In the recent years, there has been a persistent talk of, what proponents call a s, opening up of the farm

sector. This means that private organizations will be al lowed to buy farm produce from outside the designated mandi yard. While as agric ulture is a state subject, there has been a push from the centre to link various schemes and financial aid to only those states which open up the farm sector. T here is a belief that opening up will lead to a higher price realization for the f armer as the supply chain will be shortened and food items will be available in a more direct manner from farm to fork. Food processing companies which consume agri-produce have long been in existence . They have never felt the need to buy directly from the farmers, and have been content buying from the traditional systems that have existed in India. So, what are the merits and demerits of buying directly from the farmgate ? Will opening up of the entire farm sector lead to a deluge of organizations opening up buyin g facilities at the farm level ? Why have all such past models been a failure ? Let us examine the issues involved. India, due to its huge population, has a fragmented land holding at the farm lev el, leading to lower per capita produce and relatively lower incomes. This is th e major reason why all direct buying activities have not met with much success. Any organization that wishes to buy directly from the farmer, will have to guara ntee buying at the government fixed minimum support prices, ensure fair grading, fair weighment, scientific quality testing as well as on-the-spot payment to th e farmer. Further, the procurement center will have to be kept open on all days, irrespective of the prices that are prevalent. And, chances are that the farmin g community may also have an expectation that the buying organization will buy a ll the items which a farmer or region produces. There is also an added administr ative complexity where one has to manage the documentation for all the individua l farmers. And, one can never consistently enforce deductions of account of lowe r quality delivered. The farmers also get their produce in lose un-bagged form o n tractors, carts etc. These have to be first bagged in bags of uniform weight, then weighed and stacked. In such cases, the cost of labour as well as logistics gets doubled. The quantity that one ends up buying from a buying post is also l imited.