The Long Road to Transformation of Agricultural Markets in India

This paper examines Karnataka’s pioneering agricultural output marketing reforms with the twin goals of assessing the state and challenges of implementation and to glean lessons from Karnataka’s experience for India’s e-National Agriculture Market. Through a field study of 10 mandis across the state, we find that while Karnataka has been consistently pushing through with reforms, in the context of deeply entrenched relationships between farmers, traders and commission agents, there remain significant challenges. We argue, based on Karnataka’s experience, that agricultural market reform in India rests on three pillars— institutions that establish the rules of the game, incentives for agents to participate actively in the market, and infrastructure to support the modernised trading platform. Unless reforms address all these three issues simultaneously, they are unlikely to succeed.