Ques- The declining conditions of economy lead to agricultural crises. Discuss in the context of APMC Act?


  • Under the Atmanirbhar Bharat Abhiyan economic stimulus package for farmers Announced by finance Ministry to reform agricultural marketing.
  • Whereas other three proposed reforms regarding agricultural marketing are the reforms in the Agricultural Produce Marketing Committee (APMC) Act, the Essential Commodities Act, and on contract farming.


Different APMC acts in states:

The mandis regulations and various functioning across the States.

  • Kerala does not have an APMC Act and Bihar repealed it in 2006.
  • Maharashtra, West Bengal, Odisha, Gujarat, and Andhra Pradesh have deregulated fruits and vegetable trade, allowed private markets, with new unified trading licence and introduced a single-point levy of market fee.
  • Tamil Nadu with no market fee has reformed APMC.
  • States like Jharkhand, Himachal Pradesh, Uttarakhand, Haryana and Rajasthan have made some reforms.
  • Many States have introduced direct marketing of farm produce, examples being the Uzhavar Sandhai (Tamil Nadu), the Rythu Bazaar (Andhra Pradesh and Telangana), the Raitha Santhe (Karnataka), the Apni Mandi (Punjab) and the Krushak Bazaar (Odisha).


Rationale against APMC act:

  • It creates barriers to the entry and exit of traders and makes the sale and purchase of agricultural produce compulsory for farmers as well as traders.
    • The argument in favour of reforms in act is that it will allow private investment in marketing infrastructure and provide more choices to farmers, leading to better prices received by farmers.
  • The Instances of collusion and corruption.
  • The problem of political interference functioning of the mandis, with large mandis that have variety of crops.  

Given the criticism regarding the functioning of the APMC act, as many as 17 State governments have amended the APMC Act to make it more liberal.



The example of Bihar:

  • Bihar had repealed APMC act in 2006, against expected benefits.
  • The state witnessed no private investment in building market infrastructure.
  • No evidence of farmers benefits outside the mandis.

The negative impacts:

    • The state suffered a loss of revenue due to the repeal of the APMC which led to the deterioration of existing infrastructure of the market yards in the State.
    • The proliferation of private unregulated markets charges market fee
    •  These private markets have substandard or no infrastructure for weighing, sorting, grading and storage.
  • Actually the states that allowed private traders with no deregulation, faced with no positive impacts


Responsibility of the Government:

  • In a view the deregulation of markets and the consequent withdrawal of the government from the mandis shows government escaping the responsibility of creating marketing infrastructure for its farmers.
  • Majority of the existing mandis require investment in upgradation of infrastructure.



  • farmers not receiving remunerative prices for their produce.
  • The fact that more than 80% of farmers, majority from small and marginal farmers do not sell their produce in the APMC mandis.


Lack of demand:

  • For a majority of farmers, prices received for their produce is more a function of the demand for agricultural commodities than access to markets.
  • From several years, agriculture is in loss, with agricultural commodity price inflation being in the negative zone.
  • Meanwhile  inflation targeting, most agricultural commodities have seen a sharp decline in demand with farmers loss.

Way forward:

  • Government have to make macroeconomic conditions favourable with higher price realisation.
  • The government should increase fiscal spending to revive demand in the economy to protect the farmers from decline in commodity prices.
  • Most necessary after the sharp decline in incomes, job losses and decline in demand following the lockdown and expected contraction in economic activity need to revital.


Short summary

The new package to get relief from all sphere of life especially in Agriculture the government has announced the different schemes and implementation of acts to help farmer under the name of Atmanirbhar Bharat Abhiyan.

Related to agriculture marketing government has proposed reforms to help the farmers to reach mandis reduce their exploitation through middle-man. The APMC act is shade of government’s reform, various states gas implemented the act by different names but there are many arguments related to the act and several states has reformed the act whereas Bihar has repealed the act in 2006 with negative impacts.

It is the responsibility of the government to build good infrastructure and concert the low level of agricultural demands. The government have to make very effective implementation with macro-level observations in search to help the farmers.

With infrastructure proper grassroot level of awareness reguired to make farmers work more profitable.

Leave a Reply

Your email address will not be published. Required fields are marked *