APMC reforms: Some headway made; inter-state trade distant goal

New Delhi | Published: December 16, 2019 5:36:37 AM

Rajasthan, Telangana and Uttarakhand are the only three states that have issued unified licences to all traders.

Offcial data also show that only 22% of 1.26 lakh traders registered under e-NAM have received unified licences for trading within a state.

By Prabhudatta Mishra

Thirty-three months after the Centre formulated a model law for the much-needed reforms in agriculture marketing and asked all states to emulate it, most states are still in the throes of making the prescribed changes in their laws and actually implementing them.

Among the major states, Maharashtra, West Bengal, Odisha, Gujarat and Andhra Pradesh have complied with the four key reforms mooted in the Centre’s model law, namely deregulation of fruits and vegetables trade, facility for anyone to set up private market outside the purview of APMC mandis, single trading licence to enable inter-mandi trade and single-point levy of market fee.

However, even these states haven’t taken all the follow-up actions required to actually meet the reform objectives — for example, even as the state’s APMC law provides for it, Maharashtra is yet to issue unified (all-mandi) licence for traders, whereas less than 1% of licences in Uttar Pradesh and Gujarat are unified ones.

Rajasthan, Telangana and Uttarakhand are the only three states that have issued unified licences to all traders.

Of course, there are many other reforms prescribed in the Centre’s 2017 draft law, including declaring warehouses as deemed markets, direct marketing and e-trading. Arunachal Pradesh is the only state that has carried out all reforms proposed by the Centre and followed them through.

Among the states which have partially followed the Centre’s law, Uttar Pradesh, Tamil Nadu, Telangana, Punjab and a few others haven’t deregulated fruits and vegetables from the purview of APMC mandis so far.

“The progress of APMC reforms is linked with the growth in electronic national agriculture market (eNAM). Unfortunately, many states are yet to allow inter-mandi trade and an even fewer number of states have opened up inter-state trading,”said a state government official. Three key reforms — e-trading, single unified trading licence and single-point levy of market fee — are essential prerequisites for the thriving of e-NAM, an online trading platform being developed for agricultural commodities across states.

The Centre’s model law — Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017 — is aimed at enabling farmers access to markets across the country for their produce, without being hamstrung by exploitative trade intermediaries.

Offcial data also show that only 22% of 1.26 lakh traders registered under e-NAM have received unified licences for trading within a state. The tardy progress is despite the fact that such licence is a must to facilitate inter-mandi transactions.

Of course, Andhra Pradesh, Telangana, Madhya Pradesh and Uttar Pradesh can still be counted among the top performers in terms of generating business on e-NAM. The turnover of trade on e-NAM increased 24% on year to Rs 14,000 crore during April-October period of the current fiscal year. The volume too went up 19% to 44 lakh tonne during the period. But of the total mandi tranactions, e-NAM still has a very small share, although an official estimate of this could not be ascertained.

“E-NAM has great potential to remove the cobweb of mandis by bringing transparency. Karnataka experience of ReMS, a similar platform of e-trading in mandis, has delivered 10-15% higher prices to farmers. Due to opposition from existing and well-entrenched traders operating in mandis, several states have not implemented e-NAM in right spirit,” said former union agriculture secretary Siraj Hussain.

According to the Ashok Dalwai committee, which drafted the model Act, the previously enacted laws failed to serve the full objective of price discovery in a fair and transparent manner. “Unfortunately, the market functionaries have over a period of time learnt to circumvent the basic objective of marketing regulation by cartelising,” Dalwai said in the report. More importantly, the APMCs have caused fragmentation of the markets thereby inducing inefficiency over space and time, he added.

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