Even as the government unleashed significant but long-pending reforms in the agriculture sector, there are fears among some sections of the farming community over the future of procurement. It has now been clarified that the process of procurement will not stop. The assurance was given by Ashok Dalwai, Chairman of the Committee on Doubling Farmers’ Income.
He was speaking at a webinar organised by BusinessLine on ‘Agri Reforms: Will they be a game changer?’ on Friday. The interaction, part of the BusinessLine Knowledge Series, was presented by National Bank for Agriculture and Rural Development (Nabard) and powered by Union Bank of India and Dhanuka Agritech. The other panalists included S Sivakumar, Group Head Agri & IT Businesses, ITC, and GV Ramanjaneyulu, Agriculturual Scientist & Executive Director, Centre for Sustainable Agriculture. The discussion was moderated by BusinessLine‘s Senior Deputy Editor, Rajalakshmi Nirmal.
In the last few weeks, the Centre has introduced several reforms, including allowing farmers to sell outside of APMC (Agricultural Produce Market Committee), amendment to Essential Commodities Act and unveiling a legal framework for contract farming.
New paradigm
Speaking on the reforms, Ashok Dalwai said, “We need to create a new paradigm and that has to be in the post-harvest segment. This includes agriculture infrastructure in terms of storage and transportation, food and non-food processing and last arbiter, the final market.”
These measures, he said, are expected to increase private investment, particularly in segments such as processing and storage. He also responded to a few reservations among the farming community in areas of procurement by the Centre and the price discovery.
Dalwai emphasised that the government is not stopping procurement. According to him, all area outside the APMC will come under a trade zone that will fall under the Central Act where farmers can trade without any restrictions. Dalwai said the Centre hopes that the monopoly and cartelisation will get neutralised by the new trade zone. “If a farmer feels the price outside APMC is not fair, he is free to go to APMC for trade,” he said.
While these reforms are likely to boost farmers’ income and growth in the agriculture sector, there are still some challenges, Ramanjaneyulu said. “Farmers, especially, small and marginal farmers face challenges in taking their produce to APMC. This is due to distance, volume of agri-produce, lack of bargaining power and low pricing. Addressing these issues and protecting farmers’ interest are to be noted in these new regulations,” he said.
Sivakumar offered his perspective from the buyers’ point of view. According to him, with Essential Commodities Act getting liberalised, investment in development of infrastructure makes sense for the buyers. It reduces transaction cost for the buyers and enhances the bargaining power of the farmers.
“You retain some margin amount and pass on the value to farmers and that is how a viable business model gets created.” he said.
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