Re-organising agricultural markets for doubling farmer incomes in India: relevance, mechanisms, and role of policy

Abstract

It has been generally recognised by now that reform of agricultural markets is a must to achieve higher farmer incomes in India, as other attempts on the production front for the same without it would only be sub-optimal. In this context, this paper examines the rationale for the policy thrust on demand side measures to increase farmer income and assesses the role of various state-run mechanisms like minimum support price and procurement, and recently attempted new mechanisms and interventions by the government as a part of its reform agenda like deficiency price payment, and e-national agricultural market to contribute to the increase in farmer incomes. It specifically examines non-state mechanisms and alternatives like contract farming and value addition and the experience with such mechanisms in India and elsewhere from a demand side and value creation and capture perspective. It also examines the recent regulatory and policy measures, i.e., model APLM Act, 2017 and the model APL contract farming and services Act, 2018 for their goodness for contributing to the goal of higher farmer incomes and concludes with certain policy, regulatory and practice suggestions for reforming agricultural markets and value chains for better outcomes for farmer incomes.