The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill

PROVISIONS

  • It seeks to completely open up the sale of produce outside the Agricultural Produce Market Committees, or the APMCs. 
  • It not only creates an e-highway for trading and transactions, but also creates a structure for e-trading of agriculture produce. 
  • Farmers are allowed to sell their produce outside of the APMCs. 
  • The market is thrown completely open for the private players to come in the agriculture sector and deal directly with the farmers.
  • The act also prohibits state governments from levying any market fee or cess on farmers, traders and electronic trading platforms for trading farmers’ produce in an 'outside trade area'.
PROS
  • It will create an ecosystem where farmers and traders enjoy the freedom to sell and purchase farm produce outide registered 'mandis' under states' APMCs.
  • It will promote barrier-free inter-state and intra-state trade of farmers' produce.
  • It will reduce marketing/transportation costs and help farmers in getting better prices.
  • It will provide a facilitative framework for electronic trading.
CONS
  • States will lose revenue as they won't be able to collect 'mandi fees' if farmers sell their produce outside registered APMC markets.
  • The income source of 'commission agents' will vanish if entire farm trade moves out of mandis.
  • This will increase unemployment. 
  • It may eventually end the MSP-based procurement system.
  • Electronic trading like in e-NAM uses physical 'mandi' structure. 
  • e-NAM will be affected badly if 'mandis' are destroyed in absence of trading.
APMCs
  • The Government of India designed a model Agricultural Produce Market Committee (APMC) Act in 2003 as a first attempt to bring reformations in the agricultural markets. 
  • Agricultural Produce Market Committees (APMC) is the marketing boards established by the state governments in order to eliminate the exploitation incidences of the farmers by the intermediaries, where they are forced to sell their produce at extremely low prices.
  • The APMC has Yards/Mandis in the market area that regulates the notified agricultural produce and livestock. 
  • APMC ensures worthy prices and timely payments to the farmers for their produce.
e-NAM 
  • The National Agriculture Market (NAM) is a pan-India electronic trading portal, which links the existing Agricultural Produce Market Committee (APMC) mandis across the country to form a unified national market for agricultural commodities.
  • The e-NAM portal is a single-window service for any information and services related to APMC that includes: 
  1. Commodity arrivals and prices
  2. Buy and sell trade offers
  3. Provision to respond to trade offers, among other services
  • The NAM reduces the transaction costs and information irregularity even when the agriculture produce continues to flow through the mandis.
DRAWBACKS OF APMC
  • Monopoly of APMC deprives farmers from better customers, and consumers from original suppliers.
  • Agents in an APMC get together to form a cartel and deliberately restraint from higher bidding.
  • In many markets farmers were not allowed to operate, citing the licensing requirements.
  • Farmers have to pay commission, marketing fee, APMC cess which pushes up costs.
  • Agents have tendency to block a part of payment for unexplained or fictitious reasons


SOURCES: TOI, THE WIRE, INSIGHTS, 

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