Three years after rolling back three controversial farm Bills, the government is set to make another bid to achieve their essential objectives of barrier-free trade in farm produce under a uniform pan-India framework.
According to official sources, a 12-member committee, under the aegis of the Union ministry of agriculture and farmers’ welfare, has recommended a clutch of steps, including allowing direct farm-gate purchases of agriculture commodities by bulk buyers, including organised retailers, without having to go through the state-notified mandis or pay the various levies that the operators of these market yards charge. The set of measures are basically aimed at tilting the terms of trade in farmers’ favour.
Currently, farm-gate purchases of agricultural items take place in a few states like Maharashtra, Uttar Pradesh, Gujarat, Rajasthan and Karnataka, but these transactions are restricted to select commodities for defined periods, and that too, after paying the taxes to the respective Agriculture Produce Market Committees (APMCs).
The new set of proposals by the ministerial panel aims to develop “private markets” that can compete and co-exist with APMCs, but steer clear of the most controversial aspects of the farm Bills that were withdrawn amid sustained farmer protest, like contract farming and purchase agreements between farmers and bulk buyers, including corporate houses, before the start of cultivation.
The panel was set up in June this year with a mandate to formulate a national policy framework for marketing of farm items and suggest measures to ensure remunerative prices to farmers. It has suggested that warehouses, silos and cold storages, including those run by private agencies, be declared as “deemed market yards”.
“APMCs may not sustain long on merely enforcing the marketing regulation and collecting the market fee and other charges, but they have to be service providers for agri-value chain services,” the panel stated in its draft report, which is being circulated among the members.
The committee noted “in direct marketing through farm gate purchase, supply chain is squeezed. The reforms, if actualised on the ground, enhance farmer’s share in consumers’ price and reduces supply chain losses”.
Faiz Ahmed Kidwai, additional secretary, and chairman of the committee, told FE: “We are seeking some uniformity in the agriculture marketing system in the country as the existing system varies across states.”
To align with the proposed national policy, the states and union territories would have to notify state policy on agricultural marketing as the subject falls in the domain of states.
The panel in its report noted though majority of states have made enabling provision for setting up of private wholesale markets, private markets have come up only in a few states.
“It is observed that states have either not framed rules under the Act or have not provided an attractive business model for private entrepreneurs,” it stated.
On declaring warehouses, silos, cold storages as deemed market yard, the committee has stated that this reform has multiple benefits and may prove instrumental in making the agricultural marketing remunerative.
Stating that electronic-national agriculture market (e-NAM), the agriculture ministry’s pan-India digital wholesale market which currently integrates more than 1,400 mandis has expanded, the draft report has suggested a competitive ecosystem must include establishment and operation of multiple e-trading platforms, including e-NAMs in the private sector.
The report stated only some states have allowed in their APMC Acts the setting up and operation of private e-trading platforms.
The committee has noted that a single unified trading licence valid across the states has been adopted by a majority of states/UTs, though unevenly.
It has suggested the state marketing boards to encourage APMCs to improve their income not by imposing hefty market fees and other cess in various names. Market fees on perishables inclusive of all cess, charges, whatsoever, should not exceed 1% ad valorem while currently the levies are in the range of 0.5-3%, the panel noted.
According to the report, organised wholesale marketing in the country is undertaken through 7,057 regulated markets or yards out of which more than 1,100 markets are non-functional. In addition, many state market committees are notified but the market yards not yet established, which may be around 450 in numbers.