The functioning and impact of Agricultural Produce Market Committees (APMCs) established under State Acts in India have been subject to considerable debate. While some argue that these committees have played a crucial role in regulating agricultural markets and ensuring fair prices for farmers, others contend that they have hindered the development of the agricultural sector and contributed to food inflation. This perspective suggests that APMCs create inefficiencies in the agricultural supply chain, leading to increased costs for consumers and limiting the growth potential of farmers. Critics often point to issues such as market monopolies, bureaucratic red tape, and lack of transparency as key factors exacerbating these challenges. However, it is essential to critically examine these assertions and consider the broader socio-economic context to determine the true impact of APMCs on agriculture and food inflation in India.
Tag: marketing of agriculture produces and issues and related constraints
Decoding the Question:
- In the intro try to write about APMC in brief
- In Body,
- Discuss how APMC impeded the development of agriculture and caused food inflation.
- Try to conclude by underlining the need for reforms in APMC act.
Answer:
The APMC Act, which was passed in the 1960s, contains provisions that appear to be remnants of the License Raj era. Under this act, Mandis have been set up at a different location in states where farmers have to bring their produce to be sold through the auctions. The rationale behind this is to eliminate the role of middlemen. Though the legislation aimed to create a forum for farmers to sell their produce at best possible prices, it instead led to the creation of middlemen who exploited both farmers and consumers to create wealth for themselves.
APMC impediments in the development of agriculture:
- The state-level statutes have so far been unable to address the key such as expansion and modernisation of marketing facilities, improving communications, linking small producers with all the marketing channels, information dissemination to every farmer etc.
- Regulations did not allow farmers to sell outside the mandis and poor price realization of agricultural produce at mandis did not allow farmers to adopt newer technologies and investment in agriculture.
- Burdened to carry to distant mandi and poor warehousing facilities, compel farmers to sell produce in as distressed selling, making them prey to exploitation by middlemen.
- Does not support contact farming, hindering diversification of agriculture to more-valued produce
APMC and Food Inflation:
- APMC has been criticized for creating shortages of produce by middlemen in the market to earn more profit. This artificial shortage made consumers pay more for the same amount of produce.
- Several charges, commissions increase the price of food grains and vegetable fruits etc. which again contribute to increasing inflation
- Poor storage in APMC is responsible for wastage of produce generating inflationary pressure.
- Disturbed supply chain: Due to any natural disaster sometimes the supply chain gets disturbed and regulation of selling products in the market only creates a situation of inflation in markets.
Thus, APMC reforms are required including delisting vegetables and fruits from APMC Act and creating network of E-Mandis as it will give the farmers freedom to sell their products directly to retailers/consumers without the agricultural produce being routed through mandi or middlemen.It will help in bring down food inflation and increase farm income.
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