BANKING TRADE AND COMMERCE

REGULATED MARKETS

Regulated Markets.—Agricultural marketing in the past was faught with numerous malpractices and irregularities. The methods of trade were detrimental to the interests of the poor and ignorant agriculturist who was always at the mercy of the traders and usurers. The traders used to exploit him by offering lower prices as well as by imposing adverse market conditions. The presence of the middleman which was warranted by the ignorance of the agriculturists added to the difficulties of the latter. This state of affairs received the attention of the British Government [The Berar districts were ceded by the Nizam of Hyderabad to the British Government by the treaty of 1853. For details see Chapter 2.] which enacted the Hyderabad Residency Cotton and Grain Markets Law of 1897. This enactment led to the establishment of many markets, [Year of establishment of the market is given in bracket.] viz., Khamgaon (1898), Shegaon (1898), Malkapur (1899), Jalgaon (1903), Nandura (1916), Mehkar (1928) and Deulgaon-Raja (1931). Under this Law, the market was constituted of representatives of traders alone. However, this enactment was not of much consequences as most of the agricultural produce was sold outside the market, and there was no regulation as such. The Royal Commission on Agriculture (1927) studied the entire problem and recommended to the Government of India the necessity of regulating the mode of agricultural marketing. Subsequently also, various Government Commissions stressed the need to protect the interest of the agriculturists and evolve a pattern of regulation of marketing.

Accordingly the Government of the Central Provinces superceded the Hyderabad Residency Cotton and Graii Markets Law of 1897, and enacted the C. P. and Berar Cotton Market Act of 1932 which was subsequently amended in 1937. This Act sought to regulate the trade in cotton alone and prescribed that the market committee should comprise representatives of agriculturists, traders and local bodies. Fifty per cent of the members were required to be representatives of agriculturists. All the cotton markets established under the Law of 1897 were deemed to be regulated under the new enactment of 1932. For the marketing of food-grains and other agricultural produce, separate Act, viz., the C. P. and Berar Agricultural Produce Markets Act of 1935, was brought into force. This Act was made applicable to the grain market at Shegaon which was established in 1923 under the old Act. The grain markets were virtually unregulated till the era of national planning. The sequence of their regulation was as under:

Chikhali—1952; Deulgaon Raja—1954; Mehkar—1956; Khamgaon—1959; Nandura—1959, and Malkapur—1917.

The two enactments [After formation of Madhya Pradesh of which Berar was apart the words "C. P. and Berar"d in the nomenclature of the Act were substituted by "Madhya Pradesh".], viz., C. P. and Berar Cotton Markets Act of 1932, and the C. P. and Berar Agricultural Produce Markets Act of 1935, alongwith their amendments were in force till the application of the Maharashtra Agricultural Produce Marketing (Regulation) Act of 1963. The new Act consolidated the provisions in the various market Acts existent in the three regions of Maharashtra. All the cotton markets as well as grain markets established under the earlier Acts have been brought under the purview of the unified Act. Thus the provisions of the Maharashtra Agricultural Produce Marketing (Regulation) Act of 1963 have been made applicable to all the markets in the district from 1967.

There are nine regulated markets in the district of which the market at Lonar has been established recently. All the markets are governed by market committees. The market committee is a corporate body consisting of members elected by the agriculturists and traders as well as Government nominees. The agriculturists have a larger numerical representation than the traders and the nominees. The working and administration of the market committees is supervised by the Co-operation and Industries Officer of the Zilla Parishad who in his turn is accountable to the District Deputy Registrar of Co-operative Societies. The market committee grants licences to traders, weighmen, hamals, general commission agents and brokers. Only the licensees are allowed to participate in marketing operations. The committee possesses the necessary supervisory staff to guide and supervise the sale and purchase transactions. The supervisory staff are expected to maintain strict adherence to the market rules and to safeguard the genuine interest of the agriculturist.

Though all the market committees in the district have market yards, most of the yards are inadequate. This handicap prevents the weighing of cotton at the market yard. The market committees at Khamgaon, Chikhali and Deulgaon Raja have taken action to acquire adjoining land for the extension of the present yards.

The agriculturist brings his produce to the market yard. The produce is arranged and displayed in open heaps or bags. The traders and general commission agents inspect the produce and quote the purchase price. The highest bidder in the open auction purchases the same. For each transaction a sale agreement (sauda chitthi) is executed which is done in the presence of the official of the market committee. The sale agreement is prepared generally by the general commission agent who gets a rate of commission for his job from the agriculturist. Weighment of the commodities is made on the market yard by licensed weigh-men. The authorised charges for weighment and hamali are paid by the farmers. The seller delivers his commodities to the purchaser on the market yard itself. The delivery of cotton is, however, given at the premises of the ginning factories, where the weighment is also done. Payments to the agriculturist are done generally on the same day.

A remarkable feature of the entire mode of sales operation is that all transactions are done under the supervision of the market authorities. The interests of the agriculturist are protected and malpractices avoided. Disputes are solved by arbitration by the market committee. As all the market functionaries are licensed by the market committee, they are bound by rules and regulations of the latter.

The regulation of marketing is advantageous to the agriculturist due to a number of reasons. He is guided by the market authorities about the market situation. He is well informed about the prices in the market, as also those prevailing in other important markets. Agricultural produce fetches better prices to the agriculturists because of the open competition between purchasers, and he is also protected against the malpractices and exploitation by traders. The traders are prohibited from deducting money from the sales proceeds to be paid to the agriculturist, except for the authorised market charges. Weighment is done under the supervision of market weighmen and hence the extent of any deception is reduced to a great extent. The sales proceeds are paid to the agriculturist immediately after the transactions are finalised.

The progress of the co-operative marketing movement has also contributed to the good of the agriculturist. The marketing cooperatives function as general commission agents and purchasers in the markets. This is highly beneficial to the agriculturist.

The sale of agricultural produce within the official market area, which is declared for the purpose, is required by the rules to be done at the premises of the yard only. The market authorities encourage the agriculturist to bring the produce of standard quality to the market yard which assures a higher price for better quality.

Another important feature of the working of the market committees is the facility of dissemination of prices and market news.  The prices of all agricultural commodities with their arrivals are published on the market board and are announced through a loud-speaker. During the peak season the market news are published in newspapers. Besides, the prices and arrivals of some selected commodities are submitted to the office of the Divisional Joint Registrar of Co-operative Societies for broadcasting from the Nagpur Station of All India Radio of which the distantly situated markets take advantage.

With the implementation of the Maharashtra Agricultural Produce Marketing (Regulation) Act since 1967 the regulated markets in Buldhana district have progressed well. The new Act has guaranteed an assured income to the market committees by prescribing a higher rate of market cess. Because of the increased income, the market committees are in a position to provide better amenities at the market yards. The market practices and the role of market functionaries have also been more precisely defined.

There are eight regulated markets in the district which, though established under the enactments of 1897, 1932 and 1935, are deemed to be regulated and governed under the Maharashtra Agricultural Produce Marketing (Regulation) Act of 1962 at present. A market committee has been established recently at Lonar. The market committee has not started its working so far.

The account of the business transactions and the mode of operations of the various existing markets in their structural and historical aspects is given below:

Khamgaon: Khamgaon is one of the most important trade centres in Vidarbha. It is an entrepot centre of trade since the remote past and is said to be one of the oldest and biggest cotton markets in India. The cotton market at Khamgaon was established as early as 1865, and was subsequently brought under the purview of the Hyderabad Residency Cotton and Grain Markets Law in 1898. The market was subsequently regulated under the Acts of 1932, 1935 and 1963 as stated earlier. It should, however, be noted that agricultural produce other than cotton, viz., foodgrains, was brought under actual regulation of the market committee from 1959. [Prior to 1959 foodgrains trade was under the jurisdiction of municipal management] At present marketing of the following commodities is regulated: cotton, groundnut, jowar, tur, udid, mug, wheat, gram, bajra, masur, chawali, watana, math, linseed, sesamum, safflower, castor seed and gul.

Though the official market area covers only the Khamgaon Development Block, cotton and other agricultural produce comes to this market from a major portion of the Buldhana district as well as from parts of Akola, Yeotmal and Aurangabad districts. There are two separate market yards each for cotton and food-grains measuring 12 acres and 3 acres respectively. As per the estimates of the market authorities, the proportions of agricultural produce retained in the villages and brought to the market are as under: —

Cotton is by far the most important commodity traded in this market, and is followed by jowar, ground-nut, udid, mug, tur, wheat, bajri and gram, in the descending order. The turnover of trade in various regulated commodities in this market is given in the following table:

TABLE No. 12

TURNOVER OF TRADE AT KHAMGAON MARKET IN 1966-67 AND 1967-68.

Khamgaon is a huge market with a large platoon of market functionaries consisting of 63 general commission agents, 78 'A' class traders, 3 ' B' class traders, 78 weighmen, 5 brokers, 6 processors, 116 assistants to buyers and adatyas, 176 hamals, 3 clearing agents, 1 warehouseman and 45 others in 1967-68. The Market Committee has authorised the traders to deduct market charges, such as, adat commission, weighing charges, hamali, etc., which together amount to Rs. 1.05 in case of raw cotton, Rs. 1.28 in case of foodgrains, Rs. 1.50 for oil-seeds and Rs. 1.40 for groundnut. These charges are on the basis of Rs. 100 of sales proceeds. The income of the Market Committee from market fee, licence fee and miscellaneous sources amounted to Rs. 6,24,396, while the expenditure to Rs. 5,22,484 in 1967-68.

Khamgaon is an assembling as well as distributing centre of trade in cotton, groundnut, and almost all foodgrains. Raw cotton is assembled in the market from within the market area as well as from other parts of the district and also from Akola and Yeotmal districts. After ginning and pressing the bales of cotton are exported to Bombay, Nagpur, Pulgaon, Hinganghat, Ahmed-abad, Delhi, Surat, Calcutta, Kanpur, Madras, Madura and Coimb-tore. Groundnut oil is exported to a limited extent to Nagpur and Bombay. Wheat is imported from Akola, Jalna, Jalgaon (Khandesh) and Chikhli taluka. By and large wheat is consumed locally and does not figure in the export list. Udid is exported from this market to Virudhunagar, Madras, Bombay, Delhi, Agra, Bulsar, Surat and Calcutta; while mug is sent to Bombay, Agra, Delhi, Bulsar, Ahmedabad, Modinagar, etc. Tur dal is exported to Lucknow, Madras and Virudhunagar.

The Khamgaon market is provided with warehousing facilities on scientific lines by the Maharashtra State Warehousing Corporation. The warehousing charges per quintal per month are about 20 to 24 paise for foodgrains, 45 paise for groundnut, and 65 paise for cotton.

Khamgaon being a railway station, Khamgaon market does not face any transport difficulty. It is advantageously situated on the Bombay-Nagpur national highway and is directly connected by state highways to Aurangabad, Jalna, Yeotmal, Poona, etc. The freight rate per quintal for 100 kilometres of distance is 80 paise by railway and Rs. 3 by road.

Institutional finance is made available to the traders in this market by the Bank of Maharashtra, the Central Bank of India, the Punjab National Bank and the State Bank of India. Besides, the State Warehousing Corporation also arranges for the advances to traders as well as to the agriculturists on the security of the goods stored with it.

Khamgaon is a first-grade market where the fluctuations in prices depend mainly on the prices at Bombay and Nagpur. The prices of important commodities traded in this market are given below.

* Refer "Trade Routes" in this Chapter.

TABLE No. 13

FLUCTUATIONS IN PRICES OF REGULATED COMMODITIES AT KHAMGAON MARKET.

(Prices in rupees per Quintal)

Shegaon: The Shegaon Cotton Market is reported to have come into existence in 1865 which was subsequently hrought under the purview of the Hyderabad Residency Cotton and Grain Markets Law in 1898. The grain market was established under the above Law in 1923. All the subsequent enactments were made applicable to this market. Shegaon is also a prominent market of great commercial importance. It is situated on the Bombay-Nagpur-Howrah railway line and is served by the national highway from Bombay to Nagpur as well as by some state highways.

The market attracts goods from hundreds of villages though the official market area extends over the Shegaon development block. Almost all the agricultural commodities grown in the area are regulated. The market authorities have estimated the percentage of marketable surplus as given below: —

* These commodities are given in the order of their commercial importance in this market.

Cotton is the most important commodity from the point of view of trade. Since the monopoly procurement of jowar by Government, jowar is not traded in the market. Prior to this system about 60,000 bags of jowar used to arrive in this market. The following table gives the statistics of arrivals and value of commodities traded in this market in 1966-67 and 1967-68.

TABLE No. 14

TURNOVER OF TRADE AT SIIEGAON MARKET.

The functionaries in this market comprised 24 commission agents, 46 traders, 52 assistants, 23 weighmen, 2 processors, 72 hamals, 4 clearing agents and 1 warehouseman (in 1966-67). The total merchandising charges payable by the agriculturist on the sales-proceeds (per Rs. 100) in this market are as given below: —

The total income of the market committee from market-fee, licence-fee and miscellaneous sources was Rs. 51,472, while the total expenditure was to the tune of Rs. 46,329 in 1967-68.

The raw cotton is ginned and processed in the local factories and is exported to distant markets, viz., Bombay, Ahmedabad, Madras, Madura, Coimbtore, Nadiad, etc. About 60 per cent of the other produce is exported out of the district. The exports are transported by railway as well as by road, the freight charges being 80 paise and Rs. 3, respectively, per 100 kilometres.

The goods are stored in godowns owned by the merchants themselves, which number about 100 in Shegaon. The Maharashtra State Warehousing Corporation has established a warehouse at Shegaon recently. The commercial banks, viz., the State Bank of India, the Punjab National Bank and the Bank of Maharashtra advance finance to cotton buyers. The grain merchants however find it extremely difficult to secure institutional credit. It is noteworthy that the system of scientific grading in respect of jowar, wheat and tur is made applicable to this market. The commodities are graded before the auction takes place, and samples of standard grades are maintained.

Malkapur: Malkapur is a very important centre of trade situated on the Bombay-Howrah trunk railway line. The railway transport facility is supplemented by good road transport facilities, as this town is served by the Bombay-Nagpur national highway and the roads leading to Buldhana, Aurangabad, Jalgaon, Jalna, etc. The cotton market at Malkapur was established in 1899, and was brought within the purview of the subsequent enactments. At present the commodities mentioned below are regulated: cotton, jowar, wheat, rice, mug, udid, chauali, gram, tur, maka, math, hulga, groundnut, sesamum, castor-seed, safflower, mohari, jawas, tolambi, chilli, gul, banana, mosambi and orange.

The market committee possesses a permanent market yard providing the usual facilities. The market area covers the area within the jurisdiction of the Panchayat Samiti.

The income and expenditure of the market committee was to the tune of Rs. 1,55,610 and Rs. 1,32,606, respectively, in 1967-68.

Cotton is the principal item of wholesale trade at Malkapur. The cotton crop occupies an area of about 1,40,826 acres of land, which is followed by jowar with 1,19,518 acres of land. The following table gives the volume of trade transacted at Malkapur market during 1965-66 and 1967-68:—

TABLE No. 15

TURNOVER oF TRADE AT MALKAPUR MARKET IN 1965-66 AND 1967-68.

The entire cotton transacted in the market is ginned and pressed in the ginning and pressing factories in the town. The seven factories in 1965-66 ginned and pressed 31,243 bales of cotton. The cotton bales are exported usually to Bombay, Nagpur, Ahmedabad, Nadiad, Surat, Kanpur, Madras, Pondichery and Shalimar.

Besides cotton, groundnut oil is exported from this market to Bombay, Nagpur, Bhusawal and Jamner; udid is exported to Madras; tur dal is sent to Bombay, Nagpur and Khandwa; and chilli to Delhi, Agra, Lucknow, Kanpur, Hoshiarpur, Bhatapara and Calcutta.

Institutional finance is available to the traders to a small extent from the branch of the State Bank of India, while the Malkapur Urban Co-operative Bank and the branch of the District Central Co-operative Bank at Malkapur do not extend easy credit facilities to the traders. The Maharashtra State Warehousing Corporation has established a warehouse at Malkapur recently.

Nandura: Nandura is a second class market situated on the Bombay-Howrah railway route. Besides railway facilities, it is served by good roads including the Bombay-Nagpur national highway.

Nandura cotton market is one of the oldest in Berar. It was established in 1916 under the Law of 1897. The trade in food-grains and other agricultural produce was brought under regulation in 1959. The market area extends over 97 villages in the Nandura Block. The market committee possesses a small market yard which is equipped with platforms, tin-sheds, radio-set and some other amenities. Besides cotton, almost all cereals and pulses, gul, oil-seeds and chilli are brought under regulation at this market. Cotton and jowar are however the most important commodities from the point of view of trade. Jowar trade has dwindled with the introduction of monopoly procurement of jowar since 1964. The following table gives the statistics of the volume of trade transacted in this market during 1966-67 and 1967-68.

TABLE No. 16

TURNOVER OF TRADE AT NANDURA MARKET IN 1966-67 AND 1967-68.

Cotton is ginned and processed in the local ginning and pressing factories (three in number) before it is exported. The entire cotton from this market is exported, the percentage of exports to total transactions being 50 for jowar, 70 for udid, 76 for mug and 60 for tur.

There are about 14 big wholesale purchasers in this market which include proprietors of ginning factories and oil mills as well as exporters. There are 24 general commission agents, 46 petty traders, and two dalals.

During 1967-68, the income of the market committee amounted to Rs. 10,748 while the expenditure totalled at Rs. 10,484.

The market is served by two co-operative marketing societies which sell and purchase on behalf of the agriculturists. The method of grading and standardisation is not made applicable to this market. The State Bank of India provides marketing finance to the traders, while the District Central Co-operative Bank and the Urban Co-operative Bank do not readily provide easy credit facilities. A warehouse has been established recently in this market by the State Warehousing Corporation.

Chikhli:. Chikhli is a second class regulated market situated on the junction of the Malkapur-Chikhli-Deulgaon road and the Khamgaon-Aurangabad road. Though it is not directly served by the railways it is favourably situated as regards road communications. The Chikhali cotton market was established in 1917 while the trade in other agricultural produce was brought under regulation in 1952. At present almost all agricultural produce, including cotton, groundnut, sesamum, linseed, cereals and pulses, is brought under regulation. The official market area extends over 220 villages in Chikhli tahsil. The market committee has maintained a market yard which provides facilities, such as sheds, platforms, rest-house for farmers, a radio set, etc. The market functionaries licensed by the market committee include 38 traders, 238 retail traders, 19 general commission agents, 32 weighmen, 5 carting agents and a number of assistants. The income and expenditure of the market committee amounted to Rs. 12,199 and Rs. 71,685, respectively, in 1967-68.

The table No. 17 gives the statistics of turnover of trade in this market during 1966-67 and 1967-68.

TABLE No. 17

TURNOVER OF TRADE AT CHIKHALI MARKET IN 1966-67 AND 1967-68.

TABLE No. 17— contd.

Cotton is by far the most important item of export trade from this market. Cotton bales are exported to Bombay, Ahmedabad, Surat and Madras, while other agricultural produce is exported to Bombay, Jalna, Aurangabad, Jalgaon, Akola, Barshi, etc.

Chikhali market is served by eight co-operative marketing socie-ties which purchase and sell agricultural produce. The system of grading and standardisation is prevalent in this market. It is however not provided with scientific warehousing facilities. The cotton pool system which is beneficial to the agriculturist for the preservation of pure seed is made applicable to this market. The State Bank of India meets the credit needs of the traders in this market.

Mehkar: Mehkar cotton market was established in 1928, while trade in other agricultural produce came under regulation in 1956. The market was brought under the purview of the subsequent enact-ments in the course of time. All the major agricultural commo-dities are regulated in this market, of which jowar, cotton, udid, mug and wheat are more important than others. The market area extends over 228 villages in the Mehkar tahsil. There is a permanent market yard, measuring about five acres, which pro-vides a godown besides some other facilities. The market func-tionaries include 28 general commission agents for cotton and 26 for foodgrains, 13 traders of cotton and 19 traders of foodgrains, as well as a number of weighmen and assistants. The total in-come and expenditure of the market committee was reported to be Rs. 59,143 and Rs. 45,244, respectively, in 1967-68.

The following table gives the volume of trade in this market during 1967-68.

TABLE No. 18

TURNOVER OF TRADE AT MEHKAR MARKET

* The total value of arrival of foodgrains as Well as cotton, was Rs. 1,52,62,643.

Mehkar market is served by a co-operative marketing society as well as a co-operative ginning and pressing factory. Banking finance is made available to some of the traders by the State Bank of India. A bulk of the produce in this market is purchased by a few local traders as well as by the purchasing agents of big merchants from Khamgaon and Akola.

Deulgaon Raja: Deulgaon Raja situated in the southern region of the district is an old market with considerable local importance. The cotton market at this town was brought under regulation in 1931 while grain trade was regulated in 1954. The Deulgaon market commands an area in the Deulgaon Raja development block as well as the Sindkhed Raja Block. All agricultural commodities produced in the area are brought under regulation. Cotton is how-ever the principal commodity of trade which is followed by jowar and other foodgrains. Jowar trade in this market as in other markets has gone out of the purview of the market committee since the monopoly procurement by Government.

The following table gives the volume of trade in this market in 1967-68.

TABLE No. 19

TURNOVER OF TRADE AT DEULGAON RAJA MARKET IN 1967-68.

The income of the market committee from market fee, licence fee and other sources amounted to Rs. 66,396 while the expendi-ture was Rs. 75,323 in 1967-68.

This market is served by a co-operative marketing society, while the banking facilities to traders are available from the State Bank of Hyderabad.

Jalgaon Jamod: Jalgaon is a smaller market situated at a dis-tance of about 16 miles from Nandura on the Bombay-Howrah trunk railway line. The cotton market at Jalgaon was organised as early as 1903, while trade in foodgrains was brought under regu-lation much later. As may be expected Jalgaon market is not so famous for cotton trade. It is essentially a market for foodgrains. The market area extends over a radius of ten miles around the town.The market committee owns a market yard. There are six marketing co-operative societies which undertake sale operations on behalf of the agriculturists. The branch of the State Bank of India caters to credit needs of the trading community.

During 1967-68 the income and expenditure of the market committee amounted to Rs. 30,816 and Rs. 26,359, respectively.

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