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REGULATED MARKETS

The regulated markets are established as per the provisions of the `Marketing of
Agricultural Produce Acts’ of the State Government. The Commodities, with which the
market will deal, are also declared.

Regulated markets aim at the development of marketing structure to ensure remunerative


prices to the producers and to narrow down the price spread between the producer and the
consumer. It also aims at reducing the non-functional margins of the commission agents.

Basic objectives of Regulated Market

 To ensure reasonable gain to the farmers by creating environment in markets for


fair play of supply and demand forces,
 To regulate market practices and attain transparency in transactions

 Aimed at providing proper method of sale, correct weighing, prompt payment and
various marketing related services
 Democratic set up to control and manage markets

For controlling the activities of the marketing, there is a `Market Committtee’. The
Committee consists of representatives of the farmers, commission agents and the
Government nominees.

Functions of Market Committee

 The complete management of the market rests with the `Market Committee’.
 The Committee issues licences to the Commission Agents, weigh men, and other
functionaries.
 The rate of Commission to be charged is fixed by the Committee.
 Weighment is done properly by the weigh men appointed by the Committee.

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There is an arbitration Sub-Committee to look into the grievances of the farmers.

Advent of regulated markets has helped in mitigating the market handicaps of producers/
sellers at the wholesale assembling level. With the establishment of regulated markets,
many fraudulent practices of the brokers are observed in the unregulated markets are
overcome and the farmers get reasonable price for their produce. Not only this, amenities
like rest house, place for parking of vehicles, cold-storages, etc. are also created in the
market yards for the benefit of the farmers. In this respect, Government Policy is to have
rapid expansion of the regulated markets in the country.

Agri-Markets in India as on 31.03.2007

Types of Markets No. of Markets

Wholesale Markets in India (majority are regulated markets) 6261

Rural Primary Markets (about 15% are regulated markets) 20870

Total 20870
Principal Regulated Markets 2459

Regulated Market Sub-yards 5006

Total 7465

(Only 286 regulated markets in 1950)

Regulated markets have achieved only limited success and Rural Periodic Markets in
general, and the tribal markets in particular, remained out of its developmental ambit.

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A.P.M.C. – AN INTRODUCTION

Agriculture produce means all produce (whether processed or not) of agriculture,


horticulture, animal husbandry, pisciculture and forests.

The APMCs were established by the State Govt. for regulating the marketing of different
kinds of agriculture and pisciculture produce for the same market area or any part thereof.

The Maharashtra Agricultural Produce Marketing (Regulation) Act was passed in the year
1963, with a view to regulate the marketing of agricultural and pisciculture produces in
market areas. After giving due consideration to various committees’ recommendations
and study groups, some important changes have been made in this Act in the year 1987
and thereafter.

Mission

1. MAPMC is in the business of facilitating the trade of Agricultural commodities in


the geographical region of Mumbai
2. MAPMC aspires to become the most preferred trading partner of sellers and
buyers of agri-commodities all over India
3. MAPMC promises to provide the most advanced and world-class infrastructure to
all its functionaries
4. MAPMC wishes to be a fair employer, investing in the continuous upgradation
and development of knowledge and skills of its human resources
5. MAPMC is aware of its important role in the society and therefore will always
conduct itself with a measure of responsibility towards social causes and with
significant accountability towards environmental preservation
6. As one of the foremost agri-trade organizations in India, MAPMC is fully
cognizant of maintaining and enhancing the image of India and will always
prioritize national interests in its every decision

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7. MAPMC is a customer-driven organization and will constantly strive to achieve
complete customer satisfaction and provide prompt customer support.

Division wise break-up of APMC’s are as follows:

No Division Main Market Sub Market


1 Konkan 20 48
2 Nasik 51 106
3 Pune 42 121
4 Aurangabad 33 69
5 Latur 46 86
6 Amravati 55 91
7 Nagpur 43 72
Total 290 593

Classification of APMC’s (2003-2004)

No APMC Class No. of APMC’s Total Income


1 "A" Class 39 Above Rs.1 Crore
2 "B" Class 57 Above Rs. 50 Lac to Rs. 1 Crore

3 "C' Class 72 Above Rs. 25to Rs. 50 Lac


4 "D" Class 122 Less than Rs. 25 Lac
Total 290

History of Regulated Markets

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India is an agrarian economy. Approximately 70% of people are dependent on agriculture
for their basic income. Indian agriculture is dependent on rain and Indian economy is
dependent on agriculture. That is main reason why marketing of agriculture products is
dependent on demand and supply conditions. Earlier the farmers were worried about the
sales of their produce and due to low quality they could not fetch a good price.

The produce had many defects and the royal commission in 1928 studied this. There
weren’t enough marketing activities carried on by the farmers. So the royal commission
suggested commencing with the regulated markets and accordingly various market
committees were incorporated. The three basic functions of this committee were
1) To meet the demand of the Increase in population and industrial advancement
2) To increase the quality of agriculture produce
3) To fetch an appropriate price for the farmers

The sale of produce in the market yard is carried on by open auction method. During any
deal or transaction an employee from the association is present to note all the details of
the deal like transaction cost, quantity, details of buyers and details of sellers, etc.

For appropriate weighing of farmers produce, the committee has established a different
weighing department. A regular inspection is carried on for this department. The
committee also undertakes grading. In case any default in payment by the buyer the
market committee helps in settling the dispute.

M.A.P.M.C. Vashi

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Introduction

Mumbai Agricultural Produce Market Committee (MAPMC) is an autonomous body


constituted under “The Maharashtra Agricultural Produce Marketing (Regulation) Act,
1963” in the year 1977 for the purpose of regulating the marketing of different kinds of
Agricultural Produce. MAPMC was primarily set up to cater to the marketing needs of
the farmers and provide them a platform for selling agricultural produce in various
markets and at competitive prices. Apart from this, it also provides infrastructural
facilities for marketing of agricultural produce including maintenance and management
of markets. The commodities under regulation of MAPMC are food grains, fruits,
vegetables, spices, dry fruits, pulses, edible oil & oilseeds.

At a Glance:

1 Establishment 15th January Year 1977


2 Shifting To Navi Year 1990
Mumbai
3 Total Area Of Navi 300 hectares
Mumbai APMC Trading /Marketing area 72.50 hec
 Developed area – 67.88 hec
 Area under development – 4.62 hec
Remaining is for other infrastructure facilities

4 No. of declared 5 markets they are fruit, vegetables, food grains and
wholesale markets pulses, onion and potato market, sugar and spices.
5 No. of galas/ 3707
shop-cum-godowns

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5 Daily transport 4500 trucks
• 125 onion
• 100 potato
• 30 garlic
• 800 fruits
• Others
6 Commodities under Onion,Potato,Sugar,Dry Fruits, Spices & Condiments, Oil
regulation Seeds, Edible Oil, Pulses, Food Grains, Fruits, Vegetables,
Sugar Cane,etc.
7 Aim Growers (farmers) and consumers should be benefited
appropriately.
8 Timings • Vegetable Market :3am-7am
• Fruit Market: 8.30 am to 4.30 pm
• All other Markets 9.30- till darkness.
9 No. of Auction Halls 4 (Fruit market 2 , Onion market 1, vegetable
market 1)
1 Facilities provided • Cash-in-hand in 24 hrs to farmers.
0 to farmers • Guest house service at Rs.1/day for farmers.
• Other Services (as discussed below)

Daily Arrivals

Market Daily Arrivals (In Quintals)


Onion-Potato 25000
Fruits 11000
Vegetables 16000
Dry-fruits & Spices 27000
Foodgrains & Pulses 40000
Total 119000

Details of shifting of wholesale trade of agriculture commodities from Greater


Mumbai to Vashi, Navi Mumbai:-

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Sr. No. Name of the Year of Market No. of No. of Project
market Shifting Area in Galas office Cost in
Hectare blocks Crores
1 Onion and Potato 1981 7.92 238 - 4.06
market
(Dadar market)
2 Spices and 1991 19.26 660 272 28.32
condiments
market
3 Food grain 1993 16.50 412 356 24.19
market
4 Fruit & 1996 17.195 1965 364 117.00
Vegetable
Market(Crawford
market & Dadar)
5 Addl. - 7.01 228 518 80.00
SCG.Comlex.

The adjoining table gives an idea of where the commodities to MAPMC come from:

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Rice Haryana and Delhi

Wheat Madhya Pradesh and Delhi

Lady’s finger, Tomatoes, Cabbage, Mint Local markets

Coriander, Methi, Spinach, Radish, Brinjal Bangalore

Drum stick Gujarat

Peas Jabalpur, Indore

Apple J&K, HP, New Zealand and Australia

Oranges Nagpur

Pomegranates Solapur, Sangola taluka

Grapes Sangli and Nashik.

Chiku Thane and Dahanu.

Pineapple Kerala and Karnataka

Mango Karnataka, Sindhudurg and Ratnagiri

Lime Solapur district

Green chilly Andhra Pradesh and Karnataka

Onions and potatoes Shirur and Puranda

Bananas Jalgaon, Bhusawal and Nanded

Commodity Seasons

Sr. No. Name of Begin End Peak


Commodity
1. Banana Round the Year
2. Citrus Lime Aug. Dec. Sep., Oct., Nov.

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3. Citrus Mosambi Sep., Feb. Dec., Apr. Oct., Nov. Mar.
4. Citrus Orange Feb., Sep. May., Dec. Mar., Apr., Nov.
5. Grapes Mar. May Mar. Apr.
6. Guava Nov. May Dec., Apr.
7. Mango Mar. June Apr. May
8. Pomegranate Nov., Feb. Jan., Apr. Dec., Mar
9. Ber Oct. Jan. Nov., Dec.
10. Apple Aug. Nov. Sep., Oct.
11. Papaya Round the Year
12. Sapota Round the Year
13. Brinjal Round the Year
14. Cabbage Dec. Mar. Jan., Feb.
15. Cauliflower Round the Year
16. Onion Oct., Mar. Dec., May Nov., Apr.
17. Potato Feb. May. Mar., Apr.
18. Tomato Round the Year

Functions of APMC Market:

• Grant, renew, refuse, suspend or cancel license.


• Provide the necessary facilities for the marketing of agricultural produce within
the market.
• Regulate and supervise the auctions of notified agricultural produce in accordance
with the rules and the bye-laws.
• Regulate the entry of persons and of vehicular traffic into the market.
• Supervise the behavior of those who enter the market for transacting business.
• Maintain and manage the markets, including admissions to, and conditions for the
use of markets.
• Regulate the making, carrying out and enforcement or cancellation of sales,
Weighment, delivery and payment to be made thereof.
• Promote and organize grading and standardization of the agricultural produce.

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• Take measures for the prevention of purchases and sales below the minimum
support prices as fixed by the government from time to time.
• Collect, maintain, disseminate and supply information in respect of production,
sale, storage, processing, prices and movement of notified agricultural produce
including information relating to crops statistics and marketing intelligence.
• Carry out publicity about the benefits of regulation, system of transactions,
facilities provided in the market area etc.
• Provide for settling of disputes arising out of any kind of transactions connected
with the marketing of agricultural produce.
• Receive charges, fees, rates and other sum or money to which the Market
Committee is entitled.
• Inspect and verify the books of accounts and other documents maintained by the
licensees.
• Provide storage and warehousing facilities in the market area.

Advantages of APMC markets:


1) Ethical practices in selling the produce through open agreement.
2) It has removed malpractices in weighing the produce.
3) Use of certified weighs and measures.
4) It has overcome adulteration.
5) Quick settlement of disputes.

Benefits to farmers:
1) The farmers get fair price (minimum support price) for the produce, as the
intermediaries are not able to indulge in malpractices.
2) Correct weighing of the produce.
3) Storage facilities for agricultural produce.
4) Ethical practices in selling the produce i.e. open auctions and open agreement.
5) Maintenance of daily list of prices of commodities for the benefits of farmers.

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6) Immediate payment after disposal of the produce (within 24 hrs )

Market working:-

All the traders work on a commission basis. They have a fixed ceiling on the amount of
commission that they can charge. This varies from commodity to commodity. The
commission is charged on the selling price of the farmers. They are thus called
commission agents. The purchaser pays a levy of 0.8 % on the amount purchased to the
commission agent. This includes a market fee of 0.75% and a 0.05% maintenance fee.
Both the receipts are then forwarded to the market yard office by the commission office.
Quite a few commission agents and traders have now got into the export act and are
mainly supplying to clients in Europe and the Middle East. As India opens itself and sets
itself free from the shackles of licensing, a world of opportunity is opening up for
exporters. MAPMC is fully geared to support these exporters and ensure that Indian
produce gets the recognition and the price that is due. Being located in Mumbai gives the
MAPMC that edge - both the Sahar International airport and the JNPT port are merely an
hour away from the MAPMC market.

PARTICIPANTS OF THE MARKET

• Producers / Seller ( farmers) : These are the ones who are not directly involved
in the working but are the part of the whole cycle of agricultural marketing.
• Commission Agents :
o Brokers: They are the ones which take minimum risk and as a part of their
income brokerage is paid to them. The commission paid is between 2%-
10%
o Traders : They are the same as Brokers but level of risk is high
o Adatya’s :
• Wholesaler
• Retailers
• Consumers

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Number of Market Functionaries in the Market

Sr. No. Functionaries Numbers


1. Traders – Fruit 1029
2. Traders – Vegetable (Onion, Potato & Garlic) 238
3. Traders – Other Vegetables 936
4. Traders 0 Dry Fruit, Condiments & Spices, Sugar Jaggery, 660
Coconut, Ghee & Wheat flour
5. Traders Food grains, Pulses & Oil Seeds etc. 412
6. Others – Shop Cum Godowns 228
7. Warehouse facilities (Storage Capacity) 5000 MT

Marketwise Rates of Tolai, Commission, Hamali etc.

Sr. No. Name of the Rate of Rate of Hamali Rate of Tolai


Market Commission(on Rs.
100 sale value
1 Onion market Rs. 6.50 Gunny6 bag Rs. Rs. 1.82(per 100
5.17 and sack Rs. Kg)
3.10
2 Spices & Rs. 6.00 -- “ --- ---“---
condiments
market
3 Oilseeds market Rs. 6.00 ---“--- ---“---

4 Food grains & Rs. 2.75 ---“--- ---“---


pulses market

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5 Fruit market Rs. 10.00 Per pati/pati/bag Rs. 1.81(per 100
Rs. 2.25 Kg) Rs. 0.57(per
peti/peti) Loose
truck Rs. 150/-

6 Vegetable Rs. 8.00 ---“--- Rs. 0.68 (per


market peti/peti/bag) Rs.
0.45(leafy
veg.)(Per 100 Nos.
of judis)

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Functions performed at collection centres (millers)

Primary Marketing Functions:

1. Assembling: Assembling means collecting and bringing together goods of the


same type from various sources or places of supply at a central place. A trader
dealing in agricultural produce collects the goods lying at different places from
different farmers and then brings the goods as a central place for the purpose of
selling. The farmers are highly scattered over a wide geographical area and they
produce in small quantities. There are variants with regard to quantity and quality
of the produce. Therefore, Assembling is an important function and many
intermediaries participate in the process.
a. In case of APMC market farmers directly bring their produce to the nearby
market.
b. Big farmers collect produce from the small farmers.
c. Mobile Merchants who move from village to village to collect agricultural
produce. Kachcha arhatias assemble the produce in the market.

2. Processing: activities to convert raw materials and bring the product near to
human consumption. It involves change in the form if the commodity. It adds
value to the produce.
a. Paddy to boiled rice and raw rice.
b. Tea processing
c. Coffee processing
d. Cashew processing
e. Milling of pulses.

3. Distribution: After assembling and processing, the farm produce is taken to the
market for consumption. This involves storage, of ownership of the produce
through intermediaries and physical movement of stocks.

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Secondary Marketing Functions

1. Standardization and Grading: Standardization involves fixing certain norms


for the products. The norms are established by customs and tradition or by
certain authority.

Grading follows standardization and refers to classification of produce based by


standards. Standardization and grading benefits both the producers and
consumers. It helps the consumers since they are able to get goods of standard
quality and helps the producers in getting better price for their products.

2. Packaging: The main objective of packaging is to preserve the quality and


quantity of the produce during the storage and transit. It also helps in easy
handling of the produce.
a. Cotton after ginning is pressed into bales.
b. Fruits like apple, grapes are packed in hardboard boxes.

3. Transportation involves moving the agricultural produce from the place of


production (farms) to the place of consumption. Agricultural products are
perishable and therefore quick transportation from the farm to the
consumption centres is required to maintain the quality of the produce.
Transportation cost and handling charges for the agricultural produce are high
due to long distances between farm and market nad number of middleman
between the producer and consumer.

4. Storage: While agricultural production is seasonal, the consumption takes


place throughout the year.

a. Commodities like potatoes, apples can be stored in cold storage to


make them available during the off-season also.

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5. Financing: Agricultural produce takes place in the interior villages. The
produce has to be moved long distances and takes place long time to reach the
consumers and capital remains locked up during this period. Credit and money
have to be made available to meet the cost of selling the produce to the final
consumer.

6. Selling involves identification of different categories of customers,


understanding their needs and wants and supplying the produce to meet their
requirements and collecting money for the produce sold.

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System of Sale in APMC Market

• Wholesaler-to-Wholesaler
• Wholesaler-to-Agents
• Wholesaler-to-Corporate
• Wholesaler-to-Consumers
1. Cash Basis
2. Credit Basis – only by agents

Methods of Sale carried out by APMC Market

i. Sale by Sample

It is the most convenient method of sale where the produce is systematically graded. It
saves the cost of transportation and inspection. However, utmost honesty in the dealing is
to be followed. The producer or the commission agent shows the sample to the trader and
finalizes the price. Example – During the auction of chilies, the buyer quotes the price for
the produce by looking at the samples. This sale by sample is also practiced in food grain
sector. Food grains such as wheat, rice, etc. are bought by buyer and to verify that the
quality matches the sample they hit the gunny bag with sickle and check the food grains.

ii. Open Auction: The farmers undertake a bidding process in which the
commission agents bid over the prices of the produce being auctioned and the
produce is sold by the farmer to the highest bidder.

iii. Dara sale: In this system, the heaps of grains of different quantity/quality are
sold at a fixed price. The advantage is that within a short time a large number of
sales can be affected. Hence, the buyer may get better quality of produce at an

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average price. Also, the farmer will not spend more on HYV seeds or any such
agricultural inputs that will increase the quality of the produce if the method of
sale is Dara sale. Example – This type of sale is practiced in onion and potato
market .As such there is no wholesale market for commodities like oil, masala
powder, etc. These commodities are available in any market at a wholesale price.

iv. HATTA Sale (Under Cover)

This method of sale is legally not permitted to be practiced in the regulated markets. But
it is learnt that Hatta or undercover sale is practiced in the fruit and vegetables market.
• Codes:
1 finger = Rs 10
1 tapping = Re 1
Fist = Rs100
E.G: holding 3 fingers and then tapping the finger 2 times would communicate Price of
Rs.32/kg.
If the prices are acceptable to both the parties, lapping hands signals the deal as done.

The main reason why it is practiced is well justified by the wholesalers in the market. Acc
to them there has been a sharp increase in the number of retail clients visiting the
A.P.M.C market. If the prices offered to the wholesale buyers are negotiated via talking
or discussing loudly, even the retail buyers would demand a similar price which would
not be acceptable to the wholesale buyers or sellers.
So, with a view of maintaining confidentiality of wholesale prices the hatta
system is often practiced in the market.

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Facilities * Infrastructure Available in the Market or nearby Market

Sr. No. Facilities/Infrastructure Number Capacity


1. Cold Storage 20 30,000 MT
2. Waxing/Grading Line 01 3 Ton/hour
3. Ripening Chambers 01 7 Ton
4. Packaging unit 01 8 Ton
5. Vapour Treatment Plant 01
6. Rest House for farmers 01 30 no.
7. Post Office 01
8. Banks 15
9. Independent Police Station 01
10. Central facility Building 05
11. Weigh bridges 08
12. Dispensary 01
13. Export House 02
14. Sanitary Blocks 04
15. Passenger transport facility -
16. Restaurants/Canteen -

Tax provision in Maharashtra -


The traders in the APMC market are liable to pay tax as mentioned:
• Food grain sector – NIL
• Masasla market – 4% VAT
• Cash crops – 12% VAT

Insurance –

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Market provides Fire as well as Flood Insurance. However, after the 26 July deluge in
Mumbai, the traders of the APMC Market are no longer provided the facility of Flood
insurance.

Loan –

As a supplement to the finance of APMC, the Maharashtra State Agricultural Marketing


Board gives some amount as loan to enable APMCs to undertake developmental
programmes. However, MSAMB insists on availing loans from Banks by the APMCs for
their development programmes. The development works include land, drinking water
facility, compound wall, gate, internal roads, electrification, auction halls and platform,
godowns, computers, farmer’s hostel, trader's and commission agent's shops, etc. The
loans are sanctioned as per the norms prescribed by MSAMB.

APMCs submit the loan applications with details, which are being processed at the head
office. As per the rules of the Marketing Board, the rate of interest for development works
are as follows:

Sr. Class of APMC Rate of Interest


No.
1 Class A and B 12%
2 Class C and D 10%
3 Konkan and Tribal Area 8%

Role of Banks –

Financial institutions such as ICICI, SBI, COSMO Bank, UNION BANK, HDFC, etc are
located around the market due to the proximity of these Financial Institutions; it becomes
very convenient for traders to do the daily transactions. They also provide banking
facilities to these traders such as loans, credit facilities, ATM’S, etc.

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Factors Affecting Price:

The pricing decision is dependent on a number of factors:

• Main Market – The Commission agents update the A.P.M.C merchants


about the prevalent market prices on a day to day basis. The prices in the
A.P.M.C market change accordingly.

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• Season and Supply – During the winter season from December to
February, the supply decreases and thus the price rises during this period.
Price varies during the other seasons as per the supply. For eg. If there is a
very heavy rainfall and the crop has damaged, then the prices will rise.
Basically, it is dependent on the demand – supply conditions.

• Brand – There are a lot of brands available in case of grains and this has a
major impact on the prices. There are certain well established brands
which enjoy high recognition and are sold for higher prices.

• Multi-Commodities Exchange (MCX) – Today, due to the emergence of


Multi-Commodities Exchange and easy internet accessibility, the
merchants pricing decisions are affected by the prevalent MCX prices.

• Transport conditions – The transport route and charges also affect the
prevalent prices of the grains.

• Rains: This is a major factor in determining the total quantity of


production, which is the total supply which determines the price in
coordination with the demand.

PRODUCT HANDLING AND WASTAGE

Product Handling -
In APMC, product Handling is majorly performed manually by laborers. These
laborers work on daily basis and transfer goods and commodity from one katta
( shop) to another katta or from katta to trucks. On the other hand product handling
during trading between APMC and retailers or semi-wholesalers is done in 3 ways:

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i) Trucks: Trucks and Tempo’s are used as medium of road transportation in
order to cover shorter distances and to reach the interiors of city.
ii) Railways: Railways are also used as a medium of transportation goods to
longer distances. They are comparatively cheaper when it comes to road
transportation.
iii) Steamers: Some of the commodities from APMC Market are also exported
and imported. Therefore, Steamers are used as a medium of water
transportation.
Daily wages of laborers in APMC are as follows:
Kg Amount
30 kg Rs. 2/-
50 kg Rs. 4/-
100 kg Rs. 6/-

Wastage -
Generally, in all the sectors of APMC the production of wastage is very low.
However, in Fruits and Vegetables Market, wastage is up to 35% of the overall
produce as these goods are perishable in nature. Hence, in order to reduce this
wastage, the wholesalers sell them at a lesser amount compared to the original price.

TRANSPORTATION FACILITIES

For the smooth functioning of the entire market, efficient and effective transportation is a
must. Transportation facilities are widely used from Village APMC/ Mills to APMC and
from APMC to retailers/ Semi-wholesalers and vice-versa. Any type of obstacles during
transportation can largely hamper the working in the APMC market. There are 3 modes
of transportation:

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1) Road transport – Trucks and Tempo’s
2) Rail transport
3) Water transport – Steamers.

Daily average arrivals of all Agricultural commodities is 3500 trucks per day approx. 1
truck has the loading capacity of 10 tones (approx).

Transportation cost forms a major cost factor compared to the other costs of a
commodity. Higher the transportation cost, higher will be the price of the commodity.
Trucks and Tempo’s deliver the goods area wise and the cost is bared by their customer. A
single transport agency receives approx 30 to 35 contracts on a daily basis.

There are various associations formed in order to manage the transportation facilities
such as:
- Mathadi Kamgaal Pranit Association.
- Retail Motor Transport.
- Tempo Owners Association.
- Local Tempo Association
These associations handle the entire day to day working of transportation. These
committees also provide solution to the local transportation problems.
- Letter Box

CONTRACT FARMING

Contract Farming takes place between farmers and the contractor. According to this
contract, the farmer has to plant the contractor’s crop on his land. Post harvest the farmer
needs to deliver the promised produce to the contractor, based upon anticipated yield and
contracted land. This could be at a pre agreed price.

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In the APMC Market, Contract Farming is not practiced by small or local parties. Till
date contract farming was not practiced in any of the APMC’s in Maharashtra. The State
Government has thus realized the importance of contract farming and is therefore making
necessary efforts to promote the same.

Maharashtra will soon join the ranks of Andhra Pradesh, Gujarat, Karnataka, Punjab and
Tamil Nadu in promoting contract farming. This move is ostensibly aimed at bailing out
the farming community from its distress, manifested in the number of unprecedented
farmer suicides in the state in recent months. The state government has proposed an
amendment to the Maharashtra Agriculture Produce Marketing Act to allow corporations,
retailers or food processing companies to directly enter into agreements with farmers to
market their produce.

The corporate sector has been the first to rejoice, much before the farmers who are the
supposed beneficiaries of the new Act. Multinational giants like Metro Cash & Carry,
Cargill Foods, Hypercity, Shoprite and Wal-Mart have signaled their intention to get into
agreements with Maharashtra’s farmers.

Many states in India are promoting contract farming, ostensibly to allow “technology
transfer, capital inflow and an assured market” for crops.

Reliance is the first major player to have shown interest in getting into contract farming
after the Act was passed. Reliance’s proposal has been submitted to the state’s director of
marketing. The RIL plan will be studied in accordance with the state’s policy on contract
farming. The government may seek further information from RIL on its proposed crop
pattern before it decides on its proposal. “This is to ensure that the land quality doesn’t
get affected.

Reliance Industries wants to lease about 100, 000 acres of prime farm land in Pune to
grow tonnes of vegetables, flowers and other produce required to feed its huge retail
operations.

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The fabrics-to-oil giant has submitted a proposal to the Maharashtra government seeking
over 100,000 acres of farmland on a 50-year exclusive lease. According to the state’s
policy on contract farming, which allows corporates to take farm land on lease and strike
a buyback agreement with the farmers for the produce by paying market-related prices.
This is designed to ensure better prices and a ready market for farmers, while at the same
time, allowing companies to deal directly with farmers, bypassing middlemen.

RIL is not seeking to take over the land belonging to the farmers. It wants the land on
lease and will pay a fixed price of Rs 4,451 per acre per year. It’s like BOT. Instead of
build, it will be cultivate-operate-transfer. RIL will also pay market price to the farmers
for their produce.

AGMARK GRADING AND STANDARDISATION -

 Objectives

Promotion of Grading and Standardisation of agricultural and allied commodities under


Agricultural Produce (Grading & Marking) Act, 1937.

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 Salient features

Quality standards for agricultural commodities are framed based on their intrinsic quality.
Food safety factors are being incorporated in the standards to complete in World trade.
Standards are being harmonized with international standards keeping in view the WTO
requirements. Certification of agricultural commodities is carried out for the benefit of
producer/manufacturer and consumer. Certification of adulteration prone commodities
viz. Butter, Ghee, Vegetable Oils, Ground-Spices, Honey, Wheat Atta etc. is very popular.
Blended Edible Vegetable Oils and Fat Spread are compulsorily required to be certified
under Agmark. Facilities for testing and grading of Cotton for the benefit of cotton
growers is provided through six cotton classing centers set up in cotton growing belt in
the country. During the year 1999-2000, agricultural commodities worth Rs.429767
lakhs were graded and marked under AGMARK. Check is kept on the quality of certified
products through 23 laboratories and 43 offices spread all over the country.

APMC traders also require AGMARK Certificate for maintaining the quality of the
produce.

Fully Automatic grading system for fruits at Vashi


Market Trade of coconut at Vashi Market

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LICENSES AND CERTIFICATIONS.

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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. The following licenses are required in APMC:

- APMC License
- Food Dealing License (FDL) – Food Grain Sector and Masasla Market
- Pulse Dealing License (PDL)
- MPSA License – Drug License. This license is required to curb adulteration in the
market.

During the commencement period, approx Rs. 5000/- is to be paid by the traders as
certification fees. This certificate needs to be renewed on a yearly basis for which a
nominal fees is charged.

If any trader is found without license then he is liable to pay Rs. 10,000

ROLE OF GOVERNMENT

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The State government plays a way crucial role in the working of APMC.

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. Provision made
for resolving of disputes, if any, arising between private market/ consumer market and
Market Committee.

The State Agricultural Marketing Board made specifically responsible for promoting
grading, standardization and quality certification of notified agricultural produce and for
the purpose to set up a separate Agricultural Produce Marketing Standards Bureau.

The government also intervenes by releasing buffer stocks during crisis in the market.
Also in order to order to reduce exploitation in the market, government sets up the
minimum. Support price for the produce sold in the market area. It states that the market
should have a specified quantity of goods and it should not exceed the stated stock limit.
However, this is not practiced in the state of Maharashtra.

Only 1/6th of the total production of the market is allotted to the government under State
Trading Corporation.

For example, once in the food grain sector, scarcity of pulses had arise. Therefore, the
government created an action plan and stated the new stock limit i.e Retailers up to 750
quintals and wholesalers up to 3000 quintals.

Steps Taken by the Maharashtra State Agricultural Marketing Board


(MSAMB) for Betterment of Farmers

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FARMERS MARKET (SHETKARI BAZAR):

The farmer has no say while fixing price of his produce in the market. In present
agricultural marketing system a no. of middle men are involved till the produce reaches
the final consumer, as a result the farmer gets only 30 to 35% of the every rupee paid by
the consumer. Farmer’s market (Shetkari Bazar) is a concept of direct marketing, by
producer (farmer) to consumers.

Objectives of Shetkari Bazar

• To help farmers to get the reasonable rates to their produce.


• To benefit consumers by giving him fresh produce at reasonable prices.
• Immediate value realization of the produce to the farmers without any deductions.
• To provide produce in appropriate weights and measures to consumer.
• To bring Producers and Consumers together to avoid chain of middlemen.

The minimum facilities made available to the farmers and consumers in the Shetkari
Baazar are as follows:

1. The covered sale platforms (Ottas) of 6'x 8' Size for the farmers. These ottas will
be made available to the farmers on "first come first serve basis".
2. Drinking Water Supply.
3. Parking area.
4. Garbage disposal arrangements.

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5. Office for the supervising staff of APMC.
6. Ladies and Gents Toilet.
7. Vegetable washing Platform.
8. Grocery Shop.
9. Shop for Agricultural Inputs.
10. Canteen
11. Telephone Booth.
12. Compound Wall.

It is proposed to set up Shetkari Bazars in the state in following three phases:

• In first phase the Shetkari Bazars will be set up at all districts head quarters in the
state
• In second phase the Shetkari Bazars will be set up in the cities where the
population is more then 1 lac.
• In third phase the Shetkari Bazars will be set up in all importants cities in the
state.
• Shetkari Bazars in operation = 05

ONION STORAGE STRUCTURE:

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Maharashtra State produces 25-30% onion of the total production of the country.
Maharashtra State contributes about 80-85% in the total onion export. Out of the total
onion production in the State, 10-15% onion production is in Kharif season, 30-40%
production is in Late Kharif and 50-60% production is in Rabi/Summer season.

Generally onion produced in Kharif and Late Kharif season is not suitable for storage
while onion produced in summer season can be stored upto 5-6 months and it can be
brought in the market during rainy season i.e. from June to October.
There are certain problems which arises during conventional storage of onion viz. loss in
weight, sprouting and rotting of bulb. To overcome these losses onion must be stored in
scientific manner and its prices.

MSAMB with the help of NABARD and National Research Centre for Onion and Garlic,
Rajgurunagar has developed revised plan for scientific onion storage (Kanda chawl) to
promote onion producers for scientific onion storage. The onion storage as per this plan
will minimize the storage losses and quality deterioration of the onion which will in turn
help the farmers to fetch better prices for their produce. To encourage the farmers for
setting up of scientific onion storage systems, MSAMB has formulated the subsidy
scheme for scientific onion storage.

The construction cost of the onion storage structure is assumed at Rs. 6000/- per MT for
this scheme. As per the scheme, subsidy to the extent of Rs.1500/- per MT storage
capacity

RURAL GODOWN SCHEME (GRAMIN BHANDARAN YOJANA)

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In India about 165.77 mill. Ha land is under agriculture, producing 526.77 mill tons of
agriculture produce comprising mainly food grains, pulses, oilseeds, cotton, jute,
sugarcane, etc. The agriculture production of the country has increased four fold during
the last five decades. However, in spite of being self sufficient in production of food
grains, the farmers are unable to obtain remunerative prices for their produce. They lack
sufficient storage facilities, distributed in various parts of the country. So under Rural
Godown Scheme, farmers will be provided with appropriate storage facilities.

GRAIN HANDELING UNIT:

As an additional value added service to farmers, bringing their grain for sale, some
APMC’s in the State have set up Cleaning and Grading machines for grains. The machine
is set up in the APMC yard and the farmers can get their grain cleaned and graded on
charge basis. This has helped farmers demand and get better prices for their produce and
the trader and consumer gets a clean and graded produce a treasonable charges. This has
resulted in more and more farmers coming forward to use the facility.

PROJECTION TV SYSTEM FOR MARKET INFORMATION DISPLAY:

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MSAMB is collecting arrival and price information of Agricultural Commodities from
various APMC’s through MARKNET. For Dissemination of this information to farmers
and other concerns, new scheme of install. Under this scheme, Projection TV System is
installed at Market Yard in such a way that, daily arrivals, prices and Agricultural
information can be displayed effectively for the benefits of farmers and other concerns ,
new scheme of installation of Market Information Display has been started by MSAMB.

Functioning: Each of the APMC participating in the scheme has Projection TV System
connected to computer with software for information display and Internet connectivity.
The consolidated information of arrival and price is made available on MSAMB's web
site. That is downloaded on the computer of Projection TV. The information can be
displayed either APMC wise or Commodity wise on the TV through customized software
developed in regional language.

Besides displaying price information, this System is used for following purposes.
1. To display the information related to Post harvest technology, grading, packing etc.
2. To display the information about new technology in agriculture, new seeds, fertilizers,
pesticides, various crop diseases and solution for the same etc, for the use of farmers.
3. The information about various schemes, projects of the State and the Central
Government.
4. For the training of farmers.
5. While displaying price and other information, various advertisements can be displayed
on commercial basis to get the revenue, which can be used for maintenance of this system

CONTROLLING AUTHORITY

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GROMA – Grain, Rice and Oilseeds Merchant Association

The controlling authority for the grain market is GROMA. It undertakes the
registration of brokers. This helps to regulate their activities and also curb any kind of
illegal activities.

The main benefit for brokers, on registration, is they can acquire the grains as per
their requirement and in sufficient quantities. This is not the case with the
unregistered brokers; they are not assured of the entire quantity as per their
requirement.

The association is 105 years old. About 600-650 grain merchants are registered with
the authority. The entire trading is highly regulated as regards to damaged grains or
pilferated grains dealing, corruption, etc.

There is a casual checking held every 6 months. The stock limit prescribed for cereals
and pulses is 3000 quintals per trader. There is no limit for stocking of rice.

The authority conducts a meeting every 6 months with the merchants to enable them
voice their opinions.

The authority specifies the following rules:

• In case of a weighing error and subsequent calculation error of the total bill
amount, the weight and amount of the authority books will be considered
final.
• Sales Tax, General Tax, VAT and any such other taxes have to be borne by the
customers over and above the cost of products.
• In case of any association or Dharmada being the buyer, they have to pay the
other relevant Taxes also.

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• Once the goods have been sold and delivered, the authority or merchant will
not be responsible for it.
• Until and unless, the total amount specified in the bill is not paid, the
merchant has a prior lien over the goods.
• The goods are sold under the Maharashtra State’s Food Grain Licensing Order
Law.
• Pilferated, damaged or lower quality goods are sold as animal food.
• According to the weighing rules, the goods are given at Net Weight, the buyer
has to return the gunny sacks or pay as under:
o Cereals, pulses, general items Rs.14/-
o 50 kg gunny sack Rs.7/-
o Cotton, covers in a gunny sack Rs.7/-
o Gunny sack per kg Rs.40/-
• The buyer has to bear the following expenses over and above the bill amount
and this is also the source of income for APMC market:
o Marking Fee 0.75 paise
o Supervision charges 0.05 paise
o Entry charges 0.20 paise
• In case of credit sale, the following charges per day on delayed payment:
o Payment within 30 days after due date Rs.1.75 %
o Payment after 30 days after due date Rs.2.50 %
(1.75 + 0.75 % delayed charges)
• The goods are cleaned once but the user is expected to clean them once again
for safety purpose.
• The payment for the goods has to be made to the person at the “pedhi” (cash
counter). The authority is not responsible for payment made to any other
person.

Problems:

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o Lack of awareness among traders and farmers about different facilities provided
by APMC such as VST and VHT.
o Distribution chain is still long because farmers don’t directly come to APMC
Vashi, as there is no village near by.
o Middlemen’s are unavoidable part of market functions.
o Low wages to Hamali and Mathadi people which leads to mismanagement and
strikes.
Suggestions:
o Awareness should be generated among farmers about cooperative marketing of
agricultural produce and various schemes that are provided by State Boards.
o Farmers cooperatives should be formed which will lead to economic benefit of
farmers as they can demand high prices for their produce due to various variety
and higher quantity of produce.
o Even economies scale can be achieved and different cost such as transportation,
weighing, packing , storage etc. due to cooperative marketing.
o Even farmers should be given education and training related to new facilities
available for processing, storage,etc to improve their produce.
o Government should focus on decreasing intermediaries:

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o They should focus on using electronic auction halls like:

o Mechanised Handling of Produce:

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o To link Farmers to the Markets by shortening supply chains and enhance
efficiency, thus increase Farmer’s income
o Provide professionally managed competitive alternative marketing structures
that provide multiple choices to farmers for sale of agricultural produce; To
drive reforms in agricultural marketing sector resulting in accelerated
development of marketing and post harvest infrastructure including cool chain
infrastructure in the country through private sector investment;
o To bring transparency in the market transactions and price fixation for
agricultural produce and through provision of backward linkages to enable
farmers to realize higher price and thus higher income to the farmers.

Some New Markets Coming up

o Mumbai Flower Auction Market at Goregaon (east).


o Thane Terminal Market

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