A 2020 vision of India’s farm market reforms

Abstract

Concern for farmers and market facilitation by the state is as old as Indian civilization. In the post-Independence era, this concern was addressed by provision of market-yards for the farmers through APMC Acts of the state governments; and, by announcements of minimum support prices (MSP) for quite a few crops by the central government. Over time, however, these initiatives had their unintended consequences. APMC markets turned into monopsonies and central government has never committed itself to buying all produce at MSP from Indian farmers, except perhaps from a few states such as Punjab and Haryana. Contract farming was successful in a few states and for a few products; however, it never reached any threshold in most states. In this context, I discuss the institutional structure of the Indian farm markets and a few policy initiatives from the past. Thereafter, I present the main features of the new farm acts introduced in 2020 and emphasize the importance of their implementation.