APMC traders challenge APMC amendment in high court

Court has ordered for issue of notices to state government

The Karnataka High Court today ordered for the issue of notices to the cooperation department, director of agricultural marketing and APMC Secretary in the writ petition No. 38452/53/54 of 2014 challenging the government’s recent amendment to the APMC Act and the subsequent rules for renewal of trade licences.

Ramesh Chandra Lahoti, president of Bangalore Wholesale Foodgrain and Pulses Merchants Association and other members have challenged the recent amendment to the Karnataka Agricultural Produce Marketing (Regulation & Development) Rules 1968 and implementation of APMC Act 2014, which has made it mandatory for all APMC traders to renew their trade licenses as well as secure two separate licences for trading, stocking among others. Hearing the case, the High Court ordered for the issuance of notices to the government departments.

According to the fresh amendment, the traders are forced to surrender their composite trade licences which had a validity of 10 years and apply for fresh licences by paying a fee of Rs 25,000 per licence per year. The amendment has also provided for the issuance of the annual renewable trade licences by the Director, Department of Agricultural Marketing for the entire state as against the earlier system of granting of such licence for the respective APMCs separately.

“I do not want to trade across the state. If any trader want to trade across the state, let him take a temporary licence by paying a fee of Rs 50 for one month licence. Why should all the traders secure licence for the entire state. The new amendment is carried out to benefit only a few big and corporate bodies,” said Lahoti.

He said, the new Act compels the traders to secure separate licences for trading as well as other purposes like stocking of goods among others.

Lahoti said, the traders, after a prolonged battle, had managed to convince the government to issue a 10-year licence in 2008 and many traders have secured such licences. Now the government is asking them to surrender and apply for a fresh licence by paying a fee of Rs 25,000. “Why should the traders pay the fee again and that too every year, when they have valid licences for 10 years ending 2018,” Lahoti asked.

There are 13,000 traders across the state of Karnataka and hardly a hundred of them need to trade across the state, he said. Half of the 13,000 traders actually deal in processed commodities like dal and they don’t buy raw commodities, he said.

The government had set August 16, 2014 as the deadline for traders to surrender their licences and apply afresh for new ones. “The new system is another form of Inspector Raj and lead to corruption at the government department,” Lahoti said.

Meanwhile, the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has opposed amendments to the APMC Act, 2014.

“The livelihood of the marginal traders are at stake due to these amendments and also allow for unnecessary administrative bureaucracy, including the furnishing of documents and other information on the existing business. It is the view of the federation that the licences issued earlier should continue till its completion period of 2018 and the new licence policy needs to be relooked and the opinion sought from the federation and trade bodies,” said Tallam R Dwarakanath, senior vice president, FKCCI.

The new licencing order should be kept in abeyance till such time the matter is discussed in detail with the trade associations, trade bodies and other concerned representative agencies.   

Also, he said the new licencing order allowing business under e-trade mode would lead to monopolisation of the trade by big corporates.

Rendering small and marginal traders out of business.  These segments constitutes the majority stakeholders under the APMC Act.

The FKCCI has also advocated for keeping the amended policy in abeyance till such time and a memorandum to such effect has been submitted to the state government highlighting the interest of the stakeholders. It has also urged the government to thoroughly review the act and discuss the amendments before its implementation.