Niti Aayog member bats for liberalisation in marketing of fruits and vegetables

Can horticulture sector adopt a lesson or two from the success of India's white revolution? Agriculture expert Ramesh Chand, member of the government think tank Niti Aayog , thinks so.

His recent blog illustrates the similarities between milk and horticulture - both are high value, perishable, labour intensive, and income augmenting enterprises - to suggest that India's experience of milk marketing, which ushered in the white revolution, could help us harness the potential of horticulture.

"Very stable and robust growth in milk production is attributable mainly to three market factors, namely, institution of milk cooperatives, complete freedom to milk producers and buyers for sale/purchase of milk throughout the country and deregulation of dairy sector. With similar market conditions, India can achieve horticulture revolution in a much shorter period than white revolution", he claims.

The solutions he has are also not completely unknown. It goes well with the long-standing demand to completely free vegetables and fruits from the APMC Act that regulates its movement across markets and geographies.

"We need two simple measures for this. One, take fruits and vegetables out of APMC Act and make their sale and purchase completely free," he says. This, according to him, will allow the setting up of vegetable/fruit collection centres by local entrepreneurs, like milk collection centres, where farmers can sell even a few kg of their produce. "In some cases integrators will start pooling the produce for marketing, like informal milk vendors in the countryside. They can make economic lot and sell the produce in a market or they can have direct contact with vendors or other buyers in towns, cities and various consuming centres," Chand explains. This will also encourage private sector to go for contract farming and having assured supply of suitable material for processing, he adds.

Chand has also called for horticulture producers companies or associations of various types, like dairy cooperatives, that can help farmers in marketing their produce without involvement of long chains of market intermediaries. The third reform, similar to delicensing of dairy in 1991 and the amendments in Milk and Milk Product Order in 2002, has also been proposed to attract large investments in horticultural processing and value chains.

Market liberalisation in horticulture products is also critical for the growth of e-commerce trade in perishables, particularly vegetables, he notes.

"Recently some states have brought perishable fruits and vegetables out of the purview of APMC Act but it has made a difference only to a small quantity of produce. The practice of marketing, required by market regulation, has prevented application of e-commerce in fruits and vegetables, and kept producers and consumers apart", Chand says.

According to him, the practice of online sale of fruits and vegetables that started recently in many cities has no back-end support. "Market regulations constrain online purchases from the farmers/producers, which can be of immense benefit to producers as well as consumers," he point out.

Provided the right market conditions, the highly elastic demand for fruits and vegetables, preference of consumers for fresh farm produce and new e-commerce can offer vast scope for increase in production of fruits and vegetables and farmers' income in the country, he concludes.