Mr. Vikram Marwaha, Joint Managing Director, DRRK Foods
Rice has been at the heart of Indian cuisine for centuries. It is not only a staple on the table but also a livelihood for millions of farmers and part of India’s agricultural economy. Central to this system lies the mandi system, the ancient grain buying system that has not just influenced the buying and selling of rice but also the way farmers interact with markets, traders, and exporters. With India’s rice exports increasing steadily and changing consumer preferences, it is time to go back and look into the relevance, challenges, and path of local rice mandis.
Mandis: Preserving Agricultural Heritage
Mandis, or Agricultural Produce Market Committees (APMCs), have been part of India’s agri-value chain since the post-independence era. For rice farmers, especially of northern states like Punjab, Haryana, and Uttar Pradesh, mandis became the designated places to sell their product. Such market yards evolved over time as structured platforms for procurement, with commission agents (arhatiyas), traders, millers, and exporters rushing to do business.
In rice transactions, mandis had two important roles. One, they ensured prices were made transparent by streamlining procurement processes. Two, they were reliable centers for exporters and millers to buy gigantic volumes of paddy. This was extremely important during the 1960s and 1970s when India was building its food security and later its reputation as the world leader in basmati rice exports.
Why Mandis Are Struggling Today
Mandis have survived over the years, but today they grapple with fundamental structural and functional problems that demand urgent attention.
1. Price Volatility and Exposure of Farmers:
Farmers are often kept in the dark due to price volatility fueled by mandis. Minor fluctuations in mandi rates intensely impact their earnings, keeping in mind the thin profit margins of agriculture.
2. Dependence on Intermediaries:
Commission agents continue to be central, which sometimes denies direct farmer access to purchasers. Such reliance can produce inefficiencies and lower farmers’ rewards.
3. Issues of Quality Assessment:
Procurement in mandis is usually by visual appraisal; thus, the variability in grading and pricing. For exporters requiring uniform quality, this constitutes a serious issue.
4. Logistics and Bottlenecks in Infrastructure
Congested mandi spaces, limited storage facilities, and old weighing equipment are responsible for inefficiencies. Perishable commodities are affected by these issues, and they lead to wastage and losses.
5. Adulteration Problems:
Fraudulent exploitation in blending low-grade grains with top-grade paddy varieties at times occurs in mandis, which is detrimental to India’s reputation on global markets, especially for top-grade basmati.
Evolving Strategies in Agricultural Product Sourcing
Over the past few years, the mandi system has been transforming in quiet but significant ways. Large rice processors and traders are investing in innovative supply chain models that blend mandi procurement with direct farmer connection. This model keeps the mandi as a consolidation point while creating farmer-level involvement for traceability and quality control.
Technology has also begun to revolutionize mandi procurement. Electronic payments, online auctions, and price transparency are being tested on online platforms. Though the rate of adoption is uneven, especially in rural India, the direction is laid; mandis have to change from being physical markets to digitally enabled marketplaces.
Policy Shifts Driving Change in Agriculture
Government efforts to reform the APMC Acts and farmer-producer organizations (FPOs) are driving procurement towards more efficiency and giving power to farmers. Though the national debate on farm reforms has been multi-layered, one unarguable fact is that there is an acceptance that mandis have to be modernized. Enhancing transparency, reducing intermediary dependence, and providing farmers with more choices are front-of-mind policy agendas.
Driving Growth Through Inclusion
The future of rice procurement in India lies not in dismantling the mandi system, but in modernizing and upgrading it. The balanced approach can leverage the popular understanding and trust of mandis and combine it with the precision of direct purchase and technology.
- Enhanced Infrastructure: Upgrading mandi facilities with enhanced storage, grading, and electronic weighing will reduce inefficiencies.
- Digital Integration: Priced platforms for farmers to view live prices, receive electronic bids, and make digital payments will enhance transparency.
- Farmer Capacity Building: Farmer capacity building in quality standards and sustainable practices will match supply with both domestic and export markets.
- Traceability and Certification: Traceability measures at the mandi level will ensure the authenticity of Indian basmati rice in the international market.
Rice mandis have been greater than market yards; they have been symbols of India’s agricultural power and people-focused commerce. While the country focuses on maintaining its position as a world leader in rice exports and serving increasing domestic demand, the mandi system must evolve with the times to integrate into a new economy. Through the adoption of technology, strengthening farmer linkages, and enabling transparency, India’s rice mandis can still be a central figure, bridging the past and the future of farm trade.
