Common national market for agriculture will address farmers’ problems

Source: The Hitavada      Date: 05 Sep 2018 10:06:42



By Dr G N Karalay

Agriculture in India faces numerous problems. But two of these are quite serious. One is nature’s unpredictability. Agriculture in our country is predominantly rain dependent. According to India Meteorological Department (IMD), the rainfall across the country during current
year Monsoon shows deficit of six per cent.

Due to long dry spell shortly after timely start of monsoon, the sowing operations were affected adversely, requiring many farmers to re-sow crops, involving extra cost, likely delay in harvesting and adverse effect on productivity. Second factor is economic aspect of agriculture operations which is connected with cost of inputs and price of commodity in the market.

Agriculture deflation has set in with mandi prices sliding from year to year, mostly below MSP. Government has promised to ensure MSP that will be fixed at one-and-half times the production cost. But implementing this decision is replete with number of difficulties.

Government is not equipped to procure for itself substantial quantity of commodities. Government procurement so far has been to the extent of only six per cent of the agricultural production. Bulk of the commodities is bought by the private traders. The latter obviously go by the domestic as well as global market trends in pricing. In this scenario ensuring payment at any determined level of MSP is bound to be difficult.

The above problem highlights the necessity of reforms in agriculture marketing. The present structure of agriculture marketing is continuation of old system of agriculture produce marketing committees (APMCs). There are about 5,500 APMCs in the country. APMC regulations are quite restrictive in the sense that these prohibit sale of agriculture produce outside the notified market yards.

APMCs impose levies/other market charges. The overheads of present system are quite high and the resultant burden is passed on to the farmers. Many of the agriculture produce market committees are managed by the persons who have themselves conflict of interests.
In 2003, Union Ministry of Agriculture framed Model APMC Act to provide some freedom to farmers directly in the market set up by private entities. But there is lukewarm response from the states for the Model Act. Realising the difficulty in implementation of government sponsored MSP, states are trying different ways to solve the problem.

Madhya Pradesh is trying an idea of paying the difference between MSP and market determined price by paying through direct benefit transfer scheme.

In the State of Telangana, idea of paying certain amount to farmers upfront which enables farmers to buy seeds, fertilisers etc., is being tried.

What is the road ahead.? Although the problems being faced by the states are same, solutions being adopted are different, having no commonality.

The real long-term solution is by gradual change from state-level marketing structure to forming common national agriculture market.

This will open up large space for farmers instead of getting restricted to limited state level marketing demand.
In federal system as exist in our country, there is obviously going to be resistance from the states to acceptance of concept of common national market but it is high time if states are brought on board in interest of farmers.

(The author has penned books on rural development.)