Farmers protest: Why APMC mandis play an important role for farmers?

Many farming-related recommendations have been made in the past, but every legislation has proven to be inadequate compared to the needs of the farmers. The APMC mandis where the farmers have been selling their produce, just to get the MSP, have not adequately fulfilled farmers' needs.

Now, with the new Essential Commodities (Amendment) Bill 2020, the existing mandis which were of a little help to the farmers, will also come directly under the Central government.

In Bihar, the APMC (Agricultural Produce Market Committee) Act was abolished in 2006, considering that this will enable massive private investments to run agricultural markets in the state. Which in return, help the state to become the next agricultural hub. But things didn't go as expected and the number of procurement centres dropped significantly from 9,035 in 2015-16 to 1,619 in 2019-20.

Bihar recorded an average annual growth of 1.98 per cent from 2001 to 2007. But shortly after repealing the APMC Act in 2006, even the existing agricultural infrastructure deteriorated significantly.

States to monitor APMCs and centralising help?

In states like Punjab, Haryana, Uttar Pradesh and Madhya Pradesh, the APMCs were playing a significant role in improving the agricultural infrastructure. There was a rise of 4.73 per cent, 48.27 per cent, 29.48 per cent and 19.48 respectively in the number of procurement centres.

The government should have done its research before passing the new laws and how this will severely affect farmers where APMCs play a significant role. Now that we know how abolishing the APMC Act demolished the advancing agricultural infrastructure in Bihar, will centralising the agricultural market in the country really help the economy? Or is it in the interest of the big corporates who can now easily exploit poor farmers?

APMC Act already had its shortcomings, but with the new farm laws, the situation for the farmers will go from bad to worse.

The new law suggests that now the farmer will have the authority to get in direct contact with the seller. But on the contrary, even now, there is absolutely nothing stopping a farmer to get in a contract with corporates.

Centralisation of India's biggest private sector, agriculture, might not be a good idea. First and formost, India is the 7th largest country in the world, and for the central government to control agriculture by centralising the power, might not be a great idea. Secondly, states will face a major revenue loss which they earlies used to earn from the tax collected from the APMC mandis. Regulation of the current agricultural infrastructure will even worsen, we have seen Bihar as an example of this.

APMCs came into being to break the monopoly of black marketers. Who would corner the farmers, hold the stocks with them and sale it at a much higher price when the demand rises. The only person who was benefitting out of this system were the middlemen. To abolish the monopoly of these people who were controlling the agricultural market, the government introduced "The Essential Commodities Act, 1955."

The 3rd reading of the act states "Powers to control production, supply, distribution, etc., of essential commodities.―(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, 1 [or for securing any essential commodity for the defence of India or the efficient conduct of military operations], it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.

With this act in place, many restrictions were put for all the black marketers, the middlemen and all the parasites who were taking advantage of the poor farmers. But now, with the new farm laws, all the restrictions have been lifted and will only be brought in under "special circumstances" according to the government.

What do the farmers need?

Since independence, farmers have had just two little demands, firstly a fixed rate for their produce (MSP) and secondly, stability in controllable factors. But the current law offers nothing but volatile fluctuations.

Bihar is the testimony of how abolishing the APMC act further raised the problems faced by the farmers. It only helped in the stagnation of the existing agricultural infrastructure and further added to the farmer distress.

*APMC mandis are just one underlying problem that the farmers will face. There are many other problems which we will discuss in the upcoming articles.