference between end consumer and farmer.
Issues concerning vegetable market:
A. Lack of facilities
The perishable items like vegetables need proper storage facilities. In the absence of it,
it could lead to decomposition of vegetables leading to high losses
The unhygienic environment leads to loss of consumer attraction
The high temperature could lead to rotting of vegetables resulting in more than 75% of
losses
High interrupted power supply also hinders the effective storage capacities
B. Supply chain issues
Fluctuating scale of production
No standard storage and distribution infrastructure
Insufficient technical support for agro industrial sector
C. Technological constraints
Major reason for low productivity and inferior quality products

APMC
An agricultural produce market committee (APMC) is a marketing board established by state
governments in India. APMCs are governed by the APMC Act (2003). The APMC Act gives
state governments the power to notify commodities, and designate markets and market areas
where the regulated trade takes place.
As of 2014, 16 states in India have adopted the APMC act and around 7500 mandis have
been established. APMCs ensure fair price to the farmers through auctioning in the mandis.
Issues with APMC Act
The objective of the APMC Act was to ensure farmers were not exploited by intermediaries,
who would compel them to sell their produce at an extremely low price. But instead, traders
exploited the farmers by making them pay a commission to buy their produce, forcing them
to pay carrier charges, entry taxes, among other expenses.