New farm bill widening market horizon: E-commerce to link farmers directly with retail

E-commerce platforms, the new farm bill, and companies like Adani Group, ITC, and Cargill promote Indian agro-sector

The Indian agriculture sector continues to be an engine of growth for the nation’s economy. Meanwhile, the farmer’s business receives a big push from the new farm law, e-commerce platforms, and the advent of the private sector into the domain. 

It has been an earnest desire of every hardworking Indian to outsmart politicians and middlemen who benefit from the inefficiency of age-old industry structures and practices. The Indian government has endeavored to actualize this dream through the new farm bill. On the other hand, private players like Adani Group, ITC, Cargill, etc., have undertaken several initiatives towards the advancement of the sector. Policy regulations alongside technological developments too have synergized towards the growth of the Indian agrarian industry.

The Indian agri-tech sector expects significant investment and is estimated to grow to a $30 bn to $35 bn markets by 2025, accredited to e-sales of produce and digitized logistics as per a new report by Bain and Company. Digital engagement in the sector is resulting in the ‘uberization’ of services, constructing online marketplace and communities, and even propelling e-commerce. 

Initially designed to protect farmers, the physical marketplace (mandis) from where all the agricultural produce is procured, has turned into local monopolies. Political parties also extracted sizeable amounts from the revenues collected through mandis. Middlemen and commission agents are known as arathiyas usually indulged in rent-seeking practices as they exercised substantial influence, being the providers of informal credit and buyers of the yield.

The private sector has been countering this issue much before the advent of the new farm bill with Adani Group, 24 Mantra Organic, Cargill, Pepsi, and Coca Cola among others, training and educating farmers to implement more income-generating activities

On one hand, where organizations like Cargill, Pepsi, and Coca-Cola procured the yield directly from the farmers, Adani Agri Logistics on the other, procures it for the Food Corporation of India under the BOOT model, safeguarding tons of wheat grains. This results in empowering farmers with easy, faster, and transparent payments (as in sharp contrast to the mandi system). On the regulatory front, the new farm law passed by the government is aimed at widening sales channels (able to sell out of mandi), price assurance (providing with the minimum guaranteed price before sowing), and the Essential Commodities Act- amendment, deregulating commodities and addressing the menace of food wastage. Additionally, private companies like PSGC Technologies Private Limited, Om Metals Infra Projects Ltd, and Adani Group much before the new farm bill, created scientifically designed silos for FCI, preventing tonnes of food grains from getting damaged.

This obviously turns out to the farmer’s advantage as the market is widened, the farmer’s price is protected and the reduced wastage results in higher returns. The e-commerce service provider also makes his gain while the farmer secures a minimum support price (MSP) already contracted with the buyer.

The entire agricultural ecosystem is expected to transform over the period of next two decades, which will constitutionally change the way we produce and consume food in India as well as globally.

New farm bill widening market horizon: E-commerce to link farmers directly with retail
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