In April 2017, the Union Ministry of Agriculture and Farmers Welfare drafted the Model Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017. The draft law seeks to overhaul the existing legal framework related to the marketing of agriculture produce and will replace the Agricultural Produce Market Committee (APMC) Act.
For the benefit of IAS aspirants, we are providing the salient features of the Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act or APLM Act, 2017 and its intended benefits.
The salient features of Model APLM Act, 2017
(i) Abolition of fragmentation of market within the State/Union Territory (UT) by removing the concept of ‘notified market area’ in so far as enforcement of regulation by Agricultural Produce and Livestock Market Committee (APLMC) is concerned. In other words, the APLM Act provides for the recongisition of a State/UT as a single market.
(ii) Besides, cereals, pulses and oilseeds, the Act seeks to provide for geographically restriction-free trade transaction of agricultural produce including commercial crops like cotton, horticultural crops, livestock, fisheries and poultry.
(iii) Disintermediation of food supply chain by integration of farmers, processors, exporters, bulk retailers and consumers
(iv) The clear demarcation of the powers and functions between the Director of Agricultural Marketing and Managing Director of State/UT Agricultural Marketing Board with the objective that the former will have to largely carry out regulatory functions, while the latter will be mandated with developmental responsibilities under the Act.
(v) Creation of a conducive environment for setting up and operating private wholesale market yards and farmer-consumer market yards, so as to enhance competition among different markets.
(vi) Promotion of direct interface between farmers and processors/exporters/bulk-buyers/end users so as to reduce the price spread bringing advantage to both the producers and the consumers.
(vii) Enabling declaration of warehouses/silos/cold storages and other structures/space as market sub –yard to provide better market access/ linkages to the farmers.
(viii) Giving freedom to the agriculturalists to sell their produce to the buyers and at the place and time of their choice, to whomsoever and wherever they get better prices.
(ix) Promotion of e-trading to enhance transparency in trade operations and integration of markets across geographies.
(x) Provisions for single point levy of market fee across the State and unified single trading licence to realise cost-effective transactions.
(xi) Promotion of the national market for agriculture produce through provisioning of inter- state trading licence, grading and standardization and quality certification.
(xii) Rationalization of market fee and commission charges.
(xiii) Provision for Special Commodity Market yard(s) and Market yard(s) of National Importance (MNI).
(xiv) Full democratization of Market Committee and State/UT Marketing Board.
Need for APLM Act, 2017
In independent India, the reforms in the agricultural marketing sector were ushered in with the adoption of APMC Act by various States and Union Territories in the 1960s and 1970s.
While they brought in a great improvement from the preceding village trader-dominated exploitative system, they failed to serve the full objective of price discovery in a fair and transparent manner.
And, the market functionaries have over a period of time learnt to circumvent the basic objective of marketing regulation by cartelizing. More importantly, the APMCs have caused fragmentation of the markets, thereby inducing inefficiency over space and time.
It is against this backdrop, the Model APLM Act, 2017 has been prepared by the Union Government.
Benefits of Model APLM Act, 2017
• The APLM Act will aid farmers in better price realisation as they are allowed to sell their produce to the buyers of their choice.
• The consumers will be benefitted as the prices of agricultural products will come down.
• It will help the government in achieving the goal of ‘doubling farm income by 2022’.
• It will boost the prospects of food processing industries as the raw material will be available at lower prices.
• This will help the Reserve Bank of India (RBI) in maintaining a healthy food inflation.