(Indian Economy) Agricultural Marketing - Regulated Markets, e-Choupal, Pink Revolution, MOFPI & APMC Act




The union budget 2014-15 stated that the centre would work closely with states to reorient their respective APMC Acts to provide for establishment of private market yards/private markets. Also, that the state Governments would be encouraged to develop farmers markets in town areas to enable them to sell their produce directly. Recent initiatives in agricultural marketing are given below.

(i) The Department of Agriculture (DAC) has issued a comprehensive advisory to states to go beyond the provisions of the Model Act and declare the entire state a single market with one licence valid across the entire state and removing all restrictions on movement of agricultural produce within the state.

(ii) In order to promote development of a common national market for agricultural commodities though e-platforms, the department has approved Rs. 200 crore for a central-sector scheme for Promotion of National Agricultural market through Agri-Tech Infrastructure Fund (ATIF) to be implemented during 2014-15 to 2016-17. Under the scheme, it is proposed to utilize the ATIF for migrating towards a national market through implementation of a common e-platform for agri-marketing across all states.

(iii) On the request of the central government, a number of state governments have exempted the marketing of fruits and vegetables from the purview of the APMC Act. The NCT of Delhi has taken the initiative in this direction by issuing a notification in September 2014, ending the regulation of fruits and vegetables outside redefined market yard/sub-yard area of the APMC, MNI, Azadpur, APMC Keshopur and APMC Shahdara. The small farmer Agribusiness Consortium (SFAC) has taken the initiative for developing a Kisan Mandi in Delhi with a view to providing a platform to FPOs for direct sale of their sale of their produce to prospective buyers totally obviating or reducing unnecessary layers of intermediation in the process. They plan to scale their activities in other states based on the outcome of the experience of the Delhi Kisan Mandi.


e-Choupal is the first privet sector initiative in Agricultural Marketing. It is a business platform consisting of a set of organizational sub-system and interfaces connecting farmers to global markets. This common structure can be leveraged to procure/produce a host of products and services for the farmer as a producer as well as a consumer. The e-Choupal business platform consists of three layers, each at different levels of geographic aggregation. Each of the three layers is characterized by three key elements.

(a) The infrastructure (physical or organizational) orchestrating the transaction, and place.
(b) The entity (person or organisation) orchestrating the transaction, and
(c) The geographical coverage of the layer.

The first layer consists of the village level kiosks with internet access (or e-Choupal) managed by an ITC-trained local farmer (called a Sanachalak) and within walking distance (1-5 kms) of each target farmer. There may be generally one e-Choupal per cluster of five villages. The second layer consist of a bricks-and-mortar infrastructure (called hubs) managed by the traditional intermediary who has local knowledge/skills (called a sanyojak in his new role) and within tractorable distance (25-30 Kms.) of the target farmer.

The ITC chose to operate the platform on the following three business principles;
(i) Free information and knowledge which ensures wider participation by the farmers.
(ii) Freedom of choice in transactions (farmers after accessing information at the e-Choupal, are free to transact their own way.)
(iii) Transaction based income, stream for the Sanachalak by tying his revenue stream to the transaction (on a commission basis.)

The ITC has provided internet access in rural areas in several regions of the country which enables farmers to directly negotiate the sale of their produce with ITC. The farmers do not have to pay for the information and knowledge they get from the forum of e-Choupal. The principle of e-Choupal is to inform, empower and compete on the basis of click and mortar capability. There are close to 7,000 e-Choupal in operation.

Pink Revolution

India has already seen the ‘green’ and ‘white’ revolutions in its food industry come to pass, it now seems well on its way to realizing a ‘pink revolution’ too, the modernization of meat production processes. India needs a ‘pink revolution’ with an objective of affordable health to all.

The Food and Agricultural Organisation of the UN (FAO) has found that India is well on its way to modernizing meat and poultry processing, thus realizing the ‘pink revolution’ too. In a report titled the Indian Meat Industry Perspective, the FAO outlined four steps that should be taken If India’s food industry is to successfully go Pink. These recommended steps were; setting up state of the art meat processing plants, developing technologies to raise male buffalo calves for meat production, increasing the number of farmers rearing buffalo under contractual farming; and establishing disease-free zones for rearing animals.

India has already become quite rosy and meat production has been steadily growing over the past decade. According to the United States Department of Agriculture (USDA) Foreign Agricultural Service, India became the largest exporter of buffalo meat in 2012, exporting approximately 1.5 million metric tons of beef. The largest importers of Indian meat are primarily countries in the Middle East and South East Asia. The USDA also found that a record 3.2 million tons of broiler meat (i.e. chicken) had been produce in India last year. The broiler sector has been a 30 percent growth since 2009 and is among the fastest growing sectors in the Indian economy at a rate of 8 percent. This increase has been largely attributed to growing domestic demands.

Although the pink revolution has stimulated economic and production gains in India, it is important to also examine what some of the environmental an health risks associated with going ‘pink’ are. It is important to shed light on some of the often overseen, or plausibly ignored, problems associated with ‘state-of-the -art’ meat production. In the wake of climate change, growing livestock production is a global concern. The FAO has estimated that approximately 18 percent of global greenhouse gas emissions come from livestock production. Despite its significant effect on climate change, meat production and consumption, and the food system more generally, is not always included in environmental discussions in India and elsewhere.

The amount of water that is required to irrigate crops, or provide drinking water for animals is also vast. On a global scale, agriculture represents 70 of blue water use, water which is taken from surface or groundwater sources. In India, 873 liters is used to produce one kilo of chicken meat, and 1471litres of blue water is used to produce beef in industrial systems. One might argue that you save more water by not eating a kilo of meat, than you would by not showering for six months. Of concern is not only what goes into producing meat, but also what comes out. The horrors of industrial food animal production facilities are known. Characteristically they confine and concentrate large animal populations in small areas who experience short-lived, poor quality lives. However, beyond the ethical considerations of animal welfare, meat production facilities can also pose significant risks to human health and the environment.

The amount of excrement animals produce is far more than humans, yet their waste is even more unlikely to be treated properly. Much of the animal waste produced in the process of turning living animals into meat is used as fertilizer and applied to land, or runs off into streams and other surface water bodies. Animal waste may be a useful as a fertilizer, however it may also be a serious source of contamination and pollution of groundwater and air. The concentration of parasites, bacteria’s and chemical contaminants in animal waste can have drastically detrimental effects on ecosystems, and communities living near waste disposals.

Modernized mass production of meat makes its case for not only producing more meat, more efficiently but also producing meat which can be better controlled, and standardized for consumers. If India is going to become a heavy weight meat producer, is the pink revolution the better direction? Will the big players be easier to control?

The Ministry of Food Processing Industries (MOFPI) has found that a handful of large companies are already changing the Indian meat production landscape by introducing modern state-of-the-art slaughter and processing plants, as well as implementing the vertical integration management in poultry production. The Government- backed Food Safety and Standards Authority of India (FSSAI) set up under the food Safety Act and Food Safety Bill (both from 2006) aims to raise local standards of meat production. However their vision for meat production in India is largely to continue on the path of ‘modernizing’ by adopting industrial-style production facilities.

The Agricultural and Processed Food Products Export Development Authority of the Indian Government (APEDA), Has approved 70 integrated abattoirs, slaughter-houses, and meat processing plants across the country. Some laws and regulations have been designed to guarantee the quality of exported meat from India in line with requirements set by improting countries. Whether the same standards are set and as strictly enforced for domestically consumed meat is more difficult to determine.

Some have argued that increasing the production of meat is an important step to improving food security in India. The validity of this argument is questionable at best given how resource intensive the production of meat products is. According to the United Nations, 30 percent of the earth’s landmass is devoted to raising animals to become meat. This includes land that is used for grazing and for crop growth which is used as feed.
Livestock consume much of the same food products we consume such as grains, soybeans, oats and corn, yet to the meat, eggs and dairy products animals yield when consuming these foods is comparatively small. It takes 5 kgs of grains to produce less than half a kilo of meat. Any diversion of farmland to rear livestock could have terrible consequences for India. Considering it is home to the largest number of famished people worldwide. It was estimated just last year that approximately one-fifth of the total Indian population was eating less then was needed to be healthy.

The problems India faces in regard to food security is not only the amount of food being produced, but also the lack of access to food and different varieties of food and a lack of household income people have to afford food. Other factor which destabilize food security include instability of international trade, man-made disasters (including environmental degradation degradation), as well as conflict, terrorism and corruption.