Agriculture Produce Market Committee

Context: Recently, the Centre has recommended that states suspend certain provisions of their respective Agriculture Produce Market Committee (APMC) Acts for three months to allow farmers to sell their harvest from multiple locations and to any buyer for encouraging social distancing.
Background

• The APMC Act regulates buying and selling of farm produce in about 5000 mandis or markets across the country. The Act empowers states to notify markets to cater to a specific area and farmers can sell in their designated markets only.

About Agricultural Produce Market Committees (APMC)

• Agricultural Produce Market Committee (APMC) is a system operating under the State Government since agricultural marketing is a State subject.
• The APMC has Yards/Mandis in the market area that regulates the notified agricultural produce and livestock. 
• The introduction of APMC was to limit the occurrence of Distress Sale by the farmers under the pressure and exploitation of creditors and other intermediaries.
• APMC ensures worthy prices and timely payments to the farmers for their produce.

APMC is also responsible for the regulation of agricultural trading practices. This results in multiple benefits like:

• Needless intermediaries are eliminated
• Improved market efficiency through a decrease in market charges
• The producer-seller interest is well protected
• The Government of India designed a model Agricultural Produce Market Committee (APMC) Act in 2003 as a first attempt to bring reformations in the agricultural markets. 

Provisions under this act were:

• New market channels other than APMC markets
• Private wholesale markets
• Direct purchase
• A contract for buyers and farmers

The Market Committees under the APMC Act, 2003 were responsible for:

• Ensuring transparency in the transactions and pricing system of the market area
• Providing market-led extension services to farmers  
• Ensuring that farmers are paid for the produce sold on the same day
• Promoting agricultural processing that will increase the value of the produce
• Making the availability and dates public on which the agricultural produce is brought to the market
• Promoting and establishing public-private partnerships (PPP) in these markets. 

Salient Features of the Model APMC Act

• Legal persons, growers and local authorities are permitted to apply for the establishment of new markets for agricultural produce in any area. Under the existing law, markets are setup at the initiative of State Governments alone. Consequently, in a market area, more than one market can be established by private persons, farmers and consumers.
• There will be no compulsion on the growers to sell their produce through existing markets administered by the Agricultural Produce Market Committee (APMC). However, agriculturist who does not bring his produce to the market area for sale will not be eligible for election to the APMC.
• Separate provision is made for notification of ‘Special Markets’ or ‘Special Commodities Markets’ in any market area for specified agricultural commodities to be operated in addition to existing markets.
• A new Chapter on ‘Contract Farming’ added to provide for compulsory registration of all contract farming sponsors, recording of contract farming agreements, resolution of disputes, if any, arising out of such agreement, exemption from levy of market fee on produce covered by contract farming agreements and to provide for indemnity to producers’ title/ possession over his land from any claim arising out of the agreement.
• Provision made for direct sale of farm produce to contract farming sponsor from farmers’ field without the necessity of routing it through notified markets.
• Provision made for imposition of single point levy of market fee on the sale of notified agricultural commodities in any market area and discretion provided to the State Government to fix graded levy of market fee on different types of sales.
• Licensing of market functionaries is dispensed with and a time bound procedure for registration is laid down. Registration for market functionaries provided to operate in one or more than one market areas.
• Commission agency in any transaction relating to notified agricultural produce involving an agriculturist is prohibited and there will be no deduction towards commission from the sale proceeds payable to agriculturist seller.
• Provision made for the purchase of agricultural produce through private yards or directly from agriculturists in one or more than one market area.
• Provision made for the establishment of consumers’/ farmers’ market to facilitate direct sale of agricultural produce to consumers
• Provision made for resolving of disputes, if any, arising between private market/ consumer market and Market Committee.
• State Governments conferred power to exempt any agricultural produce brought for sale in market area, from payment of market fee.
• Market Committees permitted to use its funds among others to create facilities like grading, standardization and quality certification; to create infrastructure on its own or through public private partnership for post-harvest handling of agricultural produce.