Agricultural Produce Market Committee (APMC)
About the Agricultural Produce Market Committee (APMC)
The Agricultural Produce Market Committee (APMC) is an organization established by state governments in India to regulate and promote the marketing of agricultural produce. APMCs are responsible for creating a regulated environment for the buying and selling of agricultural produce, and for providing facilities and services to farmers, traders, and other stakeholders in the agricultural market.
APMCs are typically established at the district or taluka (sub-district) level, and they are usually located near major agricultural production areas. They typically operate under state government control, but the specific laws and regulations that govern APMCs vary from state to state.
Objectives of APMC
- To create a regulated environment for the buying and selling of agricultural produce.
- To provide facilities and services to farmers, traders, and other stakeholders in the agricultural market, such as grading and standardization of produce, warehousing, and transportation.
- To promote fair and equitable prices for agricultural produce through the regulation of prices and controlling the exploitation of farmers.
- To help farmers to access new markets, to achieve better prices for their produce, and to reduce transaction costs
- To ensure the quality of agricultural produce, and to provide grading and standardization services to farmers.
- To promote the development of agricultural markets, by providing infrastructure and other facilities, such as roads, water supply, and electricity.
- To provide price stabilization fund for specific agricultural commodities
Model APMC Act of 2003
The Model Agricultural Produce Market Committee (APMC) Act of 2003 is a model legislation developed by the Government of India to provide a framework for the regulation of agricultural markets in the country. The act is designed to be adopted by state governments as per their requirement, with the goal of creating a unified and streamlined regulatory system for agricultural markets across the country.
Key Provisions in Model APMC Act of 2003
- The creation of a single license system for traders and commission agents in agricultural markets, which replaces the previous system of multiple licenses.
- The establishment of a single-point levy system for market fees and taxes, which replaces the previous system of multiple levies.
- The provision of private market yards and direct marketing as an alternative to the traditional regulated APMC market.
- The permission of electronic trading and e-auction facilities to enhance transparency and competition in the market.
- The provision for the participation of FPOs and SHGs to enable them to get a better price for their produce
- The provision for the creation of a special fund for the development of market infrastructure.
- The provision for a dispute settlement mechanism for the resolution of disputes related to market fees, quality, quantity, and other issues.
- The provision for the state government to fix the minimum support price for certain agricultural products.
Criticism and Shortcomings in the APMC System
The Agricultural Produce Market Committee (APMC) system in India, which regulates and promotes the marketing of agricultural produce, has faced some criticism and shortcomings over the years. Some of the main issues with the APMC system include:
- Lack of competition: The APMC system is often criticized for being a monopoly, as it controls the buying and selling of agricultural produce within a geographical area. This lack of competition can result in lower prices for farmers and higher prices for consumers.
- Limited choice of markets: The APMC system limits the choice of markets for farmers, which can reduce their bargaining power and make it difficult for them to access new markets and achieve better prices for their produce.
- High transaction costs: The APMC system is often criticized for high transaction costs, which can include market fees, taxes, and commissions. These costs can reduce the profitability of farming, especially for small farmers.
- Lack of transparency: The APMC system is often criticized for a lack of transparency, as it is not always clear how prices are determined or how to market fees and taxes are collected. This lack of transparency can make it difficult for farmers to understand how to navigate the system and how to get the best price for their produce.
- Limited facilities: Many APMCs lack basic facilities such as grading, sorting, packaging, cold storage, and transportation.
- Unorganized sector: The APMC system does not cover the unorganized sector of the agricultural trade, which makes it harder for farmers to access markets and receive fair prices for their produce.
- Quality Issues: There are quality issues in APMC markets, as there is no grading and standardization facility available in many APMCs.
- The exploitation of farmers: The APMC system is often criticized for exploitative practices.
e-NAM & APMC
The electronic National Agriculture Market (e-NAM) is an Indian government initiative launched in 2016 to create a unified national market for agricultural commodities by connecting existing Agricultural Produce Market Committees (APMCs) markets through an electronic platform.
e-NAM and APMC have a few similarities and differences
- Both e-NAM and APMC aim to provide facilities to farmers and traders, but e-NAM focuses on the use of digital technologies to create a transparent and efficient market, while APMC focuses on regulation and provision of physical infrastructure.
- e-NAM provides a unified platform for trading of agricultural commodities, whereas APMC markets operate in specific geographical areas.
- e-NAM allows farmers to access a wider range of buyers and markets, whereas APMC markets are more localized.
- e-NAM is open to private markets, whereas APMCs are under the control of state governments.
- e-NAM is a tool for price discovery
Hello, I am Sonu Verma, M.Sc. (Horti.) Agriculture content writer, and an enthusiast who loves to share knowledge. No Culture Without Agriculture.