Farming Should Probably Not End Up Being A State Subject Matter

CII today arranged a Workshop on Reforms in the APMC (Agricultural Produce Market Committee) Act, and its impact in the Southern States. This is an effort of the Agri Business Sub-Committee, CII-Southern Area.

Speaking at the celebration, Mr. Shankarlal Master, Chairman-International Society for Agricultural Marketing said Agricultural sector is in urgent requirement of reforms by the particular State governments to assist drive the economy to a higher development rate that is expected by the policy makers, however a detailed agenda for reforms in this important sector is yet to emerge. For this reason, the need for Farming to be made a main topic and not a state subject, therefore alienating it from politics, said Mr. Expert. Contract farming ought to be motivated as it will assist bring innovation and modern practices into the farming sector - suggested Mr. Guru.

The APMC Act in each state of India needs all agricultural products to be offered just in federal government - regulated markets. These markets impose substantial taxes on buyers, in addition to commissions and fees taken by intermediaries, but typically provide little service in areas such as price discovery, grading or inspection. A crucial effect of this regulation is the failure of economic sector processors and merchants to incorporate their enterprises directly with farmers or other sellers, removing intermediaries in the process. Farmers also are not able to lawfully participate in agreements with purchasers. This leaves no incentives for farmers to upgrade, and prevents private and foreign investments in the food procedure sector.

Also addressing the audience was Mr. Sivakumar, Chairman Agri Company Sub-Committee, CII-Southern Area and President - Agri, ITC Ltd. Said that Agri business in India is at a shift point. Having actually cruised through the scarcity economy to an economy with surplus in grains, it is very important that Governments at the Centre and State recognize the need for inclusive development to take agriculture forward in India. Setting the context for the day's conversation, Mr. Sivakumar highlighted that in spite of employing about 57% of the population of the country, agriculture on contributes 27% to the GDP of India. This distortion makes farming not a profitable employment generator and for this reason, keeping with the worldwide view, India needs to carve out chances in agri-exports sector. Agreement farming and direct marketing to retail chains and processing systems are the requirement of the hour he said. Regulations to keep pace with these requirements are required, which need alternative marketing mechanisms. Hence, reforms in the APMC Act are advised in numerous fields, he added.

Making a presentation on "Aligning State Policies with emerging new marketing models", Prof. S Raghunath from the Indian Institute of Management-Bangalore, emphasized the need for a reliable and effective distribution system for agri-produce and arrangement for supply-demand openness. Because the main goal of the APMC Act was to prevent exploitation of farmers by numerous intermediaries, reforms were required in the Act, with altering face of farming and the farming supply chain, suggested Prof Raghunath. India is the largest manufacturer of vegetable worldwide, with an overall share of 15% of global fruit and vegetables. 8% of world's fruits are produced in India, ranking it second in the world market. In spite of this, there is a high cumulative wastage of 40% in India, notified Prof. Raghunath. Insufficient facilities and lack of arranged supply chain were the primary cause for such a disparity, he said. Hence, reforms in this sector requirement to catch up with the speed of advancement 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 amend APMC Act

In a move to allow farmers to directly sell their fruit and vegetables to market, agreement farming and setting up of competitive markets in private and cooperative sector, the Centre has asked the state government to modify the Agricultural Produce Marketing Act.

Under the present Act, the processing industry can not purchase directly from farmers. The farmer is likewise limited from entering into direct agreement with any manufacturer because the fruit and vegetables is needed to be canalised through regulated markets. These constraints are serving as a disincentive to farmers, trade and markets.

The federal government has just recently approved a main sector scheme entitled "Development/strengthening of farming marketing infrastructure, grading and standardisation."

Under the scheme, credit connected financial investment aid shall be supplied on the capital expense of basic or product particular facilities for marketing of agricultural products and for strengthening and modernisation of existing agricultural markets, wholesale, rural regular or in tribal locations.

The plan is connected to reforms https://www.balotrade.com/automobiles-motorcycles-c1 in state law handling agricultural markets (APMC Act). Assistance under the brand-new scheme will be supplied in those states that change the APMC Act.

The Centre has asked the state governments to notify as to whether necessary amendments to the APMC Act have actually been performed, in order to inform the reforming states for applicability of the plan.

In addition to the Centre, the market is also interested in the modification to the APMC Function as it restricts the development of trade in agricultural commodities.

"The policy regime relating to internal trade is especially restrictive. The agricultural sector continues to be hamstrung by a myriad of controls, which were introduced during the era of shortages," said the PHDCCI.

On the other hand, a decentralised system of acquiring wheat and rice would make the Public Distribution System more cost efficient, the federal government has said.