There is no question that the country – being one of the largest producers of agricultural commodities – deserves at least one modern food market similar to Rungis International Market, Paris. In fact, the issue of food marketing and distribution has always been a big issue for various incumbent Governments. Producers hardly get remunerative prices for their produce and at the same time, consumers are grappling with high food inflation. However, it would be highly erroneous to put all the blame on the intermediaries for the inefficient marketing in the long supply chain, simply for the reason that the required functions have to be performed. The pertinent question is whether the market participants are realising profits commensurate to their efforts. Therefore, there is no denying the fact that the food marketing system in the country is inefficient and not commensurate to the large production base.

Insufficient infrastructure

The low agricultural marketing efficiency and other supply side constraints are often cited as reasons for the food inflation. The Agricultural Produce Market Committee (APMC) Act, under which the markets are regulated, is also blamed for the inefficiency of markets. Most States have made reforms in their APMC Act, while Bihar has gone to the extent of repealing the Act itself. Despite all such efforts, functioning of markets has not changed substantially. Therefore, the regulation per se is definitely not the only factor which affects the marketing system. APMC Act or not, one of the key factors that affects marketing is lack of sufficient infrastructure. Although the country has come a long way as far as the number of markets is concerned i.e. from 286 regulated markets in 1950 to 7,246 in 2011.

Similarly, there are around 22,221 rural periodic markets of which around 15 per cent function under the ambit of regulation. However, there is still a lot to be done in this direction. Given the huge production base, there is practically no infrastructure for grading. Only seven per cent of the total quantity sold by the farmers is graded before sale. Scientific storage and cold storage is also abysmally low. Therefore there is need to improve market infrastructure and modernise existing mandis across the county.

Inspite of large agricultural production, our country does not have a single market which can be considered close to the global standards. Although agricultural marketing is a State subject, it is the Union Government which must find ways to establish such modern markets at least one each in four different directions of the country to promote market integration. These markets as model ones will not only improve the flow of goods across the country but also help in reducing post-harvest losses considerably.

One of the biggest advantages would be in terms of electronic auction of commodities which would increase transparency and provide better returns to the farmers. This would go a long way in eliminating unscrupulous elements in the supply chain and improve the demand-supply mismatch.

Better price discovery mechanism would also help in improving the market efficiency through integration and thus moving towards national agricultural market.

Enhancing Govt investment

Lack of private investment requires the the Government to take the initiative. The Integrated Scheme for Agricultural Marketing has estimated an investment requirement of ₹56,000 crore for marketing infrastructure and value chain development during the 12th plan Plan. However, the large supply side inefficiencies in the sector needs larger role of the Union Government to develop such markets on its own by creating special purpose vehicle. These projects in public private partnership will not only provide immediate boost to the sector but also bring in the much-needed private sector efficiency and professionalism in operations.

Such modern world class wholesale market will help in modernising and revamping mandis across the country. Rungis Market, Talad Thai Market, Bangkok and Sydney Produce Market etc are some of landmark markets across the globe and there is no reason why our country should not have the one!

The writer is Faculty, National Institute of Agricultural Marketing, Jaipur

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