1. So what are the reforms

Parliament has passed three bills. The one area these legislation address is removing the monopoly of APMC Mandi in agriculture trade. We saw in the first part of this two part series how a farmer in Solapur, Maharashtra is shortchanged as he goes to a Mandi to sell his produce. Today we look at the reform briefly.

2. Legal Challenge

  • Agriculture under the Constitution is a State Subject which means only States can make laws in this regard.
  • Thus, many states may oppose the move. But some states have already passed laws and ordinances in this regard.
  • Legalities aside, I think this is an idea whose time has come and eventually it will be adopted all across.

3. Basic right of a producer

  • There is no industry where a producer is denied the basic right to decide whom he wants to sell his produce.
  • There is no reason to deny this right to our farmers.

4. APMC Mandi is here to stay (Atleast for sometime)

  • For all the issues around it, APMC Mandi fulfils some very important roles like a common market place where buyers and sellers aggregate, storage and grading infrastructure etc
  • Even if the monopoly of APMC Mandi is taken away, they will continue to exist at least for a good period as it will take time for other channels to develop.
  • Eventually competition will force APMC Mandis to reform and modernise.

4. Lot of private sector interest

  • Although it may take time, there is a lot of private sector interest in the space and will see major investment by corporate giants as well as startups.
  • Giants like Reliance are already working in connecting farmers to consumers through its channels.
  • It is important to draw parallels with the Dairy industry.
  • The private sector was allowed in the dairy industry in 1992. Further regulations made way for ease of doing business for the private sector.
  • Private sector since then has been at the forefront along with co-operatives in the development of the dairy industry.
  • It helps if firms are competing to woo the farmer to sell them his milk.
  • Competition always ensures better prices.

5. As always the devil is in the detail

  • The only reason APMC has sustained its monopoly on the trade for so long is the powerful lobby of traders.
  • So it needs to be seen how the situation evolves and what kind of rules and regulations are made by each state.
  • For eg: if the State laws allow anyone to buy anywhere from the farmer but require that person should have a trader’s license issued by the Market Committee then it will defeat the entire purpose.
  • While some may argue it’s important to have some checks to ensure that farmers aren’t shortchanged, my argument is that we need to respect the Indian farmers acumen.
  • Enough of having policymakers far removed from his day to day struggle to micro-manage his life.

we will surely stay in touch with Mahesh, our humble farmer from Solapur, Maharashtra to understand how and if his life has changed.