Devendra Fadnavis’ government eyes agri reforms in Maharashtra, puts APMCs in its cross-hairs

By: | Published: March 18, 2017 5:00 AM

Agriculture produce marketing committees (APMCs) in Maharashtra are in for tough times.

The entire agriculture market turnover in Maharashtra is worth more than R1 lakh crore. (PTI)

Agriculture produce marketing committees (APMCs) in Maharashtra are in for tough times. After liberalising and deregulating agricultural markets, the state government is now going to relax norms to create multiple marketing channels, which would allow companies to purchase directly from farmers, bypassing intermediaries. The government is offering direct marketing licences, private marketing licences and single licences with the aim of encouraging multiple channels for marketing agri-produce and inviting bids through an online system.

As against the traditional system where farmers sell produce to APMCs, the latest move is meant to boost direct retail sales of fruits and vegetables to ensure stronger farm-to-fork linkages and in the process ensure better prices for producers and lower rates for consumers as well, Sunil Pawar, director, marketing, Maharashtra, said. The state government, through the Maharashtra Agricultural Produce Marketing (Regulation) (Amendment) Act, 2005, began the liberalisation process by providing for the creation of private markets, farmer-producer markets, direct marketing and contract farming.

The entire agriculture market turnover in Maharashtra is worth more than R1 lakh crore. Transactions worth R30,000 crore per annum take place at smaller informal markets. Private contracts worth R20,000 crore are signed outside these two markets. There are 40,000 artiyas or middlemen in Maharashtra. The state has 305 principal and 603 secondary APMC market yards. The APMC Act mandates that these markets must have facilities like auction halls, warehouses, weigh bridges, shops for retailers, police station, post office, bore-wells, farmer amenity centres and a soil-testing laboratory. However, most APMC markets offer very few of these facilities and the system to buy produce from farmers, auction it and sell to wholesalers and retailers through traders is very opaque, leaving enormous scope for malpractices.

“Until now, direct marketing licences have been issued to corporates including Reliance, Aditya Birla, ITC Foods and Tata Chemicals, among others. The government is offering such licences to traders, exporters and private players to sell either within or outside the state. Till date some 700-800 direct marketing licences have been issued. Forty-five private marketing licences have been given and single licences as well have been issued to traders and exporters.

The government has begun a campaign to encourage more players to come forward and avail these licences,” Pawar told FE. He pointed out that the state government has already amended the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1964. This enables e-marketing of agricultural produce and establishment of virtual markets, shifting the burden of levy from producers to purchasers and restricting the jurisdiction of the APMC to only the market premises instead of the entire tehsil. Maharashtra has private markets in Nashik (pomegranate), Vani in Yavatmal, Nanded, Washim and Buldhana (cotton). The state has also launched weekly markets named after Bhakti saint Savta Mali, wherein weekly agriculture markets can be set up in municipal areas for the sale of fruit and vegetables by farmers and farmer producer organisations (FPOs). The state has 307 APMCs, the turnover of which had crossed Rs 66,000 crore, and 45 private markets, which do business of around Rs 4,500 crore. The plan is to take the number of direct marketing licences to 1,000 to ensure that alternative marketing channels are a strong option to traditional APMCs.

The state has 900 FPOs organisations, wherein agriculturists come together to sell their produce. Pawar clarified that there is no plan to dismantle APMCs that have been created over the years but alternative solutions are being encouraged to ensure ease of doing business. Processes have been simplified for direct marketing licences, and the bank guarantee for a state-wide licence has been reduced to just Rs 5 lakh from Rs15 lakh earlier. The amount of guarantees required for various revenue divisions has also been brought down along with the licence fees.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition