The draft of the new model agricultural marketing law is floated by the government to invite public comments.
What is APMC act and why it is bad?
The Agricultural Produce Market Committee is a marketing board established by state governments of India, one main function of which is basically to provide a platform for farmers to sell their produce.
The APMC forces the farmers to sell their produce only to middlemen approved by the government in authorized Mandis.
Thus, a vegetable producer cannot directly sell to a supermarket, they have to go through a broker. This increases prices for the end buyer and unnecessarily adds redtape.
In a lot of cases, even after receiving the produce, some traders delay payment to farmers for weeks or months.
If payment is made at the time of sale, then the trader may arbitrarily deduct some amount.
To avoid tax, some traders do not give sale slips to farmers. As a result, it is difficult for the farmer to prove his income to get loans from banks.
On average, the farmer is able to receive barely 25% to 33% of the final retail price. Middlemen receive double commission (both from seller and buyer), thus making consumers pay for this spread.
The prime reason for the tardy progress on this front is the states’ reluctance to cede their hegemony over farm markets.
How the new Bill is different?
The new Bill is called State/UT Agricultural Produce Marketing (Development and Regulation) Bill.
It moots setting up of private and commodity-specific market yards to end the monopoly of the APMCs and offer them the much-needed competition.
Besides, it stipulates a single licence for trading within the state and at the national level and a single point levy of all market fees within the laid-down caps.
It also seeks to promote direct interaction between farmers and end-users of farm commodities, including retail chains, exporters and agro-processing industries.
The mandis are proposed to be encouraged to put up electronic trading platforms to make transactions, especially price determination, totally transparent.
Thus, the new deed amalgamates the good features of both the model APMC Bill of 2003 and the electronic national agricultural market (e-NAM) launched last year.
It also seeks to depoliticise and democratise market committees and state marketing boards by including farmers’ representatives in their managing bodies and barring individuals from contesting for more than one post simultaneously.
However, under the present rural socio-political setup, it is hard to distance politicians from farm-related bodies.
What is the way forward?
There need to be at least 1 market in 80 sq.km (presently, it is 1 in 487 sq.km). Thus, the private sector alone cannot be expected to bridge this huge gap.
The states will have to continue to play a meaningful role in both expansion and modernisation of the farm marketing network.
Since the success of the fresh move will depend largely on the states’ cooperation, the Centre will need devise ways and means to motivate them to actually carry out the suggested changes.
Because, at stake are the interests of farmers as well as consumers, both of whom are short-changed by the present inefficient, cost-intensive and non-transparent farm marketing system.
