With corporate companies entering the agri-market and launching retail outlets in fruits and vegetables, Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested changes in the Agriculture Produce Marketing Committee (APMC) Act to “empower the private sector to revamp agri-marketing in India.”
It suggested that provisions for a unified license for operating in all markets in a state, direct procurement from farmers’ fields and setting up of private market yard, contract farming, and e-auction trading be incorporated in the Act if state governments are unable to repeal it..
The trade body said though the private sector was encouraged to make forays into the farm sector and develop appropriate agri-marketing strategies, it still faced numerous hurdles such as stringent regulations in terms of APMC and Essential Commodities (EC) acts, lack of open and transparent price-discovery mechanism and trading, restrictive marketing practices in some of the wholesale market and mandis, and weak infrastructure.
“These factors often act as hindrances for the companies to scale up their operations, and also prevent farmers from deriving expected benefits from direct sale and purchase,” the paper noted.
It said there are 27,131 primary and wholesale rural markets, 7,465 regulated markets in the country. Rural primary markets and periodic markets, which are the first point of contact for farmers with buyers, have not figured in the government’s agenda of development.
It noted that facilities in these markets are alarming: only a two-third of regulated markets are covered or have open auction platforms; only one-fourth of markets have drying yards; cold-storage units exist only in nine per cent of markets; grading facilities are there in less than a third of markets; and farmers’ resting facilities are available only in half the markets.
FICCI noted that the performance of several agricultural markets has not been considered up to mark due to persistent inefficiencies attributable to (i) a long chain of intermediaries and, hence, low returns to farmers, (ii) multiple tax structure and licensing, (iii) lack of transparency in transactions, and (iv) weak storage, grading and other infrastructural problems.
It said the private sector was willing to take on this challenge and streamline market deficiencies in the system as it was more receptive to changing consumer demands and higher value markets. FICCI noted that the private sector has embarked upon providing backward linkages to farmers in terms of technical know-how, and right quality of inputs coupled with developing state-of-the-art agri-infrastructure.
So, it was unfortunate that state governments were not reciprocating by easing regulatory controls – thus impeding the speed of private investments in agriculture and agri-business.
Most of the states have amended the APMC Act in one form or the other. Bihar is the only state to have repealed the APMC Act with effect from September 2006.
– Sri Krishna