Good, on paper

The series of initiatives taken by the government to mitigate farmers’ marketing-related woes in the wake of the Covid-19 pandemic looks good on paper. The most notable among these moves include asking the states to restrict the jurisdiction of the mandis run by the agricultural produce marketing committees (APMCs) to their physical premises for three months and declare warehouses as deemed agricultural markets. It has also mooted permitting Farmers’ Producer Organisations (FPOs) to trade directly through the electronic National Agricultural Market (e-NAM) without taking the stocks to the market yards. The underlying objectives of these measures, quite obviously, are to encourage out-of-mandi transactions of farm goods and deferred sale by farmers by keeping their produce in the recognised warehouses, thus, decongesting the mandis during the Covid-19 crisis. Additionally, these moves would facilitate an unhindered supply of farm commodities to bulk buyers, retail chains, and agro-processors without over-burdening the regular marketing infrastructure, which is handicapped due to the paucity of labour, transport, and other necessities.

The problem as usual is implementation. After all, these have to be executed by states whose past record in such matters does not inspire much confidence. Only two states, Telangana and Andhra Pradesh, have designated warehouses as deemed markets. The others are still mum on this issue. Besides, bypassing the APMC markets through on-farm deals or trading through the e-NAM requires some changes in the marketing laws of many states and that may take time unless carried out through the Ordinance route. The Centre can only play a facilitating role, which it has by altering the e-NAM’s operating software to allow direct transactions by the accredited warehouses and FPOs and recognising warehouse receipts as negotiable instruments (virtual money). 

Even presuming, for argument’s sake, that most states do the needful quickly, the buyers may still be reluctant to procure stocks through online trading because of quality concerns. Most warehouses and FPOs lack credible assaying and grading facilities. The government has allowed them to upload the self-assessed quality parameters along with the photos of the stocks, but whether this would satisfy the buyers is debatable. This apart, shifting the delivery obligation from seller to buyer, as is sought to be done under the new online marketing norms, may also deter the customers because it adds to the costs and hassles. No doubt, the government has launched a new transport logistics module to help the e-NAM customers to access transport facilities, but this may be of little avail if the scarcity of labour, truck drivers, and their helpers continues to mar the transport sector. Moreover, the e-NAM itself is still far from ready to serve as a unified agricultural market for the country as a whole. Several pre-conditions need to be fulfilled before it can attract inter-state deals. These include single trading licence valid in all states, uniform marketing levies and single-point payment of these charges. In the absence of these imperatives, the e-NAM has virtually been rendered as an electronic platform for conducting business within a particular mandi or with the mandis of the same or neighbouring states only. These issues need to be resolved expeditiously to ensure smooth marketing of the anticipated bumper rabi harvest.

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