Welcome move to integrate APMCs

Poor and inefficient marketing has been the bane of Indian farmers, who comprise 65% of India’s population and contribute around 30% of the country’s gross domestic output. It is also the cause of many of the farmer’s woes, including suicides. India is one country, comprising 29 states. But its agricultural market is fragmented into 2,477 principal regulated markets and 4,843 sub-markets, created by Agricultural Produce Market Committees (APMCs). This is reflected in wide inter-state and intra-state farm-price differences. Politically influential middlemen and not the farmers rule the roost in APMCs because the law makes sale outside the notified market yards illegal. The APMCs impose arbitrary and non-transparent levies on farmers. Many states have brought not only cereal, pulses and edible oilseeds, but also fruits and vegetables within their purview. The Model APMC Act mooted recently by the Centre is a welcome step to clear this mess.

The new law was overdue as the implementation of the Model APMC Act of 2003 has been patchy and uneven. While some states carried out partial reforms, some abolished the APMCs, creating a chaos in the market place. The Model Act of 2017 proposes single-point levy of market fee across a state and a united single trading licence for cost-effectiveness of transactions. It creates a barrier-free single market and allows organised retail to procure directly from the farmers and de-lists fruit and vegetables from the APMC regulation. The caps on mandi tax and commission agents’ levy will ensure that private trade is not driven out. This will not only give farmers better incomes but also provide them an incentive to adopt modern technology to improve their productivity. The provisions to declare warehouses and cold storages as market sub-yards will provide better access and linkages to farmers.

The burden of implementing the new model APMC law now rests on the states and Union Territories as agriculture figures in the state list of the Constitution. Even if the 15 BJP-ruled states adopt the new model law, it could herald a major reform in agricultural marketing as it provides wider options for farmers to sell produce and get better prices. Fortunately, most states, including major grain producers such as Punjab, Haryana and Uttar Pradesh, have promised to come aboard. Once each state becomes a single unified market, which gives farmers multiple choices, the stage will be set to gradually move towards a single licence and single point of levy of market fee at the national level. States could then get integrated on the online platform e-NAM (e-National Agriculture Market) launched in April 2016 for online sale and purchase of commodities nationwide.