Home / Industry / Agriculture /  APMC reforms in Maharashtra hit a roadblock

Mumbai: Maharashtra’s first round of reforms to free the trade in fruits and vegetables from the clutches of agriculture produce marketing committee (APMCs) was smooth, raising farm incomes and earning praises from NITI Aayog. The second, to deregulate foodgrains, cereals and oilseeds, is turning out to be hard.

Legislators from both ruling and opposition parties have opposed the proposed deregulation, even as an 11-member committee to study it prepares to submit its final report in a fortnight. “The chief minister and cabinet would take a final call," minister of state for agriculture and marketing who heads the committee, told Mint.

A senior minister from the ruling Bharatiya Janata party (BJP) told Mint the government was still committed to agriculture marketing reforms but that “it would also have to take on board the concerns of legislators in an election year". The minister, who did not want to be named, said the government was not sure if this was the right time to take on “well-entrenched and powerful" APMC lobbies.

The government committee was formed in October 2017 to study the possible impact of deregulation of foodgrains, oilseeds and cereals on APMC markets and stakeholders such as traders, labourers and commission agents. The committee was also asked to estimate the benefits for farmers and consumers from deregulation.

Currently, under the Maharashtra APMC Act, all farm produce except vegetables, fruits and sugarcane, must be sold at APMC markets or other designated markets. In July 2016, the state government amended the Act to deregulate vegetables and fruits. The next month, it launched a scheme to establish weekly farmers’ markets to directly sell produce, unlike in the regulated markets where a hierarchy of intermediaries fixes the price, charges various fees, and sells the produce to wholesale traders who then sell it to retailers. Though most vegetables and fruits produced in Maharashtra still trade at APMC markets, deregulation has given farmers direct access to consumers.

A Nationalist Congress Party (NCP) leader and former minister, who is closely affiliated to an “A" class APMC (with a turnover of Rs1 crore or more per annum) said the reform did not take into account the services rendered by APMCs. “The APMCs have existed since 1963 and there is a good reason they have been around for such a long time. Reform is welcome but it cannot endanger an existing structure. Our party will oppose this proposal if and when it comes before the legislature," the NCP leader said, requesting anonymity.

Sanjay Kelkar, BJP legislator from Thane and a member of the committee, said deregulation of other commodities would go a long way in raising farmers’ income. “We got evidence of it last year when we organized a foodgrains and cereals festival in Thane where we had more than 300 farmers from Marathwada region who directly sold their produce to consumers. The farmers said never before had their produce fetched such a good price and the consumers said never before had they bought such a high quality produce directly from the growers," Kelkar said.

Khot, who has championed these reforms, said if commodities like foodgrains, oilseeds and cereals are deregulated, it would be a “landmark reform and send out a very positive message to the farmers that the government was in favour of reforms that helped them".

Maharashtra has 306 APMC main markets and 598 sub-markets. An official at the Maharashtra State Agriculture Marketing Board, who did not want to be named, said nearly 80% of the APMC markets were ruled by the NCP and Congress. “Of late, BJP and Shiv Sena have gained control over some APMCs. The representatives of APMCs on the committee, irrespective of their political affiliation, have opposed deregulation," the official said.

Ironically, legislators in the state are opposing this reform when the state government is citing the NITI Aayog’s 2016-17 annual report. The NITI Aayog has developed the first ever ‘Agriculture Marketing and Farmer Friendly Reforms Index’ which ranks states for reforms in agriculture marketing, land lease, and forestry on private lands. Maharashtra, with a score of 81.7 (out of 100), tops the rankings, and NITI Aayog says “the State has implemented most of the marketing reforms and offers the best environment for undertaking agri-business among all the States and Union Territories".

A BJP legislator who is a member of the committee and who did not want to be named said legislators affiliated to APMCs have opposed the proposal, saying it would sound a death-knell for the economy of APMCs. He said the legislators, from BJP and Shiv Sena as well as Congress and NCP, are of the opinion that the reform has not been well thought-through.

Khot pointed out that the fears expressed by the opponents of the first phase of deregulation had been proven unfounded. “Data shows the impact of deregulation of vegetables and fruits has had minimal financial impact on APMC markets, but has meant a lot for farmers. Between July 2015 and July 2016, APMC markets in Maharashtra collected more than Rs175 crore from market fees on vegetables and fruits. After the reform, between July 2016 and July 2017, the fees went down by Rs55 crore but farmers made a business of nearly Rs200 crore during this period," Khot said.

Admittedly, the financial impact of deregulation of food grains, oilseeds, and cereals on APMCs would be bigger because government data says in 2015-16, a drought year with low yields, 306 main APMC markets collected nearly Rs88 crore in market fees and supervision fees, over an inflow of only 60.5 million quintals of these commodities. “In a normal yield year, this income for APMCs would be more than double and they fear they would lose all of it if these commodities are deregulated," said the agriculture marketing official cited above.

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