The reforms that farming really needs 

News: Central government repealed three farm laws that it introduced in the year 2020. This has again brought the focus to the APMCs (Agricultural Produce Market Committee) where the majority of the first time sale of farmer’s produce takes place.

It has been widely acknowledged that APMC markets across the country suffer from various irregularities and are in need of reforms. 

What have been previous initiatives to improve the working of APMCs? 

Model APMC Act of 2003 and APLM (Agricultural Produce and Livestock Marketing) Act of 2017 have been some major efforts by the successive governments to improve functioning of the APMCs.

Although they have partially resulted in the opening of alternative marketing channels for farmers, several shortcomings still exist. 

What are the reforms required in APMCs? 

Number of Markets: Currently the country has about 2,477 principal regulated markets while according to a 2004 recommendation of National Commission on Farmers there is need for approximately 41,000 markets to enhance market access to farmers.  

This will also help in maintaining density of regulated markets in the country. The commission recommends that a regulated market should be available to farmers within a radius of 5 km. Currently, farmers travel on an average of 50-100 km to sell their produce.  

Infrastructure facilities: Although there are provisions for quality testing of produce in laboratories, however, only a very small fraction of the total produce is assessed in labs . 

The rest of the quality testing takes place through traditional methods of examining the produce by hand. To overcome this, APMCs can adopt artificial intelligence machines for quality testing in order to hasten the testing process. 

e-NAM: Although the majority of the country is integrated to the e-NAM, but the market integration to it is limited, with no benefits accruing to farmers. A significantly lower share of trade in APMCs takes place on e-NAM and here too it is the traders who benefit from it and not the farmers. Farmers do not have any knowledge of digital media to benefit from the perks of online trading, and in this case benefit goes to the traders who trade in both online and offline platforms. 

There is need for Digital interventions and training services to increase farmers’ integration into e-NAM-enabled markets. 

MSP as the starting bidding price: Ideally, bidding in APMCs is supposed to start at the MSP for products that are covered under the MSP programme, but traders manipulate and exhibit a tendency to fix a price below the MSP, citing poor quality. 

To ensure that the minimum support price (MSP) is the starting price for bidding, there is need for some mechanisms to ensure that the prices do not fall below MSP by a certain percentage, or strict adherence to quality checks need to be implemented. 

Traders paying fee: In many APMCs it is the traders who have to pay commission agents and not the farmers. However it is the farmer who has to ultimately bear the loss as traders can further depress the price margin received by farmers to cover for the fee they paid. 

Direct selling provision: There is a need to facilitate farmers so that they are able to take the benefit of the direct selling provision of the model APMC act. Apart from this, the existing APMC infrastructure should be effectively regulated. This will provide an edge to farmers, and they can also use APMC as a mode for bargaining. 

Source: This post is based on the article “The reforms that farming really needs” published in Indian express on 23rd Feb 2022.