Transforming Indian Agricultural Markets: A Pathway to Better Farmer Incomes

A Reserve Bank of India research paper suggests reforms in agricultural marketing to enhance farmer incomes through increased private mandis, highlighting pricing challenges with TOP vegetables. It promotes leveraging e-NAM and boosting farmer organizations to address inflation and improve market infrastructure.

A recent research paper from the Reserve Bank of India has called for significant reforms in agricultural marketing to better support Indian farmers. The paper emphasizes the crucial role of increasing private mandis to ensure farmers receive higher returns on their produce.

The study highlights the pressing issue of pricing challenges faced by farmers, particularly with perishable commodities like potatoes, onions, and tomatoes—collectively known as TOP vegetables—where there's a considerable disparity in the share of consumer spending that reaches the farmers.

Additionally, the research stresses the importance of leveraging e-national agricultural markets (e-NAM) and fostering farmer produce organizations to enhance market efficiency. The RBI points out that these changes, alongside futures trading for some crops, could ultimately manage risk and stabilize farmer incomes.

(With inputs from agencies.)