What are Mandis and how does it strike balance between farmers and consumers?

Following the BJP’s passing of the three contentious farm laws, another word that became popular is ‘mandi.’ While it is very integral and relevant in many states, the concept is foreign to Kerala and its people. What does ‘mandi’ truly mean in all these conversations around the recent issues?

Mandis, in simple terms, are market yards of APMC (Agriculture Produce Market Committee), which are run and regulated by state governments. Mandis are old and ubiquitous institutions of economic life in many parts of India. They act as a meeting point between farmers and consumers. As per suggestions by the National Commission of Agriculture (NCA), there should be at least one mandi within 80 square kilometers, so that every farmer within that area can access the mandi within one hour to sell their product.

The farm products are auctioned at mandis, ensuring a ‘Minimum Support Price’ (MSP) as a base, ensuring that they are properly compensated for the product as well as their efforts. The British proposed the mandi system or ‘grain market’ way back in 1887, and they proposed regulations to it in the 1930s. However, the project didn’t take off until the 1960s and 1970s.

Mandi safeguards farmers from exploitation by large retailers since they were not allowed to procure directly from farmers. Well, at least until now, as the latest farm bill, introduced by the Narendra Modi government, allows private retailers to engage with the farmers outside the safety of the mandis. Besides, mandis ensured that the retail price does not reach high levels, as per the Agriculture Produce Marketing Regulation Act. The mandis, therefore, act as a balance to safeguard the interest of farmers and consumers. Overall, it regulates marketing practices and establishes a well-regulated market.

How do mandis operate?

The farmers will bring their produce first to the mandis, where it will be sold via auction. The traders need a license to operate within a mandi. In 2003, the APMC Act was amended with permission for private markets and setting up of the special market for perishables.

However, when everything is said and done, mandis aren’t exactly the perfect government institutions. The unscrupulous and unregulated traders arm-twist farmers into selling their products at throwaway prices. The density of mandis is still not up to the mark, and so the farmers find it difficult to reach the mandis. The prices promised during the auction don’t reach farmers on time, let alone the full amount.

The cartelisation of mandis facilitated the present government to get away with local mandis. However, all things considered, developing the policy infrastructure of the mandis is a better option as compared to the farm laws that have acquired the wrath of farmers across the nation. The government should regulate the existing acts and improve the infrastructure of mandis as well as increasing their density.