The COVID-19 Pandemic, which led to lockdowns and other restrictions across the country, is giving space to the ruling BJP to kick-start its reforms agenda. The BJP-ruled states have already reformed labour and land laws, and now it is the turn of agricultural reforms.
Last month, it was reported that the Union Agriculture Ministry had asked states to allow bulk buyers, processors and big retailers to purchase agricultural products directly from the farmers, with the twin objective of decongesting the mandis amidst the ongoing Pandemic and relaxing the monopoly of the Agriculture Produce Market Committee (APMC) markets (mandis) so that the farmers can sell their produce at the highest possible market price.
The BJP-ruled states of Madhya Pradesh, Uttar Pradesh and Gujarat have taken the Centre’s suggestion seriously and the APMC Acts are being amended in several states to pave way for direct buying from the farmers.
A couple of weeks ago, Madhya Pradesh Chief Minister Shivraj Singh Chauhan announced that the state government made several amendments to the APMC Act to ensure that the farmers get the maximum value for their crops.
The Agricultural market is being made more competitive, and while the farmers will still have the option to sell their produce at the Minimum Support Price (MSP) at the mandis, they will also be allowed to sell their produce to traders directly from home.
While interacting with farmers, via video conference, the Madhya Pradesh CM said, “By developing a more competitive system, we have tried to provide the farmers with maximum value for their produce.”
The Yogi administration in Uttar Pradesh has also moved to amend the APMC Act to pave way for providing maximum product value to the farmers in the state.
Massive reforms are underway in Uttar Pradesh, and with the latest amendments, the Yogi government plans to abolish certain provisions of the Uttar Pradesh Krishi Utpadan Mandi Act (APMC Act) through an Ordinance that will allow farmers to sell as many as 46 vegetables and fruits directly without having to bring them to the APMC mandis.
And even if the farmers do bring their produce to the mandis, they will no longer be made to shell out the existing mandi fees and charges. All they will be made to pay is a nominal user charge that will be levied on them.
Prime Minister Modi’s home state, Gujarat too has enacted long-overdue agricultural reforms, by amending the APMC Act. The amendment is on similar lines as Madhya Pradesh and Uttar Pradesh.
Scrapping the monopoly of APMC mandis, the state government has allowed private participation in the market for purchase of crops and even livestock like cows, bulls and horses.
Moreover, farmers are now free to sell their produce in any APMC mandi and they are no longer tied to any one market. Traders are also free to buy directly from the farmers and they are not required to pay any fee to the APMC mandis for that.
Meanwhile, former Karnataka Chief Minister Kumaraswamy has warned the incumbent Chief Minister, BS Yediyurappa against amending the APMC Act, but it remains to be seen if the ruling BJP government will anyway move ahead with bold reforms.
The APMC Acts that were originally enacted with the view of protecting the farmers from getting exploited by middlemen and influential traders, have become the biggest roadblock in a vibrant farm economy themselves.
These APMC mandis situated close to the farms have monopolised farm economy of India, which doesn’t allow farmers to directly access consumers.
In fact, experts have argued that open auction at APMC mandis do not allow farmers to sell their produce at the best market rate, because traders tend to resort to under-bidding. Where farmers are tied to single APMC mandis, the traders are able to form syndicates due to which product prices remain low for the farmers.
The APMC mandis are also a logistical nightmare as farmers have to pay a number of overheads- mandi fees and commissions, loading and unloading charges, apart from sundry expenses such as weighing.
All these costs get minimised when consumers are allowed to purchase agricultural produce directly from the farms. Handling expenses and other charges stand eliminated.
Amendments limiting the scope of APMC mandis and cutting through their detestable monopoly is going to unleash the potential of India’s farm sector like never before. For the first time, the Indian farmers will be able to truly capitalise upon their produce.
A business economy in India’s farm sector is in the making and the COVID-19 outbreak has allowed BJP-ruled states to enact the biggest agricultural reforms till date.
