The Model Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 (APLM act) was proposed in April 2017 to replace the APMC Act (Agricultural Produce Marketing Committee) 2003. The act aims to be an agricultural reform by assisting farmers in directly connecting buyers in order for them to discover the best price for their commodities. The new model law proposes establishing a regulated wholesale agri-market every 80 kilometres. This article will explain to you about the Model APMC Act 2017 which will be helpful in preparing the Agriculture Syllabus for the UPSC Civil Service exam.

Model APMC Act 2017 - Objectives

• The new model law proposes establishing a regulated wholesale agri-market every 80 kilometres.
• To carry this out, it has been proposed that licences be issued to new private players and traders who establish a wholesale market.
• Warehouses, private market yards, and cold storages would all be allowed to function as regulated markets.
• Farmers and traders will be able to transact in the state's regulated agri-market. There are no separate fees for different markets.
• The maximum amount of a market fee is 1% for fruits and vegetables and 2% for food grain.
• The commission fee for agents can be increased to 2% for non-perishables and 4% for perishables.
• It establishes a single licence for trading both within the state and on a national scale.
• All regulatory powers are in the hands of the State's Director of Agricultural Marketing, who issues licences to traders and new private players. This authority is held by the mandis, who are overseen by the Board of Directors.
• It also allows for the promotion of online or spot (e-national agriculture market) agriculture market platforms.

Need for Model APMC Act 2017

• The adoption of the APMC Act by various States and Union Territories in the 1960s and 1970s ushered in agricultural marketing reforms in independent India.
• While they were a significant improvement over the previous village trader-dominated exploitative system, they fell short of meeting the full objective of price discovery in a fair and transparent manner.
• And, over time, market functionaries have learned to cartelize in order to avoid the basic goal of marketing regulation.
• More importantly, APMCs have caused market fragmentation, resulting in inefficiency across space and time.
• The Union Government has prepared the Model APMC Act, 2017 in this context.
• Farmers are unable to sell their farm produce to multiple buyers due to the APMCs' monopoly.
• The model act will establish a number of marketing channels for agricultural products.
• The model act aims to liberalise farm produce trade and help farmers achieve better price realisation.

Model APMC Act 2017 - Benefits

• Farmers benefit from this act because they can sell their produce to the buyers of their choice.
• Allowing warehouses and cold storages to serve as regulated markets expands the opportunities for farmers to sell their products, making the system more competitive and ending the APMC monopoly.
• The severe consequences of multiple fees would be eliminated.
• Electronic trading platforms facilitate transactions, particularly price determination, and provide farmers with access to markets at the national level.
• Consumers would benefit if agricultural product prices fell.
• Aids the government in meeting its goal of doubling farm income by 2022.
• It improves the prospects of food processing industries by making raw materials more affordable.
• The Act assists the Reserve Bank of India (RBI) in maintaining a healthy level of food inflation.
• It aims to promote direct interaction between farmers and farm commodity end-users such as retail chains, exporters, and agro-processing industries.

Conclusion

The Model APMC Act's goal is to create a single agriculture market with a single licence where agricultural produce and livestock can be traded. Due to the APMCs' monopoly, farmers are unable to sell their farm produce to multiple buyers. The model act will create a number of agricultural product marketing channels. The model act aims to liberalise farm produce trade and assist farmers in realising higher prices.

FAQs

MCQs

1. What is the primary objective of the Model APMC Act 2017?

A) To create a national market for agricultural products
B) To reduce taxes on agricultural products
C) To regulate agricultural exports
D) To control food prices

2. Which of the following is NOT allowed under the Model APMC Act 2017?

A) Establishment of private market yards
B) Interstate trading license
C) Use of cold storage as market sub-yards
D) Multiple market fees for different markets

3. Who is responsible for implementing the Model APMC Act in a state?

A) The State Government
B) The State Agricultural Marketing Board
C) The Central Government
D) The Director of Agricultural Marketing

4. How does the Model APMC Act promote direct sales between farmers and buyers?

A) By reducing subsidies
B) By eliminating intermediaries
C) By taxing the sale of crops
D) By enforcing contracts

5. What role do e-trading platforms play under the Model APMC Act 2017?

A) They offer subsidies to farmers
B) They facilitate price discovery
C) They regulate the quality of produce
D) They provide storage facilities

GS Mains Questions and Model Answers

Q1: Analyze the impact of the Model APMC Act 2017 on farmers and the agricultural market in India.

Answer: The Model APMC Act 2017 has the potential to significantly impact farmers and the agricultural market in India by promoting competition and transparency. By eliminating the monopoly of APMCs, farmers are empowered to sell their produce directly to buyers, reducing reliance on intermediaries. This enables farmers to get better prices and access a wider market. The promotion of private markets, the use of cold storage as market sub-yards, and e-trading platforms also improve market access, reduce costs, and encourage efficiency in agricultural trade.

Q2: Discuss the challenges faced in implementing the Model APMC Act 2017 and how they can be addressed.

Answer: One of the main challenges in implementing the Model APMC Act 2017 is the resistance from existing APMC market committees and local traders who fear losing their market power. Additionally, infrastructure issues such as inadequate cold storage and poor internet connectivity in rural areas could hamper the success of e-trading platforms. To address these challenges, the government must ensure adequate awareness programs, build better infrastructure, and provide incentives for private players to invest in agricultural marketing. Furthermore, state governments need to streamline the licensing process and ensure proper regulation of the new market structures.

Q3: Evaluate the potential long-term benefits of the Model APMC Act 2017 for India's agricultural economy.

Answer: The long-term benefits of the Model APMC Act 2017 for India's agricultural economy include the creation of a more integrated national market, which will help eliminate price disparities between regions. The direct interaction between farmers and buyers will ensure better price realization for farmers and promote greater competition in the agricultural market. Additionally, the facilitation of private market yards, warehouses, and cold storage units will help reduce wastage, enhance supply chain efficiency, and foster the growth of food processing industries. The overall impact will be a more efficient, competitive, and sustainable agricultural sector.

Previous Year Questions on Model APMC Act 2017

1. UPSC CSE Prelims 2021:

Question: The Model APMC Act 2017 aims to:

A) Provide subsidies to farmers
B) Facilitate the establishment of private markets
C) Regulate agricultural imports
D) Promote traditional market systems

Answer: (B)

Explanation: The Model APMC Act 2017 aims to promote the establishment of private markets, thereby increasing competition and improving the functioning of the agricultural market.

2. UPSC CSE Mains 2020 (GS Paper 2):

Question: "Discuss the significance of the Model APMC Act 2017 in transforming India's agricultural sector. How can it contribute to achieving food security?"

Answer: The Model APMC Act 2017 is significant in transforming India's agricultural sector by creating a more open and competitive market environment. It facilitates better price discovery, ensures transparency, and reduces inefficiencies in the supply chain. The act will contribute to food security by improving the incomes of farmers, reducing wastage, and ensuring better access to fresh produce, ultimately leading to a more stable and resilient food system.