Why in news?

In order to facilitate the farmers and farming activities at field level during the lockdown period, the Department of Agriculture Cooperation and Farmers Welfare, Government of India is taking several measures.

Measures Taken

  • The Department has circulated the SOP related to crop harvesting & threshing during Kharif 2020 to the States to protect health of farmers and farm workers and to contain the spread of Coronavirus.
  • Advisory issued to State Governments/ UT to facilitate Direct Marketing, enabling direct purchase from the farmers/ FPOs/ Cooperatives etc. by Bulk Buyers/Big Retailers/Processors by limiting regulation under State APMC Act.
  • The Department is closely monitoring the functioning of fruits and vegetable markets and on inter-State movement of agricultural produce.
  • Module of uberisation of logistics aggregator has been recently launched on e-NAM Platform. More than 7.76 lakh trucks and 1.92 lakh transporters are already linked to this module.
  • Railways introduced 62 routes for running 109 time table parcel trains to supply essential commodities including perishable horticultural produce, seeds, milk and dairy products at fast speed which will facilitate farmers/FPOs/traders and companies for continuity of supply chain across the country.
  • India had a good crop of wheat, in surplus of its own demand. On specific demand from countries, NAFED has been asked to export 50,000 MT wheat to Afghanistan and 40,000 MT wheat to Lebanon under G2G (Government to government) arrangement.

APMC Acts

  • At time of Independence, a moneylenders or trader in villages mainly controls the whole distribution system of agriculture commodities; consequently farmers were trapped into a perpetual debt instead of getting any profit. Hence to overcome this problem, different state enacted their APMC acts to set up Agricultural Markets.
  • In India, agriculture is a “state subject”. Thus, the wholesaling of agricultural produce is governed by the Agricultural Produce Marketing Acts of various State governments.
  • The specific objective of market regulation is to ensure that farmers are offered fair prices in a transparent manner.
  • The APMC Act empowers state governments to notify the commodities, and designate markets and market areas where the regulated trade takes place.
  • The Act also provides for the formation of agricultural produce market committees (APMC) that are responsible for the operation of the markets. The entire State is divided and declared as a market area wherein the markets are managed by the Market Committees constituted by the State Governments. Currently there are around 7,500 regulated markets in the country.

Need for a Model APMC Act

Centre had circulated the Model Agricultural Produce Marketing Committee (APMC) Act in 2003 and asked them to amend their APMC laws accordingly.

The act provides for the setting up of private markets, direct deals between the growers and end-users of agro-commodities, including out of Mandi transactions, and legalisation of contract farming etc.

While many states have altered their marketing laws on constant prodding from the Centre, most of the amended laws do not conform strictly to the spirit of the Model statute.

Various Issues with the existing APMC acts

  • Vested interests in retaining the present Mandi system along with virtual monopoly of the APMCs over the farm produce marketing are too strong to allow the needed legal changes.
  • The state level statues have so far unable to address the key issues such as expansion and modernisation of marketing facilities, improvement in marketing information communication and linking small producers with efficient marketing channels.
  • Further, task of establishing infrastructure needs massive investment, which the government alone cannot bear. So, Private participation is a must.
  • But private investment of this magnitude is unlikely to come about in the absence of a favourable legal framework and policy environment.
  • A planning commission working group report said that present model of marketing reforms, which seeks to create space for a new set of modern markets to operate along with the much less transparent APMC regulated markets, is unlikely to attract much private investment in modern marketing infrastructure.
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