The Indian Economy Blog

January 20, 2006

Public-Private Partnerships and Agricultural Markets

Filed under: Agriculture,Business,Growth,Infrastructure — Nitin @ 6:10 pm

Any attention the Indian government pays to modernise the agriculture sector is welcome. More so if the attention involves private participation. And even more so, if it has anything to do with modernising farm markets.

Some of the biggest names in corporate India want to join hands with the government to develop terminal markets for agricultural commodities, or state-of-the-art mandis, that will provide farmers with a modern platform to sell their produce.

The government recently sought expressions of interest for constructing and managing eight such markets, as public-private partnerships, in Nashik, Nagpur, Mumbai, Patna, Chandigarh, Rai (Haryana), Kolkata and Bhopal.

The bigger mandis will probably cost well over Rs 1,000 crore, of which the private partner is required to contribute 75 per cent.

“These state-of-the-art mandis will become the link between farmers and the rest of the country, helping them get better rates without involving intermediaries,” said PK Agarwal, joint secretary in the ministry of agriculture.

In all, 104 bids for the eight mandis have been received so far. As per plan, while the private partner will undertake construction, services, auction and warehousing, the Centre will be responsible for compliance and the state governments will have to chip in with fast clearances. [Business Standard]

If the government manages to execute this project it will be an important first step in the path towards modernisation of the agriculture sector. From an infrastructure angle the markets must next be networked to create a national market for agricultural produce. Then come commodity markets that enable farmers and the agriculture industry to manage risks.

1 Comment »

  1. Yeah it IS a really good move by the government to allow for private participation!

    do you know anything about the modalities of the APMC Act and amendments if any which was primarily responsible for keeping this sector in a primitive state?

    Comment by Karthik — January 20, 2006 @ 7:22 pm

  2. Nitin

    Re commodity markets: there’s already action on this front — see http://indianeconomy.org/2005/11/25/getting-to-the-future/

    Comment by Prashant Kothari — January 20, 2006 @ 7:52 pm

  3. While agriculture means more than grains, does this mean the government will stop hoarding away grains to rot in FCI storage keeping prices artificially high for consumers?

    Comment by Chandra — January 20, 2006 @ 8:54 pm

  4. If the government has money, why not invest in education!

    Comment by R-Squared — January 27, 2006 @ 11:10 am

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