Parliament has cleared the Farm Bills. The Bills propose to create a system where farmers and traders can sell and purchase products outside ‘mandis’. They also encourage intra-state trade and propose to reduce transportation cost. The bills formulate a framework on agreements that enables farmers to engage with agri-business companies, exporters and retailers for services and sale of produce while giving the farmer access to modern technology.
At present farmers sell their products to “Mandis” (APMC). Through a whole channel of agents, traders and whole sellers and there is 50% -80% difference in the price of Agri products from wholesale markets to the consumers. Under the new bill FMCG companies and supermarket chains can buy directly from farmers from all over the country which could be good bring price benefit for both consumers and farmers. However, the concerns are there for the small and marginal farmers, which accounts 86% of the Farming community. They don’t have the wherewithal to identify the best options which can give better price of their products. Moreover, agriculture commodity is a localised knowledge only a local agent can identify the type, varieties and quality of the product and price it accordingly.
Even today there is online “National Agriculture Market” is in place which connects almost all APMCs of the nation but still most of the marginal and small farmers are not in the position of taking advantage due to lack of digital expertise and other logistics issue. Moreover, the Farm produces have low shelve life in the absence of storage infrastructure, thus many small farmers are forced to sell their produces below MSP to which middleman makes gain. The real benefit of the bill can be realized when there will be a complete digital marketplace for Farm produces in the lines of Amazon, that provides end to end solution to both producers and consumer by bridging the gap of information, providing all supports infrastructure and logistics. Thus, the true concept of “Farm to Fork “could be realised. It is also an opportune moment for investors in real estate. Under the new bill a non- farmer can form joint venture with an agriculturist and invest in Farmlands at the outskirts of the urban areas. One-sixth of India’s land is either barren or overgrown with vegetation that has turned wild. These lands are called wastelands which are economically unproductive, ecologically unsuitable and subject to environmental deterioration. It is possible to made them productive by way of “Soil Less Farming”, “Aeroponics”, “Hydroponics” and various other “Controlled Environment Agriculture” such as “Greenhouse”, “Poly-House”, Net-house etc. These technologies are capital intensive, for example the quantum of investment could be from 25 lakh to a crore in an acre of land. Small and marginal farmers cannot raise this kind on money, but urban investors can. Already such practices started in and around cities like Mumbai, Bangalore etc. The data indicates that the investors have gained around 12-15% on annualised basis by way of investing into joint venture farming of Organic and Exotic fruits and vegetables, which is much higher than any other real estate investments.
Some states in India have liberalized the purchases of Agri land by non-farmers. It enables investors to buy barren and unproductive land and establish non soil-based farming using the expertise of the local farmers. The digital marketing of the farm produces, and online aggregators could thus see a viability and scale in operations. With geo tagging of products, organic certifications and quality check in place the consumers will have the best of the products at much lesser price which will benefit to the farmers who are selling directly to the consumers through this new age platforms and partnerships. However, there are many backward regions where digital literacy, exposures and awareness among the Farming community are poor the process could be slow. The Metro and tire-1 city regions are best poised to take most advantages. It is established that even in the worst humanitarian crisis Agriculture is the only sector that remains steady. With the inclusion of high-end technologies, skilled professionals, digital marketplace and participation of sophisticated investors can totally transform the face of this sector.
