1.   Farmers’ Produce Trade and Commerce (Promotion and Facilitation)

  • Farmers are free to sell their produce to anybody, anywhere
  • Removes all barriers for intra and inter-state trade in agricultural produce
  • It supports seamless electronic trade

How does it help?

  • Ends the monopoly of traders
  • Engenders competition among buyers
  • Yields better returns to farmers and raises incomes
  • Farm produce can move freely from surplus to deficit regions
  • Creates national market; high intimidation cost mandis will go
  • Consumer gets better and cheaper products

 

2.   Farmers (Empowerment and Protection) Agreement of Price Assurance

  • Removes cereals, pulses, oilseed, edible oils, onion and potatoes from the list of essential commodities
  • Does away with imposition of stock limit except under exceptional conditions

How does it help?

  • Ends harassment of businessmen and traders
  • Likely to attract private investment in cold storage, warehouses, processing
  • Helps reduce wastage as storage facilities improve
  • Brings price stability and raise farm incomes

 

3.   Farm Services and the Essential Commodities (Amendment) Act

  • The bill relates to contract farming
  • Allows farmers to tie up with large buyers, exporters and retailers

How does it help?

  • Farmer will have assured price before sowing
  • Transfers market risk from farmer to sponsor
  • Gives farmers access to high quality seeds, fertilisers, pesticides
  • Will attract private investment in farming and link farms to global markets

 

These Bills aim to loosen rules around sale, pricing and storage of farm produce – rules that have protected India’s farmers from the free market for decades.

 

They also allow private buyers to hoard essential commodities for future sales, which only government-authorised agents could do earlier; and they outline rules for contract farming, where farmers tailor their production to suit a specific buyer’s demand.

 

Another big change is that farmers will be allowed to sell their produce at a market price directly to private players – agricultural businesses, supermarket chains and online grocers. Most Indian farmers currently sell the majority of their produce at government-controlled wholesale markets or mandis at assured floor prices.

 

The farm Bills have not been widely accepted by some section of the farmers, fearing poor implementation of policy, as well political reasons.

 

Why is there opposition to these reforms?

  • The measures threaten the elaborate system mediating between farmers and consumers
  • Agri-produce selling involves commission agents, state mandis and bureaucracy
  • APMC mandis where farmers are forced to sell are heavily politicised
  • Commission agents get a 2-2.5% cut in sales and have a lot of political clout
  • If the reforms are implemented, this commission and patronage structure will disappear

 

 

In any case, the Israeli Agri tech companies have an opportunity, in following areas

 

  1. Warehousing, cold storages, supply chain management
  2. Introducing new varieties of products for contract farming
  3. Introducing better Agri practices for farmers through corporates farming companies.

 

For further details please contact vinod.mehta@israeltrade.gov.il