To give farmers more freedom to sell their produce, the agriculture ministry on Monday unveiled a model Agricultural Produce Market Committee (APMC) Act which defines each state/UT as a single unified market area. The move will curb the role of APMC mandis. The State/UT Agricultural Produce and Livestocks Marketing (promotion and facilitation) Act, 2017, which is being sent to states for adoption, allows existing APMC mandis to enforce regulation only in their market yard which would allow private sector players to set up mandis.
“Because of monopoly of APMCs across the states, the marketing of agricultural produce had been fragmented, thus depriving a farmer’s choice to sell his produce to multiple buyers. Through this model legislation we want to provide farmers options of several marketing channels to sell agricultural produce,” an agriculture ministry official said.
With the exception of Bihar, all other states/UTs have agreed to adopt the model Act.
The official said that as per the proposed legislation, the respective state government has to appoint an independent entity ‘director of agricultural marketing’ who would be the sole authority to grant licence for establishment of a new market yard within the state.
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The new Act also proposes to cap mandi taxes at 1% for foodgrain and 2% for fruits and vegetables while pegging arthia or commission agent’s levy at 2% of the total transaction cost.
At present states such as Punjab and Haryana levy 14% taxes including VAT, mandi taxes, various cess etc on the grain purchased from the farmers, which drives away private procurers of the commodity. though the imposition of VAT does not come under the purview of the model act.
The agriculture ministry has been urging states to carry out changes in their APMC acts such as allowing the private sector to set up wholesale markets, single point of levy of mandi fee across state, licence for allowing electronic trading (for integration into electronic-National Agriculture Market-eNAM) and delisting of fruits and vegetables from APMC’s ambit.
As many as 26 states and Union Territories, including Andhra Pradesh, Gujarat, Maharashtra, Karnataka, Rajasthan, Madhya Pradesh and Uttar Pradesh, have fully or partially modified their APMC laws.
The agriculture ministry official acknowledged that the implementation of the model APMC Act of 2003 had been rather ‘patchy’ and ‘uneven’ across the states. “While some of the states have carried out reforms in APMC Acts time to time for providing farmers choices to sell their produce, some of the states have abolished APMC, thus ensuring chaos in the market place,” the official said.
Meanwhile, about 400-odd AMPCs across 13 states integrated to the electronic National Agriculture Market (eNAM) launched around two year ago. Around 38 lakh farmers of an estimated 14 crore in the country have registered with e-NAM so far.
More than 87,000 traders and 43,000 commission agents have also been registered. India’s total trade in agricultural commodities is worth more than Rs 6 lakh crore annually.