Agricultural Marketing Reforms:

Amendments in State APMC Acts/ Rules

Agricultural Marketing Division

for

State Agriculture/ Agrl. Mktg. Ministers Conference

23.04.2008

Agri-Markets in India as on 31.03.2007

6261 Wholesale Markets in India (majority are regulated markets)
20870 Rural Primary Markets (about 15% are regulated markets)
Total 27131
2459 Principal Regulated Markets
5006 Regulated Market Sub-yards
Total 7465
(Only 286 regulated markets in 1950)

Contribution of Regulated Markets

Basic objective has been- to ensure reasonable gain to the farmers by creating environment in
markets for fair play of supply and demand forces,
- to regulate market practices and attain transparency in transactions
Aimed at providing proper method of sale, correct weighment, prompt
payment and various marketing related services
Democratic set up to control and manage markets
Advent of regulated markets has helped in mitigating the market
handicaps of producers/ sellers at the wholesale assembling level
Achieved only limited success and Rural Periodic Markets in general,
and the tribal markets in particular, remained out of its developmental
ambit.

Agricultural Marketing Constraints

Predominantly marginal or small farmers Hence small marketable
surpluses & limited bargaining power
Poor availability of markets & monopolistic tendencies of APMCs
Inadequate infrastructure in wholesale markets/ rural primary markets
Lack of fair price discovery mechanism
Multiple and exploitative intermediaries low returns
Fragmented supply chain, poor cold chain & high post-harvest losses
Lack of cleaning, grading, packaging & quality certification facilities
Limited access to market information and marketing opportunities
available

Initiative of Market Reforms

Amendments in APMC Acts suggested by Expert Committee on Market
Reforms constituted by the Ministry of Agriculture (Report in June, 2001)
Expert Committee recommendations discussed in the National
Conference of State Agriculture Marketing Ministers on 27.09.2002
Standing Committee of State Agricultural Marketing Ministers constituted
under the Chairmanship of Union MOS (A) met & resolved to implement
reforms on 29.01.2003

Committee headed by Additional Secretary (AM), GOI including State

Representatives set up to draft a Model Law for Agri-Marketing
Model APMR Act finalized on 09.09.2003 by the Committee and
circulated to States by Central Government
Model Rules based on the Model Act circulated to States by the Ministry
in November, 2007
NDC has resolved on 29th May, 2007 for completion of amendments in
APMC Acts and notification of Rules there under by March, 2008.

Amendments Proposed in Model APMC Act

Allow establishment of Private or Cooperative markets/ Farmerconsumer markets/ Direct marketing
Safeguard the interest of the farmers through provisions for
Contract Farming
Single point levy & payment of market fee/ Single point registration
of functionaries

Prohibition of Commission Agents for agriculturists and no

deduction to be made towards commission
PPP in management & extension activities/ Promotion of e-trading/
Electronic Spot Exchanges
Encouraging professional management in APMCs
Promotion of Grading & Standardization.

Proposed Legal Framework of Contract Farming

Contract Farming Sponsor to register himself with a
prescribed officer

The Contract Farming Sponsor to get the contract farming

agreement recorded with a prescribed officer
No title, rights, ownership or possession shall be
transferred or alienated or vest in the contract farming
sponsor or his successor or his agent as a consequence
arising out of the contract farming agreement
Fast Dispute Settlement Mechanism at local level
Specification of Model Agreement for Contract Farming to
ensure inclusion of terms & conditions safeguarding interest
of both farmers & buyers.

Status of APMC Act Amendments

States/ UTs having Amended Acts

States/ UTs with no APMC Act

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

(1) Bihar (repealed w.e.f. 01.09.2006),

(2) Kerala, (3) Manipur and UTs of (4) Andaman
& Nicobar Islands, (5) Dadra & Nagar Haveli, (6)
Daman & Diu & (7) Lakshadweep

Andhra Pradesh (26.10.05)

Arunachal Pradesh (09.05.06)
Assam (19.01.07)
Chhattisgarh (10.02.06)
Goa (06.08.07)
Gujarat (01.05.07)
Himachal Pradesh (26.05.05)
Karnataka (16.08.07)
Madhya Pradesh (15.06.03)
Maharashtra (11.07.06)
Nagaland (08.09.05)
Orissa (17.05.06)
Rajasthan (18.11.05)
Sikkim (20.04.05) &
Tripura (11.05.07)

Partially Amended
(1) Punjab/ (2) UT of Chandigarh (Only private
markets & contract farming)
(3) Haryana (Only Contract Farming) &
(4) NCT of Delhi (Only Direct Marketing)

Amendment Bills under finalization

(1) Jharkhand, (2) Uttarakhand, (3) U.P., (4) West
Bengal, (5) NCT of Delhi & (6) Puducherry

Reportedly no Amendment Needed

Remaining States

1.

(1) Haryana, (2) J&K, (3) Meghalaya & (4)

Mizoram

Tamil Nadu

Private Market / Direct Marketing

Establishment of private market yard and
direct purchase from farmers
States which have adopted the suggested provision:

A.P., Arunachal Pradesh, Assam, Goa, Gujarat, H.P.,

Karnataka, M.P.{not for private market - direct sale can
be permitted under the bye-laws Sect 36(2)},
Maharashtra, Nagaland, Orissa (excluding for paddy/
rice), Punjab/ UT of Chandigarh (not for direct
purchase), Rajasthan, Sikkim, Tripura, T.N. & NCT of
Delhi
States which amended the Act but not adopted this provision:

Chhattisgarh

Consumer/ Farmer Market

Establishment of consumer/ Farmer market
States which have adopted the suggested provision:

Arunachal Pradesh, Assam, Goa, Gujarat, H.P.,

Karnataka, Maharashtra, M.P.(can be permitted
under the bye-laws), Nagaland, Punjab /UT of
Chandigarh (only enabling provision) Rajasthan,
Sikkim & Tripura
States which amended the Act but not adopted this provision:

A.P. ((being set up under Exemption Clauses),

Chhattisgarh, Orissa, T.N. (being set up under
Executive Orders)

Contract Farming
The Contract Farming Sponsor shall get the contract
farming agreement recorded with the prescribed officer

States which have adopted the suggested provision:

A.P., Arunachal Pradesh, Assam, Chhattisgarh,

Goa, Gujarat, Haryana, Karnataka, M.P.,
Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim
& Tripura
States which amended the Act but not adopted this provision:

H.P., Punjab/ UT of Chandigarh, T.N.

Contract Farming
No title, rights, ownership or possession shall be
transferred or alienated or vest in the contract farming
sponsor or his successor or his agent as a
consequence arising out of the contract farming
agreement
States which have adopted the suggested provision:

Arunachal Pradesh, Assam, Goa, Haryana,

Karnataka, Maharashtra, Nagaland, Orissa,
Rajasthan, Sikkim & Tripura
States which amended the Act but not adopted this provision:

A.P., Chhattisgarh, Gujarat, H.P., M.P., Punjab/UT of

Chandigarh, T.N.

Contract Farming
Dispute Settlement Mechanism
States which have adopted the suggested provision:

A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, Haryana, Karnataka, M.P., Maharashtra,
Nagaland, Orissa, Rajasthan, Sikkim & Tripura
States which amended the Act but not adopted this provision:

H.P., Punjab/UT of Chandigarh, T.N.

Contract Farming
Specification of Model Agreement for Contract Farming
States which have adopted the suggested provision:

Chhattisgarh, Goa (as may be prescribed), Gujarat,

Haryana, Karnataka (as may be prescribed), M.P.,
Maharashtra (Rules), Nagaland, Rajasthan, Sikkim &
Tripura
States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Assam, H.P., Orissa,

Punjab/UT of Chandigarh, T.N.

Prohibition of Commission Agents

No commission agent shall act on behalf of agriculturist
seller and no deduction to be made towards commission
States which have adopted the suggested provision:

Chhattisgarh, Nagaland, Sikkim

States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Assam, Goa, Gujarat, H.P.,

Karnataka, M.P., Maharashtra, Orissa, Punjab/UT of
Chandigarh, Rajasthan, T.N. & Tripura

Registration of Market Functionaries

Registration (not licensing) of market functionaries and
single registration for trade/ transaction in more than one
market
States which have adopted the suggested provision:

Assam, Chhattisgarh, Goa, H.P., Maharashtra,

Nagaland, Sikkim
States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Gujarat, Karnataka, M.P.,

Orissa, Punjab/ UT of Chandigarh, Rajasthan, T.N.,
Tripura

Single point levy of Market Fee

Market fee shall not be levied for the second time in any
market area of the State by market committee
Market fee not to be levied more than once in commercial
transactions between traders or sale to consumers
States which have adopted the suggested provision:

Chhattisgarh, Goa, H.P., M.P., Nagaland, Punjab/ UT

of Chandigarh, Sikkim
States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Assam, Gujarat, Karnataka,

Maharashtra, Orissa, Rajasthan, T.N., Tripura

Market Extn. Cell/ State Standards Bureau

Setting up of separate Market Extension Cell in the Board
Establishment of State Agricultural Produce Marketing
Standard Bureau
States which have adopted the suggested provision:

Nagaland, Sikkim
States which amended the Act but not adopted this provision:

A.P., Arunachal Pradesh, Assam, Chhattisgarh, Goa,

Gujarat, H.P., Karnataka, M.P., Maharashtra, Orissa,

Punjab/UT of Chandigarh, Rajasthan, T.N. & Tripura

Special Concerns
In some States, no provision for registration of contract farming
sponsors, recording of contract farming agreement, dispute settlement
mechanism, indemnity against the alienation of producers land on
failure of contract and a model agreement format for contract farming

In some States, no specific provisions for setting up of private markets/

direct marketing, setting up of consumers/ producers markets and fast
redressal of disputes with regard to the same
In some States, no provision for single point levy of market fee in the
State
In some States, Licensing provided instead of registration for market
functionaries; No provision for single point registration for trade and
transaction in more than one market area
In some States, no provision to promote and encourage PPP in
management of markets/ extension activities and e-trading
Rules not notified in many States for amended provisions (Notified
only in AP, HP, Karnataka, Maharashtra, Rajasthan, Orissa so far).

Other Special Concerns

In some States, registration of contract farming
sponsors or processors vested with the Secretary of the
APMC should be out of APMCs purview (better at
State level)
In some States, contract farming dispute settlement
authority is State Level/ Divisional Officer should have
been kept at below District level for easy access to
farmers
In some States, Private Markets have been restricted
within a specified distance from the existing regulated
markets under the Rules.

Programmatic Initiatives based on Reforms

Reform-linked central assistance to encourage public/ private investment

for development of marketing infrastructure, common facilities for
aggregation & value addition of produce and grading/ packaging/ quality
certification facilities

Scheme to set up modern terminal markets under NHM for perishable

agricultural produce with suitable backward & forward linkages

Development of post-harvest/ cold chain infrastructure, CA storage

facilities, refrigerated transportation by road/ rail, perishable cargo
centres at air & sea ports under NHM

Action Plan for development of Food Processing Industries including

setting up of Mega Food Parks

World Bank assisted MACP (5-6 States) and ADB Study for Agri-business
Development Project (2 States)

Present Scenario in Value Chain of Perishables

Cost build up for one Kg. basket Of Fruits

2.5

1.7

11.6

4.1
3.3
FARMER

TRADER

WHOLESALER

RETAILER

Retail Markups

100

FARM GATE PRICES

160

MILK

CONSUMER
PRICE

350
220

FISH

FRUITS &VEGETABLES

Modern Terminal Market

Banking Institution

Electronic
Auction

Processor

Exporter

Wholesaler
/ Trader/
Retail chain
operator

Storage:
Cold Storage,
Temperature
controlled
warehouse,
Ripening
Chamber

Infrastructure:
Packhouse,
Quality Testing
Facility,
Palletisation

Services:

Transport (incl.
cool chain),
Settlement of
Payments,
Banking, Market
information

Direct Selling

Infrastructure:

Collection Centre

Washing,
grading,
transport to TM

Services:

sorting,

weighment,

Collection & Aggregation of produce,

Settlement of payment, advisory on inputs,
prices, quality, multi-modal transport

Producers/ Farmers and

their Associations

Action Required for setting up TMCs

State Government to appoint a Nodal Officer (Secretary level) in
concerned Department & make him a member of SHM
SLEC of SHM to coordinate all aspects
State to arrange feasibility study & decide bid parameters for each
identified location
Model bid documents & OMDA suggested by Central Govt. in
Operational Guidelines Document
SHM to appoint reputed FI to assist Nodal Officer in two-stage
bidding process, evaluation, short-listing of PE & entering into
agreements

Cost of feasibility study & engaging FI can be met from Mission

Management Funds of SHM
Equity support of up to 49% to be provided from NHM for TMC
State Govt. can contribute to this equity (including land value/
rentals)

Thank you
(For any further information please contact me
at uks.chauhan@gmail.com;
For details please visit www.agmarknet.nic.in)