In order to give more freedom to farmers to sell their produce, the agriculture ministry has unveiled “The State/UT Agricultural Produce and Livestocks Marketing (promotion and facilitation) Act, 2017” which has defined each state/UT as a single unified market area. The draft law is proposed to overhaul the existing laws. So far 26 states and Union Territories, including Andhra Pradesh, Gujarat, Maharashtra, Karnataka, Rajasthan, Madhya Pradesh and Uttar Pradesh, have fully or partly modified their APMC laws. Other than Bihar, all other states/UTs have agreed to adopt the model Act.
- The model act proposes to curb the role of APMC mandis. The existing APMC mandis are allowed to enforce regulation only in their market yard and thus encouraging private sector players to set up mandis.
- Traders would be able to transact in all markets within a state by paying a single fee. The model law on agricultural marketing would introduce features like single market within a state, private wholesale markets, direct sale by farmers to bulk buyers, and promotion of electronic trading etc.
- As agricultural marketing is a state subject and is governed by their respective Agricultural Produce Market Committee (APMC) Acts, the states are free to adopt portions or the entire model act.
- The state governments as per the draft law are required to appoint an independent entity ‘director of agricultural marketing’ who would function as a sole authority to grant the licence for the establishment of a new market yard in the state concerned.
- The new Act proposes to put a cap on mandi taxes at 1% for foodgrain and 2% for fruits and vegetables as well as commission agent’s levy at 2% of the total transaction cost.
Due to the monopoly of APMCs, farmers do not have a choice to sell their farm produce to multiple buyers. The model act will provide several marketing channels to sell agricultural produce. The model act aims to liberalize trade in farm produce and aid better price realization for farmers.