Retailers cheer easing of Delhi's APMC norms

Retailers ruled out any major immediate easing in prices of fruit & vegetables

The removal of fruit and vegetables from the schedule of the Delhi Agricultural Produce and Marketing (Regulation) Act, 1998, has come as a respite to big retailers. Most leading organised retailers like the Future Group, Reliance, and the Tatas have multiple stores in Delhi.

Leading retailers in the National Capital Region argued that alternate supply chains outside existing mandis would emerge, creating direct relationships between retailers and farmers. They added the impact would be in the long run as an increasing number of farmers would enter into different kinds of businesses with big retailers. But an immediate boost to market sentiment is likely.

The APMC Act continues to be applied to the three major mandis in Delhi. It is, however, outside these mandis that farmers are free to sell to whoever they want, including big retailers, after the amendment. As the existing structures have been preserved, the impact is not immediate.

Retailers ruled out any major immediate easing in prices of fruit and vegetables as the law continued to apply in the existing mandis.

While some retailers sounded upbeat, others argued that alternate mechanisms like direct marketing licences already existed in states like Andhra Pradesh, Arunachal Pradesh, Assam, Goa, Gujarat, Himachal Pradesh, Jharkhand, Karnataka, Maharashtra, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Uttarakhand and Tripura.

“It’s not a path-breaking reform but a mere sentiment booster. We can obtain a direct marketing licence in many states and directly procure from farmers from within the mandis,” said a leading retailer who did not want to be named.

Delhi also allows big retailers to obtain direct marketing licences. Experts said the move opened a new window and many new and small mandis could develop in the city acting as an interface between farmers and retailers without middlemen.

However the onus of providing support infrastructure like cold storage could shift to the organized retailers. Big retailers will also increasingly invest in the cold storage infrastructure if they are freely allowed to procure from the farmers, said Murali Krishnan, CEO of Nilgiris.

"APMC was always seen as a large impediment. Long term relationships between farmers and retailers will lead to development of alternate support structures like insurance etc for the farmers," said Mohit Bahl, Head of Retail, KPMG India.

Most leading organised retailers like Future Group, Reliance, Tata have multiple stores in Delhi.

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