NITI Aayog member suggests changes to APMC system, power subsidy to farmers

Member (Agriculture) of NITI Aayog Ramesh Chand and consultant in the government think tank Jaspal Singh have proposed an alternative to the existing Agriculture Produce Marketing Committee (APMC) marketing system in the agriculture sector.

Member (Agriculture) of NITI Aayog Ramesh Chand and consultant in the government think tank Jaspal Singh have proposed an alternative to the existing Agriculture Produce Marketing Committee (APMC) marketing system in the agriculture sector. A working paper authored by both academics argues that the APMC system has some serious disadvantages and, therefore, alternative options and systems of marketing need to be developed.

The suggestions include “the app-based sale of farm produce by farmers or farmers groups, e-commerce and digital commerce are also opening up new avenues for marketing”. Both have also argued that free or highly subsidised power to the agriculture sector is known to be the “main cause of over-exploitation of groundwater” and unsustainable use of water resources and recommended direct payment of subsidy amount to farmers and shifting to metered power supply, which will be paid for.

“Free power has also distorted cropping patterns towards water-intensive crops, showing disregard for agro-climatic conditions of various States and regions. Withdrawal of groundwater beyond recharge capacity is on the rise and the severity of this problem is increasing,” they said in the paper published by NITI Aayog.

They have also argued that the shift towards modernisation of agriculture will involve the introduction of new technologies and knowledge, private and corporate sector investments and new types of linkages between producers and end users. The paper noted that about 80% of investments in agriculture come from private sources – mainly farmers.

“The share of the corporate sector in total public and private investment in agriculture has remained meagre, below 0.2%, pointing towards the scope of expansion available for the corporate sector. The rest of the investment comes from public sources,” the report said, adding that the corporate sector is sensing several opportunities for expanding agribusiness.

“This will bring modern capital in warehousing, logistics, cold chain, food processing and integrated value chain development and, will, in turn, increase competition and improve market integration over time and space. State governments should facilitate producers to take advantage of these opportunities,” they said. The three farm laws, withdrawn by the Centre after farmers’ protests, had also proposed changes to the APMC system.