Be Mains Ready

Approach

• Identify the keywords in the question to focus.
• Briefly point out recent incidents of agricultural distress.
• Point out the need for reforming agricultural sector.
• Highlight some ways of increasing production
• Identify the issues in agriculture marketing.
• Give solutions to address the issues.
• Any report or data for value addition
• Give a futurist way out to solve the crisis.

Introduction

• Recent incidents of farmers reportedly dumping their bumper produce of tomatoes and onions and emptying cans of milk into drains is a clear evidence of poor marketing scenario for agricultural produce in the country.
• Agriculture development in India has been viewed by and large in the context of increasing the output rather than welfare of the farmers.
• Under this perspective, the Government of India in 2016 announced to double the farmers income (DFI) by 2022 by shifting the focus from agricultural output and food security to income security.

Need

• To arrest the increasing farmers sucide.
• Checking rural migration to urban areas.
• Increase the productivity of farming sector.
• To make agriculture an attractive destination for farmers and job seekers

Strategy for Increasing Production

• Crop diversification
• Integrated Farming System
• Rapid diffusion of new technological approaches
• Emphasis on improving penetration of micro-irrigation.

The National Commission on Agriculture (1976) as well as the NCF (2006) had categorically emphasised that higher output alone will not provide higher income to farmers unless it is well marketed.

Issues In Agriculture Marketing

• Absence of marketing linkages or guaranteed buyback arrangements
• Inadequate storage facilities (particularly for perishable produce)
• High transport costs
• Cartelisation by traders
• Distress sales to meet urgent cash requirement
• MSP is announced for around 23 crops but government only procures 3 crops.
• Government procurement facilities are not uniform throughout the nation.
• Price volatility due to cycle of excess and shortages.

APMC

• APMCs technically have multiple buyers, but the system of open auctions for determining prices through transparent bidding is, in practice, non-existent.
• In most APMCs, buyers have to route all purchases through licenced middlemen and these middlemen charge a commission for their “services” — many times, both from the buyer and seller.

To rectify this APMC issue

• The Union Agriculture Ministry has formulated the Model Agricultural Produce and Livestock Marketing (APLM) Act
• The Act seeks to expand farmers’ marketing choices — by allowing private markets (as against only APMCs), permitting direct bulk purchases from the farm gate, declaring warehouses or cold storages as deemed markets, and demolishing the existing concept of a “market area”
• But APLM Act is witnessing opposition, primarily due to the delineation of “market area”, which has a bearing on the earnings of APMCs.

Recommendations

• Single point levy of market fee
• Establishment of private market yards/ private markets managed by a person other than a market committee.
• Establishment of direct purchase of agricultural produce from agriculturist
• To promote and permit e-trading
• Single registration/ license for trade/ transaction in more than one market
• Storage and banking facilities near APMCs
• Promote FPOs in marketing
• Relax/abolish Essential Commodities Act(ECA)
• Creating sufficient infrastructure for storage, like godowns and cold storage, to prevent distress sale.
• Uniform government procurement policy across all major crops to shield farmers from price fluctuations.
• Promotion of food processing industries, that absorb and process the excess produce during bumper cycle, safeguarding farmers’ income and preventing food loss.
• Incentivise export through policy changes.

Reports for Value Edition

The Dalwai Committee on Doubling Farmers’ Income has pointed out that the share of farmers in consumer’s price is very low; which generally varies from 15 to 40 per cent, which was confirmed by the International Food Policy Research Institute and World Bank.

Suggestions

• Shifting agriculture from State List to the Concurrent List.

Way forward

It is time to concede that production and marketing should march together in order to benefit farmers and consumers. Farmers need to be empowered to decide when, where, to whom and at what price to sell. The intermediary culture needs to be scrapped completely. The seasonal spike in prices of perishable commodities that pushes up the food inflation cannot be addressed without market reforms.