CII panel to study impact of APMC Act in six states

The Confederation of Indian Industry (CII) has formed a technical committee comprising agri experts to study the impact of Agricultural Produce Marketing Committee Act (APMC) in six states Delhi, Punjab, Maharastra, Gujarat, Tamil Nadu and Bihar. The study is likely to be submitted by the middle of next year to the respective state governments and the Centre.

This will help policy makers in working out an effective model of the APMC Act in India as well as for the respective states.

Salil Singhal, co-chairman, CII National Council on Agriculture, while speaking to Business Standard said, " Many of the states in India is yet to implement model APMC Act, 2003, in true spirit. So, in order to study the impact, we have formed a committee which would submit its reports by middle of next year."

He added, "It is very sad that farmers of the country can't sell their produce directly to consumers and have to go through the marketing committee to sell it."

Agriculture sector needs well functioning markets to drive growth and economic prosperity in rural areas of the country.  Policies need to be put in place to encourage procurement of agricultural commodities directly from farmers' field and to establish effective linkage between the farm production, and the retail chain and food processing industries." 

According to sources, due to strong commission agents(arhtiyas) pressure, the state government like that of Punjab is yet to amend the APMC. The amendment in the act would have enabled the private players to procure directly from farmers and enable private participation. Presently, Punjab does not allow direct purchase of produce from fields. According to government officials, the amendment in the APMC Act has been hanging fire for more than seven years as the ruling government didn't go ahead with their announcements due to immense pressure of commission agents. 

It is worth mentioning that under the APMC Act, only State Governments are permitted to set up markets. Monopolistic practices and modalities of the State-controlled markets is not only a bane for farmers as they don't get the right price for their produce but also prevents private investment in the sector. The licensing of commission agents in the state regulated markets has led to the monopoly of the licensed traders acting as a major entry barrier for a new entrepreneur. The traders, commission agents and other functionaries organise themselves into associations, which generally do not allow easy entry of new persons, stifling the very spirit of competitive functioning and further harming the interest of farmers.