Agri Business

Competition panel asked to act against APMC Act

| Updated on: Feb 21, 2011

A group of agricultural economists has asked the Competition Commission of India to suo motu act against the Agricultural Produce Marketing Committee Act (APMC) as it is leading to inefficiency in marketing of agricultural products and thereby, denying better prices to farmers.

An international workshop on “Indian Agriculture: Improving Competition, Markets and the Efficiency of Supply Chains” last week discussed the issues of agricultural products marketing threadbare and zeroed in on the minimum support price, procurement by the Food Corporation of India and levy obligations for rice as issues impeding agricultural growth.

Mr Dhanendra Kumar, Chairperson of Competition Commission of India, who chaired a session on assessing impacts of regulatory constraints to food chain competition, did not respond to the pleas for action against APMC Act.

However, sources in the Government said the commission could act even if any individual filed a case against a State government or the Centre or even the Ministry of Agriculture.

If a case is filed, then the Competition Commission of India can issue notice to those responsible for implementing the act, the sources said.

According to Ms Jyoti Gujral, Director of IDFC, only 20-30 per cent of the transactions are open, while others are done in a closed way. “The APMC Act issue is complex, especially pertaining to States,” she said.

Secluded markets

Mr Piyush Joshi, an expert, said the APMC yards in most places were not connected by all-weather roads, while they need to be connected by tools such as information technology.

Prof Ramesh Chand, Director of National Centre for Agricultural Economics and Policy, said there is deceleration in growth in the domestic agriculture sector. Though horticulture production is increasing, basic foodgrain production was decreasing, he said.

More importantly, nutrition consumption was worsening, he said.

Dr Simon Hearn, Senior Adviser of Australian Centre for International Agricultural Research , said India and Australia were working jointly on water management and crop reading.

Prof Donald Maclaren of Melbourne University, said if more agencies other than the Food Corporation of India are allowed to procure foodgrain in markets, it would improve farmers' situation.

Dr Abusaleh Shariff, Senior Fellow of NCAER, said the public distribution system served the middle class more than the below poverty line.

A pilot study on regulatory constraints to competition in food chain presented at the workshop showed that the yield in foodgrain is rising but its rate of increase is decreasing. It also found the retailer's margin being quite high.

Published on February 21, 2011

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