After the independence, the Indian farmers were not in very good condition and it was a great challenge for the Government of India, how could it get the farmers the right price for their crops and at the same time ensure proper marketing of the crops in the nation. Hence, to address this issue, the Indian government has set up a committee called Agricultural Produce Market Committee (APMC) or Agricultural Produce & Livestock Market Committee. The Model APMC Act was introduced in 2003 by the government of India.
What is APMC?
The APMC is a regulatory and marketing council, developed by Indian state governments to protect Indian farmers from exploitation by large retailers. Also, it regulates the prices of the crops from the farms to the retail stores. The state governments of India through APMCs ensure that the prices of crops don’t get excessively increase. The primary duties and responsibilities of APMC include maintaining proper transparency in the pricing, keeping an eye on transactions, and the most important i.e ensuring that the farmers get their payment on the same day, they sold their crops.
What is Model APMC Act?
The central government of India passed the Model APMC Act in 2003, with the primary objective develop a better and more efficient marketing system for buying and selling crops. This act broadly focuses on promoting the export of surplus agricultural produce in the nation. Also with the help of this act, the Government of India tries a built better agricultural infrastructure, by assigning new rules and procedures.
By 2016, 17 states of India has modified (Completely/partially) their APMC in line with the center’s Model APMC Act, 2003.
What Are the Provisions of the Model APMC Act, 2003
Many amendments were made to the new Model APMC Act, 2003 by the union government to benefit the farmers. Some of the provisions that farmers get under this act are mentioned below.
- Before the Model APMC Act, 2003 passed, no individual was allowed to set up a market and buy the crops directly from the farmers, only state governments held these rights. But as the Model APMC Act came into existence any individual/group of people or an organization can set up a market (mandi) to purchase crops. Also, an individual can open more than one market in the main market area.
- This law also allowed farmers to sell their crops in open markets that are not under the administration of the APMC (Agricultural Market Committee). However such farmers were not allowed to the election to the APMC.
- The GOI put a provision for setting up a special commodity market for some specific agricultural produce. The crops like onion and other green vegetables, which have a great domestic and international demand easily get perished in the normal atmospheric condition. Thus the GOI is planning to set up a special commodity market for such crops with some processing units.
EPMC and Contract Farming:
Contract farming is nothing new for the agricultural industry in India. Contract farming simply means the farmers produce a specific crop asked by a food processing industry or any marketing consultancy. In this kind of contract, the second party buys the crop directly from the farmer at pre-decided rates. In many cases contract farming has proved to be quite beneficial for farmers but still, there isn’t complete transparency in this system thus to reduce the discrepancy in contract farming the GOI announced certain provisions for contract farming under the model APMC act.
- Compulsory registration for the sponsor companies that are going to buy the crops from the farmers.
- APMC can interfere to resolve any dispute that arises in the contract.
- Keeping a record of every contract.
- The government also provided a relation to the farmers in the market fee that come under the contract agreement.
What is the e-Nam Portal?
The e-Nam portal or the Electronic National Agriculture Market portal is a union government portal that acts as a link between several APMCs across India. This portal allows all APMCs to come together and form a single market for buying and selling all types of agricultural commodities. Via the e-NAM portal, all the APMCs can gather information about the arrival of crops, their prices, availability, etc. The e-NAM portal brings transparency to the system and reduces the discrepancy in the information and also significantly reduces the transaction costs.
Advantages of Model APMC Act:
- The model APMC act increased transparency in the agricultural transaction system and helped farmers from getting exploited by the middlemen.
- This act proved to be quite helpful in promoting contract farming among the Indian farmers so that they get a higher value for their crops.
- The model APMC act, 2003 also played a major role in removing the middlemen between buy sell and the agricultural produce. It resulted in farmers getting full price for their crops, and that too without paying money to any middleman.
- New special markets (mandi) have been set up under the APMC act for the buy and sell of special commodities of crops.
Drawbacks of Model APMC Act:
- With the launch of the APMC law of 2003, the involvement of the private sector in agriculture has increased.
- The marketing fee increased significantly to trade through the APMC.
- The government wasn’t ready with proper infrastructure for APMC, thus resulting in many disparities.
- As this act allowed to open APMC in every region, the variation in prices of the crops increased as the price of the same crops varies in every region, and state in India.
- The ratio of farmers to the APMC was quite too high and thus the available APMC was not enough to streamline the buy and sell of agricultural produce.