Now that the Karnataka government, persistently prodded by the Centre, has stated its decision to amend the APMC Act, not withstanding strident and shrill protests from all strands of society, it has become necessary to analyse as to what these amendments entail various stake holders.
The APMC Act was brought into force in 1966 to bring order and discipline to the chaotic agri produce marketing sector, where the farmer had become an object of exploitation at the hands of middlemen and traders. It stipulated farmers to sell their produce in the APMC markets, clearly prohibiting transactions outside.
The amendments proposed by the government include promoting establishment of private/co-operative agri produce markets, including farms’ groups, and promoting public private partnership in establishing markets and in infrastructure creation; allowing direct selling.
Both the Union and state governments claim that this has been designed to redefine relations between farmers, marketers and consumers and to help the ailing agro sector with investment and technology.
But, two provisions are causing tremendous consternation in the trading community. Provision for direct selling and contract farming — the system in which agro processing or trading entities enter into contract with farmers to produce a specified quantity and quality of an agricultural commodity.
For the cash starved governments, making provision of agri-services for the large number of unorganised farmers is difficult. Hence contract farming, which provides market linkages in ways which do not burden the public treasury, is most welcome.
But, one of the most serious concerns is the possibility of the shift towards export oriented cash crops from the staple crops that would seriously undermine the nation’s food security. This would also favour agro MNCs from the US and loss of freedom for the farmer, who was caring for the needs of his cattle and his people, but will have to depend fully on the contractor.
There is the possibility of “reverse tenancy” — giant corporations will take over lands of farmers.
The experiences of contract growers in Punjab and Harayana have not been encouraging. Nearer home, cultivation of Gherkin (small cucumber) and flowers on contract farming model in Ranebennur taluk of Haveri district, has not been very helpful to farmers.
With the implementation of the new legislation, the neighbourhood retailer, the lower middle class trader getting decimated and becoming unemployed may come to pass.
The government must devise creative means of surmounting these problems. As Wade Rathke, organiser of ACORN, a body which is fighting to safeguard the interests of retailers, puts it, “India must take into account the bad experiences in the rest of the world and put in some regulations”.
(The writer is a former IAS officer)
