FICCI webinar explores agricultural market reforms by GoI; suggests creation of small warehouses at farmgate

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A recently concluded webinar by the Federation of Indian Chambers of Commerce and Industry (FICCI) entitled ‘Opportunity to reinvent Agriculture @Policy Reforms’, saw Nandita Gupta, Joint Secretary (Storage and PG), Department of Food and Public Distribution, Government of India suggesting the creation of small warehouses at the farmgate that could save farmers from distress sale of their produce and also assist in providing financial assistance to them. For that, she highlighted the importance of making it mandatory for the primary agricultural cooperative societies to register their warehouses with the WDRA (Warehouse Development Regulatory Authority).

Gupta said that this will benefit the farmer by not only giving him access to standardised warehousing facilities but also by helping them secure financial assistance enabled by the Electronic Negotiable Warehouse Receipt (e-NWR)- a legal document that enables the holder to further trade. She also mentioned that the ministry is in discussion with the banks and the RBI for easy pledge financing to the farmers on the basis of the e-NWR.

Gupta was speaking on the three ordinances that were recently introduced by the GoI, ushering in major agricultural market reforms.

  • The Essential Commodities (Amendment) Ordinance, 2020, that amends the existing act to remove all agricultural commodities from the list of essential commodities. The government assumes that “the freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector. It will help drive up investment in cold storages and modernisation of food supply chain.”
  • The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, which will promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations. It basically aims to create trading opportunities outside state-run Agricultural Produce Marketing Committee yards.
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, that provides for a national framework for agreements with the farmer by any third party. It is an enabling legal framework for contract farming.

Yogesh Dwivedi, Chief Executive Officer, Madhya Bharat Consortium of Farmers Producer Company, said that the Mandi Act will facilitate direct procurement of agriculture produce from farmer’s doorstep by buyers without having to bring them to the Mandis to sell.

Amit Mundawala, Co-founder & MD, AgriBazaar said, “Transport enables the farmer to invest more and increase production.” Mundawala added that these reforms have created promising investment opportunities for private enterprises.

Pravesh Sharma, Advisor, FICCI & Co-founder & CEO, Kamatan Farm Tech said, “The present set of agriculture reforms is of course welcome, but they should be seen as the starting point and not the destination of the journey. Much needs to be done to address bottlenecks in factor markets such as land and capital, technology and infrastructure upgradation before Indian agriculture can become globally competitive, ecologically sustainable and socially inclusive.”

Siraj Hussain, Advisor, FICCI and Former Secretary, Ministry of Agriculture & Farmers Welfare said, “The rules are yet to be circulated by the Government and therefore, in many cases, there is some vagueness as to how the implementation of these ordinances will take place on ground. However, I do think that in the long run, these ordinances, if enacted into laws, will bring a lot of change to how agriculture marketing, farming and trading takes place.”

Venkatram Vasantavada, MD & CEO, SeedWorks International said, “We are in a kind of a supply surplus situation so if these reforms solve the issues around market linkages, the farmer will have incentives to invest.” Vasantavada mentioned, going forward, investment in technology, R&D and impactful collaborations will be big game changers.

T R Kesavan, Chairman, FICCI Agriculture Committee and Group President, TAFE said that the agriculture ordinances have the potential to fundamentally transform the agriculture sector, facilitate more holistic development of agriculture markets, and benefit the farmers. “What is important is that when you have surplus crops and bounties, one of the major areas of focus for this will be how to preserve the waste and convert this into processed, value added food. Indirectly it’s putting money back into the farmers’ hands.” Kesavan also mentioned that proactive approach and enabling ecosystem for promoting agriculture export could make India emerge as an important global player in the next decade.

Ramesh Doraiswami, MD & CEO, National Bulk Handling Corporation, said that the recently announced agricultural reforms could bring a paradigm shift towards a more transparent, productive and integrated post-harvest value chain in Indian Agriculture. “Good engagement amongst various stakeholders including governments can make agriculture a sunrise sector and strengthen farmers.”

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