Agriculture, GS-3, Uncategorized

National Agricultural Market: How is this a necessity for India?

State of Indian Agriculture & renewed focus on increasing a farmer’s income

If we go back in time (aug 2015) and read this PIB release – National Agricultural Market – A Harbinger of Change, we would realise that government realised (yet again) the importance of agriculture in Indian economy.

While the Government has rolled out large number of programmes to improve yield levels on a sustainable basis, it recognises the need for creating a competitive market structure in the country that will generate marketing efficiency.

Question: Good time to go back in time and revise the programs launched to improve yield levels. Would you like to write them out for us in the comments?

The net result out of this concern this –

The Department of Agriculture & Cooperation formulated a Central Sector scheme for Promotion of National Agriculture Market through Agri-Tech Infrastructure Fund (ATIF) through provision of the common e-platform.

What was wrong with APMCs?

Here’s a crisp answer from Quora,

The APMC (Agricultural Produce Market Committees) is a relic of the past that forces the farmers to sell their produce only to middlemen approved by the government in authorized Mandis (markets). Thus, if you are a vegetable producer and I’m a supermarket, I cannot directly buy from you. Both of us need to go through a broker. This increases prices for the end buyer and unnecessarily adds redtape.

  • An Agricultural Produce Market Committee is a marketing board established by state governments of India
  • One main function of which is basically to provide a platform for farmers to sell their produce

The challenges posed by present day APMCs – 

  1. Fragmentation of State into multiple market areas, each administered by separate APMC
  2. Separate licences for each mandi are required for trading in different market areas within a state. This means that we have limited the first point of sale for the farmer. He has to come to the local mandi – which could be both good and bad depending upon how it is governed
  3. Licensing barriers leading to conditions of monopoly
  4. Opaque process for price discovery

The need to unify the markets both at State and National level was therefore, clearly the requirement of time. Think of it as an e-commerce platform with a marketplace model and not an inventory one. Every farmer has his own webpage (or something to the tune of that).

Quick facts on NAM

National Agriculture Market is going to implemented by the Department of Agriculture & Cooperation through Small Farmers Agribusiness Consortium (SFAC).

NAM is not replacing the mandis. NAM is an online platform with a physical market or mandi at the backend enabling buyers situated even outside the state to participate in trading at the local level.

It seeks to leverage the physical infrastructure of mandis through an online trading portal, enabling buyers situated even outside the state to participate in trading at the local level.

source: Financialexpress.com

NAM is currently being launched in 21 mandis and it will offer trade in –

  • chana,
  • castor seed,
  • paddy,
  • wheat,
  • maize,
  • onion,
  • mustard and tamarind

Cons:

  1. Fruits and vegetables, where there often are prices fluctuations, are yet to be included in the NAM platform
  2. Country’s two biggest mandis—Azadpur (Delhi) and Vashi (Mumbai)—have not yet agreed to come on board
  3. What about interstate taxes and levies? NAM does not say anything on that!

Questions:

  1. How will NAM function and what are the benefits that it would bring?
  2. What needs to be done on ground to make sure that NAM is successful?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s