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| ONE NATION, ONE MARKET | | | Dr. Parveen Kumar, Dr. D. Namgyal
It has almost been seven decades since we became a republic. Sardar Patel, called the iron man of India united various provinces to make a United India. Political union became a reality, but unfortunately even after so many years, the country could not become one market. The present NDA government under the leadership of Hon’ble Primeminister is working with the aim of uniting the fragmented agricultural markets in the country to empower the producers and strengthen our consumers. With this vision, the present government has taken multiple initiatives to truly have ‘One Nation, One Market’.
Agriculture in the country is a state subject. The marketing of agriculture produce is administered and undertaken by the States as per their agri-marketing regulations, under which, the State is divided into several market areas, each of which is administered by a separate Agricultural Produce Marketing Committee (APMC) which imposes its own marketing regulation including fees. This fragmentation of markets, even within the State, hinders free flow of agri commodities from one market area to another and multiple handling of agri-produce and multiple levels of mandi charges ends up escalating the prices for the consumers without commensurate benefit to the farmer. This over regulation by states and local cartels limit the wholesale prices received by the farming community. Compounding further the problem of farming community and the consumers was the tax structure in the country. The country had a multitude of taxes and often, the producers ended up paying more and so did the consumers. This already has gone with the introduction of GST which envisages a uniform tax rate in the country. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Reforms in agriculture marketing were largely overdue. The government had plans to create a one-nation, one-market model for farmers similar to what GST is to taxation; a model of creative disruption for an efficient marketing system.
The National Commission on Agriculture (1976) as well as the National Commission for Farmers (2006) had categorically emphasized that higher output alone will not provide higher income to farmers unless it is well marketed. Recent incidents of farmers reportedly dumping their bumper produce of tomatoes and onions and emptying cans of milk into drains is clear evidence of it. So had the markets been integrated, the surplus produce would have been transferred to deficit regions. The Dalwai Committee on Doubling Farmers’ Income has pointed out that the share of farmers in consumer’s price is very low. It generally varies from 15 to 40 per cent. The dominant role of middlemen among others is primarily responsible for farmers not realizing a reasonable price for their produce, lowering farm income and profitability. According to Dr. Ramesh Chand member NITI Aayog, with the increase in commercialization of agriculture, the share of farm produce that is sold within the state shrinks and the share sold outside increases. Moreover, consumption patterns in the country are getting diversified largely due to an increase in per capita income and health consciousness among the peoples. People want to consume a range of products often grown outside the state and even outside the country. This necessitates seamless flow of farm produce across the country without regulatory restrictions and barriers and excessive intermediation. This requires supply chains and value chains that move products from one state to another state quickly and efficiently and integrate consumer with producer at distant geographies. Such 'one nation one market' is vital to raise price realization by farmers, supply food to the consumer at competitive prices and to compete with import and push export. The central government has shown its commitment towards one nation one market by bringing a new law for agricultural marketing through an ordinance route as there has already been considerable delay in achieving goals of market integration and competitiveness.
As a part of the creation of a single national agriculture market the electronic National Agricultural Marketing (e-NAM) was launched in 2016 in the country. It is intended to enable farmers to get a better price and for consumers to pay a lower price for agri-produce, a win-win situation at both ends of agri-value chains. The highlight of the scheme is the single point levy of market fees, i.e. on the first wholesale purchase from the farmer. e-NAM addresses the marketing constraints of the farmers by creating a unified market through online trading platform, both, at State and National level and promotes uniformity, streamlining of procedures across the integrated markets, removes information asymmetry between buyers and sellers and promotes real time price discovery, based on actual demand and supply, promotes transparency in auction process, and access to a nationwide market for the farmer, with prices commensurate with quality of his produce and online payment and availability of better quality produce and at more reasonable prices to the consumer. According to Minister of Agriculture and Farmers Welfare, Government of India Sh. Narendra Tomar the no. of electronic mandis has now gone up to 962 in 18 states and 3 union territories in order to fulfill PM Modi’s vision of 'One Nation One Market'. Presently, 150 items including food grains, oilseeds, fiber, vegetables, and fruits are being traded through e-NAM while more than 1,005 Farmers Producer Organizations (FPOs) are registered on this platform. It has traded 2900 metric tonnes of agricultural produce worth Rs 7.92 crore.
Recently also the government has come up with major structural reforms in agricultural marketing by bringing ordinances. In fact, the main focus and goal of the major three policy reforms cleared by the Union Cabinet are to help farmers get higher remunerative prices by creating new sale avenues and higher competition. The farming produce trade and commerce (promotion and facilitation) ordinance 2020 has been passed by the cabinet to provide adequate choices to farmer to sell produce at an attractive price and for barrier-free interstate trade, the cabinet has also approved It will also set up the framework for e-trading of agriculture produce. The move is aim to end fragmentation of markets available to farmers who are currently forced to sell only to licensed APMC marketers. It will help create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of their produce of both interstate as well as intrastate. The government has also brought in amendments to Essential Commodities Act to enable better price realization for farmers which will result in the deregulation of prices for foodstuffs including cereals, edible oils, oilseeds, pulses, onions and potato. It would also help in attracting investments and making agriculture sector competitive. The stock limits, another feature of the old act is now to be imposed under very exceptional circumstances like during national calamities like famine that see a surge in prices. Another one the farmers (empowerment and protection) agreement on price assurance and farm services ordinance 2020, by which the government wants the farming community to engage with processors, aggregators, large retailers and exporters with a level playing field and without fear of any sort of exploitation. This will ultimately transfer the risk of market unpredictability from the earner to the sponsor and enable the farmers to have access to better technology and better inputs. It will act as a catalyst to bring private sector human investment in creating value chains of their produce to global markets. Farmers have wanted all these reforms for a long time. With these ordinances farmers now have been freed from APMC. |
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