Lok Sabha Question No. 3434 (UNSTARRED), answered on 2016-12-06
Subject: Implementation of Agricultural Produce Market Committee Act
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: SUPRIYA SADANAND SULE, DHANANJAY BHIMRAO MAHADIK, VINOD KUMAR BOIANAPALLI, RAJEEV SHANKARRAO SATAV, BAIJAYANT "JAY" PANDA, RAMDAS CHANDRABHANJI TADAS, VIJAYSINH MOHITE PATIL, GOWDAR MALLIKARJUNAPPA SIDDESHWARA

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO.3434

TO BE ANSWERED ON THE  6 TH  DECEMBER, 2016

## IMPLEMENTATION OF AGRICULTURAL PRODUCE MARKET COMMITTEE ACT

3434.  SHRIMATI SUPRIYA SULE:

SHRI DHANANJAY MAHADIK:

SHRI B. VINOD KUMAR:

SHRI SATAV RAJEEV:

SHRI BAIJAYANT JAY PANDA:

SHRI RAMDAS C. TADAS:

SHRI MOHITE PATIL VIJAYSINH SHANKARRAO:

SHRI G.M. SIDDESHWARA:

Will  the  Minister  of  AGRICULTURE  AND  FARMERS  WELFARE      ‡ãðŠãäÓã एवं  कसान कयाण ½ãâ¨ããè

be pleased to state:

- (a) the  details  of  the  progress  made  by  the  Government  in  implementation  of Agricultural  Produce  Market  Committee  (APMC)  Act  in  various  States  of  the  country along with the benefits accrued from the APMC Act;
- (b) whether  the  Committee  on  Agriculture  of  Ministers  of  States  have  given  any recommendation to implement the Agricultural Produce Market Committee (APMC) Act effectively  in  the  States  to  promote  marketing  reforms  and  if  so,  the  details  of  the recommendations made by the said Committee;
- (c) whether the Government is considering to bring some amendments in the APMC Act  and  strengthen  the  State  Agricultural  Marketing  Boards  by  giving  more  financial powers to provide strong agricultural marketing infrastructure in the rural areas of the country and if so, the details thereof;
- (d) whether it  is  a  fact  that  some  State  Governments  have  delisted  the  fruits  and vegetables from the purview of APMC Act and if so, the response of the Government thereto; and
- (e) the  various  steps  taken  by  the  Government  to  implement  the  APMC  Act effectively in the entire country?

## ANSWER

MINISTER OF  STATE IN THE  MINISTRY OF  AGRICULTURE AND  FARMERS  WELFARE

‡ãðŠãäÓã एवं  कसान  कयाण ½ãâ¨ããÊã¾ã  ½ãñâ  Àã·¾ã  ½ãâ¨ããè (  SHRI PARSHOTTAM RUPALA)

- (a): Twenty  three  States  and  three  Union  Territories    (Andhra  Pradesh,  Assam, Chhattisgarh, Gujarat, Goa,  Haryana, Himachal Pradesh,  J&K, Karnataka,  Madhya Pradesh,  Maharashtra,  Meghalaya,  Nagaland,  Odisha,      Rajasthan,    Tamil  Nadu Telangana,  Tripura,  Punjab,    Jharkhand,  Uttarakhand,  Uttar  Pradesh  West  Bengal,

implementation    as  well.  Further,  three  States  (Arunachal  Pradesh,  Mizoram  and Sikkim) have APMC Acts but have not yet been implemented; while  three  States and four  UTs ( Bihar, Kerala, Manipur, Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu and Lakshadweep) do not have APMC Acts.

Government of India has been reviewing the status of APMC Act with the States and UTs  to ensure implementation. Department of Agriculture, Cooperation & Farmers' Welfare has also circulated a Model APMC Act   in 2003 to   all the States and UTs  so as to incorporate  progressive provisions in the interest of farmers.

APMC Acts  have  been  legislated  to      establish  market  yards  and  market-sub yards  with  the  objective  of  ensuring  reasonable  gains  to  the  farmers  by  creating environment  in  markets  for  fair  play  of  supply  and  demand  forces,  regulate  market practices  and  attain  transparency  in  transactions.  They  have  largely  been  able  to provide  the  platform  for  marketing  of  agricultural  produce  and  discovery  of  prices through the process  of auction.

- (b): Yes, Madam.

Copy of recommendations of Committee of State Agricultural Marketing Ministers on Marketing Reforms is at Annexure-I.

- (c): There is no such proposal.

(d): So  far,  fourteen  States/UT  (Assam,        Chhattisgarh,  NCT  of  Delhi,  Gujarat, Haryana,  Himachal  Pradesh,  Karnataka,    Odisha,    Madhya  Pradesh,    Maharashtra, Meghalaya,    Nagaland,  Rajasthan  and  West  Bengal)  have  deregulated  marketing  of fruits and vegetables, though in varied forms. Government is encouraging the States to deregulate marketing of fruits and vegetables outside the market yards.

(e): Government has constituted (i) Expert Committee during 2000 followed by InterMinisterial  Task Force; (ii) Formulated Model APMC Act and Rules in 2003 and 2007 respectively;  (iii)  Constituted  Committee  of  State  Agricultural  Marketing  Ministers  in 2010 and Group of Expert in 2016; and (iv) has been working with States by holding interactive sessions/ meetings with them in this respect.

## Annexure

## Recommendations of the Committee

## A.      Reforms to Agriculture Markets

- (i) The States should amend their APMC Acts on the lines of Model Act and  notify  Rules  at  an  early  date.  In  order  to  derive  full  benefits  of reforms by small and marginal farmers, States may promote formation of Self Help Groups, Farmers/Commodity Interest Groups, etc;
- (ii) The present system of licensing of traders/commission agents must be substituted  with  a  modern and  progressive  system of  registration  with open and transparent criteria for registration;
- (iii) The amended  APMC  Act  and  Rules  should specify clearly the provisions  for  setting  up  of  Private  Wholesale  Markets  and  Terminal Market  Complex (TMC).   The reformed States may come forward  for development of TMC at various locations to  facilitate the backward and forward linkages;
- (iv) There should be unified single registration for main market (Hub) and Collection Centers (Spokes) for  Wholesale and Terminal Market Complex and the Collection Centers may be treated as sub-yard under the Act;
- (v) The  validity  period  of  unified  single  registration  for  private  wholesale markets including Collection Centers should not be less than five years. It is desirable to keep it for 10 years or even more;
- (vi) The  CEO  of  the  Market  Committee  may  be  appointed  either  from outside  the  cadre  or  existing  personnel  may  be  given  professional training to manage the APMCs efficiently;
- (vii) The post of Director of  Marketing as regulator may be segregated from the post of M.D. of State Agricultural Marketing Board as the Operator/service provider;
- (viii) States may  de-link the provisions of compulsory  requirement of shop/space    for registration of traders / market  functionaries  for increasing the competition;
- (ix) The private markets should be treated at par with the existing APMCs and  licensing/ registration  procedure  should  be  simplified.      The developmental fee to be charged from private markets should be at par with  APMCs  and  it  should  be deposited with respective State Government / Marketing Board and be spent on infrastructure development outside the Mandi;
- (x) There is a need for an appropriate legal and institutional structure with a  developmental  type  of  regulation  to  ensure  orderly  functioning  of agriculture markets and attract investment for infrastructure development in States having no regulation.

## B.    Promotion of Investment in Marketing Infrastructure Development

- (xi) Under Essential Commodities Act, there is  a  need to  have  distinction between genuine service provider and black marketers/hoarders;
- (xii) There should be a stable and long term national policy on storage and movement of agricultural produce.  The contract farming sponsors and direct marketing licensees may be exempted from the stock limits up to six months of their requirement in the interest of trade;
- (xiii) States/Union  Territories    should  waive  off  market  fee  on  fruits  and vegetables  to  encourage  private  investment  and  Government  of  India may  also  consider  compensating  the  losses  of  revenue  during  initial period to the States on this account;
- (xiv) Investment in marketing infrastructure under RKVY   may be   increased to minimum 10-15 % of State RKVY spending in reformed States;
- (xv) In order to enhance the private sector investment in market infrastructure development  projects, there is a need  to provide subsidy/Viability Gap Funding to make these viable and treat them as 'infrastructure  project'  so  as  to  help  attract  FDI  and  ECB  for  their development;
- (xvi) States  may  promote  PPP  Model  for  infrastructure  development  and consider exempting market fee on trade transaction taking place inside the private market yard. However, States can levy minimal user charges preferably  not  exceeding  0.5  %  of  the  value  of  produce  transacted. State Governments should also explore the areas for private investments and PPP projects;
- (xvii) Government of India should constitute a 'corpus fund' for development of  marketing  infrastructure.    A  separate  agriculture  marketing  strategy for North Eastern Region and Hilly areas may be adopted;

## C.     Rationalization of  Market Fee/ Commission Charges

- (xviii) Market fee/cess including rural development fund, social development fund  and purchase tax, etc. should be maximum 2 % of the value and the commission charges should be not more than 2 % for food grains/oilseeds and 4 % for fruits and vegetables;
- (xix) If the direct marketing entrepreneur provides minimum  specified infrastructure  facility  to  the  farmers,  the  concerned  States/APMCs should waive off market fee on such direct marketing;
- (xx) If  a  person  has  already  paid  mandi  fee  in  a  State  where  it  procures agriculture produce and brings the same to another State for processing, no mandi fee should be charged;
- (xxi) Mandi  fee  should  be  levied  on  primary  agricultural  produce  only  and secondary  agriculture  produce  (processed  food  articles)  like  Besan, Maida, and Ghee should not be treated as eligible agricultural produce for  the  purpose  of  levying  Mandi  fee.  However,  user  charges  can  be levied based on the use of infrastructure and services;

## D.    Contract Farming

- (xxii) (a)      District  level  authority  may  be  set  up  for  registration  of  contract farming and no market fee should be levied under it. The APMC should not be the authority for registration / dispute settlement under contract farming;  and

(b)  The  disputes  may  be  settled  within  fifteen  days  and  the  decretal amount of appeal should not be more than 10 % of the amount of goods purchased  under  contract  farming.    Appeal  should  be  disposed  off within  15  days.    No  solvency  certificate  /  bank  guarantee  may  be required  from  private  sponsors/operators,  if  payment  is  made  to  the farmers on the same day of procurement of their produce;

- (xxiii) States should promote small and marginal farmers groups/associations or their company/society to encourage contract farming in the States.

## E.    Barrier Free Markets

- (xxiv) There should be provision for a single window unified single registration for   traders/market functionaries in the State to facilitate free trade;
- (xxv) Market fee may be levied only for the first transaction between farmer and trader and in subsequent sales between trader to trader/consumer, there may be only service charge related to service provided in the State and no market fee be levied for the subsequent transactions;
- (xxvi) States should take Initiative to remove physical barriers like check gates, etc.,  if  any,    and  should  notify  the  type  of  documents  required  for  the producer-seller to be a farmer, so that his consignment is not halted at the check posts / barriers;
- (xxvii) Proposed Agricultural Produce Inter-State Trade and Commerce (Development & Regulation), Bill may, to start with, be applied for a few perishable  agriculture  commodities  and  it  may  be  expanded  for  other commodities depending upon the experience of its working.

## F.  Market Information System

- (xxviii) Efforts  may  be  made  to  ensure  proper  and  regular  data  entry  in AGMARKNET nodes provided in the Regulated Markets in the State for the benefit of the farmers;
- (xxix) In  order to  ensure transparent transactions of agriculture produce and to get the best price for the produce, there is a need for electronic trading in the mandi which  should be at least at district level;

## G.  Grading and Standardization

- (xxx) States  should  provide  Directorate  of  Marketing  and  Inspection  (DMI), necessary inputs such as name  of commodity, quality parameters important for formulation of grade standards for producers' level grading under  Agricultural  Produce  (Grading  &  Marking)  Act,  1937,  which  are relevant and specific to their State;
- (xxxi) To  promote the grading and testing of agricultural produce, States are required  to  take  initiative for establishing  grading  units  with  trained manpower in the market to attend to the work of grading and to promote private  laboratories  for  testing  of  agricultural  produce  on  user-charge basis.

## H.  Other Recommendations

| (xxxii)   | 'Final Report' of the Committee may be presented to the Govt. of India with the request to convene a National-level Conference on agriculture marketing at New Delhi under the Chairmanship of Union Agriculture Minister for consideration of the report;   |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (xxxiii)  | Organize Farmers' Groups to enhance their bargaining power to improve price realization and shorten the food value chain by introducing direct marketing/ sourcing of agriculture produce from the farmers to the consumers and processors;                  |
| (xxxiv)   | Central Government needs to have a more consistent stand in their import-export policy as any sudden switch-on and switch-off in policy impacts the farmers adversely.                                                                                       |

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