Evolution of farmer produce market from zonal to district, to national

One-nation-one-market for farmers needs infra overhaul, may still be few years away

Around 55 years ago, the concept of zone bandi existed with the APMC Act, 1963, forcing farmers to sell their produce to a market yard in their district only. But Union Finance Minister Nirmala Sitharaman did an about turn on Friday when she announced a ‘one nation, one market’, which experts believe could take two-three years to materialise.

Commenting on the announcement, Siraj Hussain, former Union agriculture secretary, said, “One nation, one market will take 2-3 years to take a final shape because farmers and traders are used to dealing in a certain manner, which has to change. This is time consuming.” Relevant infrastructure is needed for implementing the new way of work — a trader having a national licence, buying from a farmer in one state and selling in another, he added.

The concept of one market already exists in India. Rajesh Sinha, managing director (MD) & chief executive officer (CEO) of Neml (NCDEX E-market) operates an online state-level integrated mandi in Karnataka. Here all agricultural produce market committee (APMCs) are interlinked online with farmers and traders dealing there. 

 

 

Farmers’ produce gets sold to the person who offers the highest price in any place in the state. The company has now linked Karnataka farmers with the national electronic mandi or e-Nam. Sinha said, “All market participants in the country are doing things that are required for an online mandi. Traders are doing assaying and grading of produce farmers bring and there are financiers who pay to farmers. Sometimes, traders are the financiers.” 

According to Sinha, the role played by all these participants should be recognised and where needed, their skills must be upgraded. This will make it easy for them to deal with a national electronic platform.

There should be testing laboratories for farm produce, assaying, and collateral management, including providing facilities to finance farmers to hold or store commodities; all these have to happen now in a scientific and formal way with the required regulations followed at every level.

The Rs 1 trillion fund for agri infrastructure development is seen as a major push factor, which will also help expand infrastructure needed for a single national market. 

Actually, e-Nam is the obvious platform for farmers but it hardly handles 10-15 per cent of the actual trading that takes place at the APMC. 

This is despite around 1,000 APMCs linking with that platform electronically.

Sinha suggests that state-level trade, when allowed on a reciprocal basis, eventually will have a national arrangement. Then, storage facilities could come in. e-Nam allows farmers to deposit commodities directly in warehouses recognised in that network and respective states have declared warehouse as a deemed mandi.  The proposed new central law may address this issue differently.

When a farmer finds more choices to sell his produce directly to the highest bidder and when he has the facility to put his goods in the warehouse to wait for right price, he will get a better price. 

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