Gramin agriculture markets-first mile linkage for farmers

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In order to facilitate the small farmer’s access to markets and online platforms the government has announced in Union Budget 2018 to allocated Rs 2000 crore to upgrade rural haats or Gramin Agricultural Markets which would be linked to eNAM.

Agricultural produce and livestock marketing (promotion & facilitation ) act, 2017 has made provisions for developing markets under local bodies so that there is a seamless flow of produce from rural to urban area.

The Act provides the framework for development of rural primary markets.

Doubling Farmers Income

As per the recommendations of Report on Doubling farmers income 2, the Rural periodic markers need to be upgraded in to a function that enables aggregation and transportation from village level to wholesale market.

It has been advised to build on the available infrastructure to establish large number of primary rural agricultural markets to provide the following two services:

1. Direct marketing between producers and consumers
2. Aggregation platforms for the small lots of farmers

Functioning of Rural Markets

The rural markets which are multi commodity in nature are first contact point of market.

The markets of Assam, Odisha, West Bengal , Chattisgarh and Jharkahand function as the primary markets which serve a small area of 1.5 to 3 km radius and operate once or twice a week.

There is relatively small market attendance of 200 to 1000 person per market day where farmer –producers sell their surplus to local consumers.

In some of these markets livestock is also assembled for sale in bigger markets. Also non farm products for
daily needs are sold.

In Rural Markets, trade is characterized by direct sales of small quantities of produce by producers to village traders and by retail sales to rural consumers.

Besides goods, that are not produced locally, are brought by smaller & occasional traders to retail to local population.

These markets, through their interconnections, are a farmer’s main connection point with the inter and intra regional marketing system.

The ruling prices in these primary markets are invariably much lower. Price variations are attributed to lack of infrastructure such as storage, transport, etc.

Due to lack of infrastructure, many times the farmer is forced to sell at harvest time, at low prices, only to buy back in off season at higher prices.

There is an increasing awareness amongst the rural population about advantages of selling their produce at market points to secure competitive prices.

This, coupled with increase in Agricultural & Horticultural production, will generate larger arrivals in Rural Markets. Handling of larger turnovers will necessitate providing appropriate infrastructure facilities at these markets.

Upgradation of Rural Markets and connectivity

The need for market infrastructure and market linkages has been addressed in the Union Budget 2018.

The rural primary markets called Gram will get a boost by having infrastructure and business linkages with markets. This will ensure participation of small and marginal farmers to markets especially eNAM.

The government will also make efforts to link villages and rural roads to agriculture markets, secondary schools and hospitals under the Pradhan Mantri Gram Sadak Yojna (PMGSY).

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This will enable farmers to connect produce in suitable quantities with market of choice will be developed. Further with farmers enabled with a choice of markets, competition and price discovery will develop.

This will approach will strengthen Farm to fork linkages and bring better value.

Issues in developing Gram:

Parallel Acts: The issue in developing Rural periodic markets are the parallel acts i.e which administer the ownership and operation of these markets. For example multiplicity of regulatory Acts- Assam Agricultural Produce market act 1972, Panchayat Act 1994 and Municipal Act 1956 acting in parallel has resulted in absence of unidirectional development.

Role of Private sector

The up gradation of rural markets will require greater role of public and private sector in providing enabling environment for growth, increasing, enhancing market facilities and market information. A PPP model for developing these markets needs to be developed.

Capacity building and awareness creation

Capapcity building and awareness building of farmers and traders about marketing is required to be in place. Empowering farmers with information, services and linkages through training will help in bringing the desired change in rural markets faster.