Presentation Transcript

1. PerishableProduce Wholesale Markets in India: Their role and making them deliver

   Sukhpal Singh Centre for Management in Agriculture (CMA) Indian Institute of Management (IIM) Ahmedabad (Gujarat)
2. Landholding profile of farmers in India 138 million farm holdings (2010-11) with 60% area rainfed. Marginal – Below one hectare (65%); Small – 1 - 2 hectare (20%) Marginal and small operate 44% area All India average size of landholding:1.16 hac in 2010-11 Average farm size-3.77 and 2.25 hac in Punjab and Haryana and only 0.22 and 0.77 hac in Kerala and West Bengal Only in Punjab, average size increasing due to ‘reverse tenancy’ Focus on high value crops
3. Changing face of agribusiness policy and practice APMC Act amendment – direct purchase, private markets, contract farming ((Agriculture a state (provincial) subject)) Warehouse Receipts Act Organic farming and organic produce standards Integrated food law (Food safety and standards Act, 2006):FSSAI Corporate alliances with NGOs/Co-ops, Farmer Clubs (NABARD) Institutional innovation: Producer companies
4. Role of wholesale fresh produce markets Much less attention paid to fresh produce wholesale markets than needed Traditional wholesale markets have not changed adequately to meet new (modern retail and consumption) needs in developing countries (unlike Europe where wholesalers supply to supermarkets as third generation markets) Increasingly being replaced by contract farming and direct purchase from growers But, traditional wholesale (APMC) markets still important for small retailers and small growers
5. Fresh Produce Markets (wholesale) in India Through regulated (APMC) markets or Unregulated local F&V markets F&V markets much less effectively regulated than grain markets High marketing/transaction and spoilage cost due to non-regulation (in Mah, farmer pays commission) and large number of intermediaries involved (CAs-kaccha and pucca) No/very little appreciation of quality (F&V washing machine for consumers due to chemical residues) Lack of hygiene and convenience
6. The Model APMC Act Non-Contract Farming Aspects Single point registration and levy of market fee Direct purchase from farmers Private wholesale markets Prohibition of commission agents (Only MP has done it)
7. New stakeholders in Wholesale markets Wholesale cash ‘n’ çarry players Food retail supermarkets (domestic and foreign) Processors Institutions Small and marginal farmers
8. Vendor Procured by mandi buying team Payment APMC (60-70%) Collection Centre (procurement from farmers) Distribution Centre (receival, grading, and dispatch) Retail Store Consumer Producers (contact) (30-40%) Typical supply chain of a fresh food retail chain (Contact Farming)
9. Mechanisms for Making APMCs Vibrant Understand Implications of FDI in retail for wholesale markets and traders/CAs therein More efficient and lower cost APMC markets needed. Ensure open auction system, buyer competition with more licenses, better facilities e-payment of market fee, Producer Company representation in APMC mgt., denotificationof CAs/Arthiyas like in MP, (APMC markets serve as competitors to contract and ‘contact’ farming (practiced by retail chains) and can help improve the terms offered by retail chains to growers as contract/contact prices are benchmarked to APMC prices
10. Mechanisms for Making APMCs Vibrant APMC markets are important for small farmers as they serve as competitors to Contract farming and retail chain/supermarket buyers and help improve terms Make warehouse receipts applicable to less perishable produce like potato/onions Exempt F&V crops from APMC rules only for CF and Direct purchase Role of the state: case of Bihar APMC Act
11. Thank You