New Delhi: The national agriculture market approved by the cabinet last week will adopt best practices from the Karnataka model and learn from reform initiatives taken up in other states, farm minister Radha Mohan Singh said on Thursday.

Singh was addressing agriculture ministers from 23 states who visited Karnataka to study the model adopted by the state.

The government of Karnataka has created an electronic trading platform for agricultural produce linking 55 mandis, or regulated wholesale markets, with each other. They traded 8,500 crore of commodities within a year.

The e-platform, Rashtriya e Market Services Pvt. Ltd., is a joint venture company between the government of Karnataka and NCDEX Spot Exchange Ltd.

“Without reforming agricultural marketing practices we will not be able to deliver the true value of the farmer’s produce to him, thus depriving him of incentives to invest in technologies for higher productivity and production," Singh said. “The second Green Revolution can only take off with a marketing revolution."

Singh said at present agricultural markets are not unified within a state and there are transaction costs for moving produce from one market to another. Multiple licences are required for different markets and this has led to a fragmented and high-cost farm economy, the minister said.

The national agriculture market will reverse this process of fragmentation of markets, by lowering intermediation costs, wastage and prices for the final consumer, Singh said. “It builds on the strength of the local mandi and allows it to offer its produce at the national level."

Last week, the cabinet approved the creation of a national agricultural market through an electronic platform. The central sector scheme will be set up through the Agri-Tech Infrastructure Fund with a budget of 200 crore.

The target is to bring 585 regulated wholesale markets across the country on board the electronic platform in the next three years. The centre will provide states with the software for e-marketing plus a grant of 30 lakh for every wholesale market for related equipment and infrastructure.

The national market will open up more options for sale for the farmers at the nearest mandi, while local traders can tap the larger national market, Singh said on Thursday, urging state governments to follow Karnataka’s model.

Exporters, processors and bulk buyers will also benefit from the e-platform, the minister said, due to a reduction in the number of intermediaries.

Within 5-7 years a fully functional national agriculture market will create a value chain for agricultural produce and promote scientific storage and movement of goods across the country, he added.

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