Why APMC reforms not helping farmers

Updated: January 06, 2020 10:24 AM

Add to this the fact that the price to the farmer is also impacted by the imposts like commissions payable to arhatiyas (market intermediaries) which have increased after the introduction of GST.

APMC reforms, Maharashtra, Buldhana district, MSP, introduction of GST, APMC mandis, Maharashtra government, Khamgaon mandiIn FY19, the Khamgaon mandi had handled 14.81 lakh quintal of soyabean, tur, urad, moong, jowar and wheat.

By  Prabhudatta Mishra

Rajabhau Rambhau Sultani, a farmer from Lanjod, a small hamlet in Maharashtra’s Buldhana district, last Saturday sold 7 quintals of jowar at Rs 1,423 per quintal at Khamgaon mandi, 14 km from his village, even as the crop’s minimum support price (MSP) announced by the government for the current season is much higher at Rs2,550 per quintal. Alas, while the procurement system is hardly efficient to ensure that crops are sold at MSPs when market prices fall below these benchmark rates, the farmer’s actual realisation is even lower than the unremunerative prices at which he is forced to sell his produce. This is because he is being made to pay fees like hamali (labour charges for loading/unloading) taulai (weighing cost) — Sultani’s forked out Rs4 per quintal as hamali and Rs12 per quintal as taulai.

Add to this the fact that the price to the farmer is also impacted by the imposts like commissions payable to arhatiyas (market intermediaries) which have increased after the introduction of GST. While unprocessed food (including grains) are exempt from GST, in the previous regime, producer realisations were hit by assorted levies like octroi, entry tax etc.

Sultani’s predicament is despite the fact that Maharashtra is one of the few states in the country to have complied with the four key agricultural market reforms mooted by the Centre 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.

In recent months, Maharashtra government has been able to ensure that commission fees, for long taken from the farmers, are actually paid by the traders.

However, this hasn’t brought much relief to the farmers as they still have to bear other fees. According to Mukut Rao Bhise, secretary at Khamgaon mandi, the weighing fee, which also includes labour charges, is decided by the mandis. The state government has stipulated that this fee must not increase more than 25% in 3 years, he said. However, farmers say the labour charges are being paid by them in addition to weighing charges. In Maharshtra, the next review of the weighing charge is likely this year.

In FY19, the Khamgaon mandi had handled 14.81 lakh quintal of soyabean, tur, urad, moong, jowar and wheat. This means farmers of these six crops had paid Rs1.78 crore last year as weighing charge in this mandi alone. Traders in many of the mandis also exploit farmers by charging them Rs25 per Rs1,000 for paying them in cash.

Sultani is one of the many such farmers in India who sell their crops with little choice once they reach the mandis where traders and commission agents decide the rates. Others, who do not want to take any chance, sell their produce at their villages itself to aggregators at even lower than market rates.

Unlike Khamgaon, where physical auction of crops take place in the open where commission agents bring traders to the spot, in most other mandis the commission agents themselves offer a rate to the farmer claiming it as price quoted by traders. Faced with little choice, most farmers accept such offers. According to an FE analysis, farmers in the country have sold eight crops including tur, moong, jowar, bajra and sunflower at 11-39% below their benchmark prices during October 1-December 17.

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