State not to denotify fruits, veggies

State not to denotify fruits, veggies

Centre wants perishables dropped from APMC list as it 'helps' consumers, farmers

State not to denotify fruits, veggies

The state government has decided to adhere to its stand and not denotify fruits and vegetables from the Karnataka Agricultural Produce Marketing Committee (Regulation and Development) Act, despite the Centre aggressively pushing for agri-market reforms.

As many as 21 fruits and eight vegetables, including apple, orange, banana, potato, onion and tomato, are notified under the KAPMC Act, 1966. The Act makes it mandatory for farmers to sell their produce only to the licensed merchants at the mandis of Agricultural Produce Marketing Committees (APMCs) by paying the commission and other charges.

Denotification of fruits and vegetables, according to the Centre, will put an end to a chain of commission agents between the farmers and the consumers, creating a win-win situation for both. Union Finance Minister Arun Jaitley made a strong pitch for the denotification and promoting contract farming in his 2017-18 Budget presented recently.

But the Karnataka government holds a different view. “We have no intention to denotify perishables (from the Act). Even now the farmers are free to sell their produce directly to consumers anywhere, including APMC yards. Moreover, the government will not be in a position to intervene and provide justice to the farmers if the traders refuse to pay judicious price,” Additional Secretary to Co-operation department (APMC reforms) R Manoj said.

As per the Department of Agriculture Marketing, cost to the supply chain due to handling of fruits and vegetables at APMCs is only 6% of the total cost of the produce. Cost of supply chain include 5% commission and 1% hamali and other handling cost. This cost will be significantly higher in unorganised sector due to involvement of middlemen at multiple levels.

Interestingly, the ruling Congress has refused to denotify perishables despite directions from the party vice president Rahul Gandhi to all the Congress-ruled state governments in 2014. Instead, the Karnataka government exempted levy of market fee on farmers (1.5% on fruits and 1% on vegetables) and made a provision for retail sales at APMC yards.

Chairman of Food Processing Committee of Federation of Karnataka Chambers of Commerce and Industries Bharat Shah said APMCs help farmers get competitive price to their produce due to the involvement of large number of traders. Besides, the farmers get necessary logistical support such as storage place at APMCs. As far as consumers are concerned, prices of fruits and vegetables are normally the lowest at APMCs compared to other places, he added, opposing the move to denotify perishables.