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Latha Venkatraman

The market yard will always remain a physical meeting point for farmers.

Mumbai , July 4

RECENTLY, the Maharashtra Government announced that it plans to amend the State Agriculture Produce Marketing Regulation Act, the agri-marketing law of the state.

Maharashtra is not the first of the States to opt for an amendment of the agri-marketing law. Madhya Pradesh, Uttar Pradesh and Rajasthan have already amended the Act in their respective States.

One of the main points of the amendment is that farmers will be allowed to sell outside of the organised mandi system or market yards. In most States, the agri-marketing law mandates farmers sell their produce only at mandis.

The amendment of the restrictive provision of the law is considered a significant move in the ongoing process of liberalising agriculture.

Some States have amended the law while a number of States have allowed farmers to sell outside of the mandi system in a limited way. Following this, companies into agribusiness have been able to get farmers to sell directly to them. But the onus of paying the mandi tax — generally used for the upkeep of the marketing yards — remains with the buyer that is the corporate.

Allowing farmers to sell outside of the mandi system is no doubt an encouraging step that allows the primary producer the freedom to market, while allowing the company to source material directly.

Companies such as Hindustan Lever Ltd and ITC Ltd have been able to procure directly from farmers.

Although agriculture is a `State' subject under the Constitution, the Central Government had come up with a model agri-marketing legislation in 2003. It talks of doing away with the mandi tax among other proposals. The model act is called State Agricultural Produce Marketing (Development and Regulation) Act, 2003.

Recently, Mr Sharad Pawar, Union Minister for Agriculture, made a reference to the amendment of the APMC Act saying that the Centre would consider giving incentive to States that amend the Act.

However, the decision to amend the act has not been an easy one. That's primarily because some of the provisions of the amended act include direct marketing of farm produce and not through commission agents, allowing contract farming, setting up competitive agricultural markets in private and co-operative sectors and developing negotiable warehouse receipt system through forward and futures markets.

Will the mandi system be completely done away with? The answer is probably `no'. In a country with vast hinterland, the market yard will always remain a physical meeting point for farmers inter-se, but also between farmers and buyers.

Sometimes companies may not necessarily offer farmers the best price prompting the growers to go to mandis.

There is resistance to the proposed amendments to the agri-marketing law, especially from traders. In Navi Mumbai, traders are planning a daylong protest in mid-July against the amendments to the law. Traders had resorted to bandhs in Karnataka last month to protest against the proposed amendments.

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