CII today arranged a Workshop on Reforms in the APMC (Agricultural Produce Market Committee) Act, and its effect in the Southern States. This is an effort of the Agri Organization Sub-Committee, CII-Southern Area.
Speaking at the celebration, Mr. Shankarlal Expert, Chairman-International Society for Agricultural Marketing said Agricultural sector remains in immediate requirement of reforms by the respective State federal governments to assist drive the economy to a greater growth rate that is anticipated by the policy makers, but a detailed program for reforms in this essential sector is yet to emerge. For this reason, the requirement for Agriculture to be made a main topic and not a state subject, therefore alienating it from politics, stated Mr. Guru. Contract farming need to be encouraged as it will assist bring technology and modern-day practices into the agriculture sector - suggested Mr. Master.
The APMC Act in each state of India requires all agricultural products to be sold only in federal government - controlled markets. These markets impose considerable taxes on buyers, in addition to commissions and fees taken by intermediaries, but generally provide little service in locations such as price discovery, grading or inspection. A crucial impact of this regulation is the inability of private sector processors and sellers to incorporate their business straight with farmers or other sellers, eliminating middlemen while doing so. Farmers likewise are not able to lawfully participate in agreements with buyers. This leaves no incentives for farmers to upgrade, and prevents private and foreign investments in the food process sector.
Likewise dealing with the audience was Mr. Sivakumar, Chairman Agri Service Sub-Committee, CII-Southern Region and President - Agri, ITC Ltd. Said that Agri company in India is at a transition point. Having sailed through the scarcity economy to an economy with surplus in grains, it is very important that Federal governments at the Centre and State recognize the requirement for inclusive growth to take farming forward in India. Setting the context for the day's conversation, Mr. Sivakumar highlighted that in spite of employing about 57% of the population of the country, agriculture on contributes 27% to the GDP of India. This distortion makes farming not a profitable employment generator and for this reason, keeping with the worldwide view, India requires to take chances in agri-exports sector. Agreement farming and direct marketing to retail chains and processing systems are the requirement of the hour he stated. Laws to equal these requirements are needed, which need alternative marketing mechanisms. Hence, reforms in the APMC Act are advised in various fields, he included.
Making a discussion on "Aligning State Policies with emerging brand-new marketing models", Prof. S Raghunath from the Indian Institute of Management-Bangalore, stressed the need for an effective and efficient distribution system for agri-produce and provision for supply-demand openness. Since the main objective of the APMC Act was to prevent exploitation of farmers by different intermediaries, reforms were required in the Act, with altering face of agriculture and the agricultural supply chain, believed Prof Raghunath. India is the largest producer of vegetable on the planet, with a total share of 15% of worldwide produce. 8% of world's fruits are produced in India, ranking it 2nd on the planet market. In spite of this, there is a high cumulative waste of 40% in India, informed Prof. Raghunath. Inadequate infrastructure and lack of organized supply chain were the main cause for such a disparity, he stated. Therefore, reforms in this sector need to catch up with the speed of development in the economy and dis-intermediation and involvement of arranged players in the sector will eliminate the lacunae, believed Prof. Raghunath.
Centre asks states to change APMC Act
In a relocate to enable farmers to straight offer their produce to industry, contract farming and establishing of competitive markets in personal and cooperative sector, the Centre has actually asked the state federal government to modify the Agricultural Produce Marketing Act.
Under today Act, the processing market can not buy directly from farmers. The farmer is likewise limited from participating in direct contract with any producer because the fruit and vegetables is needed to be canalised through regulated markets. These restrictions are functioning as a disincentive to farmers, trade and markets.
The government has just recently authorized a main sector scheme entitled "Development/strengthening of agricultural marketing facilities, grading and standardisation."
Under the plan, credit connected financial investment subsidy shall be provided on the capital cost of basic or product specific facilities for marketing of farming commodities and for strengthening and modernisation of existing farming markets, wholesale, rural routine or in tribal areas.
The plan is connected to reforms in state law dealing with farming markets (APMC Act). Support under the new scheme will be provided in those states that change the APMC Act.
The Centre has asked the state governments to notify as to whether required modifications to the APMC Act have been performed, in order to notify the reforming states for applicability of the plan.
In addition to the Centre, the market is also thinking about the change to the APMC Function https://www.balotrade.com/furniture-c1 as it restricts the development of trade in agricultural commodities.
"The policy regime referring to internal trade is particularly restrictive. The agricultural sector continues to be hamstrung by a plethora of controls, which were introduced during the period of scarcities," said the PHDCCI.
Meanwhile, a decentralised system of acquiring wheat and rice would make the general public Circulation System more cost effective, the government has actually stated.