CII today arranged a Workshop on Reforms in the APMC (Agricultural Produce Market Committee) Act, and its impact in the Southern States. This is an initiative of the Agri Organization Sub-Committee, CII-Southern Area.

Speaking at the occasion, Mr. Shankarlal Expert, Chairman-International Society for Agricultural Marketing said Agricultural sector is in urgent need of reforms by the respective State federal governments to help drive the economy to a higher development rate that is expected by the policy makers, however a thorough program for reforms in this essential sector is yet to emerge. Thus, the need for Farming to be made a main subject and not a state topic, therefore alienating it from politics, stated Mr. Master. Contract farming must be encouraged as it will help bring innovation and modern-day practices into the farming sector - opined Mr. Master.

The APMC Act in each state of India needs all agricultural products to be sold just in government - managed markets. These markets impose substantial taxes on buyers, in addition to commissions and fees taken by middlemen, however generally offer little service in areas such as price discovery, grading or examination. A crucial impact of this guideline is the inability of economic sector processors and merchants to integrate their business straight with farmers or other sellers, eliminating middlemen at the same time. Farmers also are not able to legally participate in contracts with purchasers. This leaves no incentives for farmers to upgrade, and inhibits personal and foreign financial investments in the food procedure sector.

Likewise dealing with the audience was Mr. Sivakumar, Chairman Agri Company Sub-Committee, CII-Southern Area and President - Agri, ITC Ltd. Said that Agri business in India is at a shift point. Having cruised through the scarcity economy to an economy with surplus in grains, it is necessary that Federal governments at the Centre and State acknowledge the need for inclusive growth to take agriculture forward in India. Setting the context for the day's conversation, Mr. Sivakumar emphasized that in spite of employing about 57% of the population of the nation, agriculture on contributes 27% to the GDP of India. This distortion makes farming not a financially rewarding employment generator and for this reason, keeping with the international view, India needs to take opportunities in agri-exports sector. Agreement farming and direct marketing to retail chains and processing systems are the need of the hour he stated. Regulations to equal these requirements are needed, which need alternative marketing mechanisms. For this reason, reforms in the APMC Act are advised in various fields, he added.

Making a discussion on "Aligning State Policies with emerging new marketing models", Prof. S Raghunath from the Indian Institute of Management-Bangalore, stressed the need for a reliable and effective distribution system for agri-produce and arrangement for supply-demand openness. Considering that the primary objective of the APMC Act was to avoid exploitation of farmers by various intermediaries, reforms were needed in the Act, with altering face of farming and the farming supply chain, suggested Prof Raghunath. India is the largest manufacturer of vegetable worldwide, with an overall share of 15% of international fruit and vegetables. 8% of world's fruits are produced in India, ranking it second in the world market. In spite of this, there is a high cumulative wastage of 40% in India, notified Prof. Raghunath. Inadequate facilities and lack of organized supply chain were the primary cause for such a variation, he stated. Therefore, reforms in this sector need to overtake the speed of advancement in the economy and dis-intermediation and involvement of organized gamers in the sector will remove the lacunae, believed Prof. Raghunath.

Centre asks states to change APMC Act

In a move to allow farmers to directly sell their produce to industry, contract farming and setting up of competitive markets in private and cooperative sector, the Centre has asked the state federal government to modify the Agricultural Produce Marketing Act.

Under the present Act, the processing industry can not https://www.balotrade.com/hardware-c1 buy straight from farmers. The farmer is likewise restricted from entering into direct agreement with any producer because the fruit and vegetables is required to be canalised through controlled markets. These restrictions are functioning as a disincentive to farmers, trade and industries.

The government has just recently approved a central sector plan titled "Development/strengthening of agricultural marketing facilities, grading and standardisation."

Under the scheme, credit linked financial investment aid shall be offered on the capital expense of basic or product specific infrastructure for marketing of agricultural products and for reinforcing and modernisation of existing farming markets, wholesale, rural periodic or in tribal locations.

The plan is connected to reforms in state law dealing with farming markets (APMC Act). Support under the new plan will be provided in those states that modify the APMC Act.

The Centre has actually asked the state federal governments to inform regarding whether needed amendments to the APMC Act have been carried out, in order to inform the reforming states for applicability of the plan.

Along with the Centre, the market is also thinking about the change to the APMC Act as it restricts the development of trade in farming commodities.

"The policy program referring to internal trade is particularly restrictive. The farming sector continues to be hamstrung by a wide variety of controls, which were presented throughout the age of shortages," said the PHDCCI.

On the other hand, a decentralised system of procuring wheat and rice would make the Public Distribution System more expense effective, the federal government has said.