Modernizing Wholesale Markets

APMCs form the hub of agricultural trading which are democratically run local bodies. The major stakeholders are farmers, traders and consumers. Recently the amendment of the APMC Act has enabled licensed direct marketing agencies and private markets to participate actively in the agricultural marketing. It is imperative for the APMCs to provide to the stakeholders facilities for agricultural marketing in the form of basic and productive infrastructure for the purpose of:
  • Proper Handling of Agricultural Produce
  • Dissemination of Marketing Information
  • Efficient Waste Management
The level of investment in utility infrastructures in APMCs is low, mainly because:
  • Public utility infrastructures in APMCs like land development, compound wall, drainage, electricity, pavements, auction halls and auction sheds, toilets, and canteen are non productive assets. The share of these investments in the development of APMCs is large and needs longer gestation period.
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APMCs form the hub of agricultural trading which are democratically run local bodies. The major stakeholders are farmers, traders and consumers. Recently the amendment of the APMC Act has enabled licensed direct marketing agencies and private markets to participate actively in the agricultural marketing. It is imperative for the APMCs to provide to the stakeholders facilities for agricultural marketing in the form of basic and productive infrastructure for the purpose of:
  • Proper Handling of Agricultural Produce
  • Dissemination of Marketing Information
  • Efficient Waste Management
The level of investment in utility infrastructures in APMCs is low, mainly because:
  • Public utility infrastructures in APMCs like land development, compound wall, drainage, electricity, pavements, auction halls and auction sheds, toilets, and canteen are non productive assets. The share of these investments in the development of APMCs is large and needs longer gestation period.
  • The infrastructure like godown, cold storage, cleaning, grading, and packing units can come up with public private partnership (PPP), but in order to attract private investors, support would be required in the form of advisory services and establishment of mechanisms for risk sharing.
  • Moreover APMCs do not get the loan easily from the commercial banks for such development. Many a times, personal guarantee of the Directors of the Committee is demanded by the Banks for the loans of APMCs which is not agreed to by the Directors.
The result of this complex situation is either slow development or no development of APMC yards. The problem is addressed by providing assistance under MACP that would be linked to reforms in the functioning, management and operations of the market yard.

The strategic objectives of modernization of APMCs are briefly stated below.

i)Transparency:  
To improve transparency in all the APMCs to be modernized, the transparency will be ensured by:

  • Computerized recording of arrivals of vehicles entering the market carrying agricultural produce, computerized recording of sale transaction and accounting.
  • The sale of fruits and vegetables is conducted by open auction; however there is scope to improve transparency in these transactions.
The electronic auction is proposed on pilot basis in the biggest APMCs in the State i.e., New Mumbai & Nagpur to bring in transparency in the sale of fruits & vegetables.
 
ii)Open Auction:
Open auction of the agricultural produce is mandatory in the Model Byelaws with the provision for stringent action against the defaulting APMCs for not complying with open auction. The computerized auction system will be implemented in around 10% of the APMCs proposed to be modernized to bring in complete transparency. Wide publicity by displaying the message that produce must be sold by open auction and sale by hatta system or without open auction is illegal will result in awareness generation among producers. The aggrieved will be invited to lodge complaint with APMC and Director of Marketing or his taluka/district level officer, which will be enquired and dealt with seriously. This will ensure implementation of this reform. These measures will result in increase in income of farmers; avoid evasion of cess, resulting  in increased income of APMC which will boost sustainability of the Project.

iii)Value Addition:
Cleaned and graded produce will fetch better price in all the APMCs.

  • The fruits and vegetables are required to be graded and packed properly to have value addition. In two APMCs Electronic Auction Halls are proposed, whereas in other APMCs to be modernized under the Project wherever necessary washing, cleaning, grading and packing units for fruits and vegetables with pack houses are proposed.
  • For auction of produce in Electronic Auction Hall in New Mumbai & Nagpur APMC, it would be a precondition to get the produce properly washed, cleaned, graded, and packed.
  • Food grains, oilseeds and pulses are brought by the farmers to the APMC from the field, without cleaning and grading which reduces the price received by the farmers.
The price realized by the producer is at least Rs. 50/- to Rs. 100/- per quintal less for food grains, oilseeds and pulses as compared to the price realized by the farmer for the produce duly cleaned and graded. Infrastructure would therefore be created to make the produce more acceptable to the traders and to the consumers, which is cleaned, graded and packed.
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