Commodities

Karnataka’s agri-marketing reforms have not benefited farmers: CAG

Our Bureau Bengaluru | Updated on October 10, 2019 Published on October 10, 2019

Karnataka, an early mover in implementing reforms, had connected its agriculture markets through the unified markets platform. Representative image   -  THE HINDU

The Comptroller and Auditor General of India (CAG) has said the agricultural marketing reforms, initiated by the Karnataka government, have achieved limited success in benefiting the farmers due to lack of wider markets and transparency in operations.

Karnataka, an early mover in implementing reforms, had connected its agriculture markets through the unified markets platform (UMP) to facilitate electronic trading of commodities. Karnataka, in joint venture with the NCDEX Spot Exchange, has floated a SPV — Rashtriya e-Market Services (ReMS) — to roll out the UMP since 2014.

In its performance audit report on Karnataka’s economic sector for the year-ended March 2018, CAG said that the UMP was rolled out in 160 main mandis in a phased manner, but excluded 352 sub-mandis. All notified commodities were not traded on the UMP and the trade was restricted to one or two prime commodities only.

Moreover, trading on a UMP did not necessarily guarantee better price to farmers as prices realised during 2017-18 for eight commodities were below the MSP, the CAG said. Further, the CAG report pointed out that transaction charges of ₹63.95 crore were paid to ReMS in 2014-18 in violation of the contractual provisions.

Objectives not realised

CAG observed that the concept of alternative markets to end the monopoly of the mandis was also one of the prime objectives of the agricultural marketing reforms, but these had not taken off in a big way. The licence to private market players was issued without approving operational guidelines.

Though three commodity parks were envisaged to benefit the farmers, they did not materialise. The concept of the warehouse based sales too had not yielded the desired results.

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Published on October 10, 2019
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