From UPSC perspective, the following things are important :
Prelims level : APMC, e-NAM
Mains level : Paper 3- Agri-marketing and PDS, scope for improvement
Agriculture is still the mainstay of Indian economy. There are certain problems that persist in the agri-marketing and PDS. The author suggests to use the present corona crisis to embark on the path of the reform in these areas.
Supply lines maintained during the lockdown
- India seems to have contained the mortality rate from Covid-19 to 3.3% which is lower than the global average of about 7 per cent.
- On the food front too, India has done reasonably well.
- Despite initial disruptions in supply lines, India has somehow managed to feed its large population of 1.37 billion.
- In fact, if there is any complaint, it is from the producer’s side that the prices of perishables have collapsed in some parts of the country.
- But, from the consumer’s point of view, even for perishables like milk and vegetables, supply lines were quickly restored and food is easily available in the markets at reasonable prices.
- On keeping supply lines for essential food alive and running, those in the government managing the food logistics surely deserve to be complimented.
Reforms in agri-marketing and PDS
- Agriculture still engages India’s largest workforce.
- And it may be the only sector that registers a respectable growth this year as almost all other major sectors may plummet into negative territory.
- Agriculture sector is in urgent need of the reforms that can help farmers get a better price for their produce with consumers still paying a reasonable price for their food.
- Following ways are suggested for agri-marketing:
- While the APMC markets can keep doing their business as usual, it is time to open channels for direct buying from farmers/farmer producer organisations (FPOs).
- Any registered large buyer, be it processors or retail groups or exporters must be encouraged by providing them with a license, that is valid all over India.
- They should be exempted from any market fee and other cesses as they will not be using the services of the APMC market yards.
- E-NAM can flourish if grading and dispute settlement mechanisms are put in place.
- Private mandis with modern infrastructure need to be promoted in competition with APMCs.
- On the PDS front, we need to move towards cash transfers that can be withdrawn from anywhere in the country.
- Some initiative has already been taken by the Madhya Pradesh and even Uttar Pradesh is now moving along these lines.
- But much more can be done to put India’s agri-marketing and PDS system on a more efficient path.
Consider the question asked by the UPSC in 2014 “There is also a point of view that Agricultural Produce Marketing Committees set up under the State Acts have not only impeded the development of agriculture but also have been the cause of food inflation in India. Critically examine.”
The recovery of the economy, whether it will be V-shape or J-shape, depends upon the package that the government announces. The mega reforms need to be built in this recovery package.
Agriculture Produce Marketing Committee Regulation (APMC) Act.
- All wholesale markets for agricultural produce in states that have adopted the Agricultural Produce Market Regulation Act (APMRA) are termed as “regulated markets”.
- With the exception of Kerala, J & K, and Manipur, all other states have enacted the APMC Act.
- It mandates that the sale/purchase of agricultural commodities notiﬁed under it are to be carried out in speciﬁed market areas, yards or sub-yards. These markets are required to have the proper infrastructure for the sale of farmers’ produce.
- Prices in them are to be determined by open auction, conducted in a transparent manner in the presence of an ofﬁcial of the market committee.
- Market charges for various agencies, such as commissions for commission agents (arhtiyas); statutory charges, such as market fees and taxes; and produce-handling charges, such as for cleaning of produce, and loading and unloading, are clearly deﬁned, and no other deduction can be made from the sale proceeds of farmers.
- Market charges, costs, and taxes vary across states and commodities.