28-07-2014
S U K H P A L S I N G H
C M A , I I M A
MAKING THE AMENDED
APMC ACTS WORK
apmc/ss/cma/iima/july2014delhi
WHERE IS REGULATION OF AGRI
MARKETS?
• India: 35% of wholesale markets and 25% of all agri
markets
• Karnataka: 30% and 40...
THE MYTH AND THE REALITY ABOUT
AMENDED APMC ACTS
• Is the farmer not free to sell anywhere s/he wishes?
• If not, how are ...
MAJOR F& V STATES IN INDIA
• AP, Karnataka, Kerala, TN, Bihar, Orissa, WB,
Jharkhand, Chattisgarh, MP, Gujarat, Maharashtr...
THE MYTH AND THE REALITY ABOUT
AMENDED APMC ACTS
• Is contract farming not permitted anywhere in
India?
State that permit ...
MAKING AGRI MARKETS WORK
Scrutiny of contracts, public contract terms, and competition in procurement
(monopsony)
Incentiv...
MAKING AGRI MARKETS WORK
Role of the state- How Much regulation? Bihar v/s Gujarat in APMC Act!
Role of the state:
Promoti...
MAKING AGRI MARKETS WORK
Reform APMC markets- free licensing for better competition, e-payment
of market fee, ensure open ...
28-07-2014 9apmc/ss/cma/iima/july2014delhi
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IGIDR-IFPRI, Incentives to States for Adopting the Model Market Act Sukhpal Singh, IIM

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Indira Gandhi Institute for Development Studies(IGIDR), and the International Food Policy Research Institute (IFPRI) on
‘Harnessing Opportunities to Improve Agri-Food Systems’ on July 24-25 , 2014 in New Delhi.
The two day conference aimed to discuss the agricultural priority of the government and develop a road map to realise these priorities for improved agri food systems.

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IGIDR-IFPRI, Incentives to States for Adopting the Model Market Act Sukhpal Singh, IIM

  1. 1. 28-07-2014 S U K H P A L S I N G H C M A , I I M A MAKING THE AMENDED APMC ACTS WORK apmc/ss/cma/iima/july2014delhi
  2. 2. WHERE IS REGULATION OF AGRI MARKETS? • India: 35% of wholesale markets and 25% of all agri markets • Karnataka: 30% and 40%; Tamilnadu: 90% and 30%; AP (old): 100% • Jharkhand:14% and 25%: MP: 100% and 33%; UP: 50% and 15% • UK:70% and 90%; Haryana: 35% and 60%; Punjab: 35% and 90% • Gujarat: 98% and 85%. Maharashtra:33% and 22% • WB: 14% and 20% and Orissa: 10% and 20% 28-07-2014 2apmc/ss/cma/iima/july2014delhi
  3. 3. THE MYTH AND THE REALITY ABOUT AMENDED APMC ACTS • Is the farmer not free to sell anywhere s/he wishes? • If not, how are food supermarkets procuring? and how is contract farming going on across India? And how are farmers’ markets being held? • Direct purchase from farmers allowed in: Maharashtra (130), MP (8), Chattisgarh, Karnataka (258) Andhra Pradesh(171), Gujarat (21), Haryana (37), Himachal Pradesh (12), Odisha (46), Punjab (26), Rajasthan (77), Delhi, and Tamilnadu (179). States/ UTs with no APMC Act: Bihar (repealed w.e.f. 01.09.2006),Kerala, and Manipur MoFPI says 16 states have amended the APMC Act fully or partially, and have agreed to delist F&V from the APMC Act! Some have aleady done it 28-07-2014 3apmc/ss/cma/iima/july2014delhi
  4. 4. MAJOR F& V STATES IN INDIA • AP, Karnataka, Kerala, TN, Bihar, Orissa, WB, Jharkhand, Chattisgarh, MP, Gujarat, Maharashtra, HP, UK, UP, Arunachal, Manipur, Meghalaya, Sikkim, Tripura • Where are F&V growing fast: AP, Bihar, J’khand, Guj, Haryana, HP, J&K, MP, C’garh, Maha, Orissa, UP, UK, WB, and the NE states 28-07-2014 4apmc/ss/cma/iima/july2014delhi
  5. 5. THE MYTH AND THE REALITY ABOUT AMENDED APMC ACTS • Is contract farming not permitted anywhere in India? State that permit CF: Punjab, Haryana, Himachal Pradesh, UK, Rajasthan, Maharashtra, Gujarat, Chhattisgarh, Madhya Pradesh, Jharkhand, Andhra Pradesh, Orissa, WB, Karnataka, Kerala 28-07-2014 5apmc/ss/cma/iima/july2014delhi
  6. 6. MAKING AGRI MARKETS WORK Scrutiny of contracts, public contract terms, and competition in procurement (monopsony) Incentivise smallholder inclusion (unlike MoFPI and Pb. Govt. Schemes) Link credit to CF, though not mandatory or exclusive (lower interest rates for CF?) Exempt F&V crops from APMC rules only for CF and Direct purchase Promote Producer Companies to organise/encourage market oriented and business like co-operatives (New Generation Co-operatives) which can deal with CF agencies Learn from the Thai Experience 28-07-2014 6apmc/ss/cma/iima/july2014delhi
  7. 7. MAKING AGRI MARKETS WORK Role of the state- How Much regulation? Bihar v/s Gujarat in APMC Act! Role of the state: Promotion of producers’ organizations for marketing of farm produce as PPP Provide more of marketing extension to growers Market orientation in terms of improved marketing practices at the farmer level. Incentivise/promote Group contracts to reduce information asymmetry between firm and growers, transaction cost of dealing with small growers and for better bargaining power to growers Legal protection to growers like in Japan/USA 28-07-2014 7apmc/ss/cma/iima/july2014delhi
  8. 8. MAKING AGRI MARKETS WORK Reform APMC markets- free licensing for better competition, e-payment of market fee, ensure open auction system, better facilities, PC representation in APMC mgt., denotification of CAs/Arthiyas like in MP, (APMC markets serve as competitors to contract and direct purchase and can help improve the terms offered by CF/DP to growers as contract/contact prices are benchmarked to APMC prices Make warehouse receipts applicable to less perishable produce like potato/onions 28-07-2014 8apmc/ss/cma/iima/july2014delhi
  9. 9. 28-07-2014 9apmc/ss/cma/iima/july2014delhi

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