Agricultural Produce Marketing Committee Act
Agricultural produce wholesale is governed by the Agricultural Produce Marketing Acts of various state governments. The Agricultural Produce Marketing Committee (APMC) Act empowers state governments to notify commodities, designate markets and market areas where regulated trade occurs, and establish APMCs that are accountable for market functioning. An entire state is divided and declared a market area, with markets governed by Market Committees formed by state governments.
Agricultural produce wholesale is governed by the Agricultural Produce Marketing Acts of various state governments. The Agricultural Produce Marketing Committee (APMC) Act empowers state governments to notify commodities, designate markets and market areas where regulated trade occurs, and establish APMCs that are accountable for market functioning. An entire state is divided and declared a market area, with markets governed by Market Committees formed by state governments.
Objectives
The following are APMC's objectives:
- Creating an effective marketing system.
- Promotion of agricultural processing and exports.
- Specify procedures and systems for establishing an effective infrastructure for agricultural produce marketing.
Creation of New Markets
All markets are established as a result of initiatives taken by state governments. The APMC Act also allows legal persons such as individuals, organizations, companies, growers, and local governments to apply for the establishment of new agricultural markets in a given area. In addition to this regulation, private individuals, farmers, and consumers may open multiple markets in a given market area.
Having said that, growers are not required to sell their products through existing markets managed by APMC. Farmers who fail to bring their produce to the market area for sale are ineligible for election to the APMC.
Specialized Markets
In addition to the existing markets, the Act makes separate provisions for notification of 'Special Markets' or 'Special Commodities Markets' in any market area for specified agricultural commodities to be operated.
Market Committees' Responsibilities
The following are the Market Committees' responsibilities under the APMC Act:
- To ensure complete transparency in the pricing system and transactions in the market area.
- Farmers will receive market-led extension services.
- To ensure payment for agricultural produce sold on the same day by farmers.
- To promote agricultural processing, including value-added activities in agricultural produce.
- To make available information on the arrivals and rates of agricultural produce brought into the market area for sale.
- To establish and promote public-private partnerships in agricultural market management.
Farming under contract
Contract farming is a new concept introduced by the APMC in which processing/marketing firms agree to provide production support at predetermined prices. Among the provisions are:
- All contract farming sponsors must be registered.
- Keeping track of contract farming agreements
- Dispute resolution
- Exemption from market fee levy on produce covered by contract farming agreements
- Indemnifying producers' title/possession over the land from any claim arising from such agreements.
- These provisions allow farmers to sell farm produce directly to contract farming sponsors from their fields without first passing through notified markets.
Marketing Direct
Direct marketing allows farmers to sort, grade, and market their products at the farm gate. This allows farmers to exclude markets that lack all of the necessary services and facilities that contribute to market efficiency.
The direct marketing model has been tried in India through Apni Mandis in Punjab and Haryana, Rythu Bazaar in Andra Pradesh, and Uzhavar Santhai in Tamil Nadu.
The Advantages of Digital Marketing
The following are the advantages of digital marketing in APMC:
- Reach out to wholesalers or traders and meet their specific needs.
- Profit from favorable prices in a dynamic manner.
- Reduce marketing expenses
- Elimination of an excessively long chain of intermediaries
- Price cuts for consumers
- Crop producers will benefit from higher prices.
Market Yard Private Investments
The Act aims to attract private investment in order to build market yards and a post-harvest value chain that includes cold stores, warehouses, and logistics infrastructure. These measures, however, are for high-value and perishable produce such as vegetables, fruits, and livestock products, which contribute significantly to food inflation. Some of the other provisions are as follows:
The Advantages of Digital Marketing
The following are the advantages of digital marketing in APMC:
- Reach out to wholesalers or traders and meet their specific needs.
- Profit from favorable prices in a dynamic manner.
- Reduce marketing expenses
- Elimination of an excessively long chain of intermediaries
- Price cuts for consumers
- Crop producers will benefit from higher prices.
Market Yard Private Investments
The Act aims to attract private investment in order to build market yards and a post-harvest value chain that includes cold stores, warehouses, and logistics infrastructure. These measures, however, are for high-value and perishable produce such as vegetables, fruits, and livestock products, which contribute significantly to food inflation.
Some of the other provisions are as follows:
- Implementing a single market fee
- Resolving disagreements between the private/consumer market and the Market Committee
- State governments are authorized to exempt agricultural products brought for sale in the market area from payment of the market fee.
- Market Committee with the authority to build infrastructure on its own or through a public-private partnership.
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