Sandeep Sabharwal
The government recently announced a slew of agri-market reforms which many are terming as a game-changer. One of the most crucial announcements was the proposed amendments to the Essential Commodities Act (ECA) and the Agricultural Produce Marketing Committee (APMC) Act, which now paves the way for the private entities to set up their own markets/yards.
As per the proposals, the new unified trading license will allow traders to buy directly from farmers without having to pay APMCs a fee. The Government believes that the proposed Agri-market reforms will attract investment in infrastructure and offer farmers competitive remuneration.
These recent amendments in agricultural marketing laws are in line with the Government's vision of “One Nation One Market” for agricultural commodities in India. The removal of restrictions on the sale of farm produce will help farmers increase their earnings substantially as they are now free to sell their produce anywhere.
These reforms will help in making the procurement system more competitive, transparent, and farmer-friendly and will help in taking the Agri commodity market nearer to the farmers as it will enable barrier-free Inter-State Trade.
The Rs 1 lakh crore set aside for the Agri Infrastructure fund with the main aim for augmenting support mechanism at the farm gate will have multiple effects.
The linkage of Agri markets with digitized solutions can enable the environment to reduce Agri wastage which is pegged at 10% of the Agri produce that itself is Rs 1 lakh crore per annum. In India typically food produce turns over seven times from production to consumption that is due to the fact that multiple people end up holding crops at different levels of intermediation due to the diversity of geography, crop pattern, and consumption pattern.
With the relaxation of the Essential Commodity Act coupled with the vision of one national market, some points of intermediation will automatically contract and hence the loss of revenue as well as the loss of productivity in handling, freight, etc. attributed to such pattern will also get reduced significantly.
Besides this, the transparency of information and the flow of information regarding the availability of stocks versus the known consumption pattern will also go a long way in streamlining the Agri supply chain.
From a warehousing perspective, these reforms will have a far-reaching impact. The decision to extend “Operation Greens” run by Ministry of Food Processing Industries (MOFPI) from tomatoes, onion and potatoes to all fruit and vegetables is a huge plus for warehousing sector as the scheme envisage a 50% subsidy on transportation from surplus to deficient markets and 50% subsidy on storage, including cold storages. This will lead to better price realization for farmers, reduced wastages and affordability of products for consumers.
Within the warehousing Industry, these reforms will catalyze the promotion of Scientific Warehousing. The revolutionary eNAM has already connected the farmers, traders, and Mandi’s digitally, and now with the government setting aside Rs 1 lakh crore for Agri Infrastructure Fund for farm-gate infrastructure for farmers, it is important that the warehousing industry undergoes digital reforms to be a part of the farm-gate infrastructure.
A smart warehouse integrated with real-time data embedded in Artificial Intelligence having real-time tracking of the facilities providing error-free results on the status of the warehouse and the products stored within as well as in transit.
With the government's growing focus on a connected Agri value chain, smart warehousing is now a necessity than the exception and for the warehousing sector, these reforms are surely going to create a wave of reforms and technical up-gradation within the sector.
The market reforms coupled with technology is ushering in an era for a platform play in the Agri market which if implemented properly would surely go a long way in streamlining the Agri environment and catapulting the same to augment the income of not only the farmers but the entire Agri fraternity.
The author is CEO at SLCM Group
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