Scheme to create agriculture haats for small farmers remained on paper

Gramin Agricultural Markets (GrAMs), announced by the government in 2018, were supposed to ensure access to market for small and marginalised farmers in order to double their income by 2022.
The initial target was to build 10,000 GrAMs in the first two years, however, so far, only one state has shown interest in the Centre’s idea. The Agriculture Ministry says that other states are being pursued to take the idea forward and work on building GrAMs.
Several studies highlight that access to market and better price realisation remains big constraints for small farmers in the country. Farmers get lower prices of the produce because it is costlier to transport their commodities.
The guidelines of GrAMs sound similar to the new agriculture law and recommend that these markets should function in a non-regulated environment. Experts say without regulation the GrAMs will not serve their purpose.

After braving the chilling winter on the border of the national capital for around two months, hundreds of thousands of farmers entered Delhi on India’s Republic Day on January 26 to protest against the three agriculture laws that the government had passed in the Parliament. A protestor died while many were injured during the tractor rally in the subsequent clashes between farmers and police personnel. Around 100 farmers have already died in the past two months during the protest at different locations.

While the government claims that these laws will be good for the farmers and give them a better price for their farm produce, the farmers are not convinced and have been demanding the government to take the laws back. There have been 10 rounds of discussions between the protesters and the government so far, but the standoff continues. Protestors say they doubt the government’s intentions. Slow progress on the government’s previous commitment, regarding providing access of mandis (agricultural markets) to the marginalised farmers living in remote areas, casts the doubt even further.

During the 2018-19 budget speech, the then finance minister Arun Jaitley announced a scheme to develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs). This was meant to give small and marginal farmers improved market access and better price realisation for their produce. At present, the mandis are situated at an average distance of up to 50 kilometers from the farm gates. Small and marginal farmers cannot access these existing mandis. So, these GrAMs were supposed to provide access to the market to such farmers, within the range of 4-5 Kms. The first deadline for the same, March 31, 2020 has already passed and nothing has happened on the ground.

An RTI revealed that as on January 19, 2021, there is only one state that has submitted its report to avail the facility. In response to an RTI filed by the writer, the Department of Agriculture & Farmers Welfare on January 19 confirmed that the states are being persuaded, however, so far there is only one state (Gujarat) that has submitted its Detailed Project Report (DPR) to avail the assistance under Agri-Marketing Infrastructure Fund (AMIF). The application is being processed.

About the deadline, the guideline says, “The proposals received from States/Union Territories and duly approved/sanctioned upto 31 March, 2020 shall be eligible for assistance under the scheme.” When asked through the RTI application, the department responded saying that the deadline was on March 31, 2020 but it was later extended to March 31, 2021 due to the Covid-19 pandemic in the country. It should be noted that on March 24, 2020, just seven days ahead of the deadline, government announced a complete lockdown in the country to contain the virus spread. Now, even as the second deadline approaches, there is only one state that has submitted its DPR.

Devinder Sharma, an agriculture policy analyst says, “It highlights the callous approach of the present government regarding creating infrastructure on the ground. At present, there are around 7,000 APMC mandis while the country needs around 42,000 mandis to ensure access of market for farmers.” For a country like India, it was not a big target but successive governments have overlooked the problems of this sector, he adds. To cover this lacuna, the present government planned these GrAMs and promised to connect them with eNAM, an online trading platform.

Read more: Environmental issues in agriculture a silent reason behind farmers’ protests

Access to the market: A hurdle in realising the right price for commodities

More than 300,000 (three lakh) farmers committed suicide from 1995 to 2011 and thousands continue ending their lives every year in India due to farm distress. Reducing farm income and increasing uncertainties due to climate change have created acute agrarian distress and have made the farmers even more vulnerable. In order to improve their condition, Prime Minister Narendra Modi in 2016 promised that his government will work for doubling farmers’ income by 2022.

A committee called Doubling Farmers Income (DFI) committee was constituted by the Union Government in 2016 to suggest means to improve farmers’ income. The committee submitted its report in 2018.

Several reports including the DFI have highlighted that access of market remains a big challenge for small and marginalised farmers in India.

The DFI committee says, “In India, where landholding structure is dominated by small and marginal farmers with an average size of about 1.1 hectares, both production and post-production activities are challenged in terms of efficiency.”

Recently, a study of the Agricultural Markets of Bihar, Odisha and Punjab said, “A farm’s location is a crucial determinant of the prices a farmer gets for his produce. Farmers in villages that are remotely located are doubly handicapped. First, they get lower prices because it is costlier to transport their commodities. Second, the buyers of their produce exercise greater monopoly power because it is harder for farmers to find alternative buyers in these remote locations.” The study was published by the Centre for Advanced Study of India, University of Pennsylvania in December 2020.

A local haat in Jhabua district — A woman selling farm produce at a local haat in Jhabua district of Madhya Pradesh. Photo by Srikant Chaudhary

The DFI committee found that structure of agriculture markets in the country is lopsided and is largely focused on wholesale agriculture markets. These markets or mandis are situated at an average distance of upto 50 kilometers. Small and marginal farmers cannot access these existing mandis.

It says, “In this situation, the small marginal farmer has no option but to let the local agents and village traders function as aggregators, who tend to relieve them from their produce at locally determined and dictated prices.”

To remove this hurdle, the DFI Committee recommended to set up about 30,000 markets across the country. These include both retail and wholesale markets. Under this, the committee recommended to establish existing 22,000 local haats as Primary Retail Agricultural Markets (PRAMs). These local haats are the centres where local people assemble on certain days at a regular interval. These haats are located at distance of 5-6 kilometers of the farm gates, the committee said.

Read more: Agriculture is taking the hardest hit of climate change in Chhattisgarh

Solution remains on papers only

Taking a leaf from the DFI committee which submitted its report in 2018, erstwhile finance minister Jaitley had announced, “We will develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs). In these GrAMs, physical infrastructure will be strengthened using MGNREGA and other government schemes. These GrAMs, electronically linked to e-NAM and exempted from regulations of APMCs, will provide farmers facility to make direct sale to consumers and bulk purchasers.” He also announced Rs. 20 billion (Rs. 2,000 crore) of Agri-Market Infrastructure Fund (AMIF) for the purpose.

Subsequent to this, Ministry of Agriculture, Cooperation and Farmers’ Welfare decided to cover 10,000 rural haats in 2018-19 and 2019-20. The ministry said that there were only 11,811 haats that were in control of Panchayats and where MGNAREGA provision/funds can be used. Out of these, around 1,000 haats were already adequately developed before the announcement made by the then finance minister.

And even this remained on papers only. The RTI response says, “Operational Guidelines have been circulated to states and states are being persuaded to submit the DPR to avail the assistance under the said scheme.”

Read more: Climate change impacts agriculture in the northern Himalayas

Caution: Market needs to be regulated

All experts Mongabay-India talked to, cautioned about the regulation, especially since the new controversial farm laws have been causing widespread farmer agitation. They say whether it is a public or private mandi/market, regulation is needed, in order to protect the farmers from any wrongdoings or harassment.

Interestingly, the operational guidelines for Operation and Management of GrAMs also talks about making the market environment ‘liberal’. It says that state government should ensure that this market functions in a non-regulated environment. It goes on to suggest, “GrAMs be kept out of the purview of State Marketing Acts and the Control orders relating to stock and transport be unrestricted.”

While talking with Mongabay-India, professor and former chairperson of the Centre for Management in Agriculture at the Indian Institute of Management (IIM), Ahmedabad Sukhpal Singh said, “I am all for regulation so that farmers are not taken for a ride. Think about a tribal area where farmers are not very literate. If a person from outside goes there and gets into a deal with local farmer. If he doesn’t keep his promise, where the farmers will go and get justice.”

cattle grazing a cabbage crop in Maharashtra — A farmer of Dhavalpuri village in Ahamednagar, Maharashtra left cabbage crop in the field for cattle to graze because of price crash. Photo by Srikant Chaudhary

“Small and marginal farmers are more dependent on mandi for their protection. They are free and can sell their produce anywhere be it direct purchase, contract farming or even in private wholesale market. They not only need more markets but more effective markets. It should be functional. There is no point having a market where open auction doesn’t take place and farmers do not get fair discovery of price of their produce. Just having a market is not going to help them,” he said.

There is no denying of the fact that there is a need of physical market but regulation is more important. Take Bihar as an example. There are markets in the state but no regulations, so farmers are not getting fair price there, he adds.

Sagari R. Ramdas, veterinary scientist with Food Sovereignty Alliance says that without proper regulation these GrAMs will not help small and marginlised farmers much. Now, it looks like government is creating a platform which will work as an aggregator, not a proper market where farmers can get proper price realisation of their produce.

Ramdas raised a legal issue by saying that these new controversial agriculture laws or guidelines of GrAMs have not considered the role of the gram sabhas. In Schedule V areas, gram haats are regulated by gram sabhas because of Panchayat (Extension to Scheduled Area) Act. Anything coming under this area is monitored and taken care of by the appropriate gram sabha. Whether the government has given proper thought on how these GrAMs and even bigger mandis will be governed here, she questioned.