Agriculture reform: Government takes first step for a national farm market

In what could potentially transform marketing of crops in India, the government has approved the creation of a common electronic platform which will allow farmers and traders to sell their produce to buyers anywhere in the country.

Currently, the Agriculture Produce Market Committee (APMC) Acts in different states permit the first sale of crops — after harvesting by farmers — to take place only in regulated market yards or mandis.

The farmer’s universe of buyers is restricted only to traders or commission agents licensed to operate in the area under a particular APMC. In most cases, multiple licences are required to trade in different mandis within the same state.

What is now being envisaged, based on the proposal cleared by the Cabinet Committee on Economic Affairs on Wednesday, is a National Agriculture Market (NAM) online trading portal where farmers can offer their produce to buyers in any part of the country.

“This virtual marketplace will allow a farmer from, say, Narsinghpur in Madhya Pradesh to sell his chana to a dal miller in Delhi who may be willing to pay a higher price. The miller, too, benefits by virtue of not having to be physically present in Narsinghpur or being forced to depend on traders in that APMC area,” Pravesh Sharma, Managing Director, Small Farmers’ Agribusiness Consortium (SFAC), told The Indian Express.

SFAC has been designated the lead agency for developing the NAM e-platform. “While buyers can log into the platform from homes or offices anywhere in India, the transactions will, however, be recorded as having been conducted through the mandi where the seller would normally bring his produce. The APMC concerned will, therefore, continue to earn the mandi fee on the transaction even if it does not happen in that particular market yard,” Sharma said.

The APMC-regulated mandis will, in fact, gain through the significant increase in turnover volumes likely from more buyers bidding for produce. “The NAM e-platform basically gives farmers the choice to accept the bids of local traders or price offers by online buyers. In either case, the APMC is not deprived of revenues through mandi fees. The portal will provide an integrated platform for transferring the money to the accounts of farmers and the APMC after ensuring delivery of the produce to the buyer,” Sharma said.

The Centre has earmarked Rs 200 crore for creation of the NAM portal that targets to cover 585 mandis across India: 250 in the current fiscal, 200 in 2016-17 and 135 in 2017-18.

The idea of integrating the existing APMC markets through a common e-platform has come from Congress-ruled Karnataka. The state government has established Rashtriya e Market Services Private Limited, a 50:50 joint venture with NCDEX Spot Exchange, to offer an automated auction platform for connecting all the mandis in Karnataka. Already, 55 of the 155 main market yards have been integrated into a single licensing system through this platform.

Mega irrigation plan cleared

Moving to improve farm productivity and reduce dependence on the monsoon, the government has approved spending of Rs 50,000 crore over the five years to expand irrigation in rural areas.

Finance Minister Arun Jaitley said: “The major objective of the Pradhan Mantri Krishi Sinchai Yojana is to achieve convergence of investments in irrigation at the field level… expand cultivable area under assured irrigation.”

Source: ENS