New Bill, old hurdles

Reforming farm markets requires political will

The draft of the new model agricultural marketing law, floated by the government to invite public comments, aims at removing deficiencies in farm marketing and ensuring just and transparently discovered prices to farmers. It essentially carries forward the process of agricultural marketing reforms that began in the early 2000s with the circulation of the model Agricultural Produce Marketing Committee (APMC) Act, but failed to make the desired headway. The prime reason for the tardy progress on this front is the states’ reluctance to cede their control over farm markets, which generate handsome revenues for them, besides adding to their political clout among farmers. Since the success of the fresh move, too, will depend largely on the states’ cooperation, the Centre will need to go beyond just outlining the necessary amendments in the legal framework and devise ways and means to motivate them to carry out the suggested changes. At stake are the interests of farmers as well as consumers, two segments short-changed by the present inefficient, cost-intensive and non-transparent farm marketing system.

The new Bill, called State/UT Agricultural Produce Marketing (Development and Regulation) Bill, has several reform-oriented provisions. It suggests setting up private and commodity-specific market yards to end the monopoly of the APMCs. Besides, it stipulates single licences for trading within the state and at the national level and a single-point levy of all market fees within the caps laid down. It also seeks to promote direct interaction between farmers and end-users of farm commodities, including retail chains, exporters and agro-processing industries, without attracting any stockholding curbs. The mandis will be encouraged to get up electronic trading platforms to make transactions, especially price determination, transparent. Thus, the new deed amalgamates the good features of both the model APMC Bill of 2003 and the electronic national agricultural market (e-NAM) launched last year. Where it goes beyond is in seeking to depoliticise and democratise market committees and state marketing boards by including farmers’ representatives in their managing bodies and barring individuals from contesting for more than one post simultaneously. However, whether these provisos will achieve the intended objectives remains doubtful because, under the present rural socio-political setup, it is hard to distance politicians from farm-related bodies.

Given the failure of the farm marketing infrastructure to keep pace with the increase and the diversification of agricultural production, its expansion and modernisation are absolutely essential. At present, on average, there is just one proper agricultural market in an area as large as over 487 square kilometres whereas the need, according to the National Farmers Commission (2004), is to have at least one market in 80 square km. The private sector, on its own, is unlikely to bridge this gap even if it is offered liberal fiscal and other sops. As such, the states will have to continue to play a meaningful role in both the expansion and the modernisation of the farm marketing network. How they can be nudged to do so, even while going ahead with the reforms recommended in the new model Bill, is a critical issue that the Centre will need to focus on.