1 ICRISAT Development Center Transforming Agricultural Marketing in India: Linking Farmers to National Gateway and e-markets Status and a Way Forward

Now… Primary or Periodic Markets (haat/bazaars) neglected basic amenities absent. Low density of regulated markets in some States- farmers have to travel long distances. APMCs – professional management inadequate. Licensing systems creates entry barrier to new trader/buyers. Multi-point levy of market fee (0.5 to 2%) and multiple licensing. Restrictions on movement of goods inter-state and even intra-state. Condition of cattle markets most appalling.

Key issues Too many intermediaries high cost of goods and services. Inadequate infrastructure storage, sorting, grading or post-harvest management. Private sector unwilling to invest in logistics or infrastructure under present conditions. Price setting mechanism not transparent. Mandi staff- inadequate capabilities. Market information – asymmetrical and access is not easy. Essential Commodities Act impedes free movement, storage and transport of produce.

Way Forward

Better Assaying and storage Virtuous cycle of next generation agricultural marketing

Way Forward

Way forward

Way Forward National Agricultural Market Objectives Allowing interplay of local demand and supply, duly reckoning aggregate national demand and supply for efficient price discovery in every local market. An efficiently discovered price leading to a better return to the producer, thereby enhancing the viability of the agricultural sector. Increased price information for the farmer to help in making planting decisions and enabling to effectively negotiate forward contracts. Lower costs and time taken for transaction. Availability of pledge loan facility to avoid distress sale.

Way Forward The linkages of the proposed SPV

Way forward Livestock market DAISY &NADAX

Management system

Suggested Action Plan Group action/collectives-Pos/PCs/FPOs/Associations to link small farmers to markets. Transaction facilitation for inputs and produce. Improving competition through value chains. Create better conditions for investment in agriculture marketing infrastructure and logistics. Good governance: Government as a facilitator and not regulator. Co-existence of regulated mkts and emerging formats of marketing. Marketing extension as a strategy to link farmers to mkts.

Proposed activities Organization Anticipated immediate role Sources of fundsAnticipated future roleRegulation Warehouse management companies Market for these organisations is negligible at present. Predominantly private. Scope for joint or public sector firms Employed by warehouses for facility management and logistics. Market. SPV to ensure that Warehouses In private, public or joint sector Private, PPP or public funds Enter into contracts with market committees. Network with smaller storage places with improved infrastructure and mobile testing facility. Warehouse Development and Regulation Act. Market Committees – existing local institutions APMC regulator Market fee (Rationalised), Budgetary support, and rent Licencing of traders, warehouses State Agricultural marketing Board Testing laboratories In the private, public or joint sector Private, PPP or public funds Operate in close proximity of APMCs and warehouses. May add mobile services. To be regulated by a separate entity Proposed SPV State level organisation The Market facilitating body at the state level Equity, Budgetary support Provider of online auction marketplace Commodity spot exchange regulator State Agricultural marketing Board Regulation of APMC activities Regulatory charges from APMCs State level regulator. To be a professional body Government of India/ Concerned state Govt. State Agricultural marketing Department Policy making, regulation and administration BudgetPolicy making National agricultural standards organisation (NEW) -Regulatory fees Specifying and disseminating standards, Regulation, accreditation and training Dept. of Agricultural marketing, Government of India Policy, regulation,accreditation, administrationetc BudgetPolicy Universities/ICRISAT /KVKS Technical support/Market extension Budget support from State Govt/ Marketing Boards Advisory/ build farmer groups/Capacity building Government

To sum up… Agricultural market reforms needed urgently Technological up gradation –electronic transaction systems Financial provisions – both private and public National Agriculture Market system Regulatory atmosphere should be conducive Transparency and investment friendly environment Equity and gender inclusiveness Capacity building of all stakeholders Promote PPP models BOOT, BOT, BOO, swiss challenge, hub and spoke models, regional/sectoral

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