Concept of Terminal market

Agricultural marketing is the critical link between agricultural production and farm sector revenue percolating to the farmers. Apart from performing transferring agricultural goods to consumers it transmits the price signals in the marketing chain. 

Terminal market concept is one of the emerging alternative marketing system in India. 

Terminal Market is a central site, often in a metropolitan area serves as an assembly and trading place for commodities. Terminal markets for agricultural commodities are usually at or near major transportation hubs. The term is also used for markets in other commodities such as metals and bullion. The Terminal Markets (TM) have been conceptualized and introduced as a new item under the National Horticulture mission (NHM), which will be implemented in a Public Private Partnership (PPP) mode.

 The main objectives of setting up Terminal Markets Complex (TMC) are:

• To link the farmers to the markets by shortening the supply chain of perishables and enhance their efficiency and thus increase farmers income.

• Provide professionally managed competitive alternative marketing structures that provide multiple choices to farmers for sale of their agricultural produce.

• To drive reforms in the agricultural marketing sector resulting in accelerated development of marketing and post harvest infrastructure including cool chain infrastructure in the country through private sector investment. 

• To bring transparency in the market transactions and price fixation for agricultural produce and through provision of backward linkages to enable the farmers to realise higher price and thus higher income to the farmers.

The State Government approves the number and indicative location of the TMCs based on the demand, economic viability, commercial considerations.

Who all are eligible?

TM project would be built, owned and operated by the selected Private Enterprise (PE) through Competitive Bidding process. PE includes individuals, Group of Farmers/Growers/Consumers, Partnership/ Proprietary firms, Companies, Boards, Corporations, Co-operatives, Producer Organisations and Self Help Groups. The PE could also be a consortium of entrepreneurs from, inter-alia, agri-business, cold chain, logistics, warehousing, agri-infrastructure and related background. PE will be selected through competitive bidding process. The PE has full freedom to fix the service charges based on commercial and viability considerations. The service levels as prescribed in the OMDA agreement will have to be met by the PE.

The stakeholders involved are the Private Enterprise, State Government / State Horticulture Mission (SHM) and National Horticulture Mission (NHM). The State Government can participate in the equity of the project either in the form of direct investment or by offering the assets in the form of existing market / area (land) etc. However, the combined total equity of the State Government and NHM cannot exceed 49% of the project equity.

Tradable commodity

The commodities to be marketed by the TMC will include all perishables, interalia, fruits, vegetables, flowers, aromatics, herbs, meat, poultry etc. Nonperishables can also be handled in the TMC. However, the proportion of Non- Perishables shall not exceed 15% of the total through put of the market. Similarly, the proportion of non horticultural products within the perishable commodities shall not exceed 15% of the total through put of the market.

Monitoring mechanism of it 

The State Horticulture Mission will monitor the successful implementation of the Terminal Market Projects through the Nodal Officer. The Nodal Officer will take the help of PMA of each terminal market for this purpose. The State Horticulture Mission will submit monthly reports on the progress of implementation of TMs to the Mission Director, National Horticulture Mission

Role of state government

The State Government would play a pro-active role and designate, an officer of the rank of Secretary to the Government as Nodal Officer to function under an SLEC of the SHM for the purpose of terminal market complexes. The responsibility of the Committee would include.

• Approval of the number and location of the terminal market complexes;

• Approval of the bidding process and implementation modalities of the project;

• Technical Financial appraisal of the detailed business plan of the complex; 

• Regulatory Clearances, issue of licenses and granting of permission for facilitating establishment and operation of market complexes and the collection centres;

• Identification of land and when necessary provision of Government land for TM and CC.

• Convergence with other development programmes for infrastructure support to TM/CC such as road connectivity, power and water supply; 

•  May participate in the equity of the project either through direct funding, land/ infrastructure support and/ or transfer of existing market assets.

• Selection of the Private Enterprise through an open, transparent competitive bidding process, and entering into Operation, Management, Development Agreement with the successful PE.

• Ensure the involvement of Panchayati Raj Institutions in establishing backward linkages to the Collection Centres.

• Encourage the involvement of agri-clinics and agri-business centres under each collection centre that can play an important role in establishing the backward linkages and organizing the farmers.

• The Project will be awarded to the bidder with the request for least equity participation. 

• Make recommendations to Central Government for the release of equity and for its disinvestment.

• Set up institutional mechanism for resolution of disputes, if any, arising out of the implementation of the terminal market complex.

The State Government would play a pro-active role and designate an officer at the level of Secretary to the State Government as Nodal Officer who will be the single contact point for the PE and other coordination work. The State Level Executive Committee of the State Horticulture Mission will coordinate all aspects relating to the TMC project. The Nodal Officer will also be nominated as a member of the SLEC for this purpose.