Policy Support to Augment the Agribusiness Potential of Andhra Pradesh

Abstract

Agriculture is critical for development of the State of Andhra Pradesh. It is the source of livelihood for around two third of its population. In order to increase per capita income at the bottom of the pyramid, it is essential to enhance farmers’ realization as a percentage to consumer paid price. This needs a focused approach towards grading, packaging, standardization, processing and value addition at farm gate level, which implies a paradigm shift from “Agriculture” to “Agribusiness.” In order to inculcate such practices at farm gate level, it is equally important to create a national level electronic market providing higher prices for graded and standardized commodities to the farmers as an incentive to promote such practices. Price and profit are the major drivers to carry out such reforms. Electronic market place is one of the ways to transform the system of marketing with several advantages, such as better price realization, access to a national level market, access to formal credit at cost effective rate, increase in holding and bargaining power, etc. E-market is a virtual market connecting buyers and sellers located at distant places on a single platform. Policy reform is needed in existing APMC Act and Rules to accommodate functioning of the electronic market in the State of Andhra Pradesh. Other States, such as Gujarat, Maharashtra and Karnataka have already amended their APMC law to enable operation of Electronic Agriculture Market. The Government of Andhra Pradesh has amended its APMC Act to create provisions for Private Market. But, private markets are again localized markets, working as alternative to local APMC. What is actually needed to improve marketing efficiency is to allow virtual markets, which can be accessed electronically by processors, exporters and end users located anywhere in the country. This will reduce the cost of intermediation and bring both producers and users on a single platform. The State of Andhra Pradesh can achieve this, just by taking a view on the provisions contained under Section 7 (7) of the APMC Act and Rule 53 A of APMC Rules. The Directorate of Marketing, Government of Andhra Pradesh can provide this policy support to augment the agribusiness potential of Andhra Pradesh.