- Limitations:
- Wholesalers, retail traders, or food processing companies cannot purchase directly from farmers.
- Farmers must sell their produce only in these mandis.
- Different States levy different mandi charges, creating market distortion.
- Mandis are not integrated, leading to substantial transaction costs for inter-mandi movement.
- Separate licenses required for each mandi within a State.
- Impact on Farmers:
- Traders in mandis often form cartels, keeping prices low for farmers.
- Farmers do not get the full benefit of market prices.
- Mandi charges at the first level have cascading effects on prices.
- Farmers are exploited by middlemen.