Explained: Can Punjab declare the entire state ‘Principal Market Yard’? What are the implications?

Experts said declaring the entire state as Principal Market Yard would mean the purchaser has to pay the same taxes outside the PMB yards even in a private trade area.

Agricultural workers sowing Paddy saplings at Kajjal Majra Village in Fatehgarh Sahib District. Express photo by Jasbir Malhi

Written by: Anju Agnihotri Chaba

5 min readJalandharOct 2, 2020 02:20 PM IST First published on: Sep 26, 2020 at 07:10 PM IST

To nullify the negative impact of the Agricultural Bill on Farmers’ Produce Trade and Commerce (Promotion and Facilitation), SAD president Sukhbir Badal has suggested to Punjab Chief Minister Captain Amarinder Singh to declare the entire state as a ‘Principal Market Yard’. But what does such a move mean for the farmers who are agitating across the state? The Indian Express explains with the help of inputs from experts.

What is the definition of Principal Market Yard currently?

According to Punjab Agriculture Produce Market Committee (APMC) Act, there are three types of yards under the Punjab Mandi Board (PMB) — Principal Market Yard, Sub Yard and Purchase centres. These yards are notified by the PMB in a specific area in certain acres. As per APMC Act, the PMB has 151 principal market yards, 287 sub yards and over 1,400 small mandis or purchase centres. Proper infrastructure is developed in these principal yards which included civic amenities, sheds, office buildings, canteen, platform, canteen roads, electrification and even public health facilities. The small mandis have temporary arrangements of minimum civic amenities during the procurement season.

What will change if the entire state is declared a Principal Market Yard?

Experts said declaring the entire state as Principal Market Yard would mean the purchaser has to pay the same taxes outside the PMB yards even in a private trade area.

“Though it will be clearer if something finally happens, but at the moment it can be understood that anybody who is purchasing from farmers anywhere, either in PMB yards or outside, has to pay the same taxes as in PMB mandis,” explained Prof Kesar Singh Bhangu, an expert on farm issues and Professor of Economics in Punjabi University, Patiala.

Read | Amid farmer protests, Centre orders ‘immediate’ procurement of paddy in Haryana, Punjab

Is it even possible to declare the whole Punjab as Principal Mandi Yard?

Renowned Economist Prof Sardara Singh Johal told The Indian Express that in the first place the “government has to see the legal aspect” of such a move. “I think it is possible under its own APMC Act. Then the bigger the question here is how the state government will manage the entire state as a market yard”.

In the current yards of PMB, he added, there is market committee staff to manage the sale and purchase. “How the state will manage the sale purchase outside the PMB yards?” He asked, suggesting that the government will have to develop a system to bring every purchaser under one tax regime in the state.

Jagmohan Singh, general secretary of Bharti Kisan Union (BKU) Dakaunda, said despite the APMC Act only farmers directly selling to companies go to the PMB yards. “For Instance, in Punjab around 18 million tonnes wheat, which is government purchase, is produced out of which 13 million tonnes is sold to the government for the contribution in the national pool and out of remaining around 5 million tonnes 2 million tonnes is kept by the farming families for seed and self-consumption purpose and nearly 3 million tonnes is sold in the open market to the flour mills, bread companies and other processing units etc,” he explained, and asked how this trade will be managed if the entire state is declared a Principal Mandi Yard. “It is a political statement and difficult to implement practically.”

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What can be the implications of such a move?

Dr Johal warned that such a step could isolate Punjab and be beyond the centre’s Bills on agriculture applicable to the rest of India. Prof Gian Singh, retired Economics Professor of the Punjabi University in Patiala, said that the Centre, which purchases the wheat and paddy of Punjab, may not like the idea if the state nullifies its Bills and could decide now to purchase from the state, an annual expenditure of Rs 65,000 crore. “The state government does not have money to pay its staff’s salaries then how it will purchase this huge crop? Even if the Punjab government purchase it, where it will be stored? The state does not have the infrastructure to store it because centre’s Food Corporation of Indian (FCI) manages the entire storage of wheat and paddy in the state,” explained Prof Gian Singh. Prof Bangu said trader who will be supposed to pay the taxes even outside the mandis will start paying even lesser to the farmers to keep their profit margin intact.

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