Agricultural Produce Marketing Committees remain crucial to price discovery and must reinvent themselves for better creation agri-infrastructure. Analyse (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 4 years
KEY POINTS
· Pre-APMC days were dominated by price misinformation and arbitrage. APMCs were created in the early 1960s to ensure price discovery and fair transactions.
· They were designed to create infrastructure for auctions and storage out of the cess paid by the buyers and not by the taxpayers. Many APMCs (mandis) used the funds to create rural marketing infrastructure.
· First, the state governments: The APMC cess became a source of extra revenue for them; money, which can be used at their discretion since this amount was not part of the budget. It remained in the bank accounts of the Mandi Board and was used for ‘discretionary’ development spending (there was no MPLADS in those days) mostly under the chief minister’s orders.
· Legal provisions for licencing of traders to operate in the market yards were meant to ensure prompt payments to farmers. The insistence on correct weighment and transparency in auctions were in the best interests of price discovery. The law also stipulated that prices be displayed prominently in the market yard.
· The managements made cosy arrangements with the traders and the powerful ‘commission agents’, leaving the farmers in the lurch. The story of procurement under the Minimum Support Price (MSP) remained different since there was no price discovery. The traders kept their interests intact by increasing their commissions much to the chagrin of FCI.
· First, change the law to make them farmers’ organisations. At least two-thirds of the members of the board/committee should be elected farmers/ Farmer Producer Organisations, reducing the government nominees to two.
· Allow the board /committee to appoint the chief executive from the open market. Eliminate, by law, the scope for frequent government interventions and remove all cadre-based government-controlled employees.
· The board should function like a well managed co-operative. Second, remove ‘geographical’ constraints for all farmers by allowing farmers to sell in any market yard of their choice. Third, remove the condition of a separate licence for each market. Make one licence valid for the entire state, and make it hassle-free and online.
· Fourth, reduce the cess to 1% or less. Collect service charges, if required, for facilities provided. Fifth, remove the coterie of ‘commission agents’, let the buyer or the farmer pay service charges if they use their services.
· Provide this space to FPOs. Sixth, invest substantially in the market yard premises: create modern storage & cold chain facilities, state of the art auction halls, fintech, hygiene, etc, to make the market yards modern and efficient. Seventh, make provision of ‘farm services’ to support farmers a priority. Eighth, drastically prune the list in the schedule to a bare minimum.
