The regulated market aims at the elimination of unhealthy and unscrupulous practices, reducing market costs and providing benefits to both producers as well as the sellers in the market.
However, regulated markets had some drawbacks such as:
- Under this regulation, no exporter or processor could buy directly from farmers. It discouraged processing and exporting of agricultural products.
- Under the act, the state Government could only set up markets, thus preventing private players from setting up markets and investing in marketing infrastructure.
- Formation of cartels with links to caste and political networks resulting in price variations.
- An increased number of middlemen formed a virtual barrier between the farmer and the consumer.
- The licensing of commission agents in the state regulated markets has led to the monopoly of the licensed traders acting as a major entry barrier for new entrepreneurs.
- The fragmentation of markets within the State hinders the free flow of agro- commodities from one market area to another and multiple handling of agri-produce and multiple levels of mandi charges end up escalating the prices for the consumers without commensurate benefit to the farmer.
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