The changes announced in the rules of agriculture marketing might provide women and vulnerable sections easier access to markets but we need a wider social security net and modernization
Given the agrarian crisis that the country had been going through, which got exacerbated by the pandemic, Finance Minister Nirmala Sitharaman announced 11 measures to boost the farm sector, ranging from the amendment to the Essential Commodities Act to a Rs 1 lakh crore fund to boost agriculture infrastructure. The changes announced in the rules of agriculture marketing might provide women and vulnerable sections easier access to markets.
The existing Agricultural Produce Market Committee or APMC Act was planned to protect the interests of the British Government, which wanted to ensure the supply of pure cotton at reasonable prices to the textile mills of Manchester. The first regulated market (Karanja) under the ‘Hyderabad Residency Order’ was established in 1886 and the first legislation was the Berar Cotton and Grain Market Act of 1887, which empowered a British Resident to declare any place in the assigned district as a market, for the sale and purchase of agricultural produce and constitute a committee to supervise the regulated markets. In 1928, the Royal Commission on Agriculture proposed a regulation of marketing practices and the establishment of regulated markets. The Government of India prepared a ‘Model Bill’ in 1938 and circulated it to all the Indian States. It became the guiding force for our APMC Act. So, it is not difficult to infer why the spirit of the APMC Act favours buyers rather than farmers. Of course, some would argue that it allows States to protect the farmers, as procurement is done under the supervision and surveillance of the State. But many mechanisms are available to protect the interests of farmers rather than being discriminatory against them.
The APMC Act designates a few patches as formal procurement centres. Currently, there are only 6,746 pockets in a vast country like ours and this allows limited buyers to purchase from farmers. This is a classic case of a State-backed oligopsonistic market structure, in which the number of buyers is small while the number of sellers is large. This gives enough power to buyers to pay the minimum price to farmers. Ironically, the maximum distance between a farmer and the mandi is five kilometres (km) but our field information suggests a minimum of 30-40 km travel for a farmer out to sell his produce. This means the APMC Act not only gives oligopsonistic power to buyers but also creates a geographical monopoly for them.
Further, the small number of APMCs and traders poses a challenge for farmers to sell their produce as they have to wait for days for their turn. This makes some sense for big farmers but not for small producers. Field data from Maharashtra, Karnataka and Telangana shows a minimum of three to five man-day loss for small farmers.
How the proposed changes will help: An independent country should favour the marginalised and protect their interests. This proposed change in agri-marketing rules is a step in that direction. Hopefully, new rules will encourage big-aggregators and start-ups to use technology in a better way to procure directly from farmers. These channels may be existent in pockets but operate informally due to stringent market rules (procurement and cross-border trade). A big push is necessary to bring the changes on the ground.
The pandemic is an opportunity to deregulate agri-marketing effectively to ensure social distancing. A perfect model of social distancing could be doorstep collection of agri-produce or at least at the village/cluster level. As an experiment, local collection centres were set up in parts of Vidarbha region of Maharashtra to procure agri-produce at the doorstep. These also acted as local storage and sorting facilities. All procurement activities were done by women farmers who were otherwise absent in post-harvest management. The process was iterated with tur daal. Calculations show that through this process small farmers save about Rs 175 per 50 kg of tur or approximately 10 per cent of its price; which means a marginal farmer can gain up to 10 per cent from doorstep collection. A similar experiment was done in other parts of Maharashtra and other States like Telangana and Karnataka. The outcome in those areas was also on a similar line; of course with a little variation.
Farmers can also minimise wastage in the direct procurement system. For example, a year ago the India Development Foundation (IDF) studied a vegetable value chain in Siddipet in Telangana and found big savings when Big Basket and Reliance Fresh started procuring vegetables directly from the farmers for their shops in Hyderabad. Farmers used to get the order one-day in advance and usually pluck the exact amount and quality of vegetable demanded. These are some out-of-the-box experiments that reveal huge benefits for small and marginal farmers through local collection.
New marketing rules should encourage such initiatives which are resilient in the current context, efficient and pro-farmer.
Gender aspect: The rising participation of women in farm work in India — a phenomenon commonly referred to as the feminisation of agriculture — is a huge reality now. According to OXFAM 2018, the agriculture sector employs 80 per cent of all economically productive women in India. They comprise 33 per cent of the agricultural labour force and 48 per cent of self-employed farmers. Despite their large contribution, women continue to remain invisible in the rural economy of India. Our critical evaluation suggests that women are acting as non-paid workers in agriculture or any other traditional sector; be it handicraft or weaving. Men are in control when it comes to selling their products to mandis/APMCs or handicrafts to local traders.
A vast majority of women, particularly in rural areas, are engaged in the informal sector and derive their livelihood from activities relating to agriculture, handlooms and artisanal products. Unfortunately, these women remain at the lowest end of the value chain, with their share in earnings being low out of margins, which are even otherwise very minuscule. In this context, there is scope to increase their income by continuing in the existing activity and becoming organised as a collective, so as to pool their output.
Others can be helped by getting them involved in some productive activity that is or can be popularised in the locality, and then selling the output as a group of women producers.
Doorstep selling/localised procurement will be liberating for women farmers. It will open up an opportunity for women farmers to participate in the selling activity and directly deal with the buyers. Our experience shows that exposure to agri-marketing made women aware of the information inputs and upgrades that could make their work more gainful. It made them receptive to new skills and knowledge on good agriculture practices and agri-markets. Communities witnessed that the traditionally-gendered division of agricultural work has changed. Women farmers are more confident, deciding on crop-related activities like the choice of crop, selection of fertiliser, taking loans or even children’s education.
Putting Women Self-Help Groups at the forefront: SHGs are a great way of empowering women in villages. However, the sustainability of such groups is a challenge as limited contribution from women and frequent defaults make them fragile. SHGs are formed and get dissolved in a few years. Connecting these SHGs to value chains is a great way to sustain them in the long-run. With the changed law, the SHGs now can participate in selling activities effectively, directly contact end-buyers and get a five per cent hike in the value of their produce. This amount is enough to sustain them for most of the year. And more importantly, it will increase activities in SHGs, encouraging women to meet others regularly. It has been observed that once the SHGs are linked to value chains, beneficiaries actively participate in entrepreneurial activities and have a much better understanding of their profits and savings.
In the end, one must understand that changing marking laws is not a panacea to all of our farm woes. Agriculture is a delicate area which needs continuous attention and care. Reforming a colonial-era marketing practice will definitely help the disadvantaged section of farmers but a wider social security and modernisation of agriculture is needed.
(The writer is Fellow, IDF. The views expressed are personal)
