State promotes direct marketing of agri produce

After liberalising and de-regulating agricultural markets, the state government is now relaxing norms for creation of alternative marketing channels to allow companies to purchase directly from farmers, bypassing intermediaries.

This boost for direct retail sales of fruits and vegetables as against the traditional system, wherein farmers sell produce to traders in Agricultural Produce Marketing Committees (APMCs), will ensure stronger farm-to-fork linkages, better pricing for producers and lower rates for consumers.

The state government has already amended the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1964. This enables e-marketing of agricultural produce and establishment of virtual markets, shifting the burden of levy from producers to purchasers and restricting the jurisdiction of the APMC to only the market premises instead of the entire tehsil.

An official from the state agriculture marketing department told dna that they planned to liberalise the grant of direct marketing licences to ensure that commodities like fruits and vegetables are traded outside traditional APMCs, resulting in remunerative pricing for farmers and fresher, lower-priced produce for consumers.

"We plan to take the number of direct marketing licences to 1,000," the official said, adding that this would ensure that these marketing channels "were a strong option to traditional APMCs".

At present, Maharashtra has around 150 direct marketing licences with an annual turnover of Rs1,500 crore. "However, some of these licencees are non-functional, while a few others prefer to purchase from traders instead of from the farmers as was originally envisaged," the official admitted. The state also has around 840 farmer-producer organisations, wherein agriculturists come together to sell their produce.

"We do not plan to dismantle these APMCs as this has been created over the years. The solution lies in creating an alternative to them," the official said, adding that as part of measures to ensure ease of doing business for these direct marketing licencees, bank guarantees for a state-wide licence will be reduced to just Rs5 lakh from Rs15 lakh earlier. The amount of guarantees required for various revenue divisions has also been brought down along with the licence fees.

"This will help purchase agricultural commodities from farmers without taking the APMC route," noted an official from the state directorate of marketing, adding that the conventional monopolistic regime was being gradually dismantled. The state also plans to launch online licensing.

"Ultimately, due to competition, the end user stands to benefit. In a monopolistic regime, farmers get less money with the middlemen gaining," he added, stating that in July, they had issued 25 new direct marketing licences.

Farmer leader Dr Giridhar Patil, an associate of late Sharad Joshi (the founder of the liberal farmers movement Shetkari Sanghatana) noted that more than licence numbers, it was the purchasing ability of direct marketing licencees that mattered.

"Some companies are registered only in name with little transactions being conducted," said Patil, seeking that unnecessary rules and paperwork be eliminated. "Governments want to create hurdles... an open market should be just that, an open market," he demanded.

"It is not about regulations but how they well they are accepted," said Dipti Kataria Goradia, founder-director, Agastya Infracon Private Limited, which is into e-retailing of agricultural produce and exports, adding that creation of alternative markets was important. The APMCs were successful because of assured buyers for farm producers, she noted.

"The only way this can succeed is when the consumers start buying from these people," she noted, adding that it was necessary to build a link between these producers and the around 50,000 fruit and vegetable retailers hawking their wares in Mumbai.

Maharashtra has private markets in Nashik (pomegranate), Vani in Yavatmal, Nanded, Washim and Buldhana (cotton). The state has also launched weekly markets named after Bhakti saint Savta Mali, wherein weekly agriculture markets can be set up in municipal areas for the sale of fruit and vegetables by farmers and FPOs.

The state government, through the Maharashtra Agricultural Produce Marketing (Regulation) (Amendment) Act, 2005, began the liberalisation process by providing for the creation of private markets, farmer-producer markets, direct marketing and contract farming.