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BW Businessworld

National Market For Farm Goods Planned

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The government is working on a plan to promote free movement of farm goods across the country by breaking the stranglehold of states on regional wholesale commodity markets.
State-controlled mandis, or markets, at district levels play a crucial role in the commodity trade, but they restrict the choice of places where farmers can sell their produce and seek a better price.
The central government will spend Rs 200 crore over the next three years to develop 585 wholesale markets as part of a national platform.
The Small Framers Agri-Business Consortium will be the nodal agency to implement the plan. Each mandi will get Rs 30 lakh to install the necessary equipment and facilities for electronic auctions of commodities.
In the initial phase, the government will identify 50 regulated mandis in 10 states to break trading cartels and develop a national common market, according to a proposal.
The Centre will involve state governments in reforming the functioning of these markets.
State governments would be required to adopt modern methods such as a single trading licence for the entire region, single-point levy of market fee and e-auction for price discovery. The markets adopting the changes will be eligible for funding under the plan.
Traders welcome the idea of a national market that allows free movement of agricultural goods across states, especially fruits and vegetables. This will enable places facing shortages of certain merchandise to secure them from areas where the goods are abundantly available.
"Farmers and growers are free to sell their products to anyone without any compulsion in the current setup also. They can use existing mandis in almost every district of our country, but trading practices need improvement for the benefit of farmers," said by Akbar Khan, a trader at Delhi's Azadpur Mandi, one of India's largest centres for fruit and vegetable trading.
Instead of opening new markets, the government's focus should be on modernising logistics and other facilities at existing mandis, he said.
Wholesale markets in India often suffer from a lack of adequate facilities for storage, waste disposal, transportation and cold chain.
A common national market for commodities is expected to help in establishing a transparent process of pricing goods.
"This would minimise the scope of price manipulation and also bring down market levies," a senior official at Azadpur Mandi said.
Price distortion in the farm produce market is a serious issue, with vast gaps in the retail price and the value growers get for their produce.
The absence of a national market also leads to mismatches in supply and demand as movement of goods is restricted by regional regulations.
With national laws regulating the commodities trade, both consumers and farmers will have more predictability about prices and supplies.