Indian farmers have long sought the ability to trade seamlessly across state barriers, and the new electronic "e-mandi" platform, which Prime Minister Narendra Modi formally launched on Thursday, is an important step in that direction, even if it does not go all the way. The concept of a barrier-free national agricultural market was mooted in the early 2000s to allow farmers to sell their produce wherever they could get good prices. This would allow them to escape the cartels that dominate local mandis and strangle the freedom to trade, pushing the mark-up between the farm and the table for agricultural produce in India to among the highest in the world. The first-ever National Policy for Farmers brought out in 2007 by the United Progressive Alliance government also mentioned this need. However, getting states on board for full agricultural marketing reform turned out to be difficult. The present National Democratic Alliance (NDA) government instead allocated funds in the 2015-16 Budget for the electronic infrastructure necessary to allow wholesale trading on a national electronic platform.
At present, farm marketing varies not only from state to state but also within the states, with each wholesale mandi being governed by its own Agricultural Produce Marketing Committee (APMC). These mandis require separate licences and they charge different marketing fees. The use of technology is low, which means that there is very little transparency in transactions, which eventually hurts farmers. The new integrated electronic platform begins, in a limited way, to address many of these problems. All 585 major farm markets across the country are planned to be linked to the e-platform by March 2018. Karnataka already has a statewide barrier-free electronic market for farm produce which has resulted in better price realisation for farmers by reaching out to more buyers, including food processors and organised retail chains. The new national platform will broadly follow the Karnataka model.
However, while this platform is being officially called the "national agricultural market", it stops well short of making a real national market a reality. And it is dangerous to presume that a model that has worked well at the state level will automatically succeed at the national level as well. There are too many prerequisites for that to happen. The three most critical among them are a single wholesale trading licence valid across the catchment area, a single-point levy of market fees, and e-auction as the mode for price discovery. Currently, there are too few warehouses equipped with facilities for weighing, grading and standardisation of stocks sold through the electronic platform. Moreover, aggregators would need to emerge that pool together small marketable surpluses of individual farmers for sale to bulk buyers to attract competitive bidding. The Small Farmers Agribusiness Consortium (SFAC), the nodal agency for running the new electronic platform, can serve as an aggregator through its existing or specially created local units.
The starting point for real reform continues to be what it always has been: amendment of the states' APMC Acts strictly on the lines of the Model APMC Act circulated by the Centre in 2003. Many states have changed their marketing laws, but few have followed the model Act in totality. At the root of the half-hearted marketing reforms is the reluctance of states to give up control over APMCs which, apart from giving them political clout, yield handsome revenues for the state exchequers. That is also why many states remain outside even this current and more limited effort to integrate agricultural marketing. Most of the country's important wholesale markets, including those in Azadpur in Delhi and Vashi in Mumbai, have not yet opted to come on board. The Centre would need to do a good deal of canvassing to make more states, especially major agricultural states like Punjab, part of this effort.
