New Delhi: Trading of farm produce in India is set to go digital as the government plans to introduce an electronic trading platform for farmers in its efforts to build a national market and double farm incomes by 2022.
The e-platform called National Agriculture Market (NAM) will connect 21 mandis or markets from eight states in the first phase and will be launched by Prime Minister Narendra Modi on Thursday.
The move comes at a time when parts of rural India are reeling under drought and a collapse in commodity prices.
The National Democratic Alliance (NDA) government aims to bring 585 mandis across India on to the platform by March 2018.
“Presently, farmers have no option but to sell their produce at the nearest mandi at a price quoted by traders who suppress prices by forming cartels,” agriculture minister Radha Mohan Singh said on Wednesday.
The minister added that the platform will improve transparency and provide farmers with wider choice and better prices.
The e-platform is likely to be the centrepiece of the NDA government’s goal to double farm incomes by 2022.
Falling prices of key commodities such as rice, wheat and cotton have dented farm incomes in the past few years.
Also, horticulture crops such as onions and potatoes are often sold at widely varying rates in different states and a unified market can help bring parity in prices.
Fourteen states have amended their Agricultural Produce Market Committee (APMC) Acts—state laws that currently govern how farm produce can be traded—to allow electronic trading, Singh said.
He added that the centre has approved 365 mandis from 12 states to join the platform, and 200 more mandis are expected to join NAM by March 2017.
“Some states like Kerala and Bihar, which does not have an APMC Act, have to take a call. Punjab has not agreed to the scheme in principle,” the minister said.
The eight states that will be part of the platform in the first phase are Gujarat, Telangana, Rajasthan, Madhya Pradesh, Uttar Pradesh, Haryana, Jharkhand and Himachal Pradesh.
The platform will begin by trading in 25 crops, including wheat, maize, pulses, oilseeds, potatoes, onions and spices.
Initially, farmers will have the choice to sell at any mandi within the state and the goal is to widen this to across the country, said an official from the agriculture ministry who did not want to be named.
But there are many hurdles impeding the government’s aim of creating a national market for farm produce.
“The government has formed a committee to look into the statutory requirements (as agriculture and marketing are state subjects) that can allow farmers and buyers to trade at a pan-India level,” the official added.
The centre’s move is a welcome step in reforming marketing of farm produce, but the goal of a national market will fall flat if laws are not streamlined to allow for inter-state trade, said Ashok Gulati, agriculture chair professor at the Indian Council for Research in International Economic Relations, New Delhi.
“Several states levy taxes and duties on trading of farm produce and they may not want to forego these. Punjab, for instance, do not want to lose the Rs.5,000 crore they earn from this route,” Gulati said.
He added that another point of concern is the settlement of disputes arising out of quality standards of farm produce traded on the platform.
“You can sell apples over the electronic platform claiming they are of good quality, but if the actual shipment turns out to be of a poor quality, who will settle the dispute?” he asked.
The launch of the NAM platform on Thursday, on the 125th birth anniversary of B.R. Ambedkar, will also mark the beginning of the centre’s outreach campaign for rural India called Gram Uday Se Bharat Uday Abhiyan.
The campaign will culminate with the prime minister addressing all village councils in the country on the National Panchayati Raj Day on 24 April.