What are the flaws in the Agricultural Produce Market Committee (APMC) Act that are adversely affecting both the producer and consumers? Discuss the control measures formulated by the agriculture ministry under the Model APMC Act, 2017 to combat the problem.

Agricultural marketing is a state subject and the centre can only advise states to free up agricultural trade. Currently, agricultural marketing in states is governed by their respective Agricultural Produce Market Committee (APMC) Acts. But the acts has many flaws that are adversely affecting both producers and consumers. Some of the flaws are

  • In most states, the existing acts do not allow unrestricted trade of farm produce, curtailing farmers’ freedom to sell.
  • At Present farmers can sell their produce at regulated APMC mandis only. This creates monopoly in agriculture market which is loss to both farmers and consumers.
  • Currently it is difficult for farmers to get trading license from the mandis which is managed by a board of traders

To control flaws in previous APMC acts, The Agriculture Ministry has come up with Agricultural Produce and Livestock Marketing (Promotion and Facilitating) Act (APLM), 2017. It has following provisions

  • The act proposes single-point levy of market fee across a State and a united single trading licence for cost-effectiveness of transactions.
  • Under the new model law, traders will be able to transact in all markets within a state by paying a single fee and sell fruits and vegetables outside existing wholesale markets.
  • The new act seeks to end the monopoly of APMC and allow more players to set up markets and create competition so that farmers can discover prices and sell their produce accordingly.
  • It allows Public Private Partnership in the ‘management and development’ of agricultural markets in the country.
  • The new act caps market fee (including developmental and other charges) at not more than 1 per cent for fruit and vegetables, and 2 per cent for food grains. It caps commission agents’ fee at not more than 2 per cent for non-perishables and 4 per cent for perishables.

Further, the new act withdraws the power to issue trading licences from the mandis managed by a board of traders and vests it with the state’s director of agriculture marketing.

Question for UPSC Mains:
What are the flaws in the Agricultural Produce Market Committee (APMC) Act that are adversely affecting both the producer and consumers? Discuss the control measures formulated by the agriculture ministry under the Model APMC Act, 2017 to combat the problem.

Published: December 10, 2017 | Modified:June 27, 2019

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