Threat to APMC, MSP

Sher Singh Sangwan

THE Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill are being opposed by farmers’ groups in Punjab and Haryana, where the APMC (Agricultural Produce Market Committee) and MSP systems are almost fully operational.

Farmers of other states have also joining the protests.

As per the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, any trader may engage in inter-state and intra-state trade of the ‘scheduled farmers’ produce’ with a farmer or another trader in a ‘trade area’.

The ‘scheduled farmers’ produce’ are the commodities specified under any state APMC Act and the ‘trade area’ means any location such as the farmgate, factory premises, silos, cold storages or any other structures or places from where the trade in farmers’ produce is undertaken. But the trade area does not include the premises, enclosure and structures constituting markets under APMC, its licensed private markets.

In a trade area, no market fee, cess or levy shall be levied on any farmer or trader or electronic trading and transaction platform for trade and commerce in scheduled farmers’ produce, whereas it may be done in the APMC market. Obviously, the buyers, even individuals, may not go to the APMC market due to additional fees and cess.

The regulated markets for regulation of marketing practices were put in operation during the 1960s after enacting the Agricultural Produce Markets Regulation (APMR) Act. All primary wholesale assembling markets were brought under the ambit of the APMC which framed the rules and enforced them. Earlier, the Royal Commission on Agriculture, 1928, had recommended regulation of marketing practices which resulted in the preparation of a Model Bill in 1938, but it lingered on till the 1960s when the APMC came into force. In the past 50 years, there has hardly been any agitation by farmers against the APMC framework.

However, corporates have expressed concern over the APMC due to its fees and other taxes being realised there. The Farmers’ Produce Trade and Commerce Bill may dismantle the APMC to promote tax-free ‘trade areas’ of processors, stockists, etc. like the primary assembling markets which existed before the APMC.

The MSP was started for wheat and rice, but over time it has covered 20-odd crops.

It is a well-documented fact that the procurement at the MSP in Punjab and Haryana has been the strongest incentive for the farmers to make India an exporter of wheat and rice instead of an importer. Similarly, more procurement of pulses at the MSP in recent years has resulted in their self-sufficiency. But these two Bills will start dismantling the APMC system due to no tax in trade areas and could do way with the MSP regime, which was protecting and increasing the income of farmers.

It is a fact that owing to increasing stocks of wheat and rice, the Central government is under constant pressure to keep the stocks within a manageable limit.

Even the stocks of pulses and oilseeds procured by the government at the MSP are not disposed of before the next procurement season. The MSP has become a nationwide phenomenon due to higher procurement in recent years.

No mention of the MSP in the marketing reforms Bills has created apprehension among farmers. In such situations, the better alternative would be the area planning through registering for procurement before sowing of crops.

The author is a former Professor, SBI Chair, CRRID, Chandigarh