Various states start amendment of APMC Act to begin market reforms

The amendments are aimed at rationalising food prices and attracting foreign funds

Agricultural market reforms has  started picking pace in  Indian states as  almost 18-20 states have amended their respective  Agricultural Produce and Marketing Committee Rules (APMC)  incorporating various progressive changes to rationalise food prices and attract foreign funds.

Primarily, AMPC market rules were sought to be amended so as to cut down the prices for agricultural produce by bringing down numerous taxes and fees levied by states from the time the product makes it way from the farm gate to the market place.  
In a status report submitted to the department of agriculture, eleven states  in India has  started the market reforms  by imposing single point levy of market fees  which could help in a long way to bring down food prices especially fruits and vegetables.

These  states which have triggered reforms in the agricultural marketing infrastructure are  Andhra Pradesh, Rajasthan, Gujarat, Goa, Himachal Pradesh, Nagaland, Karnataka, Chandigarh, Jharkhand, Uttarakhand, Punjab, and Mizoram.  In addition, some of these states have also implemented single registration/license for trade transaction in more than market in the entire state.   

A total 18 states where the abovementioned states are common entities besides state of Odisha, Nagaland, Sikkiim, Maharashtra, Jharkhand and Uttarakhand have established private market yards/ private market managed by one person other market committee. This means a complete privatisation of the agricultural market in the state.  These states have amended their APMC rules to effect direct purchase of agricultural produce from agriculturists by bulk buyer, retailer and exporter.

Most of these states have also granted direct marketing license to commodity exchanges registered under the commodity market regulator - the forward markets Commission to promote e- trading in agricultural produce.

These states have started contract faming provision whereas a bulk buyer can make arrangement with agriculturists and farmers to procure the produce exclusively for its own use. In fact a total of 21 states have started contract farming provisions which part from the states already mentioned include Rajasthan, Tripura, Uttarakhand, Sikkim, Haryana, Chhattisgarh, Nagaland, and Maharashtra.   

Meanwhile, Department of Agriculture and Cooperation is supporting the establishment of Kisan Mandis to enable farmers and Farmer Producer Organisations (FPOs) to directly sell their produce to wholesalers, retailers and ordinary consumers. One such Kisan Mandi is being set up by Small Farmers Agribusiness Consortium (SFAC) on a pilot basis in Delhi.  However according to officials, all  states and union territories have been advised  on establishment of Kisan Mandis or farmer markets on the same model and SFAC has offered its services for technical assistance to such mantis, said officials. However the rider is that provided such mandis could come up only if the Agriculture Produce Marketing Regulation Act of the States/Union Territories specifically permits establishment and operation of Kisan Mandis.

Besides there are also proposal to  upgrade APMC markets  either with viability gap funding or subsidy by treating them as infrastructure projects . This is aimed at attracting  foreign direct investment or external commercial borrowing.  To start with the investment in marketing infrastructure under flagship scheme of the ministry of agriculture, Rashtriya Krishi Vikas Yojana (RKVY) may be increased to 10-15% from the existing level for those states which are implementing these market reforms.