APMCs Act Bypasses Mandi System: How Important Is Its Current Structure?

It is also important to recognise that Indian agri-produce markets are decentralised and dynamic. It is contested that the APMCs in some States are inefficient and ridden with corruption and malpractices. Should we abandon the present structures or should we reform the APMC markets?

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The decision to try to do away with the APMC regime on grounds of inefficiency and monopsony is comparable to the argument against practicing democracy. Should we surrender democracy or federalism because it’s not working smoothly? If self-reliance is the purpose of those reforms, should it be achieved through corporates or through people‚Äôs agencies like APMCs and FPOs?

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The way forward is to either leave the intra-State Agri marketing reforms to the States within the spirit of co-operative federalism, as States are not any less keen to allow new channels for farmers and buyers, and compete among themselves, or to amend the Acts in consultation with the states and other stakeholders, especially farmers to create the new Acts deliver the regulatory oversight and farmer interest protection.

Within the case of the first option, the Union government can still legislate on inter-State trade and commerce in farm produce under the Union List Entry 42. Also, it can explore the supply of Entry 7 of the Concurrent List for legislating on contract farming as that’s about contracts apart from agricultural land and contract farming is about crops/produce being grown under contract.

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In the case of the amendment option, so as to win farmers’ confidence in contract farming, the land leasing provision should be far away from the definition of contract agreement within the Act, and it should be clearly written within the Act that no recoveries aside from farm produce will be made up of Famers whether or not the default.

Similarly, the ‘APMC mandi bypass Act’ should transcend PAN cards for buyer registration and also provide mechanisms for counter-party risk guarantees for farmers and build a leveled playing field for APMC mandis by imposing some buying costs within the new trade area which might also help build and support existing and new market infrastructure.

With relevance to the ECA, there’s have to scale down the comfort or introduce it in an exceedingly graded manner because the price rise ceilings provided under the amended Act are too high. Moreover, all players should be brought under that, rather than exempting some completely. Most emphasis of such Acts should still be on adequate regulation and protection of farmer and poor consumer interest and not promotion or facilitation of personal business interest.