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VIDEO – Amendment to APMC Act- Will it Bring Relief From Souring Prices?

[youtube=http://www.youtube.com/watch?v=M_6v_NMU2NQ&w=560&h=315]

Summary –
The debate is cornered around the proposed amendment by the UPA Government in the APMC Act. This moves comes in order to bring relief from prevailing high prices of fruits and vegetables. The high prices have affected the common man the most and also the farmers.
Firstly, What is APMC Act? What was the purpose for which it was brought ?
In the early years after independence, the farmers had to deal with money lenders. Lack of credit sources and supply alternatives, the farmer had to sell his produce to money lenders at the latter’s whims and fancies. The money lender also fixed its selling price arbitrarily. Thus both the farmer and consumers were at loss. In order to tackle this APMC Act was brought so as to regulate the market for Agricultural Produce, mainly fruits and vegetables. Although other items were also there. In this system every state setup its APMC i.e. Agricultural Produce Marketing Committee. The role of it was similar to what FCI does in food grains. APMC procures the fruits and vegetables of farmers and regulates its sale in regulated markets.
This system was successful in eliminating the dependency of farmers on money lenders. But another type of spoil system developed. The middlemen i.e. contractors,commission agents, suppliers, transporters etc have made a mockery of the intended process. The result is large cartels among them. New entrants find it extremely difficult to compete and negotiate so as sustain in this business. Also the APMC staff is often found indulging in corrupt practices, thus neglecting this foul system.
Thus, in the end, the main sufferers remain the same farmer and the consumers. A potato is worth 20 rs in market to the consumers.Of this 20 rs , only 4 rs reach the farmer and the rest is fed by the layers of middle men.
In order to hit on the current malpractice, recently the APMC Amendtment Act has been brought. It seeks to take of fruits and vegetables from the list of products regulated by APMC.
What the panelist in the debate have to say regarding this step :
Negatives :
1. The APMC Act should be scrapped altogether. Why ? Because the central premise because of which it was brought has now been eliminated. Money lenders have been eliminated in many forms. Plus there are credit institutions especially for Agriculture. The farmers are having mobile phones, internet to have access to markets all over India now. They can be contacted by the consumers too.. etc.
2. SAFAL, NAFED, AMUL are the some models which need to be thought of.
3. The intended amendments will not bear any results. Why ? Because the farmers lack the negotiation power. They do not have any cold storage for these perishable items. They do not have any source of value addition. So as a result, the current middlemen are bound to exploit them even if the farmers are given a choice to sell their produce at other places also.
Positives :
1. The current move is step in right direction. If we have eliminated money lenders, it does not mean they cannot revive. If a system has gained some defects, it does not mean that it should be scrapped altogether. Rather its defects should be curbed selectively.
2. SAFAL, NAFED which were setup to procure and sell from cooperatives have not remain effective. The cooperatives have failed upto the expectations. And the point regarding mobile phones, technology is also flawed. The Government of India had setup a nationwide portal of all markets. But that portal itself remains weak and outdated. Secondly, the fluctuations are not in concordance with the practical supply of such goods.
3. The current amendments need to complemented by infrastructural reforms. Rithu Bazars and Shetkari Bazars are running effectively in Andhra and Maharashtra. But this alternate markets will bear fruits only if the farmer is empowered to take advantage of these facilities. Firsly, all weather roads should be there. Secondly, he needs transportation (which also collude with other middlemen). Thirdly, cold storage. Hence our panelist suggest that instead of decrying these limitations, the government should work in these areas as well along with amending APMC Act..
RESULT –
The proposed amendment is not out of the place. But it is not an end in itself. Many other reforms in transportation, education and training, infrastructure and food processing have to be brought along with it. The system of APMC is not a complete failure. Rather it needs reforms and should not be removed altogether.