Initiatives botched up

NEELKANTH MISHRA: While I deal with investors in public markets, today the key is not setting up one large unit, but tens of thousands of small units. There forces beyond public markets are needed. Specifically for procurement, at least in fruits and vegetables, repealing of APMC powers has eased the process, however you still have to create a parallel system or market. What the repeal has done is that private companies can now directly approach farmers and procure stuff, and price transmission is actually much better for the farmers.

Private markets do come up, like in Bihar, where people have informally decided to gather and there are aggregators who are paid by financiers.

Then you have commodity markets which were to be a price discovery mechanism for farmers, and the Governments turned it on and off again and again. There was the Warehousing Development Act, whereby you could have dematerialised receipts for grains and which in turn could have facilitated the growth of processing industries. Personally, both these are for non-perishables and I think the potential for increasing farmer realisations is much higher on the perishable side.

There was another initiative like the Electronic National Agriculture Market (ENAM), which again does not seem to be working well at national level, because again creating a market is hard work. I may buy litchis from Muzaffarpur sitting here and what is the guarantee of quality? Perhaps we are thinking that creation of market is enough without creation of enabling infrastructure. Perhaps our institutions are not philosophically and intellectually committed to the concept, the mechanism. At the first signs of price spikes, we shut it down, and I think that actually destroys the market. There has to be a philosophical or intellectual commitment from within the government, which so far has been lacking.