The government may allow direct marketing, contract farming and dispense with the requirement of routing every farm produce to be sold to consumers through agriculture produce marketing committees (APMCs). The move is aimed at lowering retail prices by bridging their gap with farmgate prices.
The suggestions have been made by the Narendra Modi committee on consumer affairs. The committee is co-chaired by chief ministers of Maharashtra, Andhra Pradesh and Tamil Nadu.
The report will be submitted to the prime minister soon.
Among the committee’s likely proposals is allowing private parties — including private persons, companies, farmers and consumers — to set up agriculture markets. At present, these are built at the initiative of the state governments.
To promote a specific commodity during shortages, the committee has also proposed the setting up of special markets.
“The entry and exit norms for agriculture produce markets are set to be relaxed so that APMCs can enter into public-private partnerships for management of agriculture markets,” said an official close to development.
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The proposals include giving farmers the freedom to sell outside the APMC markets. This means direct sale to consumers.
The committee has also proposed waiving of the market fee for fruit and vegetables and a single-point market fee for produce to be sold in a particular market area.
“This will reduce transaction costs as farmers and co-operative bodies have to pay a fee every time they enter a new market in a new area under the same APMC,” said an official.
While licensing of market functionaries should be dispensed with, the market players should register themselves with the state governments and file annual returns. The state governments should also be empowered to exempt any produce from market fee to reduce prices during shortages, said the report.
The committee has also backed contract farming. The contract farmer may be an individual agriculturist or a co-operative. The sponsor may be a village panchayat, a corporate body or a local authority, it says. The contract farmer may be allowed to sell directly to the sponsor without routing it through the notified APMC market, it says.
Rather than being just a marketing body, APMCs should be required to set up a separate marketing extension cell to develop other markets and provide market-led extension services to farmers, besides developing quality testing and communication infrastructure and conducting market survey and research. APMC should also ensure payment to farmers on the day of sale, said the report.
Opposes futures in essential commodities
The Narendra Modi committee on consumer affairs, also mandated to suggest amendments to the Essential Commodities Act, is against futures trading in essential commodities.
In its report, to be submitted to the prime minister, it is likely to recommend restricting futures trading to only non-essential commodities. At present, sugar and wheat are the only essential commodities traded on the exchanges.