Agriculture Produce

The Agricultural Produce Marketing Committee (APMC) in India protects farmers by ensuring fair treatment, controlling prices, and overseeing agriculture trading. Established by state governments, it prevents pressure from lenders and middlemen. The history of agricultural market regulation dates back to the colonial era, with the first coordinated market established in 1886. The Agricultural Produce Markets Regulation (APMR) Acts were adopted in most states in the 1960s and 1970s. The APMC's objectives include creating an effective marketing strategy, promoting agricultural exports and agri-processing, and establishing efficient infrastructure for agricultural output marketing. The Model APMC Act 2003 increased the viability of contract farming, provided opportunities for farmers and individuals to establish markets, relaxed licensing regulations, and utilized revenue to improve market infrastructure.The e-NAM (National Agriculture Market) links the existing APMC and forms a unified national market for agricultural commodities.

The history of agricultural market regulation in India dates back to the colonial era when raw cotton was grown to attract the British government. The first coordinated market was established under the Hyderabad Residency Order in 1886, followed by the Grain Market and Berar Cotton Act in 1887. The Royal Agricultural Commission recommended the establishment of organized markets in 1928 to enhance trade methods and market properties in India. The Indian Government created a model law in 1938, which was distributed to all states. During the 1960s and 1970s, the Agricultural Produce Markets Regulation (APMR) Acts were adopted to cover all critical wholesale assembly marketplaces. In 2015, the Union Budget proposed the establishment of a United National Agriculture Market. After independence, many states enacted the Agricultural Market Ordinance and established market grounds and sub yards. The Agricultural Markets Commission (APMC) was established in each market area to develop and enforce rules to prevent exploitation of farmers by beneficiaries and intermediates.

The Agricultural Produce Market Committee (APMC) is a state government run system that regulates agricultural produce and livestock in the market area. Its purpose is to prevent distress sales by farmers, who are often exploited by creditors and intermediaries. APMC ensures fair prices and timely payments for produce, and regulates agricultural trading practices. This results in the elimination of unnecessary intermediaries, improved market efficiency, and protection of producer-seller interests.

• Before independence, food and agricultural raw material prices were hard for the government to regulate. However, following independence, things drastically changed.
• The protection of farmers' interests took priority. In order to boost agricultural output, pricing incentives have to be given to farmers.
• Furthermore, a weakness in agricultural administration was brought to light by multiple instances of farmers being taken advantage of by moneylenders and debt collectors.
• Interest rates, infrastructure, marketing expenses, and selling prices are all negatively impacted by incompetent governance.
• In order to guarantee proper market conduct, the Indian government passed the APMC Act.

• To shield farmers from lenders and other middlemen, the APMC committee was founded.
• These committees were also supposed to make sure that farmers received their payments on schedule from the APMC auctions and that the farm-to-retail price did not increase unnecessarily.
• Additionally, farmers can use APMCs—such as go-downs and the like—for storage.
• Through APMCs, farmers were also expected to be able to sell their produce directly to customers.
• APMCs were also used to control variations in prices.
• Constructing a productive marketing infrastructure.
• Processing agriculture and promoting exports.
• Create policies and processes for setting up a productive infrastructure for the commercialization of agricultural produce.

• The APMC, or Agricultural Produce Market Committee, makes sure that all farmer-produced goods are delivered to market and that auctions are used for transactions.
• The Mandi, or small market area, is set up in different places throughout the states under the direction of the Agricultural Produce Market Committee [APMC]. These marketplaces geographically divide the state.
• Licenses to operate in a market are issued to traders by the Agricultural Produce Market Committee [APMC]. The Agricultural Produce Market Committee [APMC] has made it illegal for retail stores, wholesalers, and mall owners to buy vegetables straight from farmers.

In 2003, the Indian government created a model Agricultural Produce Market Committee (APMC) Act in an effort to start reforming and making the agricultural markets in States uniform.
This Act's provisions included:

• channels for new markets other than APMC markets
• marketplaces for private wholesale purchase directly
• An agreement between farmers and buyers

As per the APMC Act of 2003, the Market Committees were accountable for:

• Ensuring transparency in the market area's pricing structure and transactions
• providing farmers with market-driven extension services
• Ensuring farmers receive payment for their produce sold on the same day
• Encouraging agricultural processing to raise the produce's valuable
• Announcement of the dates and availability for the public when the agricultural product is marketed
• Public-Private Partnerships (PPPs) in various markets are being encouraged and established.

The government introduced eNAM and the APMC Act of 2003 to address the issues listed below regarding APMC.

• fragmentation of the market
• High market rates or incidents related to fees
• Few marketplaces
• Reduced credit limit
• Restrictions apply to licenses.
• Unbalanced market intelligence
• Farmers receiving less money and brokers paying more
• Insufficient marketing support systems

In order to establish a single national market for agricultural products, all of India's APMC mandis are connected via the National Agriculture Market (NAM), an electronic trading platform. All APMC-related data and services are available in a single window on the e-NAM portal, including:

• arrivals of goods and their pricing,
• proposals to purchase and sell, and
• other services, like the ability to respond to trade offers

While agricultural produce is still moving through the mandis, the NAM reduces information irregularity and transaction costs. The agri-marketing legislation of each state, which separates the state into market regions overseen by individual Agricultural Produce Market Committees and enforcing their own set of marketing rules, including fees, can be followed by the states in managing agriculture marketing.
The benefits that eNAM provides to APMC are:

• Digitally recorded financial information.
• Minimizing the number of employees needed.
• Complete trading statement.
• Recording of the arrival of produce in real time.
• Analyze arrival, trade activity, and cost patterns.
• Free software to automate transaction recording and integrate systems.

• The APMC Act (Agricultural Produce Marketing Committee) 2003 was to be replaced by the Model Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 (APLM act), which was suggested in April 2017.
• By helping farmers contact with customers directly so they may find the greatest price for their commodities, the Act seeks to be an agricultural reform
• Every 80 kilometers, a controlled wholesale agri-market is to be established, according to the new model law.
• It has been suggested that licenses be given to new private participants and dealers who create a wholesale market in order to carry this out.
• Cold storages, private market yards, and warehouses would all be permitted to operate as controlled marketplaces.
• The state's regulated agri-market will be open to transactions by farmers and traders. There aren't any additional costs for distinct markets.
• By eliminating the notion of a "notified market area" from the Agricultural Produce and Livestock Market Committee's regulation (APLM), this legislation ends market fragmentation within the State/Union Territory (UT).
• The Act permits geographically unlimited trade in agricultural products, including cotton, horticultural crops, cattle, fisheries, and poultry, in addition to cereals, pulses, and oilseeds.

The Agricultural Produce Market Committee's shortcomings are as follows:

• APMC monopoly: Better clients are closed away to farmers, and original suppliers are closed off to consumers.
• Entry barriers: The cost of a license is very expensive in many markets. In several markets, farmers were not allowed to operate. Furthermore, apart from the license fee, the stores' value and rent are relatively high, which inhibits competition. Typically, APMC is run from the village or city by a select elite group.
• Cartelization: It is a common occurrence for agents within an APMC to band together in order to intentionally avoid making higher bids. Produce is purchased for a price that was made up, then sold for a higher amount. The harvest is subsequently divided among the participants, keeping farmers in the dark.
• High levies, taxes, and commissions: Farmers' expenses are increased by their need to pay marketing fees, commissions, and the APMC cess.

• A revised version of the Model Agriculture Act was proposed in May 2018 and is called the Model Agriculture Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2018.
• The previously mentioned Act brought the idea of contract farming to India for the first time. In India, the Act served as a model law for contract farming.
• Contract Farming (CF) is defined as "a farming system in which bulk purchasers, including agro-processing/exporting or trading units, enter into a contract with the farmer(s) to purchase a specified quantity of any agricultural commodity at a pre-agreed price."

• Rather than regulating, the Act is encouraging and persuasive.
• The advantages of contract farming for farmers were particularly highlighted in the Act
• Introduction of production, delivery, and pre-production services under a service contract.
• The Act excluded contract farming from the APMC Act's jurisdiction.
• For contracted producers, crop and livestock insurance is in existence.

The Indian government enacted three acts in 2020, comprising reforms however these were withdrawn after nation wide protests-

• The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act
• The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020
• The Essential Commodities Amendment Act

Considering the fact that cartelization has been a significant problem for APMCs, farmers opposed these Acts because they believe they will deteriorate APMC conditions and weaken the Minimum Support Price. This has led to protests by farmers in Punjab, Haryana, and the western regions of Uttar Pradesh.

Modern farming methods produced excess yield, which altered the way Indian agriculture was done for subsistence. Roughly 33% of the production of food grains and pulses, and almost all of the production of cash crops like cotton, sugarcane, oilseeds, and so on, are sold after the farmers' needs for their own use are satisfied. An enhanced marketing system will accelerate the growth of agro-based companies, especially in the processing sector.

Numerous laws currently in effect aim to address various issues as intended by current reforms, such as the Model Agricultural Produce and Livestock Marketing (promotion and facilitation) Act, 2017, the Model Contract Farming Act, 2018, the electronic national agriculture market (eNAM), and the Model Agriculture Land Leasing Act, 2016.

However, the fact that agriculture is a state topic makes it difficult for these reforms to actually take effect. Therefore, adhering to the cooperative federalism spirit is necessary to make India's farmers really Atmanirbar.