AGRICULTURE PRODUCE MARKET COMMITTEE (APMC)
Process of Agricultural Marketing in India
Agricultural marketing in India involves the entire process of bringing agricultural products from the farm to the end consumers. This process encompasses various stages and intermediaries.
Here is an overview of the key steps in the agricultural marketing process in India:
- The process begins with the production of agricultural goods on farms. Farmers engage in activities such as cultivation, planting, and raising livestock to produce crops and animal products.
- Once the crops are mature, farmers harvest them. Harvesting involves cutting or gathering the crops, and in the case of perishable products, it's important to ensure timely and efficient harvesting.
- After harvesting, agricultural products may go through a grading and sorting process. This involves classifying products based on quality, size, and other characteristics. Grading ensures standardization and helps in determining the market value of the produce.
- Agricultural products are packed for transportation to markets. Proper packaging is essential for preserving the quality of perishable goods and protecting them during transit.
- Transporting agricultural products from the farm to markets is a critical step. Transportation modes include roadways, railways, waterways, and airways. Efficient transportation helps in minimizing post-harvest losses.
- Agricultural produce is often first sold in wholesale markets or mandis. These markets act as intermediaries between farmers and retailers or processors. Wholesale markets may be regulated by Agricultural Produce Market Committees (APMCs) in some states
Structure of Agricultural Marketing in India
The structure of agricultural marketing in India is characterized by a multi-tiered system involving various intermediaries and market channels. The structure has evolved over time and is influenced by factors such as government regulations, market dynamics, and the diversity of agricultural practices across different regions. Here's an overview of the key components of the agricultural marketing structure in India:
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Farm Level:
- Producers/Farmers: The process begins at the farm level where farmers engage in cultivation, growing crops, and raising livestock.
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Village Level:
- Village Markets: In many cases, there are local village markets where farmers directly sell their produce to local consumers or small traders.
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Primary Wholesale Markets:
- Primary Wholesale Markets (Mandis): Agricultural produce from villages often moves to primary wholesale markets or mandis. These markets are regulated by Agricultural Produce Market Committees (APMCs) in some states. Here, farmers sell their produce to commission agents, traders, and other intermediaries.
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Commission Agents (Arhatiyas):
- Commission Agents (Arhatiyas): These intermediaries facilitate the sale of agricultural produce in wholesale markets. They act as commission agents or brokers between farmers and traders, helping in grading, sorting, and auctioning of products.
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Traders/Wholesalers:
- Wholesale Traders: After purchase in wholesale markets, traders or wholesalers buy the agricultural produce in bulk. They may transport it to larger markets or storage facilities for further distribution.
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Secondary Wholesale Markets:
- Secondary Wholesale Markets: In larger towns or cities, secondary wholesale markets exist where traders from primary markets supply agricultural products to retailers, processors, and exporters.
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Retail Markets:
- Retailers: Agricultural products reach the retail level through various channels, including local markets, street vendors, grocery stores, supermarkets, and online platforms. Retailers sell directly to consumers.
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Processing and Value Addition:
- Processing Units: Some agricultural products undergo processing and value addition before reaching consumers. This can include cleaning, packaging, and the production of processed food items.
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Export:
- Exporters: Agricultural products may be exported to international markets. Exporters play a crucial role in facilitating the export of agricultural goods, contributing to foreign exchange earnings.
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Government Interventions:
- Government Agencies: Government agencies, such as the Food Corporation of India (FCI) and National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), may intervene in agricultural marketing through policies, procurement, and distribution programs.
Agricultural Produce Market Committee (APMC)
The Agricultural Produce Market Committee (APMC) is a regulatory body that operates at the state level in India and is responsible for the regulation and oversight of agricultural markets, commonly known as mandis. The primary objective of APMCs is to facilitate fair and transparent trading practices, protect the interests of farmers, and ensure the smooth functioning of agricultural markets.
Functions of APMCs:
- APMCs regulate the marketing of agricultural produce within their jurisdiction. They provide a platform for farmers to sell their produce through an organized and transparent process
- APMCs develop and maintain market infrastructure, including market yards, auction platforms, storage facilities, and other amenities required for the buying and selling of agricultural commodities
- APMCs issue licenses and registrations to traders, commission agents (arhatiyas), and other participants involved in agricultural trade within the market area. This helps in ensuring that only authorized and registered entities operate in the market
- APMCs levy fees and charges on the transactions that take place within the market. These fees contribute to the maintenance and development of market infrastructure. The fees are typically collected from traders and commission agents
- APMCs facilitate a price discovery mechanism through open and transparent auction processes. The prices are determined based on the demand and supply dynamics in the market
- APMCs are structured with market committees that oversee the functioning of individual markets. These committees include representatives from farmers, traders, local authorities, and government officials
- APMCs play a role in resolving disputes related to agricultural transactions within the market. They may set up mechanisms for dispute resolution and ensure that grievances are addressed promptly
- APMCs provide market intelligence and information to farmers, helping them make informed decisions about when and where to sell their produce. This includes disseminating information on prevailing market prices, demand trends, and other relevant factors
- APMCs may facilitate various market-related services, such as storage, warehousing, and quality testing, to ensure that agricultural produce maintains its quality during the marketing process
- APMCs are responsible for enforcing rules and regulations related to the buying and selling of agricultural produce within their market areas. This includes ensuring fair trade practices and preventing malpractices
e-NAM
The e-NAM (National Agriculture Market) and APMC (Agricultural Produce Market Committee) are two interconnected initiatives in India aimed at transforming the agricultural marketing system by leveraging technology and creating a unified national market for agricultural commodities.
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e-NAM (National Agriculture Market):
- Objective: The e-NAM platform was launched with the objective of creating a unified national market for agricultural commodities by connecting existing APMCs across the country.
- Key Features:
- Online Trading: e-NAM enables online trading of agricultural commodities, allowing farmers to sell their produce to buyers beyond their local APMC.
- Transparency: The platform brings transparency to the trading process by providing real-time information on prices and transactions.
- Quality Testing: e-NAM facilitates quality testing and certification of agricultural produce, ensuring that buyers are informed about the quality of the products.
- Payment Facility: The platform supports electronic payment mechanisms, making transactions more secure and efficient.
- Reduced Intermediaries: e-NAM aims to reduce the role of intermediaries, leading to better price realization for farmers.
Model APMC Act of 2003
The Model Agricultural Produce Marketing Committee (APMC) Act of 2003 was drafted by the Government of India to provide a template for states to reform and modernize their agricultural marketing laws and practices. The primary objective was to encourage private sector participation, enhance competition, and create a more efficient and transparent agricultural marketing system. The model act aimed at addressing the shortcomings in the existing APMC laws, promoting fair trade practices, and improving farmers' income
Provisions of the Act:
- The act defined the market area for each market committee and the establishment of market yards within the market area
- It introduced a registration system for market functionaries such as commission agents, traders, and other intermediaries operating within the market area
- Buyers and sellers participating in transactions within the market yard were required to obtain licenses from the market committee
- The model act allowed for a single license to operate in multiple markets within a state, promoting ease of business for market participants
- The act encouraged the use of electronic trading platforms for transparent and efficient transactions. It facilitated online bidding, auctioning, and payment mechanisms
- The model act prescribed a transparent fee structure for various services provided by the market committee, and it aimed at reducing the burden of multiple levies on farmers
