Centre to modify model APMC law to address States’ concerns

The Centre will bring about changes in the model Agriculture Produce Market Committee (APMC) Act that States and Union Territories had been asked to implement to help the country move to a unified national agriculture market.

The new model APMC Act, which is expected to be ready in the next two-three months, will address some of the apprehensions expressed by States and UTs in the implementation of the existing one such as revenue loss, said Ramesh Chand, Member, NITI Aayog, at a press conference on Friday.

“States such as Punjab and Haryana expressed fears that they may lose revenue if they modify their APMC Acts in tune with the model APMC Act. There were some other concerns as well. The modified legislation will attempt to take care of them,” Chand said after the first national consultations with States on agricultural reforms.

By urging States to modify their APMC Acts, the government is trying to implement a single licence and single point of levy of market fee at the State-level and then gradually move towards a single licence and single point of levy of market fee at the national level.

The idea is to remove disincentives for farmers and traders to trade across the country as they will not have to shell out more money from their pockets.

Once States reform their APMC Acts, they could get integrated in the online platform e-NAM (launched in April) for online sale and purchase of commodities nation wide.

One of the changes that the Centre is planning to bring about in the model APMC Act is to disengage Contract Farming Act from the APMC Act so that contract farming can be carried out without going through the APMC channel, Chand said.

The Centre may also permit setting up of private yards or mandis to allow private players to get into the field to increase competition and also be a source of revenue for States.

Various ways to prevent revenue losses for States will also be explored such as the possibility of asking NABARD to fund some of the agriculture infrastructure projects that State government fund with a component of the mandi fees they currently levy, Chand said.

Even more than a decade after the model APMC Act was first circulated to States, only two-thirds have made provisions for changing their Acts and only one-third have notified the changes, the NITI Aayog member observed.

Several States that had notified the amended APMC Act had not done it for all products.

Because of the delay in amendment of the APMC Act mandis in only 10 States have been connected to the e-NAM platform while about five more are ready to come on board.

“We plan to come out with the draft of the new model APMC Act and share it with States. Then it will go through the entire process of consultations before it is placed before the Cabinet for clearance,” said Ashok Dalwai, Additional Secretary, Agriculture Ministry.

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