CII today organized a Seminar on Reforms in the APMC (Agricultural Produce Market Committee) Act, and its effect in the Southern States. This is an effort of the Agri Service Sub-Committee, CII-Southern Region.

Speaking at the celebration, Mr. Shankarlal Guru, https://www.balotrade.com/hardware-c1 Chairman-International Society for Agricultural Marketing said Agricultural sector remains in urgent need of reforms by the respective State federal governments to assist drive the economy to a greater growth rate that is expected by the policy makers, however an extensive program for reforms in this crucial sector is yet to emerge. For this reason, the need for Agriculture to be made a main topic and not a state subject, therefore alienating it from politics, stated Mr. Master. Agreement farming need to be motivated as it will assist bring technology and modern practices into the farming sector - believed Mr. Master.

The APMC Act in each state of India needs all agricultural products to be sold just in government - controlled markets. These markets impose considerable taxes on buyers, in addition to commissions and charges taken by intermediaries, however typically supply little service in areas such as price discovery, grading or evaluation. An essential effect of this policy is the inability of economic sector processors and merchants to incorporate their enterprises directly with farmers or other sellers, getting rid of middlemen while doing so. Farmers likewise are unable to lawfully enter into contracts with purchasers. This leaves no rewards for farmers to upgrade, and prevents private and foreign financial investments in the food process sector.

Likewise dealing with the audience was Mr. Sivakumar, Chairman Agri Company Sub-Committee, CII-Southern Region and Chief Executive - Agri, ITC Ltd. Said that Agri service in India is at a shift point. Having cruised through the scarcity economy to an economy with surplus in grains, it is essential that Federal governments at the Centre and State recognize the requirement for inclusive development to take farming forward in India. Setting the context for the day's conversation, Mr. Sivakumar highlighted that in spite of using about 57% of the population of the country, agriculture on contributes 27% to the GDP of India. This distortion makes farming not a profitable employment generator and hence, keeping with the worldwide view, India requires to carve out chances in agri-exports sector. Agreement farming and direct marketing to retail chains and processing systems are the need of the hour he said. Regulations to equal these needs are required, which require alternative marketing systems. For this reason, reforms in the APMC Act are suggested in various fields, he included.

Making a discussion on "Aligning State Policies with emerging new marketing designs", Prof. S Raghunath from the Indian Institute of Management-Bangalore, stressed the requirement for a reliable and effective circulation system for agri-produce and provision for supply-demand openness. Since the primary objective of the APMC Act was to prevent exploitation of farmers by numerous intermediaries, reforms were needed in the Act, with altering face of farming and the agricultural supply chain, opined Prof Raghunath. India is the biggest manufacturer of veggie worldwide, with a total share of 15% of worldwide produce. 8% of world's fruits are produced in India, ranking it second worldwide market. In spite of this, there is a high cumulative wastage of 40% in India, notified Prof. Raghunath. Insufficient infrastructure and lack of arranged supply chain were the primary cause for such a variation, he stated. Therefore, reforms in this sector requirement to overtake the pace of development in the economy and dis-intermediation and participation of organized gamers in the sector will get rid of the lacunae, opined Prof. Raghunath.

Centre asks states to change APMC Act

In a move to permit farmers to straight offer their fruit and vegetables to market, contract farming and establishing of competitive markets in private and cooperative sector, the Centre has actually asked the state government to modify the Agricultural Produce Marketing Act.

Under today Act, the processing industry can not buy straight from farmers. The farmer is also limited from participating in direct contract with any manufacturer because the produce is required to be canalised through controlled markets. These restrictions are functioning as a disincentive to farmers, trade and markets.

The government has actually recently authorized a central sector scheme titled "Development/strengthening of agricultural marketing facilities, grading and standardisation."

Under the scheme, credit connected investment aid shall be offered on the capital expense of general or commodity specific infrastructure for marketing of farming commodities and for reinforcing and modernisation of existing farming markets, wholesale, rural periodic or in tribal locations.

The plan is linked to reforms in state law dealing with farming markets (APMC Act). Assistance under the new scheme will be offered in those states that change the APMC Act.

The Centre has asked the state federal governments to notify regarding whether required changes to the APMC Act have actually been carried out, in order to notify the reforming states for applicability of the scheme.

Along with the Centre, the industry is likewise thinking about the change to the APMC Act as it restricts the development of trade in farming products.

"The policy routine relating to internal trade is particularly restrictive. The farming sector continues to be hamstrung by a huge selection of controls, which were introduced during the period of shortages," said the PHDCCI.

Meanwhile, a decentralised system of acquiring wheat and rice would make the Public Distribution System more cost efficient, the federal government has actually stated.