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What is Agricultural Produce Market Committee? What are the issues with APMC?

Recently central government issued 3 ordinances and passed them as acts which allows farmers to sell their produce outside Agriculture Produce Market Committee (APMC) mandis, which led to several protests all over India. Before proceeding further it is important to know that APMC was established as a solution to many problems which were faced by farmers, but eventually instead of being a solution, it went to be a problem. 

Back in 1857s… The farmers’ didn’t have appropriate markets for selling their products and were largely dependent on traders and money lenders for selling their products who in turn exploited farmers. Farmers started dipping into perpetual loans. After the independence of India, the government then realized the torture farmers were facing and came out with a solution to built APMC i.e. Agricultural Produce Market Committee

After the independence of India, several trading centers known as APMCs were set up in many states of India to help farmers sell their produce. A Minimum Selling Price i.e. MSP was set according to which traders cant buy products from farmers beyond the MSP and a concept of trading licenses was introduced in order for any trader to show up in these markets. This concept helped farmers to get rid of the various forms of hardships and exploitations.

As time passed, there was introduction of various issues with APMC mandis, some of which are highlighted as follows:

  •  The rates of commodities started varying in every region all across India, leading rates to be highly fragmented.
  •  Fees of trading in APMC went high.
  •  There is a limited number of APMC mandis which leads to insufficient market options for farmers to sell their produce.
  •  Even after imposing and collecting high fees, the infrastructure of the APMC was inadequate and lead to a high wastage of harvests.
  •  As it was mandatory for agents/middle man in APMC to have a license, there were limited agents with whom farmers can sell their produce which prompted less income for farmers.

To overcome these issues the government has issues “The Farmers Produce Trading and Commerce Act 2020” (FPTC) which gives farmers the freedom to sell and buy agricultural commodities at any place in the country as they feel appropriate.

Do check out the video to learn more: