Model Agriculture Produce and Livestock Marketing Act, 2017

The Model Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 (APLM Act) was proposed in April 2017 to replace the APMC Act (Agricultural Produce Marketing Committee) 2003. The act strives to reform agriculture to assist farmers by directly connecting them with buyers to enable them to discover the optimum price for their commodities. This article provides a comprehensive overview of the APLM Act.

Objectives of the Model Law

The purpose of the Model APLM Act is to create a singular agriculture market with a unified license where agriculture produce and livestock can be traded efficiently. Below are the key objectives:

The legislation advocates setting up a regulated wholesale agriculture market every 80 km. Licenses are proposed for private players and traders to establish these markets, inclusive of warehouses, private market yards, and cold storages operating as regulated markets.
Farmers and traders can interact across any regulated market within the state, without the burden of separate fees for individual markets.
The market fee is capped at 1% for fruits and vegetables and 2% for food grains, while commission agents can charge up to 2% for non-perishables and 4% for perishables.
It introduces a single licensing system for state and national level trade.
Regulatory authority rests with the state's agricultural marketing director, who issues licenses, under the purview of the Board of Directors.
The act also supports online or spot market platforms through e-national agriculture markets.

Salient Features

The Model APLM Act, 2017 features several crucial aspects:

Abolish market fragmentation within the State/Union Territory by eliminating 'notified market area' concepts, affirming the State/UT as a single market entity.
Allows geographical restriction-free trade of agricultural produce, including commercial and horticulture crops, livestock, fisheries, and poultry.
Disintermediation of the food supply chain pairs farmers directly with exporters, processors, bulk retailers, and consumers.
Delineates the responsibilities of the Director of Agricultural Marketing and Managing Director of State/UT Agricultural Marketing Board for regulatory and developmental duties respectively.
Encourages private wholesale market yards and farmer-consumer market yards to spur competition.
Promotes direct interactions between farmers and buyers such as processors and exporters to lower price spreads.
Enables warehouses, silos, cold storages to be declared as market sub-yards for enhanced accessibility.
Empowers agriculturalists to sell their produce at chosen places and times.
Promotes e-trading for transparency and market integration.
Implements single-point market fee levy across the State with a unified trading license.
Fosters a national market via inter-state trading licenses and quality certification.
Zeros in on rationalizing market fees and commission charges.
Grants provisions for Special Commodity market yards and Market yards of National Importance (MNI).
Calls for democratizing Market Committees and State/UT Marketing Boards.

Significance of APLM Act

The agricultural marketing sector's reforms, initiated in the 1960s and 1970s with the APMC Act, failed to provide transparent price discovery. The system was marred by market fragmentation and inefficiencies due to cartelization. The Model APLM Act, 2017, formulated by the Union Government, addresses these flaws.

Benefits of the Model APLM Act

The APLM Act facilitates better price realization for farmers by allowing them to sell to willing buyers.
It allows warehouses and cold storages to operate as regulated markets, enhancing competitive avenues for farmers and reducing APMC monopoly.
Alleviates the negative impact of multiple fees.
Embraces electronic trading platforms which aid in nationwide market accessibility.
Affords price benefits to consumers from reduced agricultural product costs.
Supports government objectives of doubling farm income by 2022.
Enhances prospects for food processing industries with lower raw material costs.
Assists the Reserve Bank of India (RBI) in maintaining healthy food inflation rates.
Encourages direct interactions between farmers and end-users, like retail chains and agro-processors, enhancing supply chain efficiency.

Terms and Conditions

The procedures for buying and selling are outlined below:

Commercial transactions between traders require an agreement to be executed in triplicate. A copy remains with the Market Committee records.
Payments for transacted agricultural produce in various market settings must be made on the day of sale or the following day.
If the purchaser defaults on payments, they must pay an additional one percent daily on the owed amount within five days.
Failure to comply within five days results in license cancellation for a year starting from the sixth day.
Commission agents can charge up to two percent on non-perishables and four percent on perishables, excluding farmer-sellers.

The APLM Act is a significant regulatory reform aimed at enhancing the agricultural marketing landscape in India, promoting sustainability and economic growth across communities.

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Frequently Asked Questions

Common questions about Model Agriculture Produce Livestock Marketing Act 2017 Overview.

The Model APLM Act, 2017 is a proposed legislation that aims to create a single agricultural market in each state, facilitating the trade of agricultural produce and livestock across the state with a single license. It seeks to replace the existing Agricultural Produce Marketing Committee (APMC) Act, 2003.

The primary objectives of the Model APLM Act include setting up regulated wholesale agri-markets at a distance of every 80 km, allowing private players and traders to establish wholesale markets, enabling farmers and traders to transact across all regulated markets within the state with a single license, and promoting online or e-national agriculture market platforms.

The Act allows farmers to sell their produce directly to buyers of their choice, potentially resulting in better price realization. It also increases the avenues for farmers to sell their products by permitting warehouses and cold storages to act as regulated markets, creating a more competitive system.

The Act proposes a maximum market fee of 1% for fruits and vegetables and 2% for food grains. Commission agents' fees can go up to 2% for non-perishables and 4% for perishables, but no commission can be charged from the farmer-seller.

The Act promotes e-trading platforms to enhance transparency in trade operations and market integration across geographies. It also provides for a single trading license valid across the state and at the national level, facilitating inter-state trade.

The Act aims to address the shortcomings of the existing APMC system, such as market fragmentation, lack of price discovery, and cartelization by market functionaries. It strives to create a more efficient and transparent agricultural marketing system, benefiting both farmers and consumers.

The Act facilitates disintermediation of the food supply chain by enabling direct interface between farmers, exporters, processors, bulk retailers, and consumers. This aims to reduce price spreads and benefit both producers and consumers.

The Act separates the regulatory and developmental functions, with the Director of Agricultural Marketing responsible for regulatory tasks and the Managing Director of the State/UT Agricultural Marketing Board handling developmental responsibilities. It also ensures complete democratization of market committees and state/UT marketing boards.

The Act mandates payment to the seller on the same day or the next day of the transaction. It also imposes penalties, including license cancellation and a one-year ban, for non-payment within five days of the purchase.

By enabling the availability of raw materials at lower prices through a more efficient marketing system, the Act aims to elevate the prospects of the food processing industries in the country.