The recent proposal by the Ministry of Agriculture and Farmers’ Welfare to establish a GST Council-like body for agricultural marketing reforms marks a significant step towards addressing the longstanding challenges in India’s agricultural sector. This initiative, outlined in the draft National Policy Framework on Agricultural Marketing, aims to create a more competitive, barrier-free, and transparent market for agricultural produce, ultimately benefiting farmers across the country.
For decades, the agricultural marketing system in India has been plagued by inefficiencies and fragmentation. The state-specific regulations and lack of a unified national market have hindered farmers from getting fair prices for their produce. The proposed Empowered Agricultural Marketing Reform Committee of State Agricultural Marketing Ministers seeks to address these issues by fostering consensus among states and pushing for the adoption of reform provisions in the state Agricultural Produce Market Committee (APMC) Acts.
The idea of a GST Council-like body is not new. The success of the GST Council in harmonizing tax policies across states and creating a unified tax regime serves as a model for this new initiative. By bringing together state agriculture ministers on a rotational basis, the proposed committee aims to build a consensus on critical issues such as single licensing/registration systems, uniform market fees, and barrier-free agri-trade. This collaborative approach is essential for overcoming the regulatory hurdles that have stymied progress in agricultural marketing reforms.
One of the key objectives of the proposed committee is to develop a unified national market for agricultural produce. This involves not only harmonizing state-level regulations but also ensuring adequate post-harvest management and marketing infrastructure. The draft policy highlights the need for private wholesale markets, direct purchases by processors and exporters, and the declaration of warehouses and cold storage as deemed market yards. These measures are crucial for reducing the intermediaries in the supply chain and ensuring that farmers receive better returns for their produce.
However, the success of this initiative hinges on the willingness of states to adopt and implement these reforms. The experience with the three farm laws introduced by the NDA government during the COVID-19 pandemic, which were eventually repealed due to widespread protests, underscores the importance of building consensus and addressing the concerns of all stakeholders. The proposed committee must work closely with state governments, farmers’ organizations, and other stakeholders to ensure that the reforms are implemented in a manner that is both effective and inclusive.
In addition to regulatory reforms, the draft policy also proposes a price insurance scheme along the lines of the Pradhan Mantri Fasal Bima Yojana (PMFBY) to protect farmers from price crashes. This scheme aims to stabilize farmers’ incomes, encourage the adoption of modern agricultural practices, and ensure the flow of credit to the agriculture sector. Such measures are essential for creating a more resilient and sustainable agricultural economy.
