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LATEST NEWS UPDATES | Pieces of a market -Ashok Gulati & Shweta Saini

Pieces of a market -Ashok Gulati & Shweta Saini

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published Published on May 28, 2018   modified Modified on May 28, 2018
-The Indian Express

A single national agriculture market, promised by the BJP in its 2014 manifesto, remains a pipe dream. Can the government reform the broken APMC structure in the last year of its term?

In its 2014 Lok Sabha election manifesto, the BJP promised to evolve a single national agriculture market (NAM) in the country with a view to enable farmers to get a better price and consumers to pay a lower price for agri-produce, a win-win situation at both ends of the agri-value chain. After four years, it is only legitimate to ask how far the government has moved on this front. The short answer is very little. An overwhelming majority of farmers still relies on the same broken system of markets under the APMC, which is monopolistic and rent-seeking, with high commissions, especially for perishables.

In this article, which is the third in a series to evaluate the performance of Modi government in the agri-food space since May 2014, we track the government’s progress on agri-marketing reforms.

It may be interesting to note that it was during Atal Bihari Vajpayee’s tenure as prime minister that some reforms in domestic agri-markets were attempted when a model Agricultural Produce Marketing (Regulation) Committees (APMC) Act 2003 was suggested to the states. As many as 22 states have adopted it in some form, yet it failed to transform the agri-marketing structure in India. The system kept suffering from highly fragmented markets with insufficient infrastructure. Levies and intermediation fees remained high and uneven across states and APMC licensees monopolised trade, leading to rent-seeking and a lower share for farmers in the consumer’s price.

It was against this backdrop that the BJP’s 2014 election manifesto promised to create a unified national agricultural market (NAM), which would reduce the costs of intermediation and wastages, benefiting farmers as well as consumers. In April 2016, a NAM scheme was launched. The Union government budgeted Rs 200 crore for two years and proposed a one-time grant of Rs 30 lakh (later increased to Rs75 lakh in Budget 2017-18) to every mandi which joined the NAM platform. There were three preconditions for any state to come on-board the NAM: They had to ensure (i) one trading license for the entire state, (ii) have a rationalised single levy/market-fee, and (iii) ensure electronic trading/auction. But satisfying these pre-conditions necessitated reforms in the APMC Act and so, rightfully, the government came out with the Agricultural Produce and Livestock Marketing (Promotion and Facilitation) (APLM) Act 2017. It shifted the focus from regulation (under APMC) to promotion and facilitation (under APLM), setting the right tone for agri-marketing reforms.

How far has it moved and whether farmers and consumers have gained from it is the moot question.

As per the Dalwai Committee Report 2017-18 (Volume IV), there are close to 29,547 marketing points. Of these, 22 per cent or 6,615 are regulated markets under the APMC and 22,932 are regional periodical markets (RPMs). On an average, a farmer gets a regulated market in the radius of about 12 km and an RPM in a radius of about 7 km. Out of these 6,615 markets, the NAM scheme aimed to bring 585 markets (9 per cent) on the e-market platform by the end of the financial year 2017-18. Quite commendably, as on March 2018, all targeted mandis, that is, 585 that are in 16 states (see infographic) and two Union Territories (Chandigarh and Puducherry) have been integrated with the NAM platform.

Please click here to read more.

The Indian Express, 28 May, 2018, http://indianexpress.com/article/opinion/columns/narendra-modi-national-agriculture-market-agriculture-sector-farmers-distress-bjp-election-5193566/


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