Contract Farming, Marketing Reforms, etc: NITI Aayog Proposes Big Bang Reforms In Agriculture

The central government think tank, NITI Aayog, has big plans to transform India’s agriculture. As part of that, it is proposing some radical changes in the current laws and regulations applicable to the sector. The Aayog believes that if the reforms proposed by it are implemented by the state governments, the Prime Minister’s goal of doubling farm incomes by 2022 can be achieved.

So, what are these reforms? The Economic Times reports today (20 October) that the Aayog has come up with a three-pronged strategy. This includes marketing reforms, changes in rules for forestry and land lease reforms.

The news report says that marketing reforms proposed by the Aayog include liberalising contract farming, allowing direct purchase from farmers by private players, allowing direct sale from farmers to consumers, providing for a single trader licence to operate in the APMC market, single point levy of taxes, taking fruits and vegetables out of the APMC Act, rationalisation of taxes on agriculture commodities, implementation of e-NAM, and lastly, de-linking the provision of compulsory requirement of shops in the APMC market for registration as traders.

Enabling direct selling and purchasing between farmers and consumers, and the entry of private players will lead to the elimination of the middleman.

In Maharashtra, where the state government recently took fruits and vegetables out of the ambit of the state’s APMC Act, the elimination of the middleman has led to farmers earning a higher pay for their produce. Consumers can also now buy at lower prices than before, as well as receive fresher goods.

Under the land lease reforms, the Aayog is proposing a liberal contract regime.

The Economic Times report also tells us that the Aayog is scheduled to meet the principal secretaries of all the states. Then, it will make the case for reforms to the state agriculture ministers. Since agriculture is a state subject, it is imperative that all the states, or at least a majority of them, come on board.