April 24, 2024

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APMCs are still vital for price discovery of farm produce

The APMC mandis would carry on to remain the put for price discovery of farm generate, irrespective of farmers getting supplied an possibility to sell exterior the market yards in Gujarat and Karnataka.

Personal consumers — huge processors or super market chains — would carry on to price their buys working with the mandi price as reference.

Massive consumers and authorities experience that the greater part of the farmers and consumers would carry on to rely on mandis to sell their generate because of to transparency in pricing, effortless payment conditions and price discovery via auctions, amongst other individuals.

Prof Sukhpal Singh, Chairperson, Centre for Administration in Agriculture, Indian Institute of Administration, Ahmedabad, suggests price discovery will carry on to get put from APMCs as farmers will however rely on area mandis. The government will acquire from these mandis, though the private consumers will not locate modest farmers appealing, particularly for mainstream crops.

“Whatever reforms the government may perhaps prepare, most farmers will however rely on area APMCs because they are very well founded and entertain any sort, high quality and variety of generate. Farmers have interlocking relations with traders and fee brokers for credit and generate. They borrow from there and go to sell there. Also, the APMCs are viewed as as government marketplaces,” Singh explained.

Even now, consumers these as huge super marketplaces and retail chains, which source from farmers straight via selection centres in numerous States, depend on the APMC charges for price discovery. “It is incorrect to say that farmers do not have the decision to sell to other individuals,” Singh added.

Massive processors of commodities these as oilseeds and pulses may perhaps like to carry on buying from mandis.

Adani Wilmar Ltd, which has a licence for direct invest in of agricultural generate, prefers APMCs for procuring oilseeds, grains and other staples principally because of transparent price discovery.

“Trading via APMCs is a most popular route for farmers and other players in the method. Value discovery at APMCs is straightforward and transparent. This transparency of pricing is critical for us as very well as for farmers. We would carry on to like APMCs for our procurement,” Angshu Mallick, Deputy CEO, Adani Wilmar Ltd, advised BusinessLine in a latest video clip conference.

Mallick explained that even if a farmer is compensated much more than the prevailing price, there is a chance that he may perhaps experience cheated if he discovers a price discrepancy concerning two various consumers.

Reference price

It is feared that the APMC modification will sooner or later motivate much more amount of aggregators for farmers and corporate consumers. Farmers may perhaps finish up possessing even smaller say in these a design as towards the existing just one with fee brokers getting the middlemen.

“The APMC price will be a reference for off-market transactions. Farmers will glimpse at the APMC price before agreeing to any offer,” explained a pulse processor in Kalaburgi.

Officials at an APMC in Gujarat claimed that farmers may perhaps not fully switch more than to the new design of agriculture trade, merely because they are supplied an possibility to sell exterior the market yards.

“They require be confident about the authenticity of the price supplied to them and the payments. This act exposes them to a larger threat of exploitation and cheating,” explained an place of work bearer of just one of the APMCs in Gujarat.

“In the direct working with farmers, they may perhaps inquire for advance payments or may perhaps want overall quantity in money. Which is not doable for the bulk consumers and processors. In the APMC design, the fee agent is the link who requires care of these payment mechanisms and delivers self-confidence to consumers as very well as farmers,” explained Sameer Shah, President, Saurashtra Oil Mills Affiliation.

Shah, a processor himself, said that there is no incentive to acquire straight from the farmers.