Data also show that a majority of the farmers were unaware of the Minimum Support Price regime

Between 2013 and 2019, the share of agricultural households (HHs) that sold their produce in APMC mandis reduced sharply, while those that sold their produce to private traders increased significantly. Data show that a majority of the farmers were unaware of the Minimum Support Price (MSP) programme and procurement agencies. Among those who were aware, a significant share did not sell their produce to procurement agencies due to lack of infrastructure. More importantly, the share of households that were aware of MSP but did not sell to procurement agencies because they received better prices was negligible.

Change in destination

The table depicts the % point change in the share of HHs that sold their produce to various agencies in Jan.-June 2019 period compared to Jan.-June 2013. Sharp reductions can be observed in HHs that sold to APMC mandis, across crops. HHs that sold to private traders/markets increased while the share of sale to procurement agencies remained stagnant.

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In 2013, 17% of paddy HHs sold their crops in mandis. In 2019, the share came down to 2.7%, which is a 14.3 % point reduction.

In 2013, 29% of wheat HHs sold their crops in private traders/markets. In 2019, the share increased to 66.1%, which is a 37.1% point increase.

Low awareness

The table depicts the % of HHs that were aware of the MSP. While awareness increased, the levels were still poor across HHs. Only 37% of wheat HHs and 27% of moong HHs were aware of the programme in 2019.

In 2013, 12% maize HHs were aware of the MSP, which increased to 23% in 2019.

Poor infrastructure

The table depicts the share of HHs that were aware of MSP but did not sell to govt. agencies due to unavailability of infrastructure (procurement agency not available/no local purchaser). The share was significantly high across crops.

Better prices as a reason

The table depicts the share of HHs that were aware of MSP but did not sell to govt. agencies as they received better prices than the MSP in other markets. The share of such households dropped to negligible levels in 2019.

In 9 of the 12 crops analysed, none of the HHs said that better prices were the reason not to sell to government agencies in 2019.

Last word

One of the chief aims of The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 is to unshackle farmers from notified markets. However, 2019 survey data show that most farmers were already selling their produce to private traders. Also, a majority of them were unaware of the MSP programme.

Source: National Sample Survey 70th round, National Sample Survey 77th round

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