Agriculture Marketing

Model Agricultural Produce and Livestock

Marketing (Promotion & Facilitation) Act, 2017,

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• The Department of Agriculture Cooperation pa
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formulated recommendations knownfor sashiv the Model Agricultural
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Produce and Livestock Marketing O(Promotion & Facilitation) Act,
2017, which incorporates various changes to reflect the agenda of a
unified national market for agriculture, besides facilitating alternate
market channels, including opening up the system to private sector
as well for alternate online marketing platform.
Features of the Act
• Abolition of fragmentation of market within the State/UT by removing
the concept of notified market area in so far as enforcement of regulation
by Agricultural Produce and Livestock Market Committee (APLMC) is
concerned (State/UT level single market). co
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• Full democratization of Market Committee
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and State/UT Marketing Board.
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• Disintermediation of food supply chain by integration of farmers with

processors, exporters, bulk retailers and consumers.

• Rationalization of market fee & commission charges.

• Creation of a conducive environment for setting up and operating
private wholesale market yards and farmer consumer market yards,
so as to enhance competition among different markets and market
players for the farmer’s produce, to the advantage of the latter.

• Promotion of direct interface between farmers gm

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exporters/ bulk-buyers/end users so as to n gp

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• Enabling declaration of warehouses/ silos/ cold storages and other

structures/ space as market sub-yard to provide better market
access/ linkages to the farmers.
• Promotion of e-trading to enhance transparency in trade operations and
integration of markets across geographies.

• Provisions for single point levy of market fee across the State and unified
single trading licence to realise cost-effective transactions.
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• Promotion of national market for agriculture.pproduce al@
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• Providing a level playing field to the licensees of private market yard,

private market sub-yard, electronic trading and direct marketing vis-à-vis
the APLMCs and removing the conflict of interest that the latter are likely
to practise, if both development and regulatory functions are centred in
the same authority.
Successful Reforms in States
• Madhya Pradesh, for instance, is well known for having introduced an
amendment to enable private corporations such as ITC (e-choupal)to
set up their own single-license yards outside mandis.
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• Maharashtra brought changes in its laws to ail.
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private markets, of which over sixty licensed h iva
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• Karnataka has been recognised for pioneering deep legal and

institutional reforms to interlink all its APMC mandis in a common
electronic spot market platform called Rashtriya e Marketservices ,
an innovation that partly inspired the central government’s e-National
Agricultural Market scheme.
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Alternate Marketing Systems

• Alongside, the evolution of regulated markets, some alternative

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• Alternative marketing systems suchO as cooperative marketing,
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contract farming, private wholesale mandis, retail chain linkages etc

provide other marketing platforms for farmers to sell their produce.
1. Direct Marketing
• Direct marketing in the context of agricultural marketing, where farmers
directly transact with the produce consumers.

• These operates in two basic formats-

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• Farmers’ Markets, and a l@
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• Direct sourcing from farmer’s field by processors
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• About 488 such farmers' markets are operating in different States in the
name of
• Apnamandis in Punjab, Haryana;
• Rythu bazaars in Andhra Pradesh and Telangana,
• Uzhavar Sandhai in Tamil Nadu,
• Shetkari Bazaars in Maharashtra and
• Raitha Santhe in Karnataka.
• Benefits-

• These markets have helped in mitigating the problems of fragmented supply

chain.

• Further, the quick movement of produce from farmerm to consumer, saves

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• Direct marketing and direct sourcingOallows
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for farmers to skip multiple layers in
their transactions and benefits by skipping of intermediary margins.

• In these markets no market fee is charged but service charges are collected
from sellers.
• Issues-

• The footfall is limited to the local consumer and therefore future

growth is limited.
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• Any production that is in surplus to the absorption .p
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• States’ restriction on licenses for direct sourcing.

2. Contract Farming
• Contract farming can be defined as agricultural production carried out
according to an agreement between a buyer and farmers, which
establishes conditions for the production and marketing of a farm
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• Typically, the farmer agrees to provide hiv
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purchaser and be supplied at the time determined by the purchaser.

• In turn, the buyer commits to purchase the product and, in some

cases, to support production through, for example, the supply of
farm inputs, land preparation and the provision of technical advice.
• Benefits-Contract farming can address many traditional ills, such as
lack of market connectivity, long chain of market intermediaries,
ignorance about the buyer demands, etc.

• It can help provide quality inputs to the farmers. For instance- Pepsi co.
providing good quality seeds to the farmers for potato.
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• Contracts from bulk consumers can serve to offer al.
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• Contract Farming allows farmers to vertically integrate with specific and

organised market channels.

• The vertical integration promotes transfer of management skills to the field,

reduces risks from unplanned transaction and opens avenues for
institutional credit.
• Contract Farming In India

• DAC&FW through model Act, 2003 suggested that States promote

contract farming and by now 20 States provided contract farming
provision in their APMC Acts while Punjab legislated a separate Contract
Farming Act in 2013.
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• So far, 14 States only have notified the Rules a
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farming on the ground level and onlynlStates
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of Maharashtra, Haryana,
Punjab, Karnataka, Gujarat, M.P and Chhattisgarh have registered
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companies/ firms for undertaking contract farming in their States.

• Contract farming is frequently extended to non-crop activities also.

Poultry farmers for both eggs and broilers function under large enterprises
in many States of the country particularly Tamil Nadu, Kerala, Karnataka
and Andhra Pradesh.
• Reasons for slow development of Contract Farming-

• Conflict of interest perceived by APMCs/Marketing Boards which are

designated as the registering, agreement recording and dispute settlement
authorities in most of the States;
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• Complex and long procedures for registrationpaand
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• Essential Commodities Act - Provisions
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of stockholding limit under Control
Orders issued at any point of time deters buyers to enter into contracts to
aggregate the contracted produce, even for the intended purpose of
processing, exporting, linking to retail chain; and

• Poor publicity of contract farming among the farmers about its benefits.
• However, contract farming is not a sole solution for problems in
agricultural marketing, it can very well be leveraged o m
in certain regions
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3. Private Wholesale Markets
• Various restrictive and hindering stipulations in the amendments of
APMC Acts are limiting growth of private wholesale markets like-

• permitting one limited crops for trading in private

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• prescribing certain distance from existing
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• exorbitant licence fee for setting up of such market and more importantly
asking such licensee to collect market fee at applicable rate and pass on the
same to the Mandi Board.