The Committee on Doubling Farmers’ Income has released a draft report.
What are the major recommendations?
Agricultural Marketing - The committee has called for placing agricultural marketing in the Concurrent list.
This would facilitate the one-India market concept.
Also, while cultivation is geographically limited, marketing has no boundaries which necessitates a pan-India level operation to meet the demand across the country.
It has also recommended greater private sector participation in agri-marketing and logistics.
State Level Measures -
Creation of better physical infrastructure.
Improved price information dissemination campaigns.
Reforming regulations that force farmers to sell their produce to local monopolies.
Producer Organisations - It suggested increasing the number of farmer producer and village producer organisations (FPO/VPO).
FPOs and VPOs could play a critical role in integrating the small and marginal farmers into the agricultural market system.
Each FPO/VPO would cover 1,000 farmers and/or 1,000 hectares.
It also called for amending the Companies Act to facilitate private sector shareholding in FPOs up to 26 per cent.
Also, incentivising them by treating them at par with cooperative societies would be of help.
Marketing system - Wholesale - The current agricultural marketing system comprises of Agricultural Produce Marketing Committees (APMCs) which operate principal markets and their extended sub-market yards.
It is suggested that State Governments may convert these principal and sub-market yards into full-fledged and independent markets.
Private - While this will help improve the number of wholesale markets, the remaining requirement has to be met by promoting private markets.
This could be done under the provisions of the proposed Agricultural Produce and Livestock Marketing, (Promotion and Facilitation) Act, 2017 (APLM).
The committee has also urged the Union Agriculture Ministry to roll out the Model APLM Rules so that States can make the act operational.
Rural - It suggested upgrading the existing rural periodical markets as Primary Rural Agricultural Markets for meeting the rural retail markets demand.
It also highlighted the need for both the Centre and the States/UTs constituting special purpose vehicles to own and operate the National Agriculture Market.
These suggestions are in line with achieving the desired market density (wholesale and rural retail markets) to build a pan-India system.
Other recommendations - The committee has opined that small and marginal farmers would benefit from an efficient marketing system only if they have the withholding capacity.
For this, the committee has suggested offering pledge finance i.e.post-harvest loan against produce as collateral.
Upgrading storage godowns, including cold storages is a prerequisite to make available Negotiable Warehouse Receipts for these loans.
The Ministry has to develop comprehensive guidelines to promote warehouse-based post-harvest loans and eNWR (Negotiable Warehouse Receipts) based trading.
There is also a need to orient financial institutions to participate in the pledge loan system.
Quick Facts
Dalwai Committee
The government announced to double farm incomes by 2022 in its Union Budget 2016-17.
In line with this it appointed an 8-member inter-ministerial committee headed by Ashok Dalwai, to consider major reforms in agriculture sector.
It was tasked to prepare a blueprint for transition of farm policies from being production oriented to based on incomes or value addition.
FPO/VPO
A Farmer Producer Organisation is a kind of a hybrid company between cooperative societies and private limited companies.
The objective of the concept is to organize farmers into a collective to improve their bargaining strength in the market.
They are owned and governed by shareholder farmers (or artisans) and administered by professional managers.
