Pawar makeover for APMCs

Agriculture produce marketing committees, the common farmer8217;s only marketplace, are in a tizzy over Union Agriculture Minister Sharad P...

Agriculture produce marketing committees, the common farmer8217;s only marketplace, are in a tizzy over Union Agriculture Minister Sharad Pawar8217;s recent announcement that the government will facilitate the entry of private farm produce markets to link the farmer directly to the consumer.

But with the Centre having despatched its radical draft for the model Agriculture Produce Marketing Regulation and Development Act8212;it has to be adopted by the states if they are to be eligible for Central agricultural finance schemes8212;APMCs have to either shape up or ship out.

8216;8216;We are only following a worldwide trend, linking the farmer directly to the consumers through establishments like retail chain distributors super and hypermarkets,8217;8217; says Maharashtra8217;s director of agricultural marketing R M Kharche.

8216;8216;This eliminates the middle-men, who generally pocket the biggest chunk of money with the least inputs. The new Act will bring about a radical change in agricultural marketing.8217;8217;

Kharche, who worked on drafting the model Act, explains: 8216;8216;The new markets will function like big companies with a lot of ancillary units flourish. Contract farming, value-addition, e-trading and e-auction are important parts of the new idea. It will boost processing, exports, retailing and, above all, give the farmer his due.8217;8217;

Delineating the flaws in the APMC system, Kharche says farmers have to pay heavy commission to the agents, up to 8 per cent for perishable items. 8216;8216;Combined with his interest on loan and expenses on carting etc, it goes up to about 25 per cent. In the new system, retailers, processors and exporters will source the produce they want directly from the farmer,8217;8217; says Kharche.

8216;8216;Contracts will allow farmers to get all help from processors and exporters to grow the variety they need for a price that will not be less than the minimum support price if the produce is a regulated one.8217;8217;

Story continues below this ad

According to Kharche, about one-third of the produce goes waste today because of delayed purchase processes and inadequate post-harvest infrastructure. 8216;8216;The direct farmer-consumer link will curb that waste. Also, with production targeted to double in 10 years, the present arrangement will collapse if we don8217;t create additional systems,8217;8217; he says.

Even as the state licenses ITC to directly purchase soyabean from farmers, dissent to the reformatted marketing idea, however, is increasing. Farmer leader Vijay Jawandhia, for one, suspects the government may be trying to evade protecting the farmer from the vagaries of markets.

8216;8216;Is there any safeguard against price fluctuations? APMC auctions allow farmers to get the best price. In the new system, he will be hostage to traders8217; whims. And what8217;s the guarantee that the private markets will not have middlemen?8217;8217; he asks, alleging that private traders were buying soyabean for Rs 1,450/quintal against the support price of Rs 1,700.

Co-operative baron Babasaheb Kedar claims that trading isn8217;t possible without middlemen. 8216;8216;I buy cotton for my mill, but I can8217;t personally go to the farmers. I have to employ agents. If a trader from Calcutta wants to buy Nagpur oranges, do you expect him to come here? He will always use a middleman. And why should middlemen be vilified? After all they are giving services to both traders and farmers,8217;8217; Kedar argues.

Story continues below this ad

Kedar8217;s group has long dominated Nagpur APMC, one of the biggest and best yards in the country. Its annual profit in 2002-2003 was Rs 8 crore.

Kedar and Jawandhia emphasise that under the present APMC Act, the trader is bound to pay 100 per cent of the money to the farmer within 24 hours. 8216;8216;Will private markets guarantee that?8217;8217; they ask.

Moreover, they predict, traders will gradually stop going to farmers and will make them come to their godowns, 8216;8216;a return to the old system against which the APMCs were launched8217;8217;.

Kharche says a fast-track dispute settlement mechanism will be in place to take care of farmers8217; interest.