functioning markets add to welfare of producers as well as consumers. efficient agricultural markets can also be a potent tool for poverty reduction. agricultural markets in india, in particular the supply chain management and business models, are inefficient. in india, farmers ’ produce is generally disposed of in the village, rural / primary market or secondary agricultural market. the challenges facing supply - chain management and agribusiness in india can be broadly classified into three, namely, 1 ) lack of accessibility to regulated markets, 2 ) lack of competitition under the agricultural produce market committee ( apmc ) act, and 3 ) absence of a nationwide common agriculture market. these are challenges that run across the various channels through which the supply - chain and agribusiness models operate. these channels are ( i ) producer - consumer, ( ii ) producer - retailer - consumer, ( iii ) producer - wholesaler - retailer - consumer, ( iv ) producer - commission agent - wholesaler - retailer - consumer and ( v ) producer - village merchant - wholesaler - retailer - consumer. agriculture markets in india are regulated through the model apmc acts. the number of regulated ( secondary ) agricultural markets stood at 7, 157 as of march 2010 as compared to just 286 in 1950. there are also about 22, 221 rural periodical markets, about 15 per cent of which function under the ambit of apmc regulation. 5 the model apmc act allows states to collect market fees from the buyers / traders on the sale of notified agricultural produce which are generally high. the high incidence of commission charges on agricultural / horticultural produce renders marketing cost high. there are other charges like entry tax / octroi tax that vary across states as well as across commodities. these charges prevent the emergence of a nationwide common market for agricultural produce. moreover, restrictions on the movement of goods under the essential commodities act remain in place in various states. position paper no. 1 from the img on inflation http : / / finmin. nic. in / workingpaper / img % 20on % 20inflation. pdf average area served by a market is 115 sq. km while an average area served by a regulated market is 454 sq km. according to recommendations by national farmers commission, availability of markets should be within 5 km radius ( approx. 80 sq km ). bis central bankers ’ speeches these had inhibited free access of agriculture markets. most of the agricultural markets are also characterised by dominance of cash based

discussing the role of agribusiness in growth and inflation, it would be apposite to define and understand the concept of agribusiness. way back in 1957, davis and goldberg 1 had defined agribusiness very lucidly as the sum total of all operations involved in the manufacture and distribution of farm supplies ; production operations on the farm ; and the storage, processing and distribution of farm commodities and items made from them. thus, agribusiness essentially encompasses today, the functions which the term agriculture denoted 150 years ago and agriculture now is a subset of the larger superset called agribusiness. as far as growth and inflation is concerned, you may be aware that the weights attached to objective of growth vis - a - vis that of price stability in choice of policy measures vary according to the extant macroeconomic environment. for example, during the great moderation, the policies all over the world were focussed on growth enhancing measures. presently, in view of the continuance of low inflation and low or negative growth in the developed economies, the policy measures, mainly in the form of liquidity enhancement and low interest rates, continue to focus on augmentation of growth. quoted from king, robert p., michael boehlje, michael cook, and steven t. sonka ( 2010 ) “ agribusiness economics and management ”, american journal of agricultural economics, special issue commemorating the centennial of the aaea, vol. 92, no. 2, april bis central bankers ’ speeches in india, however, the conditions are very different. along with economic slowdown, inflation is ruling significantly above the threshold level, beyond which inflation turns inimical to growth. under the current macroeconomic environment, indian policy makers have to think of various measures that can simultaneously achieve the twin objectives of higher growth and lower inflation. opinions differ on the utility of different policy measures at the current juncture and you all may be familiar with the current debate on the timing, sequencing and complementarity of various measures. there is, however, near unanimity, amongst all that agriculture and agribusiness growth is a necessary prerequisite for moderation of inflation, particularly food inflation, as well as for acceleration and sustenance of inclusive growth. the impact of agribusiness on inflation is also both direct and indirect. the direct impact of agribusiness is visible in the form of food inflation. with demand arising from increasing population and