Gujarat to amend APMC Act

The Gujarat government is planning to give the much-awaited gift to the farmers in the state soon in the form of an amendment to the Agriculture Produce Marketing Committee Act.

According to officials in the state agricultural department, the amendment is likely to be in place by the beginning of the 'Vibrant Gujarat: Global Investor's Summit-2007'. The move will pave the way for private players to set up spot exchanges in rural areas, which will help farmers reach out to exporters and wholesalers to sell their agro produce.

The amendment is part of the government's attempt to attract maximum private investment in agro industries during the 'Vibrant Gujarat Summit'.

The APMC Act currently prohibits private players to set up spot exchanges. Because of this, farmers cannot directly reach out to wholesalers and exporters and are forced to sell their products via middlemen.

The amendment will help private players like Mumbai- based Multi-Commodity Exchange of India (MCX) and National Multi-Commodity Exchange of India Limited set up their own national spot exchanges in the state.

This will put an end to the dependence on the middlemen and farmers can deal directly with exporters and wholesalers on their own prices.

Talking to Business Standard about the state government's plans for the forthcoming Vibrant Gujarat: Global Investor's Summit-2007, Avinash Kumar, additional chief secretary of agricultural, animal husbandry, fisheries and co-operation department, said, "The government has put agro industries in the focused sectors in the forthcoming event and is trying to attract maximum investment in this sector this year. As part of this, the government is trying to create a legal environment for the prospective investors by amending the APMC Act."

"The amendment is likely to be in place before or during the Vibrant Gujarat event," Kumar added.

Talking about private players' interest in setting up national spot exchanges in the state, he said, "We already have two proposals for agriculture spot exchanges from MCX and NMCE. They are pending because of the absence of provisions in the Act. The amendment is likely to pave the way for them. This move will directly benefit the farmers."

On the advantage of private NSEs, he said, "The APMC Act provides only for procurement of farmers' produce, but it is not designed to market. Marketing infrastructure for the agro produce is not in place. Entry of private players will ensure that the farmers will get maximum advantage of marketing facilities."