Marketing Reforms

Context: The long-pending market reforms open avenues for the development of the agriculture sector, which has been in perpetual-distress.

Recent developments:

• Centre’s agricultural marketing reforms via ordinances in June presented to the Parliament for the enactment of the law.

Positive outcomes of Agri-marketing Reforms:

• Decline farm goods business in regulated markets by over 40% since the grant of permission for out-of-mandi transactions in June.
• Agitations limited:  in states like Punjab, Haryana where most of the marketable product is picked up by government agencies at MSP.

Significance of the above reforms:

• Offer greater choice to cultivators: to sell their produce to whoever and wherever they can realize better prices.

• End of monopoly:  of Agricultural Produce Marketing Committees (APMCs) by permitting out-of-mandi transactions of farm goods. 
• Increased Competition: Private agricultural markets are allowed to establish to offer competition to the APMC mandis. 
• Archaic Essential Commodities Act, 1955 amended: to curtail the existing powers of the Centre and state governments to impose stock-holding and movement restrictions on agricultural commodities 
• Contract farming: which facilitates better linkages between producers and end-users of the produce, has been legalized to protect the farmers’ interests.

Issues with recent reforms:

• Misinformation about the reforms amongst various groups: 
• Farmer's misbelief that this can lead to the abolition of Minimum Support Price (MSP) and Corporatisation of Agriculture.
• About contract farming will lead to corporatizing agriculture, whereas the new law only provides legal validity to mutually agreed contracts.

• Lack of communication: in properly explaining to properly explain their objectives and implications for the farmers.

• No clarification on one of the Commission for Agricultural Costs and Prices (CACP) report that talks about phasing out of MSP.

• Unresolved existing issues:

• Harvest-time price meltdown, which is the real bane for the growers.

• Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-ASHA)- the flagship price and income assurance scheme through direct procurement, price deficiency compensation, and procurement and stocking by private parties has not moved forward.

Conclusion: The debate in Parliament over the Bills concerning these reforms is an appropriate occasion to come clean on these issues. But the clarification and awareness campaign must be carried out outside the House as well.