A
Committee of State Ministers, In-charge of Agricultural Marketing constituted
by Ministry of Agriculture, on marketing reforms submitted its report on 2nd
July, 2013 to the Government. The Committee recommended reforms of the agri
marketing sector in the country including amendment of the State Agriculture
Produce Market Committee (APMC) Acts on lines of Model Act.
The onus for bringing relevant
amendments in the Agriculture Produce Market Committee (APMC) Acts lies with
the Governments of States and Union Territories as agri marketing is a State
subject.
Recommendations of the Committee
A. Reforms to Agriculture
Markets
(i)
The
States should amend their APMC Acts on the lines of Model Act and the reforming
States may also notify Rules, and States may complete the process early. In
order to derive full benefits of reforms by small and marginal farmers, States
may promote formation of Self Help Groups, Farmers/Commodity Interest Groups,
etc;
(ii)
The
present system of Licensing of Traders/Commission Agents must be substituted
with a modern and progressive system of Registration with open and transparent
criteria for Registration;
(iii)
The
amended APMC Act and Rules should specify clearly the provisions for setting up
of Private Wholesale Markets and Terminal Market Complex (TMC) for smooth
development of infrastructure. The reformed States may come forward for
development of Terminal Market Complex (TMC) at various locations in their
States so that facilities of backward and forward linkages could be provided to
the farmers and other entrepreneurs involved:
(iv)
In order
to simplify the procedure and promote private sector investment in development
of Wholesale and Terminal Market Complex in the country, there should be a
Unified Single Registration for main market (Hub) and the Collection Centers
(Spokes). The Collection Centers may be treated as sub-yard under the Act to
provide for a unified Registration system;
(v)
The
validity period of Unified Single Registration for private wholesale markets
including Collection Centers should not be less than five years. It is
desirable to keep it for 10 years or even more. The private agriculture
markets should be given exemption on land ceiling for smooth development of
market infrastructure in the country;
(vi)
Professionals
are required for efficient management of existing markets for which either CEO
of the Market Committee may be appointed from outside the cadre or existing
personnel may be given professional training to manage the APMCs efficiently;
(vii)
There is
a need for independent regulator for market operation for which the post of
Director of Marketing as regulator may be separated from the post of Managing
Director of State Agricultural Marketing Board as the Operator/Service provider
and Director of Marketing should not draw salary and allowances from the State
Agricultural Marketing Board. Thus, the role of service provider and regulator
should be demarcated;
(viii)
States may
de-link the provisions of compulsory requirement of shop for registration of
traders / market functionaries for increasing the competition;
(ix)
The
private markets should be treated at par with the existing APMCs and there
should be simplified procedure for registration/ licensing. The requirement of
the security and bank guarantee should be reasonable to facilitate entrepreneur
for development of need based market infrastructure in the country. The
minimum parameters for setting up of Private Market may be prescribed and
farmers from any market area may come to sell their produce in the market of
their choice. The developmental fee to be charged from private markets should
be at par with APMCs and it should be deposited with respective State
Government / Marketing Board which should be spent on infrastructure
development outside the Mandi;
(x)
Complete
deregulation of markets in the States has actually increased transaction costs
rather than reducing it, and it has not helped in attracting any investment
from private sector. Therefore, there is a need for an appropriate legal and
institutional structure with a developmental type of Regulation to ensure
orderly functioning of agriculture markets and attract investment for
infrastructure development in such States.
B. Promotion of Investment in
Marketing Infrastructure Development
(xi)
Under
Essential Commodities Act, there is a need to have distinction between genuine
service providers and black marketeers/hoarders to encourage investment and
better service delivery to the farmers;
(xii)
There
should be a stable and long term National Policy on storage and movement of
agricultural produce to achieve the objective of Unified National Market. It
is recommended that Contract Farming Sponsors and Direct Marketing licensees
may be exempted from the stock limits up to six months of their requirement in
the interest of trade and facilitating long term investment.
(xiii)
In order to
reduce wastages, promote investment for development of marketing infrastructure
and to ensure smooth movement of perishable horticultural produce across the
country, States/Union Territories should waive off the market fee on fruit and
vegetables and Government of India may also consider compensating the losses
of revenue during initial period to the States on this account;
(xiv)
Investment in
marketing infrastructure under RKVY may be increased to minimum 10-15% of
State RKVY spending in reformed States. Efforts should be made to encourage
private investment in marketing infrastructure outside the APMCs also;
(xv)
In order
to enhance the private sector investment in marketing infrastructure
development projects, there is a need to provide subsidy/Viability Gap Funding
for such investments, being long gestation period projects and treat them “as
infrastructure project” so as to attract FDI and ECB for their development;
(xvi)
States may
promote PPP Model for infrastructure development and exempt market fee on trade
transaction taking place inside the private market yard. However, States can
levy minimum user charges(in lieu of market fee) for developing general
infrastructures like connecting/ rural roads, etc preferably not exceeding 0.5
% of the value of produce transacted for the use of any facilities created by
the States/APMCs. State Governments should also explore the areas for private
investments and PPP projects for market and marketing infrastructure development;
(xvii) The requirement of marketing
infrastructure in the North-Eastern region and Hilly areas is different than
rest of the country. Government of India should constitute a ‘corpus fund’
for development of marketing infrastructure in their areas. A separate
agricultural marketing strategy for North Eastern Region and Hilly areas may be
adopted;
C.
Rationalization of Market Fee/ Commission Charges
(xviii) Market fee/cess including Rural
Development Fund, Social Development Fund and Purchase tax, etc. should be
maximum 2% of the value of the produce and the commission charges should be not
more than 2% for
food grains/oilseeds and 4% for fruit and vegetables;
(xix)
It is
necessary to link the mandi fee with the services and infrastructure being
provided for transaction in agricultural commodities. If the direct marketing
entrepreneur provides minimum specified infrastructure facility to the farmers,
the concerned State/APMC should waive off market fee on such direct marketing;
(xx)
If a
person has already paid mandi fee in a State where it procures agriculture
produce and brings the same to another State for processing, no mandi fee
should be charged;
(xxi)
Mandi
fee should be levied on Primary Agricultural Produce only and not on Secondary Agriculture Produce
(processed agricultural produce) like Besan, Maida and Ghee etc. However, user
charges can be levied based on the use of infrastructure and services;
D. Contract Farming
(xxii) To encourage contracting parties
and simplifying and rationalizing the registration process:
(a) District level authority may be
set up for Registration of Contract Farming and no market fee should be levied
under it. The APMC should not be the authority for registration / dispute
settlement under Contract Farming; and
(b) The disputes may be settled within fifteen days and the decretal amount of
appeal should not be more than 10 % of the amount of goods purchased under
Contract Farming. Appeal should be disposed off within 15 days. No solvency
certificate / Bank guarantee may be required from private sponsor/operator, if
payment is made to the farmers on the same day of procurement of their produce;
(xxiii)
States
should promote small and marginal Farmers' Groups/Associations or their
Company/Society to encourage Contract Farming in the States. Successful
template of Contract Farming may be developed after studying the successful
Models adopted in other countries;
E. Barrier Free Markets
(xxiv) There should be a provision for a
single window Unified Single Registration for traders/market functionaries in
the States to facilitate free trade.
(xxv) In order to move towards barrier
free National market, market Fee/Cess may be levied only for first transaction
between the farmer and trader and in subsequent sales between trader to
trader/consumer, there may be only service charge related to services provided
in the State and no market fee be levied for subsequent transaction;
(xxvi) In some of the States, there are
check-gates for recovery of market fee, which hinder smooth movement of
agricultural commodities and leads to wastages especially in perishables like
fruit and vegetables. States should take Initiative to remove such physical
barriers, if any;
(xxvii) States should notify the type of
documents required for the producer-seller to be a farmer, so that his consignment
is not halted at the check posts / barriers;
(xxviii) Proposed Agricultural Produce Inter-State Trade and
Commerce (Development & Regulation), Bill may, to start with, be applied
for a few perishable agriculture commodities and it may be expanded for other
commodities depending upon the experience of its working;
F. Market Information System
(xxix) Efforts may be made to ensure
proper and regular data entry in AGMARKNET nodes provided in the Regulated
Markets in the State for the benefit of the farmers;
(xxx) In order to ensure transparent
transactions of agriculture produce and to get best price for the produce,
there is a need for electronic trading in the mandi which should be at least at
District level;
G. Grading
and Standardization
(xxxi) There is a need for grading of
agricultural produce before it is sold to facilitate the farmers to fetch the
prices commensurate with the quality. States should provide Directorate of
Marketing and Inspection (DMI), necessary inputs such as name of commodity,
quality parameters important for formulation of grade standards for producers’
level grading under Agricultural Produce (Grading & Marking) Act, 1937,
which are relevant and specific to their State;
(xxxii) To promote the grading and
testing of agricultural produce, States are required to take initiative for
establishing grading units with trained manpower in the market to attend to
work of grading and to promote private laboratories for testing agricultural
produce on user-charge basis.
H. Other Recommendations
(xxxiii) “Final Report” of the Committee
may be presented to the Govt. of India with the request to convene a
National-level Conference on agriculture marketing at New Delhi under the
Chairmanship of Union Agriculture Minister for consideration of the report;
(xxxiv) Organize Farmers’ Groups to enhance
their bargaining power to improve price realization and shorten the food supply
chain by introducing Direct Marketing/ Sourcing of agriculture produce directly
from the farmers to the consumers and processors; and
(xxxv) Central
Government need to have a more consistent stand in their import-export policy
as any sudden switch-on and switch-off in policy impacts the farmers
adversely.
Members from State of
Haryana was of the view that Haryana already has sufficient marketing
infrastructure and perhaps, there may be no need for the private market to come
into the State. That notwithstanding, Haryana would like to see the successful
working model of private market in other States before deciding in this regard.
This
information was given today by Minister of State for Agriculture and Food
Processing Industries, Dr. Sanjeev Kumar Balyan in a written reply to Lok Sabha
questions.
MP:
SS: CP: recommendations (lok) 8.7.2014