Many states like Madhya Pradesh are embracing the new agriculture reforms but unfortunately, some states are encouraging the farmers to protest against the changes, Niti Ayog Member Ramesh Chand said on Wednesday.
There are also some states that are following a "wait and watch" approach but with the passage of time, they will realise the mistake, he said.
Chand, also a member of the 15th Finance Commission, said the government is planning to come out with an attractive package to incentivise states for accelerating changes in agriculture.
Recently, the government brought two Ordinances in agriculture to allow farmers to sell their produce outside mandi and enter into agreement with private players for sale of their produce. The government has also proposed amendments to the Essential Commodities Act to deregulate food items.
"The reforms have gone beyond what experts had suggested... Many experts are stupefied, not able to digest and absorb it. Therefore, you find a lot of confused reactions in response to these reforms," Chand said while addressing a webinar organised by the PHD Chamber of Commerce and Industry.
All government institutions are "aggressively promoting" these reforms as they have realised they are the need of the hour. "They find that agriculture has to play a larger role in future, even in employment and many other areas," he said.
On how soon these reforms will transform the current agri-market scenario, Chand said it will depend on the speedy response of state governments and investors.
"Right now, if I look at the states, I put them in three categories. There are states like Madhya Pradesh that are enthusiastically embracing the reforms," he said.
There is a second category of states that are adopting the "wait and watch" approach, while there is a third category of states "unfortunately, where even governments are encouraging farmers to protest against reforms. I think with passage of time, they will realise the mistake", he said.
Chand said one state will attract investment, the other state will desist from investment and the third state will just wait.
"India is a big country. It is all nice to talk about the new-age agri-market at the national level. But, we need to go state by state and see how the new-age market will shape each state," he said adding that most of the goals will be achieved through "competition" like in aviation and telecom sectors.
Clearing "misperception" about closing of APMC (Agriculture Produce Marketing Committees) mandis in the wake of recent reforms, the Niti Aayog member said: "The APMC markets will exist but they will have to become more competitive. If they do not exist, the situation will tilt into another direction and will defeat the purpose of reforms." On the opportunities the reforms will provide for investors, he said they should meet the rising commercialisation of agriculture and rising aspirations of farmers.
The new-age agri-market is expected to transmit demand signals into production, re-orient production scenarios as per the consumers' demand in India and abroad, encourage investment in agri-trading platform, and link from production to processing, among others, he said.
There will be a market for exportable produce. In addition to whatever the country is exporting now, India will be required to export one-third of the increase in total agri production every year, he said.
"Otherwise, there will be chaos and the domestic market cannot absorb the kind of growth we have in agriculture. we will have a market for exportable produce. More people should invest in this area," he added.