Indian Economy

Agricultural Produce Market Committee (APMC) Act

Agricultural Produce Market Committee (APMC) Act

 

  • Agricultural Produce Market Committee (APMC) is a statutory market committee constituted by a State Government in respect of trade in certain notified agricultural or horticultural or livestock products, under the Agricultural Produce Market Committee Act issued by that state government.
  • There are about 2477 principal regulated markets based on geography (the APMCs) and 4843 sub-market yards regulated by the respective APMCs in India.[1]
  • The typical amenities available in or around the APMCs are auction halls, weighbridges, godowns, shops for retailers, canteens, roads, lights, drinking water, police station, post-office, bore-wells, warehouse, farmers amenity center, tanks, Water Treatment plant, soil-testing Laboratory, toilet blocks, etc.

Legal Background of APMCs

 

  • Under the Constitution of India, agricultural marketing is a state subject. While intra-state trades fall under the jurisdiction of state governments, inter-state trading comes under Central Government (including intra-state trading in a few commodities like raw jute, cotton, etc.).
  • Thus, agricultural markets are established and regulated mostly under the various State APMC Acts. 
  • Most of the state governments and Union Territories have since enacted legislation (Agriculture Produce Marketing Committee Act) to provide for the development of agricultural produce markets and to achieve an efficient system of buying and selling of agricultural commodities.
  • Except for the States of Jammu and Kashmir, Kerala, Manipur and small Union Territories such as Dadra and Nagar Haveli, Andaman and Nicobar Islands, Lakshadweep, etc. all other States and UTs in the country have enacted such State Marketing Legislations.
  • The purpose of these Acts is basically the same i.e. regulation of trading practices, increased market efficiency through reduction in market charges, elimination of superfluous intermediaries and protecting the interest of producer-seller.
  • Once a particular area is declared as a market area and falls under the jurisdiction of a Market Committee, no person or agency is allowed to freely carry on wholesale marketing activities. APMC Acts provide that first sale in the notified agricultural commodities produced in the region such as cereals, pulses, edible oilseed, fruits and vegetables and even chicken, goat, sheep, sugar, fish etc., can be conducted only under the aegis of the APMC, through its licensed commission agents, and subject to payment of various taxes and fee. The producers of agricultural products are thus forced to do their first sale in these markets.

The main differences in Acts of different states/UTs are noted in the following areas:-

Commodity coverage – A few states cover all the commodities while others provide the list.
Market Committee – There are differences in no. of market committees and the number of members therein, the appointment of committee members etc.

Agricultural Marketing Boards – variations in powers exercised by the Boards in different states i.e. their role vary from advisory to binding.

Demarcation of functions between Director Marketing and Board – Administrative structure for the implementation structure of the Act vary from state to state in terms of functions assigned.

The National Agricultural Market (NAM)

Union Budget 2014-15 and Union Budget 2015-16 had suggested the creation of a National Agricultural Market (NAM) as a priority issue.

  • The National Agriculture Market is envisaged as a pan-India electronic trading portal which seeks to network the existing APMCs and other market yards to create a unified national market for agricultural commodities.
  • NAM is a “virtual” market but it has a physical market (mandi) at the back end.
  • NAM is proposed to be achieved through the setting up of a common e-platform to which initially 585 APMCs selected by the states will be linked.
  • The Central Government will provide the software free of cost to the states and in addition, a grant of up to Rs. 30 lakhs per mandi will be given as a onetime measure for related equipment and infrastructure requirements.
  • In order to promote genuine price discovery, it is proposed to provide private mandis also with access to the software but they would not have any monetary support from the Government.

Also Read: Cartelisation, Agricultural Market Produce Commission (APMC) and National Agricultural Market (NAM)