Although food production has increased tremendously, farmer incomes have not been impacted positively.
This calls for massive structural reforms on the lines proposed by Niti Aayog.
What is the proposal?
The central government is pitch for restructuring agricultural marketing to double farm income by 2022.
NITI Aayog member Ramesh Chand recently said that bringing agriculture marketing into the Concurrent or Union list is imperative to benefit farmers.
While many states too have welcomed this, some are sternly opposed to it and argue that it would be a disaster for agriculture and co-operative federalism.
Significantly, the “Committee on Doubling Farmer’s Income” (Dalwai Committee) has supported the Niti Aayog’s stand.
Besides this, the committee has also recommended rolling out the model Agriculture Produce Marketing Committee (APMC) Act 2017.
This, it believes is needed to facilitate pan-India operations, through single-point levy of taxes.
These are touted to promote direct interface between farmers and end-users, and give farmers greater freedom to sell their produce for better prices.
Why is focus on markets needed?
The country’s food production has increased tremendously from just 51 million tonnes in 1950-51 to about 252 million tonnes in 2014-15.
However, farm income did not grow much, which was also highlighted by the National Commission on Farmers (NCF) headed by MS Swaminathan.
On an average, the income realised from cultivation at current prices worked out to be only about Rs.101 a day during 2012-13.
Significantly, as early as 1976, the “National Commission on Agriculture” had noted that higher output alone will not provide higher income to farmers.
This anomaly is due to the lack of proper marketability for agro-produce, and becomes amply clear in the usual distresses that follows bumber harvests.
Had the markets been integrated, the surplus produce would have been transferred to deficit regions to help easy the “Pleanty Paradox”.
What is the current situation?
Farmer’s participation in agri-markets is equally worrisome and their share as a percentage of the Consumer Price is a merely in the range of 15- 40%.
Middlemen dominance is primarily responsible for farmers not getting a reasonable price for their produce, which lowers farm income and profitability.
Significantly, The Committee of State Ministers, in charge of Agricultural Marketing, has noted that of the regulated markets only:
two-thirds have covered and open auction platforms
one-fourth have common drying yards
less than one-tenth have Cold storage units
less than one-third grading facilities
Very few have electronic weigh-bridges
The committee also noted that the post-harvest losses of various commodities ranged from 6 to 18%.
All these conditions therefore, leaves the farmers with no choice but to demand higher minimum support price (MSP) and procurement.
What is the way ahead?
The country will achieve sustained food security only when the farmer incomes are secured and “production and marketing” to achieve the same.
While farmers need to be empowered with greater autonomy for marketing, the intermediary culture needs to be systematically scrapped.
Also, the seasonal spike in prices of perishable commodities that pushes up the food inflation cannot be addressed without improving the supply chain.
Significantly, almost 40% of all fruits and vegetables are lost annually in India between the grower and the consumer.
This is mainly due to lack of storage facilities, a weak transportation system, and bad roads, which needs to be addressed by inviting massive investments.
Also, as climate change is expected to pose more challenges, states alone can’t handle these effectively due to technological shortcomings.
