28-07-2014

S U K H P A L S I N G H

C M A , I I M A

MAKING THE AMENDED

APMC ACTS WORK

apmc/ss/cma/iima/july2014delhi

WHERE IS REGULATION OF AGRI

MARKETS?

• India: 35% of wholesale markets and 25% of all agri

markets

• Karnataka: 30% and 40%; Tamilnadu: 90% and 30%;

AP (old): 100%

• Jharkhand:14% and 25%: MP: 100% and 33%; UP:

50% and 15%

• UK:70% and 90%; Haryana: 35% and 60%; Punjab:

35% and 90%

• Gujarat: 98% and 85%. Maharashtra:33% and 22%

• WB: 14% and 20% and Orissa: 10% and 20%

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THE MYTH AND THE REALITY ABOUT

AMENDED APMC ACTS

• Is the farmer not free to sell anywhere s/he wishes?

• If not, how are food supermarkets procuring? and how is contract farming going on across India? And how are farmers’ markets being held?

• Direct purchase from farmers allowed in: Maharashtra (130), MP (8), Chattisgarh, Karnataka (258) Andhra Pradesh(171), Gujarat (21), Haryana (37), Himachal Pradesh (12), Odisha (46), Punjab (26), Rajasthan (77), Delhi, and Tamilnadu (179).

States/ UTs with no APMC Act: Bihar (repealed w.e.f.01.09.2006),Kerala, and Manipur

MoFPI says 16 states have amended the APMC Act fullyor partially, and have agreed to delist F&V from theAPMC Act! Some have aleady done it

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MAJOR F& V STATES IN INDIA

• AP, Karnataka, Kerala, TN, Bihar, Orissa, WB,Jharkhand, Chattisgarh, MP, Gujarat, Maharashtra, HP, UK, UP, Arunachal, Manipur, Meghalaya, Sikkim, Tripura

• Where are F&V growing fast: AP, Bihar, J’khand, Guj, Haryana, HP, J&K, MP, C’garh, Maha, Orissa, UP, UK, WB, and the NE states

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THE MYTH AND THE REALITY ABOUT

AMENDED APMC ACTS

• Is contract farming not permitted anywhere in

India?

State that permit CF: Punjab, Haryana, HimachalPradesh, UK, Rajasthan, Maharashtra,Gujarat, Chhattisgarh, Madhya Pradesh,Jharkhand, Andhra Pradesh, Orissa, WB,Karnataka, Kerala

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MAKING AGRI MARKETS WORK

� Scrutiny of contracts, public contract terms, and competition in procurement (monopsony)

� Incentivise smallholder inclusion (unlike MoFPI and Pb. Govt. Schemes)

� Link credit to CF, though not mandatory or exclusive (lower interest rates for CF?)

� Exempt F&V crops from APMC rules only for CF and Direct purchase

� Promote Producer Companies to organise/encourage market oriented and business like co-operatives (New Generation Co-operatives) which can deal with CF agencies

� Learn from the Thai Experience

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MAKING AGRI MARKETS WORK

� Role of the state- How Much regulation? Bihar v/s Gujarat in APMC Act!

� Role of the state:

� Promotion of producers’ organizations for marketing of farm produce as PPP

� Provide more of marketing extension to growers

� Market orientation in terms of improved marketing practices at the farmer level.

� Incentivise/promote Group contracts to reduce information asymmetry between firm and growers, transaction cost of dealing with small growers and for better bargaining power to growers

� Legal protection to growers like in Japan/USA

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MAKING AGRI MARKETS WORK

� Reform APMC markets- free licensing for better competition, e-payment of market fee, ensure open auction system, better facilities, PC representation in APMC mgt., denotification of CAs/Arthiyas like in MP, (APMC markets serve as competitors to contract and direct purchaseand can help improve the terms offered by CF/DP to growers as contract/contact prices are benchmarked to APMC prices

� Make warehouse receipts applicable to less perishable produce like potato/onions

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