States were being “cajoled to reject” the agricultural produce marketing committee (APMC) system in favour of a pan-India electronic trading portal that creates a unified national market for agricultural commodities, according to Finance Minister Nirmala Sitharaman. So far, the Centre had been focussed on reforming APMCs, allocating funds to upgrade them, and persuading States to adopt a model APMC Act.
Ms. Sitharaman said the Centre was talking to States to “dismantle” the APMC system and move towards the electronic National Agriculture Market (e-NAM).
Concerns on replacing APMCs with e-NAM
- While the Centre has been promoting e-NAM since its introduction in 2016, it is not clear if the online portal is ready to bear the entire burden of agricultural trade. Only 1.6 crore farmers have registered on the portal so far, from among the almost 12 crore cultivators in the country.
- According to data presented in the Lok Sabha in June, only about half of those registered have benefited from the platform.
- Out of almost 2,500 APMCs, 585 in 18 States have been connected to the e-NAM portal so far. Interstate trade, which has the potential to give farmers wider market access and better prices, has 21 APMC mandi participants in 8 States so far.
What are the issues with APMCs?
NABARD Chairman Harsh Bhanwala told that APMCs required reforms to ensure that a transparent price discovery mechanism exists, particularly for spot prices. Also, APMCs need to have infrastructure available for storage, collateral management and quality control assessment.
In addition, point of sale should not be restricted to APMCs. There needs to be wider market access.
Source: The Hindu
Relevant for GS Prelims & Mains Paper III; Economics