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Wednesday, 24 December 2014 01:20
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Fadnavis government needs to move on this

Given that farmers end up paying commission agents in cartelised mandis—these are run under the Agricultural Produce Market Committee (APMC) Act—anywhere up to 10-12% of the value of what they produce, abolishing APMC mandis has been a long-standing demand in the agriculture sector. Not only will this help farmers get a better realisation for their produce, it will lower retail prices as well. And once the APMC monopoly is abolished—farmers can sell only in these mandis under the law—and, say, large retail chains are allowed to buy directly from farmers, efficient supply chains will also get established. Which is why, when Congress vice-president Rahul Gandhi spoke to the party faithful at the AICC meeting in New Delhi last year in December, he promised to get rid of APMC mandis in all Congress-ruled states by January 2014. Given the Congress was in power in Delhi and Maharashtra at that point, that pretty much covered the biggest mandis in India: Azadpur in Delhi and Vashi in Mumbai. That Gandhi was not able to enforce his writ is well-known, and under President’s rule in the capital, the NDA government at the Centre managed to break up the Azadpur mandi monopoly in just a few months. When the BJP came to power in Maharashtra, it was expected the Vashi mandi would go the same way.

Sadly, this has not happened though it has been over one-and-a-half months already since Fadnavis came to power. Indeed, after traders across the state went on strike, the government has just deferred by 15 days a decision on changing part of the APMC system to one where the commission is charged to traders instead of farmers—given that it has been more than 17 years since the state first tried to change the policy on commissions, it will take a very determined government to actually dismantle the entire APMC monopoly in mandis like Vashi.

Even if that does happen, the government will come up against another big hurdle, that of adequate land to be able to build alternative non-APMC mandis where farmers can sell their goods. The Small Farmers’ Agri-Business Consortium, which works under the agriculture ministry, has managed to make some headway in Delhi, but is struggling to get the land to be able to compete with Azadpur; its best estimate is that, after 2-3 years, it will be able to sell 5-7% of what Azadpur does today. If the government is serious about abolishing the cartelised APMC mandis, it needs to ensure enough land and capital for their successor entities. Without this, the change will largely be cosmetic in nature.

 

 

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