Punjab has started the process of enacting a model Agriculture Produce Marketing Committee (APMC) Act to introduce private markets, abolish market tax, boost contract farming and facilitate spot trading in foodgrains.
A committee, headed by financial commissioner (development), Punjab, has been formed, according to official sources. The other members of the committee are secretary, Mandi Board, director, agriculture, Punjab, managing director, Punjab Agro Industries Development Corporation, and a consultant from the National Farmer’s Commission. The general manager, enforcement, Mandi Board, Punjab would be member secretary.
BS Sidhu, director, agriculture, Punjab, said, “the Punjab APMC Act would be on the lines of the Model Act of 2003 initiated by the Union government.” He said the draft APMC should be ready by September 15, 2007, after which it would be sent to the state legal cell for ratification. Thereafter, it will be introduced in the Assembly, if it is in session and could also be brought as an ordinance.
To provide farmers genuine rates for their produce, neighbouring Haryana has already implemented the Act. Punjab has borrowed much of the details from Haryana. Sources said, “the Act would come in handy in view of failure of crop diversification and contract farming in the state”. Though a number of multinational companies, including Reliance, Bharti and ITC, are keen to invest in agriculture in the state, contract farming and crop diversification are still in an experimental stage.
In Punjab, contract farming was introduced but failed to gain momentum as most farmers were not clearly explained the terms and conditions.
Once the proposed Act is in place, it could pave the way for introduction of spot trading in foodgrain, as proposed by National Commodities and Derivative Exchange and may make minimum support price almost redundant.
The present system had become a stumbling block for hypermarkets seeking to scale up operations, as they had to work through an intermediary in APMC markets while sourcing bulk quantities of food.