The Hindu Business Line : Unified national market for agriculture mooted

Roadmap
Recommends redefining agriculture in terms of production, processing, transport and marketing.
Suggests promotion of cold stores/warehouses in gateways to major markets such as Dubai, Singapore, London and Moscow.

New Delhi April 14 The Working Group on Agriculture for the 11th Five-Year Plan (2007-12), in a far-reaching recommendation, has suggested shifting "agriculture marketing" from State to concurrent list to speed up reforms and evolve a unified national market.

Need to dovetail

Among the dozen sub-groups which studied the subject of agriculture to provide policy inputs for the 11th Plan final document, the working group on marketing, infrastructure and policy required for internal and external trade has underlined the need to dovetail domestic marketing/price policies with trade policies by even redefining the terms of reference of the Commission for Agricultural Costs and Prices (CACP).

One of the suggestions - which may be tough to get through by political dispensation, which resorts to off and on ban on exports of farm products - pertains to the need to avoid "knee-jerk" decisions in marketing and trade. These include the ban on exports, re-imposition of stocking limits and undue hike in minimum support prices (MSPs).

The Group headed by former Chairman, CACP, Prof Shabd S. Acharya, has also recommended redefining "agriculture" in terms of production, processing, transport, marketing and trade in food, feed and fibre and other agricultural products, including livestock and fisheries.

The Group said encouragement must be extended to market aggregators such as corporate, co-operative and contact farming. It said market intervention scheme (MIS) could be strengthened using information, communication and technology (ICT). Illustrating this point, it said commodity-wise portals for 300 commodities and 2,000 varieties could be developed, besides beefing up portal of AGMAKNET as virtual market.

For promotion of exports, it said APEDA should be allowed (50 per cent grant) to promote cold stores/warehouses in gateways to major markets such as Dubai, Singapore, London and Moscow. Alongside, there should be 50 per cent rebate on premium for crop insurance for contract farming in Agri Export Zones.

It also favoured institutional mechanism for creation of database on incidence of pests and diseases and identification of pest/disease free areas. Import of quarantine system could also be undertaken to mitigate risk of new pest/diseases, which might threaten exports, it said. Other important suggestions include posting some experts as Agro Export Ambassadors in key target countries for studying market dynamics and advising Government and exporters, remaining fully equipped and pro-active in responding to technical barriers to trade notifications (within 60 days), subsidising airfreight of fresh produce and mandating cargo space for perishables in passenger airlines.

For schemes of assistance for development of supply chain infrastructure during the Eleventh Plan (including capital subsidy for export infrastructure), the Group estimates Rs 921 crore and for schemes on market intelligence, market development and packaging development, the outlay would be Rs 3,970 crore.

While schemes for quality development and capacity building would entail Rs 652 crore, for R&D the outlay needed is Rs 41 crore and for transport assistance scheme Rs 200 crore, taking the total outlay on promotion of external trade for financial assistance schemes of APEDA to Rs 5,785 crore.

Market infrastructure

For strengthening of market infrastructure, it said the guiding principles to be governed include, among others, promotion of direct marketing (up to 50 per cent), more of direct sourcing, minimal processing at farm or village level, promotion of grading and standardisation, capacity building for quality and encouragement of demand for safe food. It estimates for infrastructure and investment in the farm sector, the sources could be Rural Infrastructure Development Fund, APMCs/SAMBs, private sector, which together might chip in Rs 47,625 crore, while the Central outlay could be Rs 16,687 crore, taking the total to Rs 64,312 crore for this vital component of farm sector in the Eleventh Plan.

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Unified national market for agriculture mooted