Just like farmers, buyers, and suppliers, commission agents also play an important role in Indian agricultural mandis. While farmers and suppliers need the help of commission agents for selling their produce, buyers need them for buying the desired produce. In the previous blog, we learned how Bijak app connects buyers and suppliers in Indian mandis. In this blog, we will discuss the role of commission agents in Indian mandis.
Role of commission agents
Commission agents are also known as aadhathiyas in Indian agricultural mandis. They have been an integral part of mandi businesses for more than 100 years. After the farmer or supplier brings their commodities to the mandis, commission agents help them in auctioning and selling the same. They also ensure the quality of the produce and take full responsibility till the buyers pay for the commodities. They are actively involved in closing deals between farmers and retailers. For doing this, they charge a commission.
Commission agents act as a representative of their clients. They do not own the produce but negotiate for its sale and purchase with different parties. They charge for their services in the form of commissions. Commission agents majorly work in the wholesale markets. They act as a link between buyers and suppliers who come to the market to seal the deal. A commission agent is usually involved in the physical handling of the produce, making arrangements for its sale, auctioning, charging buyers an appropriate price, and then passing it on to the supplier after deducting their expenses and commission.
Types of commission agents
There are two types of commission agents in unregulated agricultural markets: kaccha aadhathi and pakka aadhathi.
- Kaccha aadhathi:
Kaccha aadhathiyas primarily work for farmers and sellers. They sometimes provide advance money to the traders on the condition that the produce will be sold through them only.
- Pakka aadhathi:
Pakka aadhathiyas acts on behalf of the traders in the consumer market. In the consumer markets, the processors (rice millers, oil millers, and cotton or jute dealers) and big wholesalers employ pakka aadhatiyas as their agents for the purchase of a specified quantity of goods within a given price range.
Work of commission agent
Farmers unload their produce in mandis at a special place selected by commission agents. Commission agents are licensed dealers, authorized by the local market committee. They are responsible for the display of (farmer’s) produce, basic cleaning, and sorting, conducting auctions, and making payments to the farmers. An agent’s income is the commission fixed by the APMC. Generally, an aadhatiya is associated with 50-100 families of farmers.
Commission agents get the produce cleaned and sorted and then arrange it for auction. In mandis, an official person, also known as the ‘dami’ or auctioneer is appointed for conducting auctions. He auctions all the lots one by one. Interested bidders circle the stack of produce in the market yard, physically inspect it and place their bids on it. The highest bidder buys the lot and the officials record the details of that auction in their register. Once the bid is completed, the goods are weighed and loaded into the buyer’s trucks.
Commission agents also maintain a place such as a shop, a godown, or a rest house for their clients. Some commission agents also give loans to the farmers. They sell the farmers’ produce directly to the buyers so that farmers do not have to deal with the buyers individually. Apart from this, commission agents provide many other facilities to
Facilities provided by the commission agents to their customers
- They give 40 to 50 percent of the value of the crops to the farmers in the form of loans so that they can meet their production expenses.
- They act as bankers to the farmers. They give loans to the farmers whenever they need money.
- They give advice to the farmers regarding the purchase of equipments and selling of their produce.
- They provide empty bags to the farmers to transport their produce to the market.
- They provide food and shelter to the farmers and their animals when they come to the mandi to sell their produce.
- They provide a storage facility and give advance payment of up to 75 percent of the value of the stored product.
- They arrange for the transportation of produce from the village to the mandi when the farmer needs it.
How Bijak helps commission agents and mandi traders
Bijak understands the role of commission agents in the Indian sabzi mandis, especially how they optimize agricultural businesses. With Bijak, commission agents, farmers, buyers, and suppliers can trade their commodities effectively from one place. Also, they can connect to a network of 30,000+ traders across India. They can also check mandi rates of 200+ mandi products from 2000+ mandis across the country. Not just this, they can also make 100% secure, fast, and easy payments to their suppliers.
We hope that this blog helped you learn more about mandi commission agents. If you have any questions or suggestions, then do let us know through comments. Also, keep reading our weekly blogs. For more information related to Bijak, download the Bijak App, and don’t forget to follow our social media handles.