Agricultural produce market committee

Prior to independence in 1947, the major concern of government policy related to agricultural marketing was to keep the prices of food for the consumers and agro-raw materials for the industry in check. However, after independence, there came a need to protect the interest of farmers and to provide them incentive prices to augment the production of agricultural commodities. Common throughout the country were problems of local money lenders extorting high amounts of foodgrains from the farmer, at throwaway prices, as interest. Recognizing the defects that farmers faced—such as losses in terms of undue low prices, higher costs of marketing, and considerable physical losses of the produce in the agricultural marketing system—the Indian Government introduced several mandatory regulations in hopes of establishing a mechanism to monitor the market conduct. Regulation and development of primary agricultural produce markets was taken up as an institutional innovation, and construction of well laid out market yards was considered as an essential requirement for regulating the practices in primary wholesale markets.

History

The concept of an agriculture produce market regulation programme in India dates back to the British Raj: raw cotton was the first farm produce to attract the attention of the Government due to the anxiety of British rulers to make available the supplies of pure cotton at reasonable prices to the textile mills of Manchester (UK). Consequently, India's first regulated market (Karanja) was established in 1886 and Risod in 1899 under the Hyderabad Residency Order, with the first legislation being the Berar Cotton and Grain Market Act of 1887, which empowered British residents to declare any place in the assigned district a market for sale and purchase of agricultural produce and constitute a committee to supervise the regulated markets. This Act became the model for enactment in other parts of the country.

An important landmark in the agricultural marketing scene in the country has been the recommendation of the 1928 Royal Commission on Agriculture for regulation of marketing practices and establishment of regulated markets. One of the measures taken to improve the situation was to regulate the trade practices and to establish market yards in the countryside. In pursuance, Government of India prepared a Model Bill in 1938 and circulated it to all states; however, not much headway was made until India's independence.

During the 1960s and 1970s, most of the states enacted and enforced Agricultural Produce Markets Regulation (APMR) Acts. All primary wholesale assembling markets were brought under the ambit of these Acts. Well laid out market yards and sub-yards were constructed and, for each market area, an Agricultural Produce Market Committee (APMC) was constituted to frame the rules and enforce them. Thus, the organized agricultural marketing came into existence through regulated markets.

In 2015, the year's Union Budget proposed to create a United National Agriculture Market with the help of state governments and NITI Ayog.

Reforms

Reforms have been passed by the Government of India in the form of three acts in 2020:

1. the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act
2. the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act; and
3. the Essential Commodities Amendment Act' under which the monopoly of middlemen in APMCs is sought to be abolished and move towards creation of a free market. While cartelization has been a big problem in APMCs, these bills have been criticized by the farmers themselves because of the fear that these laws will lead to degradation of APMCs and eventually Minimum Support Price will be diluted.

This has led to protests by farmers in India specially Punjab, Haryana and west parts of Uttar Pradesh and the laws were subsequently repealed in 2021.