The Hindu Business Line : Strengthen agri-markets

THE DECADE-AND-HALF of economic liberalisation process has left agricultural production and marketing largely untouched despite the official position that selling the farm produce is the most important economic activity, particularly that of the small producers with marginal surpluses for marketing. Though originally conceived as a device to protect the interests of small farmers, regulated markets, sadly, now choke the primary producers' freedom to sell. On the farm front, the outlook has changed considerably . Thus, regulated markets have also outlived their utility what with the considerably changed outlook on the farm front with shortages, hoarding and black-marketing becoming terms of the past; the vestiges of a controlled regime. Thus, they must reinvent themselves and cater to the current needs of producers and consumers living in a competitive environment.

Though agricultural production is largely free from controls, marketing is not. Under the Agricultural Produce Marketing Regulations Act, only the State governments can initiate the process of setting up markets for agri-produce in a defined area. Private and cooperative sectors cannot move in to set up markets equipped with more modern facilities. To face the challenge of globalisation and benefit from market access opportunities, the agricultural marketing system needs to be integrated and strengthened. It is a sad commentary on the States that regulation, development and management of agricultural produce markets are far from satisfactory. Not many of the nearly 7,400 agricultural markets across the country that are categorised as `regulated' can claim to run on farmer-friendly lines. Given the strong political orientation of the committees that run these markets, most have willy-nilly restricted the development of direct and free marketing, smooth raw material supplies to agro-processors, information exchange and adoption of innovative marketing systems and technologies.

It is unfortunate that many States have been lukewarm to the Centre's model law, the State Agricultural Produce Marketing (Development and Regulation) Act, 2003 despite their broad agreement to implement reforms such as setting up private markets, direct marketing, contract farming, and rationalisation of market fees. As agriculture and agri-marketing are State subjects, the Centre can at best persuade State governments to fall in line. Fragile State finances mean little public investment is going into strengthening the markets. With economic liberalisation, free markets and freedom to trade as the new buzzwords, it is time the States stopped perceiving regulation of agri-produce markets as a sovereign function. The government's role should be that of a facilitator, rather than a manager of markets. Farmers' organisations must pressure the State governments to adopt the model law. On its part, the Centre has linked marketing reforms to grant of benefits under the Technology Mission on Horticulture, a welcome move that will go some way in stirring the States into action. The private sector is in a position to bring investments and entrepreneurial skills to manage markets; but will do so only when reforms are carried out.

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