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Model Agriculture Produce and Livestock Marketing Act-2017

Last updated : March 16th, 2020 12:03 pm

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 be an agricultural reform to assist farmers to directly connect buyers to enable them to discover the optimum price for their commodities. In this article, let us look in detail about the Act.

Objectives of Model Law

The purpose of the Model APLM Act is to create a single agriculture market with a single license in which agriculture produce and livestock would be traded. Here are some important objectives of the Law:

• The new model law suggests to set up a regulated wholesale agri-market at a distance of every 80km. To execute this, it has been proposed to issue licenses to new private players and traders who establish a wholesale market. Even warehouses, private market yards and cold storages would be permitted to act as regulated markets.
• Farmers and traders will be able to transact all such regulated agri-market within the state. There are no separate fees allocated for individual markets.
• The greatest extent of a market fee is not more than 1% for fruits and vegetables and 2% for food grain. Commission agents’ fee can go up to 2% for non-perishables and 4% for perishables.
• It specifies a single license for trading within the State and at the National level.
• All regulatory powers lie with the office of the director of agricultural marketing in the State, who issues licenses to traders and new private players. This power is vested with the mandis who are managed by the Board of Directors.
• It also has the provision to promote online or spot (e-national agriculture market) agriculture market platforms.

Salient Features

The features of the Model APLM Act, 2017 are listed below:

• To abolition of fragmentation of market within the State/Union Territory (UT) by removing the conception of ‘notified market area’ in the regulation of Agricultural Produce and Livestock Market Committee (APLMC). In simple terms, APLM provides recognition of a State/UT as a single market.
• In addition to cereals, pulses and oilseeds, the Act provides geographical restriction-free trade transaction of agricultural produce including commercial crops like cotton, horticulture crops, livestock, fisheries and poultry.
• Disintermediation of food supply chain by the integration of farmers,  exporters, processors, bulk retailers and consumers.
• There is a clear separation of functions and powers between the Director of Agricultural Marketing and the Managing Director of State/UT Agricultural Marketing Board. The former is responsible for carrying out regulatory functions, while the latter would have to look after the developmental responsibilities under the Act.
• Creation of a conducive environment to set up operative private wholesale market yards and farmer-consumer market yards, to enhance competition among different markets.
• Promoting direct interface between farmers and processors/bulk-buyers/exporters/end users to reduce the price spread to benefit both producers and consumers.
• Enable declaration of warehouses/silos/cold storages and other structure/space as market sub-yard to provide better market access/linkages to farmers.
• To give freedom to the agriculturalists to sell their produce to the buyers and at the place and time of their choice.
• To promote e-trading to improve transparency in trade operations and integration of markets across geographies.
• To provide provisions for single point levy of market fee across the State and unified single trading license to realise cost-effective transactions.
• To promote a national market for agricultural produce through provisioning of an inter-state trading license, grading and standardization and quality certification.
• To rationalize market fee and commission charges.
• Grants provision for Special Commodity market yards and Market yards of National Importance (MNI).
• Complete democratization of Market Committee and State/UT Marketing Board.

Significance of APLM Act

The reforms of the agricultural marketing sector were introduced with the adoption of the APMC Act by several States and Union Territories during the 1960s and 1970s. With the improvement from the other village trader-dominated exploitative system, they failed to serve the objective of the price discovery in an accurate and transparent manner. Moreover, the market functionaries have over the years learnt to achieve the basic objective of marketing regulation by cartelizing. The APMCs have caused fragmentation to the markets, leading to inefficiency over space and time. Taking all this into consideration, the Model APLM Act, 2017 has been prepared by the Union Government.

Benefits of Model APLM Act

• APLM aids farmers with better price realisation as they are permitted to sell their produce to the buyers of their choice.
• Allowing warehouses and cold storages to serve as regulated markets increases the avenues for the farmers to sell their products that make the system competitive and end the monopoly of APMCs.
• Severe effects of multiple fees would be eliminated.
• Electronic trading platforms make the transactions, price determination in particular, that gives access to markets to the farmers at national level.
• The consumers would benefit where the prices of agricultural products would come down.
• Assists the government to achieve the goal of doubling farm income by 2022.
• It elevates the prospects of food processing industries as the raw material would be made available at lower prices.
• The Act helps the Reserve Bank of India (RBI) to maintain healthy food inflation.
• It strives to promote direct interaction between farmers and end-users of farm commodities, including retail chains, exporters and agro-processing industries.

Terms and Conditions

The terms and procedure of buying and selling are given below:

• Apart from the commercial transaction between two traders, any individual who buys notified agricultural produce including livestock in the principal market yards, sub-market yards and market yards, have to execute an agreement in triplicate in the prescribed form. A copy of the agreement would be supplied to the seller, and the remaining copy would be kept in the records of the Market Committee.
• The price of the notified agricultural produce transacted in the principal market yards, sub-market yards, private market yards, market such-yards or e-platforms, would be paid on the same day or the next day to the seller. Payment on notified agricultural produce would be made to agriculturist seller if sold to the direct marketing licensee on the same day.
• If the purchaser does not make payment under this clause,
  • He shall be liable to make an additional payment at the rest of one per cent, per day of the total price of the agricultural produce that is payable to the seller within five days.
• If the purchaser does not make payment with an additional payment to the seller under the above clauses within five days from the day of such purchase, the individual’s license would be deemed to have been cancelled on the sixth day. In addition to this, the individual would not be granted any license or permitted to operate under this act for one year from the date of cancellation.
• The Commission agent recovers his commission from his principal trader at a rate that more than two per cent on transacted non-perishable agricultural produce, and for perishable agricultural produce not more than four per cent, with the inclusion of all expenses relating to the produce and other services that are rendered by him. However, there has to be no commission collected from the farmer-seller.