Review of APMC Act and Reform Initiatives (28 th -30 th August,2012) Lallan Rai Ex-Asstt...
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Transcript of Review of APMC Act and Reform Initiatives (28 th -30 th August,2012) Lallan Rai Ex-Asstt...
Review of APMC Act and Reform Initiatives
(28th-30th August,2012)
Lallan RaiEx-Asstt AMA/Consultant,
Directorate of Marketing and InspectionN.H.IV, Faridabad-121001
COSAMB Meeting
Outline of Presentation
• Agriculture Scenario• Agricultural Marketing Scenario• Review of APMC Act• Present APMC Act-Issues and
Concerns• Need for Market Reforms• Model APMC Act, 2003• Progress of Market Reforms• Initiatives by States• Need for Future Action
COSAMB Meeting
Agriculture ScenarioStrength• Varied agro-climatic conditions – wide
range of Agricultural/Horticultural products
• Leadership across several products-volume
• Large Domestic Market• Provides large raw material base to
industry• Abundant labour supply at competitive
cost• Strong Research and Development Set
upWeakness• Small land holdings with Small
Individual Marketable Surplus• Weak Credit flow and inadequate risk
coverage• Low level of value addition at the farm
gate• Lack of Market information• Absence of Common trade language
COSAMB Meeting
Production Trends
4
2001-02
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
190
200
210
220
230
240
250
260
270
212.85
208.60
217.28
230.78234.47
218.11
244.78
257.44
Production of Foodgrains(Million Tonnes)
Production
2001-02
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12(P)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
44
58.74
59.5665.59
68.47
71.52
74.88
77.52
88.62
109.05114.99
128.45
129.08
134.1 146.55
149.61
Production of Fruit and Vegetables(Million Tonnes)
Fruit Vegetables
COSAMB Meeting
Agricultural Marketing Scenario
Strength•Large Consumer Base•Wide network of markets across the State through APMCs•Rise in household income- enhanced demand for high value foods and FMCG products
Weakness•High Post-harvest wastages and Transportation cost•Multiple intermediaries-Low price realization by farmers•Lack of adequate Scientific Storage facilities near to Farm•Fragmented Supply Chains and High marketing Cost
Opportunities•Globalization provides better farming and value addition opportunity•Government investment policy conducive for private investment•Specialized Schemes leading to capital formation and enhancing productivity and farm income
COSAMB Meeting
7COSAMB Meeting
Mandi Charges (incl. of purchase tax, market fees,arthia commission etc) in various States
(as percentage of MSP)
State/UT Purchase/sales Tax/Trade Tax/VAT
Marketfee
ArthiaCommission
Othercharges
Total
Bihar 1.0+3.0 - 2.0 - 6.0
Gujarat - 1.0 2.0 - 3.0
Haryana 4.0 2.0 2.5 2.0(RD Cess) 10.5
MadhyaPradesh
4.0 2.0 2.0 0.2 (NirashritShulk)
8.2
Punjab 5.0 2.0 2.5 5.0 (RD Cess@2% + ID fee @3%)
14.5
Rajasthan - 1.6 2.0 - 3.6
UttarPradesh
4.0 2.5 2.0 - 8.5
Uttarakhand 4.0 2.5 - - 6.5
Source: Price Policy for Rabi crops, the Marketing season- 2012-13
8
How to Safeguard Small Producers?
• Present Agricultural Marketing -Three main Components (GMM):
Statutory charges (6 to 12 per cent); Net margins of intermediates (6-20 per cent); and Real cost of performing marketing functions (68 to 88
per cent).
COSAMB Meeting
Reduction in real cost of marketing require increasing scale of operations and technological change in the marketing system. Small farmers with low marketed surplus cannot do it. The organized sector is coming up in a big way and their role is important. Need for an institutional revolution to enable the producer organizations with professional management to emerge in the scene.Can we think of farmers’ corporations /Producers’ Companies to emerge in production as well as processing and marketing of agricultural commodities?Implications of this form of institutional set up in agricultural marketing need critical examination and serious debate.(Source: Prof.S.S. Acharya Paper)
Review of APMC Act
• Initial Regulatory Framework:• Agriculture Marketing- a State subject-
regulated through respective State APMC Act • 27States and 1 UT have APMC Act• Major Objectives of APMC Act:Development of Market InfrastructureOpen Auction for price discoveryFair Value for farmer’s produceStandardized ChargesPrompt payment to farmerDispute Settlement
COSAMB Meeting
Progress of Regulation of Markets
1940 1950 1960 1970 1980 1990 2000 2009 2010 20110
1000
2000
3000
4000
5000
6000
7000
8000
73 286715
2481
6052 6217
7127 7139 7157 7246
Number of Markets10COSAMB Meeting
11
Density of Regulated markets
COSAMB Meeting
Andhra Pra
deshAssa
m
Jhark
hand
Gujarat
Haryana
Himach
al Pra
desh
Madhya Pra
desh
Chhattisg
arh
Mahara
shtra
Meghalaya
Orissa
Punjab
Rajasthan
Sikkim
West
Bengal
Uttar Pra
desh
Uttarakhand
0
2000
4000
6000
8000
10000
12000
304 347 397 473 156
1160596 731
350
11215
496103
794
7096
130 398963
Area covered by each market(Sq.Km.)
Need of markets within 80 sq.kms.
12
Status of Cold Storages (31.12.2009)
COSAMB Meeting
4885
356
140
Private Cooperative Publc
Numbers of Cold Storages Capacity in ‘000 tonnes
2341
937107
Private Cooperative Publc
COSAMB Meeting 13
Establishment of Market Committee
• Responsibility of enforcement of provisions of the Act rests with Market Committee
• Except Tamil Nadu(One Committee for all markets in the District) all State Acts provide for constitution of separate Market Committee
• In Maharashtra separate Market Committee for Greater Mumbai
• The number and constituents of the membership of the Market Committee differ with other Committees of State
• TN Act permits Co-operative Marketing Societies to establish a market after observing certain formalities
• It is, therefore, necessary to have a Taluk level Market Committee with uniform pattern in all the States/UTs
COSAMB Meeting 14
Election of Members of Committee
• In most of the States provision of direct election of non-official members
• In Himachal Pradesh, the members are appointed by the Board out of the Panel maintained (given by the concerned District Commissioners)
• There should be indirect election of members from amongst the Panchayat members (already elected through direct election) to save wasteful expenditure
Composition of APMCs (%)Name of the State/UT
Producers/ Agriculturist
Licensees / Cooperative
Cooperatives Local Authority
State Govt. MLA/ MP Financial Institution
SWC/ FCI/ CWC
Uttar Pradesh
52.28 14.28 4.77 4.77 9.52 - - 14.28
West Bengal 50.00 16.70 5.55 5.55 11.10 5.55 5.55 -Assam 46.05 20.00 6.66 6.66 6.66 - 6.66 6.66Gujarat 47.70 23.55 11.76 5.88 11.76 - - -Rajasthan 46.68 13.33 13.33 26.66 - - - -Orissa 47.05 23.55 5.88 11.76 11.76 - - -Delhi 42.88 14.28 7.14 7.14 14.28 Lic. W/man
7.14Metro- Coun. 7.14
-
Goa 46.70 20.00 6.66 13.32 13.32 - - -
Madhya Pradesh
Upto 7.00
15.00 5.00 - 5.00 5.00 - -
Tripura 50.00 8.50 8.50 16.50 16.50 - - -Maharashtra 55.55 16.70 5.55 11.10 11.10 - - -Tamil Nadu 60.00 20.00 - - 20.00 - - -Punjab 52.94 35.30 5.88 - 5.88 - - -Andhra Pradesh
66.65 16.70 5.55 5.55 5.55 - - -
Karnataka 52.96 5.88 11.76 5.88 5.88 SC/T11.76
Taluk Dev/ Board 5.88
-
HaryanaSC/ST/BCrepresented
58.34 25.00 8.33 - 8.33 - - -
Meghalaya 38.48 23.07 15.38 7.67 7.69 - - -Arunachal Pradesh
22.22 22.22 11.11 - National Samity 44.45
- - -
Nagaland 54.55One SC/ST
18.18 9.90 - 18.18 - - -
15COSAMB Meeting
Numerical strength of Market Committees No. of persons as stipulated in market legislation
States/Union Territories
8-20 Madhya Pradesh
14-21 Uttar Pradesh
15-18 West Bengal
9 or 16 Punjab (Without representation of cooperatives)
10 or 17 Punjab (With representation of cooperative)
11 or 19 Haryana (Without representation of cooperatives)
12 or 20 Haryana (with cooperative representative)
9-16 Himachal Pradesh
9 Arunachal Pradesh
11 Nagaland
12 Tripura
13 Meghalaya
14 Delhi
15 Tamil Nadu, Assam, Rajasthan, Goa.
17 Gujarat, Orissa, Karnataka
18 Maharashtra
16COSAMB Meeting
Commodity Coverage• Commodities included in the Schedule or
declared as such by the Government Notification
• In Andhra Pradesh, Tamil Nadu, U.P., Maharashtra, Gujarat,
Rajasthan, Odisha, Punjab and Chandigarh regulation is specified in the Schedule
• Except Andhra Pradesh and Tamil Nadu all the Acts provides for inclusion as well as deletion of any agricultural produce from the list of notified commodities
• Manner of Notification as well as commodity coverage also vary from State to State
• No provision exists for livestock inPunjab, Chandigarh,
HP, MP and Tamil Nadu
COSAMB Meeting 17
Realization of Market Fee By APMCs
Sl. No.
Rate of market fee
Names of States/Uts Remarks
1 Below 1% Gujarat, Pondicherry, Goa, Tripura, Parts of Maharashtra & Kerala
Maharashtra – Rs.0.75 –100Only Malabar hills districts under MCCM Act, 1933 in Kerala.
2 1 % to below 2%
Andhra Pradesh, Assam, Delhi, Himachal Pradesh, Karnataka, Madhya Pradesh, Uttar Pradesh, Orissa, Tamil Nadu, Meghalaya, Nagaland, Rajasthan and parts of Maharashtra.
FCI & State Coop. Exempted in Assam. Meghalaya & Nagaland Collection of fee not yet introduced.In Orissa 3% for animal husbandry products.
3 2 % Punjab, Haryana, West Bengal, Arunachal Pradesh
Punjab 1% for Timber.
COSAMB Meeting
Contribution of income of APMCs to SAMB
Sl. No.
Percentage contribution to the Board
Name (s) of States/U.T.
1 Upto 5% Karnataka & Orissa
2 Upto 10% Andhra Pradesh, Uttar Pradesh, Rajasthan and Maharashtra
3 Upto 20% West Bengal, Tripura, Delhi
4 Upto 30% Assam and Meghalaya
5 Upto 50% Madhya Pradesh and Arunachal Pradesh
7 Upto 10-40% Punjab – Slab system depending upon income of APMC.
8 Upto 20-30% Haryana – Slab system depending upon income of APMC.
COSAMB Meeting
20
Settlement of disputes in various States
Sl. No.
Channel for settlement of disputes States/UT
1 Secretary Arbitrator Dispute sub-committee Gujarat, Delhi, Andhra Pradesh, Bihar, Uttar Pradesh, Orissa, Tripura, Punjab and Chandigarh.
2 Secretary Arbitrator West Bengal
3 Secretary Arbitrator Board constituted for settlement of disputes
Maharashtra
4 Arbitrator Umpire Dispute Sub-Committee Rajasthan
5 Secretary Arbitrator Empire dispute Sub-Committee
Himachal Pradesh
COSAMB Meeting
Present APMC Act -Issues
• Issues and Concerns:• Traders can not buy outside Market Yard-add to cost• Market Density Low – Long travel• Infrastructural facilities inadequate in markets• Rural Periodic Markets not properly developed• Bureaucratic management- lost original purpose• Congestion in market yards• Several Malpractices continue• Barrier to entry-Strong associations, License linked
to shops• Market fee not used for development in some cases• APMCs emerged as monopoly
COSAMB Meeting
Need for reform in Agricultural Marketing
Necessary to : Empower producers with market information to undertake market-driven production.
Provide Multiple Choice and competitive Marketing Channels to farmers.
Attract Large Scale investments needed for building Post-Harvest infrastructure.
22
Model Act, 2003- Salient Features
Establishment of Market in Private and Cooperative sector
Promotion of Direct Marketing and Contract Farming
Establishment of Farmer/Consumer Markets
Single point licensing & Single Point levy of market fee/cess
Setting up of Special Commodity Markets/ Promotion of e-trading
Professional management of APMCsCOSAMB Meeting
Progress of Market Reforms
Reforming States46%
Partial Reforming States17%
No APMC Act in States20%
State provide for Re-form3%
States not yet
re-formed
14%
Progress of Market Reforms (31.07.2012)
COSAMB Meeting
Provisions of Model Act Adopted (con..)
Area of Reforms States adopted the suggested area of market reforms
Setting up of Special Markets and Special Commodity Market
Andhra Pradesh, Gujarat, Maharashtra, Karnataka, Nagaland, Sikkim, Tamil Nadu Tripura, Jharkhand and Uttarakhand
To promote and encourage e-trading, Gujarat, H.P., Karnataka, Nagaland, Sikkim, Mizoram, Goa, Maharashtra (under Rule 5 license granted to Commodity Exchanges registered under FMC), Uttarakhand and Rajasthan
Registration of Contract Farming Andhra Pradesh, Arunachal Pradesh, Assam, Goa, Himachal Pradesh, Karnataka, Haryana, Maharashtra, Madhya Pradesh, Mizoram, Nagaland, Odisha, Rajasthan, Chhattisgarh, Sikkim, Tripura and Jharkhand and Uttarakhand
contract farming agreement recorded with the prescribed officer.
Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Gujarat, Goa, Karnataka, Haryana, Madhya Pradesh, Mizoram, Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim, Tripura and Jharkhand and Uttarakhand
No title, rights, ownership or possession shall be transferred or alienated or vest in the contract farming sponsor or his successor or his agent as a consequence arising out of contract farming agreement.
Arunachal Pradesh, Assam, Goa, Haryana, Maharashtra, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Tripura , Jharkhand, Andhra Pradesh, Karnataka and Uttarakhand
COSAMB Meeting
Provisions of Model Act Adopted
Area of Reforms States adopted the suggested area of market reforms
Dispute settlement mechanism Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Gujarat, Goa, Karnataka, Haryana, Madhya Pradesh, Mizoram, Maharashtra, Nagaland, Ordisha, Rajasthan, Sikkim, Tripura and Jharkhand; Himachal Pradesh and Uttarakhand
Exemption of Market Fee on the sales to the contract farming sponsors taking place outside the market yard under the contract farming agreement
Arunachal Pradesh, Goa, Karnataka (Reduced by 30%), Maharashtra, Mizoram, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Punjab (exempted under the Rules), Chandigarh (exempted under the Rules) and Uttarakhand
Single point levy of market fee Chhattisgarh, Gujarat, Goa, Himachal Pradesh, Madhya Pradesh, Mizoram, Karnataka, Nagaland, Sikkim, UT of Chandigarh, Punjab, Jharkhand, Rajasthan and Uttarakhand
Establishment of private market yard and direct purchase from farmers
Andhra Pradesh, Arunachal Pradesh, Assam, Gujarat, Goa, Himachal Pradesh, Karnataka, Madhya Pradesh ( only direct purchase), Maharashtra, Mizoram, Nagaland, Orissa (excluding for paddy / rice), Rajasthan, Sikkim, Tripura, Punjab (not for direct purchase), Chandigarh (not for direct purchase), Jharkhand and Uttarakhand
Establishment of consumer / farmer market
Arunachal Pradesh, Assam, Gujarat, Goa, Himachal Pradesh, Karnataka, Madhya Pradesh (under bye-laws), Mizoram. Maharashtra, Nagaland, Rajasthan, Sikkim, Tripura, Punjab (only enabling provision), UT of Chandigarh (only enabling provision), Jharkhand and Uttarkhand
COSAMB Meeting 26
Initiatives Taken by States Common License for Direct procurement from farmers
has been provided by Maharashtra (23), MP (8), Rajasthan (1) and Karnataka(249)
License for Direct marketing has been provided by Andhra Pradesh(171), Gujarat(21), Haryana(37), Himachal Pradesh(12) Karnataka(9), Maharashtra(107), Odisha(46), Punjab(26), Rajasthan (76) and Tamil Nadu(179).
License for Private Markets – Andhra Pradesh(2), Rajasthan(2), Gujarat(13), Tamil Nadu(6) and Karnataka(3)
License for Spot Exchange has been granted by Gujarat, Maharashtra, Karnataka, Orissa, Rajasthan and Madhya Pradesh
M.P.,Uttarakhand and West Bengal have waived market fee on sale of fruit & vegetables.
Government of Haryana introduced E-license to commission agents Smart Card based electronic records for farmers and Digital Mandi system.
COSAMB Meeting
Need for Future Action
• State Governments to expedite amendment of Act/Rules on the lines of Model Act/Rules
• COSAMB may pursue member States to complete the Reform process
• Initiatives for Private Markets/infrastructure development in Reformed States
• Long term Policy stability to attract investment
• Organize farmers into Groups/Co-operatives
/Producer Companies• Promote barrier free National Market
COSAMB Meeting