COVID-19/GOVERNANCE
the Essential Commodities Act, 1955 to help farmers get better price for their produce. It would be used to deregulate trade in cereals, pulses, oilseeds, potatoes and onions—no stock limits would apply for food processing units, value-addition corporations and exporters (see ‘Non-essential amendments’,
Related to agriculture markets, the second intervention would provide marketing choices to farmers. A Central law to provide barrier-free interstate trading of farm produce is also on the cards. At present, farmers have to sell their produce to licensees at Agricultural Produce Market Committees (APMCs). The Agricultural Produce Market Regulation Act, 2003 mandates that notified agricultural commodities can be traded only at specified market areas or APMCs, rather than in the open market. “I don’t call these reforms. It is just an attempt to get rid of the Minimum Support Price (MSP) and Public Distribution System (PDS) regime,” says food and agriculture policy analyst Devinder Sharma. “The MSP offered in APMC is a better mechanism for price discovery than the markets. Thanks to the procurement undertaken by these APMC
India has escaped food crises and we have managed to keep buffer stock during the lockdown,” he says. “If PDS
stops, its requirement will stop, and the government doesn’t have to do procurement. If procurement is not done, there is no need for paying MSP. If that happens, then you do not need the APMCs too,” he argues.
“These are clear indications that the government is withdrawing from purchasing farmers’ produce and giving the job to private players,” says Manpreet Singh Grewal, adviser to the Punjab Agricultural University Kisan Club. Private players are likely to force small and marginal farmers to settle for low prices. Rajaram Tripathi, president, All India Farmers Alliance, says if the government’s objective is to ensure better prices for farmers, it must penalise the buying of produce below MSP.
THERE ARE CLEAR INDICATIONS THAT THE GOVERNMENT IS WITHDRAWING FROM PURCHASING FARMERS’ PRODUCE AND GIVING THE JOB TO PRIVATE PLAYERS, SAYS MANPREET GREWAL, ADVISER TO PUNJAB AGRICULTURAL UNIVERSITY KISAN CLUB
ATTEMPTS TO AMEND APMC ACT
In April, NITI Aayog recommended suspension of the APMC Act for six months. It is not the first such attempt. In 2003, the government had proposed the Act to mandate direct purchase from farmers, private wholesale markets and contract farmers. In 2017, the Ministry of Agriculture and Farmers Welfare brought out the Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act. This legislation tried to break the hegemony of and create a national common market for agricultural products by allowing large buyers like food processing companies and retail chains to purchase directly from farmers. The aim was to reduce the number of agents in the supply chain and help farmers capture a higher share of the final price.
The Centre has been pushing states to adopt these changes but with little success. States get a good amount as tax from says Pratap Singh Birthal, professor, National Institute of Agricultural Economics and Policy Research, Delhi. In the last two years, Maharashtra tried twice to amend the Act, but failed due to protests from APMCs.
Reforms in the APMC Act are crucial. The APMC traders (commission agents) are known to monopolise trade that has prevented development of a competitive marketing system. “There are several intermediaries in the supply chain. So there is much difference in what the consumer pays and what the farmer gets. Even the fee that the traders should pay is mostly deducted from the farmers’ final payment,” says Birthal.
APMC markets are dens of corruption and blackmail for poor farmers, says Alok Verma of Bharatiya Kisan Union, Uttar Pradesh, adding that “farmers do not even get MSP”. But can allowing private players and retailers solve the problem? The experience in Bihar speaks otherwise. The state revoked the Act in 2006 to invite private investment. In 13 years, the situation only worsened. Farmers do not get MSP there either, says Sharma. No one is interested in creating a competitive market because private players just want to feed off the laid structure of regulated APMCs, he adds.