Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

[op-ed snap] The centre’s failure to steer agriculture right

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: The APMC act, E-NAM, etc.

Mains level: The newscard primarily discusses the issue related to agricultural marketing.(specially mentioned in the mains syllabus)


News

Important issues related to agricultural sector: Failure of the government
FIRST: incomplete implementations of schemes

  1. Ongoing schemes in agriculture have acquired the status of railway projects sanctioned over the years
  2. New ones keep getting added but no one can shut down any of the existing ones

SECOND: Agricultural finance

  1. The challenge of connecting millions of small and marginal farmers to institutional finance has remained unaddressed for the last two decades
  2. With informal sector interest rates starting at 24% (compared to 0-7% from banks and cooperatives),
  3. there is likely to be no breakthrough in investments on small farms, where the maximum unutilized productivity potential waits to be tapped

THIRD: Agricultural marketing

  1. The critical issue of agriculture marketing reform has again been sidestepped
  2. Rural marketing hubs will benefit from some infrastructure upgrade, which is welcome
  3. But the real issue in marketing is rearranging the institutional arrangements under the agriculture produce marketing committee (APMC) legislation
  4. This challenge has been ducked, yet again
    What is needed?
  5. There is an urgent need to introduce competition, transparency and technology-enabled transactions in the 7,000-plus mandis in the country
  6. Even e-NAM remains stunted and has failed to provide an alternative and efficient marketing platform to farmers
    (e-NAM is a electronic trading portal for agricultural commodities launched by Prime Minister Narendra Modi)
  7. To be fair, the political economy of agriculture marketing is complicated and does not lend itself to easy solutions

What should be done? : The solution

  1. Farmers are not likely to be incentivised to make investments in land improvement, machinery and technology unless the prospects of better prices materialize
  2. This can only happen by treating the entire country as a unified market for agricultural goods, as is the case for industrial products
    Other essential reforms
  3. Supportive policies for allowing direct purchase at the farm gate, portal-based trading, reform of antiquated storage and movement restrictions, and a more liberal external trade stance
  4. will be among the other essential components of a marketing reform package

The way forward

  1. Most of these measures are within the power of the Central government, though the states will have to be brought around to play their role

Back2basics

Marketing of Agricultural Produce in India: Definition; Role; APMC Act, Model APMC Act, 2003

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