India is an agrarian economy with one-third of its population depending directly or indirectly on agriculture. India has moved from coming to the brink of starvation, to becoming a food-surplus economy today. This was possible due to the efforts of all key stakeholders during the Green Revolution. In 2016 the Prime Minister of India revealed the government’s ambitious target- ‘Doubling Farmers’ Incomes by 2022′ and in that regard, marketing of agricultural produce is a key component.
Agriculture marketing includes all the activities, agents, and policies involved in the flow of agricultural products from farm to folk. They include but are not limited to assembling, grading, storing, and movement of products. Agro-commodities are perishable, seasonal, bulky, and high nature dependent, making them different from manufactured commodities. Due to their peculiar characteristics, government support becomes important. Thus, the Indian government has introduced many laws and schemes to support Indian farmers since independence.
Government Measures to Improve Agri-Marketing:
The growth of this sector is key in employment creation, infrastructure development, and an increase in average agricultural incomes. Central and state governments have taken many measures in that regard
A. Infrastructure And Logistics:
As per the FAO, more than 40% of food produced is wasted in India. This is due to the lack of investments in necessary infrastructure. Agriculture Infrastructure Fund (AIF) is a Central Sector Scheme, announced in 2020, to spur the creation of infrastructure at the farm gate. This facility will provide medium to long-term debt financing for projects that take time to build and provide returns. Infrastructure facilities like cold-chain storage, warehouses, transport networks, grading, food-processing units, e-trading points, and so on. Rs 1 Lakh crore will be loaned by banks to Farmer Producer Organisations(FPOs), Self Help Groups (SHGs), Co-operative societies, Agripreneurs, etc to build this infrastructure. Since its inception in 2020, the government has disbursed loans worth Rs 2071 crore for close to 4000 projects so far in states like Madhya Pradesh, Karnataka, Uttar Pradesh, Rajasthan, and so on.
- Rashtriya Krishi Vikas Yojana – Remunerative Approaches for Agriculture and Allied Sectors Rejuvenation (RKVY – RAFTAAR) re-introduced in 2017 focuses on building pre and post-harvest infrastructure and also aims to improve nurture and agri-business environment in India.
- Operation Greens is on the lines of Operation Flood and it is a scheme launched to revitalize the Tomato, Onion, Potato (TOP) supply chain. Since, these crops are essential in the Indian household, stable supply at affordable prices throughout the year is important. In 2020, the Ministry of Food Processing Industry launched Market Intelligence and Early Warning System (MIEWS) to monitor the prices of TOP crops and generate alerts for farmers. It also provides information related to prices, yield production, imports, and exports, helping in decision making.
- Farmers find it difficult to access transport facilities because of low output and high transportation costs. Lack of road and rail connectivity in remote areas is another factor. Kisan Rail Services were started in October 2020 to transport perishable produce like fruits and vegetables. Temperature-controlled Perishable Cargo Centres have been established at Nashik, Varanasi, Ghazipur, Fatuha, and so on. Between 2020 and Feb 2022, Kisan Rail has completed 1000 trips, and close to 4 lakh tonnes of perishable produce – fruits, vegetables, poultry, and dairy has been transported. Kisan Rath mobile app has been developed to facilitate the Farmers, Farmers Produce Organisations (FPOs), and Traders in hiring vehicles for the transportation of agri-produce.
B. Marketing of Produce:
- Reforming APMC Mandis: The monopoly of APMC Mandis needs to be reduced to ensure competition and choices for farmers. The processes need to be streamlined, a unified licensing regime for traders is required, new Mandis need to be set up close to farmers and market fees need to be rationalized. Changes in APMC laws are necessary to enable private players to set up Mandis. The Rashtriya e-market Services Ltd. (ReMS), a joint by the Karnataka government and NCDEX Spot Exchange, offers automated facilities like weighting, invoicing, market fee collection, accounting assaying facilities in the markets, facilitates the warehouse-based sale of produce and price dissemination. Mandis in Karnataka have also been integrated into a single licensing system. The Karnataka model is enabling the ‘ease of doing business and needs to be replicated by other states Mandis need to be built close to the farmers. The Swaminathan Committee Report envisages a mandi within a 5km radius of a farmer.
- Electronic National Agriculture Market (e-NAM): This envisages a pan-India market by virtually linking existing APMC Mandis across the country. This will increase market access for farmers’ produce and provide new opportunities to them. It also provides information about consumer preferences. Till 31st December 2021, Government data shows that more than 1,000 Mandis (14%) across 18 States and 3 Union Territories have been linked.
- Direct Marketing: The layers between producers and consumers needed to be cut to ensure benefits to both- farmers and consumers. Examples of farmers’ markets include- Apni Mandi in Punjab and Rajasthan, Hadapsar in Pune, Rythu Bazars in AP, and Uzhavar Santhai in Tamil Nadu. These experiments need to be replicated In other states.
C. Innovative Organisation Of Farmers:
86% of Indian farmers are small and marginal and are still exploited by middlemen. To solve this challenge, governments have been pushing for the organization of small and marginal farmers in Farmer Producer Organisations (FPOs) and Self Help Groups (SHGs) to link them to benefits that come with economies of scale and injecting professionalism in their management. Schemes like ‘Formation and Promotion of 10,000 FPOs‘, implemented by various agencies like NABARD, Small Farmers Agri-Business Consortium (SFAC), and NAFED, will help in building capacity and enabling access to credit and services to farmers while reducing marketing costs. NABARD has promoted close to 3000 FPOs. Government estimates reveal that when farmers are members of FPOs, they get 40%-60% additional benefits.
D. Risk Reduction:
Indian farmers deal with multiple risks. These have increased due to challenges like climate change. To reduce these uncertainties and instill a sense of security, the government has introduced a crop insurance scheme named PM Fasal Bima Yojana in 2016. It covers risks at a low premium.
Social security schemes like PM-KISAN, launched in 2019, are a Direct Benefit Transfer scheme that provides Rs. 6K per year as income support to small farmers. This helps in supplementing their financial needs in times of distress. An IFPRI-ICAR study in Uttar Pradesh reveals that the scheme, along with agricultural advisory services, can pull farmers out of poverty. Till 31st December 2021, Rs 1.8 lakh crore has been disbursed under the scheme and money has reached more than 10 crore beneficiaries.
Conclusion:
In spite of multiple government schemes and initiatives over the years, many challenges remain. Systems built to protect farmers have outlived their utility. Changes in laws like the Essential Commodities Act, Agriculture Produce Marketing Acts of states are necessary to create an enabling framework and encourage private sector investment. Since Agriculture is a state subject, the implementation of reforms depends on the states. This makes pan-India reforms a slow and uneven process. The government needs to hold broad-based consultations with stakeholders and re-introduce the Farm Laws with the requisite changes. The shift from a supply-pushed to a demand-led production system is only possible with the creation of a strong agri-marketing ecosystem. All the schemes and programs mentioned above need to be implemented on mission mode to realize the goal of ‘One Nation, One Market‘.