Agriculture

6 reasons why India has failed to solve the riddle of agriculture marketing

A parliamentary panel report recently submitted in the Lok Sabha has outlined the reasons

 
By Kiran Pandey
Last Updated: Monday 07 January 2019
Agri Marketing
A 'Mandi' in Muzaffarnagar, Uttar Pradesh. Credit: Agnimirh Basu/CSE A 'Mandi' in Muzaffarnagar, Uttar Pradesh. Credit: Agnimirh Basu/CSE

Farmers’ protests have ruled the headlines consistently in the last two years and their distress over low farm prices, poor logistics for transport and government-assured purchases has been clearly evident. While the 14 volumes of the Dalwai Committee Report on doubling farmers’ income released last year provided a road map for transition from a mere Green Revolution to an Income Revolution for farmers, a parliamentary panel report submitted in the Lok Sabha on January 3 underlines that the country is yet to solve the 'Riddle of Agriculture Marketing'. Here are its 6 reasons:

1.69 to 73% of the rice and wheat produced in 14 years was not procured by FCI/state agencies

This huge gap between production and procurement meant that the farmers have not been able to get remunerative pricing for their produce said the parliamentary panel report placed in the Lok Sabha on January 3. “Food Corporation of India (FCI) and state government agencies are one of the main platforms available to the farmers for sale of agriculture produce, but these agencies cannot be a wholesome substitute for an efficient marketing system,” said the 4th volume of the Dalwai Committee Report on doubling farmers income.

The committee was right, because these agencies responsible for procuring food grains like rice and wheat have been able to procure only 358.82 million tonnes of wheat as against a production of 1,340.02 million tonnes (26.77 per cent) and 487.60 million tonnes of rice as against a production of 1,557.75 million tonnes (31.30 per cent) during Financial Years 2002-03 to 2017-18.

This means that since 2002, close to 69 to 73 per cent of the production left with the farmers was sold outside these agencies and probably below the Minimum Support Price (MSP) too.

Small and marginal farmers account for 86.2 per cent of all farmers in India and are affected the most. These farmers with less than two hectares of land, lack access to government procurement facilities for agriculture produce due to various reasons such as small agriculture surplus, distance to the procurement centre, delay in payment, cumbersome bureaucratic procedure etc. These factors and the lack of an alternative marketing platform led to a situation where farmers do not have any option but to sell their produce to middlemen with very little or no profit at all.

No government in the past has been pro-farmer. Whether the United Progressive Alliance in the past or the current National Democratic Alliance, the majority of our farmers have not been able to get benefits of bumper production due to limited marketing platforms. Noting this, the committee report stressed on the need to create alternative platforms for marketing of agriculture produce which are easily accessible to the farmers and also ensure access to end consumers.  

2.Shortage of APMC markets in the country

Principal Market Yards (PMYs) and Sub Market Yards (SMYs) set up by Agriculture Produce Marketing Committee (APMCs) in various states are the main marketing infrastructure for agricultural produce in the country.

There are 6,630 APMC markets in 23 States and 5 Union Territories (UTs). But the committee was surprised to know that in 5 statesBihar, Kerala, Manipur, Mizoram and Sikkim—these markets do not exist. Further, there is no APMC market in the UTs of Andaman & Nicobar Islands, Lakshadweep, Daman & Diu and Dadra & Nagar Haveli too. Noting this, it has asked the government to create marketing infrastructure in these places.

3.Regulated markets far off from farmers

Twelve years ago, the National Commission on Farmers said that a regulated market should be available to farmers within a radius of 5 km (corresponding market area of about 80 sq km). However, the situation on the ground is very disappointing.

The committee was disappointed to note the variation in the density of regulated markets across the country that ranged from 116 sq km in Punjab to 11,215 sq km in Meghalaya. In fact, the all-India average area served by a regulated market is 496 sq km as against 5 km as outlined above. To meet the norms of the National Commission on Farmers, India needs 41,000 markets, the Union Ministry of Agriculture said in its reply to the committee.

4.Poor state of infrastructure in APMC markets

The poor state of infrastructure in these markets is another important aspect which continues to be ignored. Just 15 per cent of the APMC markets have cold storage facilities. Weighing facilities are available in only 49 per cent of the markets.

These APMC markets also fare poorly in banking, internet connectivity and drying facilities. The civic infrastructure at most APMC markets is also in a very bad shape, causing inconvenience to farmers. So, the Centre has been asked to start consultations with the concerned state governments to increase the number of agriculture markets in the country and improve civic infrastructure, banking facility, digital connectivity and other facilities in APMC markets. The government has been asked to devise a Centrally-sponsored scheme for modernisation of APMC markets in India.

5.Poorly implemented regulations of the APMC Act

Poor implementation of the APMC Act due to the corruption and monopoly of traders and middlemen ensured that these markets did not work in the interest of farmers. But the model APLM Act, 2017 that was meant to facilitate market access and provide freedom to the producers to sell their produce to the consumers has been adopted by just two states —Punjab and Uttar Pradesh. So, a radical reform in APMC Act is required to ensure justice for farmers in the country, said the committee.  

6. At least one gramin haat must be present in each Panchayat

Even though ‘Gramin Haats’ with adequate infrastructure facilities are a viable alternative for agriculture marketing, the government has not acted on the recommendation of upgrading rural markets into business hubs.

So, taking a note of the agriculture ministry’s  ‘Gramin Agricultural Markets (GrAMs) scheme',  the committee said that upgrading just 4,600 out of an existing 22,000 Gramin Haats is too low a number in a country that consists of more than 6 lakh villages. The ministry has been asked to raise the target of Gramin Haats to be modernised under the GrAM scheme. It should also be ensured that at least one Gramin Haat is present in each Panchayat of the country.

It shows that prioritising marketing management and connecting farmers with the consumers is one of the keys to overcome agricultural stress faced by our farmers. Providing a critical insight into the issues to connect farmers with the consumers, it demands serious action from the state and the central government just a few months ahead of the 2019 Lok Sabha elections. 

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