Industry body Assocham today said the Agriculture Produce Marketing Committees Act needs to be scrapped because it is creating hindrances for organised retail sector in some states.
Much more investment would have been possible in the domestic organised retail if only it was easy to procure directly from farmers, it said.
Making a strong case for reforms in agri-procurement by scrapping the APMC Act, Assocham said in a statement that cumbersome rules discourage the organised retail to flourish since an efficient supply chain is an integral part of the organised retail and not just a front end.
It said: "Even for companies like ITC, it is extremely difficult to procure wheat since they need individual licence for each of the mandis in the state.
"This is so in several states which do not give one licence for the whole state. If a company wants to procure grains from 50 mandis it will need 50 licences."
The Act has resulted in cartelisation of mandi intermediaries who fleece both consumers and the farmers, it said, adding that "we need to scrap this cartel and help farmers establish a direct contact with retailers".
Assocham said that without these reforms in the state laws, it would be extremely difficult for any global retailer to set up stores in the country even if a particular state allows FDI in multi-brand retail.
The industry body also sought a clarity on environmental laws and notifications which lack clarity.
Citing the new environment regulations in Western Ghats, it said that lack of clarity is creating confusion in states like Maharashtra and Karnataka which are active in producing and processing horticulture products.
It added: "Different states have different rules in regard to food industries. A company operating pan-India has to deal with different rules.
