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Acts and Policies that Help for Agriculture Marketing in India

Updated: Oct 9

Why we need laws and policies for agriculture marketing

Source: EURObiz

Law is a key tool for policymakers who reform the agricultural marketing system. To improve the agricultural marketing system, there should be an adequate understanding of the relationship between law and the functioning of the marketing system. The liberalization of the agricultural marketing system is a new concept to be implemented in the future. For these kinds of improvements, we have to focus on legal reforms. Because legal reforms enhance the efficiency and effectiveness of the marketing system.

These agriculture laws and policies used to,

  • Regulate marketing practices.

  • Clearly define and specify the marketing charges.

  • Prohibit unwarranted deductions.

  • Ensure the correct weighments.

  • Supply correct and reliable information on prices.

  • Enforce buy and sell quality standards and standard contracts.

In India, the agricultural produce market act exists to protect farmers from rip off by middlemen.


Acts for Agricultural Marketing


1. Agriculture Produce Market Committee Act


Source: Moneycontrol

Earlier money lenders and traders have controlled the whole market system. So the APMC Act has been enacted to get rid of farmers from continues debts instead of profits by different states.





Features of APMC Act:

  • Based on geography, the state is divided into different markets. Each market area falls under the jurisdiction of a market committee. Anyone can’t freely carry on wholesale market activities.

  • These markets are managed by the Market Committees and constituted by State Governments.

  • All traders have to take a license before carrying out any activity.

Fees related to the APMC Act:

  • A market fee as the tax levied by the state.

  • A market fee from the buyers and a licensing fee from the commissioning agents.

  • A small licensing fee from functionaries such as (warehousing agents, leading agents, etc.)

  • Large fees from both buyers and sellers by commission agents

  • Statutory levies, mandi tax, and VAT

  • Hidden charges – legal fee, tax

2. Essential Commodities Act

This Act was enacted to control and regulate trade and prices of commodities declared essential. These essential commodities include foodstuff, drugs, fuel (petroleum products), etc.


Features of the Essential Commodity Act:

  • It includes licensing, distribution, and imposing stock limits as measures

  • Empowers the Central and state governments concurrently to control the production, supply, and distribution of certain commodities in view of rising prices.

  • Fix the price limits of commodities. People who sell above those limits will penalties.

  • Control the black marketing of essential commodities.

  • Issue Drug Price Control Orders (DPCO)

  • Maintain, increase supplies, and secure the equitable distribution and availability of essential commodities at a fair price.

  • Improves supplies.

3. Model Agriculture Produce Market Committee Act 2003

This act has been enacted to reduce the monopoly power of the government on wholesalers and increase market efficiency.


Features of the Model APMC Act

  • Allows direct sale of farm produce

  • Has a sector for set up special markets for special commodities

  • Permits private individuals to establish new farm produce markets

  • Levy market fee for both bought and sold Agri commodities which brought from within and outside the state

  • Replaces licensing with registrations of market functionaries and trade

  • State Agriculture Marketing Board should take the responsibility of grading and standardization

  • Permits Market Committees to use its fund to create facilities

4. Warehousing (Development and Regulation) Act 2007

The aim of enacting this Act is to facilitate improved commodity financing and give a fillip to attracting investment in warehousing.


Features of Warehousing (Development and Regulation) Act:

Source: iPleaders Blog
  • Regulate warehousing business

  • Accreditation and registration of warehouses – Warehouses who has registered in the Warehousing Development and Regulation Authority can issue Negotiable Warehouse Receipts.

  • Special provisions for warehouse registration of Primary Agricultural Corporative Societies

  • Introduce Negotiable Warehouse System in cold storages – This is done by the consultation of the National Horticulture Mission and the National Horticulture Board.

  • Notification of agriculture commodities – Includes 123 agriculture commodities and 26 horticulture commodities.

  • Makes the warehouseman liable for loss of, or injury to, goods caused by his failure and also provides for compensation to the depositor of the goods

  • provides for punishment if the warehouseman knowingly issues a negotiable warehouse receipt

Policies for Agriculture Marketing


1. National Agricultural Policy – 2000

This policy has been formulated for the sustainable development of the agriculture sector in India.


Aims -

  • Actualize the vast untapped agriculture growth potential in India.

  • Strengthen the rural infrastructure as support to faster the agriculture development

  • Promote value addition of Agri produce

  • Create employment in the rural area

  • Discourage migration into urban areas

Highlights-

  • Greater private sector participation

  • Price protection for farmers

  • Will launch a National Agricultural Insurance Scheme

  • Dismantle the restrictions on agriculture commodity movements throughout the country

  • Minimize the price fluctuation of agriculture commodities

2. Farmer Producer Organization Policy – 2017


Aims -

  • Produce economically viable, democratic, and self-governing Farmer Producer Organizations (FPOs)

  • Provide assistant and resources for FPOs

  • As support for promoting FPOs

  • Remove barriers which prevent entering farmers to the market through FPOs

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