Electronic copy available at: http://ssrn.

com/abstract=1694096
THE INDIAN FARMER, MIDDLEMEN AND THE APMCS
SUBJECT: Law and Poverty
SUBMITTED TO:
Prof. Amita Dhanda
Profeor of Law
SUBMITTED B!:
Aditya Sin"h
B.A.LL.B. IInd !ear I#th Semeter
$o%% &o. '(()*(+
&ALSA$ Univerity of Law
,ydera-ad
Electronic copy available at: http://ssrn.com/abstract=1694096
1. The Agricultural Marketing Syte! in In"ia
A"ri./%t/ra% Mar0et in mot tate of India are eta-%ihed and re"/%ated /nder the State
APMC 1A"ri./%t/ra% Prod/.e Mar0etin" Committee2 A.t. The who%e "eo"ra3hi.a% area of the
State i divided into ma%%er mar0et area wherein the mar0et are mana"ed -y the Mar0et
Committee .ontit/ted -y the State 4overnment. On.e a 3arti./%ar area i de.%ared a mar0et area
and fa%% /nder the 5/ridi.tion of a Mar0et Committee6 no 3eron or a"en.y i a%%owed free%y to
.arry on who%ea%e mar0etin" a.tivitie.
Introd/.ed mot%y in the 789( the APMC A.t 3rohi-ited farmer from dea%in" dire.t%y
with retai%er and re:/ired them to e%% their 3rod/.e to %i.ened midd%emen or ;mar0et
f/n.tionarie;. A..ordin" to Ar3ita M/0her5ee6 a enior fe%%ow at the Indian Co/n.i% for $eear.h on
Internationa% E.onomi. $e%ation6 the aim of /.h a.t wa to "ive the farmer a fair and .onitent
3ri.e for their 3rod/.e.
7
By .reatin" re"/%ated mar0et6 the 3ri.e 3aid to farmer -y %i.ened
midd%emen for their 3rod/.e .o/%d -e monitored6 there-y en/rin" that they were not e<3%oited. B/t
over the year it "rew into a monter6 "ainin" %ayer /3on %ayer of intermediarie6 none of whom
added any va%/e to the fr/it and ve"eta-%e they traded even a they added on their own mar"in.
'
The re/%t wa a "ro%y ineffi.ient ytem in whi.h farmer are divor.ed from mar0et feed-a.0 and
often m/t wait month to -e 3aid. Many farmer ro/tine%y "o into de-t to the very trader who -/y
their 3rod/.e and then e%% them eed and ferti%i=er for the ne<t .ro3.
>
By "ivin" on%y %i.ened mar0et f/n.tionarie the ri"ht to 3/r.hae dire.t%y from the farmer6
the APMC A.t have .reated a %on" .hain of intermediarie 1or midd%emen2. ?armer e%% their
3rod/.e to %i.ened midd%emen at the APMC mandi. Thee midd%emen ree%% the ame 3rod/.e to
who%ea%er at the APMC mar0et in /r-an area. At thee /r-an APMC mar0et6 the 3rod/.e 3ae
on to retai%er and then to the end*.on/mer at the /r-an retai% mar0et.
In the a-en.e of mar0et information farmer do not "et rem/nerative 3ri.e and the
midd%emen "et the ma5or hare in 3rofit.
+
Th/ there i wide "a3 -etween the who%ea%e and retai%
3ri.e with midd%emen .on/min" the -et of the 3ie. The /i.ide in.iden.e amon" the farmer i
on the in.reae for reaon of hi"h inde-tedne6 %ow 3rod/.tivity6 %e rem/nerative a"ri./%t/ra%
3rod/.e 3ri.e6 fra"mentation of %and ho%din" -e.a/e of 3o3/%ation "rowth6 harament -y the
midd%emen and money %ender and the widenin" "a3 -etween the /r-an and r/ra% in.ome.
@

The AMPC a.t ha 3roven to -e a deterrent in deve%o3in" effi.ient 3ra.ti.e -oth for the
retai%er a we%% a the farmer. The A.t 3rovide a mono3o%y tat/ to the tate*owned a"ri./%t/ra%
7 Ahtt3:BBwww.time..omBtimeBma"a=ineBarti.%eB(687C7679'9C'@6((.htm% D a..eed 7(
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' Ibid.
> Ibid.
+ Ahtt3:BB3i-.ni..inBfeat/reBfeyr'(((Bf5/n'(((Bf7>(9'(((7.htm%D a..eed 7(
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@ Ahtt3:BB3i-.ni..inBre%eaeBre%E3rintE3a"e7.a3Fre%idG'+8'8 D a..eed 7(
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Electronic copy available at: http://ssrn.com/abstract=1694096
Prod/.e Mar0etin" Committee in the 3/r.hae of a"ri./%t/ra% 3rod/.e from farmer. A a re/%t6
the /33%y .hain i %en"thened6 farmer are not a-%e to rea%ie hi"h 3ri.e d/e to mono3o%y and
.on/mer have to 3ay hi"her 3ri.e in.e the APMC are ty3i.a%%y .arte%i=ed.
9
?or retai%er it
-e.ome diffi./%t to o/r.e dire.t%y from farmer. They are for.ed to re%y on intermediarie th/
.a/in" ytemi. ineffi.ien.ie.
9 CII and AT Hearney6 I$etai% in India: 4ettin" Or"anied to Drive 4rowthJ6 &ovem-er '((96 3. 7)
#. An APMC E$a!%le& Rele'ant Pr('ii(n () the Maharahtra Agricultural
Pr("uce Marketing Rule, 1*+,
$/%e @ .%ear%y 3rovide that no 3eron ha%% mar0et de.%ared a"ri./%t/ra% 3rod/.e at area
other than the 3rin.i3a% mar0et area that are eta-%ihed therein.
$/%e 9 deire that any 3eron who deire to o3erate a a trader in a mar0et area for the
mar0etin" of any de.%ared a"ri./%t/ra% 3rod/.e ha to /-mit an a33%i.ation in that re"ard to
the Dire.tor of the Mar0etin" Committee of the area in order to o-tain a %i.ene.
,owever6 $/%e 9 a%o 3rovide that the Dire.tor may a/thorie any mar0et .ommittee
to 3ermit a mar0et f/n.tionary to o3erate anywhere within a mar0et area6
Under $/%e 7'6 every de.%ared a"ri./%t/ra% 3rod/.e ha%% -e di3oed of -y 3/-%i. a/.tion.
$/%e 7+ 3rovide that the 3ri.e of de.%ared a"ri./%t/ra% 3rod/.e at the mar0etin" .enter
ha%% -e ett%ed -y 3/-%i. a/.tion.
$/%e 7C ma0e it mandatory for the .ommiion a"ent or the trader to i/e a -i%% to the
3/r.haer for every 3/r.hae. Bi%% ha%% -e 3re3ared in tri3%i.ate with one .o3y "oin" to the
Mar0etin" Committee for /30ee3 of it re.ord.
$/%e 78 ma0e i mandatory for the Mar0et Committee to maintain a re"/%ar and 3ro3er
a..o/nt of every de.%ared a%e of a"ri./%t/ra% 3rod/.e in a mar0et area.
$/%e '( a%o 3revent diffi./%t to the 3rod/.er -y ma0in" intant6 on the 3ot 3ayment
mandatory on.e the arti.%e have -een wei"hed.
-. APMC Market in .u/arat0 A Stu"y
The effe.t of APMC Le"i%ation on a"ri./%t/ra% mar0etin" i evident in a t/dy tit%ed I?r/it
and #e"eta-%e Mar0etin" and it Effi.ien.y in India: A St/dy of Kho%ea%e Mar0et in the
Ahmeda-ad AreaJ .ond/.ted -y #aant P. 4andhi and &# &am-oodri of the Indian Intit/te of
Mana"ement6 Ahmeda-ad in J/ne '(('6 -efore reform were inititated in the APMC A.t of the
State.
Coverage- Of Markets and Respondents
The mar0et .overed /nder the t/dy were the CJ Pate% Mar0et6 Sardar Pate% Mar0et and the
&aroda ?r/it Mar0et.
The study was reasonably comprehensive in its coverage, with the number of commission
agents interviewed account for 19 per cent, 26 per cent and 13.3 per cent of the total commission
agents operating in these three markets respectively.
Findings
Existing Market Practices
It wa fo/nd that for ve"eta-%e6 @( 3er .ent of the .ommiion a"ent 3/r.hae were made
dire.t%y from farmer6 wherea a-o/t >> 3er .ent were from trader6 and 7C 3er .ent from .o%d
tora"e 3oint.
C
In fr/it mar0etin"6 on%y >7 3er .ent of the 3/r.hae are made dire.t%y from farmer6
@9 3er .ent from trader6 and 7> 3er .ent from .ommiion a"ent.
)
Thi indi.ate that many
farmer 3art with their 3rod/.e at the vi%%a"e %eve% ite%f. Thi i am3%y i%%/trated in the Bihar
mar0et t/dy fo%%owin" thi.
Mode of Sale at Markets
It indicates that in the CJP Market, about 55 per cent of the transactions took place through
secret bidding, about 26 per cent through simple transactions, and only 19 per cent through open
auction.
9
In the SP Market, 63 per cent of the transactions occured through simple transactions, 30
per cent through secret bidding, and only 7 per cent through open auction.
10
In Naroda Fruit Market,
54 per cent of the transactions took place through simple transaction, 39 per cent through secret
bidding, and 7 per cent through open auction.
11
Thus, the level of open auction was very low in even
though under the APMC Act it is required that sale at agricultural markets take place through open
auction so that the state of prices can be ascertained by all.
C #aant P. 4andhi and &.#. &am-oodiri6 I?r/it and #e"eta-%e Mar0etin" and it Effi.ien.y in India:
A St/dy of Kho%ea%e Mar0et in the Ahmeda-ad AreaJ6 J/ne '(('6 3. 7'
) Ibid.
8 Ibid. p. 13
7( Ibid.
77 Ibid. p. 14
Prices and the Farmer's Share
In the .ae of onion6 -aed on the wee0%y avera"e minim/m 3ri.e6 the .on/mer 3aid
$.+(+ 3er :/inta%6 the farmer re.eived on%y $.7@) 3er :/inta%. In the .ae of .a/%if%ower6 wherea
the ./tomer 3aid $.7+C@ 3er :/inta%6 the farmer re.eived on%y $.+'' 3er :/inta%.
7'
Some of the
%owet hare are een in the .ae of .a/%if%ower at ').9 3er .ent6 and onion at >8.7 3er .ent6 and
ome of the hi"het hare are een in 3otato at @8.7 3er .ent6 and "reen*3ea at C>.@ 3er .ent.
The hare of the farmer in the 3ri.e 3aid -y the .on/mer wa fre:/ent%y very %ow and
varied in the ran"e of a-o/t >( to C( 3er .ent. Some of the %owet hare were een in the .ae of
.a/%if%ower at ').9 3er .ent6 and onion at >8.7 3er .ent6 and ome of the hi"het hare were een in
3otato at @8.7 3er .ent6 and "reen*3ea at C>.@ 3er .ent.
7>

In the .ae of fr/it the difference in prices across these three levels was even greater. For
example, in case of mango the consumer pays Rs.1260 per quintal, whereas the farmer received
only Rs.361 per quintal.
14
In case of apple the consumer paid Rs.6143 per quintal while the farmer
received only Rs.1594 per quintal. Thus the share of the farmer in the consumer price was very low
and varied from as low as 25.2 per cent in the case of pomegranate to 57.1 per cent in the case of
sapota.
15

Costs Incurred in Agricultural Marketing- an Overview
The cost of marketing of agricultural produce frequently amounted only about to about 10 to
20 percent of the price difference (ie. The difference in prices paid by the consumer to retailer and
the price paid by trader to farmer).
16
On an average, the marketing cost hovered around 8 per cent of
the consumer price for vegetables and around 11 to 15 per cent for fruits. or onion6 the tran3ort
.ot amo/nted to 7( 3er .ent of the .on/mer 3ri.e6 and the .ommiion >*+ 3er .ent.
,owever6 in .ae of "reen 3ea6 whi%e tran3ort .ot amo/nted to on%y ' 3er .ent of the
.on/mer 3ri.e6 .ommiion amo/nted to a-o/t @ 3er .ent of the .on/mer 3ri.e. Here the term
'cost' covers costs incurred in transportation of the produce and the commission charged by agents.
It must be noted that the 'commission' is not a random rate but has been limited at 5 or 6% by the
law. The profit margin, on the other hand, comes out very high and is frequently 80 to 90 percent of
the price difference. According to the authors, this was an indicator of the poor level of marketing
efficiency in these APMC markets.
7' #aant P. 4andhi and &.#. &am-oodiri6 I?r/it and #e"eta-%e Mar0etin" and it Effi.ien.y in India:
A St/dy of Kho%ea%e Mar0et in the Ahmeda-ad AreaJ6 J/ne '(('6 3. 7)
7> Ibid. 3. 78
7+ Ibid.
7@ Ibid.
79 Ibid. p. 23
Conclusions and Recommendations of the Survey
The study concluded that the share of the farmer in the consumer rupee worked out to only
48 per cent for vegetables and 37 per cent for fruits.
17
Further, the explicit marketing costs such as
transportation work out to only a very small percentage of the price difference between the farmer
and the consumer, and the profit margin works out frequently to 80 to 90 percent of the price
difference.
18
These figures were indicative of relatively poor efficiency of the marketing system
despite the presence of the APMC and the regulated markets.
The authors recommended various measures to improve this efficiency of the agricultural
marketing system. Recommended measures included the wide and necessary adoption of open
auction, increasing the number of buyers and sellers in the market, improvements in market
infrastructure such as storage facilities, cold storages, loading and weighing facilities, and
improving transparency through supervision, and making available up-to-date market information
through various means including internet at the market.
1. The Pr(2le! in 3ihar
The A& Sinha Intit/te of So.ia% St/die in Patna .ond/.ted a reear.h 3ro5e.t tit%ed
IProd/.tion and Mar0etin" of #e"eta-%e in BiharJ /nder the reear.h "rant .heme of the Minitry
of A"ri./%t/re. The Prin.i3a% Inveti"ator in the 3ro5e.t wa Ja"dih Praad. A tota% n/m-er of >C8
farmer .om3riin" 7'( mar"ina%6 7(8 ma%%6 C8 medi/m and C7 %ar"e were e%e.ted for the t/dy.
They were random%y e%e.ted and "ro/3ed into different .ate"orie -aed on the i=e of their %and
ho%din". ?or the 3/r3oe of the reear.h6 ho%din" /3 to the i=e of 7.( he.tare 1ha2 were
.onidered mar"ina%6 thoe -etween 7.( ha and '.( ha ma%%6 from '.( ha to +.( ha medi/m and
a-ove +.( ha were .onidered %ar"e %and ho%din". The ve"eta-%e whoe 3ri.e were /rveyed were
3otato6 tomato6 -rin5a%6 .a--a"e6 .a/%if%ower and %adyfin"er. It may -e noted that the t/dy wa
.ond/.ted -efore the APMC A.t wa reformed and Jhar0hand had not -een .reated. Bihar had not
reformed it APMC A.t a of >7
t
Jan/ary '((C.
78
7C #aant P. 4andhi and &.#. &am-oodiri6 I?r/it and #e"eta-%e Mar0etin" and it Effi.ien.y in India:
A St/dy of Kho%ea%e Mar0et in the Ahmeda-ad AreaJ6 J/ne '(('6 A-tra.t.
7) Ibid.
78 IStat/ of Mar0et $eform in A"ri./%t/re 1APMC A.t amendment2 a on >7t Jan/ary6 '((CJ6
Awww.a"mar0net.ni..inD a..eed @
th
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4. Fin"ing
Vegetale Cultivation Pattern
+(.9' 3er .ent of the farm ho/eho%d /rveyed were fo/nd to -e i%%iterate.
'(
I%%itera.y wa
fo/nd to -e hi"he amon" ho/eho%d that owned ma%% i=ed %and ho%din". A for the %and
/ti%i=ation 3attern with re3e.t to ve"eta-%e6 it wa fo/nd that areawie ve"eta-%e a..o/nted for
'8.@C 3er .ent on mar"ina%6 79.)@ 3er .ent on ma%%6 7+.9C 3er .ent on medi/m and 77.7C 3er .ent
on %ar"e farm.
'7
Thi meant that the i=e of%and ho%din" varied invere%y with the 3ro3ortionate
./%tivated area /nder ve"eta-%e. The mar0eta-%e /r3%/ of a%% the e%e.ted ve"eta-%e 3rod/.ed -y
am3%e farmer of a%% i=e "ro/3 varied from )8.9@ to 8).@' 3er .ent.
''
It eemed that ve"eta-%e
were the main o/r.e of in.ome for mar"ina% and ma%% farmer.
Marketing of Vegetales!
It wa o-erved -y the reear.her that mar0etin" ytem of ve"eta-%e a.ro Bihar i very
.om3%e<. The mar0etin" 3attern varied .onidera-%y from farmer to farmer de3endin" /3on the
nat/re of the ve"eta-%e and .a3a.ity of the farmer. In the entire mar0etin" 3ro.e6 ve"eta-%e
.han"ed hand three to fo/r time -etween 3rod/.er and .on/mer. There were m/%ti3%e
intermediarie fo/nd to -e e<itin" in the ve"eta-%e mar0etin" ytem.
'>
The t/dy f/rther "oe on e<3%ain that mot of the farmer with ma%% and mar"ina% %and
ho%din" o%d their 3rod/.e not in the a"ri./%t/ra% mar0et yard eta-%ihed /nder the State APMC
A.t6 -/t in r/ra% mar0et or haats.
'+
?armer with %ar"e a"ri./%t/ra% ho%din" on the other hand
mot%y o%d their 3rod/.e in the mar0et yard. Commentin" /3on the tate of the haats6 the re3ort
ay that they are not deve%o3ed from the mar0et infratr/.t/re 3oint of view. The re"/%atory
mea/re are a%o not enfor.ed. A3art from &a%anda ditri.t where mot ve"eta-%e are o%d in the
mar0et yard6 the 3ra.ti.e i not fo%%owed on a %ar"e .a%e -y 3rod/.er in other ditri.t.
'@
There
eemed to -e .om3%ete .ontro% of 3rivate intermediarie over the o3eration of trade in thee haats.
'9
The t/dy a%o e%a-orate on the /33%y .hain that .om3rie the a"ri./%t/ra% mar0etin"
ytem. A"ri./%t/ra% 3rod/.e f%owed thro/"h a .hain of intermediarie .om3riin" 0at.ha arhatiya6
itinerant trader6 -ro0er6 a"ent of the who%ea%erB.ommiion a"ent6 who%ea%erB.ommiion
a"ent and retai%er.
'C
The .hain howed minor re"iona% variation in it form. In the r/ra% mar0et
'( IProd/.tion and Mar0etin" of #e"eta-%e in BiharJ6 A&SISS6 Ahtt3:BBa"mar0net.ni..inBre3ro5>.htmLPro5e.t+ D
a.eed 7+
th
A3ri% '(7(.
'7 IProd/.tion and Mar0etin" of #e"eta-%e in BiharJ6 A&SISS6 Ahtt3:BBa"mar0net.ni..inBre3ro5>.htmLPro5e.t+ D
a.eed 7+
th
A3ri% '(7(.
'' Ibid.
'> Ibid.
'+ Ibid.
'@ Ibid.
'9 Ibid.
'C Ibid.
in the 3%atea/ ditri.t itinerant trader and a"ent of the who%ea%er B .ommiion a"ent were
3rominent wherea in the ditri.t in the 3%ain it were the katcha arhatiyas or ma%% itinerant
trader who were more 3rominent.
')
Coo3erative intit/tion o3eratin" a mar0et a"en.ie were
%ar"e%y a-ent6 ave for $an.hi Ditri.t.
'8
Conclusion
In it .on.%/ion the t/dy tate that -aed /3on it findin" there wa a %ar"e 3ri.e 3read
1different -etween 3ri.e 3aid -y .on/mer and 3ri.e 3aid to the farmer2 whi.h wa d/e to
vario/ mar0etin" .ot and mar"in of the intermediarie. The mar"in of intermediarie were not
3ro3ortionate to the ervi.e 3rovided -y them. A a re/%t6 the 3rod/.erM hare in the 3ri.e 3aid -y
the .on/mer wa very %ow6 to the t/ne of +( 3er .ent in ome .ae.
>(
Thi wa main%y on a..o/nt
of 3reen.e of a n/m-er of intermediarie who o3erate at vario/ ta"e of mar0etin" on hi"h
mar"in.
>7
D/e to mono3o%iti. .hara.ter of trader the farmerM -ar"ainin" 3ower wa wea0ened
.a/in" them to e%% their ve"eta-%e at 3ri.e di.tated -y trader.
>'
$e"/%atory mea/re were %eat
effe.tive at the r/ra% mar0et %eve% in the haats.
Reco""endations
The t/dy .a%%ed for tri.t enfor.ement of re"/%atory mea/re. $e"/%atory mea/re for
im3rovin" ve"eta-%e mar0etin" ytem are on%y on 3a3er d/e to their non*enfor.ement 3arti./%ar%y
at the r/ra% B 3rimary mar0et %eve%. The mar0etin" 3ro-%em of ma%% farmer emanated from their
de3enden.e on trader for .redit6 whi.h 3/t them in hi"h%y /ne:/a% tradin" re%ationhi3 with the
-/yer of their ve"eta-%e.
>>
Therefore6 im3rovin" the a-i%ity of farmer to a..e the mar0et and
tren"thenin" their -ar"ainin" 3oition wa re.ommended a the .entra% fo./ of any mar0et reform
3o%i.y.
') Ibid.
'8 Ibid.
>( IProd/.tion and Mar0etin" of #e"eta-%e in BiharJ6 A&SISS6 Ahtt3:BBa"mar0net.ni..inBre3ro5>.htmLPro5e.t+ D
a.eed 7+
th
A3ri% '(7(.
>7 Ibid.
>' Ibid.
>> Ibid.
+. Re)(r!
The Inter*Miniteria% Ta0 ?or.e on A"ri./%t/ra% Mar0etin" $eform /-mitted it re3ort in
J/ne '(('6 ma0in" a n/m-er of re.ommendation on ma0in" the a"ri./%t/ra% mar0etin" ytem
more vi-rant and .om3etitive. One of it many re.ommendation in.%/ded amendin" the APMC
A.t of the State to fa.i%itate Dire.t Mar0etin" of A"ri./%t/ra% Prod/.e.
Advantages of #irect Marketing
A..ordin" to the re3ort6 dire.t mar0etin" en.o/ra"e farmer to /nderta0e "radin" of farm
3rod/.e at the farm "ate and e%iminate the need to ha/% 3rod/.e to re"/%ated mar0et for a%e. It
ena-%e farmer and 3ro.eor and other -/%0 -/yer to e.onomi=e on tran3ortation .ot and to
.onidera-%y im3rove 3ri.e rea%i=ation. It .ite the e<am3%e of So/th Horea6 where a a
.one:/en.e of e<3anion of dire.t mar0etin" of a"ri./%t/ra% 3rod/.t6 .on/mer 3ri.e de.%ined -y
'( to >( 3er.ent and 3rod/.er*re.eived 3ri.e roe -y 7( to '( 3er.ent.
>+

>+ $e3ort of the Inter*Miniteria% $e3ort on A"ri./%t/ra% Mar0etin" $eform6 May '(('6
Ahtt3:BBa"mar0net.ni..inBta0re3.htm D a..eed 7+
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A3ri% '(7(.
,. The State Agricultural Pr("uce Marketing5De'el(%!ent 6 Regulati(n7 Act,
#88- 0It Pr('ii(n
Sin.e a"ri./%t/re i a tate /-5e.t6 the Centra% 4overnment ha more of an adviory ro%e.
,owever the Centra% 4overnment had tated that if State were to re.eive .entra% f/ndin"6 then they
wo/%d have to reform their APMC A.t on the %ine of The State A"ri./%t/ra% Prod/.e Mar0etin"
1Deve%o3ment N $e"/%ation2 A.t6 '((> 1hereinafter referred to a the ;Mode% A.t;2. Some of it 0ey
3roviion are tated here.
The term IMarket Functi(nary9 ha -een e<3anded to in.%/de -/yer and 3onor of
.ontra.t farmin".
>@
Under Se.tion ++ a 3eron deirin" to o3erate in the mar0et area a trader6 .ommiion
a"ent6 wei"hman6 hamma%6 /rveyor6 wareho/eman6 .ontra.t farmin" -/yer6 owner or o../3ier of
3ro.ein" fa.tory or /.h other mar0et f/n.tionary6 i re:/ired to a33%y to the %o.a% Mar0et
Committee for re"itration. ,e i not re:/ired to 3ro./re a %i.ene to o3erate a a f/n.tionary6 a
wa the .ae ear%ier.
Moreover6 any 3eron may -/y a"ri./%t/ra% 3rod/.e in the mar0et yard B /- mar0et yard on
day to day -ai even witho/t "ettin" re"itration in manner 3re.ri-ed -y the State 4overnment.
>9
A%o6 he .an o3erate a a mar0et f/n.tionary in more than one mar0et area.
>C
&o .ommiion a"ent ha%% A.t in any trana.tion -etween the 3rod/.er and the 3/r.haer
and he ha%% not ded/.t any amo/nt toward .ommiion from the a%e 3ro.eed 3aya-%e to the
a"ri./%t/rit*e%%er.
>)

Im3%ementation -y State
In the &ationa% Conferen.e of State Miniter on A"ri./%t/ra% Mar0etin" and Land $eform
he%d on Jan/ary C6 '((+6 a%% the State 4overnment a"reed to ado3t the Mode% A.t on A"ri./%t/ra%
Mar0etin" in their re3e.tive State.
>8
A of >7
t
Jan/ary6 '((C6 the State and U.T of Madhya Pradeh6 ,ima.ha% Pradeh6 P/n5a-6
Si00im6 &a"a%and6 Andhra Pradeh6 Chatti"arh6 $a5athan6 Oria6 Ar/na.ha% Pradeh6
Maharahtra6 Chandi"arh6 ,aryana6 Harnata0a6 4/5arat6 Uttar Pradeh6 &CT of De%hi Aam6
Mi=oram6 Tri3/ra6 Me"ha%aya6 JNH6 Uttaran.ha%6 4oa6 Ket Ben"a% 6 Jhar0hand and Pondi.herry
have either reformed their APMC A.t or have initiated adminitrative a.tion for reform.
+(
>@ Se.tion '1'82
>9 Se.tion ++172
>C Ibid.
>) Se.tion ++192
>8 Ahtt3:BBindia-/d"et.ni..inBe'((+*(@B.ha3t'((@B.ha3)7).3df D a..eed 7+
th
A3ri% '(7(.
+( IStat/ of Mar0et $eform in A"ri./%t/re 1APMC A.t amendment2 a on >7t Jan/ary6 '((CJ6
:. C(ntract Far!ing
Contra.t farmin" i an a"reement -etween 3ro.ein" firm6 mar0et intermediarie and the
farmer for the 3rod/.tion and /33ort of a"ri./%t/ra% 3rod/.t /nder forward a"reement6 fre:/ent%y
at 3redetermined 3ri.e.
Tho/"h initia%%y 3rohi-ited in India6 the mode% APMC Bi%% 3ermit .ontra.t farmin" /-5e.t
to .ertain re"/%ation.
S3onor of .ontra.t farmin" 1The -/ine entity whi.h .ontra.t with the farmer2 m/t
re"iter theme%ve with the Mar0et Committee.
+7
They are a%o re:/ired to "et their a"reement
with farmer re.orded with the Mar0et Committee.
+'
In order to 3rote.t the interet of the
a"ri./%t/rit6 no /.h a"reement .an 3rovide that the tit%e6 3oeion or ownerhi3 of the farmer;
%and wi%% vet in the .ontra.t farmin" 3onor.
+>
The farmer .an e%% hi 3rod/.e to a 3onor of
.ontra.t farmin" even if he i from o/tide the mar0et area within whi.h the %and fa%%.
++
And /.h
e%%in" .an ta0e 3%a.e witho/t the %evy of any mar0et fee.
+@
Moreover6 it ha%% not -e ne.eary for
the farmer to -rin" a"ri./%t/ra% 3rod/.e .overed /nder .ontra.t farmin" to the mar0et yard and it
.an -e o%d dire.t%y to the 3onor from hi fie%d.
+9
Coo3erative
The .on.e3t of the $yth/-a=ar wa intiated -y the 4overment of Andra Pradeh in Jan/ary
'967888 to e%iminate midd%emen and ena-%e farmer e%% their 3rod/.e dire.t%y to .on/mer at
rem/nerative 3ri.e. There are ./rrent%y 7(' $yth/ Ba=ar whi.h .over near%y +(6((( farmer from
'6)(( vi%%a"e in a%% the ditri.t head:/ater and im3ortant .itie in Andra Pradeh.
+C
The farmer
e%% their 3rod/.e dire.t%y to .on/mer at rate that are a-ove the who%ea%erM rate and -e%ow the
retai%erM rate in a 3arti./%ar area. Every farmer in the $yth/ -a=aar e%% hi 3rod/.e a a retai%er. A
imi%ar mode% .a%%ed ;A3ni Mandi; i -ein" fo%%owed in P/n5a-.
Awww.a"mar0net.ni..inD a..eed @
th
A3ri% '(7(.
+7 Se.tion >)172
+' Se.tion >)1'2
+> Ibid.
++ Ibid.
+@ Ibid.
+9 Se.tion +(172
+C Ahtt3:BBwww.mana"e."ov.inBryth/Bhtm%Bwe%.ome.htm% D a..eed 7'
th
A3ri% '(7(.
*. C(nclui(n
U3endra Ba<i6 in ;A Crii of Le"itimation of the Law;6 ha aid that -enefi.ia% %e"i%ation
for the wea0er e.tion wi%% "enera%%y -e /na-%e to de%iver "ood for the -enefi.iary 3o3/%ation and
that6 at %eat initia%%y6 the dominant interet wi%% ditort the .hanne% and "oa% of reditri-/tion in
their favo/r.
+)
Ke .an draw a mi%d ana%o"y in thi .enario. The APMC A.t were no do/-t
-enefi.ia% %e"i%ation for the farmer6 who had %on" /ffered from e<3%oitation in the 3re*
inde3enden.e era. ,owever6 the A.t wa /na-%e to 3rovide f/%%y for the farmer; we%fare. Corr/3tion
3ervaded the mar0et a/thoritie and mar0et f/n.tionarie formed .arte%. In addition6 i%%itera.y
%eve% were very hi"h amon" farmer and avai%a-i%ity of information wa minim/m. Th/ the
farmer wa %ar"e%y i"norant a-o/t the mar0et 3ri.e of hi 3rod/.e. Even if he wa aware6 he wo/%d
ti%% have to 3ay the 3ri.e :/oted -y the f/n.tionarie -e.a/e he wa not 3ermitted to e%% hi
3rod/.e o/tide the mar0et area. Thi %eft the midd%emen in a tron"er 3oition and the . Im3ro3er
enfor.ement of the 3roviion en/red that whi%e the %i.ene ho%der e<er.ied their e<.%/ive ri"ht
to 3/r.hae a"ri./%t/ra% 3rod/.e6 farmer; we%fare in the form of fair 3ri.e .o/%d not -e e./red.
The wind of .han"e are a%ready -%owin". Kith mot tate havin" amended their APMC
a.t6 it may -e aid that the "overnment ha ado3ted a -a%an.ed a33roa.h to the 3ro-%em. The
ytem of re"/%ated mar0et ti%% e<it6 -/t %i.ene have -een re3%a.ed with re"itration. Thi way
more 3eron and or"aniation /.h a .oo3erative6 or"anied retai%er and food 3ro.ein"
.om3anie .an dea% with farmer. $etai% .hain %i0e S3en.er; and More .an enter into .ontra.t
farmin" a"reement with farmer after re"iterin" theme%ve with the mar0et .ommittee.
$e"itration of 3onor and a"reement wi%% en/re "overnment monitorin" of dea% and 3ri.e.
Therefore it i een that in the ./rrent re"/%atory environment for A"ri./%t/ra% mar0etin" 3rovide
an o3en 3%ayin" fie%d to a%% 3%ayer -/t with re"/%ation whi.h 0ee3 ta- on them witho/t -ein" a
hindran.e to their a.tivitie. Midd%emen6 or"anied retai%er and .ontra.t*farmin" 3onor* a%% have
a hitory of mi.ond/.t. B/t thi wo/%d -e no "ro/nd to e<./e them from the ytem. U%timate%y6
-e it the 3re or 3ot* reform era6 the 0ey toward e./rin" the no-%e o-5e.tive of any we%fare
%e"i%ation i it 3ro3er and .om3%ete enfor.ement.
+) U3endra Ba<i6 IThe Crii of the Indian Le"a% SytemJ6 7
t
Ed. 78)'6 3. @.
18. 3i2li(gra%hy
$eear.h Pa3er6 $e3ort and Po%i.y Do./ment
#aant P. 4andhi and &.#. &am-oodiri6 I?r/it and #e"eta-%e Mar0etin" and it Effi.ien.y in
India: A St/dy of Kho%ea%e Mar0et in the Ahmeda-ad AreaJ6 J/ne '(('6 Indian Intit/te
of Mana"ement6 Ahmeda-ad.
Ja"dih Praad6 et a%.6 IProd/.tion and Mar0etin" of #e"eta-%e in BiharJ6 A.&. Sinha
Intit/te of So.ia% St/die6 Patna.
IStat/ of Mar0et $eform in A"ri./%t/re 1APMC A.t amendment2 a on >7t Jan/ary6
'((CJ6 Minitry of A"ri./%t/re6 4overnment of India6 &ew De%hi
E.onomi. S/rvey '((+*'((@6 4overnment of India6 &ew De%hi
CII and AT Hearney $e3ort: I$etai% in India: 4ettin" Or"anied to Drive 4rowthJ6
&ovem-er '((9.
$e3ort of Ta0 ?or.e On A"ri./%t/ra% Mar0etin" $eform6 May '(('6 Minitry of
A"ri./%t/re De3artment of A"ri./%t/re N Coo3eration6 Hrihi Bhawan6 &ew De%hi.
U3endra Ba<i6 IThe Crii of the Indian Le"a% SytemJ6 7
t
Ed. 78)'6 #i0a P/-%iher6 &ew
De%hi.
Internet So/r.e
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