Rural Market Environment

and structure of Indian

Agriculture
 Rural Market Environment and structure
of Indian Agriculture
• India's rural economy is a major contributor to the country's overall
economic growth.
• According to the latest Economic Survey of India, the rural economy
contributes around 40% to the national GDP and employs over 60% of
the population.
• Agriculture remains the backbone of the rural economy, with rice,
wheat, cotton, and sugarcane being the major crops grown.
 The rural market environment in India
• The rural market environment in India is characterized by a number of factors,
including:
• Low per capita income: Rural households typically have lower per capita incomes than
urban households. This means that rural consumers have a narrower range of products
and services that they can afford, and they are more price sensitive.
• Limited access to infrastructure: Many rural areas lack adequate infrastructure, such as
roads, electricity, and telecommunications. This can make it difficult for businesses to
operate in rural areas and for consumers to reach them.
• High illiteracy rates: Literacy rates are generally lower in rural areas than in urban
areas. This can make it difficult for businesses to communicate with rural consumers
and for consumers to understand product information.
• Traditional values: Rural society is often more traditional than urban society. This can
affect consumer behavior, such as the importance placed on family and community.
 The structure of Indian agriculture
• The structure of Indian agriculture is also complex. The sector is characterized by:
• Smallholder farming: Most farmers in India are smallholders, with less than two hectares of
land. This makes it difficult for them to achieve economies of scale and to invest in modern
technology.
• Low productivity: Yields of major crops in India are often low due to factors such as poor
irrigation facilities, inadequate crop varieties, and lack of access to modern agricultural
technologies.
• High reliance on rain-fed agriculture: India's agricultural sector is heavily reliant on rain-fed
agriculture. This makes it vulnerable to climate change and other factors that can affect rainfall
patterns.
• High post-harvest losses: There are significant post-harvest losses in India, with up to 40% of
fruits and vegetables being lost between the farm and the consumer. This is due to a number
of factors, including poor storage facilities, lack of transportation infrastructure, and
inadequate marketing channels.
 Examples of Rural Market Trends

• The growth of the e-commerce industry: E-commerce is growing rapidly in India, and this
is providing new opportunities for businesses to reach rural consumers. Several e-
commerce companies are now offering a wide range of products and services to rural
consumers, including groceries, electronics, and clothing.
• The rise of mobile marketing: Mobile phones are becoming increasingly popular in rural
India, and this is providing new opportunities for businesses to reach rural consumers
through mobile marketing campaigns. Mobile marketing can be a cost-effective way to
reach a large number of rural consumers.
• The development of rural infrastructure: The Indian government is investing in the
development of infrastructure in rural areas, such as roads, electricity, and
telecommunications. This is helping to improve access to markets and services for rural
consumers.
• The growing popularity of processed foods: Processed foods are becoming increasingly
popular in rural India, as they are seen as being more convenient and affordable than
fresh foods. This is posing a challenge to the traditional diet of rural Indians, which is
based on fresh fruits, vegetables, and grains.
 Examples of Rural Agricultural Trends

• The adoption of new agricultural technologies: There is a growing trend of adoption of

new agricultural technologies in India, such as the use of tractors, irrigation systems, and
hybrid seeds. These technologies are helping to increase productivity and improve yields
for farmers.
• The growth of precision agriculture: Precision agriculture is another growing trend in India,
and this involves using technology to target inputs, such as fertilizers and pesticides, more
precisely. This can help to reduce costs and improve productivity.
• The development of market linkages: Market linkages are improving in India, and this is
helping to provide farmers with better access to markets and better prices for their crops.
This is being achieved through the development of cooperatives, input dealers, and farmer
markets.
• The promotion of sustainable agriculture: Sustainable agriculture is becoming increasingly
important in India, and this involves practices that protect the environment and conserve
resources. This is being promoted through government policies and programs.
 Initiatives to Combat the Challenges
• These challenges have led to a number of initiatives to improve the efficiency and
productivity of the Indian agricultural sector. These include:
• The National Agricultural Innovation Project (NAIP): This project aims to promote the
adoption of new agricultural technologies and practices.
• The Rashtriya Krishi Vikas Yojana (RKVY): This project provides financial assistance to
farmers to improve their productivity and incomes.
• The Pradhan Mantri Krishi Sinchai Yojana (PMKSY): This project aims to improve
irrigation infrastructure in rural areas.
• The Dairy Development Programme: This programme aims to improve the
productivity and profitability of the dairy sector.
• The Fisheries Infrastructure Development Agency (FIDA): This agency provides
financial assistance to fish farmers to improve their productivity and incomes.
 Rural Market Trends
• The rural market in India is changing rapidly. The following are some of the key trends:
• Rising incomes: Rural incomes are rising, which is leading to increased demand for
consumer goods and services.
• Changing preferences: Rural consumers are increasingly demanding higher-quality
products and services.
• Growing urbanization: Rural-to-urban migration is increasing, which is leading to the
growth of urban markets in rural areas.
• Digitalization: The use of mobile phones and the internet is increasing, which is
providing new opportunities for businesses to reach rural consumers.
• These trends present both challenges and opportunities for businesses that operate in
the rural market. Businesses need to be aware of the changing needs and preferences of
rural consumers and adapt their products and services accordingly. They also need to
invest in digital marketing and distribution channels to reach rural consumers effectively.