9 August 2024 : Daily Answer Writing

Q1) The utility of APMCs is not lost despite a plethora of limitations. Discuss and recommend corrective measures for overhauling the APMCs.

(150 Words/10 Marks)

ANS

Agricultural Produce Market Committee (APMC) is a marketing board established by state governments.

Though the APMCs are criticised for limiting free trade in agricultural commodities, their utility is not lost as:

1. APMCs provide a designated place to the farmers for the sale of their products and act as a platform for price discovery.
2. APMCs provide infrastructure for weighing, grading, etc., of the farm produce, aiding in their standardisation.
3. APMCs provides an informal interface between the farmers and arahtiyas, which in absence of institutional help, aids the farmers during duress.
4. The market committees in the APMCs play an important role in the state procurement of farm produce at MSPs.
5. APMCs provide a host of important ancillary facilities to the farmers such as: soil testing laboratories, warehouses, canteens, drinking water, post offices etc.

Despite their benefits, it is argued that the APMCs suffer from a number of limitations, such as:

1. As a result of the monopoly of the APMCs, the free trade in agricultural commodities is restricted.
2. APMCs introduce a host of middlemen between producers and consumers, limiting the price realisation for the farmers due to formation of cartels.
3. APMCs charge exorbitant levies and fail to provide corresponding services to the farmers. Eg: wastage of produce due to lack of cold storage/warehouse facilities.
4. The number of APMCs are inadequate to ensure easy and seamless accessibility by the farmers, especially from hills and hinterlands.
5. APMCs are a market place and at the same time also perform regulatory functions. It leads to challenges in free trade/contract farming.

In light of the aforementioned challenges there is a need to bring reforms in the agricultural marketing:

1. As the country has glided over the issues of food security there is a need to review the utility of Essential Commodities act.
2. Inter-state and intra-state trade outside APMCs should be facilitated to ensure better price realisation.
3. Model farming contract law, should be implemented by the states in order to encourage direct partnership between the corporates and the farmers.
4. APMC reforms are an urgent imperative:
5. Infrastructure in the APMCs for grading, sorting, storage etc., should be improved.
6. Cartelization and monopolisation should be checked.
7. Number of APMCs should be increased.
8. e-NAM framework should be integrated with APMCs to effect better price discovery.
9. Decentralised procurement from the farm gate should be promoted to prevent post-harvest losses. Eg: GrAMs are a step in the right direction.

APMCs are a vital cog in the wheel of agricultural marketing. However, there is a need for a comprehensive overhaul, in order to make them more effective, relevant and farmer-friendly.