Dalwai Committee Draft Report

Why in news?

The Committee on Doubling Farmers’ Income has released a draft report.

What are the major recommendations?

• Agricultural Marketing - The committee has called for placing agricultural marketing in the Concurrent list.
• This would facilitate the one-India market concept.
• Also, while cultivation is geographically limited, marketing has no boundaries which necessitates a pan-India level operation to meet the  demand across the country.
• It has also recommended greater private sector participation in agri-marketing and logistics.

• State Level Measures -

1. Creation of better physical infrastructure.
2. Improved price information dissemination campaigns.
3. Reforming regulations that force farmers to sell their produce to local monopolies.

• Producer Organisations - It suggested increasing the number of farmer producer and village producer organisations (FPO/VPO).
• FPOs and VPOs could play a critical role in integrating the small and marginal farmers into the agricultural market system.
• Each FPO/VPO would cover 1,000 farmers and/or 1,000 hectares.
• It also called for amending the Companies Act to facilitate private sector shareholding in FPOs up to 26 per cent.
• Also, incentivising them by treating them at par with cooperative societies would be of help.
• Marketing system - Wholesale - The current agricultural marketing system comprises of Agricultural Produce Marketing Committees (APMCs) which operate principal markets and their extended sub-market yards.
• It is suggested that State Governments may convert these principal and sub-market yards into full-fledged and independent markets.
• Private - While this will help improve the number of wholesale markets, the  remaining requirement has to be met by promoting private markets.
• This could be done under the provisions of the proposed Agricultural Produce and Livestock Marketing, (Promotion and Facilitation) Act, 2017 (APLM).
• The committee has also urged the Union Agriculture Ministry to roll out the Model APLM Rules so that States can make the act operational.
• Rural - It suggested upgrading the existing rural periodical markets as Primary Rural Agricultural Markets for meeting the rural retail markets demand.
• It also highlighted the need for both the Centre and the States/UTs constituting special purpose vehicles to own and operate the National Agriculture Market.
• These suggestions are in line with achieving the desired market density (wholesale and rural retail markets) to build a pan-India system.
• Other recommendations - The committee has opined that small and marginal farmers would benefit from an efficient marketing system only if they have the withholding capacity.
• For this, the committee has suggested offering pledge finance i.e.post-harvest loan against produce as collateral.
• Upgrading storage godowns, including cold storages is a prerequisite to make available Negotiable Warehouse Receipts for these loans.
• The Ministry has to develop comprehensive guidelines to promote warehouse-based post-harvest loans and eNWR (Negotiable Warehouse Receipts) based trading.
• There is also a need to orient financial institutions to participate in the pledge loan system.

Quick Facts

Dalwai Committee

• The government announced to double farm incomes by 2022 in its Union Budget 2016-17.
• In line with this it appointed an 8-member inter-ministerial committee headed by Ashok Dalwai, to consider major reforms in agriculture sector.
• It was tasked to prepare a blueprint for transition of farm policies from being production oriented to based on incomes or value addition.

FPO/VPO

• A Farmer Producer Organisation is a kind of a hybrid company between cooperative societies and private limited companies.
• The objective of the concept is to organize farmers into a collective to improve their bargaining strength in the market.
• They are owned and governed by shareholder farmers (or artisans) and administered by professional managers.

Source: BusinessLine