The great APMC pull back

In November, the Maharashtra government decided to take back the Agriculture Produce Marketing Committee (APMC) Act in the Vidhan Parishad. The Act had been duly passed by the state assembly. The APMC Act, meant to help the farmers, would have gone a long way in improving the economic condition of farmers, saving them from exploitation. 

The history of the APMC Act suggests that for the farmers to sell and for traders to buy, a transparent system has to be in place so that trade goes on smoothly and unorganised farmers, at the receiving end of a system of loot and exploitation, are provided succour.

In the country’s Constitution, agriculture is a state subject. That is why changes in the APMC Act is mandated with the state government. Maharashtra had framed this law in 1963. In every district and tehsil, the state government had allotted land to agriculture food grain mandis. There are a total of 300 agriculture growth trading yards and 600 sub-yards.

There have been significant amendments to this law from time to time. For the smooth running of these mandis, farmers, traders, government representatives and middlemen are included, emphasising on their democratic style of functioning.

These committees, in order to procure agriculture produce, register traders, accepts their bank guarantees and issues licenses to them. They also issue certificates to middlemen. The committees also impose a 1 per cent market cess on traders for buying the produce. If we read the law carefully, we will see that this is a sound step to protect the interests of the farmers, safeguarding their rights.

But it is equally true that with corruption eating into the vitals of the country’s political system, these organisations cannot remain immune. That is why there is always a demand to introduce changes in the APMC Act.

While selling grains, lentils and cotton, anywhere between 1 to 1.5 per cent is paid to brokers and middlemen. When it comes to perishable items like vegetables and fruits, the going rate for brokers is 6 to 7 per cent. From time to time, there is talk to end this system of middlemen and corruption, but as a farmer I am convinced that there is no need to introduce changes or amendments to end corruption in the system of agriculture produce.  What is needed is political will. 

According to marketing committee laws, traders have to pay farmers within 24 hours of the purchase. In reality, traders do not pay farmers for months on end. The farmer, desperate for money, has no option but to turn to the middlemen, who in turn extorts interest from the farmer.

The subject of perishable items like vegetable and fruits is a little more complex. In Delhi and in many states, attempts to finish this system of middlemen has not worked. In some states, kisan markets and Apna markets have been set up for farmers. In Andhra Pradesh, Ramnu bazaars have come into existence. But all attempts to create an interface between the farmers and the buyers, has not worked. 

The main reason for the failure is that a farmer cannot leave his farm and spent time at these specially-created markets. Neither is there any guarantee that the entire produce will be sold off. In Maharashtra, attempts made in this direction since 2016 have not fructified.

Post the 1990 liberalisation and the setting up of the World Trade Organisation (WTO) in 1994, the dominant mood was to end government interference in trade. In 2003, the central government in an effort to make agricultural trade easier and transparent, as well as to link multinational companies and traders directly with the farmers, had send a model law to the states. 

Now the central government, after discussions with the Niti Aayog, has send the amended Market Committee law to all the states. The aim of the government is to turn the agriculture market into one integrated whole under the e-nam, or the Electronic National Market. 

That is why, apart from the existing Market Committees, there is an attempt to allow farmers to not make it mandatory for them to sell their produce in the open market, in addition to creating private markets. Sale proceeds out out of the Market Committee yards will not attract additional levy and industry can buy directly from the farmers. With the assent of the farmer, contract farming is also on the cards. 

It is keeping all this in mind that the Maharashtra government had suggested amendments to the APMC. Yet, such a progressive bill has been taken back. The traders and middlemen have said that their livelihood will be hit. No one will favour the removal of the cess on produce sold outside. 

As a farmer, I am dismayed. If today, the farmer is not getting the price he deserves, what hope does he have of selling directly to the industry and or of getting what is his due under contract farming? There is no public discourse on this crucial subject. 

The Dalvi Committee, set up to examine doubling farmers’ income by 2022, has not even made a mention of the rise and fall of prices. It is a fact that the prices of rice, wheat, cotton, jute and other produce are dictated by international prices. There is an inherent contradiction here: the state government runs the Market Committees while the central government decides on import-export. 

In 2011, under the old system of Market Committees, the trader-middleman lobby bought cotton at Rs 6,000 per quintal. In 2016-17, the same produce is being sold for Rs 4,400 per quintal. So where is the question of doubling farmers’ incomes? Thanks to the devaluation of the rupee, this amount has slipped further. Can Mr Dalvi provide answers to these questions? 

Author is from Shetkari Sangathan