Cabinet may clear Ordinance on changes to APMC Act today 

#GS2 #Governance 

While Karnataka govt. says it will help farmers, Opposition has slammed the proposal. 

  • The State Cabinet, is expected to clear the Ordinance to bring in changes in the Agricultural Produce Marketing Committee (APMC) Act, which the government says are aimed at facilitating market access for farmers during the prevailing lockdown. 

 Agricultural Produce Marketing Committee (APMC) Act 

  • An Agricultural Produce Market Committee (APMC) is a marketing board established by a state government in India to ensure farmers are safeguarded from exploitation by large retailers, as well as ensuring the farm to retail price spread does not reach excessively high levels.  
  • The first sale of agriculture produce can occur only at the market yards (mandis) of APMC. 
  • The concept of agriculture produce market regulation programme in India dates back to British period as raw cotton was the first farm produce to attract the attention of the Government due to anxiety of British rulers to make available the supplies of pure cotton at reasonable prices to the textile mills of Manchestor (UK).  
  • Consequently, first regulated market (Karanja) under Hyderabad Residency Order was established in 1886 in the Country and the first legislation was the Berar Cotton and Grain Market Act of 1887, which empowered 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.  
  • This Act became the model for enactment in other parts of the country.  
  • An important landmark in the agricultural marketing scene in the country has been the recommendation of the Royal Commission on Agriculture, 1928 for regulation of marketing practices and establishment of regulated markets.  
  • One of the measures taken to improve the situation was to regulate the trade practices and to establish market yards in the countryside.  
  • In pursuance, Government of India prepared a Model Bill in 1938 and circulated to all the States but not much headway was made till independence.  
  • Later, most of the States enacted Agricultural Produce Markets Regulation (APMR) Acts during sixties and seventies and put these in operation.  
  • All primary wholesale assembling markets were brought under the ambit of these Acts.  
  • Well laid out market yards and sub-yards were constructed and for each market area, an Agricultural Produce Market Committee (APMC) was constituted to frame the rules and enforce them.  
  • Thus, the organized agricultural marketing came into existence through regulated markets. 
  • APMCs operate on two principles: 

a.) Ensure that farmers are not exploited by intermediaries (or money lenders) who compel farmers to sell their produce at the farm gate for an extremely low price. 

b.) All food produce should first be brought to a market yard and then sold through auction. 

  • Each state which operates APMC markets geographically divide the state. Markets (mandis) are established at different places within the state.  
  • Farmers are required to sell their produce via auction at the mandi in their region. Traders require a license to operate within a mandi.  
  • Wholesale and retail traders (e.g. shopping mall owners) and food processing companies cannot buy produce directly from a farmer. 
  • Some of the salient features of the APMC Model Act 2003 are as follows 

 a.) Facilitates contract farming model. 

 b.) Special market for perishables. 

c.)  Farmers, private persons can set up own market. 

d.)  Licensing norms relaxed. 

 e.) Single market fee. 

 f.) APMC revenue to be used for improving market infrastructure. 

  • However, not all states have passed the bill. Some states have passed but neither framed rules nor notified it.  
  • Thus, inter-state barriers continue. Further, Union Budget 2015 proposed to create United National Agriculture Market with the help of State Government and NITI Ayog. 
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