Hardly the 1991 moment for

Context: The latest reforms in Agricultural Marketing Produce Committee (APMC), Essential Commodities Act(ESA) and Contract Farming amidst coronavirus have not addressed the actual problems and have just reiterated the long-pursued reform.

Myths of Reforms:

• Already Liberal APMC: 17 states have already liberalised their APMC Acts and Bihar and Kerala have even repealed it. 

• Many of them have allowed private markets, introduce unified trading licenses and single point levy of market fee. The problem lies in political interference and not in regulation.

• Ill effects of de-regulation: Allowing Private investment in Bihar has led to deterioration of existing infrastructure and as APMCs revenue dwindled and has also led to proliferation of unregulated markets.
• No issues with market : More than 80% of the farmer’s do not sell their produce in APMC. The problems lie in low demand and not the market. 

• The argument for giving choice to farmers remains valid as long as there are buyers with purchasing powers.

Way Forward

• Increased fiscal spending: To create demand and check on declining international prices. Reiterating the reforms as smokescreen to deflect the attention from the core issue will miss the targets.
• Stop vilifying APMC’s: They continue to play an important role in providing access to market for farmers.

• There is no evidence that farmers received better prices in private Mandis. APMC also lays down roads etc. providing better access to farmers.

• Favorable Macroeconomics: Marketing reforms will not lead to higher price realization if the underlying macroeconomic conditions are unfavorable to agriculture and farmers.