‘Kisan Mandi’ to bring farmers and consumers closer

With one eye on weeding out the wholesale market middleman and the other on reducing information asymmetry between small farmers and consumers, the foundation stone for India’s first ‘Kisan Mandi’ (KM) was laid here on Thursday. Taking advantage of an avenue opening up due to the on-going Delhi APMC Act amendment process, the market is likely to be fully operational within six months

The market, to be set up at Alipur on a 1.6 acre plot, will have small farmers selling only fruits and vegetables (F&V) to begin with. Principal consumers will include bulk buyers like organised retail chains, hotels and exporters. Infrastructure facilities scuh as transit cold storages and warehouses will be allotted to farmers producer organisations (FPOs) and grower associations who will have stalls at the market.

“We are making efforts to strengthen farmers and the Kisan Mandi is one such initiative in this direction,” said Radha Mohan Singh, Union Agriculture Minister.

The FPOs, promoted by the Small Farmers’ Agribusiness Consortium (SFAC), a body under the aegis of the Agriculture Ministry, will use the platform to sell directly, thereby eliminating commission agents. The model is expected to result in gains of up to 20-25 per cent for the producer while helping consumers save 15-20 per cent than what they shell out presently.

“If we manage to eliminate some of the existing seven or eight links to about two or three then costs will reduce, revenue will rise and benefits will accrue to both farmer and consumer,” said Pravesh Sharma, Managing Director, SFAC.

Different market, transparent pricing

Sharma emphasized that Kisan Mandi was different from the regulated Fruits and Vegetables markets like the one in Azadpur. “Goods must be physically transported to those markets before auctioning and sale. In this model, we will only have a sample. There will be a collection centre close to the farm gate itself to ensure quality which SFAC will assure. After auctioning — online, telephonic or physical — the produce will be sent directly to the buyer’s warehouse,” Sharma said.

The prevalent information asymmetry between buyer and seller is likely to be tackled as buyers could view the produce themselves and then quote a price which, if acceptable to the farmer, would result in a successful transaction. An online portal for the KM will be introduced to make prices available beforehand for trading.

“There is complete transparency in price discovery and the farmer earns the power to decide a price in addition to not losing money as a commission. The portal, which is being developed, will have all the information buyers require such as the quantity and quality of produce at a particular FPO,” Sharma explained. NCDEX is among the players competing to build the trade portal.

The Capital region was chosen due to its importance as Asia’s largest Fruits and Vegetabels market with produce entering its markets throughout the year, receiving 11,000-13,000 tonnes daily. During 2011-12, total annual F&V arrival was 45.04 lakh t and trade was worth between Rs. 6,000 crore and 7,000 crore.

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