Agricultural Produce Market Committee (APMC): All you need to know
The farmers in some parts of the country have expressed outrage against all three agriculture ordinances recently passed by the Government, however, their objections are mostly against the provisions of the first. The farmers allege that the amendment to the APMC Acts will deprive them of the Minimum Support Price (MSP) and they will be left at the mercy of multinational companies and big corporate houses.
This article will guide you about the Agricultural Produce Market Committee (APMC), its history, issues with the committee and the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.
Agricultural Produce Market Committee (APMC)
1- It is a marketing committee which operates under the State Governments in India.
2- The APMC was introduced to safeguard the farmers from exploitation by creditors and other intermediaries.
3- The committee also ensures that the farm to retail price does not reach unreasonably elevated levels and timely payments are made to the farmers via the auctions in the APMC markets.
4- Before the introduction of the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, the farmers can only sell their agricultural produce at the market yards of APMC.
Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
1- The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, was passed by Lok Sabha on 17 September 2020 and by Rajya Sabha on 20 September 2020. The Bill received President's assent on 27 September 2020, becoming the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.
2- The Act mandates intra-state and inter-state trade of farmers’ produce beyond the APMC and other markets notified under the state APMC Acts.
3- The farmers can now trade in an 'outside trade area' like farm gates, factory premises, warehouses, silos, and cold storages.
4- The Act also facilitates lucrative prices for the farmers through competitive alternative trading channels to promote barrier-free inter-state and intra-state trade of agriculture goods.
5- The Act additionally allows the electronic trading of farmers' produce in the predetermined trade area. It also encourages online buying and selling of such produce through electronic devices and the internet.
6- Furthermore, the Act prohibits State Governments from levying any market fee or cess on farmers, traders and electronic trading platforms for trading farmers’ produce in an 'outside trade area'.
Why is APMC facing the controversy?
1- The APMC Acts mandated the sale or purchase of the agricultural produce to be carried out in a designated market area, and, producer-sellers or traders must pay the requisite market fee, user charges, levies and commissions for the agents.
2- These charges were levied irrespective of whether the sale took place inside APMC premises or outside it and the charges varied widely across states and commodities.
3- The golden era for these markets ended in 1991 and by 2006, the Indian farmers were distressed as market facilities did not keep pace with the increased produce. Also, the farmers were not allowed to sell their produce outside the designated APMC markets.
4- This led the farmers to seek the help of the middlemen who exploited them.
Issues with APMC
1- Fragmentation of markets
2- Incidents of high market fee or charges.
3- Fewer markets
4- Fewer credit facilities
5- Restrictions were imposed in licensing
6- Asymmetrical market information
7- Less remuneration to farmers and high intermediation cost
8- Inadequate marketing infrastructure
To resolve the above-mentioned issues related to the APMC, the government introduced the Model APMC Act of 2003 and e-NAM.
In India, the history of agriculture produce market regulation programme dates back to colonial-era where raw cotton was first produced to attract the attention of the British Administration. The rulers wanted to make available the supplies of pure cotton to the textile mills of Manchester (UK) at reasonable prices.
As a result, in 1886, the first regulated market under Hyderabad Residency Order was established and in 1887, the Berar Cotton and Grain Market Act was passed. The Act empowered the British resident to declare any place in the assigned district a market for sale and purchase of agricultural produce and constitute a committee to supervise the regulated markets. The Act soon became the model for the enactment in other parts of the country as well.
In 1928, the Royal Commission on Agriculture recommended setting up of regulated markets to improve the trade practices and to establish market yards in the country.
In pursuance, the Government of India prepared a Model Bill in 1938 and circulated to all the States but not much headway was made till independence.
Post-independence, many states enacted Agricultural Produce Markets Regulation (APMR) Acts to establish market yards and sub-yards. For each market area, an Agricultural Produce Market Committee (APMC) was constituted to frame the rules and enforce them to prevent the exploitation of farmers by the creditors and other intermediaries.