Union Cooperation Minister Amit Shah announces ambitious plan to eliminate middlemen in pulses trade, empowering farmers with direct procurement and timely payments through NAFED and NCCF.

In a significant boost to India’s agricultural cooperatives and farming community, Union Home Minister and Minister of Cooperation, Amit Shah, has declared that the National Agricultural Cooperative Marketing Federation of India (NAFED) and the National Cooperative Consumers’ Federation of India (NCCF) will procure every single grain of pulses directly from farmers within the next two years. This move aims to dismantle the long-standing network of middlemen, ensure remunerative prices reach cultivators, and accelerate India’s journey towards self-sufficiency in the production of pulses.

Speaking at the launch of NAFED’s new e-auction portal, NAFEX.in, in New Delhi on June 23, Shah emphasised the transformative potential of this initiative. “The time has now come for NAFED and NCCF to procure pulses and oilseeds directly from farmers to ensure benefits reach them,” he stated, underscoring the government’s commitment to transparency and efficiency in agricultural marketing.

Strengthening Cooperatives for Direct Farmer Benefits

The announcement comes amid ongoing efforts to reform India’s agricultural marketing system. Traditionally, farmers have faced challenges in accessing Minimum Support Prices (MSP) due to intermediaries who often skim profits, leaving growers with suboptimal returns. By routing procurement through robust cooperative networks like NAFED and NCCF, the government intends to streamline the supply chain, guarantee payments directly into farmers’ bank accounts within 48 hours, and promote cultivation of pulses on a larger scale.

Shah highlighted that infrastructure for direct procurement of pulses, maize, and other crops has been significantly developed over the past three years. The focus now shifts to expanding this network to the grassroots level, enabling seamless direct sales from farmers to cooperatives. This is expected not only to eliminate middlemen but also to encourage farmers to diversify into pulses, contributing to national food security.

NAFED, which has turned around from financial difficulties a decade ago, now boasts a turnover of approximately Rs 30,000 crore and annual profits of around Rs 500 crore. Serving over 74 lakh farmers, the organization has diversified into organic farming, seed production, retail, bio-fertilizers, food security, and international trade. Shah expressed confidence that NAFED’s turnover could exceed Rs 50,000 crore in the coming two years under these reforms.

New Digital Initiatives for Transparency and Efficiency

The launch of NAFEX.in represents a cornerstone of these reforms. This digital auction platform will facilitate transparent bidding for pulses and oilseeds, replacing reliance on private platforms. Alongside NAFEX.in, NAFED introduced three other major initiatives: DRISHTI (an inventory management system), an Enterprise Resource Planning (ERP) Solution, and NAFED Kalyan.

These tools are designed to enhance operational efficiency, improve farmer outreach, and ensure greater accountability. Shah noted that modern technology is key to transparent procurement, allowing farmers to register, sell produce, and receive fair prices without exploitation.

The event was attended by prominent figures including Union Agriculture and Farmers Welfare Minister Shivraj Singh Chouhan, Minister of State for Cooperation Krishan Pal Gurjar, Cooperation Secretary Ashish Kumar Bhutani, and NAFED Chairman Jethabhai Ahir, signalling strong inter-ministerial support for the cooperative sector.

Addressing Pulses Self-Sufficiency and Import Dependence

India has made strides in increasing pulses production, yet achieving full self-sufficiency remains elusive partly because MSP benefits often fail to reach farmers effectively. Pulses like tur (arhar), masoor, and urad are critical for dietary protein needs, but the country still relies on imports to bridge demand-supply gaps.

Shah specifically mentioned plans for 100 per cent procurement of certain pulses such as tur, masoor, and urad. By ensuring MSP reaches farmers directly, the policy is expected to incentivize higher production, reduce import bills, and stabilize domestic prices. This aligns with broader government goals, including earlier initiatives like dedicated procurement portals for tur dal aimed at self-reliance by 2027.

Experts view this as a timely intervention. Direct procurement can minimize post-harvest losses, improve price discovery, and build farmer confidence. With expanding cooperative networks, even small and marginal farmers in remote areas could benefit, potentially transforming rural economies.

Social Welfare Component: Investing in Farmers’ Future

In a notable welfare announcement, Shah revealed that NAFED would allocate 1 per cent of its profits towards scholarships and career development for children from farming families. This initiative under NAFED Kalyan aims to break the cycle of generational farming challenges by supporting higher education and professional opportunities.

“This will help children of farmers pursue better careers,” Shah remarked, positioning cooperatives not just as economic entities but as vehicles for social upliftment.

Challenges and Road Ahead

While the vision is ambitious, implementation will require overcoming logistical hurdles. Expanding procurement infrastructure to thousands of villages, training cooperative staff, integrating digital tools across regions, and ensuring seamless payment systems are key challenges. Coordination between NAFED, NCCF, state governments, and farmer producer organizations (FPOs) will be crucial.

Climate variability, such as recent concerns over El Niño impacts on monsoon, also underscores the need for resilient pulses varieties and robust procurement during both good and lean harvests.

Nevertheless, the government’s track record with cooperative reforms, including the National Cooperative Policy, provides a strong foundation, officials say, adding that budgetary support, such as allocations to entities like NCEL, further bolsters the ecosystem.

Broader Impact on Indian Agriculture

Shah’s announcements signal a new era where farmers are at the centre of value chains. With direct procurement, digital transparency, and welfare measures, India’s cooperative movement is poised for significant growth, promising higher incomes for millions and greater food security for the nation.