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Agricultural Produce Marketing Committee Act


Agricultural Produce Marketing Committee Act

The wholesaling of agricultural produce is regulated by the Agricultural Produce Marketing Acts of various State Governments. Agricultural Produce Marketing Committee (APMC) Act authorizes the concerned State Governments to notify the commodities, designate markets and market areas where regulated trade takes place and provides for the establishment of APMCs that are accountable for the functioning of the markets. An entire state is divided and declared as a market area, where markets are governed by the Market Committees that are constituted by the State Governments. The article explains the Act in brief.


The objectives of APMC are mentioned below:

  • Developing an efficient marketing system.
  • Promotion of agri-processing and agricultural exports.
  • Specify procedures and systems to establish an effective infrastructure for the marketing of agricultural produce.

Establishment of New Markets

All markets are established through the initiatives adopted by the State Governments. The APMC Act also provides legal persons such as individuals, organization, companies, growers and local authorities who are permitted to apply for the establishment of new markets for agricultural produce in a given area. In addition to this regulation, private individuals, farmers and consumers can establish more than one market in a given market area.

Having said this, it is not mandatory for the growers to sell their produce through existing markets that are administered by APMC. Agriculturalists failing to bring produce to the market area for the sale are not eligible for election to the APMC.

Special Markets

The Act makes separate provision for notification of ‘Special Markets’ or ‘Special Commodities Markets’ in any market area for specified agricultural commodities to be operated, in addition to the existing markets.

Responsibilities of the Market Committees

The responsibilities of the Market Committees under the APMC Act are as follows:

  • To ensure complete transparency in the pricing system and transactions that take place in the market area.
  • To provide market-led extension services to farmers.
  • To ensure payment for agricultural produce that is sold by farmers on the same day.
  • To promote agricultural processing, including activities for value addition in agricultural produce.
  • To publicize data on the arrivals and rate of agricultural produce that are brought into the market area for sale.
  • To establish and promote public-private partnership in the management of agricultural markets.

Contract Farming

Contract farming is a new concept that has been launched by the APMC by which an agreement is made between processing/marketing firms for production support in predetermined prices. The provisions include:

  • Compulsory registration of all contract farming sponsors
  • Recording contract farming agreements
  • Resolution of disputes
  • Exemption from levy of market fee on produce that is covered by contract farming agreements
  • Providing indemnity to producers’ title/possession over the land from any claim that arises from such agreements

These provisions enable the direct sale of farm produce to contract farming sponsor from farmers’ field without the requirement of routing through notified markets.

Direct Marketing

Direct Marketing permits the farmers to undertake sorting, grading and quality marketing at the farm gate. This helps the farmers to exclude the markets that are not equipped with all the required services and facilities that contribute to the efficiency of the market.

In India, the direct marketing model has been experimented in Punjab and Haryana via the Apni Mandis, In Andra Pradesh via the Rythu Bazaar and in the Tamil Nadu via the Uzhavar Santhai.

Benefits of Digital Marketing

Given below are the benefits of Digital Marketing in APMC:

  • Reach and fulfil specific demands of the wholesalers or traders
  • Dynamically take advantage of favourable prices
  • Reduce marketing costs
  • Elimination of elongated chain of intermediaries
  • Reduction of consumer prices
  • Better prices for crop producers

Private Investments in Market Yards

The Act strives to attract private investment to construct market yards and create a post-harvest value chain that comprises of cold stores, warehouses and logistics infrastructure. However, these measures are for high-value and perishable produce like vegetables, fruits and livestock products that contribute substantially to food inflation. Some of the other provisions are:

  • Implementing a single point levy of market fee
  • Resolving disputes that arise between private/consumer market and Market Committee
  • Authorization of the State Governments to exempt agricultural produces that are brought for sale in the market area from payment of the market fee
  • Market Committee that is permitted to use its funds to create infrastructure on its own or through a public-private partnership

Establishment of Market Committee

For every market area, there would be a Market Committee that has jurisdiction over the entire market area. The Market Committee serves as body Corporate with an alternate name specified by the State Government or the Director. The committee has a common seal and may sue or be sued in its corporate name or under this Act, to acquire, hold, lease, sell or otherwise transfer any property and to do all other things that are necessary for the purpose for which it has been established. No immovable property has to be acquired or transferred by sale, lease or otherwise without the prior permission of the Director/Managing Director.

Acquisition of Land for Market Committee

If the Board or Market Committee is unable to acquire land within the market area, it may request the State Government to go on acquiring such land as per the provisions of the Land Acquisition Act, 1894 on paying the compensation awarded as stated in the Act. Once a proposal is made by the Market Committee, it shall not be withdrawn by it except for reasons that are approved by the State Government.

The Board or the Market Committee without the sanction of the State Government does not transfer or divert any land that has been acquired for this purpose. The premises used for market yard, submarket or for the purpose of the Board shall not be deemed to be included in the limits of the Municipal Corporation, Municipal Council, Notified Area, Gram Panchayat or a Special Area Development Authority.