Draft National Policy Framework on Agricultural Marketing

Farmer unions tell Union government t to reject policy on agriculture marketing.

What is Agricultural marketing?

• Agricultural marketing is a critical link between farmers and consumers, ensuring that agricultural produce reaches the right buyers at fair prices.
• It is not just about selling crops but understanding market demands, facilitating the distribution process, and ensuring equitable transactions throughout the supply chain.
• Components: Production Planning; Pricing; Promotion; Distribution; Sales.
• Key components of India's agricultural marketing system include the Agricultural Produce Market Committee (APMC), which regulates the trade of agricultural commodities to ensure fair practices.
  • Agricultural Produce Market Committee (APMC) is a regulatory body that oversees agricultural commodity markets in India.
  • It was established under the APMC Acts, and its primary role is to manage and regulate the markets where agricultural products are sold.
  • APMCs operate under the jurisdiction of the State Governments in India, aiming to ensure fair and transparent trading of agricultural produce.
  • Market Structure: APMCs, commonly known as mandis, are the primary platforms where agricultural products are sold. These mandis are regulated by state governments and are used by farmers to sell their produce to wholesalers, retailers, or processors. Agricultural markets are divided into:
    • Primary Markets: Village-level markets.
    • Secondary Markets: Larger markets at the district level.
    • Terminal Markets: Large urban centers where products are traded in bulk.
  • Objectives of the APMC:
    • Manage Farm-to-Retail Price
    • Timely Payments to Farmers
    • Limit Distress Sale by Farmers
    • Prevent Exploitation by Intermediaries

What is the Draft National Policy Framework on Agricultural Marketing?

The draft National Policy Framework on Agricultural Marketing released by the Central government aims to create a competitive and transparent agricultural marketing ecosystem. The focus is on ensuring that farmers have access to diverse markets and can secure better prices for their produce. The key aspects of the framework:

• Digital Innovations and Market Access: The policy emphasizes digital innovations to improve the agricultural marketing ecosystem. By adopting technologies like blockchain, the framework aims to enhance transparency and efficiency in trading processes. Farmers will also be allowed to sell their produce across various platforms, such as:
  • Traditional mandis (regulated markets)
  • Private buyers
  • Direct sales to consumers
• Promoting Private Investment in Infrastructure: The policy highlights the need for private investment in essential agricultural market infrastructure. This includes building warehouses, cold storage facilities, and other logistics solutions to improve the storage and handling of agricultural produce. This is expected to reduce post-harvest losses and ensure that farmers receive fair prices for their products.
• Simplifying Regulations and Improving Market Coordination:
  • Simplification of licensing norms to make market entry easier for traders.
  • Reduction of state-specific restrictions that hinder the free movement of agricultural produce across states.
  • Grievance redressal mechanisms for both farmers and buyers to resolve issues and disputes quickly.
• Addressing Challenges Facing Farmers: The policy acknowledges the challenges faced by small and marginal farmers, including:
• • Fragmented landholdings
  • Inadequate market access
  • Price volatility
• These issues often lead to unfair pricing and low income for farmers, necessitating urgent policy interventions. The framework proposes a set of measures to improve market access, ensure fair prices, and support sustained income for farmers.

Criticisms and Farmer Concerns

• While the policy aims for inclusive growth, critics argue that the framework echoes aspects of the farm laws introduced in 2020, which were later repealed after widespread protests.
  • The draft policy talks about dismantling Agriculture Produce Marketing Committee (APMC) markets and promoting contract farming, which was one of the key points in the three farm laws that farmers had protested against.
• There are concerns that the policy could still lead to privatization of agricultural markets and further weaken minimum support price (MSP) mechanisms.
• The major concern among farmers is contract farming, a subject which was a part of the three repealed farm laws, equipping APMC markets with specific infrastructure and services in Public Private Partnership (PPP) mode and the push for reforms in the state’s agricultural marketing laws and policies.