Market Update

Government’s agricultural reforms to boost online sales for farm produced essentials



The cabinet ministry has recently approved the defining reforms in India’s agriculture sector which should now become a compelling investment proposition in the post-Covid-19 era where consumption of food and other farm produced essentials are expected to play pivot role in economic resurgence.

“The changes include allowing the farmers with the privilege into direct marketing arrangements with processors, aggregators or retail chain would lead to a substantial value in the farm supply chain. These changes aim at attracting the private sector’s investment into procurement, processing and retailing of the agro products, eliminating inefficient and complicated layers of intermediaries”, ASSOCHAM said.

The decisions are most timely because, there were very few investment opportunities left in the face of sudden disappearance of demand in several sectors outside the consumer non-discretionary segment, after the pandemic outbreak. Demand for food and food products would pick up substantially in both domestic market and in exports,” ASSOCHAM secretary general Deepak Sood said.

“With this law, we expect agro-start-ups setting up electronic platforms with end-to-end solutions from online sale to lifting of produce by the buyers to online payment into farmers accounts. There would be a lot of interest in setting up the online and brick and mortar infrastructure as well,” he said.

With small land holdings and severe restrictions on the agro trade, farmers are denied of market opportunities which keep arising from the demand pick up from the domestic and international markets. “Excessive controls, including export controls on agro produce, distort markets and farmers are denied their rightful gains. The reforms were long over-due and the government must be congratulated for ushering in the same,” Sood added.

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