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[op-ed snap] Problem of plenty

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Note4students

Mains Paper 3: Agriculture | Transport and marketing of agricultural produce and issues and related constraints

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The Coweb phenomenon and the possible solutions of the issue of price-fluctuations in agriculture.


News

 Cycle of boom and bust in the prices of agricultural goods

  1. Over the last few weeks, across India the price of potatoes has fallen sharply after a year of bumper production
  2. Many distressed farmers have left their produce to rot on the roads, and in cold storage facilities
  3. Curiously, potato prices were many times higher just months ago amid scarce supply
  4. Last year, the price of other produce like red chilli, tur dal and tomato witnessed a similar trend of steep falls compared to the previous season

Explanation behind this trend

  1. The sharp swing in prices has been explained by the Cobweb phenomenon
  2. Farmers tend to increase the production of certain crops in response to their high prices during the previous season, which in turn leads to a supply glut that causes prices to crash
  3. The cycle repeats each passing year, with the lag between price and production causing a huge mismatch between supply and demand
  4. The boom-and-bust cycle is the result of a broken supply chain that is over-regulated

Temporary measures by the government

  1. These measures can come in the form of fiscal measures such as farm loan waivers, a higher minimum support price for farm produce, or some combination of the two
  2. Such relief measures that temporarily ease the pain on farmers, however, will fail to make a significant difference to their lives in the long run

Permanent solution

  1. Any permanent solution to the problem of agricultural distress will have to deal with the challenge of price fluctuations
  2. In the absence of a robust market for buying and selling forward-looking contracts, farmers are left to fend for themselves against severe fluctuations

The way forward

  1. The government must resolve to address these structural issues, and not limit itself to ad hoc policy measures in firefighting mode.
  2. There is a need to give farmers not just a better, but also more stable, return on their crops

Panel sets out an action plan to make agriculture profitable

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Note4students

Mains Paper 3: Agriculture | Issues related to direct & indirect farm subsidies & minimum support prices

From UPSC perspective, the following things are important:

Prelims level: Rashtriya Krishi Vikas Yojana

Mains level: Target of doubling farmers’ incomes in India and measures being taken to achieve it


News

Action plan for doubling farmers’ incomes

  1. A top government panel has proposed major reforms to the existing administrative structure
  2. This is a part of detailed action plan for doubling farmers’ incomes

Important suggestions

  1. Overhaul of the Union agriculture ministry
  2. Setting up a three-tier planning and review mechanism through district, state and national level committees
  3. Conducting an annual ease of doing agribusiness survey

About the committee

  1. The committee on doubling farmers’ incomes (DFI), was set up in April 2016
  2. The DFI committee is tasked to formulate the strategy to double real income of farmers between 2015-16 and 2022-23

Restructuring agriculture ministry

  1. The committee suggested revamping the marketing division of the agriculture ministry into a division of marketing and agri-logistics
  2. It suggested upgrading the Rashtriya Krishi Vikas Yojana (RKVY) division to a ‘division of investment in agriculture’ to promote strategic investments in production and post-production facilities
  3. To capture value from agri-commodities, the committee has suggested that the crops division be restructured as the ‘division of crops and primary processing’ to focus on primary processing of harvested produce at the farm gate

Other policy suggestions

  1. The report suggested liberalizing the definition of a ‘farmer’ to include cultivators, lessee farmers and sharecroppers
  2. The report also suggested a national level policy and planning committee represented by ministers of agriculture, commerce, rural development, water resources, food and consumer affairs, and food processing, among others
  3. Its proposed task would be to review the policy framework and progress in doubling farmer’s incomes, review trade policy, budgetary allocations and status of farmers’ welfare

Back2Basics

Rashtriya Krishi Vikas Yojana

  1. It was started to incentivize the states in order to increase their investment in Agriculture and allied sectors
  2. It is a State Plan scheme
  3. The eligibility of a state for the RKVY is contingent upon the state maintaining or increasing the State Plan expenditure for Agricultural and Allied Sectors
  4. The baseline expenditure is determined based on the average expenditure incurred by the State Government during the three years prior to the previous year
  5. The preparation of the district and State Agriculture Plans is mandatory
  6. The scheme encourages convergence with other programmes such as NREGS
  7. The pattern of funding is 100% Central Government Grant
  8. It is an incentive scheme, hence allocations are not automatic

[op-ed snap] Agriculture needs a reforms package

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Note4students

Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

From UPSC perspective, the following things are important:

Prelims level: Basics of the MSP. procurement, etc.

Mains level: The issues related to the MSP are specially mentioned in the Mains Syllabus.


News

Why are farm incomes unattractive?

  1. Due to the absurdity of policies features among them
  2. The overriding objective of price stability, over time, has tilted farm policy in favour of the consumer, the numerically larger vote bank.
  3. Trade and price controls are highly restrictive, and mostly anti-farmer
  4. The farmer is forced to sell in the domestic market where prices tend to be lower than global agricultural prices
  5. Incompetence and politics have ensured that policies are failing to serve even consumers

Government’s control on prices in agri-market

  1. Agri-markets are not free
  2. Governments seek to influence prices, to smoothen them out. In the absence of state intervention, prices soar in bad weather years and plunge in good weather years, hurting consumers and farmers
  3. The tools in governments’ hands are import and export controls, buffer stocks management and minimum support prices (MSPs)

What should be the MSP policy of government?

  1. The MSP, the price at which the government offers to procure from farmers, is an economic policy tool which requires technical acumen
  2. A sensible policy would be to
    (1) buy from farmers when market prices are depressed and
    (2) sell stocks in the open market when prices are elevated
  3. In the first scenario, if the MSP is pegged higher than the market price, the procurement will raise the market price, boosting farm incomes
  4. In the latter, by offloading its stocks at a price lower than the market price, government can cushion consumers against excessive inflation
  5. The buyers of the subsidised sales (an efficient Public Distribution System) are directly benefitted, but as the sales also lead to lower prices in the open market, all consumers gain

Issues related to procurement(2016-2017)

  1. Procurement works effectively only if trade controls and stocks management are aligned with it
  2. How these tools tend to be deployed in a counterproductive manner was evident in the example of pulses in 2016-17
  3. Despite a bumper harvest, after a steep MSP hike and good rains, export controls and stocking limits for private traders were retained
  4. And a record volume of imports allowed to be shipped in
  5. The resulting glut sent the market price down, below the MSPs, rendering it pointless
  6. The looming losses set off farmer protests seeking even higher MSPs

Comparison with other countries

  1. Even after four years of systematically aggressive hikes, Indian MSPs of rice and wheat are less than support prices in China and other Asian countries

What should be done?

  1. The bulk of agriculture is not sufficiently productive to be able to gainfully engage young rural Indians and so policy attention must be on building industry
  2. The upcoming Budget presents an opportunity to revisit strategic choices

Back2basics

Issues related to direct and indirect farm subsidies and minimum support prices

[op-ed snap] A law for the farmer

Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The newscard comprehensively discusses the need of forthcoming Pesticide Management Bill 2017. As, current laws are not effective enough to deal with the issues.


News

What is the issue?

  1. Recently, about 50 farmers have died due to the use of pesticides in Maharashtra and over 1,000 have suffered critical ailments
  2. The current Insecticides Act, 1968 is archaic
  3. The agriculture ministry during UPA rule had prepared a Pesticide Management Bill 2008, which was scuttled in Parliament
  4. The forthcoming Pesticide Management Bill 2017 can address the many anomalies

Sale of misbranded pesticide

  1. Farmers continue to commit suicide in large numbers and one primary cause, not even discussed in hushed tones, is the sale of misbranded (substandard, spurious, expired) pesticides
  2. Along with pesticide misuse (use, timing and quantity), the inordinate use of antibiotics in the poultry and dairy industry is a major reason for human diseases, monumental species loss and environmental damage
  3. The value of failing crops and the costs borne by farmers as a result of excessive farm inputs cannot even be properly assessed

Ineffective Laws

  1. The larger pesticide companies (brand owners and marketing agents) generally outsource production to smaller manufacturers
  2. But they can’t be prosecuted because the Central law only stipulates prosecution of the manufacturer
  3. When the licence to sell pesticides is issued, applicants declare a “responsible person” to be held accountable for violations
  4. The person is usually a low-paid employee, who over time becomes unreachable. So, even serving the prosecution notice becomes difficult

Testing of Pesticides 

  1. Most pesticide samples simply don’t fail the test
  2. This is not only because conniving officers don’t follow procedures
  3. But for a “sample failure” to be legally valid, samples have to fail consecutively
  4. The cumbersome documentation procedure allows the second sample to expire before it’s tested, rendering the process invalid. Thus, the crime cannot be established

What should be done?
Two simple notifications can result in a giant leap

  1. One, the Centre should make it mandatory for all agriculture-input packaging to have a bar code giving product information
  2. The bar code will sync with the GST and the e-way bill
  3. Second, states should make retailers log all agriculture input sales onto state government servers, allowing for traceability from the factory floor to farmer’s field and for regulation enforcement

Digitisation at the ground-level can help

  1. A data bank of agriculture input sales will give unparalleled benefits
  2. The ensuing machine-learning revolution on farms will allow for evidence-based interventions, officer promotion evaluation and better governance
  3. Digitisation at the ground-level will drive personalised and data-driven farm extension, realistic crop loss compensation and insurance
  4. Most importantly, it will facilitate a farmer grievance redressal mechanism to make the system accountable

Modi govt plans bold move to fix rural distress

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Note4students

Mains Paper 3: Agriculture | Issues related to direct & indirect farm subsidies & minimum support prices

From UPSC perspective, the following things are important:

Prelims level: minimum support price (MSP), market assurance scheme

Mains level: Farm distress across country and ways to resolve it


News

Scheme to prevent distress sales by farmers

  1. The central government, in consultation with states, proposes to launch a new price support scheme for farmers to prevent distress sales at prices below the minimum support price (MSP)
  2. Under the proposed “market assurance scheme”, states will be free to procure all crops from farmers for which MSPs are announced
  3. This will be except rice and wheat, which are already being procured by the centre for the public distribution system

Working of the scheme

  1. Under the new scheme, the centre will compensate states for any losses capped at 30% of the procurement cost
  2. It will be the states’ responsibility to dispose of the procured crops
  3. The proposed scheme will ensure an assured price for the farmer, mitigating the price risks faced by farmers after harvest

States have discretion

  1. States will take ownership of the scheme, including which crop to procure and in what quantities when wholesale prices drop below MSPs
  2. State governments will be free to use the procured crops for targeted nutrition-support programmes such as mid-day meals for schoolchildren or sell them in the open market 

Why this scheme?

  1. The proposed scheme comes against the backdrop of a record harvest of cereals and pulses in 2016-17, which led to wholesale prices plunging below MSPs
  2. The price crash has led to protests by farmer groups across the country since June, with demands for remunerative crop prices and loan waivers

 Back2Basics

Minimum Support Price (MSP)

  1. Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices
  2. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops
  3. This is done on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP)
  4. In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, govt. agencies purchase the entire quantity offered by the farmers at the announced minimum price
  5. Minimum support prices are currently announced for 24 commodities including seven cereals (paddy, wheat, barley, jowar, bajra, maize and ragi); five pulses (gram, arhar/tur, moong, urad and lentil); eight oilseeds (groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed); copra, raw cotton, raw jute and virginia flu cured (VFC) tobacco

[op-ed snap] From Plate to Plough: Agri-futures, like China

Note4students

Mains Paper 3: marketing of agricultural produce and issues and related constraints
Prelims level: not much
Mains level: Steps Needed for developing agri-futures to ensure price discovery and thus, raise farmer’s income.

News

Context
  1. In November, prices of most major kharif crops crashed below their respective minimum support prices (MSPs), triggering farm distress.
  2. One of the main reasons: planting decisions of our farmers are based on last year’s prices, rather than the prices expected at the time of harvest.
  3.  Signals indicating future prices are largely absent as agri-futures have been decimated by excessive controls and regulation.
  4. It is time to think afresh and resurrect agri-futures in India.
Agri-futures: India 
  1. In 2003, the Atal Bihari Vajpayee government’s decisions to allow futures markets in India.
  2. In the initial years — 2003-2007 — agri-futures did show promising growth.
  3. Around 2007-08, hit by global food crisis, but gained momentum again and peaked in 2011-12.
  4. However, since then, there has been heavy government intervention in agri-futures resulting in their near collapse.
  5. Government intervention: higher margin requirements and absolute suspensions.
Agri Futures: China
  1. The agri-futures market was introduced in the early 1990s in China.
  2. It struggled for a decade, but thereafter Chinese agri-futures had a robust growth.
  3. By 2016, it was at the top of global chart, crossing the 1,000 million mark, dwarfing India’s 20 million contracts in the process.
pasted1
Image Source
Issues in India’s Agri-futures
  1. Abrupt interventions, with frequent changes in stocking restrictions on private trade.
  2. Suspensions of agri-futures, as well as high margins, have been targeted more towards sensitive commodities in the common man’s food. Eg. Tur, Urad.
  3. High margins for sensitive commodities like 100% for potato, reflect the government’s intention of blocking their futures trade.
Lessons from China: Steps Needed

No Sensitive Commodities

  1. Stay away from sensitive commodities (for example, common rice, wheat), till futures gain momentum and some depth.
  2. Focus on less sensitive commodities like oilseed complex (oilseeds, meals, and oils), feed (maize), cotton, basmati rice and spices.
  3. Once markets are developed and the regulator has a higher degree of comfort, the country can diversify to other commodities
Only Delivery-based contracts
  1. The regulator should allow only delivery-based contracts, at least till markets deepen.
  2. This will assure government that speculators are not rigging markets.
Encourage State Trading Enterprises
  1. The government of India should encourage state trading enterprises (STEs) to trade on the agri-futures platform.
  2. This will boost the government’s confidence in agri-futures as it will have ample information from its STEs.
  3. India’s STEs like the MMTC, STC, PEC or even the FCI can participate on the agri-futures platform, helping it to deepen.
Conclusion
  1. Lastly, it has to be recognised that developing agri-futures is as much the responsibility of the regulator as that of commodity exchanges.
  2. Both need to work in harmony for the benefit of various stakeholders.

[op-ed snap] From Plate to Plough: What Gujarat did yesterday

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Note4students

Mains Paper 3: Agriculture | Transport and marketing of agricultural produce and issues and related constraints

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The possible solutions given in the article can be mentioned in the Mains paper.


News

Context

  1. The article talks about the Gujarat agricultural model from 2003 to 2014, and how it can help the current bad situation of agriculture situation in country.

Agriculture Growth of Gujarat from 2003 to 2014

  1. Gujarat’s agri-GDP registered an unprecedented growth of 8 per cent per annum during 2002-03 to 2013-14, way more than the all-India figure of 3.3 per cent per annum 
  2. Gujarat’s agri-growth was even higher than that achieved by Punjab during the Green Revolution’s

Expectations from the Gujarat model

  1. When Modi became the prime minister in May 2014, one was expecting that the “Gujarat model” would be extended to many states, with the fine-tuning to suit each state’s requirements
  2. But the growth of all-India agri-GDP in the first three years of NDA rule has come down to 1.8 per cent

Is deficient rain the reason behind this situation?

  1. Deficient rain in 2014-15 and 2015-16 is of course one factor behind this poor performance
  2. But there were bumper harvests in 2016-17, yet farmers suffered due to a collapse in agri-prices
  3. The advance estimates of 2017-18 do not indicate much recovery

Reasons behind Gujarat’s excellent agri-performance during 2003 to 2014
First

  1. The Atal Bihari Vajpayee government’s bold decision to allow the commercial use of Bt cotton became a catalyst for change, from which Gujarat benefited the most
  2. From nowhere in 2002, Bt cotton spread to more than 90 per cent of the area under cotton in Gujarat by 2014

Second

  1. China is taking over Syngenta for $43 billion to access the best technologies for its farmers
  2. While the Centre is creating conditions that may force companies like Monsanto to quit
  3. This government is literally reversing the benefits that the Atal Bihari Vajpayee government bestowed to farmers

Third

  1. Gujarat government at that time provided basic infrastructure to farmers — irrigation, power and roads enabled the easy adoption of Bt cotton, and benefited other crops and the livestock sector as well
  2. Currently, Gujarat has one of the best road-network in the country, of which 89 per cent are pucca/surfaced roads

Fourth

  1. Good marketing institutions propelled Gujarat agriculture, especially its dairy industry
  2. The AMUL model of directly buying milk from farmers’ cooperatives and processing and distributing it through millions of outlets ensures that farmers receive 75-80 per cent of the consumers’ price
  3. This model is worth extending to other commodities, especially fruits and vegetables, bypassing the mandi system

The way forward

  1. Enable farmers to access best technologies and best markets at home or abroad
  2. Invest in basic infrastructure that can give access to water for irrigation, power and rural roads
  3. Create AMUL type institutions for other commodities to enable farmers to access high share of consumers’ price
  4. Export bans or high minimum export prices for agri-products are anti-farmer

[op-ed snap] From plate to plough: Plan for the agri-futures

Image result for agri-futures

Image source

Note4students

Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

Op-ed discusses about the India’s poor performance in Agri-future trading and lessons we can learn from Chinese success in Agri-future trading.

Once you are done reading this op-ed, you will be able to attempt the below.

“The futures market is one way to ensure that farmers’ planting and selling decisions are forward-looking.” Examine reasons for India’s poor performance in Agri-futures trading and give suggestions?

From UPSC perspective, the following things are important:

Prelims level: Futures market, e-NAM

Mains level: Agri-trading in India-problems ,solutions


News

Context

  1. Even after 70 years of Independence, the marketing system for agri-products remains un-supportive to farmers.
  2. The e-NAM aims to create an all-India spot market by creating an electronic platform.

e-NAM, what is required?

  1. For transactions to take place across mandis and states, one has to do much more than installing a simple software.
  2. It needs assaying, grading, sorting, storing, delivering and settling disputes with respect to each transaction.

Agri-futures market

  1. The agri-futures market is one way to ensure that farmers’ planting and selling decisions are forward-looking, and not based on past prices.
  2. This can help smoothen the typical boom and bust problem in agri-prices.

India’s agri-futures trading experience

  1. India recorded the first trade in futures in 1875 in cotton in the Bombay Cotton Exchange, just 10 years after the first trade was consummated in USA.
  2. But India’s agri-futures could not develop much due to a series of suspensions around the Second World War in view of the shortage of essential commodities.
  3. This mind-set continued post-Independence, and only pepper and turmeric were allowed to trade in 1977
  4. In 2003 three national exchanges were set up and all commodities were allowed to be traded in futures markets. But since 2003, 15 commodity futures were suspended, leading to uncertainty in the market.

Problems with Indian agri-futures trading

  1. They are often disrupted by sudden bans or suspensions by the government as many policy-makers have a deep mistrust in the functioning of these markets
  2. Very few farmers or farmer producer organisations (FPOs) trade on futures, which in turn reinforces the mistrust of policymakers.
  3. The overall size of agri-futures in India remains trapped at low levels, and since 2012, it has been tumbling down

Lessons from the Chinese success

  1. China, which started in the early 1990s, and by 2016, it was the largest player in global agri-futures contracts with a whopping share of 69 per cent.
  2. State participation in the futures markets through the State Trading Enterprises
  3. No abrupt suspensions of commodities
  4. Focus on choice of commodities, which are not very sensitive from the food security point of view

Way forward

  1. Well thought-out strategy to pick the right commodities is a better way to develop agri-futures rather than a frequent stop-go policy
  2. India being now the largest importer of edible oils, especially palm and soya oils, these are promising candidates for agri-futures provided global players are allowed to trade in these.
  3. The trust in commodity futures will enhance once more FPOs start trading on agri-futures, and they start gaining directly or indirectly from agri-futures.
  4. SEBI can help incentivise the participation of FPOs on the futures trading platform, but the real onus lies with agri-commodity exchanges, and it is here that the progress has been extremely slow.

 

[op-ed snap] Missing stock is harming our food security

  1. Theme: Spoilage and pilferage of foodgrains.
  2. Background: During April this year, missing stock worth around Rs 20,000 crore was discovered in Punjab’s food purchases.
  3. Concerns: According to the Food and Agriculture Organization, around 40% of the food produced in India is wasted.
  4. Wastage from the public distribution system, which is meant for ensuring food security in the country, makes up almost half of the total.
  5. Considering that India ranked a lowly 97th of 118 nations in the recently released Global Hunger Index, spoilage and pilferage are not things the country can afford.
  6. The way ahead: The concept of a Negotiable Warehouse Receipts system, as proposed by the Shanta Kumar Committee for restructuring FCI, is one way to break the monopoly of state agencies and incentivize farmers. It allows farmers to deposit their produce in registered warehouses for an advance and sell it later when market prices are high.
  7. Strict adherence to quality standards and norms should be made mandatory for the registered warehouses, private or otherwise.
  8. A combination of private and public agencies is essential to handle the vast and diverse agricultural output in the country.
  9. Meanwhile, the FCI should be streamlined and allowed to focus on states’ surplus produce meant for distribution in other states.
  10. Most of the produce meant for a state’s own consumption should be left to the state agencies.
  11. Provisions must also be made to liquidate stocks as and when they exceed buffer stocks to minimize wastage.
  12. Efforts should be made to revamp the food processing sector in India to reduce the perishability of food items.
  13. The setting up of mega food parks and cold storage chains as part of the Make In India project, and 100% foreign direct investment through the Foreign Investment Promotion Board route in the marketing of food produced and manufactured in India is welcome in this context.
  14. Conclusion: A robust food-supply chain, which can make value additions through better storage, distribution and processing, will ensure that the agricultural sector remains competitive, transparent and profitable.
  15. This may also change banks’ negative perceptions of the sector.

What is e-NAM?

  1. e-NAM, or the National Agriculture Market, is a pan-India electronic portal for the sale and purchase of agricultural produce launched by Prime Minister Narendra Modi in April 2016
  2. Why e-NAM? The idea behind the online market is to reduce the transaction cost, provide a single licence valid across all markets
  3. To help farmers identify the best buyers, enable single point levy of market fees and maintain quality standards with provision for quality testing

250 agri markets integrated with online platform surpassing target: Minister

  1. Centre has integrated 250 regulated agricultural markets across 10 States to the online trading platform for agriculture produce, e-NAM, surpassing the target of 200 set for the period
  2. Most states and agriculture mandi boards have cooperated well
  3. At this pace, we can meet our goal of connecting all 585 regulated mandis by December 2017 instead of March 2018

Discuss: ‘Though e-NAM will improve competitiveness in market through larger participation of buyers and more transparent system of bidding, it should not be considered a panacea for all deficiencies in agricultural markets.’ Discuss

[op-ed snap] An APMC tale: Why market design matters

  1. Theme: The APMC legislation has in effect created fragmented markets—small trading zones that can quite easily be captured by trader cartels
  2. The op-ed highlights issues with good intentions but bad implementation. Case in point are the Agricultural produce market committees
  3. Issue 1: Even institutions that are set up with the best of intentions are often captured by the special interest groups
  4. Issue 2: These interest groups then have a strong vested interest in maintaining the existing way of doing things rather than support reform
  5. Issue 3: Only good intentions don’t work out in long run, we need to have a deep understanding of the incentive structure that is being put in place
  6. Challenge: The APMC legislation has in effect created fragmented markets – small trading zones that can quite easily be captured by trader cartels.

Farmers’ e-market platform could be a game changer

  1. News: The govt’s decision to create a common e-market platform for farmers could benefit them
  2. How? It will remove inter-state barriers in moving farm produce
  3. Challenge: An amendment of the state Agricultural Produce Marketing Committee Act and physical logistic support to enable the farmer to move his crop
  4. Impact: It empowers state govts to notify the commodities, and designate markets and market areas where the regulated wholesale trade takes place

The need for unifying agricultural markets

A unified market will bring uniformity in prices across states

Lessons from Karnataka APMC model

  • First, to ensure ease of doing business, it integrated 51 of the 155 main market yards and 354 sub-yards into a single licensing system.
  • Second, for improving efficiency and transparency, it introduced automated auction and post-auction facilities (weighing, invoicing, market fee collection and accounting).
  • Third, to guarantee quality, assaying facilities were made available in the markets.
  • Finally, It linked all APMCs in the state electronically, and enabled the discovery of a single state price for every commodity on a single platform.

How does integration with the national e-platform is possible by reforms?

  • A single licence valid across the state,
  • A single-point levy of market fee
  • A provision for electronic auction as a mode for price discovery.

Way forward

  • As agriculture is a state subject, the states have already taken the lead in policy innovation.
  • Be it labour laws in Rajasthan, land acquisition reforms in Tamil Nadu or land pooling for urbanization in Andhra Pradesh.
  • The Karnataka model of agricultural markets reforms should be seen as a similar case, a state innovation that can guide New Delhi.

Will the unified national agricultural market help to rein in food inflation?

National e-market for agricultural commodities



:( We are working on most probable questions. Do check back this section.







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