APMC reforms fail to create alternative marketing system

Written by Sandip Das | New Delhi | Updated: Dec 30 2013, 08:55am hrs
More than a decade after the enactment of the model Agriculture Produce Marketing Committee (APMC) Act by the Centre, which allows setting up of private wholesale markets parallel to the APMC markets, states have largely failed to create an alternative system for marketing of agricultural produce, particularly fruit and vegetables. In the absence of an alternative market, farmers across the country are forced to sell their produce at APMC markets.

Experts say Congress vice-president Rahul Gandhis announcement last week of delisting fruit and vegetables from APMC in the 12 party-ruled states is considered as a first step towards reform in agricultural marketing.

It will send a message that the government is serious about reforms, and wants to 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 agents downwards, and providing better services to buyers and sellers, Ashok Gulati, chairman, Commission for Agricultural Costs and Prices (CACP), told FE.

An agriculture ministry official said 17 states, including Andhra Pradesh, Assam, Gujarat, Jharkhand, Karnataka, Maharashtra, Orissa, Rajasthan and Uttarakhand, have carried out reforms in their APMC Acts for allowing direct marketing, contract farming and markets in private and cooperative sectors.

Key grain producing states such as Haryana, Punjab and Madhya Pradesh have carried out only partial reforms. There is no APMC Act in Bihar, Kerala, Manipur and Union Territories of Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu and Lakshadweep.

Gokul Patnaik, chairman, Global Agri System, a leading consulting firm, said these laws lack teeth in creating alternative wholesale markets in the private sector. However delisting of fruit and vegetables from APMC would be the first key step towards reducing prices and increasing farm income, Patnaik said.

An ICRIER report on the food processing sector estimates that 15 to 25% of the total produce sold through the APMC route gets wasted due to intermediaries and poor mandi infrastructure.

All fruit, vegetables and perishables with a very short shelf-life should be fully exempt from the APMC Act. This will be critical in providing a fillip to farmer incomes, reducing post-harvest losses and thereby controlling food inflation. We hope that the day the APMC regime for other commodities also gets liberalised is not far away, CII National Council on Agriculture chairman and ITC Agri Business Division CEO S Sivakumar said.