Doubling Farmers Income: Role of Gramin Haats

Dearth of local market hubs

 Rural markets are presently not working as effective price discovery points for farmers. In the last two years,
farmers have suffered much due to lack of remunerative prices for their produces.
o Either they have been dumping their perishable produces or their food grain harvests have not fetched
them price to cover cost of cultivation.
o On the other hand, Indian farmers have been harvesting surplus produces.
 While there are other factors responsible for the current agrarian distress, selling produce or getting access to
the market at the right time remains an issue.
 As it emerges, there is a severe lack of local market hubs where India’s dominant small farmers could sell their
produce.
 Lack of access to adequate number of market hubs means farmers do not get to bargain for their produces.
o The small & marginal farmers, with uneconomical sized marketable lots, find it difficult to aggregate
their produce and move to these APMCs to participate in the auction system for suitable price discovery.
o They, therefore, use local agents and traders, who relieve small farmers of their produce at locally
determined prices, to function as aggregators and transport to transact at the APMCs.
o This intermediation has naturally been depriving the farmer-producers from aiming for optimal or
market-linked price realisation.
o The current market architecture does not provide farmers with a choice of markets but imposes
constraints to their selling options.

Agriculture Marketing and Role of Weekly Gramin Haats

Agriculture marketing in most states is regulated by the Agriculture Produce Marketing Committees (APMCs) established
by state governments. Small and marginal farmers face various issues, such as inadequate marketable surplus, long
distance to nearest APMC markets, and lack of transportation facilities, in selling their produce in APMC markets.
Gramin Haats are markets in rural areas where such farmers can sell their produce without going to APMC markets.

 Issues with APMCs: The provisions of the APMC Acts are not implemented in their true sense, due to reasons
such as:
1. limited number of traders in APMC markets thereby reducing competition,
2. cartelisation of traders, and
3. undue deductions in the form of commission charges and market fee.
o Further, most farmers lack access to government procurement facilities including APMC markets.
o The central government ought to prioritise the creation of alternative marketing platforms, and hold
stakeholder consultations for reforms in agriculture marketing.
 Reforms in APMC Acts: The APMC Acts need to be reformed urgently. The Acts are highly restrictive in
promotion of multiple channels of marketing and competition in the system.
o The central government is continuously pursuing state governments for reform in APMC Acts through
model Acts. However, there is lukewarm response of state governments towards reforms in the Acts.
o The central government needs to constitute a Committee of Agriculture Ministers of all states to arrive
at a consensus and design a legal framework for agriculture marketing.
 Fees: The market fee and commission charges are to be levied on traders, but instead are collected from
farmers. In some states, market fee is levied even when it is not applicable.
o Also, market fee is levied multiple times on the same commodity when traded across multiple APMC
markets, even within the state.
 o It is recommended that
 fees and cess levied on agricultural produce should be removed, and
 the central government should hold discussions with state governments for the same.
 Availability of markets: The average area served by an APMC market is 496 sq. km., which is much higher than
the 80 sq. km. recommended by the National Commission on Farmers (Chair: Dr. M. S. Swaminathan) in 2006.
o There is a need of 41,000 markets to meet this requirement.
o The central government
 initiate consultation with state governments to increase the number of agriculture markets, and
 create marketing infrastructure in states which do not have APMCs.
 Infrastructure: The infrastructure and other civic facilities in most APMC markets are in a very bad shape.
o Markets also fare poorly in banking, internet connectivity, and drying facilities.
o It is recommended that the central government
 initiate consultation with state governments to improve infrastructure, banking facility, digital
connectivity and other facilities in these markets, and
 devise a centrally sponsored scheme for modernisation of APMC markets.
 Gramin Haats: The Gramin Haats can provide farmers direct access to consumers, require less transportation
cost, and thus, may emerge as a viable alternative for agriculture marketing. The central government must hold
discussions with state governments to keep Gramin Haats out of the ambit of the APMC Acts.
 GrAM scheme: The aim of the Gramin Agricultural Markets (GrAM) scheme is to improve the infrastructure and
civic facilities in Gramin Haats across the country.
o Under the scheme, 4,600 of the existing 22,000 Haats will be developed and upgraded using MGNREGA
and other government schemes.
o The central government must
 (i) increase the number of Haats being targeted under the scheme and ensure presence of a
Haat in each panchayat of the country, and
 (ii) make the scheme a fully funded central scheme.
o The GrAM scheme requires funds available under various government schemes, inter-ministerial
coordination is required at the central and state levels. It recommended that a monitoring committee
should be formed for planning and time bound implementation of the scheme.
 e-NAM scheme: 585 markets across 18 states are connected on the portal of the Electronic National Agriculture
Market (e-NAM) scheme.
o The scheme networks the existing APMC markets with the aim to create a unified national market for
electronic trading of agricultural commodities.
o The central government should increase the coverage of the scheme to states which do not have
APMCs.
o It also recommended that the government should start a training program on e-NAM portal to enhance
digital literacy of farmers and increase their participation.

Importance of Rural haats

 The functionalities of haats make them the most democratic market. Small producers set up their shops 2.5 million
times a year in over 600,000 villages in India.
 Sixty-two per cent of these villages are home to less than 1,000 people and a substantial number of them do not
have retail shops in a fixed place. Thus, haats are the sole places for sale and purchase. Otherwise, the producers will
have to travel to wholesale markets, which brings down their profit or results in distress selling.
 A haat depends on local ecology and deals with seasonal produces. There is no institutional mechanism to run a
haat; only the vested interest of selling and buying goods.
  What’s more, it has place for the smallest producers (people with a kilogramme of vegetable from kitchen
garden also set up shops). Its resilience to privatisation of village market is high.
 People are getting fixed location ration shops. But the haats, offering multi-purpose shopping experience, have
successfully fought this threat.
 The market as a concept can never be so equitable in opportunity. So, the retail democracy precedes the world’s
largest democracy.

Way ahead

 Unfortunately, haats have not caught the deserved attention. India has a long history of crafting programmes to
create marketing infrastructure for local producers, mostly farmers.
 These efforts lead to a new set of market bodies. Laws are enacted to regulate them. The new market bodies cater
to medium to big farmers, leaving out the small producers.
 As per an estimate by the erstwhile Planning Commission, 21,000 haats do not have any support from bodies like
panchayats and marketing committees that look after agricultural produce.
 So, the weekly markets operate without any infrastructure. This discourages many potential buyers from coming to
the markets.