Abstract
The decision to reform agricultural markets is a challenge for any policy maker given the profound efficiency and welfare impacts it is likely to have on people.
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Notes
- 1.
Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers. Contrary to horizontal integration, which is a consolidation of many firms that handle the same part of the production process, vertical integration is typified by one firm engaged in different parts of production (e.g. growing raw materials, manufacturing, transporting, marketing and/or retailing).
- 2.
These figures are unconfirmed by us.
- 3.
Foreign direct investment (FDI) in retailing has been allowed only in single-brand chains restricting the growth of the sector. FDI in retail has recently been a major issue of political confrontation among the opposing parties in the central government and faced strong resistances from opposing state governments. In November, the issue was put to vote in the Parliament, and despite the contentions, the central government found majority support in favour of FDI in retail. It is now up to the state governments to accept the motion through legislation. FDI in multi-brand retail is allowed up to 51 % under government rules but subject to specified condition (Economic Survey 2012–2013). At least 50 % of the total FDI should be invested in ‘back-end infrastructure’, and at least 30 % of the value of procurement of manufacture and processed products should be purchased from Indian small industries, although the government will have the first right of procurement of agricultural products. The retail outlet may be set up only in large cities.
- 4.
An amendment to the Companies Act 1956 in 2003 gives producers the flexibility to organize themselves as producer companies through a separate chapter based on Alagh Committee Report.
- 5.
The e-Safal is a variant of contract farming practice in areas of Karim Nagar district in Andhra Pradesh; this is an attempt to integrate the production decision, farm management, extension and marketing through vertical linkage involving a number of partners (Galab et al. 2013).
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Ghosh, N. (2013). Introduction. In: India’s Agricultural Marketing. India Studies in Business and Economics. Springer, New Delhi. https://doi.org/10.1007/978-81-322-1572-1_1
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