The Current Mandi Landscape
Traditionally, mandis were designed to provide farmers with legal protections and fair price discovery. Today, many of these markets are mired in monopoly, informal dealings, and complex fees that can reach 6–8% of a transaction. Farmers often rely on commission agents for both market access and cropping decisions, while price discovery remains opaque and inefficient. With over 70% of farmers unaware of current market prices at the time of sale, income volatility is a persistent issue.
Why Reforms Haven’t Fully Worked
Efforts like the Model APMC Act and e-NAM have attempted to modernize trade, linking more than 1,500 mandis in 23 states and 4 Union Territories. Yet, fewer than 5% of agricultural transactions occur digitally. Structural issues persist, as APMCs both regulate and operate markets, creating conflicts of interest. Meanwhile, infrastructure gaps—such as only 36 million metric tonnes of cold storage against massive produce volumes—exacerbate post-harvest losses, particularly for perishable goods.
The Roadmap for Modern Mandis
Experts recommend a multi-pronged transformation:
- Open Auction Yards: Move trade from backroom agent shops to central auction yards with digital displays and standardized lots for transparent pricing.
- Transparent Service Fees: Replace arbitrary levies and commissions with regulated service charges for logistics, weighing, and assaying.
- Managed Competition: Enable Farmer Producer Organisations (FPOs), cooperatives, and private firms to provide key services under accountable contracts.
- Quality over Quantity: Trade based on certified quality, backed by Directorate of Marketing and Inspection (DMI) standards to strengthen exports and consumer trust.
- Professional Management: Separate regulatory and operational roles, with professional CEOs managing mandi operations using digital MIS and performance metrics.
Infrastructure Investment is Key
Modernizing mandis requires strategic infrastructure upgrades. Current cold storage and warehousing capacities are unevenly distributed, causing post-harvest losses of 4–6% for cereals and up to 18% for fruits and vegetables. Expanding storage and ensuring equitable access across states will enhance efficiency, attract private investment, and support India’s export potential.
Pilot, Measure, Expand
States like Karnataka, Maharashtra, and Madhya Pradesh are ideal testing grounds for mandi modernization initiatives. Piloting reforms focused on transparency, accountability, digital integration, and service delivery can provide measurable data on income improvements, price discovery, and market efficiency. Successful models can then be replicated nationwide, aligning India’s agricultural markets with SDGs and global trade standards.
The Bigger Picture
Revamping mandis is not just about farmer welfare. Modernized markets can help curb food inflation, reduce post-harvest losses, facilitate private sector investment, and strengthen India’s global agricultural trade. Efficient, digital, and transparent mandis will connect farms to futures, ensuring prosperity for millions of farmers instead of a few intermediaries.
