, New Law For Private Agri Markets, Bihar Experience
Among the three bills on agricultural reforms approved by Parliament this week, perhaps the most contentious one is the Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020. It seeks to provide for trading areas outside mandis of an Agricultural Produce Marketing Committee (APMC). This has been a source of anger among farmers. The basic argument behind the reforms is that APMC mandis impose charges which reduce the price realization of farmers. The commission charged by middlemen is an example. By allowing unregulated trading areas beyond APMC mandis, the law seeks to remove intermediaries from agricultural trade and raise price realization for farmers.
Arguments against APMC mandis are well known. The biggest complaint is their excessive politicization, which has resulted in cartelization and price fixing. Precisely for this reason, there have been several attempts at reforming their functioning. Easier licensing norms, the removal of entry and exit barriers and computerization and transparency have been introduced in most APMC markets. However, the Bihar government decided to abolish the APMC system altogether in 2006.
https://www.livemint.com/opinion/columns/lessons-from-bihar-s-abolition-of-its-apmc-system-for-farmers-11600962615201.html
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, New Law For Private Agri Markets, Bihar Experience Among the three bills on agricultural reforms approved by Parliament this week, perhaps the most contentious one is the Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020. It seeks to provide for trading areas outside mandis of an Agricultural Produce Marketing Committee (APMC). This has been a source of anger among farmers. The basic argument behind the reforms is that APMC mandis impose charges which reduce the price realization of farmers. The commission charged by middlemen is an example. By allowing unregulated trading areas beyond APMC mandis, the law seeks to remove intermediaries from agricultural trade and raise price realization for farmers. Arguments against APMC mandis are well known. The biggest complaint is their excessive politicization, which has resulted in cartelization and price fixing. Precisely for this reason, there have been several attempts at reforming their functioning. Easier licensing norms, the removal of entry and exit barriers and computerization and transparency have been introduced in most APMC markets. However, the Bihar government decided to abolish the APMC system altogether in 2006. https://www.livemint.com/opinion/columns/lessons-from-bihar-s-abolition-of-its-apmc-system-for-farmers-11600962615201.html