Refer Mrunal.

org for this topic

Issue:
Traders and Merchant say that it has been amended hurriedly without consulting farmers and traders.
The amended law threatened the livelihood of hundreds of traders and merchants
The APMC Act enables multinational companies to trade in notified agricultural commodities and restricts
local traders
According to the amended Section 72 of the Act the state government allows companies to set up private
mar!et yards with an investment of "s #$$ crore each.
The new law also enables someone to ta!e a licence for the entire state and conduct online trading from
anywhere in the country
There were nationwide protests against the implementation of the new APMC Act. %ollowing protests by
farmers in Maharashtra "a&asthan Pun&ab 'aryana and (ttar Pradesh the implementation of the new act had
been given up
The APMC Act would enable multinationals li!e Walmart, Cargill and Monsanto to ta!e control of
agriculture mar!eting which will lead to e)ploitation of both farmers and consumers
The government is trying to eliminate middlemen by amending the APMC Act but it is allowing multinational
companies to ta!e over the agricultural mar!eting system. Anybody can trade in agricultural commodities from
anywhere and farmers will not have any control over their produce
Mrunal:
APMC act since 1950
APMC acts run on to principles*
#. +nsure that intermediaries ,and money lenders- do not compel farmers to sell their produce at the farm
gate .throwaway prices/farmer is not e)ploited
2. All food produce should first be brought to the mar!et yard/0 sell through auction/farmers gets good
money.
APMC Defnition vs MSP
Traders/middlemen can exploit farmers upto a limit in case of many cereal pulses and
oilseeds crops ,otherwise they can go to %C1 for selling their produce- but for fruits and veggies government
doesn2t declare minimum support prices
Positive Points: New APMC Act
#. ensure complete transparency in pricing system and transactions ta!ing place in mar!et area3
2. ensure payment for agricultural produce sold by farmers on the same day3
4. promote agricultural processing 5 value addition
6. Publish data on arrivals and rates of agricultural produce brought into the mar!et area for sale.
7. Setup and promote public private partnership in Mandi Management.
Limitations:
Model APMC act is not !uniforml"# a$opte$, states have made their own modifications.
%ra$ers nee$ license to operate in Man$is & corruption
License to new traders come to a halt = More corruption/monopoly to trade in
the market yards, traders have to acquire a license according to the act. But, in most
states the issuing if new licenses has come to a halt, therey reducing competition and
making it easier for the estalished traders to exploit farmers.
'o (alue a$$ition )" the tra$ers*mi$$lemen
+oar$ing & foo$ inflation
Provision for punishment: The act only in myopic manner elaorate the procedure of
selling of agro products.There is no provision entitled to eliminate the prevailing
corruption and curse of middleman
Auctionin: The licensee traders and commission agents have formed informal cartels .mandis. 8o
auction ta!es place. +ven if auction is held collectively these traders !eep low bidding so farmer never
benefits.
!ssues accordin to "raders:
"raders Monopoly lost
!"#$ !ct permits "rivate market yards, %irect "urchase $enters, farmers market
for doing trade in agriculture produce &monopoly of #andis'destroyed(
Dou#le commission #y traders
$%ect on &armers of 'ld APMC Act:
)or the farmers, the price received for the produce is low, reducing their spending
power, as a result no expenditure on improving farm productivity or education, health
etc. which is vital for improving their quality of life.
(hy )eform in APMC Act is necessary*
* To estalish a interated national ariculture mar+et
* Allowin private sector to estalish mandis &+++( giving #oost to food
processin sector
* Back end infrastructure and supply chain developed y private players will
reduce post harvest losses
* ,pen gate for innovative concepts like contract farmin and will increase
capital ,ow in ariculture sector
* By selling the agriculture produce in the state owned mandis will chec+ and
revo+e the tendency of hoardins
$-amples: -xperience tell that y aolishing middlemen ene.ts oth farmers and
consumers. )or instance, /. 0orea removed middle men leading to 123 decline in
consumer price and 423 rise in farmers income.
./ Critically comment on the APMC Act and e-amine why its reform is
necessary for the !ndian
Answer: +conomy though the act was beneficial to protect the rights of the farmers but in the
due course of time the mandis were monopoli9ed and farmers suffered more due to restrictions
imposed to sell their products to the licensed traders.
The APMC act is one of the reasons that 1ndia suffers from the conundrum of high food
production and inflation. 8ow when the government aims to moderni9e the agriculture sector
and ma!e 1ndia a hub of food processing industry it is a necessity to get away with the
anachronistic provisions of the APMC act. The government with the same intent amended the
APMC act in 2$$4 but till now it has been implemented by only #6 states.
1f implemented properly reforms will facilitate more private sector participation in the
agriculture thus helping in building the re:uired infrastructure li!e cold storages introduction of
modern farming techni:ues via contract farming and enabling the farmers to directly trade with
the consumers thus eliminating the intermediaries.
;ut a caution should also be ta!en by the government to prevent the possible e)ploitation of the
farmers via big corporates. Thus if implemented with caution the APMC reforms can become a
useful tool in containing food inflation agriculture moderni9ation and reaching the target of 6<
growth in the agriculture sectors.