Agriculture Will Not Become A State Subject Matter

Posted by Jantz on December 27th, 2020

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 Region.

Speaking at the event, Mr. Shankarlal Guru, Chairman-International Society for Agricultural Marketing said Agricultural sector remains in urgent requirement of reforms by the respective State governments to assist drive the economy to a higher growth rate that is expected by the policy makers, but a thorough program for reforms in this important sector is yet to emerge. Thus, the need for Agriculture to be made a main topic and not a state topic, therefore alienating it from politics, stated Mr. Expert. Contract farming need to be encouraged as it will assist bring innovation and modern practices into the agriculture sector - believed Mr. Expert.

The APMC Act in each state of India requires all agricultural items to be sold just in federal government - regulated markets. These markets impose considerable taxes on purchasers, in addition to commissions and charges taken by middlemen, but usually provide little service in areas such as price discovery, grading or evaluation. An essential impact of this policy is the failure of economic sector processors and sellers to integrate their enterprises straight with farmers or other sellers, getting rid of intermediaries while doing so. Farmers also are not able to lawfully participate in agreements with purchasers. This leaves no incentives for farmers to upgrade, and inhibits personal and foreign financial investments in the food process sector.

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Also attending to 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 cruised through the scarcity economy to an economy with surplus in grains, it is very https://www.balotrade.com/minerals-metallurgy-c1 important that Governments at the Centre and State recognize the requirement for inclusive growth to take agriculture forward in India. Setting the context for the day's conversation, Mr. Sivakumar highlighted that in spite of utilizing about 57% of the population of the nation, farming on contributes 27% to the GDP of India. This distortion makes farming not a rewarding employment generator and hence, keeping with the international view, India needs to carve out opportunities 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 needs are required, which need alternative marketing mechanisms. For this reason, reforms in the APMC Act are suggested in different fields, he added.

Making a presentation on "Aligning State Policies with emerging brand-new marketing models", Prof. S Raghunath from the Indian Institute of Management-Bangalore, emphasized the need for a reliable and efficient circulation system for agri-produce and provision for supply-demand openness. Given that the primary objective of the APMC Act was to avoid exploitation of farmers by different intermediaries, reforms were required in the Act, with changing face of agriculture and the agricultural supply chain, suggested Prof Raghunath. India is the biggest manufacturer of veggie in the world, with a total share of 15% of global produce. 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 waste of 40% in India, informed Prof. Raghunath. Insufficient infrastructure and absence of organized supply chain were the main cause for such a disparity, he stated. Hence, reforms in this sector need to catch up with the pace of advancement in the economy and dis-intermediation and involvement of organized gamers in the sector will remove the lacunae, opined Prof. Raghunath.

Centre asks states to amend APMC Act

In a move to enable farmers to directly offer their fruit and vegetables to industry, contract farming and establishing of competitive markets in private and cooperative sector, the Centre has actually asked the state government to modify the Agricultural Produce Marketing Act.

Under today Act, the processing industry can not buy straight from farmers. The farmer is likewise limited from participating in direct agreement with any manufacturer due to the fact that the produce is required to be canalised through controlled markets. These restrictions are serving as a disincentive to farmers, trade and industries.

The government has actually just recently approved a central sector scheme titled "Development/strengthening of agricultural marketing facilities, grading and standardisation."

Under the scheme, credit connected investment aid shall be supplied on the capital cost of basic or product specific facilities for marketing of agricultural commodities and for enhancing and modernisation of existing farming markets, wholesale, rural regular or in tribal areas.

The plan is linked to reforms in state law dealing with agricultural markets (APMC Act). Help under the new scheme will be provided in those states that modify the APMC Act.

The Centre has actually asked the state governments to inform regarding whether required amendments to the APMC Act have been performed, in order to inform the reforming states for applicability of the scheme.

Along with the Centre, the market is likewise interested in the amendment to the APMC Function as it limits the development of sell farming commodities.

"The policy program relating to internal trade is especially limiting. The farming sector continues to be hamstrung by a variety of controls, which were presented throughout the age of shortages," said the PHDCCI.

On the other hand, a decentralised system of acquiring wheat and rice would make the Public Circulation System more cost effective, the government has actually said.