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Thursday, May 13, 2021

How different is the Centre’s farm trade ordinance from Punjab’s amended APMC Act?

Punjab CM Amarinder Singh has closed ranks with state’s farmer unions to oppose three farm ordinances recently brought by the Centre.

Written by Anju Agnihotri Chaba |
Updated: July 14, 2020 8:28:34 pm
As per Punjab’s amended APMC Act, trade will be allowed in both state-owned mandis under Punjab Mandi Board (PMB) and the private mandis. (Express Photo: Gurmeet Singh)

Punjab CM Amarinder Singh has closed ranks with state’s farmer unions to oppose three farm ordinances recently brought by the Centre. Among these, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance will end the state’s Agriculture Produce Market Committee (APMC) Act. The Punjab government and farmer unions are opposing this on the pretext that it will not only privatise the entire sale/purchase system, but will also end the MSP regime. Opposition SAD, however, argues that the Amarinder Singh government had already amended APMC Act in 2017 to allow private mandis to operate. But how similar or different are state’s amended APMC Act and Centre’s ordinance.

What is the difference between state’s APMC Act (amended in 2017) and Centre’s Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance?

As per the state Act, only a licence holder from the government after meeting the provisions laid under the APMC Act can do trade, while in Centre’s ordinance, no licences from the state government are required and any PAN cardholder can do trade.

Where can trade be done?

As per the state’s amended APMC Act, trade will be allowed in both the mandis — state-owned mandis under Punjab Mandi Board (PMB) and the private mandis allowed under the amended Act. In private mandis, trade is allowed in the notified yards by the government and the farmers can sell their product in private or PMB mandis as per their wish. The PMB charges a fee/cess which is used for the development of the mandis and the rural areas.

Under the Centre’s ordinance, neither sate owned nor the private mandis are needed and trade can be done at any place which includes at farmers’ doorstep, traders’ own premises or at farmer’s fields anywhere beyond the notified market yard. Also, farmers can sell their product anywhere in the country.

Renowned Economist Sardara Singh Johal said: “Providing selling facility to the farmers outside APMCs is acceptable, but the state government should ensure that even if the farmers are selling their crop outside the APMC yards than purchase tax and market fee is charged from the buyers. Further, such funds must be shown in the budget of the state and be used for the development works of the state….If the government will not make any such provision then it will face a major blow in its income.”

What type of private market committees can be set up under the state Act?

Apart from 1,852 big and small mandis under PMB across the state, there is a provision of setting up of private market yards demarcated by the government under the amended Act. These mandis can be of three types, owned by the private players and can be set up in 10 acres, 3-acre and one-acre areas where only trade of fruits, vegetables, flowers, wood and livestock is permitted. The government will have full control over it. The owners of these private yards and their relatives cannot engage in trading activities and they can work as operators of these mandis. Taxes and other duties decided by the government will be levied on the sale and purchase of farmers’ produce.

Centre’ ordinance, meanwhile, has no such provision. Trade can take place anywhere without charging any fee as the state government will not have no control on such trade.

The state had also provided for setting up of ‘kisan mandis’ and ‘special mandis’ where farmers can sell their produce directly to the consumers. The Abohar kinnow mandi, Ludhiana’s fishmarket and Balachaur’s (Nawanshahr) ‘green peas’ market are examples of these. But there is no provision of setting up any such mandi as per the ordinance.

At a mandi near Lalton Kalan, Ludhiana. (Express Photo: Gurmeet Singh)

What if there is a high fluctuation of prices?

As per state Act, there is a provision of setting up of ‘Price Stabilisation Fund’ by the government which can be used to facilitate farmers in case of high fluctuation of the crop prices. There is no such provision under the Ordinance.

What about the market fee/cess which is charged by the PMB on the sale/purchase of farmers’ produce in its mandis?

The state APMC Act says that cess/fee like RDF (Rural Development Funds) would be levied on sale/purchase in the notified private market yards, but there is no such provision in the ordinance.

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What about payment to farmers who will sell their produce to the traders?

State APMC makes the provision that farmers will be paid for selling their products within 48 hours. The sale/purchase is regulated by the government because only licence holders can do trade in such mandis. And if the trader fails to pay farmer on time then the matter can also be resolved through Market Committee of the PMB or by presenting the case to Secretary, Agriculture. The concerned Deputy Commissioner (DC) also has the power to sell any property of the trader to pay the dues of farmers. Finally, the matter can also reach the court for settlement.

As per the Centre’s ordinance, the farmers will be paid either on the same day or within three working days. In traders does not pay, the matter can be resolved through mutual compromise, or they can present their respective case to SDM or Deputy Commissioner (DC). No provision under the ordinance provides for taking the matter to court.

What is the status of e-trading?

Only licence holding dealer can do e-trading, but as per the ordinance, any PAN cardholder can do it and no fee would be charged.

The state had also provided for setting up of ‘kisan mandis’ and ‘special mandis’ where farmers can sell their produce directly to the consumers. (Express Photo: Gurmeet Singh)

How big companies can enter the trade of crops, food processing?

The state government had introduced a Unified Licence System, so that big companies in the food processing to take steps in the interest of farmers. But in case of the ordinance, there is no need for a licence for big companies. “We are totally against the ordinance which will allow big companies to enter into the agriculture purchase market and loot the farmers as per their wish without any control on them,” said BKU (Dakunda) General Secretary Jagmohan Singh.

How many private yards were opened in Punjab under the provisions of the APMC Act of 2017?

According to the GPS Randhawa, General Manager, PMB, not a single private mandi could be opened under it till date because agricultural ventures are not much profitable these days. He said that revenue model, which will include cess/ taxes and share of the private players and government from the earning, in private mandis would be decided at the time of opening of such mandis in the state.

What happened to the MSP regime after the APMC amendment?

“After the APMC was amended three years back, the MSP regime continued in the state as it was before. Even now, major agricultural products like wheat and paddy are brought only in the PMB owned markets where state and Centre’s procurement agencies purchase it from the farmers on fixed MSP. The ordinance’s provisions may end the MSP regime soon,” claimed Randhawa.

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