MAHARISHI INSTITUTE OF MANAGEMENT<br />NOIDA<br />ASSIGNMENT ON:- RURAL MARKETING<br />SUBMITTED TO:-Mr. NITIN SINGH<br />...
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
Rana rural mark. assin
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Rana rural mark. assin

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Rana rural mark. assin

  1. 1. MAHARISHI INSTITUTE OF MANAGEMENT<br />NOIDA<br />ASSIGNMENT ON:- RURAL MARKETING<br />SUBMITTED TO:-Mr. NITIN SINGH<br />SUBMITTED BY:-RANA YOGESH SINGH<br />ROLL NO. 15033<br />ASSIGNMENT ON RURAL MARKETING<br />Q.1:-A sound agricultural marketing system leads to a greater volume of marketed <br />surplus. Comment.<br />Ans.Marketing infrastructure is most important not only for the performance of various marketing functions and for expansion of the size of market but also for transfer of appropriate price signals leading to improved marketing efficiency. The projection production and marketable surplus of farm produce show that the volume of the commodities to be handled will be quite large. The paddy output available for milling will be around 155 million tones. The marketed surplus of cereals will be 102.74 million tonnes and pulses will be 15.20 million tonnes. Row cotton output is projected to be 3.2 million tonnes. The marketable surplus of perishable (fruits vegetables and livestock products) is anticipated to go up for present 172.69 million tones by 2006-07. The capacity to clean grade process store transport etc. to have to expand correspondingly to handle the additional marketed quantities.<br />The specific areas identified for reforms in the State Agricultural Produce Marketing Regulations Acts (APMC) are :-<br /> (a) Promotion of integrated markets in Private /Co-Operative sector :-<br />Under the existing Act it is the state Govt. who are alone empowered to initiate the process of setting up a market for certain commodities to be regulated for a defined area . in which regulation is to be enforced under the provision of APMC Act . As a result of this provision ( under the chapter :- establishment of markets ) the process of initiation of a market the service providers of agricultural marketing do not have any role . Thus the service providers and / or any other individual or body of individuals can not take initiatives for evaluation of viability and feasibility for setting up of a well developed market with amenities and facilities required at a competitive cost . A ball has been set rolling in Karnataka by providing additional chapter (XIII-A ) in the Karnataka Agricultural Produce Marketing (Regulation ) Act 1966 to provide for the establishment of ‘ National Integrated Produce Market’ owned and managed by the NDDB for the marketing of fruits vegetables and flowers. It is high time that all other States follow suit by amending the APMC Act in their respective states for providing establishment of alternate marketing structures in the shape of ‘ National Integrated Produce Market ‘ to be owned and managed in the private sector or co-operatives sectors or farmers self help groups farmers associations private entrepreneurs or joint ventures . The service provider may be allowed to levy and collect service charge from the users who may be the producers – sellers or from the market users.<br /> <br />The integrated market infrastructure services will in addition to the physical infrastructure include: -<br />i.        Assembling<br />ii.       Cleaning Sorting Grading packaging and quality certification<br />iii.     Storage and finance<br />iv.     Transport<br />v.      Retailing and Wholesaling <br />vi.     E- trading<br />vii.   Warehousing and pledge financing<br />viii.  Value addition and<br />ix.     Market information exchange service.<br />(b) Direct Marketing: -  <br />The direct marketing enables farmers to meet the specific demands of wholesalers or traders from the farmers inventory of graded and certified produce on one hand and of consumers based on consumers preference on the other hand helps the farmers to dynamically take advantage of favorable prices reduce marketing cost and thus their net margins. This encourages farmers to under take cleaning sorting grading and quality marking at the farm gate. This will obviate the need to haul the produce to the regulated markets which are not necessarily equipped with all required services and facilities affecting the marketing efficiency adversely. It is reported that the consumers prices declined by the 20 to 30 % and producers received the prices rose by 10 to 20 % in South Korea as a consequence of expansion of direct marketing of Agricultural Products. This model has been experimented in Punjab and Haryana ( APNI MANDIS ) Andhra Pradesh ( Rythu Bazar ) and Tamil Nadu ( Uzhavar Santhaigal ) . All the provision exists in various states market regulation act for direct marketing.<br />c) Contract Farming: -<br />Contract Farming may be defined as an agreement between processing & /or marketing firms for production support at production support at predetermined prices. This stipulates a commitment on the part of the farmers to provide a specific commodity in terms of quality & quantity as determined by the purchaser & commitment on the part of company to support the farmer for production through inputs & other technical support contract farming is becoming popular in recent years & there are number of success stories like Maul NDDB PEPSI Co. etc. The Contract farming needs to be further developed after identifying areas commodities & markets for market oriented & demand driven production planning. However while providing for this system of alternate marketing under the APMC Act it is necessary to draft any appropriate legislation separately for ensuring definition of terms & conditions of the agreement keeping in view the objectives.<br />  <br />d) Direct Contract between Producers & Processing Factories: -<br />  <br />Presently the farmers are not in position to enter into direct contract with the processors/ manufacturers located outside the market area as the commodity has to channels through regulated markets. Or in other words producer is not free to sale his produce by entering in to direct contract without attracting the provisions of this act whether inside or outside the market area. The direct contract between the producers & processing factories or bulk processors will provide monitory gains to the producers through improved competitiveness & the consumers by way of reasonable prices. The provision has to be made through an amendment in the present market act.<br />f) Notification of Commodities: - <br />  <br />Under the APM Act the State Govt. is empowered to notify agril. Commodities under the provisions of the Act for the purpose of regulation of marketing. This has resulted into anamoly. Even commodities not passing through the market yard or for which no services are provided are also notified. It is logical that only such commodities be notified which pass through the market yard or for which marketing infrastructure has been provided & the market fee should be in proportion to the infrastructure & facilities provided.<br />  <br />(g) Single Point Levy of Market Fee: <br />  <br />At present by and large market fee is collected on a particular lot whenever it is transacted. These amounts to multiple point collection Simplification of market fee and thus adding to the cost therefore it is necessary to introduce single point levy of market fee in the entire process of marketing in the country.<br />Government of India in the Planning Commission had constituted a working Group to examine these issues. The present concept paper highlights the issues which need consideration for review so that necessary action is initiated. A draft Model Act incorporating the above proposals for amendment will be taken up if so desired.<br />Q.2:-An efficient agricultural marketing system can bring about substantial reduction <br />in marketing cost. Discuss <br />Ans.Agricultural marketing plays an important role not only in stimulating production and consumption, but in accelerating the pace of economic development. The agriculture marketing system plays a dual role in economic development in countries whose resources are primarily agricultural. Increasing demands for money with which to purchase other goods leads to increasing sensitivity to relative prices on the part of the producers, and specialization in the cultivation of those crops on which the returns are the greatest, subject to socio-cultural, ecological and economic constraints. It is the marketing system that transmits the crucial price signals.<br />1Agricultural Marketing is one of the manifold problems, which have direct bearing upon the prosperity of the cultivators, as India is an agricultural country and about 70% of its population depends on agriculture.2Most of the total cultivated area (about 76%) is to under food grains and pulses. Approximately 33% of the output of food grains, pulses and hearly all of the productions of cash crops like cotton, sugarcane, oilseeds etc. are marketed as they remain surplus after meeting the consumption needs of the farmers. Development of technology, quick means of communication and transportation has introduced specialization in agriculture.3Agriculture supplies raw materials to various industries and therefore, marketing of such commercial crops like cotton, sugarcane, oilseeds etc. assumes greater importance.4With the introduction of green revolution agricultural production in general and food grains in particularly has substantially increased. Agriculture once looked as a subsistance sector is slowly changing to a surplus and business proposition.5The interaction among producers, market functionaries, consumers and government that determine the cost of marketing and sharing of this cost among the various participants.6The producer, middleman and consumer look upon the marketing process from their own individual point of view. The producer is primarily concerned with selling his products.7Any increase in the efficiency of the marketing process, which results in lower costs of distribution at lower prices to consumers, really brings about an increase in the national income.8A reduction in the cost of marketing is a direct benefit to the society.9Marketing process brings a new varieties, qualities and beneficial goods to consumers and therefore, marketing acts as a line between production and consumption.10Scientific, systematic marketing stabilizes the price level.11An improved marketing system will stimulate the growth of number of agrobased industries mainly in the field of processing.12A marketing system can become a direct source of new technical knowledge and induce farmers to adopt upto date scientific methods of cultivation.<br />Marketing is therefore, playing an important role in the economic development and stability of a country.<br />Q.3:-An efficient agricultural marketing system is an effective instrument for breaking the vicious circle of rural poverty. Discuss<br />AnsWe take an example of Grameen Bank. The Grameen Bank is based on the voluntary formation of small groups of five people to provide mutual, morally binding group guarantees in lieu of the collateral required by conventional banks. At first only two members of a group are allowed to apply for a loan. Depending on their performance in repayment the next two borrowers can then apply and, subsequently, the fifth member as well. <br />  <br />The assumption is that if individual borrowers are given access to credit, they will be able to identify and engage in viable income-generating activities - simple processing such as paddy husking, lime-making, manufacturing such as pottery, weaving, and garment sewing, storage and marketing and transport services. Women were initially given equal access to the schemes, and proved not only reliable borrowers but astute enterpreneurs. As a result, they have raised their status, lessened their dependency on their husbands and improved their homes and the nutritional standards of their children. Today over 90 percent of borrowers are women. <br />  <br />Intensive discipline, supervision, and servicing characterize the operations of the Grameen Bank, which are carried out by "Bicycle bankers" in branch units with considerable delegated authority. The rigorous selection of borrowers and their projects by these bank workers, the powerful peer pressure exerted on these individuals by the groups, and the repayment scheme based on 50 weekly installments, contribute to operational viability to the rural banking system designed for the poor. Savings have also been encouraged. Under the scheme, there is provision for 5 percent of loans to be credited to a group find and Tk 5 is credited every week to the fund. <br />  <br />The success of this approach shows that a number of objections to lending to the poor can be overcome if careful supervision and management are provided. For example, it had earlier been thought that the poor would not be able to find renumerative occupations. In fact, Grameen borrowers have successfully done so. It was thought that the poor would not be able to repay; in fact, repayment rates reached 97 percent. It was thought that poor rural women in particular were not bankable; in fact, they accounted for 94 percent of borrowers in early 1992. It was also thought that the poor cannot save; in fact, group savings have proven as successful as group lending. It was thought that rural power structures would make sure that such a bank failed; but the Grameen Bank has been able to expand rapidly. Indeed, from fewer than 15,000 borrowers in 1980, the membership had grown to nearly 100,000 by mid-1984. By the end of 1998, the number of branches in operation was 1128, with 2.34 million members (2.24 million of them women) in 38,957 villages. There are 66,581 centres of groups, of which 33,126 are women. Group savings have reached 7,853 million taka (approximately USD 162 million), out of which 7300 million taka (approximately USD 152 million) are saved by women. <br />  <br />It is estimated that the average household income of Grameen Bank members is about 50 percent higher than the target group in the control village, and 25 percent higher than the target group non-members in Grameen Bank villages. The landless have benefited most, followed by marginal landowners. This has resulted in a sharp reduction in the number of Grameen Bank members living below the poverty line, 20 percent compared to 56 percent for comparable non-Grameen Bank members. There has also been a shift from agricultural wage labour (considered to be socially inferior) to self-employment in petty trading. Such a shift in occupational patterns has an indirect positive effect on the employment and wages of other agricultural waged labourers. What started as an innovative local initiative, "a small bubble of hope", has thus grown to the point where it has made an impact on poverty alleviation at the national level ".<br />Q.4:-On what basis can agricultural markets be classified?<br />Ans.Agricultural Markets can be classified by:<br />Pasture<br />Property must be fenced if used for livestock.  Hay or pasture sod (i.e. Bahia) operations need not be fenced to qualify.<br />An apparent effort has been made to maintain and care sufficiently and adequately for this type of land (i.e. fertilizing, liming, tilling, mowing, etc.).<br />If property is used for horse boarding, there should be a written agreement between the parties involved.  This agreement must include the terms for the lease of pasture land.  Classification is not normally granted for horses in a stable only.  There must be some agricultural land use involved.  An occupational license is required for horse boarding.  Raising of any livestock for your own use does not qualify.  Pleasure horses alone do not qualify.<br />The commercial raising of goats or sheep qualifies for the Classification.  On tracts of 5 acres or less, it would take at least 16 goats or sheep to verify a commercial operation.<br />If property is leased to others, the lease must be in effect as of January 1st and a copy of the lease must be on file in the Property Appraiser’s office.  It is the responsibility of the property owner, not the lessee, to keep this office informed on the agriculture use of the land.<br />Citrus<br />Trees must be planted prior to January 1st, or at the very least, the land must be prepared for citrus planting.  Standard plantings are from 100 to 160 trees per acre.  Anything less than 70 trees per acre could be considered a hobby and not a true commercial venture.<br />Agricultural values for citrus are based on type of fruit and effective age of grove.  A Citrus Questionnaire, available in this office, must be submitted with the application.<br />Rowcrops<br />This category is in reference to those agriculture products referred to as vegetables.  Production of crops for your own use does not qualify.<br />Parcels should be of sufficient size so that the sale of the crop products produces enough income to sustain the entire operation.  (Rule of Thumb:  5 to 10 acres).<br />Timberland<br />Must be at least 20 acres of planted pines or predominantly natural stand of pines.<br />A Forest Management Plan, prepared by a professional forester, must be submitted with the application.<br />Ongoing activities, such as cutting of fire lanes, thinning of trees, under brushing, reforesting, burning, cruising (inventorying), and any other activity recommended by the Management Plan should be readily apparent to the agricultural field appraiser.<br />Nurseries<br />Nurseries should have a state agricultural certificate.  Sales can be on a wholesale or retail level, but plants for sale must be grown on the premises.<br />Only land areas actually used for the nursery and service area shall be classified.<br />Types of Nurseries:<br />In Ground:  ornamentals and woody ornamentals<br />Above Ground:  in containers<br />Flower Farm:    flowers only<br />Miscellaneous Agriculture<br />Sugar cane, sod, swine, poultry, fish farms, aquaculture, ratite and fruit, other than citrus, will be handled on a case by case basis.<br />For a bee/honey operation you must be a registered Florida Beekeeper and have your own, or have access to, honey extracting equipment, hive building and repair facility, etc.  Bee leases will be reviewed on a case by case basis.<br />All operations should be of sufficient size so that the income produced will sustain the entire operation.<br />General<br />All applications are field checked to verify the usage and to ensure correct assessments.  Additional information will be requested from the property owner to determine the continuance of eligibility.  This information is usually in the form of income and expense documents and will be requested on a regular basis.  All financial documents will be kept confidential in this office.<br />Application for agricultural classification must be made every year between January 1st and March 1st.<br />If the application is approved, you will receive notification before July 1st.  If the application is denied, you will receive a certified letter before July 1st.  The letter will explain the appeal process.<br />Any residence on the property causes one acre to be removed from the agriculture classification.  This acre is assessed at the current market value and is referred to as a home site.<br />Agricultural classification is not an across-the-board exemption.  The agriculturally classified value is determined through a formula that uses the potential income produced by the agricultural operation as a principal factor.  This value per acre is different for each agriculture use and will usually result in a lower assessed value per acre than the market land value.  The land must be used for a commercial agricultural operation or the agriculture classification will be denied.  <br />Once an application is approved, you will receive an automatic renewal receipt at the beginning of each year.  Please read this receipt carefully as it is, in effect, your application for that year.  Even though the classification has been automatically renewed, the application can still be denied if the operation does not meet the proper criteria.  When the property is sold, or when the name of the owner is changed in any way, the agricultural classification is automatically removed and a new application must be made.<br />It is the responsibility of the property owner to notify this office of any change in the status or use of the property with an agricultural classification.<br />Q.5:-Explain the problem of “defective preparation for marketing” with reference to<br />Agricultural marketing in India. <br />Ans.Defective or Inadequacies preparation for marketing system with reference to<br />Agricultural marketing in India. <br />Indian system of agricultural marketing suffers from a number of defects. As a consequence, the Indian farmer is deprived 'of a fair price for his produce. The main defects of the agricultural marketing system are discussed here.1. Improper warehouses<br />There is an absence of proper ware housing facilities in the villages. Therefore, the farmer is compelled to store his products in pits, mud-vessels, "Kutcha" storehouses, etc. These unscientific methods of storing lead to considerable wastage. Approximately 1.5% of the produce gets rotten and becomes unfit for human consumption. Due to this reason supply in the village market increases substantially and the farmers are not able to get a fair price for their produce.<br />2. Lack of grading and standardization<br />Different varieties of agricultural produce are not graded properly. The practice usually prevalent is the one known as "dara" sales wherein heap of all qualities of produce are sold in one common lot Thus the farmer producing better qualities is not assured of a better price. Hence there is no incentive to use better seeds and produce better varieties.<br />3. Inadequate transport facilities<br />Transport facilities are highly inadequate in India. Only a small number of villages are joined by railways and pucca roads to mandies. Produce has to be carried on slow moving transport vehicles like bullock carts. Obviously such means of transport cannot be used to carry produce to far-off places and the farmer has to dump his produce in nearby markets even if the price obtained in these markets is considerably low. This is even more true with perishable commodities.<br />4. Presence of a large number of middlemen<br />The chain of middlemen in the agricultural marketing is so large that the share of farmers is reduced substantially. For instance, a study of D.D. Sidhan revealed, that farmers obtain only about 53% of the price of rice, 31% being the share of middle men (the remaining 16% being the marketing cost).<br />5. Malpractices in unregulated markets<br />Even now the number of unregulated markets in the country is substantially large. Arhatiyas and brokers, taking advantage of the ignorance, and illiteracy of the farmers, use unfair means to cheat them. The farmers are required to pay arhat (pledging charge) to the arhatiyas, "tulaii" (weight charge) for weighing the produce, "palledari" to unload the bullock-carts and for doing other miscellaneous types of allied works, "garda" for impurities in the produce, and a number of other undefined and unspecified charges.<br />6. Inadequate market information<br />It is often not possible for the farmers to obtain information on exact market prices in different markets. So, they accept, whatever price the traders offer to them. With a view to tackle this problem the government is using the radio and television media to broadcast market prices regularly.<br />7. Inadequate credit facilities<br />Indian farmer, being poor, tries to sell off the produce immediately after the crop is harvested though prices at that time are very low. The safeguard of the farmer from such "forced sales" is to provide him credit so that he can wait for better times and better prices. Since such credit facilities are not available, the farmers are forced to take loans from money lenders, while agreeing to pledge their produce to them at less than market prices.<br />Thus it is not possible to view the present agricultural marketing in India in isolation of (and separated from) the land relations. The regulation of markets broadcasting of prices by All India Radio, improvements in transport system, etc., have undoubtedly benefited the capitalist farmers, and they are now in a better position to obtain favourable prices for their "market produce" but the above mentioned changes have not benefited the small and marginal farmers to any great extent.<br />Q.6:-How does the lack of organization among cultivators affect the process of <br />agricultural marketing? <br />Ans.The importance of marketing in agriculture is very well illustrated by saying, “that a good farmer has one eye on the plough and the other on the market”. This is true when agriculture is mainly for subsistence; and now, even Indian agriculture is becoming commercialized. In these days of commercial agriculture, it will be more fit to say, “a good farmer has only his hands on the plough but the eyes on the market. Since agriculture constitutes a major part of the economy, marketing of agricultural products also assumes considerable importance in our context. Marketed surplus is the amount of agricultural produce that is brought to the market for sale after what is retained by the producers for their own consumption. Hence it will be less than total production.  It is difficult to give a correct estimation of marketed surplus, since it differs according to crop, place, season and general state of the economy. Marketing finance is also important since the small producer will experience difficulty in waiting for payment from the whole-sale buyer, if the time lag is too long. Proper storage and handling facilities are important because otherwise, the produce will perish and become unmarketable and unusable. <br />Indian Farmers and Marketing Disabilities:<br />The present system of agricultural marketing is not well-organized and the farmers have to depend largely on the middlemen for the disposal of the farm’s yield who have no hesitation in taking advantage of the farmer’s dependence upon them. The real evil is the tendency of these intermediaries who exploit the ignorance and helplessness of the farmers to increase their own profit.  The malpractices in the present system of agricultural marketing are very well known.  The Rural Credit Survey Committee described the position as follows:<br />“while standards of marketing have improved, in most of the relatively few regulated markets which have been established, a number of malpractices still exist even in them since personnel and enforcement are two great problems, not always sufficiently attended to, much less solved.<br /> Sometimes, the malpractices take fresh lease of unauthorized life just outside the market, for the private interests are strong, the advantages of evading strict regulation are many and the producer is in no position to seek eventual advantage and protection from law at the cost of the immediate disadvantage involved in the loss of powerful customers, which are also sources of credit and finance.  Moreover, there is a very great lacuna that no control at all is exercised over village sales, in which the primary producer is literally, legally and in practice at the mercy of the village trader”. Frequently large samples are also taken by the buyers with payment.  The cultivators are not paid for them even when no sale is affected. Generally the transactions take place on a sample basis.  Consequently, the producer does not get the full worth of his produce.  The reputation of Indian agricultural producers in the world market is low.<br />The villagers have practically no contact with the outside world not are they in touch with the trend of market process and they mostly depend on hearsay reports received form the village bania who is always busy in earning profits from buyers by making them fools to the ignorant villagers.<br />In India, the following are some of the common defects agricultural marketing:<br />1. Lack of organization,<br />2. Forced sales,<br />3. Presence of middlemen,<br />4. Numerous market charges,<br /> 5. Market malpractices,<br />6. Lack of standard weights and measures,<br />7. Inadequate storage,<br /> 8. No standardization of price and quality,<br />9. Lack of marketing finance, and<br />10. Want of proper market information.<br />Q.7:-What are ‘storage functions’ in an agricultural market?<br />Ans.Agricultural marketing involves in its simplest form the buying and selling of agricultural produce. In olden days when the village economy was more or less self-sufficient the marketing of agricultural produce presented no difficulty as the farmer sold his produce to the consumer on a cash or barter basis.<br />Marketing functions. In modern marketing the agricultural produce has to undergo a series of transfers or exchanges from one hand to another before it finally reaches the consumer. This is achieved through three marketing functions (a)assembling ,(b)preparation for consumption and (c) distribution. Concentration pertains to the operations concerned with the assembly and transport from the field to a common assembly field or market. The produce may be taken direct to the market or it may be stored on the farm or in the village for varying periods before its transport. It may be sold as obtained from the field or may be cleaned, graded, processed and packed either by the farmer or village merchant before it is taken to the market. Some of the processing is done not because consumers desire it, but because it is necessary for the conservation of quality. At the market the produce may be sold by the farmer direct to the consumer or more usually through a commission agent or a broker. It may also be purchased by traders, wholesalers or retailers. The transactions may be carried out by direct negotiation or through middlemen, by barter or cash, by open or under cover auction, on the spot or in future markets. The transactions take place at one or more levels in the primary, secondary or terminal markets or all three. Distribution (dispersion ) involves the operations of wholesaling and retailing at various points. By a series of indispensable adjustments and equalising functions, it is the task of the distribution system to match the available supplies with the existing demand.<br />MARKETING FUNCTIONARIES (AGENCIES)<br />The transfer of produce or goods takes place through a chain of middlemen or agencies. In the primary market the main functionaries are the producer, the village or itinerary merchant, pre-harvest contractors, commission agents, transport agents etc. In the secondary market the processing and manufacturing agents are the additional functionaries. Financing agents such as shroffs, banks and co-operatives may also take part. In the terminal or export market the commercial analyst and shipping agent also gets involved in the transfer of goods.<br />MARKETING IMPROVEMENTS<br />India being a primary producing country, agriculture plays a vital role, both as an essential infrastructure and a development component in generating and sustaining a higher national income. Out of a natonal income of about Rs 38,921 crores in 1972-73 as much as Rs 17,500 crores or about 44.9% is contributed by agriculture and allied sectors. It is estimated that about 50% of the agricultural produce is available as marketable surplus. The marketing system in India provides sustenance for abour 3 million persons who are engaged in performing various marketing function . In the field of exports too, the agricultural sector accounts for about 50% of the total value.<br />GOVERNMENT REGULATORY PROGRAMMES.<br />With this object in view, a number of marketing surveys were conducted by the Directorate of Marketing and Inspection which revealed the shortcomings in the country's marketing system. A rectification of these deficiencies was sought to be achieved by rationalizing various activities and standardizing various practices in the markets through legislation or otherwise. The primary objective of improving the system of agricultural marketing was not only to remove the handicaps from which the producer-seller was suffering but also to increase his income by ensuring him a fair price.<br />An important development in the field of regulated markets is the keen interest taken by the International Development Agency (IDA) in the development of the infrastructure in regulated markets. The IDA is financing the development of infrastructure in 50 markets of Bihar. The World Bank has approved a loan assistance of 6.5 crores to Karnataka also for the development of markets.<br />Q.8:-List out the sources of income for a Regulated Agricultural Market.<br />Ans.The World Bank estimate that 41.6% of India lives below the international poverty line.  That means that as many as 410 million Indian citizens are living on less than $1.25US a day.  If correct, this estimate implies that 1/3 of the entire world’s poor live in India, meaning that the importance of poverty reduction is exceptionally relevant to the country.  In the past 20 years, great gains have been made in reducing the number of poor encapsulated in these daunting statistics, but India is faced with an obligation to continue to reduce the number of people living in poverty.  India’s impressive growth has disproportionately benefited certain geographic and social groups.  For India to truly become a country that epitomizes the future of change, the wage gap and the economic inequality that accompanies it must be eliminated. Historically, state intervention has favored industry over agriculture.  This can be a positive influence on increasing GDP, but it does not help to eliminate poverty or reduce inequality. This is because many of the poor live in rural areas and are dependent on agriculture as a source of income. In fact, some estimates claim that up to 75% of India’s poor live in rural areas. Thus, one of the hidden creators of income inequality is underinvestment in the agricultural sector.  As investment flows into cities, wealth creation is concentrated in urban centers. While it is incredibly important to foster industry, this kind of specialization cannot take place at the expense of the agricultural industry.  Not only is a robust agricultural industry important to national food security, it is also essential to ending the wage gap.<br />Agriculture income is exempt under the Indian Income Tax Act. This means that income earned from agricultural operations is not taxed. The reason for exemption of agriculture income from Central Taxation is that the Constitution gives exclusive power to make laws with respect to taxes on agricultural income to the State Legislature. However while computing tax on non-agricultural income agricultural income is also taken into consideration.<br />Sources of income for a Regulated Agricultural Market:<br />(i)     Any rent received from land which is used for agricultural purpose.<br />(ii)   Any income derived from such land by agricultural operations including processing of agricultural produce, raised or received as rent in kind so as to render it fit for the market, or sale of such produce.<br />(iii)   Income attributable to a farm house subject to the condition that building is situated on or in the immediate vicinity of the land and is used as a dwelling house, store house etc.<br />Now income earned from carrying nursery operations is also considered as agricultural income and hence exempt from income tax.<br />In order to consider an income as agricultural income certain points have to be kept in mind:<br />(i)  There must me a land.<br />(ii)  The land is being used for agricultural operations.<br />(iii)   Agricultural operation means that efforts have been induced for the crop to sprout out of the land .<br />(iv)  If any rent is being received from the land then in order to assess that rental income as agricultural income there must be agricultural activities on the land.<br />(v)   In order to assess income of farm house as agricultural income the farm house building must be situated on the land itself only and is used as a store house/dwelling house.<br />Certain income which is treated as Agriculture Income;<br />(a)    Income from sale of replanted trees.<br />(b)   Rent received for agricultural land.<br />(c)    Income from growing flowers and creepers.<br />(d)   Share of profit of a partner from a firm engaged in agricultural operations.<br />(e)    Interest on capital received by a partner from a firm engaged in agricultural operations.<br />(f)    Income derived from sale of seeds.<br />Certain income which is not treated as Agricultural Income;<br />(a)    Income from poultery farming.<br />(b)   Income from bee hiving.<br />(c)    Income from sale of  spontaneously grown trees.<br />(d)   Income from dairy farming.<br />(e)    Purchase of standing crop.<br />(f)    Dividend paid by a company out of its agriculture income.<br />(g)   Income of salt produced by flooding the land with sea water.<br />(h)   Royalty income from mines.<br />(i)     Income from butter and cheese making.<br />(j)     Receipts from TV serial shooting in farm house is not agriculture income.<br />ertain points to be remembered;<br />(a)    Agricultural income is considered for rate purpose while computing tax of Individual/HUF/AOP/BOI/Artificial Judicial Person.<br />(b)   Losses from agricultural operations could be carried forward and set off with agricultural income of next eight assessment years.<br />(c)    Agriculture income is computed same as business income.<br />Thanks<br />

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