Agriculture mandis

Agriculture mandis

Subject :Economy

Context:

Sahyadri Farmer Producer Company (FPC) has got the license to set up India’s first private agricultural mandi (market) at Dindori, in Nashik district.

Details:

• It will be a 100-acre dedicated market space integrated with world-class infrastructure, services from banking to storage, processing, and packaging under one roof, options for offline and online trading, field trade, and ownership of farmers.
• Private markets will trigger competition

Concept:

Agriculture produce marketing:

• Regulated marketing initiated through Agricultural Produce Marketing Regulation (APMR) Act.
• This act was passed by various state governments after independence in the 1950s and 60s.
  • Agricultural Produce Market Committee (APMC) is a system operating under the State Government since agricultural marketing is a State subject.
  •  While intra-state trades fall under the jurisdiction of state governments, inter-state trading comes under Central or Federal Government (including intra-state trading in a few commodities like raw jute, cotton, etc.
• Under the APMC Act, the states can establish agricultural markets, popularly known as mandis.
  • The sale of agricultural commodities can occur only in the mandis through auction.
  • The sales process in mandis is regulated through commission agents (CAs) –arhatiyas, who mediate between the farmers and traders.
  • The arhatiyas are often a moneylender, supplying seeds, fertilisers and pesticides to farmers on credit. They, then, are forced to sell through him and settle their dues in perpetuity.
  • Also, mandi fees range from 0.5% to 5% on the value of the sale, while varying across states and commodities.
• Agricultural Produce Market Committee (APMC) is a statutory market committee constituted by a State Government in respect of trade in certain notified agricultural or horticultural or livestock products, under the Agricultural Produce Market Committee Act issued by that state government.
• APMCs are intended to be responsible for:
  • ensuring transparency in pricing system and transactions taking place in market area;
  • providing market-led extension services to farmers;
  • ensuring payment for agricultural produce sold by farmers on the same day;
  • promoting agricultural processing including activities for value addition in agricultural produce;
  • Publicizing data on arrivals and rates of agricultural produce brought into the market area for sale; and
  • Setup and promote public private partnership in the management of agricultural markets
  • ensure farmers are safeguarded from exploitation by large retailers, as well as ensuring the farm to retail price spread does not reach excessively high levels.
  • APMC is also responsible for the regulation of agricultural trading practices.
• The National Agriculture Market (NAM) is a pan-India electronic trading portal, which links the existing Agricultural Produce Market Committee (APMC) mandis across the country to form a unified national market for agricultural commodities.

History:

• It was in 1886 when India established its first regulated market, Karanja.
• In 1887, under the Hyderabad Residency Order, the British government passed their first legislation, the Berar Cotton and Grain Market Act, which empowered British residents to declare any place in the assigned district a market for sale and purchase of agricultural produce and constitute a committee to supervise the regulated markets.
• The first farm produce to attract the attention of the government was raw cotton– due to the concern of British rulers to make available the supplies of pure cotton at reasonable prices to the textile mills of Manchester (UK).
• The concept of a mandi system was first introduced in 1928, where the Royal Commission on Agriculture wanted regulated markets.
• The Punjab Agricultural Produce Markets Act, which sets up APMC in Punjab was initiated in 1939.
• In pursuance, the Government of India prepared a Model Bill in 1938 and circulated it to all states; however, it was not until India’s independence in 1947 that any progress was really made.
• In the 1960s, when India was a newly independent country, many Indian citizens were starving due to food shortages.
• The Indian Government decided to go back to the 1928 report and developed a nationwide food marketing system to ensure fair prices, which differs from state to state.
• Under this mandi system farmers take their produce to wholesale markets called APMC Mandis to sell their produce to traders through open auctions with transparent pricing.
• Thus, organised agricultural marketing came into existence through regulated markets- otherwise referred to as mandis.