CII today organized a Seminar on Reforms in the APMC (Agricultural Produce Market Committee) Act, and its effect in the Southern States. This is an effort of the Agri Organization Sub-Committee, CII-Southern Region.
Speaking at the occasion, Mr. Shankarlal Guru, Chairman-International Society for Agricultural Marketing said Agricultural sector remains in immediate requirement of reforms by the particular State governments to help drive the economy to a higher growth rate that is expected by the policy makers, but a detailed program for reforms in this essential sector is yet to emerge. Hence, the need for Agriculture to be made a central topic and not a state subject, therefore alienating it from politics, stated Mr. Expert. Contract farming should be encouraged as it will assist bring technology and modern practices into the agriculture sector - suggested Mr. Expert.
The APMC Act in each state of India requires all farming items to be offered only in government - regulated markets. These markets enforce considerable taxes on buyers, in addition to commissions and charges taken by intermediaries, but usually offer little service in locations such as price discovery, grading or examination. A crucial impact of this policy is the failure of economic sector processors and retailers to integrate their enterprises straight with farmers or other sellers, removing intermediaries while doing so. Farmers also are unable to lawfully participate in agreements with purchasers. This leaves no rewards for farmers to upgrade, and hinders personal and foreign investments in the food procedure sector.
Likewise addressing the audience https://www.balotrade.com/apparel-c1 was Mr. Sivakumar, Chairman Agri Company Sub-Committee, CII-Southern Area and Chief Executive - Agri, ITC Ltd. Said that Agri company in India is at a shift point. Having actually sailed through the shortage economy to an economy with surplus in grains, it is essential that Governments at the Centre and State recognize the need for inclusive development to take agriculture forward in India. Setting the context for the day's conversation, Mr. Sivakumar stressed that in spite of using about 57% of the population of the country, agriculture on contributes 27% to the GDP of India. This distortion makes farming not a lucrative employment generator and hence, keeping with the worldwide view, India needs to carve out opportunities in agri-exports sector. Agreement farming and direct marketing to retail chains and processing systems are the requirement of the hour he said. Laws to keep pace with these needs are needed, which need alternative marketing mechanisms. Hence, reforms in the APMC Act are advised in numerous fields, he included.
Making a discussion on "Lining up State Policies with emerging new marketing designs", Prof. S Raghunath from the Indian Institute of Management-Bangalore, highlighted the need for an efficient and effective distribution system for agri-produce and provision for supply-demand openness. Because the primary objective of the APMC Act was to prevent exploitation of farmers by numerous intermediaries, reforms were needed in the Act, with changing face of agriculture and the farming supply chain, believed Prof Raghunath. India is the largest manufacturer of vegetable on the planet, with an overall share of 15% of worldwide fruit and vegetables. 8% of world's fruits are produced in India, ranking it second on the planet market. In spite of this, there is a high cumulative waste of 40% in India, informed Prof. Raghunath. Insufficient facilities and lack of organized supply chain were the primary cause for such a variation, he stated. Therefore, reforms in this sector requirement to overtake the rate of advancement in the economy and dis-intermediation and participation of organized players in the sector will eliminate the lacunae, believed Prof. Raghunath.
Centre asks states to change APMC Act
In a transfer to permit farmers to straight offer their produce to market, contract farming and setting up of competitive markets in private and cooperative sector, the Centre has actually asked the state federal government to modify the Agricultural Produce Marketing Act.
Under today Act, the processing market can not buy directly from farmers. The farmer is likewise restricted from participating in direct agreement with any manufacturer due to the fact that the produce is required to be canalised through regulated markets. These constraints are serving as a disincentive to farmers, trade and markets.
The federal government has recently approved a central sector plan entitled "Development/strengthening of farming marketing facilities, grading and standardisation."
Under the plan, credit connected financial investment subsidy will be supplied on the capital cost of basic or product specific infrastructure for marketing of agricultural commodities and for strengthening and modernisation of existing agricultural markets, wholesale, rural regular or in tribal locations.
The scheme is connected to reforms in state law dealing with farming markets (APMC Act). Help under the new scheme will be offered in those states that change the APMC Act.
The Centre has actually asked the state governments to notify regarding whether essential modifications to the APMC Act have been carried out, in order to notify the reforming states for applicability of the scheme.
Along with the Centre, the industry is likewise interested in the change to the APMC Act as it restricts the development of trade in agricultural products.
"The policy regime referring to internal trade is especially restrictive. The farming sector continues to be hamstrung by a wide variety of controls, which were presented during the period of lacks," stated the PHDCCI.
On the other hand, a decentralised system of procuring wheat and rice would make the Public Circulation System more cost reliable, the government has actually said.