Lok Sabha Question No. 400 (STARRED), answered on 2019-01-08
Subject: Linking Farmers with Markets
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: SHIVAJI ADHALRAO PATIL, Shrirang Appa Barne

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION & FARMERS WELFARE

## LOK  SABHA STARRED QUESTION NO. 400

TO BE ANSWERED ON THE 8 TH   JANUARY, 2019

## LINKING FARMERS WITH MARKETS

- *400.       SHRI ADHALRAO PATIL SHIVAJIRAO: SHRI SHRIRANG APPA BARNE:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether development and upliftment of farmers is the first priority of the Government, if so,  whether  the  Government  is  working  on  a  concrete  plan  to  link  the  farmers  with  the markets  with  the  aim  to  help  the  farmers  in  the  trading  of  foodgrain  and  if  so,  the  details thereof;
- (b) whether the marketing in farm produce is carried out through the State Governmentdesignated mandis spread across the country and if so, the details thereof;
- (c) whether forward trading is an index of predictive pricing and as a result both the buyer and seller can plan their futures trading, if so, the details thereof and the extent to which it will help farmers plan crop planting and do away with the role of middlemen;
- (d) whether the Government is leveraging APMC mandis and at the same time amending the marketing laws to facilitate setting up of mandis by the private sector and if so, the details thereof; and
- (e) whether the Government has made any assessment of the success of the whole sale market through e-platform (e-NAM) , if so, the details and the present status thereof?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी

(SHRI RADHA MOHAN SINGH)

- (a) to (e): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (e)  OF  LOK  SABHA STARRED QUESTION NO. 400    DUE FOR REPLY ON 8 TH   JANUARY, 2019.

(a) & (b): Yes Madam. Development and upliftment of farmers is the priority of the Government.      The  Government has  been  working  continuously  and has  taken  several concrete  steps  to  link  the  farmers  with  the  markets  with  the  aim  to  help  the  farmers  in trading  of  their  foodgrain.  Agricultural  marketing  is  a  state  subject  and  wholesale agricultural marketing is undertaken by the network of 6630 regulated wholesale markets, set  up  under  the  provision  of  respective  State  Agricultural  Produce  Market  Committee (APMC) Act.

In order to provide better marketing facilities to the farmers, the Government has released a new model 'The Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017' in April 2017 for its adoption by States/Union Territories (UTs). The provisions therein provide for alternative marketing channels other than APMCs to farmers in marketing their produce at competitive & remunerative prices.

In  order  to  optimise  the  use  of  scarce  resources  and  mitigate  the  uncertainty  in price  and  marketing,  the  Government  has  formulated  and  released  a  progressive  and facilitative Model Act 'The ----State/ UT Agricultural Produce & Livestock Contract Farming and Services (Promotion & Facilitation) Act,  2018'  in  May,  2018 for  its  adoption  by  the states/Union  Territories  (UTs).  The  aforesaid  Model  Contract  Farming  Act  covers  the entire  value  and  supply  chain  from  pre-production  to  post  harvest  marketing  including services contract for the agricultural produce and livestock.

The Government has implemented National Agriculture Market (e-NAM) scheme an online virtual   trading  platform to provide farmers with opportunity for transparent price contd…2/-

-2- discovery  for  remunerative  prices  for  their  produce  through  competitive  online  bidding system.  So  far,  585  wholesale  regulated  markets  of  16  States  and  02  UTs  have  been integrated with e-NAM platform.

As  per  Union  Budget  Announcement,  2018-19,  Government  has  decided  to develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) to work as centers of aggregation and to provide farmers with facility near to farm gate for making direct sale to consumers and bulk purchasers while improving their market access.

The  Government  is  implementing  Market  Research  and  Information  Network (MRIN) Scheme covering 3355 wholesale mandies across the country linked to Agmarknet portal,  wherein Agricultural Produce Market Committees (APMCs) markets are reporting data on mandi arrivals and prices of their traded agricultural commodities on daily basis. The farmers have free access to the Agmarknet portal for getting market price information easily.

In order to ensure remunerative prices to farmers for their produce, the Government of India has launched an umbrella scheme 'Pradhan Mantri Annadata Aay SanraksHan  Abhiyan'  (PM-AASHA).  Under  PM-AASHA,  the  Department  of  Agriculture, Cooperation and Farmers Welfare (DAC&FW), Ministry of Agriculture & Farmers Welfare, Government  of  India,  implements  the  Price  Support  Scheme  (PSS)  for  procurement  of pulses, oilseeds and copra. For oilseeds, DAC&FW also implements the Price Deficiency Payment Scheme (PDPS).

Minimum  Support  Price  (MSP)  is  notified  by  the  Government  for  certain  crops primarily for procurement. Giving a major boost for the farmers income, the Government has approved the increase in the MSPs for all Rabi crops for 2018-19 at a level of at least 150 percent of the cost of production.

-3-

Further,  under  PM-AASHA,  procurement  for  paddy,  wheat  and  coarse  grains  at MSP  are  done  by  Department  of  Food  &  Public  Distribution  (DFPD)  through  Food Corporation  of  India  (FCI).  Further,  Cotton  and  Jute  are  procured  by  the  Ministry  of Textiles  through  Cotton  Corporation  of  India  (CCI)  and  Jute  Corporation  of  India  (JCI) respectively.

(c): Price discovery and price risk management  are  the  major  objectives of forward/futures  markets. While forwards are  customized  contracts,  bilaterally  negotiated between  parties for buying/selling a particular quality/quantity of commodity  at a predecided price on  a future date, futures are standardized, exchange traded contracts for buying/selling a standardized quantity of a particular commodity at a predecided price on  a future date.

Farmers and growers can benefit through the price signals emanating from futures markets  even  if  they  may  not  directly  participate  in  the  futures  market.  A  farmer  can determine  the  kind  of  crop  which  he  would  prefer  to  sow  by  taking  advantage  of  the advance  information  of  the  future  price  trends  of  alternate  crops.  Farmers  can  also simultaneously enter into the futures contract of the planted crop at the prevailing futures price  thereby  locking-in  the  price  at  which  they  can  sell  the  underlying  commodity  at  a specific point of time in future. In a futures contract, the farmer can deliver the crop directly on the exchange platform, subject to payment of market levies charged by the respective States.

As per the Fifteenth Report on 'The Forward Contracts (Regulation) Amendment Bill, 2010'   of the   Parliamentary   Standing   Committee on   Food, Consumer Affairs and

Contd…4/-

-4-

Public  Distribution,  futures  markets  also  lead  to  reduction  in  the  amplitude  of  seasonal price variations and help the farmer realize somewhat better price at the time of harvest or to postpone the sale of his produce, in part or in full, thereby moderating market arrivals as well as the ability of the trader to monopolise price setting.

(d):      Government is providing technical support and assistance to the APMC markets to leverage them for developing their infrastructure and human resources, so as to facilitate farmers to effectively and efficiently market their produce. Financial assistance is provided to  APMCs  for  upgrading  their  infrastructure  and  improving  their  forward  and  backward linkages  through  various  schemes  such  as  Agricultural  Marketing  Infrastructure  (AMI), Mission  for  Integrated  Development  of  Horticulture  (MIDH)  and  Rashtriya  Krishi  Vikas Yojana- Remunerative Approaches for Agriculture and Allied Sector Rejuvenation (RKVYRAFTAAR)  etc. The Agricultural Produce and Livestock Marketing (Promotion & Facilitation)  Act,  2017,  circulated  by  the  Government  of  India  to  the  States/Union Territories for adoption, intends and promotes of alternative marketing channels including that of setting up of mandis by private sector.

(e):              The  Government  has  not  made any specific assessment of the success of the whole  sale  market  through  e-NAM  Platform.  However,  e-NAM  portal  being  an  online platform,  provides  up-to-date  Management  Information  System  (MIS),  from market  level upto  National  level  for  monitoring  performances    thereby  helping  to  continuously  take appropriate corrective measures to improve the system. This has led to continuous and substantial increase in farmers participation as well as trade volume on e-NAM platform.

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