Arguments against the Privatisation of Agri-markets
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Why farmers sell to private buyers now?
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They are forced to sell outside Mandis.
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About 49% of paddy and 36% of wheat is already being sold to the private traders.
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Farmers are thus forced to sell outside Agricultural Produce Marketing Committees (APMC) because:
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Very few Mandis:
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While the National Commission on Agriculture (NCA) had recommended one mandi per 80kms2; currently, the average area served is 463kms2.
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There are only 6,630 mandis (required 41,000).
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A government committee in 2017 had recommended at least 10,130 mandis.
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High transport costs: Small and marginal farmers find it costly to transport produce to mandis, and hence they sell it to local traders.
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No significant private investment despite freedom to sell outside mandis:
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18 States have allowed the establishment of private markets outside the APMC, but with no major private investments.
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Lack of commitment to Minimum Support Price (MSP):
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If mandis weaken and private markets with no commitment to MSPs expand, farmers fear a gradual erosion of their entitlement to a remunerative price.
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Weakening of MSP is also signalled though government measures :
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Slow rise of MSP over the past 5-6 years.
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The Commission for Agricultural Costs and Prices (CACP) has been recommending to the government that open-ended procurement of food grains should end.
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Way Forward
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Increase number of mandis: expansion of investment in mandi infrastructure and a spread of the MSP system to more regions and crops; simultaneous universalisation of the Public Distribution System.
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Reform APMCs to ease the entry of new players: and reduce trader collusion and link them up with national e-trading platforms.
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Introduce unified national licences for traders: and a single point levy of market fees.