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Ordinance to Check APMCs: Gujarat

  • 12 May 2020
  • 5 min read

Why in News

Recently, Gujarat’s state government has cleared the Gujarat Agricultural Produce Markets (Amendment) Ordinance 2020.

  • It has ended the monopoly of state-run Agricultural Produce Market Committees (APMCs) and has allowed private entities to set up their own market committees or sub-market yards.

Key Highlights of the Ordinance

  • Restrictions on Jurisdiction: The ordinance restricts the jurisdiction of APMCs to the physical boundaries of their respective marketing yards and they can levy cess only on those transactions, happening within the boundary walls of their marketing yard.
    • Earlier, an APMC had jurisdiction over an entire or more than one taluka.
    • Farmers and traders of a particular taluka had to compulsorily sell their produce to their respective APMCs.
    • Apart from that, APMCs levied a cess on any transaction that happened within the marketing yard of the APMC or outside it.
  • Opportunity to Private Markets: The ordinance permits for setting up of private markets.
    • Privately-owned old storages or warehouses can be converted into a sub-market yard or a private market that can compete with the APMCs.
    • Farmers can also set up private markets themselves.
    • To save the smaller APMCs from the negative competition from private markets and a fair play, the state government plans to bring a rule that will not allow the setting up of a private market within a five-kilometre radius of an existing APMC.
    • Also to protect them, the government will collect 20% cess from private players and reroute 14% of it back to the APMCs.
  • Unified Single Trading Licence: The ordinance provides traders with one unified single trading licence through which they can participate in trading activities anywhere in the state.
    • It will allow multiple traders to attract the farmers depending on the quality of their produce and offer competitive prices without the restriction of place and area jurisdiction.
    • For that, amendments allow setting up of portals for e-markets.
  • Expansion in Grievance Redressal: The director of an APMC and the Gujarat State Agriculture marketing board will also start taking care of the grievance redressal which was solely managed by the APMC till now.
  • Expected Benefits to the Farmers: Permission to private entities will lead to competition and will offer the best possible remuneration to farmers for their produce.
    • Till now, APMCs used to form a cartel and decide on what prices to offer to farmers.
    • Farmers will not be bound to sell only to one particular APMC and can choose the one with the best deal in their favour.
  • Viewpoint of APMCs
    • APMCs have not welcomed the decision because it ends their monopoly and allows private players to enter.
    • The ordinance will also affect revenues because no cess will be collected on transactions outside the physical boundaries of marketing yards.
      • For example, last year, of the ₹2.5 crore earned as market fees, ₹1.5 crore came from transactions that were conducted outside the marketing yard. With the new ordinance in place, this revenue will be lost.

Agricultural Produce Market Committee

  • It is a statutory market committee constituted by a State Government in respect of trade in certain notified agricultural or horticultural or livestock products, under the Agricultural Produce Market Committee Act issued by that state government.
    • Agriculture is a state subject.
  • Objectives:
    • Ensure transparency in pricing systems and transactions taking place in the market area.
    • Provide market-led extension services to farmers.
    • Ensure payment for agricultural produce sold by farmers on the same day.
    • Promote agricultural processing including activities for value addition in agricultural produce.
    • Setup and promote public private partnership in the management of agricultural markets, etc.
  • The Ministry of Agriculture, formulated a model law on agricultural marketing, State Agricultural Produce Marketing (Development and Regulation) Act, 2003 and requested the state governments to suitably amend their respective APMC Acts.
  • Union Budgets of 2014-15 and 2015-16 had suggested the creation of a National Agricultural Market (NAM) following which e-NAM was launched on 14th April 2016 as a pan-India electronic trade portal to link APMCs across the States.

Source: IE

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