MODEL ANSWER: CIVIL SERVICE MAIN EXAM, 2014, G.S-3( ECONOMIC DEVELOPMENT) BY VASHISTHA RAY

Q.3. There is also a point of view that Agriculture Produce Marketing Committees (APMCs) set up under the state acts have not only impeded the development of agriculture but also have been the cause of food inflation in India. Critically examine.

Ans:  The given point of view clearly highlights the failure of APMCs in supervising and monitoring the activities of regulated market and thus in protecting the interests of farmers. 

APMCs have been set up by various states to monitor the activities of regulated market. The committee has representatives of state government, farmers, traders, commission agents and local body. The chairman of the committee is always a farmer. The main objective of this committee is to protect the farmers from the misery of distress sale to middlemen.

                 The committee has been entrusted with the task of providing storage facilities to farmers in regulated market. The committee also ensures that no broker or middlemen operates in regulated market. Only registered traders are allowed to purchase agriculture produce from farmers and that too at pre-announced prices. Weights & measures of traders operating in regulated market are always inspected and farmers are provided training by APMC to conduct business in regulated market.

                 Regulated market structure set up in India by respective state governments since 1951 under their respective APMCs acts has over the years brought discipline in the marketing of agriculture produce and taking care of various problems relating to malfunctioning of agricultural market.

          But over the years, it has been found that APMCs have failed to discharge their responsibilities. Farmers are not adequately informed about prevailing prices, weight & measures are not regularly inspected and training program conducted to increase the efficiency of market is irregular and unsatisfactory. There have been reports of collusion among various members of committee leading to rampant corruption in regulated market. All these along with the inefficiency of APMCs, farmers are denied fair and remunerative prices at the cost of agricultural development.

 The APMC act is also responsible for food inflation as it has created monopolies and distributional inefficiencies by not permitting private players and unregistered traders to set up the wholesale market in areas designated as regulated market by states. The committee also charges heavy mandi  fee from traders as well as farmers of regulated market. This  also becomes the cause of inflation. Since the time fruits and vegetables have been brought under the ambit of regulated market, food inflation has increased further.

 However, under model APMC acts,2003, private players have been allowed to purchase agricultural produce and develop agricultural infrastructure such as cold storage. Farmers are also sponsoring their own market in various states. These developments have brought in competition in agricultural market and thereby increasing the efficiency of APMCs. Vashistha Ray.