Agricultural Produce Market Committee [APMC]

By : Neha Dhyani

Updated : May 16, 2022, 6:22

Agricultural Produce Market Committee [APMC] is an Indian marketing board formed by the state governments to protect farmers from being exploited by big retailers while also ensuring that the farm-to-retail pricing spread does not reach unduly high levels.

The purpose of the APMC Act was to reduce the pressure and exploitation from creditors and other middlemen on farmers. The Agricultural Produce Market Committee [APMC] guarantees that farmers receive fair prices and timely payments for their goods.

Agricultural Produce Market Committee [APMC] Origin

The Agricultural Produce Market Committee [APMC] is an improvised version of the developments in agricultural acts that have occurred since the British Raj.

  • In 1886, the Hyderabad Residency Order instituted India's first regulated market (Karanja).
  • The Berar Cotton and Grain Market Act of 1887 emerged as the first law. This Act served as a model for similar legislation in other sections of the country.
  • In 1928, the Royal Commission on Agriculture's recommendation for the control of marketing activities and regulated markets was introduced.
  • In 1938, the Indian government drafted a Model Bill and dispatched it to all states; nevertheless, little progress was achieved until India's independence in 1947.
  • During the 1960s and 1970s, the Agricultural Produce Markets Regulation (APMR) Acts were adopted and implemented in most states. These Acts were enacted to cover all key wholesale assembly marketplaces.
  • In 2015, the Union Budget, with the support of state governments and NITI Ayog, proposed the plan to establish a United National Agriculture Market.

Objectives of the Agricultural Produce Market Committee [APMC]

The following are the goals of the Agricultural Produce Market Committee [APMC]:

  • Creating an effective marketing strategy.
  • Promotion of agricultural exports and agri-processing.
  • Specify methods and systems for establishing an efficient infrastructure for agricultural output marketing.

Principles of the Agricultural Produce Market Committee [APMC]

Agricultural Produce Market Committee [APMC] works on the following two principles:

  • Ensure that farmers are not coerced into selling their goods at a cheap price by middlemen (or intermediaries).
  • All food products should be delivered to a market area and then sold in auctions.

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APMC Model Act, 2003

In 2003, the Indian government drafted a model APMC Act as the first step toward agricultural market reform. The following are some of the key characteristics of the APMC Model Act 2003:

  • Increasing the viability of the contract farming (processing/marketing companies agree to production support at fixed pricing) paradigm.
  • Perishables have their market.
  • Providing opportunities for farmers and individuals to establish their markets.
  • Relaxed licensing regulations
  • Revenue from the APMC will be utilized to improve market infrastructure.

Note: However, the bill has not been passed in every state. Some states have approved legislation but have not yet drafted rules or informed the central government. As a result, inter-state restrictions persist.

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Agricultural Produce Market Committee [APMC] Reforms

In the year 2020, the Indian government passed three acts that included reforms:

  • The Produce Trade and Commerce (Promotion and Facilitation) Act
  • Price Assurance Act for Farm Services and Farmers (Empowerment and Protection)
  • The Essential Commodities Amendment Act

Note: While cartelization has been a major issue in APMCs, farmers have attacked these proposals, fearing that they will lead to the degradation of APMCs and, as a result, the Minimum Support Price will be weakened. Farmers in Punjab, Haryana, and the western sections of Uttar Pradesh, have protested as a result of this.

The Agricultural Produce Market Committee [APMC] ensures that all goods produced by the farmers must be brought to market and that transactions are conducted through an auction.

Under Agricultural Produce Market Committee [APMC], the Mandi (or small market area) is set up in various locations around the states. The state is divided geographically by these marketplaces.

Through Agricultural Produce Market Committee [APMC], traders are granted licenses to operate within a market. Agricultural Produce Market Committee [APMC] has prohibited the mall owners, wholesalers, and retail merchants to purchase vegetables directly from the farmers

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FAQs on Agricultural Produce Market Committee [APMC]

Q1. What is the Agricultural Produce Market Committee [APMC] Act?

Ans. The Agricultural Produce Market Committee [APMC] Act authorizes governments to create agricultural markets, often known as Mandis. Agricultural goods are only sold at auction in the Mandis.

Q2. Which government establishes the Agricultural Produce Market Committee [APMC]?

Ans. The state governments of India establish the Agricultural Produce Market Committee [APMC].

Q3. When was the model Agricultural Produce Market Committee [APMC] Act introduced?

Ans. The model Agricultural Produce Market Committee [APMC] Act was introduced in 2003.

Q4. What are the advantages of the Agricultural Produce Market Committee [APMC]?

Ans. The advantages of the Agricultural Produce Market Committee [APMC] are as follows -

  • Farmers are given storage facilities, like go-downs.
  • Farmers' markets are organized so that farmers may sell their goods directly to consumers.
  • APMCs aided in price stabilization.