1 icrisat development center transforming agricultural marketing in india: linking farmers to...
Post on 01-Jan-2016
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ICRISAT Development Center
Transforming Agricultural Marketing in India: Linking Farmers to National Gateway and e-marketsStatus and a Way Forward
Now…• Primary or Periodic Markets (haat/bazaars) neglected
• basic amenities absent.
• Low density of regulated markets in some States- • farmers have to travel long distances.
• APMCs – professional management inadequate.
• Licensing systems creates entry barrier to new trader/buyers.
• Multi-point levy of market fee (0.5 to 2%) and multiple licensing.
• Restrictions on movement of goods inter-state and even intra-state.
• Condition of cattle markets most appalling.
Key issues • Too many intermediaries
• high cost of goods and services.
• Inadequate infrastructure • storage, sorting, grading or post-harvest management.
• Private sector unwilling to invest • in logistics or infrastructure under present conditions.
• Price setting mechanism not transparent.
• Mandi staff- inadequate capabilities.
• Market information – asymmetrical and access is not easy.
• Essential Commodities Act impedes • free movement, storage and transport of produce.
Way Forward
Increased adoption by
farmer adoption
Better quality
produce
Improved buyer
Confidence
Better price realization
Better Assaying and storage
Virtuous cycle of next generation agricultural marketing
Way Forward
Technology
• Improve e-trading process in APMCs• Initiate computerized billing process• Start end-to-end automation processes• Improve assaying and grading systems• Linkage with spot exchange• Create warehouse receipt system in
APMCs
Way Forward
Institutions
• National Agricultural Market• Single license enabling pan India
operation• Easy movement of goods• Regulatory environment• Pan India electronic platform• Creation of Special Purpose
Vehicle (SPV)• Horticulture- integrated markets
• Cold storage, grading• Livestock Market – DAISY/ NaDAX
Way Forward
Financing
• Initiate electronic payment system• Linking warehouse with financial
institutions• Technology up gradation for FPOs• Open PPP options
• Infrastructure and logistics on BOOT, e-platforms
• Budgetary support for gap funding, pilots and scale up
Way forward
Policies
• Immediate e-tendering in all APMCs
• Create Grading Standards Authority by GOI
• Warehouse financing• Facilitating role by the
Government for PPP model • Boost up capacity building and
certified skills
Way ForwardNational Agricultural Market
Objectives• Allowing interplay of local demand and supply, duly reckoning
aggregate national demand and supply for efficient price discovery in every local market.
• An efficiently discovered price leading to a better return to the producer, thereby enhancing the viability of the agricultural sector.
• Increased price information for the farmer to help in making
planting decisions and enabling to effectively negotiate forward contracts.
• Lower costs and time taken for transaction.
• Availability of pledge loan facility to avoid distress sale.
Way Forward
SPV
ICT Solutions
Warehouse management
WDRA
Lab RegulatorMarket
Committees
Grading labs
Networked Warehouses
The linkages of the proposed SPV
Management system
• Ensure Inclusion• Organize producers• Deliver support
•FORMAL PPP AGREEMENTS: CONTRACTS & MOUS
• FIXED, WELL DEFINED PROCEURES AND CRITERIA (LA)
•DEMANDING BIDDING &VETTING PROCESS (LA, SEA)
•FEASIBILITY ANALYSIS (ECONOMIC, ENVIRONMENTAL, VCA)
• BUSINESS PLANS•M&E/ BUSINESS PLANS / CONTRACT FARMING
• Complinace with Program Design
• Lead Implementation• Secure Markets/ Finance• Technology innovations
• Define Public Good• Policy Landscape• Financial/ Technical Assistance• Feasibility• Monitoring and Evaluation
(M&E) Govt Ministries/DeptsLocal Insititutions/
PanchayatsDonors/ MultilateralsUniversities/ Research
CentresState/ Public Sector
banks
Agribusiness Entrepreneurs
FPOs/ PCs/ Other farmer organizations
Financial Insititutions
NGOsFoundations
Producers/ Farmers
MANAGEMENT SYSTEMS
Suggested Action Plan
• Group action/collectives-Pos/PCs/FPOs/Associations • to link small farmers to markets.
• Transaction facilitation for inputs and produce.
• Improving competition through value chains.
• Create better conditions for investment • in agriculture marketing infrastructure and logistics.
• Good governance: Government as a facilitator and not regulator.
• Co-existence of regulated mkts and emerging formats of marketing.
• Marketing extension as a strategy to link farmers to mkts.
Proposed activitiesOrganization Anticipated
immediate roleSources of funds Anticipated future role Regulation
Warehouse management companies
Market for these organisations is negligible at present.
Predominantly private. Scope for joint or public sector firms
Employed by warehouses for facility management and logistics.
Market. SPV to ensure that
Warehouses In private, public or joint sector
Private, PPP or public funds
Enter into contracts with market committees. Network with smaller storage places with improved infrastructure and mobile testing facility.
Warehouse Development and Regulation Act.
Market Committees – existing local institutions
APMC regulator Market fee (Rationalised), Budgetary support, and rent
Licencing of traders, warehouses State Agricultural marketing Board
Testing laboratories In the private, public or joint sector
Private, PPP or public funds
Operate in close proximity of APMCs and warehouses. May add mobile services.
To be regulated by a separate entity
Proposed SPV State level organisation
The Market facilitating body at the state level
Equity, Budgetary support
Provider of online auction marketplace Commodity spot exchange regulator
State Agricultural marketing Board
Regulation of APMC activities
Regulatory charges from APMCs
State level regulator. To be a professional body
Government of India/ Concerned state Govt.
State Agricultural marketing Department
Policy making, regulation and administration
Budget Policy making
National agricultural standards organisation (NEW)
- Regulatory fees Specifying and disseminating standards, Regulation, accreditation and training
Dept. of Agricultural marketing, Government of India
Dept. of Agricultural marketing, Government of India
Policy, regulation,accreditation, administrationetc
Budget Policy
Universities/ICRISAT /KVKS
Technical support/Market extension
Budget support from State Govt/ Marketing Boards
Advisory/ build farmer groups/Capacity building
Government
To sum up…
• Agricultural market reforms needed urgently
• Technological up gradation –electronic transaction systems
• Financial provisions – both private and public
• National Agriculture Market system
• Regulatory atmosphere should be conducive
• Transparency and investment friendly environment
• Equity and gender inclusiveness
• Capacity building of all stakeholders• Promote PPP models
• BOOT, BOT, BOO, swiss challenge, hub and spoke models, regional/sectoral
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