Amendment to APMC Act is an attempt to dilute State’s intervention in agriculture
The Karnataka government’s step of amending the Agricultural Produce Marketing Committee (APMC) Act is an effort to dilute the spirit of the State’s intervention in safeguarding the interests of farmers.
The legislation of 1964 had undergone several modifications over the years to protect farmers against abuse and exploitations by middlemen at the time of price discovery, weighing and measurement of produces or while making payment after the transaction.
Far-reaching changes were incorporated into the APMC Act such as creation of a revolving fund to implement the Floor Price Scheme to protect the interests of farmers, allowing contract farming companies to procure directly from farmers with a predetermined agreed price and so on. e-marketing initiative of the State Department of Agriculture Marketing is considered as a novel one and emulated by several States.
A democratically elected committee, the APMC, comprising of farmers, traders, and stakeholders, is assigned the responsibility of managing all these activities. This institutional arrangement comprising of 162 APMCs along with around 50,000 intermediaries is supposed to protect the interests of almost 78 lakh farmers who produce around 170 lakh tonnes of foodgrains, 68 lakh tonnes of vegetables, and 55 lakh tonnes of fruits annually in Karnataka.
The governing dispensation at the Centre, on the other hand, feels that the existing regulatory framework does not support a free flow of agricultural produce and hence is inconsistent with the ethos of a liberalised, globalised market atmosphere. In this backdrop, the Union government’s Department of Agriculture, Cooperation and Farmers Welfare prepared a Model Agriculture Produce and Livestock Marketing (Facilitation & Promotion) Act in 2017 and placed it before all States and Union Territories for adoption. Karnataka has already adopted many reforms, except a crucial alteration to limit the regulation of the APMCs to “physical premises of mandi/yard” so as to allow private buyers to procure directly from farmers anywhere. The Centre has given a strict instruction to the State government to follow an Ordinance route to incorporate this crucial change, with a claim that this would help farmers affected by COVID-19 lockdown.
Not only does this amendment make the existing APMC system redundant, but also puts an end to farmers’ hope of getting a fair price through government intervention, leaving them at the mercy of free-market forces. It is not clear whether the Centre’s much-touted unified integrated market e-NAM will materialise if uncontrolled private traders start procuring directly at the field and farm gates. The State government has made huge investment to construct roads, warehouses, godowns, and other infrastructure besides agri commodity technology parks. And with this move to privatise the agri commodity marketing, revenue generation through market cess, users fee, and GST will be in jeopardy. Above all, the APMCs have huge land area as well as real estate properties at prime locations in taluks. There is apprehension of big companies and corporates capturing these prime land.
Need for correction
At present, hardly 30 to 40% of the farm produce is being brought and sold in the regulated APMC yards in the country. However, there is no guarantee that the market functionaries can deliver justice to farmers under a totally deregulated atmosphere. Hence, the present system needs corrections so as to make it more competitive, transparent and farmer friendly. So the need of the hour is to take the agri commodity market as near to the farmers as possible with a strong government intervention by creating roads, village warehouses, and processing industries in the rural areas. Legal recourse is required for the prevention of purchases and sales of farm produces below the minimum support prices.
In the current situation, the government is compelled to take care of the health of poor and vulnerable sections for which it must undertake procurement and distribution of food and nutritious commodities such as milk, millets, and vegetables on a massive scale. Under the current unprecedented catastrophic situation caused by COVID-19 pandemic, it will be imprudent to dismantle a government-sponsored marketing mechanism for food and agricultural commodities and diluting the very spirit of State intervention that exists strongly behind that institutional arrangement.
(The author is agri-economist and former chairman of the Karnataka Agricultural Prices Commission)