The government is simultaneously working on a new law on contract farming, a piece of legislation that seeks to supplement and complement this proposed agri-trade law.
“Rules are being drafted for the agri-trade law. It will not abolish state mandis, rather would promote inclusive development of agricultural trade,” a senior agriculture ministry official told ET. “There will be a major role of FPOs, registered farmer unions and cooperatives in bringing alternative trading channels for farmers outside the mandi premises. The bill would be first placed before the cabinet for approval soon,”
Currently, mandis monopolise the trade as APMC regulations force farmers to sell to licensed middlemen in notified markets. “All kinds of agri trades happening outside the APMC market yards will be governed by the new law. This law will help in facilitating farmers sell their produce to anyone who is offering a better price – whether on an electronic platform or in physical trade,” he said.
The new law will not hit APMC revenue, said the official. “States will continue to earn Rs 6,000-7,000 crore annually through the government’s procurement process. The revenue of APMC from trading outside the mandi premises is minuscule and unaccounted,” the official said. The Constitution empowers the Centre to legislate in farm trade, including inter-state movement of products.
S K Pattanayak, former agriculture secretary, said the central law would help double farmer income. “If APMCs want farmers in their yards, they must become competitive and efficient - offer them better facilities, better prices and comfort. The central law will break cartelisation in APMCs, giving more bargaining power to farmers,” Pattanayak said.
Experts, however, are concerned about opposition from some states. BJP-ruled states such as Karnataka, Madhya Pradesh, Uttar Pradesh and Gujarat have already amended their APMC laws to allow farmers to sell their output anywhere.
“The Centre will persuade states to implement this central law in agri trade. We don’t want any conflict as both states and the Centre are working toward the welfare of farmers. We will apprise states about the benefits of the new Act while implementation,” the official said.
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