Key Strategies for Marketing Agricultural Products, Including Organic Produce

Getting agricultural products from the farm to the consumer’s plate is far more complex than it appears. It involves a chain of activities – assembling, grading, processing, transporting, and finally selling – each of which adds value and cost. In India, where agriculture supports millions of livelihoods, understanding how this marketing chain works is essential for anyone interested in the economics of farming. And when you layer organic produce on top of this system, the stakes – and the opportunities – rise significantly.

What is agricultural marketing? 🔗

Agricultural marketing covers all the activities involved in moving farm produce from the field to the end consumer. It is not just about selling. It includes assembling goods at a collection point, sorting and grading them for quality, processing or packaging where necessary, and distributing them through wholesale and retail channels. According to TNAU’s agricultural marketing resources, the process involves three core marketing functions: assembling, preparation for consumption, and distribution.

In simpler terms, a farmer harvests wheat, brings it to a local collection centre (assembling), the wheat is cleaned and graded (preparation), and then it moves through mandis, wholesalers, and retailers before reaching a household kitchen (distribution). Each step in this chain plays a role in matching supply with demand.

The three stages: concentration, equalization, and dispersion 🔗

Agricultural marketing is often described through three sequential stages that help organise the flow of goods across geography and time.

Concentration 🔗

Concentration refers to the process of collecting farm produce from scattered, small-scale producers and bringing it together at a central point. In India, this typically happens at village-level collection points or primary wholesale markets (mandis). Since most Indian farmers operate on small landholdings and produce limited surpluses, aggregation through intermediaries or farmer groups is critical. As noted in a study published in the Journal of Land and Rural Studies, a majority of Indian farmers operate on less than one hectare, creating a need for multiple informal intermediaries for aggregation and preliminary value addition like sorting and grading.

Equalization 🔗

Equalization is the stage where supply is adjusted to match demand – in terms of time, quantity, and quality. Agricultural production is seasonal, but demand for food is year-round. Equalization bridges this gap through activities like storage in warehouses and cold chains, processing (converting raw produce into shelf-stable products), and grading to meet specific market standards. Government infrastructure such as cold storage facilities, regulated market yards, and warehousing systems under the Warehousing Development and Regulatory Authority (WDRA) all contribute to this function.

Dispersion 🔗

Dispersion is the final stage where products are distributed from central collection points to various consumer markets across the country or abroad. This involves wholesale distribution, retail sale, and increasingly, e-commerce channels. Transportation infrastructure – roads, railways, and cold chain logistics – is vital here. Efficient dispersion ensures that a farmer growing mangoes in Maharashtra can reach a consumer in Delhi or even an export market in Europe.

Key marketing functions: grading, processing, and selling 🔗

Within these three stages, several specific functions add value to agricultural products and determine the price a farmer ultimately receives.

Grading and standardization 🔗

Grading involves classifying produce based on quality parameters like size, colour, moisture content, and purity. Under the Agricultural Produce (Grading and Marketing) Act of 1937, more than forty primary commodities are compulsorily graded for export and voluntarily graded for internal consumption. Proper grading benefits farmers by allowing them to command higher prices for better-quality produce, and it benefits consumers by ensuring consistency. The AGMARK certification system is one of the most recognized grading standards in India.

Processing and value addition 🔗

Processing transforms raw agricultural output into products that have a longer shelf life or higher market value. Think of tomatoes being processed into paste, or paddy being milled into rice. Value addition through processing can significantly boost farmer incomes and reduce post-harvest losses, which remain a major concern in India. The food processing sector is increasingly being promoted by government schemes like the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI).

Marketing channels and selling 🔗

Agricultural produce in India is sold through multiple channels. The most traditional is through mandis (regulated market yards) operated by Agricultural Produce Market Committees. Other channels include direct sale to consumers through farmers’ markets, contract farming arrangements with private companies, and increasingly, online platforms. Research published in the Australian Journal of Agricultural and Resource Economics found that local crop producers received significantly higher prices when selling through mandis compared to private traders, though this pattern reversed for high-value export crops.

The role of APMC in agricultural marketing 🔗

The Agricultural Produce Market Committee (APMC) system is one of the most important institutional frameworks governing agricultural marketing in India. APMCs are state-level statutory bodies established to protect farmers from exploitation by middlemen and ensure transparent price discovery through open auctions.

How APMCs work 🔗

Under the APMC framework, each state is divided into market areas, each governed by a Market Committee. Farmers bring their produce to designated market yards where licensed traders bid on it through an auction process. The system aims to ensure fair pricing, accurate weighing, timely payments, and proper record-keeping. APMCs also provide physical infrastructure like market yards, storage facilities, and grading centres. As per the Insights on India portal, the APMC model act also promotes direct marketing, allowing farmers to sell directly to consumers and thereby eliminate middlemen.

Challenges with the APMC system 🔗

Despite its original intent, the APMC system has faced criticism over the years. Key problems include the formation of cartels among traders in mandis, high commission charges, entry barriers due to expensive licensing fees, and restrictions on farmers selling outside designated market areas. These issues have often left farmers, particularly smallholders, in a vulnerable position. In 2020, the Indian government attempted reform by passing three farm laws intended to allow trading outside APMC mandis and encourage private investment. However, widespread farmer protests – particularly in Punjab, Haryana, and western Uttar Pradesh – led to the repeal of these laws in 2021.

e-NAM: digital reform in agricultural markets 🔗

One of the most promising reforms has been the National Agriculture Market (e-NAM), a pan-India electronic trading portal that links existing APMC mandis across the country into a unified national market. Launched by the government, e-NAM provides real-time price information, reduces information asymmetry between farmers and traders, and enables transparent online trading. It has been a significant step toward modernizing the mandi system without dismantling it entirely.

Marketing strategies for organic produce 🔗

When it comes to organic agricultural products, the marketing challenge is both different and more intense. Organic produce commands premium prices, but reaching the right consumer – both domestically and internationally – requires specific strategies around certification, branding, and distribution.

The organic market landscape in India 🔗

India ranks first in the world in terms of the total number of organic producers and second in terms of organic agricultural land. According to APEDA (Agricultural and Processed Food Products Export Development Authority), India produced around 3.6 million metric tonnes of certified organic products in FY 2023-24, covering oilseeds, fibre, sugarcane, cereals, pulses, spices, tea, coffee, fruits, and vegetables. The total area under organic cultivation stood at 7.3 million hectares. Organic products are exported to the USA, European Union, Canada, Great Britain, and several other countries.

Certification: the foundation of organic marketing 🔗

No organic marketing strategy works without credible certification. In India, the National Programme for Organic Production (NPOP), implemented by APEDA, governs organic certification standards. Importantly, NPOP standards have been recognized as equivalent by the European Commission and Switzerland for unprocessed plant products. This recognition means that Indian organic products certified under NPOP are directly accepted in these key export markets without additional certification hurdles. For the domestic market, the FSSAI’s Jaivik Bharat logo helps consumers identify genuine organic products.

Tapping into export markets 🔗

Exports have been a major growth driver for Indian organic agriculture. According to Invest India, the country’s organic product exports crossed $1 billion in 2021, with the United States absorbing roughly 54% of these exports, followed by the European Union and Canada. Key export products include organic soybean meal, tea, basmati rice, spices, and cotton. Strengthening compliance with international standards (like USDA NOP certification for the US market) and diversifying into new product categories remain important strategies for expanding exports.

Building the domestic market 🔗

While exports are strong, India’s domestic organic market is still developing. The India organic food market was valued at approximately USD 2.3 billion in 2025 and is projected to grow rapidly. Key challenges for domestic growth include high prices of organic products, limited consumer awareness in smaller cities, and concerns about authenticity due to inconsistent labelling. Strategies that are proving effective include selling through modern retail outlets and supermarkets, building dedicated organic brands, leveraging online retail and direct-to-consumer platforms, and participating in government-backed initiatives like the Bharat Organics brand launched by the National Cooperative Organics Limited (NCOL).

Direct marketing and farmer-consumer linkages 🔗

For organic farmers specifically, eliminating intermediaries can be a game-changer. Direct marketing models – such as Apni Mandis in Punjab and Haryana, Rythu Bazaars in Andhra Pradesh, and Uzhavar Sandhais in Tamil Nadu – allow farmers to sell produce directly to consumers. These channels are especially relevant for organic produce, where communicating the product story (farming methods, certification, health benefits) directly to the buyer can justify the price premium. Online platforms like Jaivik Kheti, the government’s organic farming portal, also help organic farmers connect with consumers and traders.

Government initiatives supporting agricultural and organic marketing 🔗

The Indian government has introduced several programmes and policy interventions to strengthen agricultural marketing, especially for organic produce.

Key schemes and programmes 🔗

The Paramparagat Krishi Vikas Yojana (PKVY) promotes cluster-based organic farming with financial assistance for certification, inputs, and marketing. The Mission Organic Value Chain Development for North Eastern Region (MOVCDNER) focuses specifically on building organic value chains in the northeast. According to a government update from March 2025, since 2015-16, approximately 59.74 lakh hectares in India have come under organic farming through the PKVY and MOVCDNER schemes, with financial aid covering certification, marketing support, and training.

Other notable initiatives include the Minimum Support Price (MSP) system, which guarantees a floor price for key crops; the Gramin Agricultural Markets (GrAMs) scheme for upgrading rural haats into proper markets; and financial support from institutions like NABARD for building cold storage, processing units, and market linkage infrastructure.

Challenges that still need attention 🔗

Despite progress, several challenges continue to hold back efficient agricultural marketing in India. Post-harvest losses remain high due to inadequate cold chain and storage infrastructure, especially for perishable products like fruits and vegetables. Information gaps mean that many farmers still lack access to real-time market prices and demand data, making them dependent on intermediaries. For organic produce, the certification process can be expensive and complex for small and marginal farmers, limiting their ability to access premium markets. And in remote areas, poor road connectivity and limited digital literacy slow down the adoption of modern marketing channels like e-NAM.

Addressing these challenges will require continued investment in rural infrastructure, simplification of certification processes, expansion of digital platforms, and farmer training programmes that make market information accessible at the grassroots level.

What do you think? How can India better bridge the gap between its large organic production capacity and its still-emerging domestic organic market? And should policy focus more on strengthening the existing APMC framework or on creating alternative marketing channels for farmers?

References

1. https://agritech.tnau.ac.in/agricultural_marketing/agrimark_India.html
2. https://journals.sagepub.com/doi/10.1177/22779787231209169
3. https://enam.gov.in/web/stakeholders-Involved/Apmcs
4. https://www.sciencedirect.com/science/article/pii/S0313592624000213
5. https://en.wikipedia.org/wiki/Agricultural_produce_market_committee
6. https://www.insightsonindia.com/agriculture/agricultural-marketing-and-issues/contract-farming/agricultural-produce-marketing-committee-apmc/
7. https://apeda.gov.in/OrganicProducts
8. https://www.investindia.gov.in/blogs/exploring-potential-indias-organic-food-market
9. https://www.imarcgroup.com/indian-organic-food-market
10. https://www.jaivikkheti.in/