Centre proposes GST panel-like body to push agriculture marketing reforms in states

On November 25, the committee circulated the draft National Policy Framework on Agricultural Marketing, seeking public comments or suggestions.

The committee notes that the DA&FW has been working with the states for more than two decades to reform agricultural marketing with the objectives to make the agricultural marketing competitive, barrier-free and transparent with adequate post-harvest management and marketing infrastructure. The DA&FW has also been striving for years to develop a unified national agricultural market for agricultural produce, it adds.

“But, the progress on the ground has not been satisfactory and the penultimate objective of making available an accessible market to farmers with better return for their produce have not been achieved to the desired level. The pitfalls diagnosed are the state specific stringent regulation and lack of passion to achieve the objective. Therefore, there is a need to develop a consensus among the states and catapult the willingness to accomplish,” states the draft.

“DA&FW with states may endeavour to constitute an ‘Empowered Agricultural Marketing Reform Committee of State Agricultural Marketing Ministers’ on the lines of Empowered Committee of State Finance Ministers on GST to push the states to adopt the reform provisions in the state APMC Acts, notify the rules and also build up the consensus among the states to move towards unified national market for agriculture produce through a single licensing/registration system and single fee,” reads the draft.

The draft further states that the empowered committee may be chaired by the agriculture minister of any state on rotational basis with agriculture ministers of the remaining states as members. It may be registered under Societies Registration Act 1860, similar to the empowered committee on GST, and the constitution of the committee should be made through non-statutory gazette notification.

“The Empowered Committee may hold meetings on a quarterly basis, or even earlier also if the Empowered Committee so feels. There may be a permanent secretariat on the lines of the GST Empowered Committee. Empowered Agricultural Marketing Reform Committee of State Agricultural Marketing Ministers may consider suggesting to bring a law for agricultural marketing, uniform market fee and such other issues for the benefit of farmers and barrier-free agri-trade with approach of ‘ease of doing trade’ on the lines of Empowered Committee of State Finance Ministers on GST,” it states.

The committee’s suggestion for the constitution of a panel of the state agriculture ministers is significant as the states are yet to adopt agriculture marketing reforms suggested by the Centre years ago. These suggestions include the adoption of the model Act, State Agricultural Produce Marketing (Development &Regulation) Act 2003, and implementation of 12 areas of reforms identified and circulated by the ministry.

The 12 reform areas include allowing of the setting up of private wholesale markets; permitting wholesale direct purchase by processors, exporters, organised retailers, bulk buyers from farm-gate; declaring warehouse/silos/cold storage as deemed market yard; single-time levy of market fees across the state; and a single unified trading licence valid across the state.

Stressing the need to develop a unified national market for agricultural produce, the committee notes, “State-legislated APMC Act not only fragments the market within the state in the name of notified market area managed and regulated by statutorily constituted market committee therefor. Development of even state-level “Unified Market” for agriculture produce is a challenge. Over years’, various committees and commissions through reports have been recommending [the development of a] national-level “Unified Market” for agriculture produce for seamless trade across the country and improving the marketing efficiency.”

A mechanism like the Empowered Committee of State Finance Ministers on GST is significant as there have been a divergence of views between the Centre, states and farmers on the agriculture marketing reforms. The NDA government tried to usher in agriculture reforms by bringing in three farm laws during the Covid pandemic but had to repeal them eventually, in the face of farmers’ protests.

To ensure better prices for farmers’ produce, the committee has proposed a price insurance scheme\” on the lines of PM- Fasal Bima Yojana (PMFBY).

“DA&FW has been implementing PMFBY to cover production risk through insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests and diseases. The objectives of PMFBY are to (i) stabilize the income of farmers; (ii) encourage farmers to adopt innovative and modern agricultural practices; and (iii) ensure flow of credit to agriculture sector. Similar price assurance through insurance mechanism is also needed in case of price crash /fall below threshold level,” the draft states.