Apmc act revamp a sound initiative

Apmc act revamp a sound initiative

The Centre has reportedly recommended a new model law to replace the restrictive Agricultural Produce Market Committee (APMC) Act that makes it mandatory for farmers to sell only to designated middlemen, who then control trade in farm produce and corner the benefit of higher prices. An overhaul of the law to create a barrier-free single market is long overdue. State APMC Acts have created thousands of fragmented and inefficient markets. Bihar scrapped the law. Some states have modified it, but changes have been patchy because of the political influence of the middlemen. Reform would enable organised retail to procure directly from farmers, giving them better incomes and the incentive to produce more.
The new model law suggests single-point levy of a market fee and single registration or licence for trade in more than one market and delisting fruit and vegetables from the APMC Act. This makes sense. It also proposes to cap mandi taxes at 1% for food grain and 2% for vegetables, and pegs the commission agents' levy at 2% of the total transaction cost. At present, mandi taxes vary from 14.5% in Punjab to 10.5% in Haryana, driving the private trade out and eating up the Centre's food subsidy subvention. The procurement price must subsume all taxes and the Food Corporation of India must stop paying such huge levies.
Rightly, the model law also has provisions to declare warehouses and cold storages as market sub-yards to provide better access and linkages to farmers. This is welcome, and investments must be stepped up. A vast network of regulated warehouses, whose receipts are negotiable instruments, will also make middlemen redundant. The need is to develop marketing infrastructure and make the supply chain that links the farmer and the consumer efficient.