APMC draft law proposes private market yards

Single licence for all traders; caps on mandi fees: retail chains can buy directly from farmers

The draft model of APMC Bill proposes private market yards, farmer-consumer markets, electronic trading platforms and converting warehouses into smaller mandis to provide better linkages and prices to farmers.

The draft State/UT Agricultural Produce Marketing (Development and Regulation) Bill, to replace the 2003 model APMC Act, also proposes a uniform licence for all traders within a state and a single national licence for the electronic National Agriculture Market (e-NAM) within six months of enactment of the new law.

The draft also provides for a penal provision which might extend to six months of jail term or a fine of Rs 5,000 for violation any provisions. The draft proposes all notified farm commodities be sold in mandis and outside them and licensing of food processing companies, retail chains and cooperatives to purchase produce directly from farmers outside mandis. 

Stock limits under the Essential Commodities Act  (ECA) will not apply to such buyers and they have to pay 0.25 per cent of the licence fee towards a development fund.

To draft a Bill, which has been put in the public domain for comments by March 15, is part of the Centre’s efforts to unshackle farm trade. Other initiatives include model land leasing and contract farming laws.

The original model APMC Act was adopted by states in bits and pieces, setting back agricultural marketing reforms. “As agriculture marketing is a state subject, it remains to be seen how many of these reforms are adopted by states,” said Sukhpal Singh, chairperson of the centre for management in agriculture at the Indian Institute of Management, Ahmedabad.

The draft APMC Bill proposes no mandi fee be collected from farmers and these must not exceed two per cent (ad valorem) on transacted non-perishable goods and one per cent on perishable goods. Agents cannot charge a commission more than two per cent (ad valorem) for non-perishable goods and more than four per cent for perishable goods.

The draft seeks to overhaul the composition of mandi samitis to make them more democratic. It proposes a minimum 15-member mandi samiti of which 10 members must be farmers, three state agriculture department nominees, and one each from a cooperative society and local authority. The chairman and vice-chairman must be farmers. Mandi committee members’ tenure should be fixed for five years.