Use the COVID crisis to transform the agri- marketing system.
Because of significant disruption in supply chains as a result of the lockdown, farmers are stuck with a large amount of produce, especially of perishables like milk, fruits and vegetables, flowers and even poultry meat and eggs.
- Due to this glut, farm prices are collapsing, pushing farmers into destitution. Many of them are dumping milk and vegetables on the roads.
- With the procurement season for rabi crops having started, the mandi system will choke, and social distancing will go for a toss if immediate steps are not taken to organise procurement operations in an orderly manner.
- The wisdom lies in converting this crisis into an opportunity for reforming the agri-marketing system.
Here are a few suggestions that may help to put the agri-system on an efficient path.
- Abolish/reframe the APMC Act and encourage direct buying of agri-produce from farmers/farmer producer organisations (FPOs). The companies, processors, organised retailers, exporters, consumer groups, that buy directly from FPOs need not pay any market fee as they do not avail the facilities of APMC yards.
- The warehouses can also be designated as markets, and the warehouse receipt system can be scaled up. The private sector should be encouraged to open mandis with modern infrastructure, capping commissions.
- Futures trading should be encouraged by allowing banking finance to hedge for commodity price risks.
- Promote e-NAM through proper assaying and grading the produce and setting up dispute settlement mechanism; rope in major logistics players for delivery of goods.
- Procurement must be staggered through coupons and incentives that give farmers an additional bonus for bringing produce to the market after May 10, or so.
- The amount provided under PM Kisan should be increased from Rs 6,000 to at least Rs 10,000 per farming family to partially compensate them for their losses.
- Once the fire-fighting is over, India needs to evaluate the WHO’s role in this fiasco. Whatever the causes of this disaster are, it is clear that the WHO failed in its duty to raise the alarm in time. India must ask for fundamental reforms in the UN System, including the WHO, making it more transparent, competent, and accountable.