Friday, 31 August 2012

Agriculture Produce Marketing Committee (APMC) Act

Extract from Economic Survey 2012, pp 83

Agriculture markets are regulated in India through the APMC Acts. According to the provisions of the APMC Acts of the states, every APMC is authorized to collect market fees from the buyers/traders in the prescribed manner on the sale of the notified agricultural produce. The relatively high incidence of commission charges on agricultural / horticultural produce renders their marketing cost high, an undesirable outcome.

This suggests that a single-point market fee system is necessary to facilitate the free movement of produce, bring price stabilization, and reduce price differences between the producer and consumer market segments. As the APMCs were created to protect the interest of farmers it would be in the fitness of things to secure farmers the choice to go to the APMC or not. In the light of this, the Inter-Ministerial Group recommended that the APMC Act be revisited, so that enough flexibility is imparted to farmers to sell their produce. Further, it is important to develop a robust agricultural marketing system through adequate investment - domestic and/or foreign - so as to strengthen the back end infrastructure and reduce wastages.

The Inter-Ministerial Group (IMG) on Inflation convened in 2011 has suggested reforms of APMC Acts to strengthen supply-chain effeciency. Overall, any strategy for strengthening agricultural marketing needs to have a three-pronged objective:
  1. of providing remunerative prices to farmers; 
  2. strengthening efficiencies of supply chain; and 
  3. ensuring that end consumers are charged fair and reasonable prices

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