Non-APMC states asked to regulate marketing practices

The ministry of agriculture has asked states that do not have agricultural produce market committees (APMC) Acts to set up regulatory frameworks at state levels to monitor agricultural marketing practices.

Currently, six states---Bihar, Kerala, Daman and Diu, Lakshwadeep, Andaman and Nicobar islands, Manipur and Dadra and Nagar Haveli---have no APMC Acts. The APMC Act 2003, amended in 2006 as the APMC Model Act, forms the framework for marketing fruits, vegetables and livestock.

“While extreme government control discourages the efficient marketing of agricultural produce, complete privatisation, as in the case of these states, is creating a price distortion and not facilitating the moderation of prices for consumers,” said senior officials. They added it had been observed that the marketing of agricultural produce is dismal in these states.

“While anyone, public or private, is entitled to market its produce and not required to pay a fee in an APMC market, the prices charged to consumers are monitored. The entire profit is garnered by marketers and hence, there is no infrastructure in the market places either for livestock or the farmers, unlike APMC markets. We have urged these states to form some sort of a regulatory body or a framework to regulate the marketing of agricultural produce in their states”, the officials said.

The APMC Act was in effect in Bihar till 2006, after which it completely privatised its agricultural marketing infrastructure by repealing the Act.

Officials said these observations form a part of a report prepared by the Asian Development Bank for Japan, which aims to fund small farmers to improve and increase their access to markets in Bihar and Maharastra. In its study on social economy and strategy for states, the report identified the lack of access to credit, basic infrastructure and quality inputs and access to extension services and market information as the primary constraints for farmers.

The APMC Act makes marketing agricultural produce a state subject and thus, marketing such products is carried out by government-approved market infrastructure.

After the amendment, the Act provided for private investment in market infrastructure to increase alternative marketing opportunities for farmers and minimise the cost of intermediation. More than 20 states have now amended their APMC Acts. The Union government has also decided assistance for creation marketing infrastructure would be released only to states that have, at least for perishable horticulture commodities, waived market fees and permitted direct marketing by farmers to consumers, processing units, bulk buyers and providers of cold chain facilities/storage/contract farming.

While APMC Acts ensure marketing agricultural produce is guided by the government, the supply, storage and distribution is guided by the Essential Commodities Act.