Reforms in Agricultural Marketing adoption and implications

1
Reforms in Agricultural Marketing- adoption and
implications

• Dr. B.K.Paty
• Deputy Director
• NIAM

2
Agricultural Marketing Constraints

• Predominantly marginal or small farmers Hence
  small marketable surpluses limited bargaining
  power
• Poor availability of markets monopolistic
  tendencies of APMCs
• Inadequate infrastructure in wholesale markets/
  rural primary markets
• Lack of fair price discovery mechanism
• Multiple and exploitative intermediaries low
  returns
• Fragmented supply chain, poor cold chain high
  post-harvest losses
• Lack of cleaning, grading, packaging quality
  certification facilities
• Limited access to market information and
  marketing opportunities available

3
Reforms in Agricultural Marketing Sector

• Necessary to
• Enable producers to undertake market-driven
  production planning.
• Facilitate integration of farm production with
  domestic and Global markets.
• Attract massive investments needed for building
  Post-Harvest infrastructure.

4
Initiative of Market Reforms

• Amendments in APMC Acts suggested by Expert
  Committee on Market Reforms constituted by the
  Ministry of Agriculture (Report in June, 2001)
• Expert Committee recommendations discussed in the
  National Conference of State Agriculture
  Marketing Ministers on 27.09.2002
• Standing Committee of State Agricultural
  Marketing Ministers constituted under the
  Chairmanship of Union MOS (A) met resolved to
  implement reforms on 29.01.2003
• Committee headed by Additional Secretary (AM),
  GOI including State Representatives set up to
  draft a Model Law for Agri-Marketing
• Model APMR Act finalized on 09.09.2003 by the
  Committee and circulated to States by Central
  Government
• Model Rules based on the Model Act circulated to
  States by the Ministry in November, 2007
• NDC has resolved on 29th May, 2007 for completion
  of amendments in APMC Acts and notification of
  Rules there under by March, 2008.

5
Amendments Proposed in Model APMC Act

• Allow establishment of Private or Cooperative
  markets/ Farmer-consumer markets/ Direct
  marketing
• Safeguard the interest of the farmers through
  provisions for Contract Farming
• Single point levy payment of market fee/ Single
  point registration of functionaries
• Prohibition of Commission Agents for
  agriculturists and no deduction to be made
  towards commission
• PPP in management extension activities/
  Promotion of e-trading/ Electronic Spot Exchanges
• Encouraging professional management in APMCs
• Promotion of Grading Standardization.

6
Proposed Legal Framework of Contract Farming

• Contract Farming Sponsor to register himself with
  a prescribed officer
• The Contract Farming Sponsor to get the contract
  farming agreement recorded with a prescribed
  officer
• No title, rights, ownership or possession shall
  be transferred or alienated or vest in the
  contract farming sponsor or his successor or his
  agent as a consequence arising out of the
  contract farming agreement
• Fast Dispute Settlement Mechanism at local level
• Specification of Model Agreement for Contract
  Farming to ensure inclusion of terms conditions
  safeguarding interest of both farmers buyers.

7
Status of APMC Act Amendments
8
Private Market / Direct Marketing

• Establishment of private market yard and
• direct purchase from farmers
• States which have adopted the suggested
  provision
• A.P., Arunachal Pradesh, Assam, Goa, Gujarat,
  H.P., Karnataka, M.P.not for private market -
  direct sale can be permitted under the bye-laws
  Sect 36(2), Maharashtra, Nagaland, Orissa
  (excluding for paddy/ rice), Punjab/ UT of
  Chandigarh (not for direct purchase), Rajasthan,
  Sikkim, Tripura, T.N. and Jharkhand.
• States which amended the Act but not adopted this
  provision
• Chhattisgarh

9
Consumer/ Farmer Market

• Establishment of consumer/ Farmer market
• States which have adopted the suggested
  provision
• Arunachal Pradesh, Assam, Goa, Gujarat, H.P.,
  Karnataka, Maharashtra, M.P.(can be permitted
  under the bye-laws), Nagaland, Punjab /UT of
  Chandigarh (only enabling provision) Rajasthan,
  Sikkim, Tripura and Jharkhand
• States which amended the Act but not adopted this
  provision
• A.P. ((being set up under Exemption Clauses),
  Chhattisgarh, Orissa, T.N. (being set up under
  Executive Orders)

10
Contract Farming

• The Contract Farming Sponsor shall get the
  contract farming agreement recorded with the
  prescribed officer
• States which have adopted the suggested
  provision
• A.P., Arunachal Pradesh, Assam, Chhattisgarh,
  Goa, Gujarat, Haryana, Karnataka, M.P., H.P.,
  Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim,
  Tripura and Jharkhand
• States which amended the Act but not adopted this
  provision
• Punjab/ UT of Chandigarh, T.N.

11
Contract Farming

• No title, rights, ownership or possession shall
  be transferred or alienated or vest in the
  contract farming sponsor or his successor or his
  agent as a consequence arising out of the
  contract farming agreement
• States which have adopted the suggested
  provision
• Andhra Pradesh, Arunachal Pradesh, Assam, Goa,
  Haryana, Karnataka, Maharashtra, Nagaland,
  Orissa, Rajasthan, Sikkim, Tripura and Jharkhand
• States which amended the Act but not adopted this
  provision A.P., Chhattisgarh, Gujarat, H.P.,
  M.P., T.N., Punjab and Chandigarh
• ( Nomenclature as Market oriented Farming)

12
Contract Farming

• Dispute Settlement Mechanism
• States which have adopted the suggested
  provision
• A.P., Arunachal Pradesh, Assam, Chhattisgarh,
  Goa, Gujarat, Haryana, H.P. Karnataka, M.P.,
  Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim,
  Tripura and Jharkhand
• States which amended the Act but not adopted this
  provision
• T.N., Punjab and Chandigarh

13
Contract Farming

• Specification of Model Agreement for Contract
  Farming
• States which have adopted the suggested
  provision
• Chhattisgarh, Goa (as may be prescribed),
  Gujarat, Haryana, Karnataka (as may be
  prescribed), M.P., Maharashtra (Rules), Nagaland,
  Rajasthan, Sikkim, Tripura and Jharkhand
• States which amended the Act but not adopted this
  provision
• A.P., Arunachal Pradesh, Assam, H.P., Orissa,
  T.N., Punjab and Chandigarh

14
Prohibition of Commission Agents

• No commission agent shall act on behalf of
  agriculturist seller and no deduction to be made
  towards commission
• States which have adopted the suggested
  provision
• Madhya Pradesh, Chhattisgarh, Nagaland and Sikkim
• States which amended the Act but not adopted this
  provision
• A.P., Arunachal Pradesh, Assam, Goa, Gujarat,
  H.P., Karnataka, M.P., Maharashtra, Orissa,
  Rajasthan, T.N., Tripura, Punjab, Chandigarh and
  Jharkhand

15
Registration of Market Functionaries

• Registration (not licensing) of market
  functionaries and single registration for trade/
  transaction in more than one market
• States which have adopted the suggested
  provision
• Assam, Chhattisgarh, Goa, H.P., Maharashtra,
  Nagaland, Sikkim and Jharkhand
• States which amended the Act but not adopted this
  provision A.P., Arunachal Pradesh, Gujarat,
  Karnataka, M.P., Orissa, Punjab/ UT of
  Chandigarh, Rajasthan, T.N., Tripura

16
Single point levy of Market Fee

• Market fee shall not be levied for the second
  time in any market area of the State by market
  committee
• Market fee not to be levied more than once in
  commercial transactions between traders or sale
  to consumers
• States which have adopted the suggested
  provision
• Chhattisgarh, Gujarat, Goa, H.P., M.P., Nagaland,
  Punjab/ UT of Chandigarh, Sikkim and Jharkhand
• States which amended the Act but not adopted this
  provision
• A.P., Arunachal Pradesh, Assam, Karnataka,
  Maharashtra, Orissa, Rajasthan, T.N. and Tripura

17
Market Extn. Cell/ State Standards Bureau

• Setting up of separate Market Extension Cell in
  the Board
• Establishment of State Agricultural Produce
  Marketing Standard Bureau
• States which have adopted the suggested
  provision
• Nagaland, Sikkim and Karnataka
• States which amended the Act but not adopted this
  provision
• A.P., Arunachal Pradesh, Assam, Chhattisgarh,
  Goa, Gujarat, H.P., M.P., Maharashtra, Orissa,
  Punjab/UT of Chandigarh, Rajasthan, T.N., Tripura
  and Jharkhand

18
Special Concerns A.P.

• No provision to promote and encourage PPP in
  management of markets e-trading
• No provisions regarding indemnity against the
  alienation of producers land on failure of
  contract farming
• No provision specifying a model agreement format
  for contract farming
• No provision for single point levy of market fee
  in the State
• Licensing provided instead of registration for
  market functionaries No provision for single
  point registration for trade and transaction in
  more than one market area
• No provision for prohibiting commission agents in
  APMCs
• No clear-cut provision for setting up of producer
  / consumer markets (being facilitated through
  exemption clause) and dispute settlement
  mechanism for private markets/ direct marketing
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau

19
Special Concerns Arunachal Pradesh

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• No provision specifying a model agreement format
  for contract farming
  
  
  
  
  
  
• No provision for single point levy of market fee
  in the State
• Licensing provided instead of registration for
  market functionaries No provision for single
  point registration for trade and transaction in
  more than one market area
• Provision for prohibiting commission agents by a
  resolution of APMCs
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau
• Rules not notified for amended provisions.

20
Special Concerns Assam

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• Registration of contract farming sponsor with the
  DC would have been better at State level
  recording agreement also with DC - would have
  been better at lower level/ APMC
• Dispute settlement on contract farming at
  Director level no clear provision for appeal -
  dispute settlement below District level and
  appeal at District/ Divisional level was
  desirable
• No provision specifying a model agreement format
  for contract farming
  
  
  
  
  
  
• No provision for single point levy of market fee
  in the State
• Licensing provided instead of registration for
  market functionaries No provision for single
  point for registration for trade and transaction
  in more than one market area
• No provision for prohibiting commission agents in
  APMCs
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau
• Rules not notified for amended provisions.

21
Special Concerns Chhattisgarh

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• No provision for registration of Contract Farming
  Sponsors and indemnity against the alienation of
  producers land on failure of contract farming
• Licensing provided instead of registration for
  market functionaries
• No specific provisions for setting up of private
  markets/ direct marketing, setting up of
  consumers/ producers markets and redressal of
  disputes with regard to the same
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau
• Rules not notified for amended provisions.

22
Special Concerns Goa

• No provision to promote and encourage e-trading
• No provision for prohibiting commission agents in
  APMCs
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau.

23
Special Concerns Gujarat

• No provision to promote and encourage PPP in
  management of markets extension activities
• No provisions for registration of contract
  farming sponsors and indemnity against the
  alienation of producers land on failure of
  contract farming
• No provision for single point registration of
  market functionaries for trade and transaction in
  more than one market area
• No provision for single point levy of market fee
  in the State
• No provision for prohibiting commission agents in
  APMCs
• Provision for setting up private market
  restricted for trading in only fruits
  vegetables
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau
• Rules not notified for amended provisions.
• Special Feature Provision for setting up of
  e-markets

24
Special Concerns H.P.

• Registration of contract farming sponsors or
  processors vested with the Secretary of the APMC
  would have been better at State level
• No provision for recording of the contract
  farming agreement, safeguarding the rights of the
  farmers over land in the case of the failure of
  the contract, dispute redressal under contract
  farming etc.
  
  
  
  
  
  
• No provision specifying a model agreement for
  contract farming
• No provision for prohibiting commission agents in
  APMCs
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau
• Rules not notified so far for amended provisions.

25
Special Concerns Karnataka

• No provision for single point registration of
  market functionaries for trade and transaction in
  more than one market area
• No provision for prohibiting commission agents in
  APMCs
• No provision for setting up of a separate market
  extension/ training cell
• Rules not notified for amended provisions.
• Special Features
• Constitution of a revolving fund for implementing
  a floor price scheme and procurement of produce
  at MSP (also a provision for State MSP)
• Market fee reduced by 30 for private markets,
  spot exchange, direct purchase and purchase under
  contract farming
• No market fee for 5 years on purchases made by
  new processing industries
• Price determination mechanism for private markets
  and direct marketing
• Establishment of Spot Exchange to facilitate
  online trading clearing system.

26
Special Concerns M.P.

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• No provisions for registration of contract
  farming sponsors and indemnity against the
  alienation of producers land on failure of
  contract
• No clear-cut provision has been made under the
  Act for private markets, direct marketing,
  setting up of producer / consumer markets and
  disputes settlement (made permissible through
  bye-laws)
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau.

27
Special Concerns Maharashtra

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• Provided for licensing of market functionaries
  instead of registration
  
  
  
  
  
  
• No provision for single point levy of market fee
  in the State
• No provision for prohibiting commission agents in
  APMCs
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau
• Private markets restricted within a specified
  distance from the existing regulated markets
  under the Rules

28
Special Concerns Orissa

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• Registration of contract farming sponsors or
  processors vested with the Secretary of the APMC
  - would have been better at State level
• Dispute settlement authority is Director would
  have been at below District level for easy access
  to farmers
• No provision specifying a model agreement for
  contract farming
• Provided for licensing of market functionaries
  instead of registration no provision for single
  point registration of market functionaries for
  trade and transaction in more than one market
  area
• No provision for single point levy of market fee
  in the State
• No provision for prohibiting commission agents in
  APMCs
• No provision for direct marketing, setting up of
  producer / consumer markets and dispute
  settlement mechanism for private/ producers
  market direct marketing
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau.

29
Special Concerns Punjab/Chandigarh

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading (Provision to promote and encourage
  e-trading was introduced under the Ordinance
  which has lapsed)
• No clear-cut provisions for registration of
  contract farming sponsors, recording of contract
  farming agreement, dispute settlement mechanism
  and indemnity against the alienation of
  producers land on failure of contract etc.
• No provision specifying a model agreement format
  for contract farming
• Provided for licensing of market functionaries
  instead of registration
• 
  
  
  
  
  
  
• No provision for single point registration of
  market functionaries for trade and transaction in
  more than one market area (It was provided in the
  Ordinance which has lapsed)
• No provision for prohibiting commission agents in
  APMCs
• Provision for direct marketing was made under the
  Ordinance which has lapsed
• Under the provision for private market yards,
  Govt. can fix distance limits
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau.

30
Special Concerns Rajasthan

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• Registration of contract farming sponsors or
  processors vested with the Secretary of the APMC
  - would have been better at State level
• No clear-cut provision for single point levy of
  market fee in the State
• No provision for single point registration of
  market functionaries for trade and transaction in
  more than one market area
• No provision for prohibiting commission agents in
  APMCs
• No provision for dispute settlement in the cases
  of private markets etc.
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau
• Rules not notified so far for amended provisions.

31
Special Concerns T.N.

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• No provisions for registration of contract
  farming sponsors, recording of contract farming
  agreement, dispute settlement mechanism and
  indemnity against the alienation of producers
  land on failure of contract etc.
• No provision specifying a model agreement format
  for contract farming
  
  
  
  
  
  
• No clear-cut provision for single point levy of
  market fee in the State
• No provision for single point registration of
  market functionaries for trade and transaction in
  more than one market area
• No provision for prohibiting commission agents in
  APMCs
• No provision for private markets, direct
  marketing, setting up of producer / consumer
  markets (being set up under Executive Orders) and
  dispute settlement thereon
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau.

32
Special Concerns Tripura

• No provision to promote and encourage PPP in
  management of markets extension activities and
  e-trading
• No provision for single point levy of market fee
  in the State
• No provision for single point registration of
  market functionaries for trade and transaction in
  more than one market area
• No clear-cut provision for prohibiting commission
  agents in APMCs
• No provision for setting up of a separate market
  extension/ training cell and the agricultural
  produce marketing standards bureau
• Rules not notified so far for amended provisions.

33
Thank you