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Modi Govt Tried Agriculture Market Reforms for Long, And Then Came the Lockdown

agriculture market reforms

It has been evident that the Modi government has been trying to reform the agriculture market by expanding the coverage of e-NAM and Farmer Producer Organizations. Arguably, there was a push back from many states unwilling to lose control over the present state of affairs. But is the corona lockdown situation pushing for the agriculture market reforms? Let’s revisit the two prominent pitches that the Union government has made in recent times to understand the trend.

FPOs and e_NAM – Two Pitches

In February this year, Prime Minister Narendra Modi kickstarted 10,000 Farmer Producer Organisations (FPOs) spread all over the country.

What are they aiming at?

FPOs are aimed at paving the way for unification of small, marginal and landless farmers, giving them the collective strength to deal with issues of technology, quality control and financing. Members of the FPOs will manage their activities together in the organization to get better access to technology, input, finance and market for faster enhancement of their income.

Back in November 2019, Finance Minister Nirmala Sitharaman had made this statement:

“eNAM is being pushed very much by the union government. Hope states are cajoled into rejecting APMC. APMC has outlived its utility.”

Lockdown Boosting the Idea of Direct Marketing

The lockdown seems to have moved state governments, and making them toe the line of direct marketing concept advocated by the Centre for a long-time. Farmer Producer Organizations have also got a major boost.

Ministry of Agriculture & Farmers Welfare recently listed the initiatives of direct marketing of agriculture produce during the lockdown period.

  • Karnataka exempted Cooperative Institutions and FPOs in the State for engaging in wholesale trade of agricultural produce outside the market yards.
  • Tamil Nadu exempted market fee on all notified agricultural produce. it was observed that traders have preferred to buy the produce from farmers from their farm gate/villages.
  • Uttar Pradesh allowed trading in e-NAM platform from farm gate, and promoted issuance of unified licence to processors for direct purchase from farmers. It also allowed FPOs to undertake procurement operations of wheat. The State has facilitated in establishing linkages with FPOs and Zomato Food Delivery App, thereby ensuring smooth distribution of veggies to consumers. All these measures have reduced the wastage.
  • Rajasthan allowed direct marketing by traders, processors and FPOs. It has issued more than 1,100 direct marketing licences to processors during lockdown period, whereby farmers have already started selling directly to the processors. In addition to that, Primary Agriculture Credit Societies/ Large Area Multi-Purpose Cooperative Societies in Rajasthan have been declared as deemed markets. Out of more than 550 PACs declared as market-yards in rural areas, 150 PACs have become functional for direct marketing and village traders are performing trade transactions successfully.
  • Apart from Individuals, firms, and processing units, Madhya Pradesh has allowed to set up private purchase centres outside the market–yard to purchase directly from farmers with an application fee of ₹500 only.
  • Himachal Pradesh, Uttarakhand and Gujarat have also allowed direct marketing without requirement of any licence. Uttarakhand has also declared Warehouse/Cold storage and Processing plants as sub-mandis.

It is expected that even after the ease in lockdown, the restrictions may remain in place, as the world has not yet managed to free itself from the clutches of the pandemic and has not discovered any cure. In such a situation, direct marketing of agriculture produces may also become a new normal. So, just like the corona situation speedup the path of innovations in India, does it also push for agriculture market reforms in a decisive manner?