As veggie rates skyrocket, govt admits to flaws in agri-reforms

Days after delisting fruits and vegetables from the Agricultural Produce Market Committee (APMC) markets, allowing farmers to sell their produce directly to buyers, the Maharashtra government seems to have realised the flaws in what was being dubbed as a "big reform" in the agricultural sector.

Since the implementation of the "reform", supply of vegetables and fruits has declined and prices have skyrocketed. A major reason for the crisis is that most farmers are unable to bring their produce to the cities directly due to the lack of a supply chain. The government's move has been criticised by the Opposition as well.

The traders and middlemen, who the government had thought would come forward to help farmers bring their produce to markets, didn't show any interest due to the hefty Direct Marketing Licence (DML) fee of Rs15 lakh.

Interestingly, the government has delisted but not de-licensed the fruits and vegetables. Realising the deadlock, the government now plans to bring down the licence fee from Rs15 lakh to Rs5 lakh.

The file has been put up before the law and judiciary department. After getting a green signal, it would be put up for public suggestions for a limited period, against the tradition of one month. "We can't wait for one month for issues that affect day-to-day life of common citizens," said sunil Porwal, additional chief secretary, marketing and planning.

There is also a plan to rope in fresh as well as existing traders, who have remained dormant despite having licences due to the powerful APMC mandis.

Porwal also admitted that most farmers were in no position to reach consumers directly. He said, "There are transport and time constraints. But things will change gradually. Farmers will form self-help groups to trade directly.

Private companies and entrepreneurs will also come forward."

Further, the government is planning to issue a revised ordinance soon to ensure that the sale of fruits and vegetables is free of any regulation within as well as outside the APMC markets.

The DML system that bypasses APMC mandis has been available since 2006. It, however, requires a bank guarantee of Rs15 lakh, which aims to ensure that farmers get their payment even when the trader defaults.

Only 200-odd licences, however, have been issued in the last 10 years, supposedly due to the high fee, said sources in the government. Only half of them are active, including big corporates such as Tata, Reliance, Big Bazaar and so on.

The DML transaction is estimated to be just 1-2% of the APMC trade, which is to the tune of ?70,000 crore. The state government had delisted fruits and vegetables from the APMC regulations earlier this month.

The move aimed to reduce middlemen's interference in selling farm produce and to increase farmers' profits. The state has kept both options open – selling fruits and vegetables through market committees and directly to customers.

Traders and head-loaders from most of the 300-odd APMCs in the state, however, have opposed the move. They even organised a strike on July 11 but it was called off later.

Amid all this confusion, a few farmers have complained to the government that their trucks were being stopped at toll nakas. While the government suspects APMC traders to be behind the "illegal detaining", its own machinery to stop such harassment is yet to be in place. Porwal admitted receiving the complaints and claimed his department was looking into it.