BackMaharashtra govt puts off APMC reforms
Maharashtra minister for cooperation, Chandrakant Patil, says that the state is not yet ready to carry out the required reforms
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Mumbai: Farmers in Maharashtra will have to wait longer to be free to sell their produce to their preferred buyer as the state government is still reluctant to reform the Maharashtra Agriculture Produce Marketing (Development and Regulation) Act or APMC Act.
State minister for cooperation, Chandrakant Patil, said on Thursday that the state was not yet ready to carry out the required reforms.
Currently, states have their own version of APMC Act which determines the market structure such as who can buy and sell to whom and the charges to be paid at each stage.
The centre had asked all states to amend their APMC Acts and break the monopoly of APMC traders—a formidable political lobby—over farm produce. For a start, it had asked states to at least de-control perishable commodities like fruits and vegetables from the APMC regulations so that a direct market between farmers and consumers could be established.
So far only three states—Madhya Pradesh, Andhra Pradesh and Karnataka—have amended their APMC Acts. Patil said Maharashtra would insist on a solution that protects the interests of both, the farmers and the APMC traders.
“Farmers have complained that the various APMC levies and commission they have to pay to bring their produce to APMC markets work out to 10% of the cost of the produce. But we have also found that not many farmers actually bring their produce to the APMC markets," Patil said.
APMC traders have opposed changes to the act because they fear it could lead to closing down of APMC markets, the minister said. “We will go to the centre and ask why it is insisting on this reform. There has to be solution that protects the interests of both farmers and APMCs," he added.
Last week, APMC traders across Maharashtra had warned the state against carrying out this reform. The APMCs in several states in India including Maharashtra have resisted amendments to the APMC regulations which strike at the stranglehold of traders licensed by the APMCs to purchase and sell farm produce on APMC market yards only.
To be sure, Maharashtra has made some important amendments to its APMC Act of 1963 to provide farmers and bulk buyers of farm produce with some choice outside APMC markets. For instance, a 2006 amendment allowed buyers outside APMC to buy directly from farmers provided they have a direct marketing license issued by the Pune-based Maharashtra State Agriculture Marketing Board (MSAMB).
These buyers also have to pay 1% (of the transaction cost) cess to the state. For instance, big retail chains like Future Group and Reliance Fresh directly buy from farmers in Maharashtra using the direct marketing license. But since 2006, not more than 100 such licenses have been issued because a key perquisite is that the purchaser has to have proper warehousing infrastructure.
“The APMC monopoly has meant that the farmer does not have a very good choice," said a co-operation department official requesting anonymity.
The reform being pushed by the centre, however, proposes to do away with this license condition and gives a complete freedom to farmers to sell their produce at multiple markets to buyers of their choice.
MSAMB managing director Milind Akre said the APMC traders are opposing the reform apparently because it challenged their monopoly.
“The reform not only seeks to end their monopoly but also proposes to create multiple competitive markets for farmers," he said.
The reform has also been proposed to establish a direct interface between farmers and consumers that would help both. “If farmer has the right to choose from among many buyers, that would create competition but that is what the APMC is afraid of," the co-operation department official cited above said. He said the APMC markets were “a very sensitive political constituency that no government wants to antagonize".
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