A.P.M.C.

AN INTRODUCTION:
The Maharashtra Agricultural Produce Marketing (Regulation) Act was passed
in the year 1963, with a view to regulate the marketing of agricultural and
pisciculture produces in market areas. After giving due consideration to various
committees recommendations and study groups, some important changes have
been made in this Act in the year 1987 and thereafter.

MISSION:
1. MAPMC (Maharashtra Agricultural Produce Market Committee) is in the
business of facilitating the trade of Agricultural commodities in the
geographical region of Mumbai.
2. MAPMC aspires to become the most preferred trading partner of sellers and
buyers of agro-commodities all over India.
3. MAPMC promises to provide the most advanced and world-class
infrastructure to all its functionaries.
4. MAPMC wishes to be a fair employer, investing in the continuous up-
gradation and development of knowledge and skills of its human resources.
5. MAPMC is aware of its important role in the society and therefore will
always conduct itself with a measure of responsibility towards social causes and
with significant accountability towards environmental preservation.
6. As one of the foremost agri-trade organizations in India, MAPMC is fully
cognizant of maintaining and enhancing the image of India and will always
prioritize national interests in its every decision.
7. MAPMC is a customer-driven organization and will constantly strive to
achieve complete customer satisfaction and provide prompt customer support.
PARTICIPANTS OF THE MARKET:
1. Producers / Sellers (farmers) These are the ones who are not directly
involved in the working but are the part of the whole cycle of agricultural
marketing.
2. Commission Agents
3. Brokers -They are the ones who take minimum risk and as a part of their
income brokerage are paid to them. The commission paid is between 2% to 10%
4. Traders- they are the same as Brokers but level of risk is high
5. Adatyas
6.Wholesaler
7. Retailers
8. Consumers

METHODS OF SALE CARRIED OUT BY APMC MARKET:

1. Sale by Sample:
It is the most convenient method of sale where the produce is systematically
graded. It saves the cost of transportation and inspection. However, utmost
honesty in the dealing is to be followed. The producer or the commission agent
shows the sample to the trader and finalizes the price. Example During the
auction of chilies, the buyer quotes the price for the produce by looking at the
samples. This sale by sample is also practiced in food grain sector. Food grains
such as wheat, rice, etc. are bought by buyer and to verify that the quality
matches the sample they hit the gunny bag with sickle and check the food
grains.
2. Open Auction:
The farmers undertake a bidding process in which the commission agents bid
Over the prices of the produce being auctioned and the produce is sold by the
farmer to the highest bidder.
3. Hatta Sale (Under Cover)
This method of sale is legally not permitted to be practiced in the regulated
markets. But it is learnt that Hatta or undercover sale is practiced in the fruit and
vegetables market.
Codes 1 finger = Rs 10 1 tapping = Re 1 Fist = Rs100 e.g. holding 3 fingers and
then tapping the finger 2 times would communicate Price of Rs.32/kg. If the
prices are acceptable to both the parties, lapping hands signals the deal as done.
The main reason why it is practiced is well justified by the wholesalers in the
market. According to them there has been a sharp increase in the number of
retail clients visiting the A.P.M.C market. If the prices offered to the wholesale
buyers are negotiated via talking or discussing loudly, even the retail buyers
would demand a similar price which would not be acceptable to the wholesale
buyers or sellers.
So, with a view of maintaining confidentiality of wholesale prices the hatta
system is often practiced in the market.
GROWTH OF APMCs IN MAHARASHTRA

Sr. No. Year Number of APMCs

1 1964-65 157

2 1974-75 203

3 1985-86 240

4 1993-94 251

5 2002-2003 281

6 2010-11 295

IMPACT OF DEMONETISATION ON APMC

Demonetisation has led to an implosion of agricultural trade in the country. In

the week following demonetisation, soybean arrivals in select major states had
collapsed by 87% relative to average arrivals over the week preceding
demonetisation. The figures were 55% for paddy, 61% for guar, 51% for maize,
38% for tur and 23% for cotton. Last year, for a comparable span, such effects
are largely absent. As one would expect, these effects are muted for perishable
commodities. Cabbage, cauliflower, tomato and brinjal arrivals have fallen by
9% to 19%. Farmers with commodities that perish are more likely to offload
their produce at deeply discounted prices or on credit, as long as the net benefits
of doing so are higher than letting produce rot on farms.
 By the end of the second week, there were few signs of recovery. Paddy
arrivals over the second week after demonetisation were 61% lower than
in the week preceding demonetisation, comparable to the fall in the first
week. For commodities such as soyabean and maize, the arrivals were
lower by 76.52% and 28.85% respectively. The decline, even though
lower than in the first week following demonetisation, cannot be
interpreted as a sign of recovery for two reasons. First, farmers, who
cannot afford to store the produce any longer have no choice but to bring
the produce to themandi and sell at either lower prices or on credit. The
higher arrivals in the second week relative to the first week could, in part,
reflect this. Second, for the actual recovery, reduced arrivals in the first
week should show up as higher arrivals in the second week for the
markets to get back on track. We do not see this trend yet in the data. This
suggests perhaps that the concessions to farmers and traders at the
agricultural produce market committees are yet to find traction. The
impact on prices at the mandis is as yet unclear, although reports suggest
a dampening consumer prices. Another striking feature is the significant
variation in the impact across states. For example, aggregated soybean
and maize arrivals across mandis in Madhya Pradesh fell by about 97%.
In contrast, aggregated soyabean arrivals in Maharashtra fell by 68%. Our
hypothesis is that mandis that trade mostly in cash or have limited
penetration of banks and are relatively less connected to urban areas are
likely to be more affected. It is possible that transitions to bank payments
reported in several states will aid the recovery process, but only time will
tell.

India is the worlds second most populous country with a rate of growth that is
rapidly making it one of the biggest economies in the world. Its grains sector
reflects that with increasing demand from an increasingly affluent population.
According to the most recent International Grains Council (IGC) figures, Indias
total grains production in 2016-17 will be 136.2 million tonnes, up from 124.6
million the year before.

Indias wheat production for 2016-17 is forecast at 93.5 million tonnes, up from
86.5 million the previous year. Theres been a good start to the following
season.

While seeding in India started quickly, there were reports of subsequent delays
following the demonetization of certain bank notes, with some farmers unable
to pay for inputs, including seeds, the IGC said. After heavier monsoon rains,
reservoir water availabilities were estimated to be improved y/y, albeit slightly
below the 10-year average.

Indias maize production in 2016-17 is forecast at 25 million tonnes, up from

21.8 million the year before. India is an important producer of sorghum, with its
2016-17 crop forecast at 5.5 million tonnes, up from 4.4 million tonnes. Indias
total imports of grains are put at 3.4 million tonnes in 2016-17, up from 1.8
million the year before. Exports are put at 1.1 million tonnes, down from 1.4
million the year before. Indias imports of wheat are set to jump to 3 million
tonnes, from just 400,000 the year before.

Based on the most recent official production estimate, the carryover in India is
seen contracting to an eight-year low of 13.7 million tonnes , the IGC said.
This is well above the governments food grains stocking norm of 7.5 million
tonnes as of April 1, 2017. However, by the beginning of October 2016,
centrally held stocks were already only fractionally above the official stocking
norm for that date. Strong buying by private traders is reported to have curtailed
government procurement of the 2016-17 crop, which restricted the size of this
seasons official reserve.

In addition, private sector purchasing from government stocks has been high,
leading to a quicker monthly drawdown than usual and suggesting open market
supplies are becoming tight. Because of this, some local analysts believe the
official 2016-17 production estimate of 93.5 million tonnes could be overstated
by as much as 6 million to 10 million. Based on recent levels of offtake,
centrally held inventories could be close to minimum stocking norms by the end
of the marketing year.

At the same time, exports of wheat are set to fall to 300,000 tonnes, from
800,000. Indian maize exports are set to rise to 700,000 tonnes from 500,000.
The country also is set to export 50,000 tonnes of sorghum, down from 63,000
the year before.
Indias rice production is expected to rise to 107.5 million tonnes in 2016-17
from 104.3 million the year before.
In India, timely and well-distributed monsoon precipitation was beneficial for
the nations summer sown (kharif) outturn, while also recharging supplies for
winter (rabi) seeding, the IGC said. Together with attractive minimum support
prices, prospects for the countrys winter-seeded (rabi) crop appear positive.
India is likely to be the biggest supplier of rice to the worlds market for the
sixth consecutive year in 2017, shipping 10.7 million tonnes, compared with
10.3 million in 2016.

Production of soybeans in India is set to increase to 11.5 million tonnes in 2016-

17, up from 8.6 million the year before. The IGC commented that sowings were
little changed, but an improved monsoon increased the potential yield.
CONSUMPTION GROWS
Earlier in 2016, the attach forecast a recovery in 2016-17 wheat consumption
to 87.5 million tonnes from 86 million the year before as population grows by
around 1.6% a year.

Despite relatively tight domestic supplies, the government is likely to continue

the sale of wheat at subsidized prices through the public distribution system
(PDS), but the sale of wheat to local millers through the Open Market Sales
Scheme (OMSS) are likely to come down from last years level on relatively
tight government stocks, the report said.

Typically, whole wheat is distributed through the open market and public
distribution system to be subsequently custom milled by the household for
home use.

Much of the wheat retained for farmers is also milled, in small flour mills called
chakkies.

Some of the open market wheat and government wheat is procured by the
organized milling sector for producing wheat flour for the hotels, restaurants
and institutional sector and a small share for branded and packaged wheat flour
and atta, the report said. The organized milling sector is relatively small with
about 1,000 to 1,100 medium to large flour mills in India, with aggregate
milling capacity of about 25 million tonnes, mostly milling maida (flour) and
semolina to cater to institutional demand, and by-product bran flakes used as
filler in the cattle feed industry.

The report put the average capacity utilization of those mills at around 45% to
50%, processing 12 million to 13 million tonnes of wheat a year.
A more recent report explained the governments moves to make more imported
wheat available. At the same time, the attach raised the USDA estimate for
Indian wheat consumption to 92.4 million tonnes.

On Dec. 8, 2016, the Ministry of Finance issued a notification removing the

import duty on wheat for an indefinite period, the report said. Earlier in
September, the Ministry of Finance lowered the basic custom duty on imports of
wheat from 25% to 10 % (ad valorem on CIF value) until March 1, 2017.

Market sources report that the GOI decision to remove the import duty was
due to concern about the rising domestic prices and declining government-held
wheat stocks in the recent months. Domestic prices have surged over the last
two months to record levels due to tight domestic markets. Due to the concerns
on declining government-held wheat stocks, the government reduced wheat
sales under open market sale scheme (OMSS) in recent months, contributing to
the strong escalation in domestic prices. Consequently, the government removed
the import duty on wheat to allow private mills to augment their wheat
consumption requirement through imports.

EFFECT OF DEMONETIZATION

The Indian governments recent withdrawal of large denomination banknotes

triggered concerns that rabi planting operations could be affected as farmers
and input suppliers (seed, fertilizers, chemicals and fuel) faced a shortage of
currency (most sales are cash based).

However, the government took steps to improve the cash availability to

farmers like increasing the cash availability to the rural banking sector,
increasing the cash withdrawal limit from the banks for farmers, allowing
farmers to buy seeds from government agencies using old INR 500 notes, etc,
the attach said. The impact of demonetization on seed and labor purchase is
limited. Most farmers reuse seeds from their last years crop (seed replacement
rate for most crops range from 15% to 30%, except hybrid corn) and purchase
whatever new seeds they want in advance before the planting operation.

Most of the farm laborers have long working relations with the farmers and are
unlikely to stop working on critical planting operations for lack of immediate
payments. However, farmers can face problems in purchasing fertilizers and
chemicals, but the new relaxations will help them source these inputs for the
ongoing planting.