The first market started in January 1999 during the regime of Chandrababu Naidu, then Chief Minister of Andhra Pradesh. It is run by the Government of Andhra for small farmers with small landholdings.
Rythu Bazars were introduced with a view to eliminate the middlemen and arrange facilities for the farmers to sell their produce directly to the consumers at reasonable rates fixed every day. The scheme benefits both the farmers and the consumers. Regulated market yards for fruits and vegetables are functioning only at a few centres. The marketing system for fruits and vegetables is now in the hands of middlemen. Middlemen exist at various levels between the farmers and the consumers and exploit through malpractices in weighing, handling and payments. Large number of small farmers are unable to effectively bargain for better price in the wholesale market. Inefficiencies in the wholesale markets result in a long chain of intermediaries, multiple handling, loss of quality and increase the gap between the producer and consumer prices. Large number of small retailers, each handling small quantities, create high overheads leading to high margin on produces. Also In the absence of adequate facilities for storage and preservation, farmers are forced to make distress sales. At present,market yards are mostly set up by the State Governments. For setting up of agricultural markets, funds are sourced from National Bank for Agriculture and Rural Development (NABARD) through Rural Infrastructure Development Fund (RIDF) and National Cooperative Development Corporation (NCDC). However, infrastructure available to farmers for selling their produce still remains inadequate.Rythu Bazar is thus an initiative to create infrastructure facilities to enable farmers to sell their products directly to retail consumers thereby ensuring that farmers realize better prices and consumers receive fresh vegetables, fruits, etc., at reasonable prices and thus address constraints in agri-marketing infrastructure. Typically, a Rythu Bazar covers 10 to 15 villages and at least 250 farmers including 10 groups (self help groups) who are selected by a team consisting of Mandal Revenue Officers, Horticulture Officers and Agriculture Officers in the villages to operate in the bazars. Joint Collectors of the concerned districts ensure that adequate transport facilities are arranged for transport of goods to Rythu Bazars in consultation with State Road Transport Corporation. In addition, online information of prices and commodities movements is provided on the internet. Outreach and Potential: More than 100 Rythu Bazars are in existence benefitting 4500 farmers and large number of consumers. Rythu Bazars can play a key role in addressing some of above given marketing problems, and there is thus a clear need to facilitate similar marketing infrastructure throughout the country.