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Agricul tural Market ing Reform s:

Amendments in State APMC Acts/ Rules

Agricultural Marketing Division

for

State Agriculture/ Agrl. Mktg. Ministers Conference

23.04.2008

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Agri-Markets in Ind ia as on 31.03.2007

6261Wholesale Marketsin India (majority are regulated markets)

20870Rural Primary Markets(about 15% are regulated markets)

Total27131

2459Principal Regulated Markets

5006Regulated Market Sub-yards

Total

7465

(Only 286 regulated marketsin 1950)

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Contr ibu t ion of Regu lated Markets

Basic objective has been-

- to ensure reasonable gain to the farmersby creating environment inmarkets for fair play of supply and demand forces,

- to regulate market practices and attain transparency in transactions

Aimed at providing proper methodof sale, correct weighment, promptpayment and various marketing related services

Democratic set upto control and manage markets

Advent of regulated markets has helped in mitigating the market

handicapsof producers/ sellers at the wholesale assembling level

Achieved only limited successand Rural Periodic Markets in general,and the tribal markets in particular, remained out of its developmentalambit.

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Agricul tural Market ing Constraints

Predominantly marginal or small farmers Hence small marketablesurpluses & limited bargaining power

Poor availabilityof markets & monopolistictendencies of APMCs

Inadequate infrastructurein wholesale markets/ rural primary markets

Lack of fairprice discoverymechanism

Multiple and exploitativeintermediarieslow returns

Fragmented supply chain, poor cold chain & high post-harvest losses

Lackof cleaning, grading, packaging & quality certification facilities

Limited access to market informationand marketing opportunities

available

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Ini t iat ive of Market Reforms Amendments in APMC Acts suggested byExpert Committee on Market

Reformsconstituted by the Ministry of Agriculture (Report in June, 2001)

Expert Committee recommendations discussed in the NationalConference of State Agriculture Marketing Ministers on 27.09.2002

Standing Committee of State Agricultural Marketing Ministersconstitutedunder the Chairmanship of Union MOS (A) met & resolved to implementreforms on 29.01.2003

Committee headed by Additional Secretary (AM), GOI including StateRepresentatives set up to draft a Model Law for Agri-Marketing

Model APMR Act finalized on 09.09.2003 by the Committee and

circulated to States by Central Government

Model Rulesbased on the Model Act circulated to States by the Ministryin November, 2007

NDC has resolved on 29th May, 2007for completion of amendments in

APMC Acts and notification of Rules there under by March, 2008.

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Amendments Proposed in Model APMC Ac t

Allow establishment of Private orCooperative markets/ Farmer-consumer markets/ Direct marketing

Safeguard the interest of the farmers through provisions forContract Farming

Single point levy & payment of market fee/ Single point registration

of functionaries

Prohibition of Commission Agentsfor agriculturistsand nodeduction to be made towards commission

PPPin management & extension activities/ Promotion of e-trading/

Electronic Spot Exchanges

Encouraging professional managementin APMCs

Promotion of Grading & Standardization.

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Proposed Legal Framework o f Con tract Farm ing

Contract Farming Sponsor to register himself with aprescribed officer

The Contract Farming Sponsor to get the contract farmingagreement recordedwith a prescribed officer

No title, rights, ownership or possession shall betransferred or alienated or vest in the contract farmingsponsor or his successor or his agent as a consequencearising out of the contract farming agreement

Fast Dispute Settlement Mechanism at local level

Specification of Model Agreement for Contract Farming toensure inclusion of terms & conditions safeguarding interestof both farmers & buyers.

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Status of APMC Act Amendments

States/ UTs having Amended Acts

1. Andhra Pradesh (26.10.05)

2. Arunachal Pradesh (09.05.06)

3. Assam (19.01.07)

4. Chhattisgarh (10.02.06)

5. Goa (06.08.07)

6. Gujarat (01.05.07)

7. Himachal Pradesh (26.05.05)

8. Karnataka (16.08.07)9. Madhya Pradesh (15.06.03)

10. Maharashtra (11.07.06)

11. Nagaland (08.09.05)

12. Orissa (17.05.06)

13. Rajasthan (18.11.05)

14. Sikkim (20.04.05) &

15. Tripura (11.05.07)

Reportedly no Amendment Needed

1. Tamil Nadu

States/ UTs with no APMC Act

(1) Bihar (repealed w.e.f. 01.09.2006),

(2) Kerala, (3) Manipur and UTs of (4) Andaman

& Nicobar Islands, (5) Dadra & Nagar Haveli, (6)

Daman & Diu & (7) Lakshadweep

Partially Amended

(1) Punjab/ (2) UT of Chandigarh (Only private

markets & contract farming)(3) Haryana (Only Contract Farming) &

(4) NCT of Delhi (Only Direct Marketing)

Amendment Bills under finalization

(1) Jharkhand, (2) Uttarakhand, (3) U.P., (4) West

Bengal, (5) NCT of Delhi & (6) Puducherry

Remaining States

(1) Haryana, (2) J&K, (3) Meghalaya & (4)

Mizoram

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Private Market / Direct Marketing

Establishment of private market yard and

direct purchase from farmersStates which have adopted the suggested provision:

A.P., Arunachal Pradesh, Assam, Goa, Gujarat, H.P.,

Karnataka, M.P.{not for private market - direct sale canbe permitted under the bye-laws Sect 36(2)},

Maharashtra, Nagaland, Orissa (excluding for paddy/

rice), Punjab/ UT of Chandigarh (not for direct

purchase), Rajasthan, Sikkim, Tripura, T.N. & NCT of

Delhi

States which amended the Act but not adopted this provision:

Chhattisgarh

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Consumer/ Farmer Market

Establishment of consumer/ Farmer market

States which have adopted the suggested provision:

Arunachal Pradesh, Assam, Goa, Gujarat, H.P.,Karnataka, Maharashtra, M.P.(can be permitted

under the bye-laws), Nagaland, Punjab /UT ofChandigarh (only enabling provision) Rajasthan,Sikkim & Tripura

States which amended the Act but not adopted this provision:

A.P. ((being set up under Exemption Clauses),Chhattisgarh, Orissa, T.N. (being set up underExecutive Orders)

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Con tract Farm ing

The Contract Farming Sponsor shall get the contract

farming agreement recorded with the prescribed officer

States which have adopted the suggested provision:

A.P., Arunachal Pradesh, Assam, Chhattisgarh,Goa, Gujarat, Haryana, Karnataka, M.P.,

Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim

& Tripura

States which amended the Act but not adopted this provision:

H.P., Punjab/ UT of Chandigarh, T.N.

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Con tract Farm ing

No title, rights, ownership or possession shall be

transferred or alienated or vest in the contract farmingsponsor or his successor or his agent as a

consequence arising out of the contract farmingagreement

States which have adopted the suggested provision: Arunachal Pradesh, Assam, Goa, Haryana,

Karnataka, Maharashtra, Nagaland, Orissa,Rajasthan, Sikkim & Tripura

States which amended the Act but not adopted this provision:A.P., Chhattisgarh, Gujarat, H.P., M.P., Punjab/UT of

Chandigarh, T.N.

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Con tract Farm ing

Dispute Settlement Mechanism

States which have adopted the suggested provision: A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, Haryana, Karnataka, M.P., Maharashtra,Nagaland, Orissa, Rajasthan, Sikkim & Tripura

States which amended the Act but not adopted this provision:

H.P., Punjab/UT of Chandigarh, T.N.

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Con tract Farm ing

Specification of Model Agreement for Contract Farming

States which have adopted the suggested provision:

Chhattisgarh, Goa (as may be prescribed), Gujarat,

Haryana, Karnataka (as may be prescribed), M.P.,Maharashtra (Rules), Nagaland, Rajasthan, Sikkim &

Tripura

States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Assam, H.P., Orissa,

Punjab/UT of Chandigarh, T.N.

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Prohib i tion of Comm iss ion Agents

No commission agent shall act on behalf of agriculturistseller and no deduction to be made towards commission

States which have adopted the suggested provision:

Chhattisgarh, Nagaland, Sikkim

States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Assam, Goa, Gujarat,H.P.,

Karnataka, M.P., Maharashtra, Orissa, Punjab/UT ofChandigarh, Rajasthan, T.N. & Tripura

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Registrat ion of Market Func t ionar ies

Registration (not licensing) of market functionaries andsingle registration for trade/ transaction in more than one

market

States which have adopted the suggested provision:

Assam, Chhattisgarh, Goa, H.P., Maharashtra,Nagaland, Sikkim

States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Gujarat, Karnataka, M.P.,Orissa, Punjab/ UT of Chandigarh, Rajasthan, T.N.,

Tripura

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Sing le poin t levy of Market Fee

Market fee shall not be levied for the second time in any

market area of the State by market committee

Market fee not to be levied more than once in commercialtransactions between traders or sale to consumers

States which have adopted the suggested provision: Chhattisgarh, Goa, H.P., M.P., Nagaland, Punjab/ UT

of Chandigarh, Sikkim

States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Assam, Gujarat, Karnataka,

Maharashtra, Orissa, Rajasthan, T.N., Tripura

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Market Extn . Cell/ State Standards Bureau

Setting up of separate Market Extension Cell in the Board

Establishment of State Agricultural Produce MarketingStandard Bureau

States which have adopted the suggested provision:

Nagaland, Sikkim

States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,Gujarat,H.P., Karnataka, M.P., Maharashtra, Orissa,Punjab/UT of Chandigarh, Rajasthan, T.N. & Tripura

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Special Concerns In some States, no provision for registration of contract farming

sponsors, recording of contract farming agreement,dispute settlementmechanism, indemnity against the alienationof producers land on

failure of contract and a model agreement format for contract farming

In some States, no specific provisions for setting up of private markets/direct marketing, setting up of consumers/ producers marketsand fastredressal of disputeswith regard to the same

In some States, no provision forsingle point levy of market fee in theState

In some States, Licensing provided instead of registration for marketfunctionaries; No provision forsingle point registration for trade andtransaction in more than one market area

In some States, no provision to promote and encouragePPP inmanagement of markets/extension activitiesand e-trading

Rules not notifiedin many States for amended provisions (Notified

only in AP, HP, Karnataka, Maharashtra, Rajasthan, Orissa so far).

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Other Special Concerns

In some States, registration of contract farming

sponsors or processors vested with the Secretary of theAPMCshould be out of APMCs purview (better atState level)

In some States, contract farming dispute settlement

authority is State Level/ Divisional Officershould havebeen kept at below District level for easy access tofarmers

In some States, Private Markets have been restrictedwithin a specified distancefrom the existing regulatedmarkets under the Rules.

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Programmatic Ini t iat ives based on Reform s

Reform-linked central assistance to encourage public/ private investment

for development of marketing infrastructure, common facilities for

aggregation & value additionof produce and grading/ packaging/ qualitycertification facilities

Scheme to set up modern terminal marketsunder NHM for perishable

agricultural produce with suitable backward & forward linkages

Development of post-harvest/ cold chain infrastructure, CA storage

facilities, refrigerated transportation by road/ rail, perishable cargo

centres at air & sea ports under NHM

Action Plan for development of Food Processing Industriesincluding

setting up of Mega Food Parks

World Bankassisted MACP (5-6 States) and ADBStudy for Agri-business

Development Project (2 States)

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Present Scenario in Value Chainof Perishables

Cost build up for one Kg. basket Of Fruits

FARMER TRADER WHOLESALER RETAILER CONSUMERPRICE

3.34.1

1.72.5 11.6

Retail Markups

FARM GATE PRICES MILK FISH FRUITS &VEGETABLES

350

220160

100

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Collection Centre

Modern Terminal Market

Producers/ Farmers and

their Associations

Infrastructure:Washing, grading, sorting, weighment,transport to TM

Services:Collection & Aggregation of produce,Settlement of payment, advisory on inputs,

prices, quality, multi-modal transport

Infrastructure:Packhouse,Quality TestingFacility,Palletisation

Services:Transport (incl.cool chain),Settlement ofPayments,Banking, Marketinformation

ElectronicAuction

Banking Institution

Storage:Cold Storage,Temperaturecontrolledwarehouse,RipeningChamber

Processor Exporter Wholesaler/ Trader/Retail chainoperator

Direct Selling

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Act ion Requ ired for set t ing up TMCs

State Governmentto appoint a Nodal Officer (Secretary level)inconcerned Department & make him a member of SHM

SLEC of SHMto coordinate all aspects

State to arrange feasibility study & decide bid parameters for eachidentified location

Model bid documents & OMDA suggested by Central Govt. inOperational Guidelines Document

SHM to appoint reputed FI to assist Nodal Officer in two-stagebidding process, evaluation, short-listing of PE & entering intoagreements

Cost of feasibility study & engaging FI can be met from MissionManagement Funds of SHM

Equity support of up to 49% to be provided from NHM for TMC State Govt. can contribute to this equity (including land value/rentals)

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Thank you(For any further information please contact me

atuks.chauhan@gmail.com;

For details please visitwww.agmarknet.nic.in)

mailto:uks.chauhan@gmail.commailto:uks.chauhan@gmail.com