New State/ UT Agricultural Produce Marketing (Development and Regulation) Bill

An urgent need to reframe the existing market structure of the country was felt by the government, in order to make it create a more competitive marketing environment which could lead to better efficiency. With this, in the recent time the much discussed State/UT Agricultural Produce Marketing (Development and Regulation) Bill was passed by the legislature. This bill aims to accelerate the agricultural growth which would consequently promote farmer’s welfare and employment and thus bringing rapid improvement in the agricultural sector.

Flaws in the previous Act

• In the earlier setup, the organized whole sale marketing in the country was done through network of markets set up under State Agricultural Produce Marketing (Regulation) Act. These markets were set up to assure the farmers of reasonable gains by creating a conducive environment in the market by fair play of demand and supply forces so that price could be well regulated and maintained. However, with the passing time, these markets became monopolistic and abusive. The Agricultural Produce Market Committee established by state governments of India, became a hurdle in the free flow of agricultural produce since it forced the farmers to sell their produce only to middlemenapproved by the government in authorized mandis thus preventing direct interface between the farmers and the buyers / exporters/ end users. This was disadvantageous for both the farmers and the consumers as involving of the middlemen in the transaction led to unnecessary increase in the price.
• Another big issue is that in many cases, even after receiving the produce, the traders delay in making payment to farmers for weeks or months. And when timely payment is made at the time of sale, then the trader may arbitrarily deduct some amount.
• Generally, in order to evade tax liability, some traders do not issue sale slips to the farmers, which creates a big difficulty for the farmers to prove their income at the time of taking loans from the banks.

Therefore, in order to overcome the limitations and restrictions of the existing agricultural system, a legal framework which could provide a transparent and efficient market structure was much needed.

Salient features of the Agricultural Produce Marketing (Development and Regulation) Bill, 2016

• It does away with the problem of fragmented market within the state /UT by removing the concept of notified area.
• It establishes a private and commodity-specific market yardsto end the monopoly of the APMCs and thus bringing the much needed competition in the market.
• It seeks to promote direct interaction between farmers and end users of farm commodities, including retail chains, bulk buyers and exporters so as to reduce the hike in the price thus bringing advantage to both the producers and consumers and cutting the profit of the middlemen.
• It proposes a uniform license for all the traders within a state and a single national license for national agricultural market (e-NAM) thus replacing the 2003 model APMC Act.
• It promotes e-trade to bring in more transparency in the trade operation, therefore it proposes all the mandis to put up electronic trading platformsto make transactions, especially price determination, totally transparent.
• It declares establishment of various warehouses, cold storages and other structures in order to provide better linkage and storage facilities to the farmers.
• It proposes that no mandi fee should be collected from the farmers and must not exceed 2 per cent on transacted non- perishable goods and one per cent per cent perishable goods.
• It specifies for a single license for tradingwithin the state and at the national level and a single point levy of all market fees to realize the cost-effective transactions.
• It seeks to provide full democratization of the Market Committee and State/UT Agricultural Marketing Board by including farmer’s representatives in the managing bodies and restricting individuals from contesting for more than one post simultaneously.
• It also provided or penal provision in case of violation of any provision which might to extend from Rs. 5,000 fine to 6 months imprisonment.

Review and Conclusion

The success of this APMC Bill largely depends upon the state’s cooperation, therefore the states will have to continue to play a meaningful role in both expansion and modernization of the farm marketing network and it also requires the Centre to devise ways and means to motivate states to actually carry out the suggested changes mentioned in the Act. Some states like Karnataka have already implemented various aspects of this scheme through the establishment of kisan markets, haats etc. and have fruitfully gained from it as well however, due to the strong hold of bureaucracy over APMC committees and the perpetual generation of good revenue by manipulating the flaws in the older act have made the various other state governments reluctant to approve and implement the newer act.

Since, the present system of the agricultural market puts the interests of farmers as well as consumers at stake, it is the duty of the Central government to resolve this issue with the help of and cooperation of the state governments. Considering the rapid change and diversification of the structure of Indian agricultural sector, there is an urgent need to adopt a comprehensive Act which can regulate and develop the agricultural market across the country and weighing the pros of this new bill, it ensures transparent and cost effective regulation of the market condition and thus it should be welcomed well and implemented well to change the agrarian face of the country.