Maharashtra to denotify sugar, aatta, maida and split dal from APMC list

Written by Geeta Nair | Pune | Updated: Jan 24 2014, 04:09am hrs
While the Maharashtra government is up against the strong traders and commission agents' lobby to exempt fruits and vegetables from the APMC Act to give farmers better access to markets, it is now also in the mood to decontrol some more commodities and free them from the clutches of the Agriculture Produce Market Committee markets.

On the government's denotification list are rava, aatta, maida,split dal and sugar. Expectantly, the traders are up in arms against this move and most APMCs have opposed this and letters of protest are coming in.

Deepak Taware, director, marketing, Maharashtra, said the government is serious about removing rava, aatta, maida, split dal and sugar from the list.

These are not directly produced by the farms and are their derivatives so there is no need to keep these commodities on the APMC list, Taware said.

Regulations add about 8% to 10% to the cost without bringing any value into the chain. These commodities are attracting multiple cess and these are loaded on to the price of the commodity, points out Taware.

Take the case of groundnuts. First they are handled as groundnut pods and cess loaded on them, then again when they move as groundnuts, and for the third time when it is processed and converted into groundnut oil. At every stage it attracts cess and commission.

Deepak Chavan, commodity analyst with Agro Futures, says rava, aatta, maida and split dal are not agriculture produce but processed food and should not have been in the list in the first place.

But this was done so that the APMCs could charge the 0.5% cess and 5% to 6% commission these products got on to the APMC list.

If they can exempt these commodities, it will be an achievement as it can have an impact on the cost, he added.

He was, however, sceptical about whether the Maharashtra government can really take on the powerful lobby of traders and commission agents and free these commodities.

There will always be resistance to reforms. Traders fear that their interests will be hurt but there is nothing to fear. There is enough space for everybody to operate, Taware said.

The sector strongly needs investment but it has been choked by the limited infrastructure and license system with no modernisation of the handling systems, he added.

Once these commodities are denotified, enterprising traders can grab this opportunity and create their own markets with modern facilities and do well, he suggested.