End of a monopoly

Context – Central Governments initiative to reform APMC is a welcome step, but it should have come from the states as “Agriculture” and “Markets and Fairs” fall under the State List of the Seventh Schedule.

Centre’s initiative

• Constitutional  provision: Centre can enact a law using the provisions of entry 33 of the Concurrent List dealing with agricultural produce, including “foodstuffs”, “cattle fodder” and “raw cotton”.
• Examples of political leadership at the Centre 

• Green Revolution of 1966: Approved the import of 18000 tonnes of seeds of high-yielding semi-swarf wheat varieties from Mexico by the Central Govt.
• Nod to Bt cotton cultivation in 2002

Issue with Agriculture Marketing in states

• Seller: State APMC laws permit first sale of farm produce to take place only in notified mandis within the particular tehsils or talukas.
• Buyers: need to obtain individual licenses from each APMC in order to transact.
• Single unified market licenses: by some states which allow direct procurement from farmers but are required to pay APMC fee irrespective of using the infrastructure of the local mandi.
• Commission agents: mediate between sellers and buyers in absence of national market for agricultural commodities which goes against Article 301 of the Constitution (freedom of trade and commerce “throughout the territory of India”)

Way forward

• Maintaining spirit of cooperative federalism: Centre must make clear the objective behind its proposed law is not to dismantle APMCs but reform APMC based on choice of both farmers and buyers.
• Farmers will continue to bring their produce to mandis that have good infrastructure (auction platforms, weighbridges, godowns, etc) and where they are likely to find more buyers (Andhra Pradesh’s Guntur Mirchi Yard for chilli and the Unjha APMC of Gujarat for jeera).