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HomeStateDraftHow India’s most farmer-friendly state failed to allow direct farmer-to-consumer sales

How India’s most farmer-friendly state failed to allow direct farmer-to-consumer sales

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Maharashtra government wanted to exempt all agricultural products from mandatory sales at regulated markets, but the attempt failed. 

Mumbai: Shital Rajoba, a farmer from Sangli district’s Narde village, was closely following developments in Maharashtra’s Vidhan Bhavan last week.

A bill important to him, one that would have permitted farmers like him to sell their produce directly to consumers instead of compulsorily taking it to designated agricultural markets, was likely to be passed.

It was a bill to amend the Maharashtra Agriculture Produce Marketing (Development and Regulation) Act, 1963. The amendment would have taken all agricultural produce out of the legislation’s purview, ensuring better prices for farmers by eliminating middlemen.

However, protests by traders, commission agents and labourers forced the Devendra Fadnavis government to withdraw the ordinance, and Rajoba’s hopes came crashing down.

For the farmers

The APMC Act was implemented in 1963, mainly to ensure that farmers had regulated markets close to their farms and that they didn’t get exploited by middlemen and traders.

The markets, which are supposed to be equipped with infrastructure such as auction halls, weigh bridges, warehouses, shops for retailers and so on, allow farmers to sell their produce to traders through an open auction, and supervise trade in agricultural commodities.

However, a number of experts and farmer leaders have called for the scrapping or limiting of the APMC Act, which is in force in several states, and allowing farmers direct access to consumers.

They say the APMC markets don’t help farmers get the most competitive prices as traders tend to resort to under-bidding. Moreover, farmers also have to pay various charges such as market fees and commissions, besides fees to labourers for loading, unloading, weighing and so on.

In open markets, on the other hand, farmers can sell directly to consumers. Unlike in APMC markets, there aren’t multiple levels of handling, and farmers do not have to pay any charges either. Additionally, it is said, open farmer-consumer markets help buyers get the best prices.

Also read: Farmers’ anger against Narendra Modi is no sign of their voting preference

Praise for reform

Maharashtra has 305 principal APMC markets, or regulated wholesale mandis, and 603 secondary ones, with an estimated turnover of about Rs 50,000 crore a year.

In 2016, despite protests by APMC traders, the Fadnavis government amended the law to take vegetables and fruits out of its purview, a move aimed at helping farmers. The government also opened farmer-consumer markets across the state and earned high praise from NITI Aayog for the reform.

The same year, the central planning agency released its first index on reforms in the farm sector and ranked Maharashtra as the most farmer-friendly state in the country.

But feedback for the experiment has been mixed, with farmers and experts saying that the shortage of compatible markets had rendered the move less fruitful than it should have been.

‘Middlemen still in the picture’

Farm activist Kishore Tiwari, who chairs the Vasantrao Naik Sheti Swavlamban Mission, a Maharashtra government task force, said the government had not been able to fully eliminate the role of middlemen despite the reforms.

“As of now, less than one per cent of the state’s farmers must be selling their produce directly to consumers,” he added.

“If you talk to farmers who sell outside APMC markets, one figures that the buyers sometimes end up being traders and not end consumers,” Tiwari said.

Sangli’s Shital Rajoba too said the 2016 reform had had a limited impact. “I had a good harvest of capsicum and brinjals last year, but I had no option other than the Sangli APMC market to go to,” he told ThePrint.

“There aren’t any alternative markets near me close to my village. And I am a farmer. Should I focus on farming or keep looking for buyers to purchase my produce outside the APMC?”

Tiwari added that farmers needed to create their own organisations and markets to be really free of exploitation by middlemen.

A crucial intervention

Maharashtra is not the first state to initiate agriculture market reforms. Bihar abolished the APMC Act in 2006, while Madhya Pradesh and Delhi have delisted fruits and vegetables from the Act’s purview. Many other states, meanwhile, have exempted fruits and vegetables from market fees.

The Maharashtra government’s latest proposal — to deregulate the sale of other agriculture commodities such as food grains, cereals, oilseeds, flowers, and even livestock — was seen as crucial at a time when several parts of the state have been grappling with an agrarian crisis.

The plan was to limit APMC’s powers to regulate trade within the jurisdiction of their yards, instead of the entire taluka.

The government also planned to nominate some mandis, such as those in Pune, Mumbai, Nashik and Nagpur, as markets of ‘national importance’ to help them grow as hubs for inter-state trading and even exports.

It proposed that the elected bodies for the nominated APMC markets be replaced with committees picked by the government. This proved controversial too as the opposition parties Congress and Nationalist Congress Party (NCP) have a strong hold over APMC markets, and the move was seen by some leaders as a government attempt to wrest control of major markets.

In October, the state government promulgated an ordinance for these reforms before tabling the bill during the winter session, which ended last week.

However, while the lower house passed the bill, the government withdrew it from the upper house after traders and loaders at some APMC markets went on strike.

Seeking to explain their opposition, Sanjay Pansare, a fruit trader at the Mumbai APMC, told ThePrint that direct sales to consumers didn’t benefit farmers.

“It is unfair that the government has maintained all the regulation that was in place within APMC markets and made trade completely free outside,” he added. “It is not practical and does not benefit farmers. Here, inside APMC markets, we have a system check to ensure that we are following the rules. There are no such checks outside.”

“The government has already deregulated fruits and vegetables, but has it benefited farmers at all?” he said

According to Pansare, outside APMC markets, consumers are scattered, and, on account of the demand-supply forces, it is the buyers who benefit instead of farmers.

The bill, meanwhile, is likely to return to the house in a revised form. Maharashtra cooperation minister Subhash Deshmukh has said the bill was passed by the lower house in a hasty manner and would be brought back after suggestions of all stakeholders were taken into account.

Also read: Why angry farmers protesting in Delhi could spell trouble for BJP


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