Five more states to amend Mandi Act

Five more states "" Andhra Pradesh, Punjab, Himachal Pradesh, Nagaland and Sikkim "" have notified the amendment of the Mandi Act/Agricultural Produce Marketing Committee Act (APMC Act) to allow direct marketing of agricultural commodities and the setting up of competitive agricultural markets in the private and co-operative sectors.

Following this notification, the infrastructure projects for agriculture and its allied sectors that are taken up in these states would be able to enjoy subsidies on their investments made in these states.

A senior agriculture ministry official on Friday said with this subsidy notification, infrastructure projects in these states will now be eligible for an investment subsidy of 25 per cent of the capital cost of up to Rs 50 lakh on a project.

However, in the north eastern states, hilly and tribal areas, rate of subsidy will be as high as 33.3 per cent of the capital cost of up to Rs 60 lakh. The notification comes after the states decided to amend the Mandi Act. Till now, total seven states, including Madhya Pradesh and Kerala, have agreed to the amendment, the official said.

The scheme is aimed at attracting private investment for the development of marketing and post harvest infrastructure projects in agriculture and allied sectors.

Further, there is no upper ceiling on subsidy in respect of infrastructure projects of the state agencies, the official added.

The central government has allocated Rs 190 crore for the scheme during financial years 2005-06 and 2006-07.

Subsidy under the scheme is to be released to the financing banks via the National Bank for Agriculture and Rural Development (Nabard) and the National Cooperative Development Corporation (NCDC).

For this purpose, the government has broadly defined infrastructure projects to include user facilities like market yard; platform for loading; assembling and auction, and weighing and mechanical handling equipment; functional infrastructure for assembling, grading, packaging, quality certification, labelling and packaging; infrastructure for e-trading, marketing extension and market-oriented production planning.

Mobile infrastructure for post-harvest operations such as grading, packaging and quality testing are also eligible for subsidy under the scheme.

The official also said the state governments could also take up modernisation projects and set up state-of-the-art modern terminal markets for marketing of flowers, fruits and vegetables.

Prior to these five states, two states Madhya Pradesh and Nagaland, had amended their respective State Agricultural Produce Marketing Committee Act--better known as the Mandi Act--in line with the model Central APMC Act.

The model Act, named State Agricultural Produce Marketing (Development and Regulation) Act 2003, seeks to amend the APMC Act to permit private and corporate bodies to establish a marketing network for agriculture produce and change land leasing laws to facilitate renting of the operational land by private companies.

The proposed amendments include setting up of special market zones for agriculture produce, contract farming and processing of agri produce; formation of competitive agricultural markets in private and cooperative sectors; expansion of marketing credit system and development of negotiable warehouse receipt system through forward and futures markets.

The proposed amendments are aimed at help farming community in particular. These will work in tandem with the union government's decision to amend APMC Act in order to abolish the mandi tax and thus, allowing farmers to sell their produce outside the purview of the mandis.

The model Act seeks to eliminate well-entrenched ahartiyas, or commission agents, who control marketing of farm produce at present all over the country.

Agri panel to meet on July 13

The Consultative Committee of the Parliament on Agri-marketing is scheduled to meet on 13 July, 2005 (Wednesday), a senior agriculture ministry official said.

The committee is likely to discuss the progress made in the sector and what steps are necessitated for helping other states to amend their respective state APMC Acts., the official added.