Maharashtra misses APMC deadline as traders protest

Written by Sandip Das | New Delhi/Pune | Updated: Jan 22 2014, 11:07am hrs
Stiff opposition from the 300-odd agriculture produce market committees (APMC) in Maharashtra has prevented the government there from implementing Congress vice-president Rahul Gandhis suggestion that Congress-ruled states remove fruit and vegetables from the purview of the Agricultural Produce Marketing (Development and Regulation) Act by January 15.

Maharashtra state agriculture and marketing minister Radhakrishna Vikhe-Patil confirmed on Tuesday that while the state had notified the delisting of fruits and vegetables from the APMC Act last year the first part of the process the government was meeting all stakeholders and addressing their concerns. Vikhe-Patil insisted a decision would be taken soon.

After Azadpur in Delhi no longer ruled by the Congress Mumbais Vashi is the countrys largest fruit and vegetables market. While Azadpur handles 40,000-50,000 tonnes of the commodities a day, Vashi gets 200,000-40,000 tonnes a day.

Others in the government are less sanguine about the speed of the final decision. While Maharashtra agriculture marketing director Deepak Taware told FE that they were discussing the possible impact on both farmers and traders, the problem was that farmers have no other place to sell their fruits and vegetables. A final decision, Tawade said, would have too wait till the issues raised by the Vashi traders are resolved. Vikhe-Patil added that traders had little to worry about since they would remain in the market, only they would lose their monopoly. Traders who had announced a strike on January 8 postponed it on the assurance of a discussion.

As in Maharashtra, little headway has been made in some other Congress-ruled states like Andhra Pradesh, Haryana and Kerala. Kerala agriculture minister KP Mohanan indicated to FE it would take at least two more months since the process involved all krishi bhavans at the grass-root level.

The Karnataka government had in July last year passed a Bill to modify the Karnataka Agricultural Produce Marketing (Regulation and Development) Act,1966, which included the provision to remove perishables from the APMC.

Himachal Pradesh and Uttarakhand, two key fruit producers, have acted on Gandhis advice. While Uttarakhand has delisted fruits and vegetables from its APMC Act, Himachal has abolished the existing 1% market fee applicable in the mandis.

Traders said the Vashi market caters to close to 2 crore people in Mumbai, Navi Mumbai and other areas, and farmers bring in their produce from various states to the sell in the huge wholesale mandis. Because of our regulations, farmers are not cheated by traders and in the absence of any market committee, the farmers would be exploited, Shankar Pillai, a member with APMC Vashi said. More than 2,000 trucks bring in fruits and vegetables to the Vashi mandi daily and the APMC charges 6.5% as commission and 0.75% as market fee from the farmers.

Currently, wholesale-to-retail mark-ups are two to three times the farm-gate price in many part of the country. Sundry taxes VAT, mandi tax, octroi etc account for an estimated 10-12% of the final retail price.

At an average of 23% last year, annual inflation in fruit and vegetable far outweighed the 10.1% headline inflation and 2.9% core inflation. Both the fruit and vegetable segments witnessed an average annual inflation of 38.9% for the months since July, compared with the average headline inflation of 6.8%.

These two segments have also contributed the highest in pushing up consumer price inflation, which remained in the range of 9.6-11.2% during the July-December period.

HS Baweja, managing director, Himachal Pradesh Marketing Board, cautioned that existing mandis would lose Rs 15-20 crore annually due to the removal of the market fee in mandis, adding that the Centre needed to compensate 50-odd mandis in the state.

JC Binwal, marketing officer with the Uttarakhand Agriculture Produce Marketing Board, said: We will be losing around Rs 8-10 crore annually as mandi taxes.

The Haryana and Jammu and Kashmir governments, sources said, are expected to announce delisting of fruits and vegetables from their respective APMC Acts shortly.

Ashok Gulati, chairman, Commission for Agricultural Costs and Prices, said: The move to delist fruits and vegetables from the purview of APMC would break the monopoly of a few in the archaic mandi system. The fact that many others can enter the fray, creating competition for the existing licence holders, will have a welcome effect in pushing the commissions of commission agents downwards, and providing better services to buyers and sellers.