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OpinionsFarmers Need Markets, Not Charity !

Farmers Need Markets, Not Charity !


Dr. Sanjeev Chopra

The last  three Bharat Ratnas  were actually a tribute to the entrepreneurial spirit of the Indian farmer.  All  the  three – two  former Prime Ministers Charan Singh and PV Narasimha Rao as well as  Dr MS Swaminathan , the scientist administrator entrusted with the roll out of the Green Revolution – were deeply invested in  and personally committed to  agriculture as well as farmers welfare .Swaminathan's contribution is quite well known and acknowledged , but it is equally important to understand  the context of the political economy in which the Green Revolution was successful . It was Charan Singh who explained to Nehru  the pitfalls of  the Soviet and Chinese type of  ‘collective farming'.   He was clear that farmers were  fiercely independent cultivators  who did look up to the  state  for support in provisions for  public goods – water for the fields  as well as access to credit , roads and market infrastructure – but  were vehemently opposed to any centralized plan of ‘land pooling and co-operative farming'which the  then Planning Commission was enamoured of .

It was during the tenure of PV Narasimha Rao that joined the WTO, and signed the  Agreement on Agriculture (AoA) which made India's agriculture globally competitive. Till then , India policy regime was to restrict imports : under Rao, India looked to Agri exports as an important foreign exchange earner . With budgetary and institutional  support to APEDA , he helped the Indian agriculture to becomegloballycompetitive , though  domestic trade continued to be operate  through restrictive trade practices which were good for the procurement agencies and the registered traders of APMC, but not for the farmers. Moreover, while the traders were looking to the as their market, the farmers were confined to the area marked for their respective market yard.  But perhaps the most meaningful policy intervention made by him was the establishment of the SFAC in 1994  ,the organization which has now been tasked with the establishment of  the electronic market for agriculture , thereby giving the farmer the ‘glocal advantage' : a global market for local produce.

All this provides the background and the context to a transformative initiative launched by Prime Minister Narendra Modi eight years ago  on the first of Baisakh ( 14 April ) . The reference here is to  the SFAC backed Electronic National Agriculture market ( E- NAM) initiative : ‘a phygital (physical plus digital) market'. This is a single window portal with  a physical back end which  provides actionable information , physical infrastructure , trade options and financial settlements . The information component provides   notifications  on  commodity arrivals, quality and   prices  . The  physical infrastructure includes   market yards , storage godowns  , weigh bridges , sortex machines , moisture testing equipment  and   offers services like weighing , assaying  and warehousing. For ease of doing , it also   organises  the  mandi arrivals into  ‘offers for the sale and purchase of produce'  in terms of ‘specific  lots' and  ‘trade offers. The fourth component  includes the actual trade  and electronic settlement of payments  directly into farmers' account.It is different from  the speculative futures trading, because the settlement is taking place on a ‘here and now basis' with  physical deliveries taking pace in the market yard  accompanied by online settlement.

Today, thanks to this initiative of the SFAC ,   10.7 million farmers have the freedom , flexibility and the facility to transact across 1389 regulated wholesale markets in 23 States and 4 UTs in their own language on their own mobile phone .Another 1.7 lakh integratedlicenses have been issued by the  participating states and UTs ,but of even greater significance is the active participation of 3500 FPOs – for their  transactions reflect granular   support for this platform. As of January 2024, business of over Rs 3 lakh crore has been transacted on this platform

Before closing , it's imperative to share the backstory of this successful intervention. It must be mentioned that when the APMCs were introduced in the fifties ,  the farmer needed protection against distress sale . This was before KCC became the ubiquitous instrument of rural credit , for in those  days ,  money lenders advanced loans to the farmers and compelled them to   sell the produce at the farm gate itself.  The APMCs were designed to ensure ‘price discovery' and provide a platform for procurement by state agencies under the MSP regime . However , in this process , it also created a special class of intermediaries – the trader who had a license to operate in  the particular mandi with its notified command area. However, as India became an IT superpower and agriculture moved from a peasant to a market mode of production, there was a need to change the restrictive rules of trade . Institutions like the SFAC were established to leverage technologies and financial instruments for improving the terms of trade of the marginal and small famers .  From providing venture capital funds to agribusiness entrepreneurs to creation of infrastructure , the SFAC broke new ground in the establishment of FPOs , market intelligence , warehousing and procurement support . No wonder then , that the mandate for establishment of  the ENAM was also given to the SFAC .To set the ball rolling ,  the Agriculture Ministry gave a grant of Rs 30 lakhs per mandi for equipment / infrastructure such as computer hardware, internet facility, assaying equipment etc. in those regulated mandis, for installation of the e-market platform.  This was enhanced to Rs 75 lakhs from 2017  for creation of  additional  infrastructures like cleaning, grading and packaging facilities and bio composting unit.While in the first three years , about 200 Mandis were brought under its purview , the pace picked up  with 415 mandis by May 2020,another 260 mandis by July 2022,  yet another 101 mandis by March 2023 and 28 mandis  the  end of the last calendar year .   The number grows every quarter !

Policy  making is the easy part. More difficult is the creation of the physical  and IT infrastructure . The hardest is the task of making it work on the ground. For initial handholding,  SFAC identifies and supports   an IT expert (mandi analyst)  for initial hand holding for a period of one year to each mandi integrated with e-NAM. They report  to the state  coordinator (s), each of whom    handle the day-to-day coordination for  50 mandis each. They are also responsible for providing pro bono training to all stakeholders in the E NAM system -farmers, traders, commission agents & mandi officials

What next ? Rather than rest on its laurels , the E NAM is setting newer and higher standards . Its revised mandate incudes the  the   expansion an and consolidation of  the e-NAM  by opening platform beyond APMC/RMC mandis to create further and ensure competitive price realization to the farmers. There is increased emphasis on Warehouses Based Sale (WBS) and e-NWR trade through e-NAM. It is expected that this, along with quality assaying and trade reliable grade standards will promote inter-mandi and inter-State.For in the final analysis, it is price discovery and the freedom to sell which will usher greater prosperity for the farmer.


The authoris Historian,

Columnist and Festival Director




The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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