‘Farmers need training to access digital platform’

LabourNet Services India is a social enterprise engaged in training farmers in alternate agricultural trades that provide means of livelihood. It seeks to deliver this through skilling interventions, wage employment or self-employment.

Gayathri Vasudevan, its Co-founder & CEO, spoke to BusinessLine on recent government initiatives to help farmers come to terms with the dynamics of pricing and on doing away with middlemen. Excerpts:

What does LabourNet make of the government’s proposal of creating a common agricultural market?

This is a bold step towards a more transparent farm-to-market process. It should help farmers understand the dynamics of pricing and the role of intermediaries in the whole process. So far, farmers have been operating in a highly restrictive environment.

LabourNet operates in the informal sector and a major portion of it constitutes farmers. The agricultural sector echoes a situation similar to information anomalies in sectors like construction and rubber manufacturing, wherein regulatory intermediaries play a vital role.

Accessing the common digital platform will necessitate educating the farmers on how to derive maximum benefit. This entails a relook at our programmes too. Training farmers in several peripheral agricultural operations will enable them to advance into the digital era. On the demand side, we are working with companies, including Mahindra & Mahindra, to train the farming community. Digitisation has huge potential and hence it is an area of interest for us.

To what extent has a fragmented and over-regulated market tied down the farmer to the local mandi, constricting his choices?

Over-regulation has meant that states and local mandis dictate terms, making it difficult for the farmer to get remunerative wholesale prices.

The APMC (Agricultural Produce Market Committee) Act was originally introduced to protect farmers against exploitation of intermediaries and traders.

But it also restricted farmers from entering direct contracts with any bulk processor as the farm produce had to be routed through regulated markets.

The latter’s monopolistic stance harms the farmers’ interest and denied them better prices.

Under the new policy, all 29 states will be united, removing taxation and other hurdles. Under a common platform, farmers will have more choices as intermediaries will not be able to create a smokescreen. Direct selling will enable better prices and more transparency.

What is your idea of an ideal model of disruption in the market that benefits the farmers’ cause best?

Rather than disrupt creatively, the new system introduced by the government will usher in innovation for a better tomorrow for farmers. However, the model should ensure that the price discovery is effortless and accurate.

There should be no distortion in price signals and profit routes. Government decisions should align with farmers’ interests and long-term benefits.

Furthermore, any model should enable them to make decisions on selling their produce to advantage.

Given the presence of intermediaries, the farmer is currently unable to know the actual worth of his produce and is instead offered a prevailing standard price. He is unable to make informed decisions as he is unaware of the actual selling price. This has to change.

If the farmer is able to transfer ownership after the actual pricing is worked out by the processor based on the future market rate, he will be able to take decisions to his advantage and earn better.

How does the electronic National Agriculture Market (eNAM) benefit farmers?

With everyone in the supply chain integrated into a single platform through eNAM, the farmer should be able to benefit most with various options at his disposal through proper information-sharing. This is going to bring decision-making capabilities to those at the grassroots, shifting control away from monopolistic markets.

By integrating 585 wholesale markets across India, buyers from outside the State can actually participate in trading at the local level, leveraging infrastructure and opening options for farmers.

Similarly, when bulk buyers save on intermediary costs via eNAM, they will be able to offer better prices to the farmer.

Slowly, as the license issue process and movement of produce become standardised, farmers should be able to reap maximum benefits in the form of high returns.

eNAM is also expected to nurture value chains that will facilitate better storage and movement of agricultural goods in the future, bringing relief to the farmer and consumer alike.

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