Govt clears Rs 200-cr online agricultural market

On a day when the government announced a new national irrigation scheme with Rs 50,000 crore expenditure, it allocated Rs 200 crore for three years to set up an online national agriculture market by integrating 585 wholesale mandis across India, a move aimed at providing farmers free market access to realise better price.

There are about 7,000 mandis in the country regulated under the Agricultural Produce Marketing Committee (APMC) Act. Even within in a state, farmers are restricted to sell their produce at one particular APMC mandi paying various taxes.

In a bid to reform agri-marketing system, the Cabinet Committee on Economic Affairs had on Wednesday approved a Central Sector Scheme for Promotion of National Agricultural Market through Agri-Tech Infrastructure Fund.

"Now, there will be one licence for entire state, there will be 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," Finance Minister Arun Jaitley told reporters after announcing the scheme.

He said that Rs 200 crore has been earmarked for this scheme during 2015-16 to 2017-18.

"Seamless transfer of agri-commodities within the state can take place. The market size for farmers would increase as he won't be limited to a captive market," he added.

Elaborating the scheme, Agriculture Minister Radha Mohan Singh said that the online platform, integrating 585 mandis, would be operational in next six months.

The Karnataka government has already set up its own online agri-market platform integrating 13 mandis, while Maharashtra is doing on a pilot basis.

"We don't want each state to develop separate software as it would be difficult to integrate. So, we have decided to provide a single software. Several states have expressed interest," Agriculture Secretary Siraj Hussain said at a conference organised by Assocham.

Chhatisgarh and Gujarat have agreed to implement, while Andhra Pradesh, Madhya Pradesh, Odisha, Jharkhand and Uttar Pradesh have shown interest, he added.

Union Agriculture Ministry has appointed Small Farmers Agribusiness Consortium (SFAC) to set up a common e-platform.

The agency will integrate 250 mandis in the current fiscal, 200 mandis in 2016-17 and 135 mandis in 2017-18.

Industry chambers also welcomed this initiative saying that it will will give higher transparency and better market access at better prices for farmers.