Context:

• India must use the corona-crisis to reform the agri-marketing system by abolishing the APMC Act, promoting e-NAM, and allowing warehouses to double up as mandis.

Brief Background:

• The nation-wide lockdown forced migrant workers walking long distances to their homes which have led to large scale destitution. Most migrant workers come from farming families.
• Because of significant disruption in supply chains as a result of the three-week lockdown, farmers are stuck with large produce, especially of perishables like milk, fruits and vegetables, flowers, even poultry meat and eggs.
• Due to this glut at the farm level, farm prices are collapsing, pushing farmers into destitution, and many farmers are dumping milk and vegetables on roads.
• With procurement season for rabi crops having started, the mandi system will choke, and the social distancing that is necessary to beat Covid 19 will go for a toss, if immediate steps are not taken to organise procurement operations in an orderly manner.
• Wisdom lies in converting this crisis into an opportunity for reforming the country’s agri-marketing system.

What the Government should do to make Marketing System Effective?

• Abolish/reframe the Agriculture Produce Marketing Committees (APMC) Act, and encourage direct buying of agri-produce from farmers/farmer producer organisations (FPOs).The companies, processors, organised retailers, exporters, consumer groups, etc, that buy directly from FPOs need not pay any market fee as they do not avail of the facilities of APMC yards
• Warehouses can also be designated as markets,and the warehouse receipt system should be scaled up
• The Government must encourage the private sector to open mandis with modern infrastructure, capping commissions.
• Encourage futures trading by allowing banking finance to hedge for commodity price risks
• Promote the electronic National Agricultural Market (e-NAM) through proper assaying and grading of the produce, and setting up a dispute settlement mechanism. Rope in major logistics players for delivery of goods.
• Stagger procurement through coupons, and incentives of additional bonus for farmers to bring produce to the market
• Increase PM-Kisan amount from `6,000 to at least `10,000 per farming family to partially compensate them for their losses.

Source: The Indian Express