Central Sector Scheme for Promotion of National Agricultural Market through Agri-Tech Infrastructure Fund

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Shri Narendra Modi, has given its approval to a Central Sector Scheme for Promotion of National Agricultural Market through Agri-Tech Infrastructure Fund (ATIF).   The Department of Agriculture & Cooperation (DAC) will set it up through the Small Farmers Agribusiness Consortium (SFAC) by creation of a common electronic platform deployable in selected regulated markets across the country.   

An amount of Rs. 200 crore has been earmarked for the scheme from 2015-16 to 2017-18.   This  includes provision for supplying software free of cost by DAC to the States and Union Territories (UTs) and for cost of related hardware/infrastructure to be subsidized by the Government of India up to Rs. 30 lakh per Mandi (other than for private mandis).

The target is to cover 585 selected regulated markets across the country, with the following break-up:

2015-16: 250 mandis  

2016-17: 200 mandis  

2017-18:135 mandis

585 regulated markets across the country will be integrated with the common e-platform to provide farmers and traders with access to opportunities for purchase/ sale of agri-commodities at optimal prices in a transparent manner across the country.   Besides, private markets will also be allowed access to the e-platform thereby enhancing its outreach.

The Scheme is applicable on All-India basis. There is no State wise allocation under the Scheme. However,  desirous States would be required to meet the pre-requisites in terms of carrying out necessary agri-marketing reforms.

SFAC will be the lead agency for the development of the National e-Market by the Ministry of Agriculture, and they will select a service provider through open bidding. An appropriate common e-market platform will be set up that would be deployable in the selected 585 regulated wholesale markets in States/UTs desirous of joining the e-platform.   The SFAC will implement the national e-platform in three phases during 2015-16, 2016-17 and 2017-18.  DAC will meet expenses on software and its customisation for the States and provide it free of cost to the States and UTs.  DAC will also give grant as one time fixed cost subject to the ceiling of Rs.30 lakh per Mandi  for related equipment / infrastructure in the 585 regulated mandis, for installation of the e-market platform.    Big private mandis will also be allowed access to the e-platform for purposes of price discovery.   However they will not be supported with any funds for equipment / infrastructure.

For integration with the e-platform the States/UTs will need to undertake prior reforms in respect of (i) a single license to be valid across the State, (ii) single point levy of market fee and (iii) provision for electronic auction as a mode for price discovery. Only those States/UTs that have completed these three pre-requisites will be eligible for assistance under the scheme.

The e-marketing platform should promote reform of the agricultural marketing sector and apart from promoting free flow of agri commodities across the country and should result in greater farmer satisfaction as prospects for marketing of his produce would be significantly enhanced. He will have improved access to market related information and better price discovery through a more efficient, transparent and competitive marketing platform, which gives him access to a greater number of buyers within the State and from outside, through transparent auction processes. It would also increase his access to markets through warehouse based sales and thus obviate the need to transport his produce to the mandi.

Background: 

Following successive Budget announcements of 2014 and 2015 on setting up an "Agri-Tech Infrastructure Fund" and on National Market respectively, DAC formulated the scheme for Promotion of National Agriculture Market through Agri-Tech Infrastructure Fund (ATIF).

Integration of agri-markets across the country through the e-platform is seen as an important measure for overcoming  challenges posed by the present agri-marketing system namely - fragmentation of State into multiple market areas each administered by separate APMC, multiple levy of mandi fees, requirement for multiple license for trading in different APMCs, licensing barriers leading to conditions of monopoly, poor quality of infrastructure and low use of technology, information asymmetry, opaque process for price discovery, high level of market charges, movement controls, etc.

The need to unify markets both at State and National level is, therefore, clearly the requirement of time, in order to provide better price to farmers, improve supply chain, reduce wastages and create a unified national market through provision of the common e-platform.