One India, One Agriculture Market…what opportunity does that hold?

This has been a week of historic decisions for the agri sector with the ordinances announced by the Union Govt, creating a revolutionary, progressive path forward for India’s farmers, intermediaries & agri-entrepreneurs.

Here’s my take on the impact of these revolutionary reforms. A quick #12Point analysis, in simple terms, of why and how this is an important opportunity, from a farmer/ agri-entrepreneur lens…

1. Previously, farmers with marketable surplus could only sell to Licensed buyers such as State & private mandis, APMC licenced cold storages/ warehouses/ Companies. But these buyers could sell to anyone! A very skewed market, right!? Farmer lost earning, Trader gained margins!
2. Further, with the Essential Commodities Act (ECA) Govt had the right to impose price or stock control on commodities or ban exports at any time. This created intense volatility & trust deficit. No entrepreneur small or large wanted to venture into this unpredictable quagmire.
3. With the ECA & Agri markets update this week, Union Cabinet bypassed State control of APMC by creating a potential parallel market. The ordinance enables anyone with a PAN card to be a buyer, in any state, from any state, offering competitive rates, assured markets to farmers.
4. This will potentially create a surge of opportunities, combined with the loan stimulus for MSMEs. New players in online marketing/ warehousing/ cold storages/ processing/ exports etc can now directly procure from farmers at large. Removes license raj, liberalises agri trade.
5. As consumers you may have experienced the delight of direct to home/ direct from farmer purchase during #lockdown2020. You got fresh produce, interacted & built connects with farmers, probably got better prices too. Farmers also earned more per unit. Imagine scaling this up!
6. These reforms will begin to drive funding into solid business ventures in the agri ecosystem. FDI, state of the art technology, better talent, new business services, new support services, more warehousing, cold storage, processing units etc…driven by natural demand/ supply.
7. In the short term you will see old invested players cry because their hegemony is being trampled. You’ll hear statements like ‘Corporates will take over’; this will ‘corporatise farming’; it will ‘destroy small farmers’ etc from all the usual sources such as Aggregator lobbies trying to protect their interests on farm produce and future sales. But the fact is this is not true. India’s small holding farmers are wise, they are seasoned survivors of the pain inflicted over decades by the British inspired APMC act. They will choose a better future if they have an option. The new agri market law gives them that option.
8. But lets also recognise the potential roadblocks. Firstly, Entrepreneurs. Or the lack of it to be precise. We need a huge surge in agri entrepreneurship. A host of new MSMEs led by risk taking, enthusiastic new entrepreneurs who can bring global value into the agri ecosystem.
9. Secondly we need demanding, aware Consumers. This is the time for end consumers to begin demanding certified produce, traceability to farms, environmentally safe food, grown with regenerative agriculture practices. How can we trigger such large-scale consumer engagement?
10. Innovative, entrepreneurial supply chain ventures established over the last decade, like @DeHaatTM, @myergos and @ENinjakart; Ag-Tech ventures like @CropInTech & renewable energy ventures like Ecozen Solutions have put in great effort in building the ground work for the future.
11. Fantastic India origin brands like @arakucoffeein, @UTMT & #DevBhumi Honey & Spices from Uttarakhand have demonstrated how to combine farmer development, fair trade, soil science and native agri practices to make world class products. Lots of inspiration for more enterprise!
12. In summary: It’s the beginning of the 1991 Liberalization effect, on Agri. Will unsettle a lot of the old guard, but I really hope to see a surge of mainstream enterprise & demand in this sector! I dare say, would be even better to see more Women Entrepreneurs take lead!

Some further reading if this is of interest.

1. Sweeping Reforms In Agriculture: Cabinet Approves Ordinance To End APMC Monopoly, Amends Essential Commodities Act.
2. How will govt’s agri marketing reforms benefit farmers? Secretary Sanjay Agarwal explains.
3. And finally a nice round up of 25 inspirational, entrepreneurial Indian food brands that are world class! From organic honey, chocolate, to gut-friendly drinks!