Currently Indian farmers are restricted to selling their produce at wholesale ‘mandis’ or farmer’s markets that impose various taxes on producers, however, at a meeting of the Union Cabinet headed by Prime Minister, Narendra Modi, Rs 200-cr (US$31.43 million) was allocated for three years to establish an online nationwide agricultural market.
The National Agricultural Market will integrate 585 wholesale mandis across the country in order to provide farmers with free market access, higher transparency, and the possibility of better prices. Under the plan designed to spark reform in India’s agricultural marketing system, the Cabinet Committee on Economic Affairs approved a Central Sector Scheme for Promotion of National Agricultural Market through the Agri-Tech Infrastructure Fund.
After announcing the scheme, Finance Minister, Arun Jaitley told reporters, “Now, there will be one license for the entire state, there will be a single-point levy. There will be electronic auctions for price discovery. The impact will be that the entire state will become a market and the fragmented markets within the states would be abolished.”
The state of Karnataka has already established its own online agricultural market integrating 13 mandis, and the state of Maharashtra is currently involved in an online market pilot program, but government officials are targeting a single umbrella market for the entire country.
“We don’t want each state to develop separate software as it would be difficult to integrate,” says Agriculture Secretary, Siraj Hussain, “So, we have decided to provide a single software. Several states have expressed interest.”
The ministry has appointed the Small Farmers Agribusiness Consortium (SFAC) to build a common online platform and integrate 250 mandis in the current fiscal year, 200 mandis in 2016/17, and 135 mandis in 2017/18.
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