Status of Reforms in APMC Act

Photo Source: The Indian Express

Over the years Indian economy has changed both in terms of its structure and outlook. The sectoral changes have become broader and continue to expand in terms of output generations. More than half of India’s population still relies on agriculture as its main source of income for their living. During the last decade, there has been a record production of foodgrains in the country.

In the so called reform era, the outlook of industry and services sector have been seen with considerable attention to re-structure or to move away from traditional way of governing them. At the same time, the agriculture sector is continued to be seen from outside of any attempt to initiate or unleash the potential structural reforms. More than a decade ago, Dr.Y.V.Reddy said that “There is some merit in the argument that the reform process has bypassed agriculture so far and that this is best illustrated by the co-existence of segmented and overregulated domestic markets with liberalised export–import regime in agricultural commodities.” This he said in 2001 and we are now in 2014. More than a decade has been bypassed yet again and this situation still continues.

The time has come now that some of the extremely crucial aspects of the agriculture sector have to be recognized and need to be addressed systemically. Dr. Reddy stressed that “the agenda for reforms virtually encompasses a thorough change in mindset and overhaul of legal and institutional mechanisms to enable a growing, healthy and efficient agriculture sector.” The issues and challenges faced by the Indian agriculture marketing are enormous and needs changes through institutional reforms. The domestic market regulations in agriculture is an important one such issue which merits for structural reforms. To be more specific, there is an urgency to re-boot the State’s institutional delivery mechanism for completing the reforms already initiated in the Model Agriculture Produce Marketing Committee (Development and Regulation) (APMC) Act, 2003. The APMC Act was designed to focus on protecting farmers from the vagaries of the market, mainly to ensure remunerative prices for the farmers.

The present agriculture marketing regulatory mechanism involves licensing and control on marketing, storage; creation of facilitating centres in the form of regulated markets; encouraging co-operative marketing; etc. The key issues are information asymmetry, lack of transparency in price discovery and collusive behaviour among distribution agents are common problems in our agricultural markets which have prevented competition to existing licensees. One of the main issues is that there is a large difference between the prices at retail level and those at wholesale level due to multiple intermediaries and high taxes ranging from 13% to 15.5% advalorem apart from other Market Charges which need to be rationalized.

In fact, there is a classic case, the delisting of some of the essential (perishable) commodities which are at present part of the APMC Act needs to be removed. The Act makes it mandatory for farmers to sell their produce only to licensed merchants at mandis set up by state agriculture marketing boards. According to a recent report by ICRIER on the food processing industry, about 15% to 25% of the total agriculture produce sold through the APMC route gets wasted due to multiple intermediaries and poor quality of mandi infrastructure.

In order to bring structural and institutional reforms in the agriculture sector the model Agricultural Produce Marketing (Development and Regulation) (APMC) Act was passed in the Parliament in 2003; the Act’s Rule has been implemented since 2007. The Model Act, inter-alia, provides for direct marketing, contract farming, establishment of markets in private and cooperative sectors, etc. Agriculture market reforms at the State level essentially provide farmers an alternative competitive marketing channel for transaction of their agricultural produce at remunerative prices.

Hence, all the State/UT governments have been urged to bring amendments/reforms in their own APMC Acts. The process of market reforms has been initiated by several states through either amendments or completely repealing the Act. So far, 16 States (Andhra Pradesh, Arunachal Pradesh, Assam, Goa, Gujarat, Himachal Pradesh, Jharkhand, Karnataka, Maharashtra, Mizoram, Nagaland, Odisha, Rajasthan, Sikkim, Tripura and Uttarakhand) have amended their respective APMC Acts. Bihar has repealed its APMC Act in 2006. Other States have either done reforms partially (MP, Chhattisgarh, Haryana, Punjab & Delhi) or initiated administrative actions (UP, J&K, and WB. etc.). So far, 9 States have amended their APMC Rules in line with the Union government.

Seven Congress-ruled States have amended their respective APMC Act in line with the model Act of the Union government. On 27^th December, 2013, the Vice-President of Congress Party had discussed the possibility of bringing urgent reforms in the APMC Act with the 12 Congress-ruled States including Manipur, Mizoram, Assam, Karnataka, Andhra Pradesh, Haryana, Himachal Pradesh, Uttarakhand, Maharashtra, Arunachal Pradesh, Kerala and Mizoram. The specific reforms- it seems- they all agreed was delisting of fruits and vegetables from the APMC Act. By January 15, 2014, 5 Congress-ruled States (Uttarakhand, Assam, Arunachal Pradesh, Meghalaya and Haryana) have delisted the two items (fruits and vegetables) from the APMC Act. According to Vice-President the delisting will eliminate these licensed merchants or middlemen who raise the prices for profits.

According to ICRIER Professor Arpita Mukerjee, the “Delisting of fruit and vegetables from the APMC Act is a positive step as only 7 per cent of the total fruit and vegetables sold are through the mandis. Even though organised retailers could buy directly from the farmers, yet they had to pay the mandi charge. The delisting will benefit organised retailers as also food processing firms.”

However, even after all the initiatives being taken, there have been various issues which have been quite persistent in the history. It is only hoped that the issues get addressed in coming years.

B.Chandrasekaran and Shruti Issar

Towards a Socially Grounded Policy Framework: Bridging Everyday Reality and State

Photo Source: Livemint

This is a perspective on the interface between rural labour markets and village based dalit women in eastern Uttar Pradesh (UP). These insights, drawn from fieldwork conducted in three villages of eastern Uttar Pradesh in the late 2000s, can serve as a basis for designing suitable policy interventions.

A stark feature of the rural labour market is the gender and caste segmentation. Barring isolated exceptions, dalits are concentrated at the bottom of the rural labour hierarchy-in agriculture, brick kilns, construction and distress driven petty self-employment and migrant work. Dalit men reflect high occupational diversification away from agriculture. Accordingly, their income sources and employment relations have been significantly delinked from the village. However, dalit women continue to be held captive in the village economy and society for a variety of reasons-responsibilities of own cultivation, domestic and care economy; a patriarchal value system; increasing role in everyday household reproduction in the face of male outmigration; delivering unfree labour to the local elites on whom they are dependent for employment, credit etc. Moreover, the village economy is largely agrarian in which the least paid and most demeaning types of work are done by women. Therefore, dalit women left behind in the villages are directly and to a greater extent than their male relatives embedded in village based social, economic and political relations of domination and subjugation which are underscored by intersecting caste, class and gender identities.

However, piece-meal transformations are unfolding in villages. In the case of UP, the regional context of BSP has been an enabling factor as it has at least posed a challenge to the traditional purity-pollution discourse, in removing the terror of police from the minds of dalits and ensuring them hearing at the police station, extending scholarships to students etc. Unfortunately however, BSP’s politics of dignity has not managed to structurally combat dalit women’s acceptance of their inferior status, their lack of confidence, their marginalisation from economic and political freedoms enjoyed by dalit men etc. Nonetheless, dalit women are gradually collectivising and protesting against their social and economic exploitation. This is evident in their struggles for better wage relations, in securing PDS ration, in filing complaints against corruption etc. But these struggles do not pose a systemic challenge but seek concessions within the existing order.    

What type of policy insights does such a scenario provide?

One clear lesson is that agriculture continues to be the daily mainstay of dalit women. As such, there is an urgent need to reorient growth strategy such that it does not bypass agriculture and develops synergetic linkages with other sectors to enable greater labour absorption in productive employment opportunities. Policy response can no longer casually treat the gender dimension of differentiation and exploitation and the structural inequalities which are ruthlessly exploited in pursuit of accumulation. Moreover, the idea of hitherto rural/agrarian labour needs to be reconceptualised considering it is simultaneously involved in varied employment relations across geographically dispersed production sites.     

Government interventions such as NREGA and widow/old pension scheme have had positive spin-offs, acting as a crucial buffer against absolute poverty and destitution, but these have also been used as tools by the local elite to build vote banks, labour lobbies or to secure unfree labour. In this region, NREGA has failed to counter the gendered division of labour. Even the petty pension amount is not disbursed regularly without grease money which leaves a very vulnerable section at the mercy of their families for food, health expenses and shreds their dignity. Petty corruption has emerged as a major source of income and accumulation by the local elite. On this front, the Lokpal Bill is definitely a good beginning but again much depends on the implementation and social efforts to enable the use of this legislation.              

The present policy emphasis on promotion of self-employment opportunities and skilling does not seem to have had desired outcomes. The few women who had acquired tailoring skills (seemingly the only skill women learnt), operated out of their houses and had a smaller customer base. Since social relations overshadowed economic transactions in such a setting, these women received less than the market rate and often received delayed payment. In addition to the conceptual and practical social barriers women faced in setting up as micro-entrepreneurs, the demand for products coming from dalit households was also comparatively low. Skill training should involve education about doing business and developing backward and forward linkages. For a variety of reasons, skills are not as strongly related to employability in the case of dalit women. In general though, it is the case that despite significant government interventions in the area of skills and entrepreneurial development, wage employment and not self-employment is perceived as more important for household survival. This is also because of overhead costs associated with self-employment, irregular and fluctuating income flow etc.   

Any policy design on poverty has to contend with the fact that the poor are not a homogenous group. They are embedded in multiple affiliations, are subject to different compulsions and likely to be a polarised and contentious group. State initiatives for poverty reduction are cornered by the relatively better-off or those poor who are ‘tied’ or ‘loyal’ to the local elite. Rather than poverty alleviation and asset creation, a vicious cycle of dependency underlies attempts by the poor to access scarce resources and benefits. Moreover, poverty is dynamic-economic and social shocks, occurring in quick succession, can force even relatively better-off households into a worse-off position. The fieldwork clearly points to a multi-dimensional understanding of poverty.

A final point for consideration-if there are obvious limits to dalit politics i.e. the subversion of authentic and effective politics of representation for narrow sectarian gains, then are there alternate legitimate political and social institutions or movements to ensure the inclusion and empowerment of dalit women and other marginalised Indians who have been unjustly and deliberately rendered mute.

 

Ishita Mehrotra