CII today organized a Seminar on Reforms in the APMC (Agricultural Produce Market Committee) Act, and its impact in the Southern States. This is an initiative of the Agri Business Sub-Committee, CII-Southern Area.
Speaking at the occasion, Mr. Shankarlal Expert, Chairman-International Society for Agricultural Marketing said Agricultural sector is in immediate need of reforms by the particular State federal governments to assist drive the economy to a higher growth rate that is expected by the policy makers, however a thorough agenda for reforms in this important sector is yet to emerge. For this reason, the need for Farming to be made a central subject and not a state subject, hence alienating it from politics, stated Mr. Guru. Contract farming must be encouraged as it will help bring innovation and contemporary practices into the agriculture sector - suggested Mr. Guru.
The APMC Act in each state of India needs all farming products to be sold only in federal government - regulated markets. These markets enforce considerable taxes on buyers, in addition to commissions and charges taken by intermediaries, but normally offer little service in locations such as cost discovery, grading or assessment. An essential effect of this guideline is the failure of economic sector processors and retailers to integrate their enterprises straight with farmers or other sellers, getting rid of middlemen at the same time. Farmers likewise are not able to lawfully enter into agreements with purchasers. This leaves no incentives for farmers to update, and inhibits private and foreign investments in the food process sector.
Also attending to the audience was Mr. Sivakumar, Chairman Agri Company Sub-Committee, CII-Southern Region and President - Agri, ITC Ltd. Said that Agri organization in India is at a shift point. Having actually sailed through the scarcity economy to an economy with surplus in grains, it is necessary that Federal governments at the Centre and State recognize the requirement for inclusive development to take agriculture forward in India. Setting the context for the day's conversation, Mr. Sivakumar stressed that in spite of using about 57% of the population of the nation, farming on contributes 27% to the GDP of India. This distortion makes agriculture not a profitable work generator and hence, keeping with the international view, India requires to take opportunities in agri-exports sector. Agreement farming and direct marketing to retail chains and processing systems are the need of the hour he stated. Regulations to equal these needs are needed, which require alternative marketing mechanisms. For this reason, reforms in the APMC Act are advised in different fields, he added.
Making a presentation on "Aligning State Policies with emerging brand-new marketing designs", Prof. S Raghunath from the Indian Institute of Management-Bangalore, emphasized the requirement for an efficient and efficient distribution system for agri-produce and provision for supply-demand transparency. Given that the main objective of the APMC Act was to avoid exploitation of farmers by different intermediaries, reforms were needed in the Act, with changing face of farming and the agricultural supply chain, suggested Prof Raghunath. India is the largest producer of vegetable worldwide, with a total share of 15% of worldwide produce. 8% of world's fruits are produced in India, ranking it second on the planet market. In spite of this, there is a high cumulative waste of 40% in India, notified Prof. Raghunath. Inadequate facilities and lack of arranged supply chain were the main cause for such a disparity, he stated. Thus, reforms in this sector need to overtake the speed of development in the economy and dis-intermediation and participation of arranged players in the sector will get rid of the lacunae, opined Prof. Raghunath.
Centre asks states to change APMC Act
In a transfer to permit farmers to directly sell their produce to industry, agreement farming and setting up of competitive markets in personal and cooperative sector, the Centre has actually asked the state government to amend the Agricultural Produce Marketing Act.
Under today Act, the processing market can not buy directly from farmers. The farmer is likewise limited from participating in direct contract with any maker due to the fact that the produce is needed to be canalised through regulated markets. These restrictions are serving as a disincentive to farmers, trade and industries.
The government has recently authorized a main sector plan titled "Development/strengthening of agricultural marketing facilities, grading and standardisation."
Under the plan, credit linked investment aid shall be provided on the capital expense of basic or product particular infrastructure for marketing of farming products and for reinforcing and modernisation of existing farming markets, wholesale, rural routine or in tribal areas.
The scheme is connected to reforms in state law handling farming markets (APMC Act). Assistance under the new https://www.balotrade.com/textiles-leather-products-c1 plan will be offered in those states that amend the APMC Act.
The Centre has actually asked the state federal governments to notify as to whether necessary changes to the APMC Act have been performed, in order to notify the reforming states for applicability of the scheme.
In addition to the Centre, the industry is likewise thinking about the amendment to the APMC Function as it restricts the development of trade in agricultural commodities.
"The policy program referring to internal trade is especially limiting. The agricultural sector continues to be hamstrung by a huge selection of controls, which were presented throughout the age of lacks," stated the PHDCCI.
On the other hand, a decentralised system of acquiring wheat and rice would make the Public Distribution System more cost effective, the government has actually stated.